HC Deb 31 January 1945 vol 407 cc1584-94

Motion made, and Question proposed, "That this House do now adjourn."—[Major A. S. L. Young.]

5.56 p.m.

Mr. Lipson (Cheltenham)

I desire to raise a very human problem. It concerns certain old age pensioners who are beneficiaries under the Pensions (Increase) Act of 1944. The purpose of that Act was to give some modest increases in pension to certain retired servants of the State and of local authorities and to former members of the Irish Constabulary. The amount of the increase was very small. It was intended to apply only for a limited period, and the Act comes to an end at the end of this year. The object of the Act was to meet the increased cost of living. It has been found in practice, however, that the Act is penalising certain non-contributory old age pensioners as compared with other beneficiaries under the Act. When Parliament passed this Act it intended that all those who came under it should receive the full benefit of the Measure, such as it was. In practice, that has not happened and those who are suffering a deduction in consequence of the Act are the poorest of those who come under it.

Who are the non-contributory old age pensioners? They are men who, to qualify for an old age pension, must satisfy two conditions. First, they must have exceeded the Psalmist's allotted span of life; unless they are over 70, they do not get any benefit. Also, they must be very poor, because unless their income is very limited in amount, they do not get this old age pension. I am not asking to-night that any more money should be spent because of this Act than was originally intended when Parliament passed it, but I say that it is not right that because of benefits received from this Act, those old age pensioners should have their old age pensions reduced.

I understand that there are instances where this is taking place all over the country. I wish to draw attention to-night only to two examples from my own constituency. They come to me from the local pensions committee and the facts which I will put before the House have been sent to me—

It being Six o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Cary.]

Mr. Lipson

I was saying that these facts have been sent to me by the clerk to the committee who is also the town clerk of Cheltenham, a responsible official whose facts can, I think, be accepted as correct.

The first concerns an old age pensioner and his wife whom I will call Mr. and Mrs. A. They were each receiving the old age pension of 10 shillings a week, and the man had his civil pension. Under the Act of 1944 he is entitled to an increase of £27 5s. and he is getting it, but in consequence of that increase the old age pensions of himself and his wife have each been reduced by 4s. a week. The result is that though he receives £27 5s. under the Act, he and his wife between them lose £20 16s. of their old age pension; that is to say that a benefit which Parliament intended should be worth £27 5s. to him and his wife, is reduced to £6 9s. Parliament did not intend that, and I do hope that something will be done to make that sort of thing impossible.

Let me give one or two facts about this old man and his wife. He is a confirmed invalid. Though these old age pensioners reach the age of 70, unfortunately their health and their financial circumstances are not such that they can enjoy retired leisure in comfort. This particular man suffers from epilepsy, and needs special attention and treatment. His wife is nearly blind. I would remind the House that these old people are having a very unhappy time because of war conditions. Like all of us, they are exposed to the hazards of enemy attack from the air. They too, have their anxieties with regard to their dear ones who may be fighting. The cost of living is such that they have an awful struggle to make ends meet. Luxuries are quite impossible. Are these the people that we want to single out for an economy of the kind that I have indicated?

The second instance is Mr. B, who was also getting the old age pension of 10s. a week. He is entitled, under the Act, to an increase of £14 4s. a year. He is getting that, but £10 8s. a year has been taken from his old-age pension, with the result that instead of getting £14 4s. a year, which Parliament intended, he is actually benefiting only to the extent of £3 16s.

Captain Prescott (Darwen)

The hon. Member is directing the attention of the House to a particular instance. Does he not realise that it is merely typical of the general niggardliness and cheeseparing manner in which old-age pensioners are treated, and that this case could be multiplied by many others?

Mr. Lipson

The hon. and gallant Member has quite properly drawn attention to the fact that old age pensioners get a very raw deal under present conditions. Many of us have said so again and again, and in company with other hon. Members, I welcome the support we have received from my hon. and gallant Friend who has just intervened. This particular man has applied for a supplementary pension, and has been awarded 2s. 6d. a week. The net result, though he gets his 2s. 6d. supplementary pension, is that he is 1s. 6d. a week worse off than if the cut in his pension had not taken place. Does the State want to save that 1s. 6d. a week? at the expense of this old man? It might buy him nearly half an ounce of tobacco. Would we not all be glad if that were possible? Who is he, what is his career? He is a retired Post Office employee, and has served in two wars. He fought in the Boer War and in the Great War, and this is the treatment which has been meted out to him. The old-age pensioners were very glad when this Act was passed. It was not much, but it was something, and it seems a tremendous shame that such pleasure as they got, and that such expectation and hope as were raised by the Act, should have been spoiled and ruined in this way. It causes a great deal of bitterness.

I refuse to believe that the Chancellor of the Exchequer cannot find some way by which this difficulty could be overcome, so that this incredible meanness should not be perpetrated on these old people. We know that during the war the Chancellor has tackled some very big problems and tackled them well. He is a big man. I believe that he has not only a fine brain but a big heart. I am quite sure that if he could realise how much unnecessary misery, suffering and hardship is caused to old-age pensioners, he would turn his attention to this, even though it is a comparatively small problem compared with many of the big ones with which he has to deal. But it is really a very big one to the people concerned. I appeal with confidence to my right hon. Friend who is to reply, to say that further consideration will be given to the matter, and that it will not just be left where it was by the answer given by the Chancellor to my Question.

Really it is incredible to think that our power for effective action is such that when we are faced with an obvious wrong and injustice of this kind, when something happens as a result of the passing of an Act of Parliament which no one intended, we should say that "Nothing can be done; very sorry, but it must be left there." I ask that it should not be left there, but that some statement should be made which will give hope to those who are suffering in this way that a way will be found to prevent this sort of thing from happening.

6.10 p.m.

Mr. Evelyn Walkden (Doncaster)

I believe the hon. Member for Cheltenham (Mr. Lipson) has not only rendered a service to old-age pensioners, but given a public reminder to Members of Parliament as well, of the effect of Acts of Parliament which are not properly understood by them when they are passing through the Legislature. If these Benches were filled to-night and there could be a kind of inquiry of every Member of Parliament who was present when the Pensions (Increase) Act, 1944, was being considered, I question whether one hon. Member could say that he believed or intended that it should be applied as it has been in the case outlined by the hon. Member for Cheltenham. My hon. Friend says he could have told us. I believe, on reflection, there are one or two of us who could, including perhaps the hon. Member for Rugby (Mr. W. J. Brown). We were on a deputation to the then Financial Secretary of the Treasury, now chairman of the Conservative Party. When we met the right hon. Gentleman, he was sincere, as he always has been, and he said, "We will try to do something." The Chancellor of the Exchequer did that something and we accepted it, although the hon. Member for Rugby asked that there should be a step up in the ratio of income.

It is a bad thing that we Members of Parliament should be reminded in this manner, but the defence of the Minister to-night is going to be that this is the law. We are to be told that this is the application of the Determination of Needs Act, combined with the Non-Contributory Old Age Pensions Act. That is the defence. Let us face the facts. Almost all the people, retired civil servants, local government employees, who have benefited in any small degree by these increases under this Act, and who were receiving old-age pensions because of being 70 years of age, are now trooping up staircases to every local old-age pensions committee throughout the land. I have here cases from one committee, and I think that more are coming up this very week. An old-age pensioner, formerly receiving 6s. a week, has, because of this increase, had his pension reduced to 2s. a week. Another one, who was formerly receiving 8s. a week, because of this increase finds his pension now reduced to 4s. a week. Another man, whose pension was 4s. a week, has had it taken away altogether.

I must mention these facts to the Minister, and say to him that the kind of defence that is likely to be put up is not good enough to convince these old-age pensioners. They are saying to the local committees and their officers, "We have been cheated by Parliament." It is a bad thing for us as legislators to find ourselves in this position, when all our good intentions, displayed from the Treasury Bench and backed up by the Coalition and Parliament itself, to afford in some measure the sustenance needed because of war circumstances, are defeated, and we find we have cheated the old folk of 70 years of age. They are very disappointed in us. I therefore beg the Minister, whatever his case may be about the Determination of Needs Act and the Non-Contributory Old Age Pensions Act, and despite the fact that this is the law, to try to find another answer and go into the whole subject, as the hon Member for Cheltenham has suggested, so that we can at least see to it that the few shillings given under the Act to old-age pensioners shall be theirs by right and none shall be taken away.

6.15 p.m.

Mr. W. J. Brown (Rugby)

I want to say a few words about this as the Member who initiated the movement for the Pensions (Increase) Bill, 1944. What I want to say will be directed to asking the House to consider who are the beneficiaries under that Act and what is the effect on them of what is now being done. The beneficiaries were a very badly treated body of men and women. As far as civil servants were concerned, the majority of them had put in many years of unestablished service which did not count for pensions at all. The pensions they were given on retirement were related only to that part of the service which was "established" and they went out on beggarly pensions. The House of Commons, which, after all, is the employer of these people, was nearly five years before it gave a penny of relief to that badly treated body of men and women in respect of an increase in the cost of living which the Minister of Labour estimates at 30 per cent., which I estimate at 60 per cent. and which others estimate higher still.

What I am saying about the Civil Service applies to Army officers as well, and I mention the Civil Service only because I know that aspect of the case well. We dealt in a mean and niggardly way with those people. We could find relief for everybody else in Britain within that five years, but it took five years to find a penny of relief for those to whom we, as a House of Commons, directly owe most, because we stood in relation to them as direct employers. After five years of agitation on my part, with others, did we give them full compensation for the rise in the cost of living? No. Did we give them half compensation for the rise in the cost of living? No. Did we give them quarter compensation for the rise in the cost of living? No. We gave them the minimum increase with which the Front Bench felt that it could get away, having a coalition behind it in this House strong enough to override every form of opposition. I was going to say they gave them the widow's mite, but the widow's mite was all that the widow had. This was not the widow's mite, but the minimum that the Front Bench thought necessary to allow.

I have had letters from all over England expressing pathetic gratitude even for what we did. It was a moving experience to read those letters expressing gratitude even for that. Then we began to come up against other difficulties. Although over a year has gone by, half of them have not yet received the increase we gave. The Bill will have expired at the end of this year before the distribution of this miserably inadequate increase takes place. After the wretched few shillings a week that we gave that night—and I believe the House felt that it was doing a little to leave these folks a little better off—we went home feeling that some hundreds of thousands of people would be a little better off because of the Bill introduced by one Government Department. I observe that they have been studying the Scriptures, and they have come across that maxim of St. Matthew: Let not thy left hand know what thy right hand doeth. What is given by one Department has now been taken away by another; what was wrung from the Treasury has been squeezed back by the Assistance Board in the shape of reductions in the miserable supplementary old age pension. I want to leave the Minister ten minutes in which to reply, and I apologise for even taking the two or three minutes I have taken, but I want to say this: I wish Ministers could understand the way the minds of poor folk work. It would be better not to give a poor man or woman something and then, as they see it, wretchedly and fraudulently extract it in another way; it would be better not to give it at all than to give it and grab it back in that particular way. The men and women who are affected by what the Assistance Board is doing will be twice as bitter as they were before after this experience. Do not tell me that this is what the law says. If this is what the law says, tell us that you will alter the law. That is the only reasonable response that can be made to these representations.

Mr. Deputy-Speaker (Mr. Charles Williams)

I must point out that if legislation is involved, it is out of Order in an Adjournment Debate.

Mr. Brown

I find that whenever I rise to advocate anything in this House it is out of Order.

6.21 p.m.

The Financial Secretary to the Treasury (Mr. Peake)

I apologise to other hon. Members who wish to speak, but time is short, and I think Members wish to hear what has to be said from this bench on the subject. I hope it will not be thought that I have less sympathy for the old-age pensioners than the hon. Members who have voiced this grievance to-night. But let us get the position as clear as we can. Non-contributory pensions, as my hon. Friend said, are paid to those over 70 at the full rate of 10s. per week, but they are subject to an income limit. That is embodied, of course, in the Old Age Pensions Act of 1936, following on preceding Acts of the same character, and the effect is that anyone who has other unearned income of more than £65 5s. a year, does not qualify for the full non-contributory old-age pension.

Mr. W. J. Brown

This is not the matter—

Mr. Peake

Perhaps the hon. Gentleman will just let me make my statement. After the unearned income reaches £65 5s., for every additional £5 5s. of income the pension falls by 2s. weekly until, at £88 17s. 6d., it ceases to be payable altogether. Whether those scales are right or wrong it is not for me to discuss on the Adjournment, because in order to alter them legislation would be required. However, the principle embodied in the Act is, that if we are to give away out of the Exchequer money in respect of which no contributions have been paid, there should be an income limit of some kind in order to prevent persons who are quite comfortably off drawing a pension at the expense of other taxpayers. I do not think anybody can quarrel with that principle. Hon. Members may say that the amounts and the scales are wrong, but I do not think anybody can quarrel with the principle. This statutory scheme has these two effects: it avoids, as I have pointed out, giving away the taxpayers' money to persons who are comfortably off; the descending escalator also has the effect of stabilising income at about 35s. a week for a single person or, I think, double that figure in the case of a married couple.

We come now to the particular case of the effect of the Pensions (Increase) Act of last year. I do not know whether hon. Members foresaw what the consequence of that Act would be, but I must point out to them the extreme difficulty of treating income derived under that Act on a different basis from income from other sources. I am sure hon. Members will appreciate this difficulty. Suppose there is a person who, under the Pensions (Increase) Act, has his pension made up to a figure of, let us say, £80 per annum. Imagine also, living next door or in the same street, another aged person who, equally, has an income of £80 per annum drawn from some other source. In one case it may be that one of them has saved throughout his working life, and has bought an annuity of £80 per annum in order to see him through his old age. In the other case, the person may be drawing £80 per annum under an industrial scheme which was set up in the business in which he worked. Or, again, there may be a person who has been a private employee in domestic service and who is drawing a pension from the employer with whom he has served for many years.

There might be all these cases where the income is the same—under the Pensions (Increase) Act, £80, under a private industrial scheme £80 and under an annuity scheme £80—and I do not see how any Member can say that it would be practicable to differentiate between them, or to say in one case "We will disregard a certain part of your income from another source and give you an old-age pension in full," and in the other cases I have mentioned, in the case of the annuity or the pension from private sources say "We are going to regard all your income from those other sources and reduce your old-age pension according to the existing escalator scale." I am sure hon. Members will see the great difficulties and anomalies which would arise if we were to select for special treatment a particular class of pensioner who comes under the Pensions (Increase) Act, and to say in that case, and in that case alone, "We will disregard your income for the purposes of old-age pension."

Mr. Lipson

This is a temporary Measure.

Mr. Peake

That is perfectly true, but it is quite clear that it is a temporary Measure that will continue for some time: we could not allow the Act to expire at the end of this year—that would create hardships. This, to sum up, is the dilemma in which we find ourselves. It is very difficult to select a particular class of income and to say that the recipients in that class shall not have their income regarded for the purpose of old age pension and, at the same time, say to another class, "You shall have your income regarded."

However, there have been a few cases—and I would like hon. Members to know this, because it is of some importance—where, within the administrative field, we have been able to do something to remedy the position. There have been cases where, owing to the escalator stairs being 2s. each, payment of the full addi- tion under the Pensions (Increase) Act has resulted in a net loss of income of a few pence each week. By administrative action, by not paying the whole of, say, the additional 30 per cent., but something slightly less, we have been able, in the case of retired State employees, to prevent that loss falling on the pensioner. If cases of that sort come to the notice of hon. Members I hope they will communicate with me, so that I can see whether any necessary action can be taken on those lines. I cannot go further than the answer which my right hon. Friend gave in the House the other day, but I do undertake to convey to him the general feeling of the House and to place the facts, as they have been stated by my hon. Friends, before him.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes after Six o'Clock.