HC Deb 01 May 1947 vol 436 cc2292-302

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

10.2 p.m.

Sir Ian Fraser (Lonsdale)

May I first express the feelings, which I know will be shared by Members in all parts of the House and by ex-Servicemen and other organisations throughout the country, of appreciation of the services rendered by the present Postmaster-General who occupied the post of Minister of Pensions and before that of Parliamentary Secretary for so long, and may I say a word of welcome to the new Minister, this being, I think, his first Debate?

The Government have decided to throw over the cost-of-living index under which we have worked for a very long time and it is indeed time they did, because it is out of date and misleading. The British Legion and Members of the House have been pointing out to one Government after another for the past 25 years that this index was not related to the reality of the life of our people. That is not surprising when you consider it was devised upon tables prepared in 1904, and it left out many commodities and services which, far from being luxuries, have become ordinary day to day expenses of ordinary families. In the old cost-of-living schedule it was presumed that a workman and his family never eat any vegetables except potatoes, and no less than 22 per cent. of the services and goods which are known by recent surveys to be commonly used in all houses in the country were left out of the old index altogether.

The passing of the old index is a matter on which we must congratulate the Chancellor of the Exchequer, but it raises certain questions which I want to put to the Minister. Why is the old index being thrown over? Because it is out of date partly, but also presumably because the Government expect a rise to take place in the new cost of living and it would embarrass them. It would affect the lives of three to four million people and the pensions of three quarters of a million more pensioners. Are the obligations which now exist such as to lay upon the Government the need to raise the basic rate of pension, notwithstanding the change of index, assuming that the obligation is shown to exist by the figures?

The reason for asking is this. If hon. Members think in terms of a company balance sheet, the form of which is changed in a particular year, they will appreciate that one cannot readily compare that year with the previous year. One has not a common standard for the two years. If we enter upon conditions in which a new index comes into force we do want to be assured that some factor which will relate it to the obligations which already exist will be brought forward, and that it will be a fair one. The Chancellor said that consultations were going on between the Ministry of Labour and both sides of industry by which, of course, he meant the trade unions and the employers. Are consultations going on between the Government and the representatives of ex-Servicemen? Are consultations going on between the Government and the British Legion? No, they are not, and since there are 750,000 people to whom the State owes an obligation in this matter, the second question that I have to ask the Minister is whether he will call ex-Servicemen's representatives and the British Legion into consultation so that they may have as fair a chance as the two sides of industry of asking how this new cost-of-living index is to be constructed and how it will operate in relation to the men in whom they are interested.

Now with regard to the cost of living itself. The luxury—if you like—of 40 years ago has become the commonplace of today, and I want in the few minutes available to me to explain why I think that a rise in the basic rate of pension is already due. In 1919 the 100 per cent. disabled man was given £2 a week as a flat rate pension. He has since been raised to £2 5s. to assimilate his rate to that which is to be paid under the Social Insurance Act for disability. In addition to that he receives a marriage allowance for a wife whenever he marries her—that is a recent innovation, but he gets it now—he gets children's allowances, as he always did, but he gets them for all his children, and if he is unemployable he draws £1 a week un-employability allowane. Moreover, if he is unemployable his wife's allowance is 16s. instead of 10s.

I do not want to worry the House with figures but I should like to take a case to show what this means. A man who is disabled in the highest degree receives £2 5s. for himself, plus £1 if he is unemployable, plus 16s. for his wife, making £4 is. in all. He may be a veteran of the first war, and he is keeping himself and his wife on that money. His daughter, who may be 19 and may be working for the Minister of Pensions in his office, will get £4 plus if she is an unskilled typist or messenger girl, and or more if she is a shorthand typist. Is £4 1s. enough for that man? If he has lost both his eyes, both his hands and is terribly disabled in that sort of way he will receive big attendance allowances. They go some way towards putting him in a fairly good position, and I am not making any complaint for him. There are 30,000 men disabled in the highest degree. I think that only a very few of them receive attendant allowances, and only a handful get the big attendant allowances. I think that there is, therefore, a case for raising the basic rate for the man who does not qualify for those allowances.

Out of the whole body of pensioners, who number 750,000, 450,000 belong to this recent war. Of those, some 60,000 receive pensions above 50 per cent. and the balance, nearly four-fifths of the whole number, receive 50 per cent. or less. Let us look at them. A man has lost one leg or one arm. In 1919 and throughout the years between he got £1 and no more unless he was married. That was 50 per cent. of the average rate. He now gets 22s. 6d. and he is not qualified for the attendance allowance and he does not need it. A great mass of people of this sort have got jobs and the argument may be used that because he has got a job he has gained the advantage of any rise that has taken place in the wages for his job. It remains a fact that between 1919 and the present time he has only got 2s. 6d. more than he used to get. He is 25 years older and his disability is a seven days' one and not five days. Moreover, he has been handicapped in the race of life and is not as free as other men to choose his job.

The great mass of these people are not in highly paid jobs and are paid less than the average man, so that it cannot be argued that, because he has got a job, his pension should stay where it is. My contention is that the pound is not worth as much today as it was in 1919, whatever the cost-of-living figure may be. I do not want to be sentimental about the beer and cigarettes, but I would ask the House to realise this that if a disabled sailor, soldier or airman has 10 cigarettes a day and one pint of beer a day it will cost him 19s. 3d. a week. If he has a Guinness on Sunday it will be over the pound. Is he to abstain, or is he to be given a pension which will enable him to have some of these small amenities of life which I think that a grateful people in 1919 meant him to have?

I would draw to a close by making these requests to the Minister. First, will he consult the representatives of the ex-Servicemen as he is consulting the representatives of industry? Second, will he look into the question now and see whether a rise in the basic rate of the 100 per cent. and all the other percentages is not already due? Third, I want to say one word to the ordinary man in the street. There is only a limited amount of goods available for all of us. If we raise everybody's wages and incomes to meet the increased cost of living, which I am sure is coming as a result of the economic stress and strain of the bad winter, of the coal shortage and of all the rest of it, then proportionately the pensioner will not get any more actually. We are simply going to have another bit of inflation. Is it not perhaps time when we might say to the trade unions so strongly organised and so powerful, "You have your rise, good luck to you, but is it not time now to stand back just a little and let the 750,000 disabled men throughout the country have their rise"? I make a plea to the Government and to a wider sphere to consider whether the time has not come to take into account this coming rise in the cost of living and to bring about this measure of justice which I feel is more than overdue.

10.15 p.m.

Mr. Derek Walker-Smith (Hertford)

I feel bound to associate myself, for a very few moments only, with the case put forward so sympathetically by my hon. Friend the Member for Lonsdale (Sir I. Fraser), who spoke with such authority and such eloquence on this subject. As he has shown, the disabled ex-Serviceman has received very little advancement to help keep pace with the controlled inflation with which this country is faced today. The 5s. rise, to which he has referred, is a small thing when compared with the rise in the cost of living. I feel, as my hon. Friend has said, that the time has come, more particularly in view of the approaching revision of the cost of living index, when the needs and the position of these men, who have deserved so well of the community, should be taken into account. I reinforce his plea to the Government to lose no time in making whatever investigations they can to see how they can help these men, so that they do not suffer further from the rise in the cost of living.

10.16 p.m.

The Minister of Pensions (Mr. John Hynd)

I should first of all like to thank the hon. Member for Lonsdale (Sir I. Fraser) for the welcome he gave me in my capacity as Minister of Pensions. I, too, echo the well-merited tribute he paid to my predecessor. I fully appreciate that my task tonight might have been very difficult had I not the good fortune to follow a Minister of Pensions who had done such fine work on behalf of our disabled ex-Servicemen, and on behalf of the civilian casualties of the last war. The hon. Member opened his remarks by suggesting—and I think it is the first time I have heard it suggested—that the Government are considering examining the cost of living index because we are expecting a heavy rise in the cost of living, and we would not wish this to be reflected in increased wages. It is a new suggestion to me, and contrary to the facts.

This is a measure pressed for by all sections of the community, particularly by the trade unions, for a long time, and it is a matter of getting the cost-of-living index on a practical basis. What the hon. Member suggested, among other things, is that the Government, in abandoning the old cost-of-living figure, should now give undertakings that they will carry out the policy and the pledges in regard to the adjustment of wages and people's earnings, despite all that may be shown as a result of this examination into the cost of living figure. The hon. Member knows better than anyone else that so far as war pensions are concerned, they are not related to any cost-of-living figure. I do not think he will dispute that, because it is generally accepted.

Sir I. Fraser

I do challenge that most definitely. I have the statements of successive Ministers, made over the last 25 years, proving—and I have chapter and verse, but not the time to give it—that the flat rate is, in fact, related to the cost of living.

Mr. Hynd

I, too, have not the time to recite the history, but, in brief, if I may refresh the hon. Member's mind, it was a fact that the original 1914–18 pensions were related to the cost-of-living index, and an assurance given that the pensions would be adjusted according to the rise and fall in the cost-of-living index figure over a margin of 5 per cent., but, as was implied by subsequent statements of Ministers not of this Government, the Minister of Pensions, in 1928, made a very clear statement that while there would be no reduction in the pension rate as a result of the fall in the cost-of-living index figures, there might be an increase, assuming that the cost of living rose over 215, which was the level in 1919—that was provided there was no substantial change in the pension range by the addition of new classes of beneficiaries. There have been substantial alterations by the additions of new classes as a result of the new classes brought in during the 1939–45 war.

Pension rates in 1919 were related to the cost-of-living figure of 215, and they were placed at 40s. In spite of considerable decreases in the cost-of-living figure since then, there have been no reductions in the pensions. In 1943, the new war pensions were established, in relation to the cost-of-living figure at that time, at 32s. 6d., in comparison with the 1919 rate of dos. In August, 1943, it was decided to assimilate the basic pension rates for the two wars at the rate of 40s. The hon. Member knows that in December, 1945, the pension was increased to 45s. but not because of a rise in the cost of living. In fact, the cost-of-living figure was still considerably below that of 1919. Had the formula of 1919 been applied, the pension might then have been reduced. It was, in fact, increased from 40s. to 45s.

That, as the hon. Member says, was due to the fact that we were recognising a new factor, namely, the relationship—the desirable relationship—between the war pensioned and the victims of industrial injury. Indeed, it was said by an hon. Member on that occasion that this change was desirable. He said that he, and other hon. Members of the party now sitting opposite, regarded the change as of vital importance because those who had suffered in the war in the service of their country ought not to receive disability pensions lower than those granted to the casualties of industry. I believe that view has been generally accepted by the House.

What the hon. Member for Lonsdale has said, of course, is that the relationship the industrial injuries scheme—I do not think that the hon. Member has any objection to that principle, broadly—is not enough, in the present situation. His remarks infer that he was not concerned only with the war pensioner but also with the industrially injured and with other classes who have fixed incomes, and that he was not so concerned with the working trade unionists or with the ordinary worker. Although war pension rates were then related to the Industrial Injuries Act, the war injured still had considerable advantages. The wife and family allowances continued' to be paid to the war injured although not to the industrially injured; the child allowances for men under treatment applied to all the children of the war injured but not to the industrially injured; similarly, widows' pensions were higher. The widow also received benefit for all her children.

The hon. Member again referred—when I say "again" I have in mind the previous occasion on which he raised this point in the House and on which occasion he said what I thought he repeated tonight—to the fact that he was not dissatisfied with the rates applicable to the most seriously injured class. That is the class with not only 100 per cent. disablement but who are unemployable and to whom the unemployable supplement, attendance allowances, and so on, apply. The hon. Member emphasised his dissatisfaction with the rates applicable to those who are on the bare 100 per cent. and are not unemployable, and those who are on still lower rates. I do not know whether it is really necessary to point out again that 45s. is not a rate applicable to many of the recipients of war pensions. The case quoted by the hon. Member was a 5o per cent. disability case. That is precisely the kind of case where a man is in a position to earn more money at his work.

When one compares the position of the completely unemployable pensioner and that of the employable pensioner, the employable pensioner is not in a very much worse position. If we take a comparison, we will find that the unemployable pensioner has 45s., he has his wife's allowance of 16s., he has his children's allowances amounting to 7s. 6d. per child, with 5s. family allowance added for every child after the first, he has his unemployability allowance, and he has his attendance allowance; but although he has his attendance allowance, it has also to be noted that that allowance is given for attendance, and that man, therefore, is not necessarily a net gainer to the amount of the attendance allowance. The employable pensioner has 45s. and he, too, can have a wife and children, and if he has, he has 10s. additional for his wife, which makes 55s., he has 7s. 6d. for the first child, which makes 62s. 6d., if he has another child he gets 7s. 6d., which makes 70s., plus family allowance at 5s., which makes 75s., and he gets another 12s. 6d. if there is another child, making 87s. 6d. over and above his earnings. Therefore, I feel that a comparison of the two cases does not always redound to the advantage of the completely unemployable pensioner.

Sir I. Fraser

The point is that if the basic rate is raised, it will, of course, be raised for both.

Mr. Hynd

That is true, but it is also true that it was generally accepted, I think, by the House, and in the country, that it was preferable to pay attention to the most needy cases and to adjust such sums as were available for war pensions purposes on that basis to ensure that the most needy cases had the most benefit. Therefore, it follows that if we were to increase the basic pension, we would not only increase the pensions for the unemployable and the employable pro rata, but we would also probably have to review the supplementations which were made as the alternative to a higher basic pension. I do not think the hon. Member or the House generally would prefer to depart from the principle which has been generally accepted that it is better, with the money available, to pay the most attention to the most needy cases rather than to lay down arbitrarily a higher basic rate without having the means or opportunities to supplement the more needy cases. That is very well borne out by a report in the journal of one of the ex-Serviceman's associations which makes direct reference to the point in regard to one of their members who suffered amputation of one leg and one arm as a result of service in the 1914–1918 war. The reference continues: His pension was 40s. per week. He married after disablement and received no allowances for his wife and the children which came to them. In 1943, the Ministry of Pensions introduced the unemployability supplement, and an application for our member resulted in award, so that his income from pension and allowances was then increased from 40s. to 92s. 6d. for himself, wife and three children. Applications for an attendance allowance were persistently rejected. The allowance for a wife in such cases was later increased by 6s. per week, and from January, 1947, our member is automatically entitled to 10s. per week attendance allowance, and 5s. weekly increase in disability pension. He is also entitled to family allowances of 5s. per week for two of his children, so that the total income for this badly disabled member and his family is now £6 3s. 6d. per week compared with 40s. weekly from 1918 to 1943. The point about this comment in the ex-Servicemen's journal is that they say: The future policy of ex-Service organisations in regard to flat rate pensions for 100 per cent. disablement and special supplementary allowances for extreme forms of disablement, unemployability, attendance, treatment, temporary incapacity, etc., requires very careful consideration. General opinion is veering to the view that adequate supplementary allowances for those who need or deserve special provision is of greater importance than a high flat rate for all disability pensioners. That is the opinion of the B.L.E.S.M.A. organisation. I would like to refer to one further point. The hon. Gentleman asked me whether I would consult the British Legion and other ex-Servicemen's organisations on the implication of the cost-of-living index figure. The implications of whatever may be the new cost-of-living index figure are very much wider than their implication in relation to ex-Servicemen's pensions, and it is not for me to commit the Government an any interpretation they may make of these cost-of-living figures and their application in various quarters, but I am prepared constantly to consider the whole field of war service pensions, particularly in consultation with my Advisory Committee, of which the hon. Member is by no means a silent or useless member.

I am sure that with the advantage of consultation with him and his colleagues we will be able to examine the whole of the repercussions of present-day conditions, including any changes that may be made in the cost of living or any other factor in relation to the existing pensions. I appreciate the fact that the hon. Gentleman has taken this early opportunity to raise the question, and if it were not for the fact that the outcome of the present discussions in regard to the cost of living were so hypothetical at this time, I would have preferred to have been able to give him a direct reply.

The Question having been proposed after Ten o'Clock, and the Debate having continued for half an hour, Mr. DEPUTYSPEAKER adjourned the House without Question put, pursuant to the Order made upon 13th November.

Adjourned at Twenty-eight Minutes to Eleven o'Clock.