HC Deb 02 November 1948 vol 457 cc670-2
35. Mr. Lipson

asked the Minister of National Insurance if he will take action to remedy the grievance of voluntary contributors under the National Insurance Act who were guaranteed a weekly pension of 10s. without conditions at the age of 65 but who, if their birthday falls after 5th July, 1948, must now retire from work, which many do not wish to do, in order to qualify for a pension.

Mr. J. Griffiths

The conditions linking pension with retirement apply equally to all insured persons. The benefits now provided for contributors under the old scheme arc in all cases actuarially more valuable than those which they have replaced, and I can see no reason why the former voluntary status of a contributor should give privileges in the new scheme which are not accorded to those whose previous insurance was compulsory.

Mr. Lipson

Does the right hon. Gentleman agree that these persons entered into a contract with the State, and is not the State under a solemn obligation to honour its part of the contract, which has been violated?

Mr. Griffiths

As a matter of fact, the State is doing very much better than honouring its contract. If I may quote an example, there was a voluntary scheme by which women paid 6d. per week to become entitled to a pension of 10s. at 65 years of age. From 5th July last. however, they have been entitled to 26s. a week at 60 years of age and already over 50,000 such awards have been made.

Mr. Haworth

Is the Minister aware that it is a very old principle in trade union negotiations that where better schemes are brought forward people may opt to remain in the old one, and, since the people referred to in this Question would be entitled to 10s. without retiring, could the Minister give them the option to remain under the old scheme if, rather short-sightedly, they prefer to do so?

Mr. Griffiths

I do not know how I could give them that option and at the same time introduce the benefits of the new scheme to a very much larger number of people as from 5th July. We considered carefully whether any such option could be given, but I do not think that it would be practicable.

Mr. Osbert Peake

If an option were, in fact, given to these persons, would not there be a very great saving to the Insurance Fund, to the benefit of all other contributors?

Mr. Griffiths

The right hon. Gentleman knows perfectly well that this idea was first put forward in the White Paper of the wartime Coalition Government. I took the idea from that White Paper on its own merits. Quite frankly, an option of the kind suggested is not workable.

Mr. S. Silverman

In view of the present state of manpower in the country, would not my right hon. Friend consider it desirable to review now those aspects of the retirement pension which penalise at the age of 65 those people who desire to go on working?

Mr. Griffiths

I do not admit there is any penalty for those who wish to go on working beyond the age of 65. There is, in fact, an added increment which is not available beforehand. I am, however. keeping under close observation the working of this scheme and if I were to find that it did penalise people in this way, I should not hesitate to seek to bring about a change.

Mrs. Castle

Does not my right hon. Friend agree that there is evidence in Lancashire and elsewhere that this increment is inadequate as an incentive to prevent people from retiring when, in fact, the country wants them to go on working?

Mr. Griffiths

No. The evidence is not that it is inadequate. In fact, 64 per cent. of the men who reach the age of 65 do not retire but remain at work. The increment in our scheme is double that which was proposed in the Beveridge Report. If I felt that the increment could be further increased as an inducement to people not to retire, I would certainly consider such a proposition.

38. Sir Frank Sanderson

asked the Minister of National Insurance whether he is aware that Mr. Charles Penn, 82, Meadvale Road, Ealing, was a contributor under the old National Insurance Act from its inception, under which he was to receive 10s. a week pension on attaining the age of 65 and his wife a similar sum on attaining the age of 60; and since under the new Act Mr. and Mrs. Penn are eligible for no payments, under what regulations are they and similar cases covered.

Mr. J. Griffiths

The benefits of the National Insurance scheme for which Mr. and Mrs. Penn may be eligible are explained in the full letter which my hon. Friend sent to the hon. Member on 1st September. The National Insurance (Pensions, Existing Contributors) (Transitional) Regulations, No. 612, 1948, set out the way in which pensions contributions under the previous schemes are to be counted for the purpose of title to the more valuable benefits of the new scheme.

Sir F. Sanderson

Is the Minister aware that not only Mr. and Mrs. Penn, but countless other people similarly situated, regard the attitude of his Ministry as a breach of contract since they receive no pension, for which they have consistently paid their contributions year after year?

Mr. Griffiths

No, Sir. What has happened is that the old contract has been replaced by a new one which is very much better.