HC Deb 26 June 1952 vol 502 cc2686-92

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

4.17 a.m.

Sir Ian Fraser (Morecambe and Lonsdale)

I apologise to you, Mr. Speaker, and to the House and the servants of the House for raising a matter so late, but the Minister having waited, it seems better to proceed briefly to the matter. There are 4.8 million people living in this country who are 65 years of age or over, and they are, of course, a group of people who are slowly dying out, and before very long those of them who receive the non-contributory old age pension—the old fashioned, original old age pension—will have completely died out. I do not know at the moment how many receive the non-contributory old age pension and how many receive the newer type of pension for which contributions are made, but we may, perhaps, guess that a half of them receive the one and a half of them receive the other.

Now, this old fashioned, non-contributory old age pension is payable subject to a means' test, the base for which is the sum of £39 a year, and there are no disregards in connection with this old old age pension. Unlike the other types of pension and other social allowances of this kind, in connection with which certain incomes are disregarded, there are no disregards in this old type of pension. Savings are not disregarded. war pensions are not disregarded, contributions by the family are not disregarded, and nor are regular charitable contributions.

The consequence is, in my submission to the House, that a very great many people, perhaps 2 or 3 million, are unable to get any assistance in their old age because they have a very modest income. If it was right to fix the figure which should be disregarded as £39 in, say, 1939, then clearly the fall in the value of money would make that figure equivalent to £100 now. It can, I think, be shown, and it must be within the experience of very many hon. Members, that there are a great many of these old people who find it very hard to make ends meet and to lead anything like a comfortable life on the incomes available to them.

Inflation is not disagreeable to many people. Indeed, it is agreeable enough to wage earners, salary earners and those who receive dividends, because as inflation proceeds these people receive their money in the new currency of today rather than in the old currency of an earlier generation. But a vast number of our people are not themselves able to contribute towards their better living because they are too old or too disabled to work; inflation hurts them very much, and there is this large number of our people for whom at present no provision is made. The policy in the Budget was to try to stop inflation, and I welcome that myself because it seems to me very wrong to allow an economic process to go on which hurts so much all those defenceless people who cannot do anything themselves to avoid its consequences.

It would be out of order were I to suggest methods of meeting the difficulties of these people by, for example, legislation so I will content myself with calling attention to their plight, and with saying to the Government that, just as they have compensated many classes in the community to some extent for the Budget changes which imposed higher costs of living upon many people, so they ought to consider whether there is not some way in which they can compensate this group of whom I am speaking.

Anything that could be done must be done in the context of the national finances, and if it were not possible to alter the disregards in the case of these persons so that they were allowed £100 a year of income, so that the £1 a week of a war pension was disregarded, and so that some of the other disregards which occur in other social legislation——

Mr. Speaker

I should like the guidance of the Parliamentary Secretary on this. Would not what the hon. Gentleman is suggesting involve legislation?

The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton)

I understand, Mr. Speaker, that the hon. Gentleman is suggesting the alteration of a means test that is fixed by Regulations under the Old Age Pensions Act, 1936. In that case it would be in order.

Sir I. Fraser

I ask the Government to review the position of this very deserving and thrifty class of the community. It is not their fault that they are unable now in their old age to compensate themselves by working. It is not their fault that the war and the subsequent periods of five or six years led to this severe inflation, but it is a fact that many of them are very hard up, and I ask the Government to see what they can do about it.

4.26 a.m.

The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton)

The history of these pensions is that they were originally payable under the Old Age Pensions Act of 1908, introduced by Mr. Lloyd George. When contributory pensions started in 1926 the right to these non-contributory pensions was preserved and at that time there were over 1 million of them. Now, with the passing of the 1946 Act, the majority of old people are eligible for contributory retirement pensions, and the number of non-contributory pensions has declined very considerably. On 27th May this year the number of non-contributory pensions in payment was 385,000. As the years pass the number will decline very rapidly and after September, 1961, no new non-contributory old age pensions at the age of 70 will be awarded.

Unlike the retirement pension under the National Insurance Scheme, the recipients of these pensions have not contributed to the cost which has to be borne entirely by the Exchequer. There is, therefore, a means test attached to them. The hon. Gentleman has argued tonight that that means test should be raised. I think he should bear in mind that of the 385,000 non-contributory pensioners less than one-sixth have their payments reduced on account of means. I mention that to put this matter in its true perspective. Hon. Gentlemen must also consider the relationship between these pensions and assistance paid under the National Assistance Act, 1948. Both are paid and administered by the National Assistance Board. The only reason why these pensions were not completely merged in the National Assistance scheme in 1948 was to prevent established expectations from being disappointed.

As a result, there have been two scales of assistance and two different means tests administered by the Board. The non-contributory pensioner can choose whichever test or scale gives him the greater advantage. Indeed, he can go further and supplement his non-contributory pension under this test of means with National Assistance under that test of means. In fact, over one-third of the non-contributory pensioners are adopting that course.

I think my hon. Friend is under a little delusion as to what this means test is. It is not £39 a year as he mentioned, but £39 plus £26 5s. making a total disregard of £65 5s. And any non-contributory pensioner who has an income between £65 5s. and £128 5s. receives a modified pension. In the case of a married couple, each partner is treated as owning half the joint means. Therefore, there is no reduction of non-contributory pensions for a married couple unless the joint incomes amount to £130 10s. and the pension is not extinguished unless their joint means are £256 10s. a year.

I must qualify this broad statement by pointing out that the limit of earnings in order to obtain full pension is £26 5s. in the case of the single person and £52 10s. in the case of the married person. Turning from the income to capital, the test of means under this means test allows a disregard of £865 capital for a single person and £1,730 capital for a married couple.

Sir I. Fraser

An entire disregard?

Mr. Turton

An entire disregard, £865 for a single person and £1,730 for a married couple. Claims for pension are not extinguished unless the capital exceeds £1,495 for a single person and £2,990 for a married couple.

Sir I. Fraser

Is that really entire disregard? Do they not have to produce a certain percentage of capital each year more than, in fact, it yields?

Mr. Turton

If the capital does not exceed those amounts of £865 and £1,730, then there is no deduction at all from the pension. The test of means is worked out so that when the capital exceeds a certain sum the actuarial value of the capital is taken; it is worked out at a certain percentage; that is one-twentieth or one-tenth of the remainder is taken as means.

If the suggestion of my hon. Friend were adopted and this disregard raised by £61, the result would be that the capital disregard would be raised to £1,475 for a single person and £2,950 for a married couple, and the income limits would be up to £378 a year for a married couple. At a time of great economic pressure I feel that we would not be justified in giving this special relief to some 60,000 pensioners, whose pensions are reduced on account of means. I cannot believe that that would be justified, and it would not be consistent with the policy of Her Majesty's Government which is to see that the hardest needs are met first, as we said in our Election manifesto. It was because we considered that the harder cases were the non-contributory old age pensioners who were having recourse to National Assistance that we raised the National Assistance scales from 16th June of this year. It has been our policy, and will continue to be our policy, to relieve hardship wherever possible and where the needs are greatest.

My hon. Friend complained that neither savings nor war pensions were disregarded. I hope after he has heard what I have had to say that he will agree with me that we are giving a substantial disregard for savings, a far higher disregard than is afforded under the National Assistance test of means.

On war pensions which my hon. Friend mentioned I would only say that I have not in my experience in this office come across any case where the operation of the test of means has deprived a war pensioner of his non-contributory pension or has reduced his non-contributory pension. I would be most grateful if my hon. Friend would send me details of any such cases and I promise him that if he does I will give the most careful consideration to them. I cannot believe that they will be very numerous.

Sir I. Fraser

Before my hon. Friend leaves that point—in case it should go on record that there are no such cases. There is the case of Mr. B., who lives in London. He is a man nearly blinded in the war. In addition to his 55s. war pension, he has 10s. for his wife and 10s. attendance allowance, and he gets 15s. a week for an adopted son. When I had the particulars of his case a year ago, he was getting 2s. a week non-contributory old-age pension. Obviously, if there had been no disregard in respect of his war pension he would not have been knocked down to 2s. Probably now that his war pension has gone up by 10s. he has been knocked down altogether. 'That may be typical of many cases.

Mr. Turton

I am most grateful to my hon. and gallant Friend. If he will send me any such cases after the debate I will go into them.

The interesting fact came in the National Assistance Report, 1949, that three-quarters of these non-contributory pensioners are women, and, of course, there cannot be many war pensioners when it is borne in mind that in order to qualify for a non-contributory old age pension the war pensioner must have been at least 32 years old in the year 1914.

This debate will have served a useful purpose in drawing attention to the struggle these old people are facing, owing to the rise in the cost of living that has gone on for the last six years. I believe that one of the greatest worries that these old people face is the problem of accommodation. I should like in this connection to pay tribute to the work of the Church Army, the Salvation Army, and other organisations who are providing that accommodation for these old people. If I might make a suggestion, it would be that other organisations should consider whether they cannot give help in this direction rather than by giving money grants. Help in the way of providing either cottages or flats for old people can do much to reduce their anxieties. If that course is taken the results will be treated with the greatest possible indulgence by the officers of the National Assistance Board.

I can assure the House that my right hon. Friend the Minister and the National Assistance Board are doing their best to administer these Acts of Parliament with sympathy and helpfulness towards old people.

Question put, and agreed to.

Adjourned accordingly at Twenty-one Minutes to Five o'Clock a.m., Friday, 27th June.