HC Deb 05 December 1955 vol 547 cc156-66

9.56 p.m.

Dame Irene Ward (Tynemouth)

Now that we appear to have settled down to a life with a high standard of living, with high wages, high salaries, high profits and, indeed, a high cost of living, I think that the time is opportune for me to raise again the question of people who live on small fixed incomes and who are not in a position to share the advantages of controlled inflation.

It was in June, 1952, that I last initiated an Adjournment debate on this subject. On that occasion I asked my right hon. Friend's predecessor, now Minister of Transport and Civil Aviation, to consider the setting up of a committee to try to find ways and means of dealing with this important group of our fellow citizens. My right hon. Friend's predecessor said that he would not rule out the idea of a committee although, obviously, he was not favourable towards its appointment; but nothing materialised.

I waited a few months longer and at the Conservative Conference at Margate, in 1953, my constituency having put down a motion asking the Government once again to appoint a committee to try to find an answer to some of the problems of these people, and having obtained top priority in the ballot, a discussion again took place on this most important subject.

On that occasion my right hon. Friend the Minister of Pensions and National Insurance went to the conference and, in a charming speech to the assembled multitude, pointed out that the Government would only set up a committee when they did not know what to do or, if they did know what to do, to delay the taking of action. In very eloquent terms, my right hon. Friend got the motion of my constituency rejected.

I want, however, to quote the relevant words. My right hon. Friend said at Margate: If anyone—and I give this assurance without qualification—in this hall has any suggestion—and the speakers today have made one or two—we will examine them on one condition only; that is, provided they do not involve the extension of the means test to these people, who, I am quite sure, do not want to be subjected to it. He further said: These people are our concern and our responsibility.

It being Ten o'clock, the Motion for the Adjournment lapsed, without Question put.

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

Dame Irene Ward

I was saying that my right hon. Friend said: These people are our concern and our responsibility. We accept that responsibility. Since that date we have made slight progress. We have relieved a few more people from the payment of Income Tax, and we have made a slight extension in the income limit at which age relief is made, but, beyond that, very little of material benefit to this section of the community has been done.

There is, however, one point to which I would draw attention because I consider that it is a record of some progress. In June, 1952, I asked the then Financial Secretary to the Treasury whether he would consider discussing with the boards of the nationalised industries the position of the pensioners of those boards, the pensioners, of course, who had been taken over by the boards when the industries were nationalised. On that occasion, my right hon. Friend replied that he did not think he had power to do so. I was delighted to note, from an Answer to a Question of mine and a Question from the other side of the House last Wednesday, that the Minister of Transport and Civil Aviation is now discussing with the Chairman of the British Transport Commission the important question of pensions for old railway employees. This I am very glad about indeed.

The various Ministers concerned with the nationalised boards have, I think, power to make regulations, so that even if my right hon. Friends do not make any impression on the chairmen of the boards they have authority to ask the House, by regulations, to do something for these important groups of persons. As I say, I think we have made a little progress.

I have to return to the proposal of mine for a committee, in order that we may once again try to get some action on behalf of the people in whom I am interested, and I ask the present Financial Secretary to the Treasury if he will set up a committee. I think that the climate of public opinion has altered considerably since 1952. Indeed, the whole nation is talking about the plight of the people who are trying to exist on their small fixed income. Therefore, I think I can say with confidence to my right hon. Friend that the country is behind him in any action he may propose.

I outline the terms of reference which I should like the committee to have when it is set up. In the first instance, I should like the committee to consider the possibility of relieving entirely of taxation at, say, the age of 65, all single people whose income is not above £300 a year and married couples whose income is not above £400 a year.

In a second reference to the proposed committee I make a novel suggestion. When one raises the question of what could be done for people who are not paying Income Tax one is always told by the Chancellor of the Exchequer how difficult it is to find some means of helping them. That is so, but I am not satisfied that the Chancellor and the Financial Secretary have really set their minds to this task. I note that the Report of the Royal Commission on the Taxation of Profits and Income refers to the plight of the family man. The Commission thought that the family man who was in a fairly low income range was having a rather bad time. Therefore, as another term of reference, I suggest that the committee should examine this question and consider whether the time has not come when we could use the family allowance as a flexible instrument.

There has been considerable pressure to give a family allowance to the first child. It has occurred to me that it might be possible for this to be done in the case of a family man, with one, two, or three children, who is in a low income group and who can no longer receive any benefit from a reduction in the standard rate of Income Tax. That would be some means of relieving this section of the community and it would fall within the recommendations of the Royal Commission.

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I think that what the hon. Lady advocates would require legislation, would it not?

Dame Irene Ward

I am not suggesting that it would require legislation, Mr. Deputy-Speaker. It certainly does not require any legislation to have the position of the family man examined, because he came within the purview of the Royal Commission's Report. I am merely suggesting that my right hon. Friend might follow what was stated in the Report and find some method of dealing with this problem. I was merely indicating that this could be among the terms of reference of the Committee which I suggested should be set up.

Mr. Deputy-Speaker

Yes, some method might be found, but it could not be done without legislation.

Dame Irene Ward

I have been in the House a long time and I always understood that one could talk about anything if one asked for the appointment of a committee to examine it.

Mr. Deputy-Speaker

However long the hon. Lady has been in the House, I am afraid that she cannot do that.

Dame Irene Ward

I have made many speeches of this kind in the past. But I have made my point and I will not pursue the matter any longer.

I am afraid that I shall have to step up the tone of my speech if I cannot speak about amelioration, and become more critical of the Government. I must tell the Financial Secretary that when, in the last Budget, the Chancellor, in accordance with the recommendation of the Royal Commission, increased the personal allowance by £20, most people thought that, while that was to be commended, it was rather mean to alter, at the same time, the band of Income Tax. I do not like to be associated with a Government that is mean. I hope, therefore, that fresh consideration will be given to this point in the next Budget.

May I put the matter to my right hon. Friend in this way? Once again, the Chancellor maintained that he was doing this because the Royal Commission had recommended that the additional personal relief should not be given in respect of people who came within the high income group, and that commended itself to the House. So much so, in fact, that the House forgot to oppose the mean little action included in that general recommendation.

I suggest to my right hon. Friend that it might be possible to put on a ceiling and allow people in the low income groups, with incomes up to, say, £500 a year, to revert to the old position in the grades, which would help them to get the benefit of the increased personal allowance and, at the same time, not to be deprived—

Mr. Deputy-Speaker

Order, order. I hope the hon. Lady has made her point this time, because this, also, would require legislation. I must ask her to keep within the rules of order.

Dame Irene Ward

I will do so, Mr. Deputy-Speaker. I always bow to your Ruling, but it makes it extraordinarily difficult to discuss an important section of the community in the House of Commons, where they are entitled to have their grievances raised.

I am sure that I shall have your sympathy in connection with another difficulty which arises. When I address Questions to the Chancellor which refer to other Departments but, generally speaking, cover the entire range of action which might be taken to ameliorate the condition of these small income groups, Ministers of the Crown have a habit of saying that the Question should be put down to some other Minister, or of actually transferring the Question. Therefore, there is little opportunity of raising grievances and I have always understood that the Adjournment was the time for doing so.

Mr. Deputy-Speaker

That is true, but on the Adjournment one must not suggest legislation.

Dame Irene Ward

No. I am sure that you would not like me to send to you for your perusal the large volume of HANSARD which I have here containing the suggestions I made in 1952. Of course, they were not quite as concise as the ones I have made tonight, but I suggested then the setting up of a central committee, and I return to that suggestion.

I want to give the Minister sufficient time to deal with these important problems, but before I close I hope I shall be in order, as I was on that previous occasion, in saying one or two words about the National Assistance Board. If I remember rightly, on that occasion, since the Assistance Board can be dealt with by regulation, which apparently brought the matter within the sphere of order, Mr. Speaker decided that questions could be raised about non-contributory pensioners under the regulations of the Board.

I have not been able to make any progress for years about non-contributory pensioners and, of course, many of those people come within that category to which the Chancellor is always referring, saying that he is trying to help but how difficult it is because those people do not pay Income Tax. If the Chancellor wants to do something, as I think he is bound to do under the terms of the speech made by my right hon. Friend the Minister of Pensions and National Insurance, at Margate, it has occurred to me that it could be put to the Chairman of the National Assistance Board that he might discuss whether there could be further disregards in respect of people who have some little savings, who have been thrifty, but have not been able, in this modern world, to keep themselves as comfortably as they did before we got into this period of controlled inflation, and are, therefore, some of the hardest-hit sections of the community.

I am sure that the Chancellor is concerned to do something for the people living on small fixed incomes. I know he is now reviewing the Pensions (Increase) Act, for which a great many people are extremely thankful, but I should like him also to consider having further disregards in respect of small capital savings and a different assessment in respect of house owner-occupiers so that this section of the community may be able to share our improved standard of living.

I have said almost everything that I wanted to say, Mr. Deputy-Speaker. I feel very strongly—I know it is the feeling in the Conservative Party in the House—that the next job to be tackled is the position of the small fixed income groups. I do not expect my right hon. Friend to suggest legislation tonight, but I want to appeal to him—very little has happened since I raised the subject more than two years ago—not just to tell me that all these people will benefit from the main- tenance of our financial stability. Everybody recognises that they will do so; but so do all the people who are receiving increased wages and dividends. The preservation of our financial stability benefits all of us. The people for whom I am pleading tonight are those in the small group of people living on fixed incomes, some of whom are the very salt of the earth. and I want some action to be taken.

10.17 p.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

This is the rare case of a matter being raised on the Adjournment because the hon. Member was satisfied with a reply given to her in the House by a Minister. As Mr. Speaker said on that occasion, her preface to giving notice of an Adjournment Motion was unusual but none the less acceptable, certainly to the Minister who gave the answer.

I should like to congratulate my hon. Friend the Member for Tynemouth (Dame Irene Ward) upon having got so much on the record despite the rule against raising on the Adjournment subjects which require legislation. Much more seriously, I congratulate her upon having brought this intensely important subject once again to the notice of the House. She really has earned the right to be regarded as one of the foremost champions of these people who, in the years since the war have suffered more than any other class of the community owing to the pressure of mounting prices. In their defence she is not always as gentle a knight as she has been this evening; more often she is a militant lady. They certainly have great cause to be thankful to her.

My hon. Friend was a little ungenerous in suggesting that since 1953 we had made very slight progress. She spoke about—I was glad to hear it—the improvements in Income Tax arrangements which were made in the 1955 Budget, but I did not detect any mention of the improvements in the rate of old age pension, which, I should have thought, was one of the greatest benefits conferred on a large section of the people that she has in mind, of whom there are some 4 million. The basic rate of old-age pension was raised a year ago by 7s. 6d. for a single person and 11s. for a married couple. There must be vast numbers of people who are grateful for that and who are appreciative of the fact that now the old-age pension has a higher purchasing power than it had in 1946.

Three out of four old-age pensioners have other resources in addition to their pensions—that is not always realised—whether those other resources are part-time earnings, pensions from employers, or personal savings. I will certainly bring to the attention of my right hon. Friend the Minister of Pensions and National Insurance all that she has said this evening about old people, and particularly what she has said about the work of the National Assistance Board. Indeed, she may have an opportunity to speak on that subject on Wednesday, so we must not anticipate that debate.

My hon. Friend urged the Government to set up a committee to examine the position of those people living on small fixed incomes and see what could be done. I must say that I have no great faith in setting up committees when, in fact, the situation is widely known. Committees are of great value in dealing with complex and obscure hidden matters where the facts have to be dug out. But this is not one of those cases. It is not a question of somehow unearthing abstruse facts. We know the facts. Indeed, many would say that the facts are known only too well. The question is what are the right remedies and I am debarred as was the hon. Lady from ranging over the various kinds of legislative action which might be taken.

My hon. Friend spoke of the tax liability of some of those people living on small incomes. I am not sure whether she realises that in the last four years the tax liability of a married couple living on £400 a year has been reduced by more than £20 a year; that is to say, by more than 8s. a week. Four years ago a single person with an income of £250 a year was paying £18 10s. if the income were earned, or £32 5s. if it were derived from investments. He would now be paying only £6 2s. 6d. Five out of every six married couples with incomes between £180 and £400 a year—and that is just the type of married couple which my hon. Friend had in mind—are now paying no tax and the tax payable by those who are liable averages only 1s. 3d. a week.

The hon. Lady spoke of family allowances. I cannot pursue that because, unquestionably, changes would involve involve legislation, but she appeared to me to be suggesting that instead of having Income Tax consequential on one's income, in future the income of certain people should be consequential on their tax. That would be an altogether new conception in our arrangements. I will carefully examine what she has said and see it receives consideration, but I cannot hold out very much hope.

My hon. Friend referred to the noncontributory old-age pensioners. Again, I must point out that to raise the amount of the non-contributory old-age pension would require legislation, and I am debarred from discussing it, but I have already assured her that I will bring to the attention of my right hon. Friend what she has said about the disregards.

I thought that she might have touched on the question of the repayment of postwar credits, because Treasury Ministers get a great number of requests of that kind, especially in respect of widows. Here again this would be a matter requiring legislation. But I should like to put on record for her, and indeed for the House and the country, that we at the Treasury are surprised that we have not yet had as many applications as we had expected to have for the repayment of post-war credits from widows whose husbands would have been 65 by now if they had lived. Anything that she and other hon. Members can do to bring to the attention of people that they may be holding the post-war credits of deceased holders, which could be turned into cash if by now the deceased holder would have reached the age, would be a service to many of those who have not yet claimed what they are entitled to.

The hon. Lady spoke of the Pensions (Increase) Acts that have been passed, and of the position of public service pensioners. I have already announced on behalf of the Government that we are considering further measures and that our proposals will be laid before Parliament in the New Year. I am sure that she will appreciate—because this is a matter which runs right through the whole question which she raised this evening—the need to balance the claims, maybe the justifiable claims, of particular classes of persons, such as public service pensioners, against the tax burdens that are falling upon the people at large who are sometimes people who are no better off than the class for whom she may be pleading.

We should all wish to see help given to those who have given their working lives to the service of the State, whether in a civilian capacity or in the Forces, and who now find that their pensions have been, in part, eaten away by the fall in the value of money. We must, however, bear in mind, in whatever we do for them, that we must also protect the interests of those who may be no better off but who happen not to derive their small incomes from a public service pension and who may have, by additional taxation, to help to find the money for just the class of person whom we are seeking to help.

My hon. Friend, I know, realises that this is a subject of many facets. I hope I have convinced her this evening, as on previous occasions when I have answered her Questions, that I am not trying simply to fob her off with words of sympathy. I feel as deeply as she does for the people whom she has in mind. These, after all, are the patient homes in which devoted people try loyally to preserve standards, though all the good fortune seems to accrue to those who have economic or political weapons in their hands which they have not. These are people who deserve to be defended because they have no defence of their own against inflation, which causes prices to mount.

The one wholly effective remedy for their daily difficulties, the one salvation from the pressure of prices on them, is that we should check inflation. That is the foremost reason why I personally have been proud to have been working with my right hon. Friend the Chancellor of the Exchequer in his measures against inflation this autumn. If they succeed, and we all hope they will, no one will benefit more than the very people for whom my hon. Friend has spoken so sincerely and persuasively tonight.

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.

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