Cost of Living (Hansard, 21 November 1955)

§ 7. Captain Pilkington
asked the Minister of Pensions and National Insurance how the purchasing power provided for 1026 by the old-age pension today compares with that in 1947 and 1951.

§ Mr. Peake
Retirement pensions were introduced in 1946 at a standard rate of 26s., which remained unchanged until the autumn of 1951, when it was increased to 30s. for most but not all retirement pensioners. On the basis of the Interim Index of Retail Prices and the previous cost-of-living index, the present 40s. rate of retirement pension is equal to 26s. 7d. in 1947 and to 32s. 9d. in 1951.

§ Captain Pilkington
While everybody wants to do what they can to help the old-age pensioners a little further, does not my right hon. Friend think it would be a good thing if this improvement were mentioned a little more frequently, especially by hon. Members opposite?

§ 8. Captain Pilkington
asked the Minister of Pensions and National Insurance how the standard of living provided for by the National Assistance Board today compares with 1951.

§ Mr. Peake
I am informed by the National Assistance Board that the value of the scale payments varied from time to time during 1951. At no time in that year was the standard as good as it is today, and throughout most of the year it was substantially lower.

§ Captain Pilkington
While I congratulate my right hon. Friend on this improvement, does he think a further improvement could be effected as soon as the Budget has strengthened the country's economy?

§ Mr. Peake
As my hon. and gallant Friend knows, the question of responsibility in the matter of National Assistance rests in the first place with the Board itself.

§ Mr. Warbey
Will the Minister agree that last December, when introducing the new scales, he told the House that they were 56¼ per cent. over those of 194S and the cost of food and fuel, the main items, had risen in the same period by 56 per cent.? As the cost of living has since increased by a further 5 per cent., will he now admit that people receiving National Assistance are not only worse off than they were last December but worse off than they were in 1948?

§ Mr. Peake
No, Sir, I cannot agree with that. In any case, the Question deals only with a comparison between scale rates today and in 1951.

§ 20. Sir H. Linstead
asked the Minister of Pensions and National Insurance if he will state the rise in the cost of living since the current retirement pension rate of 40s. was approved; and how this rate compares with the rate which it replaced.

§ Mr. Peake
Since December last, the Interim Index of Retail Prices has risen by 4½ per cent. The pension rate of 40s. is 23 per cent. more than the former 32s. 6d.

§ 29. Mr. Paton
asked the Minister of Pensions and National Insurance what weight is given to the peculiar pattern of old-age spending when the value of retirement pensions and National Assistance scales is assessed by reference to the cost-of-living index.

§ Mr. Peake
Account has been taken of information of this kind in settling the rates, which give a higher purchasing value than changes in the retail prices index would themselves call for.

§ Mr. Paton
If this weightage is given in assessing the scale, why is it that the Minister in this House inevitably refers to the Interim Index of Retail Prices when defending these figures? Is he aware that the average expenditure of persons living alone is, on fuel and on food, something like three-fifths of their total income, and that therefore it is of no relevance whatever to quote the index in relation to these figures?

§ Mr. Peake
Hon. Gentlemen will have noted that I refer to the index only when referring to insurance pensions, because we know that more than three cut of every four insurance pensioners have other resources and do not have to have recourse to the National Assistance Board for supplementation.

§ Mr. Paton
Will the Minister publish in the OFFICIAL REPORT a statement of how the rates are applied by the National Assistance Board, because this is of very great importance and interest to hon. Members of this House?

§ Mr. Peake
The hon. Gentleman must know that under successive Governments the National Assistance Board has always 1028 declined to publish any kind of notional budget because there is such wide variety in the needs of individual pensioners.

§ Mr. Hale
Is the right hon. Gentleman aware that in this House he has been constantly urged to issue an index of old-age pensioners relating to their needs; that he has on a number of occasions refused to disclose the methods used by the National Assistance Board for computing the basis and what basis is computed; that the index of consumer prices is wholly out of accord with the Interim Index of Retail Prices, and therefore every figure he has given today relating to old-age pensioners and National Assistance is, in essence, deceptive and misleading?

§ Mr. Peake
No, I cannot accept that. I have stated to the House what has been the practice under successive Ministers ever since 1948.

§ Dame Irene Ward
Can my right hon. Friend explain how it is that when the cost-of-living index rises, owing to a rise in the cost of seasonal foods, the index does not also drop when the costs of those foods drop?

§ Mr. Peake
Perhaps my hon. Friend would put that question to the Minister of Labour and National Service, who is responsible for the index.

§ 33. Mr. Hamilton
asked the Minister of Pensions and National Insurance the estimated loss in purchasing power of the old-age retirement pension since the date of the last pension increase.

§ Mr. Peake
On the basis of the Interim Index of Retail Prices, the loss in purchasing power of the 40s. retirement pension is 1s. 4d. The retirement pension is still worth more than at any time before the present rates were introduced.

§ Mr. Hamilton
Is the Minister aware that this further underlines the complaint of my hon. Friend the Member for Oldham, West (Mr. Hale) that he is basing this additional cost of living on the Interim Index of Retail Prices? Is he aware that in that period food prices have gone up 5.7 points in that same index and fuel prices more than that; that the cheaper clothing will be dearer as the result of the Budget, and that all these things affect old-age pensioners 1029 more than the average citizen? Will not the Minister consult his right hon. and learned Friend the Minister of Labour and National Service to see whether he can formulate some special cost-of-living index to show the real loss in purchasing power of old-age pensions.

§ Mr. Peake
Those considerations may be very relevant to the scales of National Assistance, but when we consider National Insurance pensions we must remember that the whole population is insured today and more than three out of four pensioners have other resources.