HC Deb 20 November 1958 vol 595 cc1313-6
26. Mr. Palmer

asked the Chancellor of the Exchequer what steps the Government are taking to bring about an improvement in pensions paid in the Government service and in the nationalised industries, in view of increases in the cost of living since the last revision was made.

Mr. Simon

The cost of living, as measured by the Retail Price Index, has risen by only about 6 per cent. since the Pensions (Increase) Act, 1956, took effect. This does not justify the introduction of a new Measure.

In the case of nationalised industries, to which the Pensions (Increase) Acts do not apply, any increase is in the first instance a matter for the Boards concerned.

Mr. Palmer

Is the hon. and learned Gentleman aware that the nationalised industries have always closely followed Government initiative in these matters; secondly, is he aware that, because of the limitations of entitlement, great numbers of pensioners gained nothing at all from the previous revision? Does his Answer mean that there is no hope of any new legislation?

Mr. Simon

It is, of course, true that in the past the nationalised industries have themselves frequently followed the central Government's pensions increases in their own policies. With regard to the second part of the hon. Member's supplementary question, the last Pensions (Increase) Act was by far the most generous that has ever been promulgated. For the first time there was no means test and no income limit and these restrictions were removed from all previous Acts. In answer to the third part of the hon. Gentleman's supplementary question, it seems to me that there is no case at the moment for a fresh Pensions (Increase) Act.

31. Mr. McKay

asked the Chancellor of the Exchequer what will be the allocation to pensions out of the level rate contributions of 8s. 4d. for men, and 7s. 2d. for women under the new pensions scheme; what are the weekly tax-reliefs on these individual payments; and what is the individual tax-relief on the contributions of a man paying 10s. 10d. and a man paying 13s. 5d. per week, provided that income tax remains as at present, if single, married, or married with one child, respectively.

Mr. Simon

I regret that the figures required by the hon. Member are not yet available.

32. Mr. McKay

asked the Chancellor of the Exchequer the estimated total contributions under the new pensions scheme in a full year covering both sections, from insured persons, and from the employers, separately; and what will be the tax-relief collectively to insured persons, and to the private and public sectors of employers, respectively, provided that income tax and profits remain as at present.

Mr. Simon

The total National Insurance contributions payable in the first full year of operation of the proposed new scheme are estimated to be about £400 million in the case of insured persons and about £400 million in the case of employers. The tax relief for employers would be of the order of £140 million, most of which would go to private employers. I regret that, as I explained in answer to the previous Question, the figure for tax relief to insured persons is not available.

Mr. McKay

Does not the Minister consider that the position of these insurance schemes which give tax reliefs to the highest-paid workers, and about 40 per cent. tax relief to employers, needs to be reconsidered, in order that the whole of the workers may pay the same amount in actual cost and get the same benefits?

Mr. Simon

No, Sir. It has always been part of our structure of insurance payments that the contributions are free of tax and that the benefits are taxed, and this is no more than an application of that principle.

38. Dame Irene Ward

asked the Chancellor of the Exchequer how much money he has collected, from people drawing pensions from Government Departments in Income Tax over the last five years, prior to the pension being paid.

Mr. Simon

The total tax deducted under P.A.Y.E. from pensions—excluding National Insurance pensions—paid by Government Departments over the last five years is nearly £25 million.

Dame Irene Ward

While appreciating the fact that my hon. and learned Friend has told me that there is now to be an alteration in the scheme, may I ask him whether he really thinks that the Treasury has been protecting the interests of those living on small fixed incomes? May I ask whether, as it has deducted and had the benefit of £25 million in advance of payment of pensions, he will now assess how much ought to be repayable to each member whose pension was paid after tax had been deducted so that at any rate they can have a little bit of justice from the Treasury?

Mr. Simon

I have today written to my hon. Friend about the case she raised with me. She will see from that letter that her constituent really can be considered to have been very fortunate indeed. If my hon. Friend has any other case which she wishes to raise with me, I shall, of course, gladly consider it.

Dame Irene Ward

On a point of order. I was not asking about that case at all. The hon. and learned Gentleman is absolutely out of date.

Mr. Speaker

I am afraid that is not a point of order for me.