RETIREMENT PENSIONS

HC Deb 13 April 1960 vol 621 cc1290-341

4.52 p.m.

Mr. James Griffiths (Llanelly)

There are obvious disadvantages in beginning a debate after the exciting time we have just had, but I believe there is one advantage that we on this side have, and that is that we have some idea of the value attached to money by Her Majesty's Government.

We have taken this opportunity of again raising the question of pensions and benefits, because during the debates on the Budget last week both the Chancellor of the Exchequer and the Economic Secretary to the Treasury found it necessary and desirable to reaffirm the pledges which the Government gave, or, to put it more accurately, which the party opposite gave in the election and which the Chancellor reaffirmed during the debate on the Budget.

As a kind of text for this debate, I should like to quote the pledge given during the election and reaffirmed by the Chancellor last week. In an election T.V. broadcast on 23rd September, 1959, during the General Election, the Home Secretary gave this undertaking and pledge: We give an undertaking to the old-age pensioners that, not only will we maintain the rate of pension in relation to the cost of living, but "— I call attention to these words to which I shall refer later— We also say that you will take your share of the rising prosperity of the country. That was reaffirmed by the Chancellor in winding up the debate on the Budget. He said: Our election pledge was perfectly clear. We said that we would ensure that pensioners would continue to share in the rising prosperity of the nation."—[OFFICIAL REPORT. 7th April, 1960; Vol. 621, c. 696.] Those are the words. We now await the deeds. Today, the Minister has an opportunity of telling us when we can expect the redemption of that pledge given during the election and reaffirmed by the Chancellor last week. The pledge is now six months old, and I think it is time that it was redeemed.

I propose to raise two aspects of this problem. These debates tend to become arguments between both sides of the House about what happened in 1951, and 1066 and all that. If I fall into the temptation with the Minister, who is a poacher turned gamekeeper and revels in this kind of argument—I observe that his right hon. Friend the Joint Parliamentary Secretary is following in his train—I do so, not for the purpose of discussing the past, which I am willing to do, but because what has happened in the past is relevant to an obligation which the Minister has, not this evening, but this year.

This is a very important year in the life of the National Insurance Act, with which I had something to do. This debate is being held at a time when, in accordance with the obligations placed upon the Government under the Act, the Minister will shortly have to report to this House. At the end of five-yearly periods —one five-year period I think is now at an end—the Actuary, by the Act, is under an obligation to present an actuarial report to the Minister and to Parliament concerning the National Insurance Fund —contributions, benefits, provisions, and so on. When that report has been received by the Minister—I understand that he expects it in the very near future—he has an obligation under Section 40 of the Act, which is, having received the quinquennial report of the Actuary, to review the rates and amounts of benefit in relation to the circumstances at the time of insured persons in Great Britain, including in particular the expenditure which is necessary for the preservation of health and working capacity. Before the Minister prepares his report, I want to raise some very important issues which are relevant to the case which we are making. Fourteen years ago the House of Commons gave its unanimous approval, without a Division, to the National Insurance Bill, which became the National Insurance Act, 1946. That Measure was designed to implement the recommendations of the Beveridge Report. Certain cardinal principles were laid down in the Report, which the House accepted and which it was sought to embody in the provisions' of that Measure. Here I quote the words of the Beveridge Report, because they are important: This scheme of social insurance is designed of itself to guarantee the income needed for subsistence in all normal cases. Sir William Beveridge, in his Report, said that it would be, particularly for a transitional period, essential to support the National Insurance scheme by a system of National Assistance, but he laid down clearly that, whereas National Assistance would play a subsidiary rôle in supplementing benefits for a period, it would be a diminishing rôle that would eventually disappear, and that the scope of assistance will be narrowed from the beginning and will diminish throughout the transition period. Fourteen years ago we agreed that this scheme should be established in which benefit would be, as of right, based on contributions, and that the benefits by themselves and of themselves would be adequate for subsistence and that recourse would be had to the National Assistance Board only in respect of residual and exceptional cases.

We can argue about who did what and who is wrong, but the fact is that our hopes have not been fulfilled. The last report which we had from the Minister was unworthy of the obligation placed upon him by the Act. We shall all be very disappointed if we do not have a very full report from the Minister and have adequate time in the House to review the whole of this matter.

Those were the hopes. What are the facts? First, it is now quite clear that we have failed under the National Insurance Act to provide benefits for pensioners, sick people, unemployed, and widows which, by themselves, are adequate. Secondly, far from diminishing, the rôle and scope of assistance in our social security scheme is increasing and becoming enlarged all the time. This is a very important matter which deserves the full attention of the Committee and is related to the problem of pensioners and beneficiaries.

I should like to give the Committee the facts and to quote from the latest full Report of the National Assistance Board which is available to hon. Members, the Report for 1958 published in June, 1959. Appendix III on page 43 gives these facts about the percentages of households receiving National Insurance benefits which are also receiving National Assistance:

"Retirement pensions	20.4
Sickness benefit	11.6
Widow's benefits	11.6
Unemployment benefits	19/"

One in five of all our pensioners who have earned their pensions by their own contributions. [HON. MEMBERS: "No."] Yes, I am using the term within the meaning of the Act. There are, of course, contributions from the State and the employer. Let us then say that they are contributions credited to him as well as paid by him. We will not argue about that.

One in five of these retirement pensioners are receiving assistance. One in nine of those who are sick, one in nine of the widows, and one in five of the unemployed who are entitled to benefit are also receiving supplementation. There is another figure wrapped up in the figure for sickness benefit. I understand that the figure for those here described as receiving sickness benefit and on assistance includes persons who receive injury benefit. I hope the Minister will tell us how many there are. I had the privilege of piloting both Acts through Parliament. If people who are entitled to receive injury benefits under the Industrial Injuries Act are also entitled to receive National Assistance, that Act needs looking at very seriously, too.

These are the last figures available in this form for the year ended 21st December, 1958 as published in this Annual Report. Yesterday, in a Written Answer in reply to me, the Minister gave up-to-date figures. His Parliamentary Secretary told me that: At 29th March, 1960, the number of weekly National Assistance grants paid as supplements to retirement pensions and other benefits under the National Insurance Acts was 1,268,000 …".—(OFFICIAL REPORT, 12th April, 1960; Vol. 621, c. 122.] These grants were paid in supplementation of the benefits which we had believed would be adequate. The same Answer stated that the 1,268,000 represented about 70 per cent. of all weekly assistance grants paid by the Board.

I should like to make a diversion for a moment or two before coming back to this subject. The amount of work which the National Assistance Board has now, apart from supplementing benefits, is very little. I only throw out some ideas on this now because time is short, but I am concerned about this matter, as I know also is the Minister. I have given thought to it and I throw out these ideas without arguing them now.

I would take the payment of supplements out of the hands of the National Assistance Board and transfer it to the local offices of the Ministry of National Insurance. That means 70 per cent. of the work, and if one adds non-contributory old-age pensions it means three-quarters of the work. I would abolish the Board as at present set up and provide that the Minister should have an advisory committee to advise him on this problem of assistance.

There remain 30 per cent. who are outside the scope of National Insurance and to whom grants rather than supplements are paid. I would reorganise the whole of that work in connection with the welfare work done by local authorities and make it paid welfare work throughout the country. I hope that we shall consider these suggestions when we receive the Minister's quinquennial report. No less than 70 per cent. of this work is due to the fact that we have all failed to keep our promise.

I will not bandy words. We have all failed and are responsible for the fact that 70 per cent. of those who are entitled to benefits, in respect of which many paid contributions long before 1946 or 1948, are also entitled to National Assistance. Millions of old-age pensioners, sick people and people who have been injured in industry have to seek assistance. This is something which we ought not to tolerate. These are matters on which the Minister will have to report. When he does, we shall expect him to deal with the problems. Therefore, I have submitted these ideas. I would ask the Minister to say something about them even today.

In the course of the discussions on the new graduated pensions scheme when the National Insurance Act was before Standing Committee A as a Bill, the Minister reaffirmed the Government's policy on the level of benefits and he said: But, from the point of view of our philosophy, I am quite certain that the right level is somewhere related to a basic minimum. …"—[OFFICIAL REPORT, Standing Committee A, 12th February, 1959; c. 50–51.] I accept that as the Minister's view, but would he now accept that the present levels of benefits, in the light of the figures which I have quoted about assistance, are nowhere—not somewhere—related to a basic minimum? If the right hon. Gentleman believes that the benefit should be related to a basic minimum, will he tell us what he proposes to do about it? It is quite clear that they are not now so related.

The Minister may now say that the whole emphasis is shifted and that in future we are to have a new insurance scheme which provides subsistence pensions and sickness benefit and that we are to expect that once the new graduated pensions scheme comes into operation everything will be all right. He may say that we shall have a pension earned by graduated contributions, available to those covered on retirement, which they will have earned and will get as a right and which will bring them right above the assistance level.

I did not debate this matter, as some of my hon. Friends did, in Standing Committee, but I have studied it very carefully. The Bill is now an Act, and I believe that the country ought to face up to what is being done. The Minister's job is very interesting, but sometimes one gets criticism in it, and I must tell him from what I have seen of the scheme that he is "in for it." My hon. Friend the Member for Coventry, East (Mr. Grossman) called the scheme "a swindle". I cannot think of better English.

I have already quoted figures about the present rôle of assistance, and I have said that, far from diminishing, it is increasing; and it will not end under this scheme. To begin with, in round figures, 15 million people will be outside the scheme altogether, so the Actuary tells us. There is nothing for the 5¼ million existing pensioners who are outside the scheme. For them there is the basic pension and assistance. Women earning below 9 a week are out, and there are 4¾ million of them at present. Men earning less than £9 a week are out, and at present there are 3 million of them. All the self-employed and non-employed are out—2 million. So 15 million persons in employment are outside this scheme. They will have to depend upon the flat rate and assistance. In other words, nearly half the working population of the country is outside the scheme.

Let us see what will happen to those who are inside the scheme. I will take one example from the document I have in my hand. I urge hon. Members to get a copy of it. The document is in the Library, provided by the Minister, and I thank him for it. It is called "Guide to the new graduated pensions scheme". It is document N.I. 111. I hope the Committee will follow me as I give this example which is taken from pages 6 and 7. It is in the table headed: How the new scheme will work for people of various ages and different levels of the earnings. Contributions and benefits. I take the example of a man earning £12 a week in 1961 who enters the scheme in that year at the age of 42. He will be 65 in an ominous year— 1984. I hope the Minister knows the significance of the date. This man will not be entitled to a pension until 1984 at the age of 65. What happens to him? First, contributions are paid by him and for him of 20s. 4d. a week, nearly double the total contribution under the 1946 Act. He himself will pay a contribution of 10s. 10d., more than double what he had to pay under the 1946 Act.

That is what he pays. Let us see now what he gets. If his earnings remain at £12 a week and he earns that amount every contributory week until the year 1984, he and his wife will receive a pension of £4 10s., whereas on the present assistance rates he and his wife would receive £4 5s. plus the average rent payable by the Board, which according to the Report is 18s. 6d. a week—a total of £5 3s. 6d. a week. In other words, he can now receive 13s. 6d. a week more than he will be able to get from the graduated pension in 1984.

Frankly, I have not gone into this in great detail. Sometimes I have thought the language of my hon. Friends was extravagant, but now I believe that they have been far too modest. Does the Minister realise what will happen when people wake up to the fact that under the graduated pension scheme, at the end of twenty-three years of contribution, the pensioner will have to go and ask for assistance? This is not an insurance scheme, this is bedlam.

Mr. Arthur Tiley (Bradford, West)

It is very interesting to follow the figures, but perhaps the right hon. Gentleman will be glad to know that on the same wage of £12 a week the total contribution under the Socialist National Superannuation scheme was 24s. a week, not 20s. 4d. as in the Government scheme, and that even after forty-five years of membership of that scheme the pension would be £6.

Mr. Griffiths

We can discuss that afterwards. That is a scheme, and if there is anything wrong with it we can amend it. This is an Act of Parliament voted for by hon. Gentlemen opposite who were in the House last year. Therefore, they cannot tell their constituents that this is not a good thing. They can tell them, "This is an Act of Parliament. In April next year you will have to pay contributions at this level".

Returning to my example of the man earning £12 a week who enters the scheme in 1961, we hope his earnings will rise. So far as I can calculate, if his earnings increase at the rate of 2 per cent. per annum from 1961 until 1984, his pension for himself and his wife even then will be only £5; in other words, 3s. 6d. less than he can get from Assistance now.

Mr. F. Blackburn (Stalybridge and Hyde)

And all those calculations are based on a pension of £2 10s. a week. Therefore, the Government ought to be made to state whether they intend to increase it before 1961 or whether they are going to alter all the figures.

Mr. Griffiths

Exactly. I have raised this point because it is clear that, for a long time to come, for millions of people there will be no new graduated pension scheme, only the existing scheme, and therefore their hope lies in our raising the basic pension. Secondly, for large numbers of those covered by the new scheme assistance will still be a substantial part of their subsistence in 1984.

I am curtailing what I have to say, but I must say frankly to the Minister that I believe there will be a row when these facts come home to people. There is still time before April of next year. I say to hon. Members on both sides of the Committee that this is a matter of vital importance. I am sure hon. Members will agree than none of us will like to explain this to our constituents when they have to pay these contributions next April. So I ask the Minister, when he makes the review, seriously to consider whether in his own interests, and in the interests of the country, we should allow the scheme to go forward.

Now I will say a few words about the pledge to maintain the benefits in accordance with the cost of living. There is a change, and I welcome it. The pledge given by the party opposite when they fought the election was that the pensioners' should have a share in our prosperity. This is a new basis. I ask the Minister what he means by that. Let us get something other than words. I shall try to make some calculations. The Minister has told us in reply to questions put by hon. Members in the House that the real value of the 50s. pension today in terms of 1946 prices, when the pension was 26s., is 29s. l0d. I accept those figures, although there are some who doubt whether the calculation is right. For the purpose of my argument and for the purpose of my claim I will accept that.

I am going to accept, therefore, that in real terms pensioners are now 3s. l0d. per week better off than they were in 1946 when the 26s. was first paid. [An HON. MEMBER: "What about the non-smokers? "] I agree that the non-smokers lose half of it. I am taking the Government's own figures. There are some who doubt the validity of the figures, but I am accepting them. As I say, the increase is 3s. l0d. per week as compared with 1946. How are we to judge our prosperity on such figures?

I am not going to speak about dividends, profits and those sorts of things. We have already spoken about them. Regarding this affluent society of ours, someone has said that we are in danger of reaching a society in which there will be private affluence and public squalor. We are personally affluent and yet we are depriving our social services. I am not going to speak about Blue Streak and the £65 million and all the rest of it. The Minister of Defence spoke in very light-hearted terms this afternoon about £65 million. I am, therefore, going to relate the pensions and benefits, an increase in real value of 3s. l0d. a week since 1946, to what wage earners are getting.

This is not class warfare. I speak to my constituents, to my fellow miners and to everyone else with whom I am associated in this way. Here is the position. It means that since 1946 the real value of adult male earnings has increased by 47s. a week.

The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter)

In terms of prices of what year?

Mr. Griffiths

In terms of prices of 1946. They are the figures which the Minister himself used. He said that in terms of 1946 prices the pension today is worth 29s. l0d. and, therefore, worth 3s. 10d. a week more than in 1946. I am not afraid to say this to my own people, for I am a believer in the contributory system. I want the contribution to be fair between employers, workers and the State. I want to see them put back into the position in which they were in 1946

Are we to say that the real share of our prosperity which we are going to give to pensioners, sick people, disabled people, widows and others on National Assistance is to be only 3s. 10d.? If we gave them an increase strictly on the basis of the increase enjoyed by wage earners, then, on the figures given by the Minister in answer to Questions, it would mean that the basic pension would be increased by 8s. 4d. a week.

The Minister answered another question and said that the cost of raising benefits and pensions to this level would be £160 million per annum. That would be the cost of raising to this standard the pensions and benefits paid to people whose work in the past has made a very great contribution to the possibility of higher earnings. I am one of that generation who are now pensioners. True, I am not yet a pensioner, but I am of that generation which came to young manhood in 1914, which stood, suffered and survived in the 1920s and 1930s, which stood when the world fell apart in 1940 and which has worked since 1945.

Are all of us who are in work to say that the share of the pensioners of our prosperity shall be only 3s. l0d. a week while for the average worker it is to be 47s. a week? Are we to say that this country cannot afford £160 million in order to put the pensioners on the same level? I do not believe that any one of us wants to give that answer. I hope that the Minister will not give that answer, and that he will today begin to redeem his pledge and give the answer which we all want him to give and which the country wants him to give in the debate tonight.

5.25 p.m.

The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter)

Let me, first, because I think that it is nearly two years since the right hon. Member for Llanelly (Mr. J. Griffiths) took part in one of these debates, welcome him back to them. I make no complaint that this debate follows very shortly after that of 16th March. I know that hon. Members on both sides of the Committee are properly and deeply concerned with these matters, and I am always very glad when the right hon. Gentleman and his hon. Friends arrange for such a debate, though, like him, I regret that he and I and those of the rest of us who have the good fortune to take part find the time for our observations inevitably curtailed by events over which we have no control.

I will, first, because I must use the limited time at my disposal as economically as possible in the interests of the Committee, deal quickly with one or two of the right hon. Gentleman's opening remarks. The right hon. Gentleman was the author of the quinquennial review, so he naturally, on the whole, gave an accurate account of the procedure, though I am sure he will allow me to say that he slipped on one point. The Government Actuary does not report to the Minister of Pensions and National Insurance but to the Treasury, whose duty it is to lay the report before Parliament. I can tell the Committee that the Government Actuary has not finished the review, though I understand that he is well forward with it. As I said in reply to a Question a little while ago, there is no intention other than to follow the procedure laid down in the National Insurance Act, 1946.

The right hon. Gentleman spent a good deal of the earlier part of his speech referring to the number of cases in which recipients of National Insurance benefits were receiving a supplement through the National Assistance Board. The right hon. Gentleman will know that, as a proportion of the whole, the numbers receiving that supplement have remained extraordinarily steady through the years. Indeed, the latest figure available for December, 1959, shows in respect of retirement pensioners a percentage of 21.8 compared with 22.7 in December, 1951. As far as sickness benefit is concerned, the latest figure is 14 per cent. compared with 15 per cent. for the same date in 1951; and in the case of widows it is a great deal less, being 13.7 per cent. as compared with 23.1 per cent. in 1951. So the rôle of assistance in our social services has not changed, and this, I think, contradicts materially some of the assumptions of the right hon. Gentleman for the years since he was responsible. That is the more satisfactory when one recalls the fact that a very significant change was made last September.

As the Committee will be aware from our debates last summer, the changes in National Assistance which were made then were unique in the history of National Assistance. All the previous changes had been made to take account, with a small favourable margin, of changes in prices. The change made last summer departed from that. There was, indeed, on strict cost of living grounds, no particular reason for a change. The change made then involved a positive increase in the real standards of Assistance in order, if I may use words not unfamiliar to the Committee, to give to the poorest section of the community a share in that community's increasing wealth.

That change, as the Committee will remember, was accompanied by an increase in the National Assistance disregards, thereby bringing more people with modest savings within the possibility of applying successfully for assistance. When the Committee recalls that the real standards of assistance were advanced and the eligibility for it widened by an increase in the disregards, it becomes, I think, clear that the right hon. Gentleman is quite wrong in building the suggestion for there being quite a substantial change in the rôle of National Assistance in our social services on the foundation that the percentage of this supplement is only a little less than it was in 1951.

Mr. J. Griffiths

That is not my case. I am putting the case for all. It is this. When we began the scheme our view was that National Assistance should not keep its then rôle but that it should have a diminishing rôle and finally disappear. That is my case.

Mr. Boyd-Carpenter

The right hon. Gentleman says that, and, of course, it would have been easy to have appeared to bring that about if we had kept National Assistance and the National Assistance disregards down to the original level. What I do not think the right hon. Gentleman has grasped is that the improvement which the Committee and the House welcomed when we took the Regulations and the Bill last summer has given somewhere between £30 million and £40 million a year extra to the poorest section of our community, and must have the effect, if it operates at all, of increasing the proportion of cases in which other benefits are supplemented by assistance. It is, therefore, important to appreciate the deliberate improvement of the conditions and standards of the poorest of the poor which the Committee and the House saw fit to authorise last year.

I am not, if the right hon. Gentleman will forgive me, going to spend my time in discussing his proposals for the reorganisation of the Board, except to point out to him—it was, no doubt, a slip of the tongue on his part—that of course neither assistance nor retirement pensions are actually directly paid by the Board or by my Department, but both are paid at the counter at the post office.

I do not think—and this is a point which has been looked at and discussed many times—that the idea of abolishing the Board with its discretion to meet individual needs would really be a constructive and forward step in social policy, and I am rather sorry that the right hon. Gentleman, as the author of the Board in its present form, should seek to commit infanticide upon it.

Mr. J. Griffiths

The right hon. Gentleman will know that I did not create the Board with the thought that 70 per cent. of its work would be supplementation of insurance benefits.

Mr. Boyd-Carpenter

I do not know what the right hon. Gentleman had in mind, but if he contemplated the effect and the consequences of the universality of National Insurance which the 1946 Act brought about he must, I think, have appreciated that by the scope of the Act a very large measure of supplementation of those benefits, as part of a universal system, in due course would be inevitable.

The right hon. Gentleman said that he would not refer to Blue Streak, so, with similar kindliness, I will not refer to the Princess or the Brabazon or the Swift or any of the curiously-named bits of apparatus which could enliven problems of this sort.

I want to come back to the right hon. Gentleman's central point. He made considerable play with the 3s. l0d. which, he appreciates, is the figure he arrived at only by adopting 1946 prices. He appreciates, and the Committee appreciates, that we think now in terms of 1960 prices, and in terms of 1960 prices the figure is, in fact, 6s. 2d. I think it is important for the record that that should be made clear.

What the right hon. Gentleman did, I think, dodge was this. When he moved the Second Reading of the National Insurance Bill in 1946 he described the 26s. level embodied in it as giving a broad subsistence basis". — [OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1742.] He now comes to this Committee and criticises us for maintaining a level which is—whatever else we may argue about— a level appreciably above that which he himself commended to Parliament as giving a broad subsistence basis. I think it is important that we should conduct this discussion on the basis of what is now being suggested by the right hon. Gentleman, that standards admittedly better than those he was commending to Parliament ought further to be improved. That is a legitimate matter of argument.

Mr. J. Griffiths

What about the Government pledge?

Mr. Boyd-Carpenter

I am coming to the pledge.

That, as I was saying, is a legitimate matter of argument, but I think we can deal with it on this basis, that, without importing either emotion or exaggeration, we all appreciate that the level of contributions as well as benefits under the National Insurance scheme is a difficult and very important matter which we ought not—and here I agree with the right hon. Gentleman—to embitter by comparisons or tit-for-tats, and which we should deal with on the basis of admitted facts: that the benefits are better than they were, better in real terms than at any time before the change in January, 1958, and that what we have to discuss is when and to what extent yet further improvement may successfully be achieved.

Mr. Leslie Hale (Oldham, West)

The right hon. Gentleman keeps on talking as though the Government were paying the pensions. All this money is coming out of the National Insurance Fund, which has carried a profit year after year, at any rate on retirement pensions, and in respect of which the Government have diminished the Exchequer contribution in relation to the total sum going in— that is, on any sort of relevant percentage. What we are really asking is whether the right hon. Gentleman thinks that a country with twice the national income of seven or eight years ago still can say that it is not going to increase the Exchequer contribution.

Mr. Boyd-Carpenter

The hon. Gentleman is quite wrong. The Exchequer contribution happens to be at the highest level that it has ever reached, £170 million, and it happens to be the fact— and the hon. Gentleman compels me to recall it—that one of the necessities for amending legislation was that his right hon. Friend left the National Insurance Fund with an increasing and, indeed, an unlimited deficit. I am grateful to the hon. Gentleman for his observation, but in fairness to the Committee I must not allow myself to be further deflected by it.

I think that the right hon. Gentleman and many of his hon. Friends have really let themselves be deluded by their own propaganda on these subjects.

Hon. Members

No.

Mr. Charles Loughlin (Gloucestershire, West)

What about the pensioners?

Mr. Boyd-Carpenter

I have studied the Budget debates, which, at times—I think the right hon. Gentleman will agree with me—seemed more like a pensions debate. For example, the hon. Member for Southall (Mr. Pargiter) said this: Obviously, the time to have improved the conditions for pensioners was when the terms of trade were moving very much in our favour —last year, the year before that, or the year before that. For two or three years there has been an opportunity to benefit those people who most needed help. Instead of that, the money has been given away elsewhere."—[OFFICIAL REPORT, 4th April, 1960; Vol. 621, c. 90.] The hon. Gentleman does not appear to have appreciated that the year before that, to adopt his own phrase, was the year in which the standard rate of National Insurance benefit was increased by 10s.—in January, 1958. As for the people to whom he referred as those most in need, those on assistance, an increase in their real standards, as I said a few moments ago, was made last year, 1959.

Then we had the hon. Member for Glasgow, Govan (Mr. Rankin) saying: Nothing has been done for them "— that is, the pensioners— since January, 1958; over two years ago. What was done on that occasion benefited only a small fraction, about 1 million out of nearly 5 million. The great majority of old folks in receipt of pensions went unaided. At that time 4½ million did not even get a bean."—[OFFICIAL REPORT, 4th April, 1960; Vol. 621, c. 130.] The hon. Gentleman quite plainly did not realise what happened in 1958 when increases, in benefits were made to apply to all, at least to the extent that National Assistance scales were increased at the same time.

Then we had the hon. Member for Cardiff, West (Mr. G. Thomas), who said, as his right hon. Friend said today, that for the old folk things have not been so difficult since the Welfare State began. Their proportion of the national income is smaller each year".—[OFFICIAL REPORT, 5th April, 1960; Vol. 621, c. 316.] In fact the expenditure on retirement pensions was 2.31 per cent. of the national income in 1951. In 1958—and this is the last year for which we have full figures—if we adjust it downwards to allow for the increased number of pensioners, it was 2.77 per cent. and if we do not adjust it, it was 3.33.

The right hon. Member for Huyton (Mr. H. Wilson) interrupted my hon. Friend the Economic Secretary and asked by how much national income had gone up, and whether he thought that pensioners were getting a fair share of the increase. The answer is plain. Under the administration of right hon. Gentlemen opposite they did not. The gross national product went up by 46 per cent. and pensions for those who did get the increase went up by 154 per cent. The sick and unemployed got nothing. Under our administration the gross national product went up by a little over 62 per cent. and the standard rate of retirement pensions by 66.6 per cent. I am not sure whether the right hon. Member for Llannelly was grateful to his right hon. Friend for that intervention.

Mr. J. Griffiths

No one has yet given as big an increase in the basic pension as we gave in 1946.

Mr. Boyd-Carpenter

Because the right hon. Gentleman knows more about this than his right hon. Friend, he is trying to get away from the question of the share over the years of the national income which has been made available for pensions. I have given figures which show the increases. I will give more if he wants them. In 1951, £270 million was paid for retirement pensions. In 1959 it was £660 million. Therefore, the answer to the right hon. Member for Huyton is that the pensioner has more than shared under the present Administration, in rising standards.

Mr. Hale

The Minister has made a fraudulent statement, and it is time someone said so. It is dishonest and disgraceful. I have never listened to a speech in this House with more contempt.

Mr. John Eden (Bournemouth, West)

On a point of order, Mr. Hynd. Did I not see you rise when my right hon. Friend and the hon. Member for Oldham, West (Mr. Hale) were on their feet at the same time? My right hon. Friend sat down in view of that and then the hon. Member for Oldham, West took advantage of it to intervene. I was under the impression—

The Temporary Chairman (Mr. H. Hynd)

I was under the impression that the right hon. Gentleman was giving way to the hon. Member for Oldham, West (Mr. Hale).

Mr. Boyd-Carpenter

I did give way, but in view of the intemperate, inaccurate and offensive language which the hon. Member for Oldham, West used, I regret that I did not stick to my first thoughts.

Mr. Hale

On a point of order. I rose to my feet because the right hon. Gentleman gave way. I was interrupted by a point of order from the other side, so am I not entitled to make my intervention now? I am protesting against gross misrepresentation. The question which the right hon. Gentleman was asked to deal with was about the percentage of their own money that the pensioners—

The Temporary Chairman

The hon. Member must resume his seat.

Mr. Boyd-Carpenter

The hon. Gentleman's point is a bad as his method of raising it, and that is saying something. If I am allowed to continue with my speech there is a chance that some hon. Members may get into the debate. If I am wrong, they are in a position to contradict me. That is a more orderly method. I am now coming to the pledge—

Mr. R. H. S. Crossman (Coventry, East)

rose—

Mr. Boyd-Carpenter

I normally give way to the hon. Gentleman, but I hope that he will let me get on with my speech.

I come now to our pledge. My right hon. Friend the Chancellor of the Exchequer confirmed, when he wound up the Budget debate on Thursday night, that it is our intention to implement it.

The words of our pledge have been correctly quoted, but I will quote them again: We pledge ourselves to ensure that pensioners continue to share in the good things which a steadily expanding economy will bring.

Mr. Loughlin

Is starvation a good thing?

Mr. Boyd-Carpenter

The right hon. Member for Llanedly knows that we did not, as did his right hon. Friends, commit ourselves to a precise change on a precise date. I do not wish to re-fight the General Election, but we did not do so because we believed that was the wrong way in which to deal with the problem of the social services.

Mr. J. Griffiths

I asked the right hon. Gentleman to deal with the pledge given by the Chancellor of the Exchequer last week, and not the terms which he has read out. The Chancellor said that the pensioners would share in rising prosperity. What is that share?

Mr. Boyd-Carpenter

There is no difference in substance between the terms of the manifesto and the words used by the Chancellor of the Exchequer. If I may finish again the quotation: …continue to share in the good things which a steadily expanding economy will bring. We faced considerable electoral disadvantage because we were not prepared, as right hon. Gentlemen opposite were prepared, to commit ourselves to a particular figure on a particular date. We reserved the right to deal with this matter with judgment, and to do so responsibly. It means that we shall follow in the future, as in the past, with improvements in the pension, with improvements in its real value. Most certainly.

We must reach a fair judgment as to what it is right to impose upon the contributor in the insurance scheme, and the contributions are already heavy. We must also consider what is the right timing, and we cannot be held to making statements about this on every occasion that it suits the Opposition's convenience to put down a particular Vote.

This goes beyond the question of pensions, but it includes pensions. It includes also the advantages of living in a society whose standards are rising. That is a matter of very great importance when it is recalled how many pensioners live with people of working age, in many cases their own younger relations, and so share in that way in the rising standards of the community. It includes the advantages to the pensioners of stability in prices.

The right hon. Member for Llanelly will recall from his own days at the Ministry the nightmare effect on him as a Minister of watching the value of the pension eroded each year by rising prices, and the erosion also of the limited savings that many pensioners have and which are similarly affected by rising prices. Therefore, we include in this picture the very great stability of prices which has been obtained in recent years. The index figure has been steady for two years. It is the same figure that it was in April, 1958.

I understand that the figure for last month will be published tomorrow and that it will show that we are still at the same whole number, and that the decimals will show a fall rather than an increase. All these are things comprehended within the pledge, but, in the ultimate, this is a matter not of words but of understanding what past records mean. On that, the pensioner will still continue to have confidence in this Government and their record in the implementation of their pledges to a far greater extent—

Mr. Loughlin

Could the right hon. Gentleman live on a pension?

Mr. Boyd-Carpenter

—than they were disposed to have confidence in the offers of the party opposite a few months ago.

Mr. J. Griffiths

We are told that under the pledge pensioners are to share in rising prosperity. What does that mean?

Mr. Boyd-Carpenter

I have been doing my best to explain it at some length, and, I hope, with clarity, and so have my right hon. Friends. The right hon. Gentleman knows perfectly well from his own experience the considerations which have to be balanced, and how utterly wrong it is to make premature statements which give rise to hopes and expectations among people who are concerned and interested. The right hon. Gentleman knows that—and he must know it only too well from his own experience—the only difference being that during the years when he was concerned the corresponding improvements were not made.

The great mistake that right hon. Gentlemen opposite, perhaps deluded by their own propaganda, have made in this matter is their attempt to build up the idea that our 5½ million retirement pensioners are a homogeneous body, all of them in dire poverty. Right hon. Gentlemen opposite even try to create that impression by using the evocative but obsolescent phrase "old-age pensioners" with which to describe retirement pensioners under the 1946 Act. The retirement pensioners are drawn from every section of our society. As I have reminded the right hon. Gentleman, since the late-age entrants came in, the scheme is now a completely universal one and the retirement pensioners include rich and poor alike and all the gradations and graduations of our complex and variegated society.

Therefore, it is wholly unrealistic, and adds what is regarded outside as a touch of unreality to the arguments of right hon. and hon. Members opposite, to group this vast mass of our fellow-countrymen together and to seek to describe them all as one. They have little in common with each other except age, the fact that they have paid their contributions and the fact that, if they are under the age of 70, they have retired from regular work. It is part of this real problem of dealing with them properly, justly and fairly to all sections of the community that they are not—as hon. Members opposite seek to suggest— all of them, or even the majority of them, people who by any standards can be described as in grinding poverty.

Mr. Grossman

rose—

Mr. Boyd-Carpenter

The right hon. Gentleman himself referred—this again shows the complexity of the matter—to the fact that they had paid for their pension. The right hon. Gentleman may recall certain figures that I gave in the White Paper "Provision for Old Age" on this very point. I can bring those figures up to date. A man who retires this year at the age of 65 and who has a wife aged 60 gets a pension whose capital value is £2,650. If he has been in the scheme from the beginning, from 1926, and has contributed all he can for pension, together with his employer, to- wards that £2,650, he will have contributed about £250. Therefore, it is not right for the right hon. Gentleman to confuse the issue with that sort of suggestion.

The problem is one of the most difficult that faces any Government. Nobody knows that better than the right hon. Gentleman. Equally, the right hon. Gentleman knows that descriptions of poverty and of hardship are at least as relevant, and perhaps more relevant, to the adequacy or otherwise of the scales of National Assistance than they are to a discussion of this issue affecting as it does people who can be described as rich as well as people who can be described as poor. I hope, therefore, that we can discuss this matter on the basis not that all is simple black or simple white, not that this is merely a great simple claim for millions of simple people in hardship against a hard-hearted Government, but that it is a matter of balancing a number of considerations.

What I have said about the position of some of the pensioners does not mean that we resile in any degree from our intention, expressed in our pledge, to make improvements in the pension. We recognise that it is right to use the machinery of the State compulsorily to transfer from the population of working age to that which is retired some wealth which otherwise those of working age would be able to enjoy for themselves. That is the essence of the pledge. As I have said, however, it confuses counsel and blurs the matter with genuine but, on the facts, false emotion to try to deal with this human issue simply on the basis of emotional appeals ad nauseam on behalf of the old people.

Mr. J. Griffiths

The effect of this is that the right hon. Gentleman and his Government have now given up the concept of an insurance benefit payable as of right equated to an adequate income. If the right hon. Gentleman accepts that, he must not start dividing the 5½ million between rich and poor. He said in Committee that that was what he accepted. Do I gather that he has now given it up and that, therefore, for him and his Government, National Assistance will in future be an essential part of insurance?

Mr. Boyd-Carpenter

The right hon. Gentleman could hardly have piled more inaccuracies into less space. What is more, he knows it. The right hon. Gentleman knows that the standard of pension, which in due course will be improved—[HON. MEMBERS: "When?"]— is already above the level which he himself described at this Box as the broad level of subsistence. For the right hon. Gentleman, therefore, to try to twist my analysis of the most difficult social problem of our time into a suggestion of a fundamental change of policy is unworthy of his record in these matters.

I do not, however, want to leave the Committee under the impression that this is an easy matter or one that we regard as easy. It is an infinitely difficult matter of judgment to know when and to what extent, in fairness to the working population as well as to those who have retired, we should move. But we have a good record in these matters and no intention whatever of spoiling it.

5.56 p.m.

Mr. R. H. S. Crossman (Coventry, East)

Those of us who have worked opposite the Minister have always known his skill and ability. The speech he had to make today was the most difficult speech in his career as Minister of Pensions, for a very simple reason. He tells us that the problem is a difficult one. The difficulty which he faces is the difficulty of welshing on an election promise. That is the only difficulty of the debate today.

During the Minister's speech, I tried to ask him a question. I will ask him it now. Will he tell us what was the increase of national prosperity since he last increased the pension? Let us keep to the present, since 1958, a period of which the right hon. Gentleman is so proud. He is proud of the high pension and of the fact that prices have remained relatively stable since 1958 and that, therefore, no increase in terms of cost of living is justified. He is proud also of the fact that he has raised National Assistance rates since that time, not related to the cost of living but related to a real increase to keep pace with national prosperity.

What the right hon. Gentleman promised in the election, however, was not to raise National Assistance on a means test. He said to every pensioner, "I promise you, whether you are on National Assistance or whether you are not, that you shall keep pace with national prosperity."

Since 1958, in our affluent society we have had a considerable increase in national prosperity—we do not deny it. In terms of wages, the wage-earner has increased and benefited slightly on the average. We do not deny that the average wage has risen. Neither do we deny the statement by the Chancellor of the Exchequer that the real standard of living of a large number of people has risen since 1958. The only group whose standard has not risen are those who are not on National Assistance.

When I raised that question with the Minister in the last debate, he said, as he always does, "Of course, there are the very poor and we have helped them, but above that level you all grossly exaggerate the amount of poverty". I gave a figure which we had calculated as best we could. We used the two researches which we know—Salford and Bethnal Green. On the basis of those two boroughs, we calculate, because it was the case there, that there are as many people who do not apply for National Assistance but who are justified by poverty to apply as there are who do apply for it. Therefore, we reckon that there are almost as many people who are in poverty though not on National Assistance as there are who are on National Assistance.

The Minister indignantly denied this during the last debate. He said that it was nonsense. We suggest that there should be an investigation. The Government deny the figures which we put forward from the researches which have been made, but they have assiduously refused to make an adequate national investigation into what we regard as the greatest problem and scandal of our generation, the poverty of the old people.

If the Government are so proud of their record, let them set up a committee of an independent group of people to study how old people live. Such a study has been begun on a small scale by Cambridge University. By the middle of this year we hope to have the results of five or six further studies to add to the figures available for Salford and Bethnal Green. It is high time that the Government realised that they can- not go on telling us that what we say about the condition of old people is untrue and that the Government know better while they refuse to hold an impartial investigation. One of the things which I hope that we shall be able to insist on this evening is that we shall at least have an investigation of that kind.

What we have to define today is what we mean by subsistence. As my right hon. Friend said, the Minister is quietly reversing the policy of his predecessors, without saying so, by permitting the basic pension to be kept down and raising National Assistance scales ever higher and higher above the basic pension so as to limit the assistance one gives to the very poor. That would work if all our fellow citizens were willing to go on a means test. The Government are not prepared to help the poor unless they go on the means test. That is what we mean when we accuse the Government of systematically reintroducing the means test.

Mr. Christopher Chataway (Lewisham, North)

Did I understand the hon. Gentleman to say that it would work if everybody applied? Does that mean that he would support such a scheme if everybody applied?

Mr. Crossman

I am grateful to the hon. Gentleman. No. I said that it would work if all our fellow citizens were willing to accept the view that they should get an adequate pension only if they submitted to the means test. That is opposite to the view we hold, which is that the pension is a right. It should be adequate as of right to the contributors in return for what they have paid, without the necessity of a means test.

That was the intention of the National Insurance Act. It is that which is being reversed, not by legislation but by underhand administrative action by the Government who are assiduously raising National Assistance scales and disregards and keeping the basic pension far below the level of subsistence. It is high time that the Minister told us what he defines as subsistence. He tells us that it is all a matter of judgment whether a pension should go up. A few months ago he promised that it would go up in relation to rising national prosperity.

I suggest to fair-minded hon. Gentlemen below the Gangway that there is a simple way of testing rising national prosperity. Why should we not take the average wage and say that if it goes up by £1 a year the pension shall automatically be adjusted in relation to the average wage? This was one of the proposals in our national superannuation scheme which enabled the scheme to carry with it, as on an escalator, old people so that their standard of living kept pace with that of the rest of the community.

Major H. Legge-Boorke (Isle of Ely)

I hope the hon. Gentleman realises that if that had been the basis adopted the pensioner today would be getting less than he is.

Mr. Crossman

I know that the hon. and gallant Member for the Isle of Ely (Major H. Legge-Bourke) would not claim to be an expert on this subject. My right hon. Friend gave figures to show what would have happened to the pension since 1946 if it had borne any relation to the average wage. One could relate the pension to the average wage in various ways. I suggest that the Minister must be prepared to come clean with the Committee on the principle he uses to decide whether 5s. or 10s. should be added to the pension. It is not good enough to have this type of paternalism which says that the Minister knows best, that he will decide, that it is his judgment which will decide whether pensioners are poor enough to deserve another five bob. There must be some objective criteria by which the Government decide to what extent a pension should share in the national prosperity.

The best way would be to relate the pension both to the cost of living and to the average wage rate, and make an adjustment if either rose. In the last two years when the cost of living has remained steady but when the national average wage has increased, the pension could have been increased in relation to the average wage to provide some benefit to the pensioner. If, however, a rise in relation to the cost of living would treat him better than a rise in relation to the average wage, he should be given that rise. I do not believe that we shall get this basic pension right until we get clear agreement about the principles on which pensions should be decided.

It is odious for the Government to say, "We know that they do not need a rise" when they have not made an investigation into the difficulties of pensioners, and when they have refused to say how they judge whether an increase is necessary. We have worked out plans by which this could be done. Nothing succeeds with this Government except pressure. I have never seen a Government more susceptible to pressure. There is only one way to teach this Minister that the pensioners deserve another ten bob, and that is to get them to use their votes, their lobbying power, and get them to put pressure on people who have no principles but who are concerned solely and simply with calculating political advantages.

6.7 p.m.

Mr. Denzil Freeth (Basingstoke)

On 15th December, I had the privilege of following the hon. Member for Islington, North (Mr. Reynolds) and I hope that he will be successful later in catching the eye of the Chair. On that occasion, I opposed him asking the leave of the House to introduce a Bill to do roughly what the Opposition are asking the Government to do today.

I should like briefly to continue, after the interval of the last four months, the three arguments I used then to show why I did not think that the time was yet propitious for us to fulfil our General Election pledge. First, I thought that it was imprudent to run down the National Insurance Fund any faster than we were doing. Secondly, I did not think then that our increased prosperity was sufficiently soundly based for us to be able to make a further increase in the pension. Thirdly, I believed that the hardest cases of hardship had been relieved by the increase in National Assistance that had taken place in the autumn.

The argument about the National Insurance Fund is slightly stronger today than it was four months ago. The hon. Member for Oldham, West (Mr. Hale) became very heated a few moments ago about the £1,150 million in the National Insurance Fund and the £65 million which figured earlier in our proceedings today in connection with the Blue Streak missile. The fact remains that, under the National Insurance financial arrangements, we are having to finance the present scheme to the tune of about £50 million a year from securities sold out of the National Insurance Fund.

I wonder whether my right hon. Friend can give us an estimate of the market value of the National Insurance Fund as it is likely to stand at the end of the current financial year, assuming no change in the level of pensions or contributions and bearing in mind that the gilt-edged market has declined substantially over the last two years. This £50 million, and any further sum that has to be raised, would have to be obtained by selling stocks on the open market, and the Chancellor is already budgeting for having to raise £318 million, by National Savings or by selling stocks in the open market. That sum, considering the National Insurance Fund sale that has to be made, should be thought of as £368 million.

Mr. G. W. Reynolds (Islington, North)

Is the hon. Member aware that this House provided in the 1955 Act for £350 million to be paid from the Exchequer to meet the emerging deficit to which he is referring, spread over a period of five years? In the Act of 1959 that period of five years was extended and thus the £350 million voted by this House is still available. In fact, less than £70 million has been paid over. At the rate of £50 million a year, it will be another six years before we need take anything from the Fund.

Mr. Freeth

The fact remains that at present we are having to raise money to the tune of £50 million a year, through the Exchequer or by selling out of the Fund, to balance income with expenditure, taking into account the £170 million that my right hon. Friend has contributed from the central Exchequer Fund.

We must consider this question against the background of what my right hon. Friend the Chancellor said about last year, namely, that he has not been able to fund any Government stock during the year and had had to issue an extra £300 million in Treasury bills. If we were to tack further sums on the back of the Government deficit, whether by sales out of the National Insurance Fund, or by the Government trying to borrow in the open market, or by selling other Department's securities, we should end up with further Treasury bills, and inflation starting once again.

We must think how we are to finance any increase that we make. It is very easy to point to the hardships which exist and to the desirability of giving money to people. We are all generously-minded in this House, and we all like voting increased expenditure for worthy causes, but the bill has to be paid. It annoys some of my hon. Friends that the bills have to be paid in budgetary terms. It would involve quite a big bill if we were to do anything worth while in respect of increased pensions, and I do not believe that it should be met by increasing the budgetary deficit.

Secondly, there is the question of prosperity. We are now facing a threefold boom—a consumer-goods boom; a stockpiling boom, and an industrial investment boom. The consequence is that already the strain of our balance of payments is beginning to be felt. Before I came into the Chamber I saw the import-export figures for March on the tape. They show that in March of this year—in the half-year which should be most favourable to us—the gap between imports and exports and reexports was no less than £71.6 million. In the first quarter of this year, although exports have risen by about 10 per cent. over the equivalent period a year ago, imports are still running at about 12 per cent. more than last year.

Therefore, any action of the Government which increased the total volume of demand would be bound to run us into a balance of payments crisis once more, and I do not believe that we would get the thanks of the pensioners, or anybody else, if we disturbed the present prosperity, expansion and price stability. If we were to increase the pension we would have to increase taxation, and the rate of contribution, to pay for whatever increase we voted or our action would be completely dishonest and dishonourable.

If we were to increase taxes further at present, we should make it very difficult for our industry to compete, especially in view of the large-scale alterations in European tariffs which will occur this summer. If we increased contributions we might get further demands for increased wages. I hope that my hon. Friend the Parliamentary Secretary will say something about contributions in relation to the lowest-paid wage earners. I do not believe that it is yet possible to treat our prosperity as being firmly enough based to enable us to give something further to pensioners in the next few months.

If there were a great many grave cases of hardship we would want to give something to those who were hit hardest, as we did nine months ago. But the greatest benefit that we have brought to the pensioners is the stability in the cost of living, to which my right hon. Friend referred. We should wait to see how the year progresses, how the balance of payments turns out, and how the revenue looks like turning out. Then, if things go well, we should be in a position to fulfil our election pledge.

I would take up one point mentioned by the hon. Member for Coventry, East (Mr. Crossman). It would be a gross waste of our national resources to put up the pensions of 5½ million people possibly to help some undefined number who are not willing to apply for a supplementary pension. I hope that before the debate ends my hon. Friend will tell us something about the information which the National Assistance Board possesses in respect of people who do not apply for it.

Mr. Crossman

The hon. Member is telling us that he thinks it would be a gross waste of money to keep the pledge which his party made to pensioners. It pledged itself to raise the pensioners' standard of living.

Mr. Freeth

The hon. Member should not try those rather elementary debating tricks. I was so determined to make myself clear that I wrote down the words before saying them. I said that it would be a gross waste of our national resources to put up the pensions of 5½ million people possibly to help some undefined number who do not apply for supplementary pensions. It is quite a different matter to put up the pensions of 5½ million people so as to give them an increasing share in our prosperity. I hope that the hon. Member will not misquote me in future.

As for the pledge, those of us on the back benches on this side of the House intend to keep it. I can assure the hon. Member for Coventry, East that we have no intention of welshing, and I am sure that the Government have no intention of welshing. An election pledge is not broken because it is unfulfilled in the first Session of a Parliament. This Parliament is yet young, and I am sure that we shall so conduct ourselves on this side of the House that when the next General Election comes this pledge, like all the others contained in our election manifesto, will have been amply and fully redeemed and that we shall be worthy to receive—as we received last October —a further commission to govern the country for another five years.

6.18 p.m.

Mr. Leslie Hale (Oldham, West)

I wish that there could be listening to this debate some of those people in Oldham who are living on £2 10s. a week, or some of the couples in Oldham who are living on £4 a week. I was in Oldham last week, talking upon a favourite theme of mine. I was saying that politics is not a dirty game, and that there are as many decent people in the House of Commons as are to be found in any other institutions. But the presentation of figures can sometimes be very unfortunate. I have spent a good deal of time in criminal courts, where men are often sentenced to considerable terms of imprisonment for the mere misrepresentation of figures, which misrepresentation has induced people to take actions that they would not otherwise have taken.

I am told that during the Minister's speech I intervened angrily. I congratulate myself upon my reticence, because I was exceedingly angry. It is a great pity that in this Chamber a Minister should be able to use figures as the Minister of Pensions and National Insurance did this afternoon. He was talking about losses on the National Insurance Fund, which has, in fact, shown a very small loss this year, and which has piled up over £1,000 million. He was drawing a comparison, as always, with the Labour Government—sometimes the Government of 1951 and sometimes that of 1946. Sometimes the 1946 figure gave him a slightly better result, and sometimes the 1951 figure was the better one for him.

When I intervened to talk about the £100 million of Government contribution to the National Insurance Fund, the right hon. Gentleman sprang one of those "cracks" about "now it is £170 million". It has been that for a few days under the new Act demanding higher contributions. When those higher contributions are paid, that £170 million will be a lower proportion of the insurance revenue than their miserable £100 million was.

Let us see what it is costing. I have seen figures in which, to show the amount that the Government are paying, they include family allowances to bolster up the figure. The plain fact is that when my right hon. Friend brilliantly introduced the 1946 Act he was under some pressure from some of us even then. He said time after time that we had to face the unfortunate, almost catastrophic, rise in the number of old-age pensioners which would take place over a period and that during that period the Fund would have to face a temporary period of almost insolvency unless we could build it up before. Of course, under my right hon. Friend's scheme it has been built up. The reserves are larger than anyone anticipated, larger than the Actuary anticipated. He had in mind an unemployment figure of 4 per cent. to 5 per cent. when, in fact, the average figure has been considerably less under both Governments.

The result has been that for years old-age pensions have been financed out of the money which the unemployed did not have to claim, and indeed, out of the fact that sickness has been reduced. I sometimes wish that this Committee, when considering figures relating to the social services, would try to construct a balance sheet. We talk of the cost of the National Health Service, but no one talks about what is saved. No one realises, when considering the cost of the National Health Service, that, apart from its great moral value, we make money out of it. No one will make any money out of Blue Streak and we would not have it done. But these are things of value.

I do not wish to be emotional about this. I will take the advice of Simon Tappertit, who said, "There are strings in the human heart that had better not be wibrated," or words to that effect. I am in entire agreement with what was said by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), but there was one phrase I am not sure about. Although I agree that this must be a contributory service, it cannot really effectively be a contributory service before 1994, 1999, or even 2000. That is the trouble. My right hon. Friend realised that and dealt with it appropriately. It was provided that some persons should be entitled to participate almost immediately on one basis and that there should be full participation fairly soon, which meant Government subsidisation, and to that extent we should be taking more out of the fund than was actuarially practicable.

What has happened since? This really is the question which the Minister ought to answer. Let him spend Christmas in a two-room house in Oldham—I will share it with him—on £4 a week and really see how things are. The first thing is that these figures have always been a swindle. We talk of a cost-of-living index which includes such things as the cost of newspapers and 65 per cent. of transport and all sorts and sizes of things which old-age pensioners never buy. If one lives in two rooms in Oldham, with the roof leaking, and so on, one needs a great deal of fuel and power which are the things that have gone up in price over the last few months. For years we have tried to persuade the Minister to have a fair cost-or-living index.

Secondly, there is not merely an expansion of income, there is an expansion of need. As new things come in today the poorest households begin to think of a television set as a necessity, that a television set for an old-age pensioner is something worth while.

Thirdly, a good deal depends on administration. My clear impression, which is confirmed by hon. Friends who represent constituencies in the North, is that there is a good deal of cutting out and cutting down on supplementary benefits. I had to deal with a case of an old lady of over 72 who received a small allowance for laundry. Someone sold her a secondhand washing machine on the "never-never", at "five bob a week", so she lost her washing allowance. A great many old people have been persuaded to buy their houses by instalments which they will never finish paying until the house has been pulled down. I know of one old man who succumbed to that blandishment and lost his rent allowance.

A test of the decency, the value, the integrity of a country is how it treats its young and its aged members of the population. As my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), whose temporary absence we all regret, said so often, the real test is that of priorities and the art of politics is priorities. That is the test, that should be item No. 1—education, school milk, and things like that. Old-age pensioners and such people are entitled to live out their last years of their lives—having contributed to the wealth of the country and borne the burden of the years—and to share in the national wealth. They are not sharing at all.

The right hon. Gentleman says, "Well, if you work it all out…" My right hon. Friend said 3s. 4d. in 1946, and the right hon. Gentleman opposite says about 6s. 2d.—6s. 2d. from a national income which has gone up over the period from £10,000 million to £21,000 million, and from a Government who have just introduced a Budget involving the expenditure of over £5,000 million a year, and whose contribution up to now has been about 4d. in the £ of our budgetary expenditure. I think I am right in saying at a guess—

Mr. George Lawson (Motherwell)

rose—

Mr. Hale

I do not want to give way. I know that other hon. Members are waiting to speak and I am trying to conclude what I have to say—

Mr. Lawson

What I wish to say is important. I know that I shall not now have a chance to speak in the debate and I have been concerned to do so. I wonder whether my hon. Friend knows that it is not a question of 6s. 2d. or 3s. 8d. but, according to the Minister himself, for those old-age pensioners who smoke the improvement in their pension on the 1946 figure is at present 9d. more than it was before.

Mr. Hale

That is not the pledge they gave us in Oldham. I am bound to say that the explanation given by the hon. Member for Basingstoke (Mr. Denzil Freeth) that a pledge to the old-age pensioners comes in the same category as a long programme of reformist legislation; that a stop which we could take in 24 hours and by Order is to be regarded as in the same category as a pledge to denationalise transport or the steel industry—

Mr. Denzil Freeth

No.

Mr. Hale

But the hon. Member did say that. He said, "We shall do it sometime during the next five years if we have time and if we do not have another crisis." Of course, they will. They will probably do it just before a General Election.

Mr. Freeth

I said that an election pledge is not broken because it is not actually fulfilled in the first year. I did go on to say that I had no doubt that before the end of this Parliament we shall have amply fulfilled our pledges.

Mr. Hale

This is, of course, an old theory. The hon. Member knows that a breach of promise cannot be maintained so long as you stay engaged to the girl until she is 90. But it becomes a course of conduct which is regarded as a breach, regardless of the precise dates involved.

I beg the Minister—no doubt I have been discourteous to him today; I was deliberately discourteous, but I am not often discourteous—to reconsider his attitude on this matter. I beg him to look at what is the present position of couples trying to live on £4 a week, perhaps with some small supplementation from National Assistance. I beg him to look at the figure of £4 a week in relation to the incomes of the houses adjoining—and that is relevant. I beg him to remember the great principle laid down by Lloyd George, that the State itself must bear the full measure of its responsibility to pay a real contribution from the Exchequer, which we can easily afford to pay.

6.30 p.m.

Mr. Christopher Chataway (Lewisham, North)

The hon. Member for Oldham, West (Mr. Hale) said that he did not intend to be emotional, and I do not think he was, but he based his argument upon the case of a couple living on £4 a week, or that of a single person living on £2 10s. a week. I must assume that these are people who are not claiming National Assistance, and for good reasons. I admit that there are plenty of people who will not claim National Assistance out of pride.

The hon. Member for Oldham, West however, based his argument on the figures of £4 and £2 10s., and I submit to this Committee that that sort of case or plea could be made in just those terms if the pension rates were £5 and £3. This type of plea can be made a long way further up the financial scale than this, and it is for this reason that I want to urge upon my right hon. Friend the Minister the exactly opposite point of view to that put forward by the hon. Member for Coventry, East (Mr. Crossman).

I accept that there is hardship. We all know that there is hardship among old-age pensioners, and I am most anxious that that hardship should be met at an early date. In my constituency, I have ample evidence of elderly people who do need money. Of course, there is hardship amongst a majority of old people which has nothing to do with money, but has to do with the inevitable sadness of advancing age. But there are those who are suffering from a lack of money, and I accept that.

I want to see what money is available go to those who are in need. It seems to me to be nonsense, whatever amount of money we have, to say we have £160 million that we can give to the old-age pensioners this year, to say that it would be right to transfer that £160 million from the working population to the elderly. All the same, I would not be in favour of putting up the basic pension by 10s. It seems to me to be the wrong way of going about it.

The hon. Member for Coventry, East argued that a selective increase of the type which I am urging would be a breach of our election pledge. I do not accept that. The Prime Minister said that the Conservative Government would ensure that the old-age pensioners shared in the increasing prosperity of the country. It is a question of how that share should be distributed. [HON. MEMBERS: "When?"] I am not wanting to argue on that. The question is how the share should be distributed. Are we to distribute the share evenly over those who do not need it and those who do? Surely, there is no sense in that. Let us distribute the share, giving the majority of it to those who are in need.

I think that this principle would be accepted by large sections of the Committee, though I know that there would be some who would oppose it on principle, but I believe that this idea is attractive to a large number of people, because, obviously, what we want to do with the money is alleviate hardship.

Mr. William Hamilton (Fife, West)

Would the hon. Gentleman extend that principle into other fields, such as farming subsidies and the like?

Mr. Chataway

It is a principle to which I am generally sympathetic. I cannot tell what practical difficulties there may be in farming, and I do not want to go into other subjects. I should be called to order by the Chair. I am arguing merely from the point of view of elderly people.

The difficulty in all this, obviously, is to persuade people in need to go to the National Assistance Board, and to remove the humiliation and the stigma which is involved in National Assistance. The right hon. Member for Llanelly (Mr. J. Griffiths), I thought, argued admirably that National Assistance is still here. He said that it was not disappearing, as Beveridge hoped. From what the right hon. Gentleman and some of his hon. Friends have said, it appears that they do not expect National Assistance to disappear for another twenty or thirty years. Let us, then, alter the method of payment.

I will suggest that a way in which this extra money can be paid, whether we call it National Assistance or supplementary benefit. Let us not bother too much about words, because in principle there is not a very great deal of difference between the money paid in increased National Assistance and the money in increased basic pensions, for they both come at present from more or less the same source. I suggest that there should be a return of income from every old-age pensioner. Already many of them make a return of their incomes to the Exchequer. These should be passed on to the Ministry of Pensions and National Insurance. A simpler form for a return of income should be given annually to the remainder of old-age pensioners on the basis that they should be entitled, as of right, to so much more above the basic pension.

Obviously, that would be a sliding scale, and in this way we could ensure not only that there was nobody in the country who had a pension of less than £3, because already there should be nobody with a pension less than that amount, but it should also be possible to ensure that there is nobody with less than £3 or £4 per week. I do not know the amount, because it would depend, obviously, on the number of people there are who would not accept National Assistance because they feel it to be wrong.

The hon. Member for Coventry, East says that it might be another million people, and my right hon. Friend thinks it is unlikely to be as many as that. Let us take the mean, and say that there are half a million people who will not accept National Assistance. Let us add to that the million who now take National Assistance. This adds up to about a quarter or one-third of all old-age pensioners. We can do far more if what money is available is distributed to them than if we give it to those who do not need it, because in these days there are plenty of people with ample means who yet, and quite rightly, collect their increased pensions.

There is no violation of our election pledge in this suggestion, which I urge upon the Minister most strongly. It seems to me to be utterly wrong to deny help to those who need it simply because we are wasting what money we have upon those who do not need it.

6.47 p.m.

Mr. George Lawson (Motherwell)

I have only a very short time in which to say what I want to say, and I suggest to the hon. Member for Lewisham, North (Mr. Chataway) for his consideration that the idea which he put forward was discussed fully by the Committee which considered the National Insurance Bill.

If the hon. Member's point of view were adopted, there would be no sense in having basic pensions at all. The only value of a basic pension is that a man or a woman shall have that pension as of right, and if it is admitted, as it is admitted, that the basic pension is insufficient to live upon and must be supplemented from National Assistance, there would be no need on his argument for a basic pension, because all those in need could be given National Assistance. The sensible course, if we follow that point of view, is to have National Assistance for those who need it on the basis of a means test. The hon. Member should live a little bit longer and learn how other people live. He would then appreciate how deep is the humiliation which some people have felt and ate still feeling—

Mr. Chataway

What possible further humiliation could there be in filling up a return of income for the Ministry of Pensions than the hon. Member feels in filling up his Income Tax return?

Mr. Lawson

It is a very different process. When we fill up our Income Tax returns, it is all done privately and sent by post. We do not have somebody coming into the house, listing all the items, going carefully over our clothes and in some respects treating us as if we were paupers. I say this to the Minister, and if he wants to challenge me I am prepared to take it up. This kind of thing is still going on. Though I do not want to do it in public, I can bring evidence of this kind of treatment. In the main, there is a much better spirit, but this kind of thing goes on. I can remember this as a child, and I have said it before. I can remember our attitude as children towards those children who were supplied with police boots. Those were boots which had five holes stamped in them to ensure that the parents could not pawn them. That attitude has pervaded working class conditions, and it still exists.

In the very few moments which I have I want to deal with the Government's record on pensions. I am in agreement with those who say that we ought to be thinking in terms of the present and of the future, but I put it to the Committee that whenever the question of pensions is raised we always hear the hackneyed story, "We did better than you". No doubt the right hon. Lady who is to reply will return to this theme when I have concluded—"We did very much better than you".

I want to look into this claim. I will not elaborate on the period when the pension was raised from 10s. to 26s. a week. Let us take it, very hurriedly, from the point at which it was raised to 26s. a week. As my hon. Friend the Member for Sowerby (Mr. Houghton) said on Second Reading of the National Insurance Act, 1954, the 26s. granted in 1946 was merely the 1938 Poor Law relief standard marked up in terms of 1946 prices. I say this in front of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), who was responsible for the 1946 Act. The 26s. granted in 1946 was the Poor Law standard of 1938 brought up to 1946 prices.

Let us look at what happened. I say right away that this pension—this Poor Law pension—was never enjoyed by the old people of this country. From the very beginning there was a process of erosion, of inflation. I will give the Government's figures, not my own figures; I may question their figures as being a little optimistic and feel that they are slightly exaggerated in favour of the Government. By 1950 the pension had dropped in value, in terms of 1946 prices, to 22s. 7d., which was a drop in purchasing power of 3s. 5d. below the Poor Law standard of 1938.

When the Labour Government raised the pension to 30s. in 1951, I say straight away that not all beneficiaries received the increase. Existing pensioners received it, but not all beneficiaries. When the figure was raised to 30s. it did not bring the purchasing power of the pension back to its original 26s. From Government figures we see that it was still 2s. 9d. below the original purchasing power of the 26s. in 1946. I admit that. I could go on to point out that there were many extenuating circumstances, such as the Korean war, but I will leave it there. We had the position in 1951 when the pension was 2s. 9d. less in real purchasing power than it had been in 1946. That is the record of the Labour Party.

Let us turn to the Government's record. We have heard very much about this, and I am convinced that many hon. Members opposite believe it. To use the Minister's own words, I think that they have been deceived by their own propaganda. A fortnight ago the Chancellor talked about how much better the Conservatives had done for the pensioners than had the Labour Party. In reply to Questions from some of my Scottish colleagues, the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food said that the Conservatives had done very much better than we did. I agree that they are honest men and that they believe what they are saying, but let us look at the record.

When they came into power the Tory Party raised the pension from 30s. to 32s. 6d., and I admit straight away that all pensioners received it, including the sick and the unemployed. But what was the 32s. 6d. in terms of 1946 prices? Even after the pension had been raised to 32s. 6d. it was still substantially below the 1946 level. Let us look at the three rises. There was a rise from 30s. to 32s. 6d. in September, 1952; from 32s. 6d. to 40s. in April, 1955, conveniently on the eve of an election; and from 40s. to 50s. in January, 1958.

The pension of 32s. 6d. never reached in purchasing power the value of the original 26s. By October, 1952, it was down in value to 2s. 5d. less than the 1946 level. By October, 1953, it was 2s. 10d. less and by October, 1954, it was 3s. 5d. less than the original 26s. in terms of 1946 purchasing power. These are Government figures, and they can be found in the OFFICIAL REPORT. Thus, the same thing happened as had happened under the Labour Party; under the Labour Party in 1950 the value was 3s. 5d. below the original purchasing power. But this time I am talking about the Conservatives who make such boasts about their record.

Mr. Dudley Williams (Exeter)

rose—

Mr. Lawson

I have not time to give way to the hon. Member.

After three years of Conservative Government the purchasing power of the pension was 3s. 5d. less than it had been in 1946. In 1955 the pension was raised by 7s. 6d., but by October, 1955, the pension having been raised in April, it was worth only 5d. more in purchasing power than it had been in 1946. These are the Government's own figures. This process of erosion was certainly not confined to the Labour Government. It continued under Conservative Governments, too.

I agree that when the pension was raised to 50s. in 1958 it rose above the 1946 level. Again on the Government's own calculations, in October, it was up to 29s. 9d. in value, which is 3s. 9d. above the original value. We have since been given a figure of 3s. 8d. more in value than the 1946 pension. But we must remember that this is after eight years of Tory rule.

One of my hon. Friends the other day asked the Minister of Pensions and National Insurance, taking into account the abolition of the tobacco coupons, to state how much better off the pensioner was now than he had been in 1955, expressed in 1946 prices. The answer, which is to be found in HANSARD, is 9d. for those pensioners who smoke. These are, again, Government figures to be found in the OFFICIAL REPORT. He is 9d. better off than he was in 1946. I put it to hon. Members opposite that this is not a process about which one can be proud.

I wish I had time to develop the other leg of the argument. A process has been going on by which steadily the contributors have been carrying a larger and larger part of the cost of the pensions, and this process will continue under the National Insurance Act, 1959.

The hon. Member for Lewisham, North spoke as if the money all came out of a common pool. He spoke about the emerging deficit, but under the new Act that deficit largely disappears. The Minister and his predecessor, now Minister of Housing and Local Government, have talked in terms of a huge deficit which they were carrying. The previous Minister mentioned it on the 1954 Act and the present Minister, when he introduced the 1959 Act, spoke in terms of a huge deficit which the Exchequer was carrying and which meant that eventually the Exchequer would meet about 50 per cent. of the cost of the pensions.

The answer, which the Minister well knows, although his Parliamentary Secretary may not, is that under the 1959 Act the deficit is permanently placed on the shoulders of the contributor. By 1971–72, for example, the proportion of the total cost being borne by the Exchequer, again in Government figures, is about 14 per cent.

We therefore have a swindle in two ways—and I use the word deliberately. My hon. Friend the Member for Coventry, East (Mr. Crossman) used it many times in Committee. We have a swindle in the sense that people are led to believe that pensioners are very much better off under the Tories than they were under the Labour Party. The second part of the swindle is that a regular process is going on of taking the burden from the Exchequer and the general taxpayer and transferring it to the contributors' shoulders.

6.50 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Patricia Hornsby-Smith)

We have had a very interesting debate this afternoon. It has ranged over much of the ground which was covered less than a month ago on a Motion on a similar subject. Once again, we have had very great claims made by hon. Members opposite as to what money should be expended, but very little suggestion—beyond that of running down the National Insurance Fund—as to how these additional contributions should be made.

First, I take up the right hon. Member for Llanelly (Mr. J. Griffiths) on a point he quite fairly made in analysing the Beveridge recommendations and point out an omission which I think completely nullifies the estimates of Beveridge. It was laid down, as the right hon. Member quite rightly said, that it was the aim of the Beveridge proposals gradually to eliminate National Assistance for pensioners, but that hope was based on the fact that the Beveridge recommendations were to stagger the raising of pensions over twenty years and thus eliminate the tremendous burden which was bound to result from raising the standard benefit all round whether people had contributed or not. The House rightly agreed that pensions all round, regardless of whether they had been contributed to—

Mr. J. Griffiths

That is quite true, but what about sickness and unemployment benefits cases in which one in ten or one in nine have to go to National Assistance?

Miss Hornsby-Smith

I think that the right hon. Member will accept that the majority of people on National Assistance are pensioners.

I understand that hon. Members want this debate to terminate fairly soon— I hope the right hon. Member will forgive me if I do not go into that branch of the subject, but keep to pensions, as most of the debate has been concerned with that issue.

In accepting that principle we deliberately, and rightly, made nonsense of the Beveridge estimates and it is to be expected that the burden placed on the community to meet pensions would be automatically much greater than was ever estimated or contemplated in the Beveridge Report.

The right hon. Member then referred in, I thought, less than fair terms, to the National Assistance Board. I regret that so many hon. Members—not intentionally, but certainly by implication —have spoken rather scathingly and rather denigrated the very good work and the great humanity of the staff, the Chairman and members of the National Assistance Board.

Mr. J. Griffiths

I cannot remember having done that.

Miss Hornsby-Smith

I am not suggesting that the right hon. Member did. To eliminate the large number—and I admit that it is a large number—on National Assistance who are now getting supplements to their benefits, this could be achieved—at any rate, one of his suggestions was that it could be achieved —by increasing the pension by an amount comparable to that by which wages have increased.

The right hon. Member mentioned 8s. 11d. and said "make it ten bob in round terms". Does he really suggest that if there were a 10s. rise in pension he would be prepared to eliminate from National Assistance the people who need the help most, those who happen to be on National Assistance? Does he mean that 10s. extra is the limit of the allowance for them and that we should reduce the numbers but give 10s. also to people who have a second pension and do not require the 10s., and that then we would have fewer on National Assistance?

Let us get down to the realisation that every time pensions have gone up hon. Members on both sides have rightly said that if we knocked that number off National Assistance we would be hurting the people who need it most and giving them nothing. I do not believe that that is what the right hon. Member meant, nor that it is a policy which be would support. It is quite false to suggest that we could easily eliminate the numbers of people for whom we have deliberately increased benefits, for whom we have deliberately increased the disregards and whom hon. Members on both sides of the Committee recognise are those most in need because they have no other income but their contributory pension.

I wish to say a few words about the numbers on National Assistance. They have gone up, but that was inevitable if the level was raised because the intention of raising the level was to bring in a few more who were on the margin and who previously just failed to qualify for additional help. Perhaps the most valuable contribution is that made in respect of rents. Of the 976,000 pensioners receiving supplements in December, 1959, on the basis of rents a sample showed that 871,000 were householders, 77,000 were members of other people's households, 20,000 were boarders and 8,000 were in homes, hospitals or hostels.

The contributions made are even more interesting. The owner-occupiers had to pay rates and other out-goings averaging 12s. 4d. a week, 250,000 in local authority houses had an average rent of 20s. 8d. a week, while 515,000 other tenants had an average rent of 19s. a week. The rent allowance, which with the exception of 5,000 cases was paid in full, was made to a large number of pensioners by the National Assistance Board and it was substantial. It is not something which we should lightly denigrate or suggest would be quickly wiped out by the normal additions which might come in pensions.

Mr. Ellis Smith (Stoke-on-Trent, South)

No one suggested that.

Miss Hornsby-Smith

We were challenged by the hon. Member for Mother-well (Mr. Lawson). He said that he had evidence of bad treatment by the National Assistance Board. I hope that he will let us have it. We would like to look into it, because it is not true that officials of the Board poke about in people's clothing and belongings, or that personal belongings have to be disposed of before people can get National Assistance. It is quite untrue. It is quite untrue that all their personal savings have to be exhausted before they can get National Assistance. We have put up the limit and, as a result of putting it up from £400 to £600, 2,000 more have come on to National Assistance because their savings are not now above the limit.

Hon. Members on both sides of the Committee have pointed out—and I know that, to an extent, it is true—that there are people who are reluctant to go to the Board for a supplement to their pension. We have endeavoured to make the process very easy. There is no going before a committee. The Board's visitor, on application, will visit a pensioner's home. There is no publicity and, if the pensioner is a householder and has only his retirement pension on which to maintain himself, or if his means are within the savings limit, he can have the additional supplement to his pension for which he qualifies, as is the desire of all hon. Members.

Hon. Members opposite have said a great deal about "half a million people". They made a lot of that during the election. I am sorry that the hon. Member for Coventry, East (Mr. Cross-man) is not here, because he raised the question again tonight about half a million people, claiming that they were not receiving the benefits to which they are entitled in this connection.

If, as he said, hon. Members have carried out investigations and taken samples in two cities, and if the evidence is based on real knowledge and facts, they should send us the names. Hon. Members are not generally shy in putting forward cases on behalf of their constituents—indeed, it is their duty and their right to do so. If hon. Members find such cases every week, they should let the Board have them. They should send in the details.

After this claim, I expected, going newly into the Department, to be flooded with applications from the half a million people the Labour Party said were not getting their due. Hon. Members opposite should send them in. We will be delighted to see that they get their due. If hon. Members cannot find the names, I can tell them that far from there being half a million—I accept that some people still may not desire to go to the Board— we have not had 100,000. We have not even had one in five. Unless the half million is a myth cooked up in Transport House, it should be substantiated by better evidence.

The hon. Member for Coventry, East then suggested—[HON. MEMBERS: "Where is he?"] He will doubtless read my speech tomorrow. I am not worried about that. He used a term which I think was an affront and an insult to my right hon. Friend. He said that he was welshing the old-age pensioners. The hon. Member for Coventry, East has a lively choice of words. It perhaps can be compared with his accusation that his own Government cheated the old-age pensioners when they let the value of the pension go down over six years.

The significant point of this afternoon's debate is that, whatever hon. Members may say about the current rates of pension under this Government, with the one exception of the hon. Member for Motherwell—I give him his due— every hon. Member compared them with the Labour Government record of 1946, not, as one would have expected, with the happy position that they would have hoped to leave when they went out of office in 1951. They compared the 1946 figures with our present record and not the lamentably lower figures in real terms which they left in 1951.

We had an interesting recommendation from the hon. Member for Coventry, East. He made much of adequate pensions, according to contributions, as of right. He then made a sturdy plea that these pensions should automatically be adjusted, both to wages and to the cost of living. He did not say whether they were to be paid for, as he recommended in the last debate, by increased taxation or, if they are to be by contributions, whether they should be met by increased contributions.

In the suggestion of the hon. Member for Coventry, East that pensions should be automatically adjusted, we have again that divergence which occurs so frequently among hon. Members opposite. I cannot better demonstrate the administrative impossibility of pushing pensions up and down and, if it is to be a contributory pension, pushing contributions up and down, than by using the very sound analysis of the right hon. Gentleman for Llanelly when he was at this Box, and was replying on this question: We are definitely of the view that it is undesirable, as well as impracticable, to have automatic adjustments. This method of pegging benefits to a specific cost of living and adjusting them automatically was tried at the end of the last war in war pensions, and broke down the first time it came to be applied. We are convinced, after examination, that it will break down again."—(OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1741.] So are we.

My hon. Friend the Member for Basingstoke (Mr. Denzil Freeth) asked what was the present value of the National Insurance Funds. I can only give him a recent estimate, and that was £1,175 million. If hon. Members suggest that that should be run down to meet even the amount suggested by one hon. Member opposite, the Funds would be eliminated in a very few years. There would be no real basis of security for the future pensions of those who have contributed to the Fund over the years. They have a right to draw their pensions. It is not good economics or practical politics to take away from that surplus when the number of pensioners will rise year by year from 5½ million now to 7½ million over the next twenty years, and the demands will be all the greater and will require the surplus.

The hon. Member for Oldham, West (Mr. Hale) also claimed that my right hon. Friend's figure of £170 million was tied to the National Insurance Act, 1959. That is not true. The £170 million is paid this year for the current pension fund.

Mr. Hale

I said, "this year in advance."

Miss Horns by-Smith

No, it is not.

Mr. Hale

The hon. Lady's own report says £170 million going on to 1980.

Miss Hornsby-Smith

Yes, but that has nothing to do with the graduated

scheme of next year. It is for the current pension scheme. The graduated scheme is not yet in operation. Therefore, the demands we are now facing are for the basic pensions and insurance under the current funds and the currently operated Act.

There are many other points to which I would have been very happy to reply, but we agreed with the Opposition to close the debate as near to seven o'clock as possible. I should like to conclude by saying that we adhere to our pledge that we shall see that the old-age pensioner joins in and shares the prosperity. [HON. MEMBERS: "When?"] We have, by our record, shown that it is not hon. Members opposite who have a monopoly of sympathy with old-age pensioners. On our record we believe that pensioners acknowledge, with their present pensions and their present benefits, that we have followed that pledge and we shall continue to honour it and to follow it.

Mr. J. Griffiths

To register our protest against the failure of the Government to redeem their pledges, I beg to move, That Item Class X, Vote 2 (Ministry of Pensions and National Insurance) be reduced by £5.

Question put: —

The Committee divided: Ayes 226, Noes 289.

Division No. 73.]	AYES	[7.8 p.m
Abse, Leo	Collick, Percy	Gourlay, Harry
Ainsley, William	Craddock, George (Bradford, S.)	Greenwood, Anthony
Albu, Austen	Cronin, John	Grey, Charles
Allaun, Frank (Salford, E.)	Crosland, Anthony	Griffiths, David (Rother Valley)
Allen, Scholefield (crewe)	Crossman, R. H. S.	Griffiths, Rt. Hon. James (Llanelly)
Bacon, Miss Alice	Cullen, Mrs. Alice	Grimond, J.
Baird, John	Darling, George	Gunter, Ray
Baxter, William (Stirlingshire, W.)	Davies, G. Elfed (Rhondda, E.)	Hale, Leslie (Oldham, W.)
Beaney, Alan	Davies, Harold (Leek)	Hall, Rt. Hon. Glenvil (Colne Valley)
Bellenger, Rt. Hon. F. J.	Davies, Ifor (Gower)	Hamilton, William (West Fife)
Benn, Hn. A.Wedgwood(Brist'l,S.E.)	Davies, S. O. (Merthyr)	Hannan, William
Benson, Sir George	Deer, George	Hart, Mrs. Judith
Blackburn, F.	de Freitas, Geoffrey	Hayman, F. H.
Blyton, William	Dempsey, James	Henderson,Rt.Hn.Arthur(RwlyRegis)
Boardman, H.	Diamond, John	Herbison, Miss Margaret
Bowden, Herbert W. (Leics, S.W.)	Dodds, Norman	Hill, J. (Midlothian)
Bowcn, Roderic (Cardigan)	Donnelly, Desmond	Hiton, A. V.
Bowles, Frank	Driberg, Tom	Holman, Percy
Boyden, James	Dugdale, Rt. Hon. John	Holt, Arthur
Braddock, Mrs. E. M.	Ede, Rt. Hon. Chuter	Houghton, Douglas
Brockway, A. Fenner	Edwards, Rt. Hon. Ness (Caerphilly)	Howell, Charles A.
Broughton, Dr. A. D. D.	Edwards, Robert (Bilston)	Hoy, James H.
Brown, Alan (Tottenham)	Edwards, Walter (Stepney)	Hughes Cledwyn (Anglesey)
Brown, Rt. Hon. George (Belper)	Evans, Albert	Hughes, Emrys (S. Ayrshire)
Brown, Thomas (Ince)	Fernyhough, E.	Hughes, Hector (Aberdeen, N.)
Butler, Herbert (Hackney, C.)	Fitch, Alan	Hunter, A. E.
Butler, Mrs. Joyce (Wood Green)	Fletcher, Eric	Hynd, John (Attercliffe)
Callaghan, James	Forman, J. C.	Irvine A. J, (Edge Hill)
Carmichael, James	Fraser, Thomas (Hamilton)	Janner, Burnett
Castle, Mrs. Barbara	Gaitskell, Rt. Hon. Hugh	Jay, Rt. Hon. Douglas
Chapman, Donald	George, Lady Megan Lloyd	Jeger, George
Chetwynd, George	Ginsburg, David	Jenkins, Roy (Stechford)
Cliffe, Michael	Gordon Walker, Rt. Hon. P. C.	Johnston, Douglas (Paisley)
Jones, Rt. Hn. A. Creech (Wakefield)	Moody, A. S.	Soskice, Rt. Hon. Sir Frank
Jones, Dan (Burnley)	Morris, John	Spriggs, Leslie
Jones, Elwyn (West Ham, S.)	Moyle, Arthur	Steele, Thomas
Jones, Jack (Rotherham)	Mulley, Frederick	Stewart, Michael (Fulham)
Jones, J. Idwal (Wrexham)	Neal, Harold	Stonehouse, John
Jones, T. W. (Merioneth)	Oliver, G. H.	Stones, William
Kelley Richard	Oram, A. E.	Strachey, Rt. Hon. John
Kenyon, Clifford	Oswald, Thomas	Strauss, Rt. Hn. G. R. (Vauxhall)
Key, Rt. Hon. C. W.	Owen, Will	Stross, Dr.Barnett (Stoke-on-Trent, C.)
King, Dr. Horace	Padley, W. E.	Summerskill, Or. Rt. Hon. Edith
Lawson, George	Pannell, Charles (Leeds, W.)	Swain, Thomas
Ledger, Ron	Pargiter, G. A.	Swingler, Stephen
Lee, Frederick (Newton)	Parker, John (Dagenham)	Sylvester, George
Lee, Miss Jennie (Cannock)	Parkin, B. T. (Paddington, N.)	Symonds, J. B.
Lever, Harold (Cheetham)	Pearson, Arthur (Pontyridd)	Taylor, Bernard (Mansfield)
Lever, L. M. (Ardwick)	Peart, Frederick	Thomas, George (Cardiff, W.)
Lewis, Arthur (West Ham, N.)	Pentland, Norman	Thomas, Iorwerth (Rhondda, W.)
Lipton, Marcus	Plummer, Sir Leslie	Thompson, Dr. Alan (Dunfermline)
Logan, David	Popplewell, Ernest	Thornton, Ernest
Loughlin, Charles	Prentice, R. E.	Ungoed-Thomas, Sir Lynn
Mabon, Dr. J. Dickson	Price, J. T. (Westhoughton)	Wade, Donald
McCann, John	Probert, Arthur	Wainwright, Edwin
MacColl, James	Proctor, W. T.	Warbey, William
McInnes, James	Pursey, Cmdr. Harry	Watkins, Tudor
McKay, John (Wallsend)	Randall, Harry	Weitzman, David
Mackle, John	Rankin, John	Wells, Percy (Faversham)
McLeavy, Frank	Redhead, E. C	Wells, William (Walsall, N.)
MacMillan, Malcolm (Western Isles)	Reid, William	Wheeldon, W. E.
MacPherson, Malcolm (Stirling)	Reynolds, G. W.	White, Mrs. Eirene
Mahon, Simon	Rhodes, H.	Whitlook, William
Mallalieu, E. L. (Brigg)	Robens, Rt. Hon. Alfred	Wilcock, Croup Capt. C. A. B.
Mallalieu, J.P.W.(Huddersfield, E.)	Roberts, Albert (Normanton)	Wilkins, W. A.
Manuel, A. C.	Robinson, Kenneth (St. Pancras, N.)	Willey, Frederick
Mapp Charles	ROSS, William	Williams, D. J. (Neath)
Marquand, Rt. Hon. H. A.	Royle, Charles (Salford, West)	Williams, Rev. LI. (Abertillery)
Marsh, Richard	Short, Edward	Willis, E. G. (Edinburgh, E.)
Mason, Roy	Silverman, Jullius (Aston)	Wilson, Rt. Hon. Harold (Huyton)
Mayhew, Christopher	Silverman, Sydney (Nelson)	Winterbottom, R. E.
Mellish, R. J.	Slater, Mrs. Harriet (Stoke, N.)	Woodburn, Rt. Hon. A.
Mendelson, J. J.	Small, William	Yates, Victor (Ladywood)
Millan, Bruce	Smith, Ellis (Stoke, S.)	Zilliacus, K.
Mitchison, G. R.	Snow, Julian
Monslow, Walter	Sorensen, R. W.	TELLERS FOR THE AYES:
		Mr. John Taylor and Mr. Rogers.
NOES
Agnew, Sir Peter	Campbell, Gordon (Moray & Nairn)	Erroll, F. J.
Allan, Robert (Paddington, S.)	Carr, Compton (Barons Court)	Farey-Jones, F. W.
Allason, James	Carr, Robert (Mitcham)	Fell, Anthony
Alport, C. J. M.	Cary, Sir Robert	Finlay, Graeme
Amory, Rt. Hn. D. Heathcoa t(Tiv'tn)	Channon, H. P. G.	Fisher, Nigel
Arbuthnot, John	Chataway, Christopher	Fletcher-Cooke, Charles
Ashton, Sir Hubert	Chichester-Clark, R.	Fraser, Hn. Hugh (Stafford & Stone)
Atkins, Humphrey	Clark, Henry (Antrim, N.)	Fraser, Ian (Plymouth, Sutton)
Balniel, Lord	Clark, William (Nottingham, S.)	Freeth, Denzil
Barlow, Sir John	Clarke, Brig. Terence (Portsmth, W.)	Gammans, Lady
Barter, John	Cleaver, Leonard	Gardner, Edward
Batsford, Brian	Cole, Norman	George, J. C. (Pollok)
Baxter, Sir Beverley (Southgate)	Collard, Richard	Gibson-Watt, David
Bell, Philip (Bolton, E.)	Cooke, Robert	Glover, Sir Douglas
Bell, Ronald (S. Bucks.)	Cooper, A. E	Glyn, Dr. Alan (Clapham)
Bennett, Dr. Reginald (Gos & Fhm)	Cordle, John	Glyn, Col. Richard
Berkeley, Humphry	Costain, A. P.	Godber, J. B.
Bevins, Rt. Hon. Reginald (Toxteth)	Coulson, J. M.	Goodhart, Philip
Bidgood, John C.	Courtney, Cdr. Anthony	Goodhew, Victor
Biggs-Davison, John	Craddock, Beresford (Spelthorne)	Gower, Raymond
Birch, Rt. Hon. Nigel	Critohley, Julian	Grant, Rt. Hon. William (Woodside)
Bishop, F. P.	Crowder, F. P.	Grant-Ferris, Wg Cdr. R. (Nantwich)
Black, Sir Cyril	Cunningham, Knox	Green, Alan
Bossom, Clive	Curran, Charles	Gresham Cooke, R.
Bourne-Arton, A.	Currie, G. B. H.	Grimston, Sir Robert
Box, Donald	Dance, James	Grosvenor, Lt.-Col. R. G.
Boyd-Carpenter, Rt. Hon. John	d'Avigdor-Goldsmid, Sir Henry	Hamilton, Michael (Wellingborough)
Boyle, Sir Edward	Deedes, W, F.	Harris, Frederic (Croydon, N. W.)
Brewis, John	de Ferranti, Basil	Harris, Reader (Heston)
Bromley-Davenport, Lt.-Col. W. H.	Digby, Simon Wingfield	Harrison, Col. J. H. (Eye)
Brooke, Rt. Hon. Henry	Donaldson, Cmdr. C. E. M.	Harvey, John (Walthamstow, E.)
Brooman-White, R.	du Cann, Edward	Harvie Anderson, Miss
Browne, Percy (Torrington)	Duncan, Sir James	Hay, John
Bryan, Paul	Duthie, Sir William	Heath, Rt. Hon. Edward
Bullard, Denys	Eccles Rt. Hon. Sir David	Henderson, John (Cathcart)
Bullus, Wing Commander Eric	Eden, John	Henderson-Stewart, Sir James
Burden, F. A.	Elliott, R. W.	Hendry, Forbes
Butcher, Sir Herbert	Emery, Peter	Hlcks Beach, Maj. W.
Butler, Rt. Hn. R. A. (Saffron Walden)	Errington, Sir Eric	Hlley, Joseph

Hill, Dr. Rt. Hon. Charles (Luton)	Maginnis, John E.	Shaw, M.
Hill, J. E. B. (S. Norfolk)	Maitland, Cdr. J. W.	Shepherd, William
Hirst, Geoffrey	Manningham-Buller, Rt. Hn. Sir R.	Skeet, T. H. H.
Hooking, Philip N.	Markham, Major Sir Frank	Smith, Dudley (Br'ntf'd & Chiswick)
Holland, Philip	Marlowe, Anthony	Smithers, Peter
Hollingworth, John	Marples, Rt. Hon. Ernest	Smyth, Brig, Sir John (Norwood)
Hope, Rt. Hon. Lord John	Marshall, Douglas	Soames, Rt. Hon. Christopher
Hopkins, Alan	Marten, Neil	Spearman, Sir Alexander
Hornsby-Smith, Rt. Hon. Patricia	Mathew, Robert (Honiton)	Speir, Rupert
Howard, Gerald (Cambridgeshire)	Matthews, Gordon (Meriden)	Stanley, Hon. Richard
Howard, Hon. G. R. (St. Ives)	Mawby, Ray	Stevens, Geoffrey
Howard, John (Southampton, Test)	Maydon, Lt.-Cmdr. S. L. C.	Steward, Harold (Stockport, s.)
Hughes Hallett, Vice-Admiral John	Mills, Stratton	Stodart, J. A.
Hughes-Young, Michael	Montgomery, Fergus	Stoddart-Scott, Col. Sir Malcolm
Hutchison, Michael Clark	Morgan, William	Storey, Sir Samuel
Iremonger, T. L.	Morrison, John	Studholme, Sir Henry
Irvine, Bryant Godman (Rye)	Mott-Radclyffe, sir Charles	Summers, Sir Spencer (Aylesbury)
Jackson, John	Nabarro, Gerald	Talbot, John E.
James, David	Neave, Alrey	Tapsell, Peter
Jenkins, Robert (Dulwich)	Nicholls, Harmar	Taylor, W. J. (Bradford, N.)
Johnson, Eric (Blackley)	Noble, Michael	Teeling, William
Johnson Smith, Geoffrey	Nugent, Sir Richard	Temple, John M.
Jones, Rt. Hn. Aubrey (Hall Green)	Oakshott. Sir Hendrie	Thatcher, Mrs. Margaret
Joseph, Sir Keith	Orr, Capt. L. P. S.	Thomas, Leslie (Canterbury)
Kaberry, Sir Donald	Orr-Ewing, C. Ian	Thomas, Peter (Conway)
Kerans, Cdr. J. S.	Osborn, John (Hallam)	Thompson, Kenneth (Walton)
Kerby, Capt. Henry	Osborne, Cyril (Louth)	Thompson, Richard (Croydon, S.)
Kerr, Sir Hamilton	Page, A. J. (Harrow West)	Thornton-Kemsley, Sir Colin
Kershaw, Anthony	Page, Graham	Tiley, Arthur (Bradford, W.)
Kimball, Marcus	Pannell, Norman (Kirkdale)	Tilney, John (Wavertree)
Kirk, Peter	Partridge, E.	Turner, Colin
Kitson, Timothy	Peel, John	Turton, Rt. Hon. R. H.
Lancaster, Col. C. G.	Percival, Ian	van Straubenzee, W. R.
Langford-Holt, J.	Pickthorn, Sir Kenneth	Vane, W. M. F.
Leather, E. H. C.	Pike, Miss Mervyn	Vickers, Miss Joan
Leavey, J. A.	Pilkington, Capt. Richard	Vosper, Rt. Hon. Dennis
Leburn, Gilmour	Pitman, I. J.	Wakefield, Sir Wavell (St.M'lebone)
Legge-Bourke, Maj. H.	Pitt, Miss Edith	Ward, Rt. Hon. George (Worcester)
Lennox-Boyd, Rt. Hon. Alan	Powell, J. Enoch	Watkinson, Rt. Hon. Harold
Lewis, Kenneth (Rutland)	Price, David (Eastleigh)	Watts, James
Lilley, F. J. P.	Price, H. A. (Lewisham, W.)	Webster, David
Linstead, Sir Hugh	Prior, J. M. L.	Wells, John (Maidstone)
Litchfield, Capt. John	Prior-Palmer, Brig. Sir Otho	Whitelaw, William
Longbotton, Charles	Profumo, Rt. Hon. John	Williams, Dudley (Exeter)
Longden, Gilbert	Ramsden, James	Williams, Paul (Sunderland, S.)
Loveys Walter H.	Redmayne, Rt. Hon. Martin	Wills, Sir Gerald (Bridgwater)
Low, Rt. Hon. Sir Toby	Rees, Hugh	Wilson, Geoffrey (Truro)
Lucas, Sir Jocelyn (Portsmouth, S.)	Rees-Davies, W. R.	Wise, A. R.
Lucas-Tooth, Sir Hugh	Ridley, Hon. Nicholas	Wolrige-Gordon, Patrick
McAdden, Stephen	Ridsdale, Julian	Wood, Rt. Hon. Richard
MacArthur, Ian	Rippon, Geoffrey	Woodhouse, C. M.
McLaren, Martin	Robson Brown, Sir William	Woodnutt, Mark
McLaughlin, Mrs. Patricia	Roots, William	Woollam, John
Maclay, Rt. Hon. John	Ropner, Col. Sir Leonard	Worsley, Marcus
Maclean, SirFitzroy (Bute&N.Ayrs.)	Royle, Anthony (Richmond, Surrey)
McLean, Nell (Inverness)	Russell, Ronald	TELLERS FOR THE NOES:
McMaster, Stanley R.	Scott-Hopkins, James	Mr. Legh and
Macmillan, Maurice (Halifax)	Seymour, Leslie	Mr. Edward Wakefield
Macpherson, Niall (Dumfries)	Sharples, Richard

Original Question again proposed.

Motion, by leave, withdrawn.