HC Deb 22 March 1965 vol 709 cc7-9
6. Mr. Shepherd

asked the Minister of Pensions and National Insurance what is the present purchasing power of the increase in the pension rate announced last November.

8. Mr. Ridsdale

asked the Minister of Pensions and National Insurance what she estimates is the present purchasing power of the increase in the pension rate announced last November; and what items she takes into account when making this estimation.

Miss Herbison

On the basis of the Retail Prices Index (All items) for February, which is the latest available, the 12s. 6d. increase for a single pensioner is now worth about 1d. less than when it was announced in November; the 21s. for a couple is worth about 2d. less.

Mr. Shepherd

Is it not clear that these additional benefits are depreciating—[Interruption.] Will the right hon. Lady take up this matter with her right hon. Friends to ensure that in future they pursue policies that are not calculated further to diminish these advantages?

Miss Herbison

It is evident that, in the light of my reply, the hon. Gentleman has had some difficulty with his supplementary question. It seems to me that the efforts that have been made by this Government to steady the cost of living have been successful, and this is of the greatest importance to all old people.

Mr. Ridsdale

Could the Minister establish a cost of living index for old people, to include such critical items as heating and lighting, rates—which have gone up so much in the last three months—and, in particular, the cost of education borne by the elderly?

Miss Herbison

A great deal of thought has been given to getting a special cost-of-living index for the old people, and it is being examined at the present time. Quite frankly, I prefer to link increases in pensions, not to the cost of living, but to increases in earnings. If one does that, the retail prices index—which really very often does not apply to old people—is a matter we would not have to take into account very much.

Mr. A. Henderson

Can my right hon. Friend include in her reply the fall in the value of old-age pensions between 1951 and 1964?

Miss Herbison

That is another question, which my right hon. and learned Friend might like to put down.

14. Mr. Farr

asked the Minister of Pensions and National Insurance by what amount the purchasing power of the retirement pension for a married couple has declined since 15th October, 1964.

Miss Herbison

On the basis of the Retail Prices Index, the value of the present pension for a couple has declined by about ls. 7d.

Mr. Farr

In view of this continual erosion in the purchasing power of the old-age pension, can the right hon. Lady tell me why the increases which have been promised have not been implemented earlier? Is she aware that, if the purchasing power declines continually in the way that it is doing, when this increase is brought into being it will do little more than restore the old-age pension to the purchasing value it had when the Conservatives were last in office?

Miss Herbison

The reasons for the delay have been explained in debates we have had in the House. As to the loss in value of the pension, I made it clear in the Memorandum which was published on the National Insurance &c. Bill, 1964, that we expected that to give the pension the same purchasing power as it had at the previous increase would require only between 4s. and 5s. The actual loss in value of the pension is only 3s. 8d. Therefore, it looks as if, by the end of March, namely, in about one week's time, when the increased pension is paid the loss in value will not be even as much as we had reckoned when the 12s. 6d. increase, far beyond the loss in value, was announced.

35. Mr. Park

asked the Minister of Pensions and National Insurance what is the present purchasing power of the increase in the pension rate announced last November; and what, by the time the previous Administration went out of office, was the purchasing power of the last increase in the pension rate.

Miss Herbison

On the basis of the Retail Prices Index, the 12s. 6d. increase has lost 1d. in value since November 1964; the 10s. increase given in May 1963 lost over 4½d. in value by October 1964.

Mr. Park

Will my right hon. Friend agree that, for the 13 years when the party opposite was in power, the purchasing power of the pension was continually eroded by increases in living costs without any action being taken to correct the situation?

Mrs. Thatcher

Will the Minister point out to her hon. Friend her own testimonial given on page 7 of the Memorandum accompanying the last National Insurance Bill, when she said: Over the period of the quinquennium under review, the rise in earnings was about 27 per cent., as compared with the increase in benefits of 35 per cent., so that in recent years improvements of benefit rates have been overtaking the rise in earnings"?

Miss Herbison

Since this is the second time that has been quoted in the House, perhaps, when it is quoted for the third time, the part before it will be given also. At the end of this month, for the first time ever since 1946, increases in pensions will by a slight margin have overtaken the percentage increase in earnings. At no time during the 13 years of the Tory Government did that obtain.