HC Deb 19 May 1969 vol 784 cc17-22
8 and 9. Mr. Worsley

asked the Secretary of State for Social Services (1) how he plans to finance the increase in retirement pensions this autumn;

(2) what pensions and benefits he plans to increase this autumn.

30. Mr. Tapsell

asked the Secretary of State for Social Services how he proposes to finance the autumn increase in pensions.

56. Sir H. Harrison

asked the Secretary of State for Social Services what is the size of the existing imbalance between income and expenditure of the main National Insurance Fund.

57. Mr. J. E. B. Hill

asked the Secretary of State for Social Services whether he proposes to bring in graduated contributions to pay for the cost of the autumn pensions' increase.

63 and 64. Mr. Carlisle

asked the Secretary of State for Social Services (1) when he expects to announce the contributions increases necessary to finance the increase in pensions this autumn;

(2) by how much he now estimates the Exchequer subsidy will be increased in order to finance the autumn increase in pensions.

Mr. Crossman

I would refer the hon. Members to what I and my hon. Friend the Minister of State said in the debate on 15th May.

Mr. Worsley

But the right hon. Gentleman did not answer the question then. Is he seriously saying that when the Government decided to increase pensions and announced their decision in the Budget no decision about how they would be paid for had been taken and that still no decision has been taken? Is not this the act of a spendthrift?

Mr. Crossman

I do not think that that was the impression created by my speech last Thursday. On the contrary, I told the House, and it was printed fully in the Press next day, that we still had one major difficulty, which was the problem of the benefit which should be paid on the so-called graded element of the scheme and that I was still discussing this.

Mr. Tapsell

Does the right hon. Gentleman seriously deny that it is an unprecedented and astonishing situation that five weeks after the Chancellor of the Exchequer told the country that pensions would be increased the workers still do not know by how much contributions will go up?

Mr. Crossman

The Chancellor of the Exchequer made his statement a few weeks ago and the increase will be made in November. If the hon. Gentleman says that it is an absolute scandal that people should not be told now rather than in three weeks what they will be paying in November, he somewhat aggravates the problem.

Sir H. Harrison

Would not the Minister agree, with hindsight, that it has been very unwise to let the Fund run into such a heavy deficit so that increased pensions have to be linked to increased contributions? Is not this the result of the inflationary policies of the Government?

Mr. Crossman

I would put it differently. The Fund has run into deficit owing to three factors: the great increase in the number of old people who are receiving pensions; the very considerable increase in sickness benefit payments; and the considerable increase in unemployment benefit payments. These are the three major factors which have caused the present situation. If the hon. and gallant Gentleman thinks that in those cases it would have been simpler not to pay, I do not agree.

Mr. Hill

Does the right hon. Gentleman realise that to have to wait for another three weeks before the level of extra contributions is known is having a paralysing effect on all employers, who have to make estimates and put forward predictions of what their activities will cost in future? Will he, therefore, urgently consider making a statement, since otherwise the pensions plan merely becomes "Crossman's chaos"?

Mr. Crossman

I gave the employers last Thursday a very accurate account of the total costs which would fall on the Fund and I gave them an assurance that they would not pay any extra part of it and that it would be shared equally between employers and employees. They should easily be able to assess their total burden.

Mr. Tinn

Surely these Questions must have been tabled three weeks before the debate. Are not right hon. and hon. Members simply using them to try to score party points?

Mr. Crossman

One would be surprised if hon. Members opposite did not behave according to their characteristics and those of an Opposition.

Mr. Carlisle

The right hon. Gentleman is reported to have said last Wednesday that the Bill was to be published this week. What is the cause of the delay? What has happened since last week to make him change his mind?

Mr. Crossman

If the hon. Gentleman will study the speech I made on Thursday afternoon, he will see the reason I gave and I will now repeat it. The difficulty we have which is not yet resolved is in the problem of whether graded benefit should be remitted to receive the uprating every two years according to the flat-rate pension. We want to give further consideration to this and it was in the light of this that I decided to postpone publication of the Bill until after next week.

Lord Balniel

The right hon. Gentleman owes the country the plain and simple duty to sort out the now unbelievable muddle which exists about how the extra £430 million needed for the National Insurance Fund is to be raised. Why did the right hon. Gentleman announce on Wednesday that he was going to introduce a Bill this week and on Thursday decide to withdraw it? Has his swindle been over-ruled by the Cabinet?

Mr. Crossman

I do not often do so but I re-read my speech in the OFFICIAL REPORT and I am satisfied—and I am sure the hon. Gentleman will agree if he reads it carefully—that there should be no uncertainty or confusion about the way in which this money will be raised. I am clear that the total amount involved, the method of how we are to divide it, for the first time, between the flat rate and the graded element, together with the element of doubt to which I referred and which has caused postponement, were all clear to everyone outside the House.

10. Mr. Boyd-Carpenter

asked the Secretary of State for Social Services what increases he proposes to make in the autumn in the rates of war pensions and industrial injury benefits; and, in respect of the latter, what increases in contributions are under consideration.

Mr. Ennals

I must asked the right hon. Gentleman to await the publication of the Bill which will also be the occasion for the announcement of the increases proposed in war pensions.

Mr. Boyd-Carpenter

Does the hon. Gentleman recall hearing the Secretary of State a few moments ago telling my hon. Friend the Member for Horncastle (Mr. Tapsell) that the pensioners were entitled to hear very soon what they were going to get in the autumn? Does the hon. Gentleman not recall that he himself said the same thing on Thursday night? if that is right for retirement pensioners, is it not right for war pensioners and industrial injury pensioners? Or do the Government think of them as inferior?

Mr. Ennals

The latter categories have known for a number of weeks that there is to be an increase. The increases in the main rates of the war pensions and the industrial injuries schemes will be, as in the past, broadly proportionate to the main National Insurance increase. One of the main reasons why my right hon. Friend the Chancellor of the Exchequer announced a pensions increase in his Budget Statement was in order that the pensioners should know that they were to have an increase in the autumn, and if hon. and right hon. Members opposite do not appreciate that notice, the pensioners do.

Mr. Dean

The Secretary of State has just said in answer to a previous Question that everyone outside knows how much extra they are going to pay. Will the hon. Gentleman be specific and say how many people will pay 5s. a week or more on the stamp?

Mr. Ennals

The hon. Gentleman knows perfectly well that the Bill will be published and that it will contain both the details of the amount that will be contributed and the details of the amount of benefits. He must just be patient.

11. Mr. Boyd-Carpenter

asked the Secretary of State for Social Services what increase he proposes to make in the rates of supplementary benefits at the time when National Insurance benefits are raised in the autumn.

29. Mr. Tapsell

asked the Secretary of State for Social Services by how much he proposes that supplementary benefit levels will be raised this autumn; and what estimate he has made of the cost.

Mr. Ennals

I must refer the hon. Gentleman to the replies which I gave my hon. Friends the Members for Abertillery (Mr. Geoffrey Williams) and Darlington (Mr. Ted Fletcher) on 28th April.—[Vol. 782, c. 158–9.]

Mr. Boyd-Carpenter

Does not the hon. Gentleman appreciate that the 2 million poorer pensioners will not know how much net they are to get in the autumn until they know what the increase is going to be in supplementary benefits, because they do not know how much of the increased pension will be clawed back?

Mr. Ennals

Those on supplementary benefits know that there will be an increase in the autumn because it has been announced. They also know that there was an increase last autumn and that this further increase will cover the changes in prices during the 12 months.

Mr. Tapsell

Will the hon. Gentleman explain how it is that, while the Secretary of State justified the timing of the Chancellor's announcement purely on the ground that the poorer sections of the community had to be given advance reassurance that their benefits would go up, he is taking the line that it is not necessary for the poorest of them to be given details?

Mr. Ennals

Obviously, when the Bill is published it will give details both of contributions and of benefits. Perhaps the hon. Gentleman will look carefully through the records of the Conservative Government. If he does, he will find that there were long delays, sometimes as much as 3½ years, between pension increases when they were in office. He will also find that their Bills to give effect to their announcements of increases were introduced after a longer interval than this Bill is being introduced after the Budget announcement. The interval in this case between the announcement and the introduction of the Bill will be shorter than what was achieved by the Opposition.

Mr. Ellis

Will my hon. Friend consult the Chancellor of the Exchequer to see whether we can have an annual review of the old-age pensions as such in order to avoid the invidious position whereby supplementary benefits apparently lose out every time we have this second year review?

Mr. Ennals

Under the new scheme to be introduced on the target date of April, 1972, instead of having to have legislation from time to time in order to raise the rates, any increases made will be brought in automatically by a review every two years, and in these reviews the level of supplementary benefits will be considered as well as the National Insurance rates.

Lord Balniel

Why is it desirable to tell pensioners the exact amount of extra benefits they will be getting this time but to refuse figures for the very poorest sections of the community?

Mr. Ennals

The hon. Gentleman should consult his hon. Friends behind him. They have been complaining that we have not given all the details of the benefits as well as the details of the contributions.

Mr. Boyd-Carpenter

On a point of order, Mr. Speaker. Arising out of the unsatisfactory nature of the reply and also of the reply to Question No. 10, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.