HC Deb 24 November 1969 vol 792 cc8-12
13. Mr. Boyd-Carpenter

asked the Secretary of State for the Social Services whether in his forthcoming legislation he intends to seek powers to alter existing pensions schemes in the public and private sectors.

Mr. Crossman

Powers will be sought, similar to those included by the right hon. Member in the National Insurance Act 1959, to facilitate the consequential modification of occupational pension schemes by those responsible for them.

Mr. Boyd-Carpenter

Following the very respectable precedent which the right hon.Gentleman cited, will information be given at the same time about the extent to which these powers are intended to be used in the public sector for which Ministers are responsible?

Mr. Crossman

The provisions will lay clown how they should be used, mainly to qualify the contracting out and to meet the statutory requirements on preservation of occupational pension schemes.

Mr. Dean

On previous occasions the right hon. Gentleman has referred to a cut back. Today he talked about modification. In view of the great uncertainty which exists at the moment in public service pension schemes, and, indeed, in private occupational schemes, can the right hon. Gentleman say when these negotiations in the public service are likely to start?

Mr. Crossman

I think that the hon. Gentleman is confusing two different things I was asked whether powers would be taken to enable occupational pension schemes to modify themselves in the light of the new scheme. This has nothing to do with a cut-back at all.

14. Mr. Fortescue

asked the Secretary of State for Social Services what advice he has received from the National Association of Pension Funds about earnings-related state pensions.

Mr. Crossman

The association has publicly stated the view on earnings-related State pensions which it put to me.

Mr. Fortescue

At Question Time three weeks ago the right hon. Gentleman indicated that it was his belief that there was general agreement about the desirability of an earnings-related State pension scheme. Does the Minister agree that the views expressed by the National Association of Pension Funds are somewhat counter to that belief?

Mr. Crossman

I hesitate to correct the hon. Gentleman, but I think I said that the popularity of earnings-related schemes had been clearly demonstrated by the existence of 65,000 of them in the private sector. It is because we are encouraged by that belief that we are starting the State earnings-related scheme to follow the work of the pioneers.

Mr. Winnick

Is my right hon. Friend aware that whatever difficulties have to be ironed out in the scheme, many people at work will be pleased that when they retire they will not have to face the poverty which so many retired people are facing now?

Mr. Crossman

That is something which we should not forget. Nor should we forget that at least 25 per cent. of the working population are not, and cannot be, covered by occupational pension schemes.

15. Mr. Fortescue

asked the Secretary of State for Social Services what is his estimate of the number of pensioners in 1972 who will be ineligible to participate in the proposed earnings-related state pension scheme.

Mr. Ennals

People who are already retirement pensioners when the earnings-related pension scheme begins will not pay contributions under that scheme.

Mr. Fortescue

I should be grateful if the hon. Gentleman would answer the Question and tell me what will be the number of such people in 1972. As both the Prime Minister and the Secretary of State have said continuously that the object of their new scheme is to prevent a divisive effect among pensioners, to prevent pensioners being divided into two nations, in the words of the original White Paper, does not the hon. Gentleman agree that from 1972 onwards there will be an additional division among pensioners which will last until at least the end of the century?

Mr. Ennals

The answer to the first part of that question is that it is estimated that by April, 1972, there will be about 7½ million retirement pensioners. The answer to the second part is that the Government's decision that every two years all pensions, both existing pensions and those under the new scheme, are to be uprated will mean that old pensioners will share in the rising standard of living. If the previous Administration when in power had given that same pledge the plight of pensioners today would be better than it is.

Lord Balniel

All those 7½ million pensioners will be held down on a flat-rate pension whereas the younger people will be placed on an earnings-related pension? Does not this mean, by definition, that the young will do better than the older people and that there will be a widening gap between the two generations? Surely that is wrong.

Mr. Ennals

It certainly means that those who pay the new rates of contribution to the new scheme will receive the new rates of benefit from it. The noble Lord says that they will be held down. It is not the intention of this Government that existing pensioners should be held down. It is our intention that they should have their levels raised and should share in rising standards of living.

Mr. Marks

Is my hon. Friend aware that hon. Members opposite would do nothing about changing the present inadequate pension scheme? In the meantime—before 1972—will my hon. Friend do everything in his power to arrange for annual reviews of standard rate pensions, so that they can come within reach of the new scheme, with an adequate pension, by 1972?

Mr. Ennals

In answer to the second part of my hon. Friend's supplementary question, we shall be able to debate this when the Bill is before the House. As for the first part of the question, the decision to have a biennial review is of extreme importance to the pensioners, because at one stage when the previous Government were in power they had to wait for 3½ years before they had an increase to cover the rising cost of living.

Sir B. Rhys Williams

Will the hon. Gentleman tell the House why he proposes to bring in a scheme which will give most money to people with the least need?

Mr. Ennals

That is not so. We are proposing to bring in a scheme because the present scheme does not ensure that people can retire with an adequate pension on which they can live.