Retirement Pensions (Hansard, 9 November 1971)

§ 3. Mr. Hardy
asked the Secretary of State for Social Services what is the number and proportion of persons receiving National Insurance retirement pensions who did not obtain the full increase in September because of the increase in supplementary benefit earlier in the year.

§ The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)
One million seven hundred and eighty-eight thousand National Insurance retirement pensioners—approximately 28 per cent.—receive supplementary benefits. Their total income was increased in September by the amount of the increase in their appropriate supplementary benefit scale rate.

§ Mr. Hardy
Is it not true to say that the additional purchasing power provided by the improvement in supplementary benefits early in the year completely disappeared by the time the pension increase commenced in September? Will the hon. Gentleman say when he will take steps to ensure that the purchasing power of the majority of retired people is restored?

§ Mr. Dean
That is not correct. The real value of the purchasing power was increased by at least 3 per cent., and those on supplementary benefit got their increase in two annual instalments. The total of those two was the same as the retirement pension increase.

§ Mrs. Shirley Williams
Does the hon. Gentleman recognise that every year the poorest pensioners are cast into despair by the fact that part of the pension increase is withheld from them? Will he and his right hon. Friends now look much more seriously at the case for an annual review? Incidentally, if we believe in harmonisation upwards, it should be realised that an annual review applies in many other countries but not yet here.

§ Mr. Dean
This is a long-standing problem which existed under the previous Administration. I accept that it is not easy to explain to supplementary 805 benefit pensioners what the situation is, but the fact of the matter is that in two years they get at least as big an increase as retirement pensioners get in one year.

§ 14. Mr. Thomas Cox
asked the Secretary of State for Social Services what is the number of letters he has received from retired pensioners concerning those pensions since the increase of the State retirement pension last September.

§ Mr. Dean
About 750 in the last six weeks.

§ Mr. Cox
The hon. Gentleman will be fully aware of the views that retired people are now expressing about the inadequacy of the increase they received in September. As that increase is now worth only 60p, considering the price increases that have taken place since then, will the Department be reviewing pensions before the date when they are scheduled to be reviewed? If not, is the hon. Gentleman aware that the living standards of retired people will be further eroded?

§ Mr. Dean
The Government will keep the situation under continual review. The real increase in purchasing power was 3 per cent. for the ordinary pensioner, over 7 per cont. for the over-80's, over 18 per cent. for the old person's pension and 31 per cent. in respect of the top end of the chronic sick allowance. These very real increases compare with a real increase in 1969, when hon. Gentlemen opposite were responsible, of nil.

§ Mr. O'Malley
If the hon. Gentleman's figures are to mean anything outside the House, would he care to explain why, within a matter of weeks after the last increase, against a background of rapidly rising prices, the National Federation of Old-Age Pensions Associations held rallies all over the country which were very successful and extremely well attended? Is the hon. Gentleman saying that the Government are prepared, in present circumstances, to leave the problem of the old-age pensioner for another 12 months at least and that nothing at all will be done before next autumn?

§ Mr. Dean
I am saying that we have done substantially better than hon. Gentlemen opposite did—[Interruption.]—in 1969, and we intend to go on building on that.

§ 21. Mr. Carter
asked the Secretary of State for Social Services if he will seek to change the review of retirement pensions to a yearly examination.

§ Sir K. Joseph
Our policy on reviews was set out in the White Paper "Strategy for Pensions", Cmnd 4755.

§ Mr. Carter
That is a most unsatisfactory reply. Will not the right hon. Gentleman agree that in view of the alarming rate of inflation over the past year and the prospect of more to come in the next year, and the increased costs arising out of entry into the European Economic Community, a two-year review puts the retired pensioner at severe disadvantage as compared with the rest of the community? Why does the Secretary of State not accept that, with this two-year period, the lot of the old-age pensioner in the coming two years will be one of diminishing living standards?

§ Sir K. Joseph
But the Government have already given assurances to the pensioners in connection with the Common Market. The House must not accept the implication that inflation will continue at last year's rate.

§ 22. Mr. Skinner
asked the Secretary of State for Social Services if he will increase retirement pensions to £8 for a single person and £14 for a married couple, in line with the demands of the Pensioners' Association proposals.

§ Sir K. Joseph
No, Sir.

§ Mr. Skinner
Is the right hon. Gentleman aware that on Monday next we shall be debating a Bill from another of the Tory Government's Departments —the Housing Finance Bill—which includes a needs allowance of £9.50 for a single person and £13.50 for a married couple? If the right hon. Gentleman means business, why does not his Department pay it? If his Department will not pay it, can we not dismiss this gimmick on Monday, introduced in order to put over this vicious means test, as just another Tory phoney?

§ Sir K. Joseph
The hon. Gentleman must recognise that any Government have to balance the anxieties of the pensioners with the interests of the contributors, and to raise pensions as he now suggests would put a very heavy burden indeed on contributors.

§ Mr. Pardoe
With respect, the Secretary of State is talking nonsense. Will he now accept that inflation will go on at between 8 per cent. and 9 per cent. and that unless he links pensions to the average national wage, old-age pensioners are bound to fall behind in the prosperity stakes; and that that will happen unless he reviews every 12 months and links pensions to the average national wage rate as is suggested in the Question?

§ Sir K. Joseph
No, Sir. The proposal in some of the Questions has been to price protect, and the Government are pledged at least to price protect the pensions.