Pensions

HC Deb 14 March 1972 vol 833 cc274-7

5. Mr. Skinner

asked the Secretary of State for Social Services if, in his next review of retirement pensions, he will consider the proposal in the Trades Union Congress Economic Review 1972, a copy of which is in his possession, that the level of such pensions should be increased by £2.

44. Mr. Strang

asked the Secretary of State for Social Services if he will make a statement on the representations which have been made to him for an immediate £2 increase in the national insurance pension.

Sir Keith Joseph

As soon as our proposals arising from this year's review are ready I shall make a statement. Until then I cannot make any comment.

Mr. Skinner

Is the Minister aware that there is a great need for this £2 increase immediately, as has been suggested in the T.U.C. economic review, which the T.U.C. leaders referred to when they met the Prime Minister last week? Taking into account the fact that the 3 per cent. increase which emanated from the last pension increase has now been overtaken by the inflationary spiral in the cost of living index, surely the right hon. Gentleman must realise that it is necessary to give pensioners more money immediately instead of waiting until the autumn.

Sir K. Joseph

I am well aware of the T.U.C.'s point of view. I have also to bear in mind the cost of any rise in increased contributions. It is not correct to say that the recent increase has been eroded. There was an increase of 20 per cent. All pensions have, of course, lost some of their value between up-ratings.

Mr. Lane

Will my right hon. Friend keep in mind that if our right hon. Friend's Budget next week foreshadows another substantial increase in the retirement pension later in the year, no feature of the Budget will be more widely welcomed?

Sir K. Joseph

My hon. Friend does not have to go in for speculation here. The Government are commited to an up-rating of pensions and related benefits in October this year.

Mrs. Castle

Is the right hon. Gentleman also aware of the views of the National Council of Labour, which sent a deputation to the Chancellor and to himself on the same point as the T.U.C. only recently? If the payments are not increased until October of this year, will not their comparison with average earnings be more unfavourable than at any time since 1960?

Sir K. Joseph

I would not think that that is true. We cannot tell until we see how prices and earnings move. But I am aware of the right hon. Lady's participation in the deputation to which she refers.

7. Mr. Sydney Chapman

asked the Secretary of State for Social Services what is his estimate of loss to the revenue of abolishing the earnings rule for retirement pensioners up to a limit of £1,500 income per year per person.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)

The effect would be very similar to that indicated in my reply to my hon. Friend on 7th March.—[Vol. 832, c. 283.]

Mr. Chapman

Would my hon. Friend consult his right hon. Friend about these proposals? Would he not agree that apart from the wider beneficial effects that it would have on stimulating the economy it would help to remove much of the bitterness and resentment felt by that section of the community that has suffered most from inflation under successive Governments in the past few years?

Mr. Dean

My hon. Friend will appreciate that to abolish the earnings rule would cost about £110 million a year, and that the bulk of this would go to people already in full time work and therefore earnings. I remind the House that there was a substantial improvement last September, when the amount that could be earned was increased by no less than £2, and in the case of a wife under the age of 60, by nearly £6.

Mr. Tinn

Would the Minister agree that these and similar provisions ought to be more frequently adjusted upwards to take account of the falling value of money, which otherwise brings into the purview of the provisions people who ought not and were never intended to be covered by them?

Mr. Dean

As I mentioned, last September's increase of £2 in the amount that can be earned was a substantial one. The Government are committed to keep these figures under review.

Sir B. Rhys Williams

I welcome the increase that the Government have introduced. Would my hon. Friend agree that although there would be a significant cost in making the level still higher, there would also be a gain to society as a whole? A further movement in that direction would be welcomed in all parts of the House.

Mr. Dean

I am obliged to my hon. Friend. It is for that reason that we are keeping the figure under review.

Mr. Pardoe

There is a tax aspect of the earnings rule as well. For instance, as a result of the recent rise in agricultural wages a retired agricultural worker can now work for only two days of the week without being taxed, whereas he used to be able to work for three days. Would the hon. Gentleman have discussions with his right hon. Friend the Chancellor to sort out this matter?

Mr. Dean

Yes. I am sure that the hon. Member appreciates that he is now on a different point. I take note of it, and I will have discussions about it.

20. Mr. Kaufman

asked the Secretary of State for Social Services whether, in his forthcoming legislation on pensions, he will include a provision compelling employers to refund an employee's superannuation contributions when that employee leaves his employment before retirement; and whether he will seek to backdate this provision to 1st July, 1970.

Mr. Dean

No, Sir. In "Strategy for Pensions" the Government have proposed that all employees who leave after the new arrangements come into force and who satisfy the qualifying conditions should be able to obtain a deferred pension in respect of the whole of their pensionable service.

Mr. Kaufman

Is the Minister aware that, taking advantage of technical circumstances following its merger with the District Bank, the National Westminster Bank pocketed £243 in superannuation payments belonging to a constituent of mine? Should not the hon. Gentleman take action to prevent and put right this legalised theft?

Mr. Dean

I know the case to which the hon. Gentleman refers. I do not think that it would be right for me to comment on it, but I can tell him that under Government proposals there will be much better cover for employees who change their jobs, in terms of the preservation of their pension rights, which will mean not only their own contributions but their employers' contributions as well.