HC Deb 20 November 1972 vol 846 cc969-1033

Order for Second Reading read.

6.12 p.m.

The Secretary of State for Social Services (Sir Keith Joseph)

I beg to move, That the Bill be now read a Second time.

It is a great pleasure for me to bring before the House a Bill that is at once short, comprehensible and, I believe, beneficial.

The main purpose of this Bill is to enable a special payment of £10 to be made to all those who qualify—that is, to persons who have attained pensionable age and to whom specified pensions or benefits are payable for the week beginning 4th December, 1972. An additional payment of £10 will be made to a number of those pensioners in respect of their spouses who are also over minimum pension age.

I am sure the House will welcome the quick payment proposed. The House will wish me, in the light of this quick payment, to pay a tribute to the Post Office staff and to sub-postmasters who have indicated their willingness to take on this job at that time in the interests of the pensioners so as to enable them to receive payment at the earliest opportunity, notwithstanding that the Post Office will then already be preparing for the Christmas rush. I should like to emphasise that extraordinary efforts are needed to achieve this date and that these efforts are being willingly undertaken both in the offices in the field and by the staff in my Department.

I remind the House that the payments in the week starting 4th December depend upon the Bill completing all its stages in both Houses before the end of next week.

It was common ground during the tripartite discussions which the Government held with the CBI and the TUC that no one suffers more from inflation than the pensioners. My right hon. Friend the Prime Minister, however, went further than this common ground and offered that in the event of an agreement on wages and prices right across the board which successfully countered inflation, the Government would ensure that following the next pension review in the spring, the autumn increase in the pension would enable pensioners to share in the increased prosperity in the country. As an earnest of their good intentions, the Government offered to make a special once-for-all payment to those over the national insurance retirement age in receipt of retirement or supplementary pensions and certain other benefits.

Although, in the event, it was not possible to reach agreement in the tripartite talks, my right hon. Friend the Prime Minister told the House when announcing the Government's anti-inflation measures on 6th November that they still proposed to carry through the measures affecting those in low-paid employment and the pensioners which had been put forward in the package.

Clauses 1 and 2 implement that promise so far as concerns pensioners. Clause 4 provides that the special payments will come wholly from the Exchequer and will not, therefore, be a burden on the contributors. The cost, with some 8 million recipients. will be about £80 million.

These payments provided in the Bill for those over retirement age are tax-free. Those in hospitals and in Part III accommodation who receive one of the qualifying benefits will receive the special payment in full. The payments are disregarded for supplementary benefit. The Bill applies to Northern Ireland as an exceptional once-off measure, which does not breach the normal constitutional arrangements on social security.

I turn now in more detail to those who will benefit—

Mr. A. W. Stallard (St. Pancras, North)

I am obliged to the right hon. Gentleman for giving way. On the question of the payments, will he give an assurance that no other payment will be affected by the £10?

Sir K. Joseph

It is tax-free and is disregarded for supplementary benefit; so the short answer is "Yes".

Mr. Brian O'Malley (Rotherham) rose

Sir K. Joseph

If hon. Members are going to raise Committee points now, may I point out that I have given a general assurance that this is disregarded for supplementary benefit and is tax-free. If hon. Members want to pursue any other relatively minor questions they will find that they can cross-examine us under Clause 1(6) in detail.

I should like to get on to deal with those who will benefit—

Mr. O'Malley

I am grateful to the right hon. Gentleman for giving way. Referring to the point made by my right hon. Friend the Member for St. Pancras, North (Mr. Stallard), of course we understand that, in the technical sense of the disregard, this £10 is to be disregarded for supplementary benefit purposes. My hon. Friend was asking for an assurance that where there are discretionary allowances within the powers of the Supplementary Benefits Commission, applicants will be considered for those discretionary allowances—for example, heating allowances—as though the £10 has never been paid at all.

Sir K. Joseph

If that is the question, the answer is still "Yes". The £10 will not be taken into account as income for supplementary benefit purposes.

I turn to those who will benefit, listed under Clause 1. The £10 payment will go to persons over pensionable age for National Insurance purposes—that is, 65 years of age for a man and 60 for a woman—to whom specified benefits are payable in the week beginning 4th December, 1972. The Bill specifies the following pensions or benefits: retirement pension, including old persons' pension; invalidity pension; widow's benefit; attendance allowance; unemployability supplement or allowance; war widow's pension; industrial injuries widow's or widower's pension; and supplementary pension. I emphasise that to qualify an individual must have reached the minimum retirement age and be entitled in the relevant week to one of those benefits. This entitlement extends to about 8 million persons, of whom just over 7½ million are retirement pensioners.

Most married retirement pensioners have separate pension books, and a payment of £10 will be made on each book. Where, however, a husband has an increase of his retirement pension for a wife who is over 60 or where an old person, without a title to retirement pension, is receiving supplementary pension which includes the requirements of a wife who is over 60, a payment of £20 will be made. I emphasise that no single individual will get in respect of himself or herself as such more than one payment of £10.

There will be general publicity about methods of payment both by the national Press and by posters in post offices. A special leaflet setting out the categories will he available in post offices. In effect, retirement pensioners will get their special payments when they cash their pension orders which fall due the week beginning 4th December. Others will have their special payments sent to them by post, either by one of the Department's local offices or by one of the central offices at Newcastle and Blackpool. Only those persons who have elected to receive their pensions monthly or quarterly—that is about 400,000 persons—will have to wait until after Christmas for payment. They should receive their payment during January, 1973.

There are also provisions in the Bill which will help low-paid people in the working age group. As I informed the House on 6th November, the operation of the family income supplement scheme was in any case being reviewed to see in what way it could be made more effective. I undertook that it would be so reviewed after about a year in operation. The most important outcome of the review is the proposal which is now embodied in Clause 3, which extends the period for which an award of family income supplement runs from six months to 12 months. That means that for 12 months from the date of an award the amount payable will not be affected by any change in the circumstances of the person concerned. That change will especially benefit those people affected by what is called the poverty trap. Although the numbers concerned are much smaller than generally thought, I am sure that the House will welcome that change.

It is not the case that the extension of awards to 12 months will merely postpone the poverty trap. Assuming that family income supplement levels move upwards each year at least in line with prices, and if a man's earnings increase by a similar amount over the year, he will in future find when he renews his claim that he will get about the same award as he did previously. Throughout the 12 months of the award the family income supplement will continue to serve as a passport to certain other means-tested benefits—for example, free welfare foods and free school meals.

The change from six-month awards will take place from 3rd April, 1973. Additionally, beneficiaries who have a 26-week award at that date will have their award converted to 52 weeks. The effect of the change is that all awards of family income supplement which began on or after 10th October, 1972, will last for 12 months.

As a result of the change the number of people in receipt of family income supplement after April, 1973, will be about 10,000 higher than would otherwise have been the case, at a cost in a full year of £1 million. Incidentally, there will be a small saving of staff in the Department.

One other matter connected with family income supplement, although it does not arise from the Bill, should be mentioned. The family income supplement prescribed amounts were uprated in April of this year. The Government now intend that, subject to the approval of Parliament, they should be increased again with effect from 3rd April, 1973. That is the same date as applies for the change to 12-month awards. This is a decision of principle, and the new amounts which will be prescribed will be announced later.

Mr. Michael Meacher (Oldham, West)

With regard to the poverty wage trap, will the right hon. Gentleman confirm that Clause 3 will not include what are traditionally called the FIS passport benefits, nor free school meals, but will apply only to family income supplement?

Sir K. Joseph

I have said that the passport which goes with FIS will run from 3rd April next year for 12 months instead of six. So I will not confirm what the hon. Gentleman says. The passport will run for the 12 months.

Mr. Meacher

And free school meals?

Sir K. Joseph

All the items covered by the passport—that is, free welfare foods and free school meals—will run for 12 months instead of six months. That is to say, those corollaries going with FIS will be extended to 12 months instead of six.

I believe that the House will agree that this is a beneficial Bill, and I commend it to the House for Second Reading with confidence and pleasure.

6.26 p.m.

Mr. Brian O'Malley (Rotherham)

The Opposition welcome the payment of £10 to pensioners and their wives proposed in the Bill. The payments, particularly as they are being made just before Christmas, will help pensioners.

We see the Bill as an open acceptance by the Government that they have allowed inflation to get badly out of control. On 30th November, 1971, my right hon. Friend the Leader of the Opposition pressed the Government to make such payments in face of the emergency created by soaring prices. But our requests then were ignored both by the Secretary of State for Social Services and by the Under-Secretary of State.

Of course we were not alone 12 months ago in making requests for such payments. For example, Patrick Hutber in the Sunday Telegraph of the 28th November, 1971, asked: How about £10 a head for the pensioner …? Nothing happened. The message was ignored, even though there was roaring inflation and pensioners were obviously suffering real hardship. The Government were not prepared to act. It has taken a year for them to change their minds, and they are now under pressure. It is almost as if they are telling the country "We recognise that we have many vices, but consistency is not one of them".

We know that the change of mind within the Cabinet, and the proposals in the Bill, resulted from the pressure of the TUC during the tripartite negotiations. Nevertheless, we welcome the proposals.

Some of my hon. Friends have already commented on the proposals by way of notice of Motion. I refer to Early Day Motion No. 52 in the names of my hon. Friend the Member for Bassetlaw (Mr. Ashton) and other hon. Friends which states: That this House notes with contempt the cynical attitude of the Government towards the electorate and the pensioners of Sutton, Cheam and Uxbridge in hastily fixing the date of these by-elections and changing the date of the £10, bonus payment so that they coincide "—

Mr. Patrick Cormack (Cannock)

What about Lincoln?

Mr. O'Malley

The hon. Gentleman must contain himself. The Motion continues: notes the inflationary price of a vote since the days of the rotten borough; and is confident that this form of attempted corruption will be decisively rejected. We are talking about Sutton, Cheam and Uxbridge and not Lincoln. We can come to that a little later if that is what the hon. Gentleman wants.

There is no need for me to take up the cudgels on behalf of my hon. Friends, who are quite capable of handling their Motion more than competently. But can the Government confirm that they are still asking the Conservative candidates in the by-elections to mention on the loudspeaker on polling day that when the pensioners turn out to vote they will pick up their two £5 notes at the same time? Have the Government considered the possibility of the payments being made in the polling booths in Sutton, Cheam and Uxbridge at the same time as polling is taking place? There is no need for me to comment further on that, because my hon. Friends who tabled the Motion will express their own views on it if they catch the eye of the Chair.

The hon. Member for Kensington, South (Sir B. Rhys Williams) is looking worried, so of course I give way to him.

Sir Brandon Rhys Williams (Kensington, South)

I am grateful to the hon. Gentleman. Would he prefer the payment to be deferred, in view of the by-elections, until the New Year?

Sir K. Joseph


Mr. O'Malley

Of course I shall answer. The right hon. Gentleman knows that I always answer all questions openly, frankly and immediately. I have already said that the payments will be very welcome to pensioners at this time of the year, as the Government have allowed inflation and prices to get out of control. It is the pensioners who have suffered most as a result of Government policies, while the Government have been effecting a massive redistribution of wealth in favour of the better-off. I hope that the hon. Member for Kensington, South will feel that I have directly answered his question.

Although every hon. Member welcomes the proposed payments to pensioners, and therefore wants to facilitate the passage of the Bill so that it receives Royal Assent as quickly as is reasonably possible, the payments should be seen for what they are, a stopgap emergency measure and nothing more. They are no substitute for pensions big enough for pensioners to live decently on in 1972.

The tragedy is that the new Tory pensions proposals offer no better future for millions of elderly pensioners for a long time ahead. The very existence of such proposals amounts to an overt recognition by the Government that their social security arrangements covering the elderly have broken down and that at Christmastime, 1972, there is a crisis. What is needed is an immediate substantial increase for pensioners. To that end there will be a massive lobby of the House on Wednesday by thousands of pensioners and their supporters from all over the country. They realise how critical and deplorable the condition of the retirement pensioner is.

Sir K. Joseph

Before the hon. Gentleman works himself up too much, perhaps he will remember that an additional £500 million a year was put into the hands of beneficiaries, starting in October, only six weeks ago.

Mr. O'Malley

I am sorry the right hon. Gentleman felt that I was working myself up. I thought I was being very friendly towards him and his Government. The best way to answer him is to quote from an article by Ken Gofton headed "Matching inflation" in the Financial Times of 22nd March this year, which refers directly to the subject of the right hon. Gentleman's intervention. I expected he would say something like that. Mr. Gofton wrote: Mr. Barber said that the increases in pensions and benefits being made now amounted to about 12½ per cent.… Unfortunately, it will not have escaped notice that not only are pensions going up by record amounts. So is the cost of living. The 12½ per cent. increase in pensions promised for the autumn matches exactly the increase in retail food prices last year. The Government claim that they have given big increases to pensioners, but when we see the movement in the retail price index and the food price index we realise just how little was done for the pensioners and how desperate is their situation this winter.

Sir K. Joseph

The hon. Gentleman touched on the point that I will ask him to acknowledge, that the retail price index has risen over the year in question by significantly less than the increase in pensions. I have never over-stated the position, but I hope he will acknowledge that a significant increase in the buying power of the pension has been available to pensioners since October despite the rise in prices, which has been less than the rise in pensions.

Mr. O'Malley

The right hon. Gentleman must not try that with me, because I have been dealing with pensions for too long. It is not only the Index of Retail Prices that is significant in assessing the comparative position of the pensioners. We must also consider the food price index and give it a fair degree of weighting for pensioners, because the distribution of their income and the demands on their limited income are effectively different from those of people with higher incomes who are still at work.

It is not without significance when the Government try to blame the trade union movement for everything—everything that has gone wrong is no longer the Government's responsibility but is that of someone else—that the trade union movement is this week in the forefront of the campaign for proper retirement pensions. The trade union movement as a whole has said that the workers are prepared to pay for decent pensions for their ex-members to live on.

The type of emergency measure that we are considering is of course welcome, but it is a stopgap. What we need in addition to deal with the problem, even in the short term, is a massive increase in pensions, and very quickly. The Government may say that the need is not so urgent now because they have frozen prices. They allowed things to get out of control, but now they say "We know that we have failed the country. We know that the famous promises that prices would be reduced at a stroke have all been broken. But we recognise the error of our ways and we shall revert to a statutory type of incomes policy, which we always said was much worse than the disease. We shall try that, and tell the pensioners with pride 'We are running a system in which we have said we do not believe, but the result will be helpful to you. It will freeze prices.'"

But already, before the so-called freeze, there had been a rapid increase in food prices and in the broader index of retail prices. In spite of any price freeze, there will be continuing price rises during the rest of the winter. The Financial Times aptly observed on its front page on 18th November that a number of the price increases—massive increases at that—had not yet been reflected in the official Index of Retail Prices issued on 17th November.

The Financial Times continued: This shows that between September 19 and October 17 prices rose at a faster rate that in any month since April 1971, bringing the annual rate of increase in the last six months to 8.7 per cent... these indices will not magically stabilise in the immediate future. The October retail index was compiled before the freeze was introduced and the November statistics will reflect the burst of anticipatory price increases which were announced at the beginning of the month. Therefore, the index by no means reflects everything. It will rise still further even in the period of freeze because of the increases that had already taken place, seasonal fluctuations and the de facto devaluation resulting from the Government's financial policies. There will be further substantial price increases next year, from which the pensioners will suffer, as a result of the introduction of the value added tax and our entry into the EEC.

It is small wonder the Opposition must say that the £10 is welcome but that the Bill is a stopgap measure. It is not enough. The Government should do far more by giving a major increase in the weekly pension now.

I turn now to some very important exclusions in the Bill. The Secretary of State has explained that the only recipients of the £10 will be those who satisfy a number of conditions. One of the conditions is that every man or woman who draws this £10 bonus has to be over the retirement age, which is 65 in the case of men and 60 in the case of women. If these benefits are introduced because of a crisis in our affairs, because it is recognised that the worse-off people, the pensioners, suffer particularly from this crisis in our economic and financial affairs, do not the same considerations apply, for example, to the long-term sick who are under the ages of 65 and 60? If we are talking about pensioners, why not include the invalidity pensioners?

The Money Resolution does not refer to retirement pensioners. If one looks at the technical use of the word "pensioners" in the national insurance legislation of 1972 and before that, there are a number of pensions in the technical sense apart from retirement pensions. We are therefore bound to ask why the right hon. Gentleman has not included such categories in the Bill and whether he will be prepared to consider the possibility of such inclusion during the Bill's later stages.

We are particularly concerned about the plight and position of invalidity pensioners; of widows; of those receiving the attendance allowance; of those who are disabled—whether they be war pensioners or people suffering from industrial injury; of those blind people who are recipients of supplementary benefit; and, of course, of the long-term unemployed. The right hon. Gentleman and the Government must reconsider this position before we reach the Committee stage.

Clause 3 deals with the modification of the family income supplement. Even the Government now use the phrase "the poverty trap". I can recall that when not so very long ago that terms was used we on this side were told by Conservatives that the poverty trap was a myth and did not apply to many people at all. Now the Secretary of State himself has been bound to admit, as the Prime Minister and other senior Ministers admitted during the tripartite talks, that as a result of the use of means testing and selectivity by the present Administration during the last two years there has been created very high marginal rates of tax and a very serious poverty trap.

The Clause seeks to provide a temporary way out of that trap but at the same time it will provide another increase in the number of working people who are receiving means-tested benefits. The right hon. Gentleman explained that this would be helpful in dealing with the poverty trap; but that poverty trap still exists and will continue to exist in a very serious form even if the Clause is improved. In particular, when one looks forward to the next 12 or 18 months and the development of the Government's prices and incomes policy as it seems likely or possible to develop, it will be seen that the Government will have to think far further than this temporary expedient which they have introduced, once again, as a result of the tripartite talks.

While we welcome its major provisions, we believe that the Bill is presented by a Government in deep trouble, a Government whose whole strategy has collapsed and collapsed particularly in the realm of prices policy. The Bill in itself represents a patched-up policy and is an open recognition that the Government's social security policies have failed. In spite of this little Bill, it is clear that the Government have no policies, even in the medium or long term, to deal with the problem of poverty. We on this side have, and we shall put those policies into operation when we return to power.

6.45 p.m.

Mr. Marcus Worsley (Chelsea)

In his concluding passages the hon. Member for Rotherham (Mr. O'Malley) talked about his party continuing on a policy for poverty which it hoped to have a chance to bring into operation. It is some time since I spoke in one of these debates, but I remember that on the last occasion when the hon. Gentleman was speaking from these benches his party had had six years in which to produce an effective policy for poverty but had failed. My right hon. Friend the Secretary of State has done more to tackle these problems and has laid before the House more plans for the future than did the hon. Gentleman and his right hon. and hon. Friends in their six years of office.

It is therefore a little hard for the hon. Member to talk about these problems being created by the Conservative Government. It is hard also when he talks as though inflation was created by my right hon. Friends. The hon. Gentleman and his hon. Friends should remember what they were saying about that two and a half years ago when inflation was roaring ahead. The fact is that under the previous Government pensioners suffered more than anyone else from the rate of inflation. Exactly the same is true when inflation exists under the present Government—

Mr. Stallard

Even worse.

Mr. Worsley

It is not worse. The hon. Gentleman knows that it is not true to say that it is.

Mr. O'Malley

In November, 1970, speaking of the rate of inflation and the movement in the index, I said: Between the beginning and the end of 1966 the percentage increase in the index was 2.4. In 1967 it was 4.1 per cent.; in 1968 3 per cent.; in 1969 4.1 per cent.; and then up to December, 1970, it was 6.8 per cent. In early 1971 the increase was 9.1 per cent., and by October, 1971, the increase already this year is 7.5 per cent.—[OFFICIAL REPORT, 30th November, 1971; Vol. 827, c. 363.] The situation has got worse since then. How does the hon. Gentleman reconcile those figures with what he now says?

Mr. Worsley

The fact is that there has been inflation under both Governments—

Mr. Stallard

Can the hon. Member produce figures to prove his statement that the position has not got worse?

Mr. Worsley

There was massive inflation in the last years of the Labour Government which they did singularly little to tackle. They never had a Bill such as this. At the end of six years of office they had not succeeded in bringing into operation the pensions scheme on which they had been working for donkey's years. So, whatever the hon. Gentleman claims, he cannot claim that his Government had a particularly sparkling record in this respect, and my observations have not discovered any very clear plans for the future.

Mr. Leslie Spriggs (St. Helens)

Will not the hon. Gentleman agree that it is wrong in principle for any Government to allow walkers who retire from industry at 65 or 60 years of age to retire at poverty level? Is that principle right or wrong?

Mr. Worsley

For donkey's years we have all agreed that it is quite wrong, and the hon. Gentleman knows it very well. What he and some of his hon. Friends should remember is that one of the principal causes of inflation, though not the only one, is excessive wage demands—[HON. MEMBERS: "Oh."] I repeat that one of the principal causes of inflation is excessive wage demands. Therefore, when a union demands an excessive wage award it is doing just what the hon. Gentleman indicates—

Mr. Spriggs rose

Mr. Worsley

With respect, I am seeking to reply to the point made by the hon. Gentleman by making this further point that if a union seeks to obtain a wage award greater than the productivity of the industry concerned, it is contributing towards the poverty of its elder members who previously worked in that industry.

Mr. Spriggs rose

Mr. Worsley

I will give way once again to the hon. Gentleman.

Mr. Spriggs

The hon. Gentleman says that one of the particular causes of inflation is claims by workers for wage increases which outstrip their productivity. Can he name any worker who helps to produce the wealth of the country who has claimed more than he puts into it? Can he name industrial workers who have achieved such an objective?

Mr. Worsley

The simple answer is that the majority of wage awards in recent months have been in that category. If we seek to pay ourselves more than we earn, we inflate the currency and in doing that we attack first of all the pensioner. In spite of the fireworks across the Chamber, I do not think that we are in dispute about that. I think we all accept that inflation hits the pensioner.

The hon. Member for Rotherham called this a stopgap emergency measure, and he is right. The point I want to make as a backbencher is that the sort of measure a Government bring in in a moment of necessity like this can easily become a precedent. I hope that this Bill will not become a precedent. That is not because I am opposing it—I realise that it will make Christmas a much pleasanter time for many people. Nevertheless, in the long term I believe that ad hoc payments of this kind are not the right way to secure what all of us want to secure—a dignified living standard for the old people. I do not think there is any dispute amongst us on that.

Mr. Spriggs indicated assent.

Mr. Worsley

I am glad to have sedentary agreement from the hon. Gentleman that that is our common objective, although of course there are some differences, which one can exaggerate, I think, about the means. We all want to see people in retirement enjoying as of right an adequate income. We do not want to see them coming to the State for charity, for a payment given in an ad hoc or random way. What we want is an income for them which they feel they have earned, which is theirs as of right.

This is why the National Insurance Scheme was created and why none of the suggestions for amending it have ever proposed that it should be abolished. From the purely administrative point of view, it would be easier to pay pensions out of the general Consolidated Fund. From the administrative point of view, the general machinery of the National Insurance Fund is a complexity. But we keep it, and want to keep it, because it gives the recipient the feeling that he has earned the payment and that it is his as of right.

Therefore, it seems to me that we are on the right lines when we seek to provide pensions not out of the Consolidated Fund, not out of ad hoc payments from time to time, not—decreasingly, we hope—from supplementary benefits, but increasingly out of the National Insurance Fund and—at least we on this side hope—increasingly as well from the occupational pension and from private savings. because this is the true way to dignity in old age.

Although I accept that the situation demands it now, I believe that the Bill is a step in another direction and I hope it will not be a precedent. I have a nasty feeling, however, that it may well be a precedent. The best way to see that it does not become a precedent, to see that increasingly as the years go by we rely on pensions as of right and not on emergency measures of this kind, is to ensure that inflation is contained. This is why I believe that everyone who has the interests of pensioners truly at heart will support the Government in what they are seeking to do.

6.55 p.m.

Mr. Kenneth Marks (Manchester, Gorton)

I welcome the £10 bonus for pensioners, especially since it is being paid before Christmas. The fact that to so many of those receiving it it will be of tremendous help is itself an indication of the desperate need. I have talked to many old people this weekend, and I know that the £10 for the single pensioner and the £20 for the couple will be greatly welcomed.

Whilst I am in the mood, I also congratulate the Government on introducing last year the annual review of pensions. As one who tried hard to get both Governments to introduce an annual review—being told that it was virtually impossible from the administrative point of view—I have come to the conclusion that anything which is administratively impossible and yet politically desirable can be done, and whatever their reasons, I am glad that the Government decided on an annual review.

Many cruel things will be said about the fact that the Government are making this payment due on 4th December, two days before two by-elections. But the Secretary of State for Social Services does not decide the date of by-elections. It is done, I understand, by the Prime Minister and the Government Chief Whip, and no doubt for once if questioned about it the Prime Minister would be satisfied with the co-ordination between at least two of his Government Departments.

This £10 bonus is, of course, contrary to the Government's stated policy, strangely enough—that of helping most those in need most. The fact is that the £10 bonus will be paid to a great many people who have no need of it whatever. I know of one couple who between them receive pensions of £70 a week. They have their national insurance pensions plus a pension from a good contributory scheme; yet they will get a £20 tax-free bonus. I do not object to that because I believe that basic pensions should be increased, and, therefore, this couple would be included. I think that the bonus is going to everyone, however, only because of the need for speed in this case.

As my hon. Friend the Member for Rotherham (Mr. O'Malley) pointed out, there are some people in great need who will not get the bonus—for example, men below the age of 65, some of them with wives over the age of 65, who are in receipt of invalidity benefit. Many of them have been "on the sick", as they call it, for several years. Their need is very great. I wish they had been included in this help. Another group is the long-term unemployed. There is now a great number of unemployed, but I believe that those out of work for over a year would find a bonus paid to them before Christmas greatly welcome. This might even have made the Government more popular, although I would not have worried about that. The long-term unemployed are another group for which we should think seriously of setting a precedent.

The hon. Member for Chelsea (Mr. Worsley) did not like the idea of the Bill as a precedent. I think that it is a good precedent if one does it often enough, and I think that during this next year—while we have to wait until the next rise in pensions, next October—we should think seriously about taking such action again. When we debated the last pension rise we thought the pension ought to be £8 a week at least. One way of achieving that without administrative difficulties is to do this by three or four, perhaps five, stages during the next 12 months.

The hon. Gentleman was right, that the answer lies in a sound basic pension, and when the trade unionists and the pensioners come here on Wednesday, as they will in their thousands, and urge a £10 minimum pension we ought to give it serious consideration. They should, too, because we have to realise what a £10 basic pension means: it means some £1,000 million net when we have allowed for all the tax reliefs and supplementary benefits payments.

Using the same basis for finding the money, we see it means a 50 per cent. rise in contributions from workers. I hope that the trade unionists will appreciate this. We may talk about spending less on defence or less on some other thing, but when we talk of an immediate increase in pensions we know that there are very few ways of raising the money immediately otherwise than through contributions. I would welcome that. I think we have got our priorities wrong, and that there ought to be more taxes and more contributions—but with higher pensions.

I do not think that the Government's new scheme, the one we shall be discussing, I suppose, in a couple of weeks, will be of much help. People will pay 5¼ per cent. of their gross earnings to get a pension in current terms of £6.75, the existing pension. There will be a reserve scheme under which they will pay another 1½ per cent., and a man of 55 entering the reserve will get 4 per cent. of his earnings as pension. The 22-year-old who will be paying contributions for 43 years will get 19 per cent. of his pay as his pension. It is not good enough.

However, those are points for the future. At the moment I heartily welcome this bonus for pensioners this Christmas.

7.3 p.m.

Dame Joan Vickers (Plymouth, Devonport)

I welcome the speech made by the hon. Member for Manchester, Gorton (Mr. Marks), but I was surprised by the speech by the hon. Member for Rotherham (Mr. O'Malley) because it is exactly an hour ago that the Opposition voted against measures to prevent inflation, so the hon. Member's speech seems strange in view of that fact. I think he will regret his remarks about the old-age pensioners and the by-elections, that the pensioners are being bribed. They are very proud and not bribable; the hon. Member was unfortunately suggesting that the Bill would act as a bribe. That is an insulting suggestion and I hope he will withdraw that remark as it was a very undesirable suggestion indeed.

Mr. O'Malley

I will not withdraw because there is nothing to withdraw. If the hon. Lady had listened to me she would have heard me say that I felt there was no need for me to take any part in yielding the cudgels of my hon. Friend the Member for Bassetlaw (Mr. Ashton) and others of my hon. Friends. I confined my remarks to making two helpful comments to the Secretary of State, about how his Department could be given advice on this matter.

Dame Joan Vickers

I do not think the old-age pensioners will see it like that. The hon. Member made a very regrettable remark, especially considering that at the time of devaluation right hon. and hon. Members opposite did nothing to help the pensioners, and that was a worse crisis than we have at present.

There are one or two questions I would like to ask about the Bill. I would like to know what the words ordinarily resident in the United Kingdom at any time during that week mean. Do they mean that a person has to be in the United Kingdom in that week? Some people may be away; for health reasons people go to other countries for a time; and I want to know whether they will be able to draw this benefit.

Clause 2(5) says that two persons cohabiting as man and wife can qualify for the benefit. I welcome the fact that a Government Department is now recognising cohabitation. The hon. Member for Eton and Slough (Miss Lestor) and I have previously brought up this matter. I should like to know how my right hon. Friend will determine who, in those circumstances, will be able to benefit by that subsection.

Clause 2(3) says that the Secretary of State may reverse a decision under subsection (2) on new facts brought to his attention. Will there be any form of appeal? Will there be a tribunal? How will this be done? Will there be a long procedure so that people may not get their benefit in time for Christmas? I gather from Clause 2(5) that they may have to make a claim in writing, and this can take a considerable time. Will there be officials who will give people advice?

I should like also to know whether persons in local authority homes or other homes or hospitals who are assessed according to their means for weekly payment will have to include the £10 in their means for assessment for their keep. I should be grateful for an answer on that.

I was very pleased to hear that, under the family income supplement, if a man gets extra money in wages he will not be penalised. I think that the family income supplement is the only extra means-tested subject which the present Government have brought in, but I am still very worried about family income supplement, and I hope we will keep a close watch to see that wages are not kept down because of it and that employers do not pay inadequate wages simply because they know that people can get the family income supplement. That is a danger to which I drew attention in a previous debate. There should be a minimum national wage, above the normal subsistence allowance.

I welcome this Bill as being of some help to individual people, but I am still sorry that we have not been able to do anything—I know the difficulty—for the war widows and widows who were widowed before 1950, who still do not get any pension at all. I was fortunate enough to be able in a debate on the Consolidated Fund Bill to draw attention to the plight of those 30,000 people. If the Government could find some way of helping them, that would be very desirable.

I welcome the Bill and I hope it is passed quickly through Committee so that those who are to benefit may receive the benefit in time for Christmas.

7.7 p.m.

Mrs. Barbara Castle (Blackburn)

The hon. Member for Chelsea (Mr. Worsley) told us that he hoped that the £10 one-off bonus would not prove to be a precedent. I think he is going to be disappointed. Considering the almost uncritical enthusiasm with which the Government's gesture has been welcomed, I would think this a device to which the Government will resort every year. After all, it is a very conveniently popular but cheap substitute.

All of us, of course, are delighted that the Government have been compelled, not least by pressure from this side of the House, to recognise that something has to be done for the pensioners this winter, but the remarkable thing about the Bill is that it reflects the inadequacy of the Government's own recent uprating. To hear the Secretary of State, who came like Santa Claus and scattered a little sparkle around the Chamber—and then disappeared—one would not have realised that it is only six weeks ago that the Government carried into effect what was supposed to be their proper and fundamental answer to the old people's needs.

It is true that in the winter of 1964 the Labour Government introduced an emergency payment, but that was not a substitute for an adequate uprating; it was an additional advance payment on the most generous uprating for years in the spring of 1965. In the House and in Standing Committee the Secretary of State has admitted that the Labour Government's 1965 uprating was very generous. I wish that some of my hon. Friends would occasionally pay a little more credit to what we did in the face of inherited difficulties, because that 1965 uprating put pensions in a better relationship to industrial earnings than they had been for many years—perhaps better than at any time, but certainly for many years. However, because when we came into office in October, 1964, we found that the Conservative Government, busy running up a balance of payments deficit of £800 million, had not made a single administrative preparation to put an extra penny into payment for the old-age pensioners we had to introduce a winter emergency payment to fill the gap until our proper uprating could come into effect.

But today we are facing an entirely different situation. In the past few months the Government have had a chance to deal with old-age pensioners properly. Indeed, some of my hon. Friends who are present this evening were with me on the Standing Committee discussing the National Insurance Bill. We argued then that an uprating to £6.75 in October of this year was utterly derisory, and we pressed for what was then the National Council of Labour figure for a single pension of at least £8. If our amendment had been accepted then, a single pensioner today would be getting not £10 a year but £65 a year.

What is the £10 supposed to cover? Is it supposed to cover the rent increases that the Government have deliberately introduced? Is it supposed to cover the rising cost of food? In that telling speech of his, my hon. Friend the Member for Rotherham (Mr. O'Malley) pointed out that the recent uprating and the £10 were to deal with not only food price increases that had already occurred but, supposedly, the food price increases lying ahead. Everybody knows that the effects of our entry into the Common Market on the cost of living and, above all, on food will be calamitous for pensioners. Again, this is the result of deliberate Government choice and policy.

Or is the £10 supposed to be compensation for the value added tax to be imposed next April? Between now and the next uprating deliberate Government action will have imposed an increase of 10 per cent. in the cost of living, increases on the essentials that old people buy. We are told that some prices will come down, and no doubt they will—the prices of luxury goods that carried the luxury rate of purchase tax. But those are not the things that dominate the budgets of old-age pensioners.

Or is the £10 supposed to avoid the situation of last winter when hundreds of thousands of old-age pensioners could not afford to keep warm? I hope that the Under-Secretary will tell us what were the actuarial calculations on which the Government based the sum. The sum of £10 cannot cover all these things. Many old-age pensioners and others this winter will be desperate—desperate for food, desperate for clothing and, above all, desperate for warmth.

Let us take the example of heating. The Opposition have pressed for months that all old-age pensioners on supplementary benefit should receive a special heating allowance of at least 50p a week. The Government have turned us down. Instead, we have had a derisory addition to the long-term addition of 10p a week. Announcing his last uprating, the right hon. Gentleman said that the special additions for heating would go up by 20 per cent. But 20 per cent. of what? We asked that question then, and I am asking it again now because we have never had an answer. How many old-age pensioners are getting the special heating allowance today? Is it 180,000 out of 2 million? That is the sort of situation that we ought to be talking about tonight.

The real answer, as my hon. Friend the Member for Manchester, Gorton (Mr. Marks) said, is an adequate pension. The figure which we endorse has now risen from £8 a week to £10, because the £8 figure, thanks to the rise in the cost of living, is already out of date. I say to the Government advisedly that one day we shall have to face up to it.

The Secretary of State referred earlier to the tripartite talks. Other hon. Gentlemen opposite have given us the hoary old canard that it is the demand for wage increases that puts up prices. Nobody wants an agreement to contain inflation more than we do, but I say advisedly to the Government—and I speak as a member of my party's liaison committee with the TUC—that the Government will never get a voluntary agreement with the trade unions on a prices and incomes policy unless that agreement contains an adequate pension for all old people as of right. That is one of the passionate convictions of the trade union movement about the just society.

The £10 bonus is just tinkering with the problem, and tinkering with it in the most ineffective way. If the Government say that our proposals would cost too much money and that this is all that they can afford after all they had given away to the well-to-do, if they have put us in this position thanks to their tax reliefs—£3,000 million worth, one-quarter of it going to those earning more than £5,000 a year—so that we have only £80 million to spend, is this the best that we can do with it? I say this conscious that my own husband will be one of the beneficiaries. I do not consider that the one-off, indiscriminate, tax-free payment is in any way equivalent to saying that everybody as of right should have a proper pension without means testing. I do not believe that the two things are parallel.

Our duty tonight is to look far more imaginatively at the situation which will face inumerable old-age pensioners in the months ahead. We know that as the cost of living creeps up and up many people on low incomes live in positive fear. What, then, should we make our priority? We must face the fact that there are hundreds of thousands of pensioners in this country who at this moment have acute special needs, needs which are not being met. This is a situation which the sum of £10 will do little to meet.

It is surely appreciated by everybody that the pensioner and the other categories such as the disabled, the sick and the unemployed—indeed, anybody who has to live on supplementary benefit for any period of time—have special needs in terms of food, laundry and heating Is it not significant that by this Bill the Government are giving an alternative to a permanent improvement in the condition of the poorest in the land?

Let us take, for example, the long-term addition, the hallmark of somebody in real need. Anybody who has to live on supplementary benefit for any period faces real and desperate need, and this is why the long-term addition is made. The Government have increased the long-term addition by the derisory figure of 10p—a coin which some of us in this House would not bother to stoop down and pick up if we dropped it in the street.

Mr. Cormack

The right hon. Lady should speak for herself.

Mrs. Castle

The long-term addition comes at the end of a two-year qualifying period. If the Government really wish to deal with the problem of people in hardship, why do they not increase the long-term addition by 50p? Why do they not reduce the qualifying period from two years to 12 months? Why do they not place before the House a policy to give far more generous heating allowances based on a proper scrutiny of old people's heating needs, as was requested in a recent document by Task Force?

In an earlier discussion the Under-Secretary of State was very defeatist in his attitude to heating allowances. He said that there was a limit to the value of providing heating for houses which were so damp and badly insulated that there was excessive heat loss.

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

Mrs. Castle

The hon. Gentleman nods. The answer, he said, was proper housing. But these people are not in proper housing, and are not likely to be in the coming months. What does he expect them to do with his inadequate heating allowances—freeze to death?

The Secretary of State for the Social Services paid a tribute to the Post Office staff in hurrying through the payments despite the Christmas rush. We fully endorse that tribute. We have always known that trade unionists care about the pensioners and all the unfortunates in our society. There has never been adequate public tribute paid to the fact that Post Office Engineering Union members are giving their labour free to fit the telephones for disabled people under the "Alf Morris Act". Therefore, of course we endorse that tribute.

However, it was a little hypocritical, coming as it did from a member of a Government who were so keen to cut down the number of civil servants that they starved the Supplementary Benefits Commission of the staff necessary to carry out review visiting. The commission has been starved of staff to such an extent that civil servants recently struck against their excessive overtime. There has not been adequate examination of old people's needs, and there has been no review visiting to the degree that is required through no fault of the staff involved. This has not been carried out because we are faced with a gimmick Government.

The Government have not provided an adequate policy to deal with poverty—above all, poverty among the old. We are glad to have forced the Government to give at least this sum of money, but we badly need a Government who really understand how poor people live and who then decide to do something about it.

7.27 p.m.

Sir Brandon Rhys Williams (Kensington, South)

I think the House knows that in debates on social security matters I try to avoid party controversy and, instead, seek to put forward specific recommendations arising from circumstances which are agreed between the parties. I try to make recommendations which can be implemented and which possibly will relieve hardship. I wish to emphasise that, in spite of what was implied in the tone of the right hon. Lady the Member for Blackburn (Mrs. Castle), such hardship is of equal concern to Conservative Members as it is to Labour Members.

Of course we care about pensioners who are living in cold or who have to face a winter with inadequate nutrition. But what we expect from the right hon. Lady are positive recommendations which are workable and realistic. I shall listen to her speeches in future in the hope that we may hear from her details about the way in which money can be found to give benefits which are not subject to means test and which will really give effect to what the nation wants—not only, as again she implied, what trade unionists want. We are all ashamed of the conditions in which pensioners are living, and we are well aware of them, but the people who are helping the pensioners most are those who are studying the problem with a view to making positive recommendations rather than those who seek to create an air of bitterness, as the right hon. Lady tends to do when discussing these matters.

The right hon. Lady dwelt on the problems of housing, but failed to mention that the Government have tried to solve the problem in another way by bringing housing allowances to people who live in rented accommodation and do not have the benefit of council subsidies. My recollection is that she and her hon. Friends consistently voted against the introduction of allowances to help poor people who find difficulty in meeting their rents. That was not a helpful attitude; it was partisan. She cannot answer me on that point because she knows that the policy of her party neglected the interests of poor people who do not live in council-subsidised accommodation.

In regard to inflation and the pensioners, I recall a prominent member of the Opposition saying that one man's wage rise was another man's price rise. It was the right hon. Lady herself who tried to draw attention to the need for productivity improvements to go hand in hand with wage increases. When wage increases run ahead of productivity improvements, as they have been doing in the past two years, prices must go up, and it is people living on fixed incomes and small incomes who suffer most. I have the feeling that there are right hon. and hon. Members on the Opposition benches who know that the very large claims for wage increases which have been made especially in recent months are dreaded by the pensioners. Perhaps it is a feeling of guilt that emphasis is now laid in speeches from those benches on the need to help the pensioners. But how is it to be done?

Mrs. Castle

If the hon. Gentleman says—and I agree—that pensioners live in dread of price increases, does he not think that it would be a very big contribution for the Government to postpone the introduction of the value-added tax?

Sir B. Rhys Williams

I do not believe that the campaign which the Opposition are waging against the VAT is doing anything more than create anxiety. What we need from them is solid evidence that ending SET and purchase tax and simultaneously raising VAT at the rate of only 10 per cent. and not raising it on foodstuffs will cause the dramatic increases in basic costs of living that they pretend. Sooner or later the Labour Party will realise that raising scares which do not eventuate does not add to its electoral strength in the long run.

The specific point that I wish to make is that one man's pension increase is another man's contribution increase. It has to be. That is why the Government are courageous and right to get away from flat-rate national insurance contributions which are not buoyant and do not change with the value of money. It is not really a matter of dispute between the parties that we should hasten towards a system where national insurance contributions are earnings-related. Then. when earnings rise contributions to help those on fixed incomes also rise, and if there is inflation the revenue is also buoyant. The Government can introduce measures like this Bill costing £81 million because the revenue arises out of the current situation in the economy.

The best solution of all is to end inflation. Then people living on savings, fixed incomes or national insurance pensions know where they stand and do not have to dread the future.

As for the timing of this proposal, first we heard that it would be difficult, if not impossible, for the increase to be paid by Christmas. After that we heard with relief that, thanks to the special efforts of Post Office staff, for almost all beneficiaries it would be possible for the increase to be brought in in time for the Christmas holiday. We were delighted. But we were reminded that the mechanism for paying pension increases is pitifully obsolete.

I was a member of an all-party delegation which went to Brussels a year ago, where we spent an extremely instructive day. We saw the mechanism which the Belgian national insurance system uses for paying pensions, and we were shown how changes are introduced from time to time. When we were there, the Belgian authorities had already made two rates of increase in national pensions that year and were preparing for a third without flutter or anxiety.

I did not refer to my notes before rising, so I speak subject to correction. But I recall that for one reason or another—I think it was a rise in the cost of living—the Belgian authorities were anticipating that new figures for pensions would be decided upon by the Government towards the end of September. We asked when they would be able to make the corresponding payments to pensioners. They said that, provided that they had the data by 26th September, they would be able to make the first payments at the new rate by 10th October. Of course, the Belgian population is smaller than our own, and pensioners in Belgium total only about 1 million. But there are just as many complexities in the Belgian national pensions situation as there are ours. Therefore, it is merely a question of the extent to which computers are introduced and whether it is possible to match that degree of efficiency in the system operating here.

I do not know when the Government intend to tackle this problem. One hears alarming stories of the difficulties encountered by the Government in their computerisation programme for national insurance payments. I shall not quote rumours or dwell upon matters which are only hearsay. But it is my conviction that the EDP programme in the Department is sadly in arrear and possibly needs a major overhaul. Only then shall we be able to get away from the agony where we announce an increase but have to tell our pensioners that it will not be possible to implement it for weeks or perhaps months while they wait in need.

The whole House will welcome the extension of the family income supplement just as much as it does the Christmas bonus for pensioners. I feel I must point out that, although I do not oppose the Government's suggestion in this Bill, it makes for some inequity. Identical families in identical circumstances will get different treatment. Families which earlier in the year were on a lower rate of income and, therefore, qualified for family income supplement will, after they have been able to increase their earnings somewhat, still qualify for the benefits to which they were formerly entitled, whereas other families which are continuing at a steady rate will not be entitled because they never were. There is bound to be conflict between those who are able to use the "passport" benefits and others who are not, although their circumstances are identical.

The Bill is proposing a way of escape from the difficulty which has arisen because a means-tested benefit was introduced here and the Government have rightly recognised the existence of the so-called poverty trap which afflicts those who lose means-tested benefit as they improve their circumstances. The Government have taken a step in the right direction in extending from six months to a year the length of time for which benefit can be paid. All the same, we must agree that the FIS system is a transitional measure. We look forward to more fundamental proposals being introduced in its place in due course.

I would like to make a specific suggestion which I have made many times before. It is that we should look seriously at the need to introduce family allowance for the first child and to pay them at a higher rate. The Government's Green Paper recommends that family allowance should be paid at £2 free of tax for all children, including the first, but that the introduction of benefit should be accompanied by the abolition of the child allowance for tax purposes. This is such an excellent idea that I do not feel disposed to wait until the parliamentary Committee has examined all the different aspects of the tax credit scheme. In terms of child benefits, we want it to begin as soon as possible.

It is so easy to do it. The family allowance system has existed since 1945, and the administrators of the scheme and the public are familiar with it. It works, and it is cheap to administer. The extension to the first child is not an insuperable difficulty considering that when one pays a family allowance to the second child one knows that the first child is in existence. The administrative work has been done. I believe that it would be right in the forthcoming Budget to abolish the child tax allowance, increase the family allowance to £2 and make it payable to the first child. That would be the right solution to the problem that the Government are seeking to solve in this Bill.

That is not to say that I oppose the Bill. I do not. I welcome it warmly, as I am sure do right hon. and hon. Members in all parts of the House.

7.40 p.m.

Mrs. Doris Fisher (Birmingham, Ladywood)

I also welcome the £10 allowance which the pensioners are to get for Christmas but, like my hon. Friends, I realise that it will bring only temporary relief from financial hardship.

My right hon. Friend the Member for Blackburn (Mrs. Castle) referred to heating costs. Hon. Members have said that the £10 allowance will be of tremendous help at Christmas. I remind the Government that gas and electricity bills come in at Christmas. Therefore, the £10 will help not towards the Christmas festivities, but towards the payment of those accounts.

My right hon. Friend also spoke about pensioners living in bad housing and therefore damp conditions, and the need for extra help with heating costs. Many old-age pensioners in my constituency live in multi-storey blocks of flats with under-floor electric or gas warm air central heating. They have no option but to use those forms of heating. Those are the forms of heating provided in those blocks of flats and they have to be used. One can economise on such heating only by turning it off. But one cannot live day after day in a multi-storey block of flats with the wind howling round the building without any form of heating.

I am not clear about the Secretary of State's intervention concerning discretionary payments for heating allowances. Several forms of heating allowance designated by the Department of Health and Social Security are paid to the ill and the housebound. However, these extra allowances for heating are decreased by the amount that the old-age pensioner receives by way of long-term allowances. Therefore, to all intents and purposes the pensioner is excluded from benefit.

Mr. Dean

It might be helpful to the House if I clarify this matter straight away. All these discretionary allowances will be completely disregarded for the purpose of the £10. In other words, people will receive not only the £10 but will continue to receive all the discretionary allowances which they are now getting. The £10 will in no way affect any of them.

Mrs. Fisher

I thank the hon. Gentleman for that intervention. The special allowances made to old-age pensioners who have not saved sufficient money for the payment of their electricity bills are not discretionary. I refer to those pensioners who struggle week by week to have money—in stamps, tin boxes or a separate purse—for the payment of their electricity or gas bills. In my constituency old-age pensioners, faced with electricity bills for £30 to £32, which put them in great difficulty, often come to see me and say "We have got £18 towards it, Mrs. Fisher. What can we do?" The social security offices in Birmingham have been very helpful in these cases. However, these are not discretionary heating allowances; they are special allowances, over and above, which the social security offices make perhaps as annual payments.

When the pensioner goes, as he will at Christmas, to ask for the special allowance because he has not saved quite enough to pay his bill, will the £10 be taken into consideration?

Mr. Dean indicated dissent.

Mrs. Fisher

It will not. I hope that this will permeate right down. It is easy for the hon. Gentleman to nod his head, but he is not the person sitting behind a desk in a social security office who normally has to interpret the regulation in the way that the Government intend. I should be grateful if the Minister would make this point clear so that on on account will the £10 be taken into account in any special allowance for which the old-age pensioner might apply. whether for clothing or perhaps a special claim for bedding or housing. Will the hon. Gentleman ensure that that message gets through to every social security office?

I welcome the Secretary of State's observations about the details of the scheme being advertised in newspapers and at post offices. However, many old-age pensioners do not buy, and therefore do not see, newspapers; some are very lonely and have few visitors, while others rarely go to the post office.

Mr. Thomas Cox (Wandsworth, Central)

My hon. Friend has touched on a vital matter. Would it not be possible, when a pensioner goes to collect his pension at a post office, for a slip to be issued by the Ministry—we have heard this evening of the willingness of post office workers to speed up the payment—explaining his position?

Mrs. Fisher

I sincerely hope that that possibility might be considered. At the moment, pensioners are very confused.

Pensioners in Birmingham have had rent increase notices. All those in receipt of social security benefits have been given forms which have to be completed and returned to the social security offices. I am not criticising the way it has been done. Generally it has been done very well and there is no problem for anyone in this Chamber. We would understand what it was all about. However, it is terribly difficult for an old-age pensioner trying to work out legal language. This kind of help has to be spelled out very simply. If we are not careful pensioners will become very confused about extra payments. Their minds will boggle at these things. Therefore, is it possible for a television announcement to be made on this matter? Ofter a home help is the only person who explains these things to a pensioner. The advertising of this system should extend beyond newspapers and post offices.

The hon. Member for Plymouth, Devonport (Dame Joan Vickers) spoke about allowances for residents in homes for the aged. Such people are allowed a certain amount out of their weekly allowances for pocket money; it is a fixed amount of £X out of the whole of the benefits they receive from the State. May we have an assurance that the £10 can be retained as pocket money by those in homes for the aged or in long-stay geriatric hospitals?

In Birmingham the social services department, in conjunction with the public health department, is most concerned about the great number of cases of hypothermia among older members of the community. It is unfortunate that public money, whether nationally or locally, is being spent wastefully. The services department and the public health department in Birmingham, together with the voluntary organisations whose members visit people in their homes, are preparing plans to counter any serious problem which arises. They amount to an alarm system which is sounded off if anybody finds a serious case of hypothermia. These preparations would not be necessary if the basic needs of the elderly were accepted in a manner which would enable them to pay for their own requirements.

I welcome the £10 for the old-age pensioners. I should welcome £10 being paid quarterly.

Mr. Stallard


Mrs. Fisher

My hon. Friend says "weekly". That would be an admirable solution, but I recognise that the Government will not go for it as a weekly payment.

Mr. Alexander Wilson (Hamilton)

Does my hon. Friend agree that while most hon. Members welcome the £10 lump sum payment, they feel that the Government, being responsible for the old people's plight, should now increase the old-age pension to the extent sought by the old-age pensioners' associations—that is £10 for a single person and £16 for a couple?

Mrs. Fisher

No doubt when the pensioners lobby the House on Wednesday the Secretary of State will be able to give them some hopeful news. Perhaps he will tell them that he can put a little more in their Christmas stocking. Perhaps he will say that as well as the £10 for Christmas he has in mind for them an excellent New Year's gift. After hearing from the old-age pensioners, perhaps he will be moved by the serious plight in which thousands of them live. We hope that the Bill is a step in the right direction and that it will be followed by a living pension.

7.53 p.m.

Mr. Robert Boscawen (Wells)

The hon. Member for Birmingham, Lady-wood (Mrs. Doris Fisher) said that many pensioners were confused by the forms they had to fill in and by many of the manifestations of modern life. That is true and it is very often why, though they would never admit it, their money does not go further. They are particularly confused by decimalisation. So am I. Many pensioners, although they would not admit it, are not the best managers and that is why they get into difficulties. However much their payments are increased, this will not necessarily enable them to provide the heat, the light or the food they need. We must examine much more closely the special needs of the pensioners, although I know that the subject has already been studied by various groups.

Mrs. Doris Fisher

I do not accept that old-age pensioners are not good managers, if that is what the hon. Member is suggesting. The old-age pensioners I represent are very good managers but the pension is insufficient to meet their basic needs.

Mr. Boscawen

Not all pensioners are confused, I agree, but some of those that I know appear to be extremely confused by the various manifestations of modern life.

Like the hon. Lady I welcome the £10 benefit for Christmas, not least because it will go to many groups of people who would not otherwise draw their pension in full because some of the money is clawed back in taxation. I agree with the right hon. Lady the Member for Blackburn (Mrs. Castle), who said she strongly suspected that this payment would be a precedent to be set for future years. I too can foresee enormous pressure on Governments in future to hand out £10 at Christmas to pensioners. That would be a dangerous thing. The tendency would become for Governments to hold back, say, 20p of the pension per week as a sort of enforced saving in order to give a bonus at Christmas. I believe that to be undesirable and open to abuse.

The payment this year is a special case and it is an emergency measure but I would greatly mistrust it if it were repeated year after year.

Mr. Sydney Bidwell (Southall)

Why does the hon. Member describe the payment as an emergency measure when the Minister says that it has nothing to do with a cost-of-living increase?

Mr. Boscawen

The payment is undoubtedly part of a package of measures designed to overcome inflation. One of the reasons for it was to try to win agreement with the trade unions and the CBI. The right hon. Member for Blackburn spoke about increasing the pension to about £10 a week. Of course, we should like to see that. But such a move would create one great difficulty to which I cannot see an answer. It concerns those on supplementary benefits.

If the pension were increased to £10 a week, the numbers of people receiving supplementary benefits would be greatly increased. If supplementary benefit is increased by £3.25 for a single person, the same amount as the pension is increased, the poverty level will rise also. Perhaps the problem will be overcome by the introduction of the earnings-related State second pension which would not push up the poverty level for those on supplementary benefit. But if there were to be an increase to £10 in the pension next year and the supplementary benefit level were to be increased by £3.25 there would be a large increase in the number of people eligible for supplementary benefit. I should be interested to hear how that problem could be overcome.

There is also the question of the Exchequer contribution. The figure of 18 per cent. or 19 per cent., which has been bandied around since the war, must be looked at afresh. I cannot find why the Exchequer contribution should be as low as that. It seems to have stayed at that level, and now that there is to be annual growth of about 5 per cent. we should consider carefully whether the Exchequer contribution should not be increased to about 25 per cent.

Many claims will be made on the proceeds of increased growth—for example education, health, roads and all the other requirements of a modern society—but now that we are going into a period of sustained growth we can surely consider increasing the Exchequer contribution towards pensions. When the tax credits scheme is adopted the Exchequer contribution will increase considerably. I do not think it is possible to work it out exactly, but I should like to hear some estimate of it.

We all welcome anything that we can do for the elderly, but we must be suspicious of this measure. We must ask whether this is the best way of helping these people at this time. We are giving the most to those most in need but a flat rate tax-free to everybody irrespective of the tax that people pay. Although I welcome this help this year, I have grave misgivings about any suggestion that it might be repeated.

8.0 p.m.

Mr. Thomas Cox (Wandsworth, Central)

Like all other hon. Members, I warmly welcome the payment of this lump sum. But, as my right hon. Friend the Member for Blackburn (Mrs. Castle) asked, what exactly is it for? Is it to take account of the increased cost of living of recent months, or is it an attempt to influence the unions to accept the Counter-Inflation (Temporary Provisions) Bill in any talks which are to take place in the future?

For many months hon. Members on both sides have repeatedly brought the plight of the elderly to the attention of the Secretary of State. When the Chancellor announced last March in the Budget that pensions were to be increased, he said that it would not happen until September. An Early Day Motion called for a lump sum to compensate for that delay, but it was refused. We were told that it would be too complicated and expensive. Hon. Members know, from their contacts with retired people, the great bitterness that they felt about this delay. I therefore welcome the fact that this payment is at long last to be made, and no one will dispute its urgency.

My constituency in inner London has a large percentage of retired people. I am myself this evening suffering from the effects of the cold weather of the last few weeks, and already some pensioners have told me that they have started to go to bed very early at night because it is the only place where they can keep warm. They cannot stay up as long as they would like because it would mean higher bills for heating, light and television. So they go to bed to keep warm and, far more important to many of them, to save money. This highlights the problem they face.

During the last few days we have discussed the Government's proposals to counter inflation. I do not want to make party points about who causes inflation. Nothing earns greater contempt from pensioners than political parties claiming a far superior record to that of their opponents in the welfare of pensioners.

Inflation affects everyone but most directly the pensioner. All of us represent pensioners, whatever our constituencies. But when I hear some of the speeches made here I wonder what kind of contact some hon. Members have with pensioners. Pensioners have to pay the same costs for food, light and heat. For the reason which I have outlined we should not encourage the Secretary of State, therefore, to think of this as a once-for-all payment.

The State retirement pension, even when someone is receiving supplementary benefit, is not enough to live on. If anyone suggested that now, I am sure that he would not do so on Wednesday, when hundreds of pensioners will be lobbying to inform us of their position.

We should therefore consider a yearly lump sum. Few pensioners can save enough during the year to enable them at Christmas to do what we all like to do—buy those things that they would not think of buying throughout the year. Nothing concerns us more than the kind of problems we hear at our weekly surgeries or when we visit retired people's organisations.

A fortnight ago at one old people's club I asked some ladies what they were going to do for Christmas, and whether they would have the grandchildren over. One old lady, near to tears, said "I am not going to invite my grandchildren because it is natural for them to expect me to be able to give them some small present. I just do not have enough money to be able to buy them something. Rather than disappoint them and upset myself, I asked my daughter not to bring them to see me this Christmas."

Last Tuesday the Secretary of State told me that he had met representatives of retired people's organisations in October. So he must be fully aware of their great concern because of their belief—I believe that they are right—that their standard of living is being eroded month by month. There are 8 million pensioners in this country; so millions of families must have a direct or indirect relationship with pensioners, and they must be fully aware of the kind of problems that pensioners face.

The question has been asked tonight: if we want pensions to be increased, how is that to be done? We should have the courage to say to the people "If you really believe that retired people should have a decent standard of living, we shall have to pay for it"—and that includes us, as Members of Parliament—"in increased contributions." If that were put to the people, there would be overwhelming support for it. I made the point to the Minister last week in a supplementary question that at the three party conferences the pensions spokesmen of each of the parties spoke about the plight of pensioners and how we could help to improve their standard of living. As there appears to be unanimous agreement between the three political parties represented in the House that pensions should be increased, why do we, as a Parliament, shy away from saying to the wage earners that we believe that pensions should be increased and that the increase can come only from contributions and Exchequer grants? That is what we are campaigning for, and it is not a party political issue. If we did that we should get away from the argy-bargy we hear in the House from time to time. It would be deeply respected by pensioners, and by wage earners.

We should start to realise that if pensioners are to have a decent standard of living, that standard must be tied to the average national weekly wage. For too long this has been another issue which we have talked about but rarely accepted as being the first essential in ensuring that pensions keep pace with the general rise in the cost of living and our general prosperity. One thing is often completely misunderstood in the House. We seem to think that when a person has retired he ceases to have certain rights. Why, for example, do we think that when a woman who has been working retires she no longer has the right to buy a dress or a new coat when she wants one, or to have her hair attended to if she wishes? Many women do this when working, but shortly after ceasing work many of them are unable to do so. Equally, many men like to visit the local pub for a drink or spend a few shillings a week on the football pools. Why should they not still have the right to do that when their retire?

That is what we should consider when talking of pensioners' rights and standard of living. Surely this is what Parliament is all about. We are trying to represent the needs and views of people, and 8 million retired people form a very substantial part of the population. I shall not go into the rôle they have played in the past. Surely all of us must be fully aware of that. Why do we not have the courage to say "We agree with the pen- sioners' point of view and are prepared to campaign in support of it"? If we are prepared to say that, this evening's debate will have some relevance. It will certainly have a great deal of support from pensioners and the vast majority of people. If we fail to say that, they will regard the debate as utter hypocrisy in relation to their present needs.

8.14 p.m.

Mr. Leslie Spriggs (St. Helens)

My right hon. Friend the Member for Blackburn (Mrs. Castle) raised the question of the covering of the long-term unemployed and those in receipt of sickness benefit. It would be interesting to know the figures for people who, whilst not registered as unemployable, have very little chance of getting another job. Though fit and willing to take a job, for some there is very little hope of entering remunerative employment again. Most of this group of people, the unemployed, the sick and the injured, will probably be signing on the dole for perhaps the next 10 or 20 years before receiving a retirement pension.

On reading the Bill, I felt very dismayed about the large number of people who will not receive the £10 lump sum prior to Christmas. We welcome the Government's decision to make this payment possible. However, it is the Opposition's duty to draw the Government's attention to the large number of people who will not benefit but should benefit. My plea to the Minister is that in Committee an amendment should be introduced to bring in the groups of men and women to whom I have just referred. The Minister would have the support of the Opposition for such an amendment.

Some old people live in older properties, perhaps in two- or three-bedroomed houses. One has only to visit some of their homes to find that, as a result of insufficient money to effect repairs and maintenance, those houses are very often cold and damp. During the last cold spell, in my three-bedroomed house I must have spent at the very least £10 on fuel alone. We have not wasted it. But what about the old people, whose pensions do not provide them with the nourishing food required to keep the body warm? If they cannot afford the food, at least they should have a warm home.

Of the many examples I could bring to the Minister's attention one is rents. I hope the Minister will look very closely into rents. Only last Saturday morning, at my interviews in St. Helens, I met a pensioner who had been forced to leave his home under a rehousing plan. He used to pay £1 a week in rent. The house was far from being a slum, but because of a development scheme it had to go. The council rehoused him, and his new rent was £2.58. The pensioner received a letter assuring him that the rent would remain at that level, only to receive a later notice stating that he was to be charged a higher rent of £3.82. This man receives an industrial pension of between £1 and £2 a week from the corporation in addition to the State pension.

Many old people and even some young people complain to me that their electricity or gas has been cut off because of non-payment of bills.

The Minister could do the community a service by taking the old-age pensioners' case out of the arena of party politics. The National Old Age Pensioners Association has proposed that there should be a pension of £10 for a single person and £16 for a married couple. The association is not asking for exorbitant figures.

On Wednesday there is to be a mass lobby of old-age pensioners in which, for the first time in the history of the pension case, the larger trade unions are to take part. The Government should heed this warning presented by the change of policy on the part of some trade unions. I welcome the assistance of the trade unions, because for far too long pensioners have been left to their own resources.

A man can be a paid-up member of his trade union for upwards of 50 years. The day he retires he ceases to be a member of his union and he has no more trade union rights. On Wednesday I hope to see the beginning of the professional trade union negotiator throwing the weight and might of the trade union movement behind an attempt to influence the Government to do something for the pensioners. My constituency will be well represented.

In the event of Wednesday's mass lobby wishing to send a deputation to put a case to the Minister on behalf of all pensioners, will the Under-Secretary be prepared to receive such a deputation and pass the message on to the Government immediately? I am sure that the Under-Secretary has just as much sympathy for the pensioners as we have. I do not make a submission for the pensioners on a party political basis.

Mr. O'Malley

My hon. Friend is right; I confirm that the Under-Secretary has a deep sympathy for pensioners. The difficulty is that in the practical application of that sympathy he introduces a new pension scheme which will result in leaving millions of old-age pensioners dependent on supplementary benefits until the 21st century. Therefore, although one can accept the Under-Secretary's sympathy in practical terms, he will achieve nothing for the pensioners.

Mr. Spriggs

I thank my hon. Friend for his intervention, but I must disagree with him slightly. We must avoid straying into the party political arena on this vital subject. If we tell pensioners that we believe that they do not receive sufficient to live on, let us prove it. The Government said that they could not make pensioners a lump sum payment before Christmas, but they decided to make inquiries and, after consulting the Post Office workers and others, they found that by means of people such as Post Office workers making a superhuman effort the payment of £10 could be made before Christmas. Where there is a will there is a way.

It behoves everyone who has something better to look forward to in his old age than the State pension—namely, superannuation or an industrial pension worth having—to do more than just express sympathy for those living below the poverty line. On Wednesday evening the trade union representatives together with the pensioners will give us a message through the mass lobby. People who express their sympathy should be prepared to prove their words by action—that is, we must all help to find the money, I know that it will be costly, but it is far more costly for the person who dies from malnutrition in old age or for the person who dies before his time through lack of nutrition or lack of warmth. We are talking about people.

If the trade union representatives show their willingness to make a contribution to raising the pension to at least the level proposed by the National Old Age Pensioners Association, I hope that the Government will accept the proposal. I assure the Under-Secretary that if the Government were to do so both sides of the House would welcome it.

8.29 p.m.

Mr. Cyril Smith (Rochdale)

I agree with the hon. Member for St. Helens (Mr. Spriggs) that it is time that the matter of pensions was taken out of the political arena. I can only say, having been in the House for close on two hours this evening, that I wish he would persuade some of his colleagues to do exactly that.

One thing which has amazed me during the last two hours is that hon. Members have continually been asking the reason for the increase, whether there is some veiled threat behind it, whether it is to do with trade union wage negotiations and so on. For myself, what matters is that the pensioners are to get £10. I am not really concerned about the reasons which have led to that decision; I am more concerned with the decision itself. I appeal to people to stop carping about it and to give a sincere welcome to the fact that this £10 is to be paid.

The suggestion has been made from the Government benches that it would be dangerous policy to pay this sum annually. I dissociate myself from such an expression of opinion. For many old-age pensioners the only Christmas present they will receive is the £10 which the Government propose to pay them. In addition, as has been mentioned by an hon. Member on these benches, old-age pensioners get as much joy from giving as from receiving and it may be that this £10 bonus will provide them with their only opportunity of giving a present.

On both those counts I welcome the £10 bonus, and I hope the Minister will consider the possibility of making it an annual payment instead of subscribing to the view that this would be a dangerous policy.

I hope too that the Minister will remember—some hon. Members seem to be in danger of forgetting it—that poverty is only half the problem of age. Loneliness is as vital a part of the problem as poverty. That is why in my maiden speech I appealed for pensioners to be given free television licences. I make that appeal again tonight because it would cost the Minister less than £10 a pensioner. Indeed, if two pensioners were living together in the same house the Minister would get away with this for half price because only one television licence would be required for two people. I make this plea for free television licences not on economic grounds but in order that we can meet half of the problem of loneliness by means of the companionship that a television set can give to a pensioner.

My next point relates to certain matters which were raised by the right hon. Member for Blackburn (Mrs. Castle) concerning heating allowances. I remind the Minister from my recent local government experience that many pensioners have to have under-floor heating and district heating in the bungalows in which they live; and in addition, if they are living in flats it is essential that the heating be kept on not merely for their benefit but for the benefit of all the other people living in the block. If in a block of flats there are areas where the heating is not in operation, this has an adverse effect on the maintenance system in the whole of the block of flats. I ask the Minister to remember this when assessing heating allowances for pensioners.

My next point is the main reason why I decided to speak in this debate. I was a little concerned that when an hon. Member on the Government side was speaking of the need for residents in local authority homes to be allowed to keep the £10, the Minister nodded his head in agreement. As a member of a local authority and as one who was an active member up to four weeks ago, I appeal to the Under-Secretary not to instruct local authorities—the decision surely rests with them—that the £10 shall be paid in cash to all residents in old people's homes. If an instruction is to be given it should be to the effect that the money shall be used for the benefit of people in old people's homes. In my own authority at Rochdale we have 13 or 14 old people's homes and many of the people in those homes are 85, 90 and 95 years of age. They have no living relatives. They are past the age of discretion in terms of their mental capacity. We should be doing them a disservice by putting a £10 note into their hands. Many of the people in our homes for the aged are those whose relatives have deserted them.

Mr. Marks

Is the hon. Gentleman suggesting that anybody who is not certified should not receive the money in cash? It is desirable that people in such homes should be able to give presents. They must have somebody whom they feel they can help, by spending the money themselves.

Mr. Smith

I have an intimate knowledge of the situation. There are people living in homes for the aged who have no relatives for whom to buy presents. They never have a visitor in 12 months and, therefore, they have no visitors for whom to buy presents. When they die, the people who appear on the scene are long-distant relatives who have never been to see them for years. However, they come in for the pickings at the time of death.

Some of the residents of homes for the aged in Rochdale have considerable sums of money. They save from week to week from the basic old-age pension because they do not know how to spend the money. They are not capable of spending it.

I hope that the Secretary of State will ensure that the £10 is used for the direct benefit of the people in homes. Instructions should not necessarily be given that the money shall be handed in £1 notes to the person for whom it is intended. I accept that there are some people in homes for the aged to whom the £10 should be paid. However, to those in a home with, for example, 10 people of 90 years of age—a common situation in Rochdale—a good theatre trip, a good booze-up or something like that would be just as relevant as putting 10 £1 notes into their hands and saying "Go out and spend that." In any case, they are physically incapable of spending it.

Mr. Marks

Who does the hon. Gentleman suggest should make the decision?

Mr. Smith

The people who now make the decisions should continue to make them. That is why I urged at the beginning of my speech, when the hon. Member for Manchester, Gorton (Mr. Marks) was not present, that they should not be sent an arbitrary letter with instructions on what to do. The matter should be left to their discretion, with a clear statement that the money shall be used for the benefit of the people to whom it is being paid.

Mr. Marks

I was in the House for both Front Bench speeches. I have been present for most of the debate, except for the past half hour. I still think that somebody must make the decision as to which people in homes, if the hon. Gentleman's suggestion is implemented, shall receive the money in cash. But who is to have this bower? Is the money to be handed to the director of social services or the matron of the home?

Mr. Smith

In legal terms the decision should be made by the director of social services and in practical terms by the person most closely associated with the old people concerned, which would usually be the matron of the home.

Whilst I welcome the £10 bonus being paid to pensioners, and whilst I think that the bonus should be an annual payment, I hope that this will not be taken as an excuse for not raising the basic pension. The sooner pensions are linked to wage levels and the cost of living the better.

8.40 p.m.

Mr. Sydney Bidwell (Southall)

It was pointed out earlier in the debate, although not very seriously, that the payment of the lump sum to retirement pensioners coincides with two by-elections. I am sure that it is a pure coincidence, because I cannot seriously believe that any Government in their right mind would think they could bribe intelligent people in that way. The constituency in which I live, where a by-election is pending, is not exactly a Labour stronghold, but I think it will become a Labour gain. Even a lump sum payment of £20, £30, £40 or £50 would have no bearing on the result.

As political representations is determined by class division in our class society, by and large it follows that the payment will probably represent a serious good turn to more pensioners living in the Uxbridge constituency than to those in Sutton and Cheam, although there are in Sutton and Cheam a number of people who are really up against it. Pensioners cannot live on the new rates of £6.75 for a single person and £10.90 for a couple. Therefore, they are driven to supplementary means-tested benefits.

A number of us were involved in the consideration of the National Insurance Act, and this is not the first time that we have put our minds to the problem. The Minister's speeches throughout the consideration of that Act gave no hint that the Government would introduce a measure of the kind we are considering. The whole logic of his arguments then pointed in the reverse direction.

Why are we considering such a Bill at this time of the year? Most people understand the reason, and perhaps it is not necessary on this nice, quiet Monday evening to underscore it. But I must say for the record that it is a part of what was thought to have been the package proposed during the negotiations or discussions—I do not know that "negotiations" is the correct term—between the Prime Minister and representatives of the trade union movement. It sounds to me very much like a proposal made by the Prime Minister in the heat of the moment as a sop.

Therefore, I do not share the almost jubilant acclamation of the payment of this miserable sum of money. It will be regarded as miserable in parts of Cheam and Sutton, because it will probably mean only that people there can buy two or three bottles of whisky this Christmas instead of the lesser amounts to which they are accustomed. In fact, I do not think the sum of money involved even affects that possibility, either. It will affect in a very tiny way the plight of the two-thirds of the old-age pensioners living on or near the basic national insurance pension.

Pensioners in my constituency are among those in the forefront of the current trade union pensioners campaign, and some of them will be lobbying hon. Members on Wednesday. That lobby will probably be the biggest turnout on this question ever known. The Government and particularly the Secretary of State, who is not now present, will be very much mistaken if they believe that this sop will in any way detract from or counteract the national determination implicit in that campaign for the retirement pension increases which are sought. Even the sums of £8 for a single pensioner and £14 for a couple proposed in our amendments to the National Insurance Bill of last Session have been overtaken by the galloping rise in the cost of living, and the amount for a couple should be £16.

Had a Labour Government continued in office there would undoubtedly have been an annual review system; yet here we have a Government which have presided over an astronomical rate of inflation boasting of such an annual review. Most of the recipients of the £10 bonus know that it is nothing to write home about. It can therefore be correctly described as a sop, and Conservative speeches tonight have been very revealing in that respect. If there is a case for giving pensioners this very modest amount there is also a case for giving it every year, regardless of means. In this connection the speech of the hon. Member for Wells (Mr. Boscawen) had to be taken notice of, because he was a member of the Standing Committee on last Session's National Insurance Bill.

Whatever can be said of this sum of money, it cannot be regarded as solving the problem of the 8 million old-age pensioners, most of whom during their working lives have not been able to make adequate pensions arrangements. The great deficiency in what was said by the hon. Member for Chelsea (Mr. Worsley) about what life would be like in the future is that it had nothing to say for the 8 million pensioners who when they packed up work in industry found that they had to drop from a normal weekly income to the present miserable pension.

The Government are hoist with their own petard of this miserable sum of money. It mocks at the whole case they have been presenting. I am not opposed to the idea of a Christmas or holiday bonus. Working-class people save for simple projects. They cannot save enough for a rich old age because they do not earn enough to do so, and the bulk of present-day pensioners are shut out from the starry-eyed highways towards better pension deals in the future which we have had from both parties. While such deals remain in the nebulous future, the present fact of life is that millions of our fellow citizens have to try to make ends meet.

Society has ensured that our old will live longer through the provision of better medical services, welfare schemes, meals on wheels and the like. Within that context, women are living longer than men. Yet we do not put sufficient into the handbags of widows. They should not merely be provided with a telephone by which they can sit waiting for people to call them. They need more stimulus than that. During discussion of the National Insurance Act last Session, the hon. Member for Norwich, South (Dr. Stuttaford) pointed to the need for intellectual stimulus and for enabling elderly people to travel around in so far as they were able to do so. That cannot be done unless they have money in their pockets. They will not get it by sops of the kind enshrined in the Bill.

I feel exceedingly sorry for the Under-Secretary of State, but on balance it is the old-age pensioners, my kind of people, for whom I have the greatest compassion and sympathy in their plight under the present Government.

8.53 p.m.

Mr. Michael Meacher (Oldham, West)

The Secretary of State was distinctly modest in introducing the Bill. Perhaps this was hardly surprising, because there is so much in the Bill to be modest about. My hon. Friend the Member for Southall (Mr. Bidwell), in an incisive speech, struck exactly the right note when he called the Bill a sop. The political function of the Bill is merely to cast a veneer of respectability and fairness over the freeze resulting from the crassly unfair social and economic measures of the Government in the last two years. Even for the present Government, this Bill must surely be one of the thinnest and most transparent veneers we have had to take.

The modest, not to say exiguous, benefit being offered to pensioners is demonstrated by the fact that for the single pensioner this once-and-for-all donation, as the Foreign Secretary likes to call it, will represent an increase in purchasing power for pensioners at an annual rate of a mere 20p per week.

The total being offered to pensioners is £80 million. So far, the National Insurance Acts have more or less kept the pension in line with the rise in the cost of living, and, as hon. Gentlemen have said earlier in the debate, the reason why we have an annual review is precisely that the rate of inflation has nearly doubled in the last two years. It had to happen. By this Bill, for the first time an attempt is being made to provide a tiny extra gain for the pensioner over and above limping along behind what can only be described as a galloping rate of inflation. But how far are the Government going, and is this not yet another shallow pretence by which the pensioners and the poor are merely being offered crumbs which have fallen from the rich man's table?

By comparison with the £80 million now being offered to the pensioners, the 1½ per cent. of the population with incomes over £5,000 a year—I have said this before but I make no apology for saying it again—have been offered in these last two years from Government handouts—I give the Government's own figures—£62 million from the 6d. cut in the standard rate of income tax, £45 from increases in child tax allowance, £110 million from the raising of the investment surcharge, and the ending of all excess tax over the standard rate on unearned income up to £2,000 a year, another £35 million from the raising of personal reliefs and the surtax reduction in the last Budget. The references are from HANSARD of 24th November, 1970, and 1st May, 1972. They are the Government's figures.

The last figure I come to is admittedly controversial. I hope that the Under-Secretary of State will accept that the figures I have just given are not controversial. Now I refer to the last of the figures, the gains which have accrued to this group of people from the 5 per cent. cut in corporation tax. I have estimated it at £160 million, although I am well aware that the Treasury, for technical reasons, would give a figure nearer half that sum.

So, accepting the Government's view on that last point—though I do not—there have been gains to this richest group over the last two years from Government handouts, and not from any other source, of nearly £350 million, and this group is just over 150,000 persons. It is a gain of at least £1,000 a year to each of those on average. By contrast the pensioners are now being offered £80 million for about 8 million of them; that is, £10 each, or one-hundredth of what has been handed over in the last two years to the Government's richest supporters. It is this kind of sordid fraudulence which makes the Government's pretensions to justice and reasonableness in this Bill such a sick joke.

Sir B. Rhys Williams

We recognise the hon. Gentleman's concern at the concessions in tax which have been made to senior management, but could he point to any major industrial country where taxation of senior management is higher than it is in this country? Does he not think that there may be some connection between our relatively stagnant, unadventurous economy and the penal rates of tax imposed on senior management by his Government?

Mr. Meacher

The hon. Gentleman's last remark merely reflects the myth which is widely held and propagated in the City of London but for which there is no evidence. The Brookings Institution study in this country could not find any single cause of the relatively lower growth in this country. As regards the hon. Member's suggestion about the higher rate of taxation of senior management in this country he should bear in mind also social security contributions and tax allowances, and certainly tax is no higher than that imposed on our European and American competitors.

If the Government insist that the Bill is in some senses fair, even within the narrower canons of their own kind of fairness, why do they include only those who are over pensionable age? As my hon. Friend the Member for Rotherham (Mr. O'Malley) so eloquently asked, why do they exclude those who are in as great need and sometimes in greater need—for example, the long-term sick and the disabled and the long-term unemployed, many of whom, as a result of the Government's own economic policies, are now deprived of all insurance benefit? Why do they exclude widows who are under pensionable age? I was disappointed when the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) did not press her perfectly fair argument, for there is no reason why the Government should not have included them. Why have they not included the single-parent family, often those who find it most difficult to manage?

Why have the Government, who for their own reasons have so regularly stressed concentration on those in greatest need, abandoned this first-class opportunity to do just that at this juncture without recourse to a means test? If the Government are so clearly unwilling to give pensioners a proper deal by spending big money, why have they not decided instead, for example, to give a non-means-tested supplemented those many pensioners who are severely disabled?

According to the Government's own report—"Handicapped and Impaired in Great Britain"—there are about ¾ million disabled pensioners, and within the expenditure of about £80 million the Government could perfectly well have provided £2 a week—weekly, not once and for all—as a supplement to the pension for all those who are undoubtedly far more in need than those merely over pensionable age. That would have been a far better selection of priorities for the aged and would have been non-means-tested.

Alternatively, why did not the Secretary of State use this opportunity to come clean from his persistent excuses and obscurantism about providing an automatic heating allowance for the aged, as my right hon. Friend the Member for Blackburn (Mrs. Castle) urged? He knows perfectly well from the abundant evidence in the two excellent reports produced by Task Force—"Old and Cold in Islington" and "Still Left in the Cold"—that the means-tested system of exceptional needs grants for heating has been a miserable and tragic failure. He knows perfectly well that the number of people in receipt of the grant is less than 2 per cent. He knows that the number of elderly people getting the top rate of grant, namely, 75p per week, about one-third of what it costs to heat a house or flat in the winter, is about one-fiftieth per cent. He must know that for £80 million he could provide a heating allowance as of right for all supplementary pensioners at a rate of £2 a week for each of the three winter months and £1 a week for each of the nine other months. That the Secretary of State has done nothing at this time in a non-means-tested way to bring help to those who need help most urgently is a central criticism of the Bill.

The main argument against the Bill adopts the premise of the Government's own approach. If the Government believe that their own tax credit proposals will be a major boon to the poor, especially to the elderly and the low-paid, if they are prepared to spend £1,300 million in five years' time for that purpose, why are they not prepared to do a great deal more now? If the Government believe that the poor, the pensioners and the low-paid who are mentioned in the Bill need this money, and if they are prepared to spend that sum in five years' time, presumably the Government accept that those people need it now. Why, for example, have the Government not been prepared to increase family allowances at this time? Surely it is inconceivable that such a vast sum as this can be raised entirely out of higher growth. Why cannot the Government markedly increase their offer for the poor now?

I return to the point about family income supplements. Why have not the Government been prepared to double family allowances and include the first child, since this undoubtedly would bring by far the most valuable non-means-tested help at the lowest cost to low-paid workers?

The Secretary of State artfully escaped the clear and unambiguous pre-election commitment by the Prime Minister that he would do two things in 1970. The first was that the family income supplement would work quicker and that it would include the first child. Two-and-a-half years have now passed and there has been plenty of time for the Government to raise family allowances and to extend them to the first child. Therefore, that argument has collapsed.

The second argument was much more valid; namely, that the low tax threshold had effectively invalidated the clawback procedure. I accept that point, but since the Government have considerably raised the tax threshold—I give them full credit for so doing—that argument also has collapsed. Therefore, there is no reason at present why the Government could not introduce a doubling of family allowances or, preferably, a child endowment type scheme.

Therefore, irrespective of what is finally decided in the middle distance about the tax credit proposals, why not increase family allowances now? It is the failure to provide an answer to that question which shows what a major charade this Bill is with regard to the low-paid worker. All that is proposed for the low-paid worker is an extension of the eligibility period for FIS from six months to a full year. Apart from the tardy acknowledgement by the Government that a poverty wage trap exists, I believe that this will achieve very little. It will not mitigate family income surtax when eventually it falls, as it will if the low-paid worker becomes better off.

It is interesting that at the beginning of the debate the Secretary of State suggested that this would not be so because the FIS eligibility level would rise in line with the rise in the cost of living. But the whole logic of that argument is that he believes that in many cases the low-paid workers will not increase their wages beyond the rate of inflation—in other words, that they will stay poor or become poorer. It is significant that the right hon. Gentleman sees that as the only ultimate escape from the poverty wage trap. Nor does an extended eligibility period for FIS prevent the same effect being produced by the host of other means-tested benefits which also exist. I am thinking of rent and rate rebates, school uniform and clothing allowances, education maintenance allowances and a host of others—indeed, there are a total of 45 such benefits. The right hon. Gentleman believes that this will affect only live of those benefits.

Because these are not included in the Bill, I suggest that the figures produced by the Secretary of State in terms of the poverty wage trap are under-estimates. He accepts that at present 3 per cent. of the work force who are low paid are liable to losses of 80 per cent. or more on their earnings as a result of a rise in their wages. He has chosen a level above the highest tax rate ever imposed on senior management, as I hope the hon. Member for Kensington, South (Sir B. Rhys Williams) will accept. The fact that this minimum estimate will not be greatly diminished shows just how small is the concession offered by Clause 3.

This is a small Bill. Nevertheless, no doubt one should be grateful for small concessions from the Government. But in terms of the political motive underlying the Bill—namely, providing a facade of justice to conceal the political realities leading to the freeze and the Government's responsibility for it—this is an ill-disguised fraud, and it will not deceive—

Mr. Cormack

That is absolute rot, and the hon. Gentleman knows it.

Mr. Meacher

I accept all the arguments put forward by my hon. Friend the Member for Southall. It is a sop. It has a political purpose which is quite different from the liberal interpretation that far too many people have given it—

Mr. Cormack


Mr. Meacher

In those terms it will not deceive those who are becoming increasingly aware that for every £1 given to the pensioners and low-paid workers by this Government there have been hundreds and thousands of pounds given to the rich. In those real terms the Bill will be seen for what it is; it is a skim of concessions to conceal the sea of injustice beneath.

Mr. Cormack

Sour grapes.

9.11 p.m.

Dr. Shirley Summerskill (Halifax)

Every speech in the debate has given a sincerely warm welcome to the two provisions of the Bill. On that there has been general agreement on both sides of the House. But clearly the agreement ends there. On no account can we on this side of the House brings ourselves to look upon the Government as a collection of benevolent Father Christmases. The necessity for Christmas handouts to 8 million old people should be anathema to this House, and any self-congratulation is misplaced.

In itself the Bill is a symptom of the total failure of the present social security scheme. The majority of retired people desperately need this £10. But they will not spend it buying Christmas cards or holly. They need it for basic winter necessities—for warmer clothing, for extra heat and for extra light. Most retired people will not spend it on turkey and mince pies. For a treat, they may buy a luxury such as fish, fruit, meat or eggs—basic foodstuffs which under the present Government are rising in price every day. No wonder it has been suggested by many hon. Members that the £10 should be given not once a year but quarterly or monthly.

My hon. Friends the Members for Manchester, Gorton (Mr. Marks) and St. Helens (Mr. Spriggs), among others, pointed out the glaring omissions in the Bill. Those in receipt of sickness benefit, especially the chronic sick and disabled, will get no help this Christmas. The long-term unemployed who are rising in number under this Government and through no fault of their own are without work, will get no help this Christmas. Then there are widows under pensionable age and single-parent families. What sort of Christmas will they have?

Will the Under-Secretary answer the most important points made by my hon. Friend the Member for Birmingham, Ladywood (Mrs. Doris Fisher) about technical knowledge of the operation of the Bill by social security officials, wardens of old people's homes and the pensioners themselves?

My hon. Friends the Members for Wandsworth, Central (Mr. Thomas Cox) and Oldham, West (Mr. Meacher) and others have pointed out that the Bill is an attempt to paper over the ill feeling generated by the Christmas freeze policy being brought in by the Government. Everyone in this House knows that those who will be affected by the Bill will see it for what it really is. After all, for them it is only a stopgap measure to see them over a few weeks of cold Christmas weather. As my right hon. Friend the Member for Blackburn (Mrs. Castle) said, it is a popular cheap substitute for a real pension scheme.

Retired people and all pensioners should not need to rely on this kind of handout. They want, throughout the year, whatever the season, whatever the cost of living, whatever the average wage, to rely as of right upon an adequate income for a decent life without having to lobby Parliament and ask for more.

Only a just, effective social security scheme will end, once and for all, poverty and need among the old, the sick, the unemployed and the low-income families. This Bill is not the answer.

9.15 p.m.

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

Most hon. Members who have spoken in the debate have welcomed the Bill. It has had an understandably general welcome, because it brings benefit to 8 million pensioners in the £10 lump sum and to 100,000 families who are benefiting from the family income supplement at a total cost of around 80 million.

The hon. Member for Rotherham (Mr. O'Malley) described the Bill as a response to a crisis situation, a stopgap emergency. It is far from being that. Indeed, one of the aims of the tripartite talks which took place in recent months was to help the pensioners. All three parties to those talks were agreed, and at that time the Government said that if inflation could be curbed the pensioners would benefit and would have a share of the increased prosperity which would result. The Bill is an earnest of intention on the part of the Government as a direct response to that.

The hon. Gentleman talked about the menace of inflation. How right were my hon. Friends the Members for Chelsea (Mr. Worsley) and for Kensington, South (Sir B. Rhys Williams) when they pointed out the relevance of excessive wage claims in the battle against inflation. The hon. Gentleman cannot skate over that one. Surely it is now generally recognised that the pensioners' biggest enemies are those sections of the community who are taking out more than their fair share, because this inevitably leads to rising prices, and when we get rising prices the pensioners suffer first and hardest.

The hon. Gentleman said that there had been no increase in the value of the pension and that pensioners had fared worse under the present Government. Has he forgotten the annual review? From this year onwards pensioners have a firm commitment from the Government that pensions will be increased at least enough to deal with any rise in prices which have taken place during the previous 12 months and that more will be done, if possible. Indeed, on this occasion there has been a modest but real improvement of nearly 4 per cent. in the value of the pension.

The hon. Member for Manchester, Gorton (Mr. Marks) acknowledged the value of the annual review and the increase which had taken place.

I was sorry that the hon. Member for Rotherham went on to talk about the date of the increase and to tie that to certain by-elections. Was he really suggesting that we might leave the payment of this lump sum until the New Year? That really was not worthy of him. Again, the hon. Member for Gorton went out of his way to say how right we were to bring this increase on and to ensure that the pensioners had it before Christmas.

It has been no easy task. My right hon. Friend paid tribute to the Post Office workers who, at a very busy time of year for them, have responded to this widely expressed desire on both sides of the House that the payment should be put into operation before Christmas.

The hon. Members for Wandsworth, Central (Mr. Thomas Cox), St. Helens (Mr. Spriggs) and Southall (Mr. Bidwell) referred to the pensioners' lobby and the view that had been put forward that the level of the pension should be £10 for a single person and £16 for a married couple. Of course one understands pensioners' organisations and hon. Members putting forward a case for an improvement in pensions, but I was very sorry that none of those three hon. Members when making these points said a word about who would pay for the improvement. My hon. Friend the Member for Wells (Mr. Boscawen) pointed out that substantial sums were involved.

Mr. Spriggs

The Minister has just included me with two of my hon. Friends in saying that I submitted a case for an increased pension without showing how it was to be paid for. I hope the hon. Gentleman will reflect on what he has said, because I said that following Wednesday's lobby by pensioners and trade unionists they would come forward and show the Minister how the pension should be paid for.

Mr. Dean

I beg the hon. Member's pardon. I remember his speech and I remember his referring to that point. I withdraw entirely what I said about him but my remarks still apply to his two hon. Friends.

Mr. Bidwell rose

Mr. Dean

May I complete my sentence? It is only right that I should tell the House what the cost would be. Their proposal would cost an additional £2,000 million a year.

Mrs. Castle


Mr. Dean

That includes the figure for supplementary benefit as well as for the national insurance benefits, which means that the gross figure and the net figure would be the same—assuming the same increase in contributory and non-contributory benefits, a pattern which we set last year and have continued this year. But an additional cost of £2,000 million a year would mean an increase in contributions of over £1 a week at the higher level of contributions.

Mr. Bidwell

Will the Minister stop messing about with this and direct his mind to getting nearer and nearer to our objective year after year, which was the purpose of my Private Member's Bill last Session? What can he tell us about real prospects of improvement and the cost of that per year?

Mr. Dean

There has been a modest improvement this year in the real value of the pension, there was a modest improvement last year and there is a firm commitment to the annual review. But in assessing any increase it is only right that the House should consider the cost, how it will be met and how much people will have to pay on top of their existing contributions.

The hon. Member for Oldham, West (Mr. Meacher) mentioned many of the well-worn arguments that we have heard on previous occasions but when he referred to the Brookings Institution as not being able to find a cause for growth or the lack of growth, that is as may be. When, however, we move from the realm of theory to the realm of reality, from the transformation from a nil rate of growth under Labour to a 5 per cent. rate of growth under the present Government—

Mrs. Castle


Mr. Dean

—and to substantial reductions in excessive taxation, that is far more effective than the theories of envy that we have heard from the hon. Member tonight and on many other occasions.

The hon. Member for Halifax (Dr. Summerskill), the hon. Member for St. Helens and the hon. Member for Oldham, West spoke about exclusions and those sections of the community which are not included as recipients of the £10 lump sum. Those qualifying are, broadly speaking, people over the age of 65 for a man and 60 for a woman who are getting a retirement pension, supplementary pension or other pension of that kind.

Some of the other categories have been mentioned. The hon. Member for St. Helens mentioned the long-term unemployed and the near-unemployable. But I ask the House to recognise that this operation is being carried out in record time. It was necessary, if it were to be paid before Christmas, to ask who needed this payment most and what categories could be readily recognised, either by the Post Office or by the Department, so that it could be done on time. This is to some extent, of course, rough and ready. That is the price we have to pay for this prompt response and to get this payment into operation before Christmas.

Mr. O'Malley

The House is grateful for the hon. Gentleman's explanation of why other groups are not included. Of course we understand that there has been a great effort and that special work is being done by Post Office staff to make these payments. If that is the reason for the exclusion, of course we understand it and we want these payments made for Christmas. Probably, therefore, we can come to some understanding across the Box. If that is the reason for this difficulty, I am sure that the widows, the disabled and so on will say "If you cannot pay it for Christmas, we will have it in the New Year", and if we move an amendment to that effect I hope that the hon. Gentleman will accept it.

Mr. Dean

The hon. Gentleman knows, from his former experience in this Department, that once one departs from readily definable categories it is difficult to know where to stop. One could easily get into a position in which one included a person who was sick for just a short period, say one week. What we have had to do is find readily identifiable groups. I hope that the whole House will accept that the pensioners are the most readily identifiable and those to whom everyone is most anxious to see this payment made.

Mr. O'Malley

I understand the Government's difficulties; anyone on the Treasury Bench would have the same difficulty. Can I push the hon. Gentleman a little further? I am sure that his sympathies rest with these wider groups. If one can identify readily available groups for whom we cannot make arrangements before Christmas but for whom we can early in the New Year, will the Government be prepared to look kindly at amendments—perhaps there could be Government amendments, which we would support—to assist in that way?

Mr. Dean

The hon. Member must not anticipate later stages of the Bill, but I have made it clear, as did my right hon. Friend, that in doing this speedy operation we have primarily in mind the pensioners, those who are over pension age.

I was asked about disregards. The Supplementary Benefits Commission itself decided that, with effect from 6th November, 1972, all disregarded income shall be ignored when discretionary special additions are considered. But the Bill provides that the special lump sum payment shall be disregarded for purposes of any legislation which has regard to a person's means. This includes rent and rate rebates as well as other payments which have been mentioned.

The hon. Member for Birmingham, Ladywood (Mrs. Doris Fisher) asked us to make it clear how these payments will be made. I accept her point. Publicity material will be available. The publicity campaign will be beginning so that people know who will be entitled to these benefits. The main point I emphasise, however, is that in all cases the initiative will come from the normal paying agent in the case of the very large majority of pensioners with order books. When they present their order book in the week of 4th December, they will automatically receive from the post office, along with their weekly pension, the additional lump sum of £10. The onus, therefore, will be on the post office to see that that is paid.

There are some who receive their pensions quarterly or four-weekly and they, equally, will receive a payment in due course along with their normal payment arrangements. There is a small number of supplementary pensioners who are not receiving one of the qualifying benefits, and they will be paid by Giro order to be issued by the appropriate local office by 4th December. There are a few other categories which will be paid either from our central offices in Newcastle or Blackpool or by the local offices.

These payments apply to people in old people's homes and people in hospital who are in receipt of the basic pocket-money level of pension. The hon. Member for Rochdale (Mr. Cyril Smith) asked about this. He was worried about very elderly people who may not be able to manage the money for themselves. With regard to those in old people's homes, the answer is that in a great many cases these people have appointed someone as their agent to draw their pension for them. Quite often it is the authority in the old people's home or the local authority. Where that is so, the agent will be empowered to draw the money in exactly the same way as he draws the pension at present. I hope that that will deal with the point made by the hon. Gentleman. I very much take the plea which came from him and a number of other hon. Members that we must ensure that all those concerned, not so much in the Post Office, as they will hear about this through normal channels, but the authorities in hospitals, old people's homes and so on, are fully informed as to the procedures. We plan to do that.

Mr. Harold Walker (Doncaster)

I want to put this point beyond any doubt. The Minister will know that the normal practice in respect of retirement pensioners in hospitals on long stay and in Part III accommodation in some local authority homes is that the authority retains either the whole pension or a major part of it and gives the pensioner pocket money. Will the hon. Gentleman assure me beyond doubt that every individual pensioner will get his or her £10, or that it will be put aside for the pensioner and will not in any way be taken as part of a contribution towards keeping that person in the institution concerned?

Mr. Dean

They will be entitled to that money and it will be disregarded. In other words, it will not be taken into account in assessing how much they should nay towards their accommodation in the old people's home. Everyone, therefore, who is in receipt of a pension, even if it is at the pocket-money rate, will be entitled to the lump sum. There may be cases, as I have said, where the pensioner has freely appointed an agent. Quite often one of the effects of appointing an agent is that the agent decides, on behalf of the person concerned, how the money should be used to that person's advantage. This will obtain with the lump sum in exactly the same way as it obtains with the pension at present.

My hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) asked about people who are absent from this country during the week of 4th December. The answer is that as long as their normal place of residence is in the United Kingdom they will receive the money like anyone else. She also asked whether there was a right of appeal. The answer is "No". This follows from the speedy one-off operation involved in a task of this kind.

The right hon. Lady the Member for Blackburn (Mrs. Castle) and a number of other hon. Members asked about the number of people in receipt of the heating allowances. These are the special allowances over and above those which are already built into the pension rates, the supplementary benefit rates and the long-term additions to which all retirement pensioners and all long-term beneficiaries are entitled. At the latest count in November, 1971, 194,000 beneficiaries were getting exceptional circumstances additions which includes some provision towards heating. Of these, 159,000 were supplementary pensioners.

Mrs. Castle

We were told that there had been an increase of 20 per cent. I asked, 20 per cent. of what? What is the average amount?

Mr. Dean

I gave the right hon. Lady the answer when she asked this question on a previous Bill. The answer is 20 per cent. on the amount. All the amounts were increased last autumn by 20 per cent. The additional 10p on the longterm addition was completely disregarded for that purpose.

Mrs. Castle

But 20 per cent. of what? Will the Under-Secretary give us some indication by telling us what the average amount in payment is?

Mr. Dean

They were all increased by 20 per cent. of the three sums which were available for these special heating allowances. All of them rose by 20 per cent.

Mr. Meacher

Twenty pence.

Mr. Dean

My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) asked about the arrangements for paying the pension and drew attention to the machinery which exists in Belgium where increases in pensions appear to be paid out more quickly than here. My hon. Friend will recognise that there is a substantial difference between the arrangements in Belgium and those here. For one thing, I think that the pensions are paid only once a month in Belgium, which makes any changes much easier to promulgate than when they are paid, as most of ours are, once a week. Equally, the postman plays a much bigger part in getting the money to the pensioner than is the case in this country.

My hon. Friend said that the tax credit arrangements would help to deal with the one-child family which at present is not entitled to family allowances. This is so. One of the strengths of the system is that it will do that. It is, incidentally, one of the strengths of the family income supplement system too, which the hon. Member for Oldham, West again criticised.

Whatever criticisms were made of the family income supplement, it is by far the most effective way of bringing substantial help to families on the lowest level of earnings in full-time work. I need only quote the highest figure which can now be paid, namely £5 a week. Any improvement in family allowances particularly to bring in the first child which would bring anything like that order of help to the low income families would cost a very substantial sum.

Mr. Meacher

Bearing in mind the Prime Minister's firm commitment that this Government would introduce family allowances, how does the hon. Gentleman explain the fact that they have not done so when the one single good argument against doing it—namely, that the low tax threshold invalidated the drawback procedure—has been destroyed by the action of the Government in raising the low tax threshold? Will the Government now carry out their pledge, which would give non-means-tested help not to 50 per cent. of those eligible, but to 100 per cent.?

Mr. Dean

We did not realise when we were in opposition how viciously antisocial the Labour Budgets had been. Although my right hon. Friend the Chancellor has done much to reverse that tide and to take people out of tax and to raise the tax threshold, there is still nothing like enough margin, and the effect of what the hon. Gentleman is proposing would be still to bring into tax families on modest earnings who are not paying tax now. I do not believe that any of my hon. Friends would wish to see that situation.

I hope I have been able to answer most of the points that have been raised. If there are any that I have missed, I shall write to hon. Members. I have pleasure in commending the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Jopling.]

Committee tomorrow.