HC Deb 17 July 1973 vol 860 cc236-8
7. Mr. Ashton

asked the Secretary of State for Social Services what is the current retirement pension as a percentage of the national average wage and the equivalent percentage in June 1970.

Mr. Dean

The standard rates of pension as a percentage of the estimated net average earnings of male manual workers—with which comparison can most appropriately be made—were 26 per cent. and 24.7 per cent. in June 1970 and April 1973 respectively for a single person, and 39.8 per cent. and 38.4 per cent. for a married couple.

Mr. Ashton

Does not that answer show that pensioners have fallen behind other members of the community? In view of that, will the Government stop boasting that they have done more for pensioners than anybody else has ever done and at least increase the pension by £1 plus 4 per cent., which would be on a level with wage earners?

Mr. Dean

The Government do not intend to boast and never have done about their record in pensions, but the facts speak for themselves. The present Government have improved the pension in real terms more than the previous Government did.

Mr. Ridsdale

Why is it that on the Continent pensioners are able to receive much more as a percentage of national earnings? Is it because countries on the Continent have not had the big increase in the number of pensioners that we have had—2 million over the last 10 years—or is it because their gross national product is much higher?

Mr. Dean

What my hon. Friend says is correct in Holland, which has a smaller proportion of pensioners in the population than we have. But it is very difficult to get comparative figures. One has to take into account not only the level of pensions but the more comprehensive range of cover which we have for wives and dependants, and also the fact that we have the National Health Service, which, broadly speaking, is free at the point of use.

Mr. O'Malley

Will the hon. Gentleman confirm that the single person's pension as a percentage of national average earnings is substantially lower today than it was six years ago in 1967?

Mr. Dean

It has altered very little in relation to average earnings over the years but the proportion of pensioners in the community has continued to rise. What matters to pensioners is what the pension will buy, and it will buy more now than when the hon. Gentleman was responsible for these matters.

Sir B. Rhys Williams

Will my hon. Friend confirm that in Continental countries where pensions are higher than in this country the contributions are also higher? Will he make it plain that higher pensions in this country also mean higher contributions?

Mr. Dean

My hon. Friend is absolutely right. It is true that both employer and employee in most European countries pay substantially more towards the pension than is the case in this country.

Mr. O'Malley

Will the hon. Gentleman now answer my question? Is it or is it not true that during 1967 the single pension represented 21 per cent. of national earnings and that it is 3 per cent. below that level today?

Mr. Dean

The Labour Party really has to realise—

Mr. Heifer

Answer the question.

Mr. Dean

—that it is no good egging on greedy wage claims and then weeping crocodile tears for pensioners.

12. Mr. Marks

asked the Secretary of State for Social Services what is the present real value of the basic national insurance pension of £6.75 compared with the date of the last increase; and if he will arrange for another additional payment to compensate for this particularly in view of the latest price increases.

Mr. Dean

£6.40 at May 1973. The Government are confident that the substantial increase in pensions which will come into operation this October will more than compensate for the rise in prices.

Mr. Marks

Is the drop in the value of the pension more or less than the Government anticipated when they made the review in the spring of 1972? If the Minister cannot bring forward the date of the increase, will he not at least during the next 10 weeks make a bonus payment on the lines of the much-welcomed Christmas payment made last year?

Mr. Dean

But the hon. Gentleman knows that there is now an annual review of pensions which gives pensioners the assurance, which they have never had previously, that before the onset of each winter the pension will be increased by at least enough to compensate for rising prices. We are confident that this year it will do more than that.

Mr. Pardoe

Does the hon. Gentleman accept that what matters is the relation. ship between pensions and average industrial earnings? Will he confirm that under both Conservative and Labour Governments the pension has declined as a proportion of average industrial earnings? When will the Government accept the target that in a civilised society pensions cannot and must not be less than half average industrial earnings?

Mr. Dean

The proportion has not altered substantially. What has altered is the proportion of pensioners in the population. This has meant a substantial shift of resources, quite rightly, from the working population to the retired population.