PENSIONS

HC Deb 01 July 1974 vol 876 cc98-172

Mr. Speaker

Before calling the right hon. and learned Member for Surrey, East (Sir G. Howe) to move the motion, I must inform the House that I have selected the amendment in the name of the Prime Minister and the names of his right hon. Friends.

6.56 p.m.

Sir Geoffrey Howe (Surrey, East)

I beg to move, That this House deplores the arbitrary decision of the Secretary of State for Social Services not to bring into operation Parts II and III of the Social Security Act 1973; regrets the serious confusion and uncertainty that this will cause; further regrets that this is likely to deprive many people of an early opportunity to secure a second retirement pension; and calls upon the Secretary of State to reverse her decision so as to allow the 1973 scheme to come into effect, while referring any proposals for subsequent improvement of that scheme to an all-party committee, with the intention of establishing an agreed foundation for pension policy. This motion is being discussed separately from the Bill which we have just debated because that Bill deals with the financing of the National Insurance Scheme as it now stands. The motion deals with the very important and distinct question of the future of the National Insurance Scheme and other insurance schemes that were to be established as a result of the Social Security Act 1973 with effect from 1st April next year.

This is very much a critical motion. It is critical because the decision taken by the Secretary of State, quite apart from being one of the most unexpected decisions taken by the present minority Government and not foreshadowed in some of the right hon. Lady's earlier statements, is the least justifiable and one of the most destructive decisions taken by the present Government. Here, surely, one would have expected a minority Government to have shown more humility and restraint in their approach to the subject of pensions than they have done.

The motion is not only critical. It is also constructive, because, like hon. Members in all parts of the House, we recognise the need, especially in a period of inflation such as that in which we are living, for us all to work out the best ways of helping those who are in retirement and those approaching retirement.

In earlier debates we have welcomed improvements in the State basic scheme, we have discsused action taken by the previous Government as well as by the present Government to key the value of pensions to the cost of living and living standards, and we have discussed the possibility of letting that key operate more frequently than once a year. That is not a matter of controversy.

It is a matter for the utmost regret, however, that the present Government have chosen to reject, as they have done, the opportunity of working on the established foundations laid in the 1973 Act for occupational schemes in the future and of proceeding on that foundation, as many on both sides of industry are already doing, to build pensions in the future and to work out ways of improving or changing the scheme thereafter so far as there is agreement on that. It would have been desirable for such future progress on that foundation to have taken place, so far as possible, with all-party agreement. That is why the last part of the motion calls for the establishment of an all-party committee to consider future pension policy.

Unhappily, one contrasts with that desirable approach the fact that the Secretary of State has chosen—against, I suspect, her first instincts—to throw the whole of the pension situation back into the political arena so that it becomes, as many commentators have said, a political football. The right hon. Lady will, no doubt, say that, if that is the case I advance, why cannot the same case be made against the failure of the previous Goverment to work upon the foundation of the Grossman pension scheme?

There are substantial and solid reasons for rejecting that argument. First, the Grossman scheme—I need not take the debate any further this evening—was the subject in itself of at least as many criticisms as those which the right hon. Lady and her friends advanced against the 1973 Act. I could say, but I need not say so this evening, that those criticisms were more formidable and more penetrating, and that the legislation introduced by Richard Crossman was incomprehensible and unlikely to work effectively. In fact far more important than that, the Grossman scheme was not on the statute book—nor was it being acted on by people on both sides of industry; it was still going through Parliament at the time when the 1970 election took place.

On this occasion, when the right hon. Lady came into office the legislation was on the statute book. The schemes were actually in being. Much work was being and had been done by Government, by employers, by unions, and by the pension industry, to bring schemes into operation.

Incidentally, there is nothing in the fact which I have seen advanced by some hon. Members opposite that very few recognition certificates had been granted under the 1973 Act procedure at the time the right hon. Lady took her decision. I refer to a Press release by the Corporation of Insurance Brokers Society of Pension Consultants after the meeting which its representatives had with the Minister of State in the Department, which concludes by stating: … the Society said that unless the Secretary of State really did ensure in her new policy that the impetus in the development of occupational pension schemes was maintained the loss to emloyees and their dependants could be very great. The Society, whose members have been responsible for the setting up of the great majority of insured pension schemes, gave evidence of the wide scale on which development had been taking place in recent months and the advanced stage which planning had reached. They explained that this had been obscured by the fact that at the date when the Secretary of State announced the suspension of recognition arrangements the timeable had not allowed the final stage of obtaining recognition certificates to be reached. So there is nothing in that argument, and what the right hon. Lady has done has been to deal a severe and unnecessary blow to the work that was well advanced on the basis of the legislation that was on the statute book.

The House will not be surprised to know that I have received, through my hon. Friends and directly, many letters of bitter and angry complaint from people throughout the country about the Secretary of State's decision. One that reached me through the Smaller Businesses Association, and, I think, in different forms from my hon. Friends the Members for Basingstoke (Mr. Mitchell) and for Doset, West (Mr. Spicer), states: We, and I imagine thousands of other companies, now find ourselves in this position. First, considerable time and expense expended both by us, our actuaries and other advisers in formulating a scheme for our employees has been totally wasted. Secondly, the discussions with employees about the Social Security Act and its implications now become meaningless and since pensions are becoming a vital area of discussion especially since the introduction of Phases I, II, III there must be adverse repercussions to industrial relations. Thirdly, those considerations are damaging enough, but we now know nothing of what will be introduced to replace the State Reserve Scheme—are we therefore to `bash on regardless' must we expect the farcical provisions of the Grossman Scheme to be resurrected—or what? Logically we should do nothing, but this is hardly likely to be acceptable to staff, employees and Unions in the impending round of wage negotiations. The Minister's answer to this dilemma is the vacuous statement that 'the setting up of any good new occupational scheme or improvement of an existing one represents a move in the right direction'. What, one wonders, does she believe that everyone involved with pensions, be they employers, actuaries, life officers, lawyers and a host of others have been doing over the past year to eighteen months? More crisply still, from the Isle of Ely comes this complaint and particularisation: In the belief that the recent Conservative Government's new and enlightened approach to State and private pensions, and in particular the State Reserve Scheme, would be honoured by the present Government, and in the belief that such progress would make many employees more cognisant of the importance of pensions provisions, my company has not only set up its own alternative scheme but has done so twelve months in advance. Our scheme provides the employee with a much improved pension, as well as substantial life cover and other advantages, and involves him in a contribution of 2½ per cent. less tax, which is about 1¾per cent. or only ¼per cent. more than the projected State Reserve Scheme. On the other hand, the employer's contribution we have elected to pay amounts by our scheme to 4.7 per cent., compared with the 2½ per cent. of the projected State Reserve Scheme. Our employees, both the Labour and the Tory ones alike, were quite stunned to hear of Mrs. Castle's pronouncement on this subject, and have asked us if we can get the whole thing 'frozen' until someone can tell us what is likely to happen under our new Government's administration. From the company point of view, I was happy to accept the considerable cost of our contribution at 4.7 per cent. of our wage bill while Government action was engendering a live interest in pensions, so that the payment would be appreciated by the employees. Indeed, it was our opinion that the new approach to pensions involving the State Reserve Scheme would mean that employers would find it necessary to provide good alternative schemes, as an adjunct to the normal terms of service, in order to retain a proper chance of recruiting the right sort of labour. But now, not only do our employees want to freeze or suspend our new scheme, but we ourselves are doubtful whether we can see our way to making our own contributions to it. I have read those letters at some length to the House because they are typical of many comments and are representative of the reaction of many hundreds of employers on behalf of many thousands of employees throughout the country. It is for that reason that we regard the Secretary of State's decision as being so destructive.

The effect of the right hon. Lady's decision can be analysed as follows. First, those employers who already have schemes, intending to introduce them in response to the legislation, will be obliged by the present uncertainty—it is massive—to discontinue those plans. This can have an adverse effect on the pension provision of about 12 million people already covered by occupational schemes.

Secondly, many other firms intending to introduce schemes in response to the 1973 Act may well not do so. Personally, I hope that they will still continue to do so, but it would be idle not to recognise that a statutory obligation to introduce second occupational pension schemes has now been replaced by ministerial discouragement of the most explicit kind. Indeed, as Mr. Stewart Fleming, writing in the Financial Times on 10th May, said: She— he is referring to the Secretary of State— —has provided a positive inducement to employers to postpone action at least until they have seen the Government's alternative proposals, promised in a White Paper later this year. So I would invite the House to conclude that the Secretary of State's decision is clearly wrong as a matter of policy. The error was summarised by Lord Byers, who has a prominent position in promoting compliance with the 1973 Act, when he described the work that had been going on in a letter to the Daily Telegraph on 28th May in these words, though he had made the statement in many other places: All this has gone by the board to the possible detriment of thousands of workers, or at the very best, has been postponed for very many years. I have told the House previously of the unhappily not prophetic observations of Lord Houghton, speaking at the Financial Times Pensions Conference in 1973, when he traced out what should have been the reaction of the present Government. He said this: While the Labour Party has many criticisms of the present Government's 1973 Act, I am convinced that it would be a great mistake for a Labour Government, should there be one after the next General Election, to suspend the operation of the new scheme. That, I am certain must go on, … I conclude … that the 1973 Act should stand for a while before embarking on the next move forward. I see no alternative to that in the short run. It is because of that wise forecast—unhappily unfulfilled—that I said at the beginning of my speech that this decision by the Secretary of State was not only a disastrous one but was also a surprising one. It was wrong in policy and wrong, too, as a matter of politics for a minority Government to seek to act in this way.

I have advanced elsewhere the suggestion that the decision may possibly be wrong as a matter of law as well. That has been considered by the Joint Select Committee on Statutory Instruments, at least from one point of view, and I do not wish to dwell now on it, save to say that the matter could yet be challenged elsewhere. It is certainly a very remarkable thing for an entire piece of legislative apparatus, being acted upon by thousands of people throughout the country, to be suspended—revoked, in effect—by means of an order described ironically as a "commencement order".

Mr. George Cunningham (Islington, South and Finsbury)

Is it not the fact that that order was possible without parliamentary approval because that was the procedure laid down in the Conservative Act? It could have been made subject to parliamentary approval if the previous Government had wanted it to be.

Sir G. Howe

It could indeed have been done, but what Government in this country, in accordance with our traditions of constitutional government, could have foreseen, notwithstanding the observations and advice I have just quoted from Lord Houghton, that a minority Labour Government at any point within the next 12 months would have acted so irresponsibly as the right hon. Lady has done? One designs legislation to be worked by reasonable men, not by unreasonable minority Governments.

The case which the Government may seek to make against the existing scheme cannot justify the decision taken by the Secretary of State. It would be wrong, for example, to argue that the 1973 Act could have been set on one side because the benefits provided were too low and too slow to come into operation. The Act set out prescribed minimum standards, and they could have represented a major advance in pension provision. It established a firm base on which any Government should have been willing and able to operate.

Experience shows that once a pension scheme is started improvements to it are inevitable over a period. That is why it is absurd for Labour Members to consider that under the 1973 Act the reserve scheme was set for all time. Improvements in due course were not only possible in that scheme but proper and probable, and it was quite wrong to set it aside in this way. On any view, even under the Crossman scheme, there is likely to be a gap till the scheme, whether it is a pay-as-you-go scheme or is funded, reaches full maturity. It has always been sensible to conclude that that gap in provision should be met by tax credit provisions, and that is another reason why we deplore the delay of the Government in bringing in the tax credit scheme.

The second reason which might be advanced against the 1973 Act is that it did not make sufficient provision for women. That, of course, was the subject of much argument, and it may yet be so hereafter. It is still necessary to bear in mind that women both live longer and retire earlier, and any outcome that ignores those facts is not, whatever else it may be, equal. Even so, it is possible in future to reach different conclusions about provisions as between the sexes under the 1973 Act, possible to consider them again in the future, after the 1973 Act has been activated.

However, neither of these reasons justifies a refusal to allow the 1973 scheme to come into force. It had very real merits which cannot be provided in any other way. It recognised that a pay-as-you-go alternative—if that is what the Government have in mind—means that there is no guarantee of a second pension. it recognises also that occupational schemes with the consultative provisions imposed under the 1973 Act are far more in tune with the needs of our time than a massive State scheme.

If one contemplates the flexibility of occupational schemes, the fact that they can be designed by a consultant, employees and employers, one can, see that they may be more attractive at the present time. I quote from the observations of the Chairman of the National Association of Pension Funds, reported in the Daily Telegraph, who said: In my experience most people prefer to be in a well-run private fund. It is much more flexible and usually it is operated on a much more personal basis than a State scheme. Employees are quite rightly having more and more say in the running of funds, and obviously a State scheme cannot be altered except on a nationwide basis. Surely that is a second, solid and substantial reason for preferring the occupational schemes the 1973 Act was designed to promote.

The present situation has very real demerits and difficulties for pensions and future pensioners. On any view it will involve a delay of several years in making a start. We are promised a White Paper later this year with legislation perhaps effected by 1976 and coming into effect by 1978. The right hon. Lady may smile at that with some curious sense of pride, but it is not something to be proud about. I quote from Mr. Haddon-Grant. He said: The worst thing about it"— he was referring to the Secretary of State's action— is that for the first time in the history of the pension fund movement something has been taken away without us knowing what is going to be put in its place. So, inevitably there will be a hiatus of three years at best, and if the present Government have their way, due to a combination of sloth and arrogance on the part of Labour Governments, the delay before the establishment of a second effective pension scheme will be prolonged.

It will be one of the most important tasks of the next Conservative Government to repair as quickly as possible the damage done by this minority administration. We need to secure progress as soon as possible in the establishment of the right to a second pension. We need to preserve the value of work already done throughout the industry if we are to achieve just that. The next Conservative Government, therefore, will, with all reasonable dispatch, reactivate the 1973 Act by making a fresh commencement order at the earliest possible commencement date. The question of when that date will be, having regard to the time that has elapsed, will have to be subject to urgent consultation, but it would certainly not be later than April 1976.

In addition, we shall consider ways in which any future improvements can best be considered—and this I emphasise—on an all-party basis so as to establish, if at all possible, an agreed foundation for future pension policy. It is upon that basis that we should approach the future of pensions provision.

Perhaps I may now quote The Times leading article which greeted the Secretary of State's announcement. It said: Every Government has the right to have its pension strategy judged by its long-term achievements more than by its interim decisions, but this Government's first move is to surrender ground which had been won in the long struggle to secure a decent pension for everyone in Britain. It is that we deplore, and it is upon that basis that I invite the House to join me in supporting the motion.

7.17 p.m.

The Secretary of State for Social Services (Mrs. Barbara Castle)

I beg to move to leave out from "House" to the end of the Question and to add instead thereof: notes that the financial provision made under the Social Security Act 1973 was insufficient to support an adequate level of retirement pension; welcomes the prompt improvements in pensions made by the present Administration; endorses the determination of the Government to ensure that employees are relieved from contributing to a scheme which would have provided inadequate pension cover, especially for women and older workers; recognises that the pension arrangements under the Act could not have served as a sound foundation for an effective and fair pensions policy directed to relating the living standards of pensioners more closely to their earnings and avoiding reliance on means tested benefits; and calls upon the Government to bring forward as soon as possible proposals for public and Parliamentary discussion which would meet the legitimate aspirations of workers in modern conditions and merit the widest possible support. The most significant remarks in the concentrated speech of the right hon. and learned Member for Surrey, East (Sir G. Howe) was his last one. In the context of appealing to the House to take pensions out of politics he announced that if the Conservatives won the next election they would immediately reintroduce the reserve pension scheme. That is certainly a great foundation for unity in pensions policy! It is that, in keeping with all this great talk about actions of national unity and rising above party politics, that we are asked to approve tonight. I suggest to the hon. Member for Hazel Grove (Dr. Winstanley) that that is what he will be voting for if and when he supports the motion.

The Opposition have made certain charges in their motion. The first was an epitome of the double standards that the Conservative Party always applies. The right hon. and learned Gentleman even said—I jotted down his words, hoping that he would fall for it, and he did—that we were making pensions a political football. I had not suspected that the right hon. and learned Gentleman would roll out one which had such whiskers on it, but he did. The double standards, as we noticed in the right hon. and learned Gentleman's criticisms, apply both legally and politically.

The right hon. and learned Gentleman, very wisely from his point of view, skated over the legal argument that he tried to advance at one stage against my decision by order not to activate the reserve pension scheme. As my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) helpfully pointed out, I had only been using powers set out in a Conservative Government's Act. it does not do for Conservative Members to say "It is all right to have those powers if we are on the Government benches, but it is wrong if Labour Members are sitting there". [Interruption.] It is not a cheap debating point. There have been attempts, through the columns of The Times and elsewhere, to pontificate that I committed a constitutional monstrosity. In fact, I took advantage of a power that my Conservative predecessor took to himself.

The second sphere for double standards is political. The right hon. and learned Gentleman knows what weak ground he is on when he says that it is outrageous for me to reverse the Con servative Government's scheme, knowing full well that that is exactly what the Conservative Government did to the Richard Crossman scheme. It is no good his saying that there is a subtle difference, because the Conservative Government's scheme is on the statute book. As he himself admitted, it has not been activated.

Sir G. Howe

The right hon. Lady must not be carried away by her debating ardour. How can she seriously say that there is not a difference between a Bill that is still being debated in Parliament and an Act on the statute book, with regulations having brought it into force, an Act in respect of which many thousands of people were carrying out their obligations? It is wholly different.

Mrs. Castle

I will give the right hon. and learned Gentleman a recent example of the fact that there is no difference. The Industrial Relations Act is on the statute book. We have set out to repeal it. Are Conservative leaders attacking us for that? On the contrary the Leader of the Opposition has thanked us for removing it from the statute book and has said that if the Conservatives return to power they will not put it back. That is exactly the position on pensions. We have shown that we can improve upon the Conservatives' scheme.

Mr. Kenneth Clarke

rose—

Mrs. Castle

I will not give way. I am making a valid point. No doubt, if the hon. Gentleman catches the eye of the Chair, he can say whatever he feels about me that is now pent up to bursting point in him.

It is nonsense to say that because one Government have legislated their successors are committing a constitutional impropriety if they reverse that legislation. Time and again, history has shown that the reversal of legislation has been to the national good. Just as that is happening in industrial relations, it will prove to be the truth in pensions as well.

The Richard Crossman scheme had been thoroughly discussed in the House. Conservative Members did not like it, and they were free not to like it. On Second Reading the right hon. Member for Welwyn and Hatfield (Lord Balniel) made it clear from the Opposition Front Bench, not knowing whether the Cross-man Bill would ever get on the Statute Book, that We will not follow the Government in this new and unsound pensions structure."—[OFFICIAL REPORT, 19th January 1970; Vol. 794, c. 82.] He had a perfect right to do that, and I have a perfect right to do the same today. What is democracy all about?

Let us get away from the irrelevances and discuss the merits, which the right hon. and learned Gentleman was very careful not to do. It was interesting that his defence of his Government's reserve pension scheme was so lukewarm and tentative. The motion admits that that scheme needs improvements, that it is already out of date.

The right hon. and learned Gentleman tried to argue that all pensions policies evolve over the years, that when we have had a little experience of them we realise that we have to improve them, and so on. But we have had no experience of the reserve pension scheme. It is not even activated, and already the spokesman of the Government who introduced it is moving a motion appealing for all-party unity on the basis that we can together improve the reserve pension scheme.

When I listened to the right hon. and learned Gentleman I felt that there was already one bonus from our refusal to rubber stamp our predecessors' policy. Already, before the scheme would have come into operation on their own timetable, they are admitting that it is inadequate. Does the right hon. and learned Gentleman really mean to tell the House that if I had meekly said "I shall introduce the reserve pension scheme", they would have been at the confessional this evening saying that it was in effect inadequate?

As Liberal Members and Conservative Members rush to the television microphones to tell the country that what we need is a coalition Government, I can only say that the right hon. and learned Gentleman's admission now of the inadequacy of the reserve pension scheme is proof of the value of party government.

Sir G. Howe

The right hon. Lady must not build too large a structure on a simple proposition. The motion says while referring any proposals for subsequent improvement of that scheme to an all-party committee". That is not admitting the inadequacy of the scheme. Does not the right hon. Lady recognise that it is an attempt to suggest that the proposals put forward by her or by anyone else should be constructively considered upon the basis of a going scheme? That is no admission. It is a sensible proposition.

Mrs. Castle

If we are to have a sound foundation for pensions policy on a non-party or all-party basis, we had better begin by understanding each other's policies. Is or is not the right hon. and learned Gentleman saying that the reserve pension scheme is inadequate? I suggest that Liberal Members should listen to the right hon. and learned Gentleman's reply, because they will be voting for it. Does he or does he not think that the reserve pension scheme is inadequate?

Sir G. Howe

I made it perfectly clear in my speech that the reserve pension scheme was sensible and a good foundation for further progress. It was a foundation upon which many occupational schemes were coming forward, all of which are to be retarded through the right hon. Lady's arrogance.

Mrs. Castle

There would be more validity in the right hon. and learned Gentleman's suggestion that we should find a way of taking pensions out of politics if he had given us an indication of what he now feels is wrong about the reserve pension scheme. Are we voting tonight for the previous Government's scheme or for the possibility of amending it?

Of course the Liberals could not enter into any such all-party agreement about improving the reserve pension scheme. After all, in their last election manifesto they came out in categorical opposition to it. They said: The Conservative Government's Occupational Pension Scheme incorporates a degree of compulsion which is anathema to Liberals in forcing everyone to contribute to a second pension scheme which will do nothing for today's pensioners. Obviously the great national unity front on pensions cannot include the Liberals. That must apply even if any modifications are to be made to the reserve pension scheme or statutory recognition conditions for occupational pension schemes. That must also apply if any scheme contains compulsion for someone to be a member of an all-embracing earnings-related scheme.

Dr. Michael Winstanley (Hazel Grove)

Our position has not changed. We have said that the State reserve scheme is unsatisfactory. We have said time and again that we would like it to be improved. We would like as an addition a universally available occupational pension scheme to which those who wish to have a second pension can contribute. Will the right hon. Lady tell me what possible reason there could have been for not keeping the present scheme and building upon it? Can she give me any possible explanation?

Mrs. Castle

I am delighted to do that. This is the centre of the argument. However, the hon. Gentleman cannot say that he has no[...] altered his party line since the manifesto was published on which so many votes were won, because his party's manifesto denounced compulsory membership of reserve or alternative occupational pension schemes.

The Liberals, if they stand by what they said at the last election, are way out in a one-man band of their own and are not within the central argument in which I am now about to engage. The Labour Party is not as sweeping about this proposition as the Liberals. We believe that people should be made to provide adequately for their old age. If they do not do so, society must pick up the bits. It is better to have provision properly planned and organised.

Let me tell the House what the Government believe is wrong with the previous Government's scheme. In our view there must be -bur main aims of a pensions policy. The first must be to lift everyone in retirement off supplementary benefit. I am sure that the Liberals will agree with that. The second aim must be to give women full equality. The third aim must be to make adequate provision for widowhood. The fourth aim should be to safeguard the value of pensions against the erosions that inflation can bring.

One of the tragedies in modern society is that there are still people who contribute to various schemes who have no guarantee that the value of the pensions of those schemes will not melt away before their eyes in today's inflationary world. I put to the House in extreme seriousness the Government's thinking. Pensions policy is a matter of profound seriousness which strikes at the heart of every party's policy and its philosophy of society. I say seriously that none of the aims which I have mentioned would be achieved by the previous Government's reserve pension scheme or by the recognition conditions for occupational pension schemes that were linked with it.

I go further than that. The previous Government's scheme cannot be amended to provide for the four aims I have listed. That is the challenge every hon. Member must face this afternoon. It is basic to the structure of the reserve pension scheme that many contributors and their widows will still be drawing inadequate pensions well into the twenty-first century.

Why do I say that that challenge is basic to the structure of the reserve pension scheme? First, under the reserve pension scheme the build-up of entitlement is so slow that a 20-year-old man entering the scheme next year, when it was due to come into operation, would not get his full entitlement until the year 2019. Second, because the level of contributions and, therefore, of pensions is so low, the best that can be achieved under the scheme, on the assumption made by the previous Government about rises in real earnings and bonuses, is one-fifth of a man's reckonable earnings on retirement. That means that by the year 2018 a man aged 22 and earning £30 a week who entered the reserve pension scheme next year would, in terms of today's earnings, earn the magnificent second pension of £5.70. Third, under the reserve pension scheme and under the recognition conditions for occupational pension schemes it is provided, unlike the position in good occupational pension schemes, that women will get a lower accrual rate than men.

I take a parallel to the male example that I have just given. A woman of 22 on £20 a week, entering the scheme at its outset next year, would, in terms of today's earnings, receive after 38 years a second pension of only £2.60 a week. That is what we are considering. Fourth, a widow under the reserve pension scheme—

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

rose—

Mrs. Castle

I do not want to be too long and I must get on.

Fourth, a widow is entitled under the reserve pension scheme to only one-half of her husband's already inadequate pension entitlement. Fifth, the scheme gives no guarantee of inflation-proofing. It is a funded scheme. The right hon. and learned Gentleman said that a pay-as-you-earn scheme could not meet its obligations, but such a scheme with State backing or employer backing is the only sort of scheme that can offer inflation-proofing. Can any hon. Member lay his hand on his heart and say that the bonuses which are earned by a funded scheme will be sufficiently strong, as a result of investment, to guarantee to pensioners in future years the inflation-proofing which is so essential?

We are asked to debate what is called a serious motion of censure. The right hon. and learned Gentleman has not suggested one way in which the basic defects in the reserve pension scheme can be remedied. He has not done so for the simple reason that the defects cannot be remedied through a money-purchase scheme such as the reserve pension scheme except at levels of contribution for older workers which would be intolerable. That is the reality which we must all face if we are seriously talking about taking pensions out of politics. Pensions will come out of politics when everyone feels that he has security in retirement, but not until then.

It follows that the minimum conditions laid down by the Conservatives' policy for the recognition of contracted-out occupational pension schemes are equally derisory. I was a member of the Standing Committee which discussed the 1973 Social Security Act. I moved an amendment—Conservative hon. Members can laugh, but let them tell the House and country what they thought about the amendment I moved. I thought that it was one of such elementary justice that not even a masculine-dominated House of Commons could have rejected it. My amendment provided that where women worked side by side with men in the same firm they should have the same right as men to belong to the firm's occupational pension scheme.

My amendment was rejected by the last Conservative Government. I am glad to see that the hon. Member for Somerset, North (Mr. Dean) is present. Why did they reject it? The hon. Member for Somerset, North told me that my amendment would result in some occupational pension schemes being closed down. The difference between the present Government and Opposition Members—this does not apply to the Liberals because they have an entirely different policy—is not that we do not agree that there should be a partnership between the State scheme and occupational pension schemes but that we want that partnership to be only with good occupational pension schemes.

We say that no occupational pension scheme can be good which refuses to include the women in a firm on the same terms as the men—in which, in other words, if it is too inconvenient to do so, the chaps will close it down. This is the sort of issue we are considering, and I ask the right hon. and learned Gentleman to tell us whether he agrees with what his hon. Friend the Member for Somerset, North said on that occasion. The right hon. and learned Gentleman is wise to refrain from answering, because this question enters into the whole question of partnership with occupational pension schemes.

We are not talking about people having been robbed of immediate benefits. We are talking about whether we are to scrap a scheme which is, by the Opposition's own admission, now seen to be inadequate. [HON. MEMBERS: "No".] It is not inadequate? So Tory hon. Members believe, do they, that women should be excluded from the right to belong to occupational pension schemes? I am glad to have that point made known. I shall make it widely known among the women's organisations. I recall how even the Women's National Commission bombarded the Conservative Government with protests about the 1973 Act when it was going through the House.

Mr. John Davies (Knutsford)

rose—

Mrs. Castle

No, I am sorry. I am not giving way to you. I will give way to the right hon. and learned Member for Surrey, East if he wants to tell me in what respect he thinks that the Government scheme is inadequate. You cannot speak for the right hon. and learned Gentleman.

Mr. Davies

No. I speak for myself.

Mr. Deputy Speaker (Mr. George Thomas)

Order. I, too, have no desire to speak for the right hon. and learned Member for Surrey, East (Sir G. Howe) or anyone else.

Mrs. Castle

I apologise, Mr. Deputy Speaker. I was not referring to you but at that stage I had forgotten the constituency of the right hon. Member who interrupted.

Mr. Davies

Knutsford.

Mrs. Castle

I was speaking of the right hon. Member for Knutsford (Mr. Davies).

It is not a question of robbing anyone of benefits. If the right hon. and learned Gentleman were to look at what would have accrued in the way of additional benefits under this pathetic system, he would have seen quickly how any decent scheme could have overtaken them in less than the time of our postponement of it. The House must never forget that, as against this short postponement, pensioners as from July this year will be enjoying the highest increase in their basic pension in the history of national insurance. This is an essential part of the whole process. We are bringing in increases of 29 per cent. and 28 per cent. in the basic pension.

Mr. Patrick Cormack (Staffordshire, South-West)

And in the cost of electricity.

Mrs. Castle

The hon. Gentleman knows perfectly well that the 29 per cent. increase after a period of 10 months is still way ahead of the price increases which that figure was taking into account—far further ahead than was the last increase of the Conservative Government, who gave a rise of 15 per cent. over 12 months, during which the retail price index rose by nearly 10 per cent. We are in a different dimension here.

Mr. Cormack

rose—

Mrs. Castle

No, I cannot give way. I did not give way to the right hon. Member for Knutsford, for whom I have a very soft spot, simply so that I could make more rapid progress.

I want to ask the Liberals what on earth they will be voting against if they vote against us tonight. We are told that they will vote against us. It is fascinating. On Second Reading of the Social Security Bill the hon. Member for Cornwall, North (Mr. Pardoe), speaking, I understood, for the entire Liberal Party, said that what they thought was most important was that a married couple should get a minimum pension increase to half the average national earnings. That would have meant at the time £16 a week. The hon. Gentleman added: … it should be done over a period."—[OFFICIAL REPORT, 28th November 1972; Vol. 847, c. 295.] We have taken a very big step towards that aim. The figure of £16 is already in operation. I agree that it does not meet the target of 50 per cent. of average national earnings, but we have made it our priority. Apparently, however, that is what the Liberals now object to.

Dr. Winstanley

Clearly the right hon. Lady has a soft spot for me, for which I am grateful. She asks what we would be voting for and against. We have made our position clear. If the right hon. Lady reads what I have said, she will find that our policy has not changed. We say that by abandoning the 1973 scheme she has caused a great deal of trouble and uncertainty and has deprived many people of rights that they would have had, to no obvious benefit. We see no reason why she should not have allowed that scheme to operate and built upon it. Had she tried to build upon it, she would have had our enthusiastic support.

Mrs. Castle

I hope that the hon. Gentleman has also paid careful attention to what I have just said. I ask him to go away and talk to his pensions experts, wherever they may be. One cannot achieve the four aims I have set out by a money-purchase scheme—

Sir Brandon Rhys Williams (Kensington)

Yes one can. It was done in New Zealand.

Mrs. Castle

—except at contribution rates which would be prohibitive. I ask the hon. Member for Hazel Grove to realise that some of us have spent a great deal of time struggling to understand the actuarial complexities of pensions, and the conclusion is inescapable. Does the hon. Gentleman think that any Government would have gone out of their way to court criticism and misrepresentation when it would have been easier simply to say, "Take it on and then improve on it"?

It is because we know that mere treatment within the framework of the Conservative Government's policy could not achieve the aims which we believe are paramount that we are compelled to do the only sensible thing—to scrap the reserve pension scheme and start afresh.

The right hon. and learned Gentleman read bits and pieces from different firms protesting about our decision. Lord Byers is taking a far more forward-looking attitude than the right hon. and learned Gentleman would give him credit for. He says, in effect, "Let us look to the future. We are sorry that the reserve pension scheme is scrapped, but now we must be concerned with what the Government are putting in its place." That is really what the House should be concerned about.

The right hon. and learned Gentleman read a letter from someone saying that it would cause terrible industrial trouble to postpone the recognition conditions for the introduction of occupational pension schemes. But the TUC is the real expert about what workers feel about occupational pension schemes. Its social insurance committee is very concerned about them. Like the Government, the TUC is 100 per cent. behind good occupational pension schemes. Yet the TUC, after mature consideration, welcomed the scrapping of the reserve pension scheme because it would clear the way, and was the only way to do so, for the provision of a more satisfactory system.

Hon. Members might better have said "Never mind about arguing as to who was right or wrong in the past. Let us get together and find a way forward for taking pensions out of politics."

Mr. Leslie Spriggs (St. Helens)

I have been listening with great care to my right hon. Friend's speech. She has been making every effort to make the Opposition understand the Government's case. How does she expect the Opposition to understand the case when it was the last Conservative Government which caused the worst industrial disruptions in history through the Industrial Relations Act?

Mrs. Castle

I agree with my hon. Friend. This certainly shows that they are not the right people to talk about what will cause industrial unrest. My advice was that there would have been profound anxiety and disillusionment in trade unions if the Government had merely proceeded with the Conservative scheme which had been so critically attacked.

Even if we wished to build an all-party pensions policy, it could not have been done by way of this motion. In the first place—this is a minor but perhaps significant point—the motion is defective in that it talks about my refusal to bring in Parts II and III of the 1973 Act. I have done nothing of the kind because some of those provisions are still to take effect, for example those referring to the preservation of pension rights.

The motion asks for the administratively impossible. Even if it were carried it would not now be possible to bring the second pension provisions into effect by April 1975.

Sir B. Rhys Williams

That is your handiwork.

Mrs. Castle

Whatever the reason, I am explaining the situation.

Mr. Cormack

You jigged it up.

Mrs. Castle

All right. Hon. Gentlemen want a few fireworks to make them feel better. That is fine, but they cannot alter the practical, administrative and constitutional position. Their gesture would be meaningless. Regulations have to be made and administrative preparations have to be completed. Employers have to be given time to make their arrangements again. Incidentally there would be absolutely no chance of occupational pension schemes being able to put forward applications for recognition in time for them to be processed by April 1975. Even before the delay over this, the work on that was well behind.

The scheme cannot be brought into operation next April. As it has to be brought into effect at the beginning of a tax year, if we were to reverse the policy now the first date on which it could be brought into effect would be April 1976. That would bring us even nearer to the starting date for our own scheme and, therefore, make it even more ridiculous to have an interim scheme which would then be superseded.

Above all, the motion asks us to amend a money-purchase scheme, which by its nature is substantially unamendable. It cannot take pensions out of politics by lifting pensioners above supplementary benefit. It cannot bring women equality, help widows adequately or guarantee pensioners against inflation. Moreover, by calling for our proposals to be referred to a Select Committee the motion could prolong the very uncertainty which has produced the accusations against me tonight.

No one who has served on a Select Committee could think that there was any guarantee that at the end of it there would be agreement. For many months we sat in a Select Committee considering the tax credit system. There is no guarantee about agreeing anything. We would simply have taken time and produced further uncertainty and in the end we would have to agree to disagree. There would be more confusion and delay.

There is already a great deal on which we can agree. We are agreed about the need to move to earnings-related contributions. We are agreed about the need to preserve pensioners' rights and about the need for the State to enter into partnership with good occupational pension schemes. The Opposition might show that little bit of extra humility and admit that it is just possible that, when they see our proposals, they might agree with them. We might have found a better formula.

Why are we advocating delay tonight? We all know. The motion says it. We do not want a Select Committee to be set up until there are proposals to be referred to it. The House has admitted that thinking on these pension schemes has been moving forward, even in the past two or three years. We have promised that our proposals will be produced as soon as possible, certainly before any Select Committee could get down to work.

The House has four more parliamentary weeks. No Select Committee could begin to operate effectively in that time. By the time a Select Committee could get together again after the recess, our proposals would be available. I tell the House frankly that I cannot guarantee that we can have them published before the House rises for the Summer Recess. Certainly we will get them published as quickly as possible, certainly before a Select Committee could begin to examine them.

Mr. Cormack

Before the election.

Mrs. Castle

I should hope so. The public have the right to know and to choose. They have to know what they are buying. We are not running away from that. What if it happens that our proposals prove broadly acceptable? The House would not want the delay of a Select Committee. It would surely say "Let us move on to legislation as quickly as possible". It would be our intention to give the House and everyone concerned the fullest opportunity of expressing their views.

How we would do that and what would be the best way must depend on the reception given to our proposals. The House would want it to depend on that. I say let us wait and see what the reception is before committing ourselves. I believe that the White Paper proposals will command widespread support, not least from those who back good occupational pension schemes. In the meantime we are making full use of the Occupational Pensions Board in its advisory capacity.

I have today made three specific references to the board under Section 66(1)(b) of the 1973 Act asking it to give me its advice on various matters. These are, how we can get better supervision of occupational pension schemes and guarantee their solvency; whether there should be statutory provision for the disclosure of information to members of occupational pension schemes and generally; and to what extent members of a scheme should be involved in its management. That advice will be available to the House in time to influence legislation.

If the Government are defeated tonight, it will not be because there is some mystic agreed foundation of pensions policy among Liberals and Conservatives. We offer that foundation to all those who genuinely wish to give fair treatment in retirement to everyone, young or old, rich or poor, male or female, manual or non-manual. Those who oppose us are in favour of what? An agreed policy between themselves? Oh! come off it! They offer us a hatch-patch of negative criticisms. I ask hon. Members to stand up and be counted this evening and to say whether they are prepared to give the Government a fair chance to have their proposals examined on their merits.

8.0 p.m.

Mr. Paul Dean (Somerset, North)

I begin by declaring a double interest. In the last Parliament I had something to do with the Social Security Act 1973, and I am now involved in pension schemes outside the House. Former Ministers who make long speeches about legislation with which they have been involved in the past are likely to bore the House, so my remarks will be short, unlike those of the right hon. Member for Blackburn (Mrs. Castle). The right hon. Lady began her speech by referring to "this afternoon" and after 45 minutes ended it by referring to "this evening". It was one of the thinnest speeches I have ever heard the right hon. Lady make from the Treasury bench.

The right hon. Lady totally failed to answer the question put by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and the hon. Member for Hazel Grove (Dr. Winstanley). She totally failed to say why she could not keep the Social Security Act and build on it. The four aims laid down by the right hon. Lady are advanced by that Act. It laid down new standards in all those areas, in most cases for the first time. It made provision for women and widows to be covered, it provided for a pension to be increased after award and it provided for certain people to come into pension schemes for the first time. In all those areas there was some advance, although I agree that in some cases it was modest. That was the cardinal omisssion from the right hon. Lady's speech.

In 45 minutes the right hon. Lady failed to give any indication to the House, and to those outside the House who are responsible for pension schemes and are anxious about the future of those schemes, of her proposals and her thinking. To try to destroy one piece of legislation without giving an indication of what they wish to put in its place shows up the barrenness of Government thinking.

I warmly welcome the important statement made by my right hon. and learned Friend the Member for Surrey, East when he explained to the House that the Act is still on the statute book and that the next Conservative Government will reactivate it by a commencement order. I was glad to hear my right hon. and learned Friend say that he hoped that the Act would be in operation at the latest in April 1976.

I wish to make three main points. My first concerns the way in which the right hon. Lady has set about her task. I was amazed at the way she came down to the House this afternoon at the behest of an Opposition motion to try to explain her conduct. If the right hon. Lady really believed in parliamentary government, surely she could have found a way of doing this major thing which would have given the House the opportunity to debate it. As it is, she has gone sneaking around obscure passages of the Act to find a way to attempt to cancel a major Act passed by Parliament after full debate, on which much work has been done outside. She does it without being answerable to the House in any way until the Opposition drag her down unwillingly to the Treasury Bench today to answer a motion.

Mrs. Castle

The hon. Gentleman will admit that many weeks ago I volunteered a statement of my intentions and what I was doing under the Act.

Mr. Dean

The right hon. Lady should not make it worse. Of course she made a statement, as Ministers do when they have something important to say, but she well knows that a statement occupies a small amount of time, there is no opportunity to put amendments and there is very little opportunity to make points. The right hon. Lady should not make it worse. This is a parliamentary outrage, and she knows it.

The second matter which I should like to examine is the right hon. Lady's statement that nothing will be lost as a result of her attempt to postpone the Act. I suggest that a great deal will be lost, however fast the right hon. Lady works—assuming that she remains in a position to do so. It will take four or live years for a new scheme to be put into operation. That is assuming that she succeeds, and my hon. Friend will recollect that the Labour Party has never succeeded in bringing into operation a pensions scheme. In the meantime, how many people will retire without a second pension who would have been building up for a second pension as from next April? How many men will die in service during those four or five years and leave their widows unprotected? Has the right hon. Lady attempted any calculations? Whatever she may do in four or five years' time, she will find no way adequately to compensate widows who as from next April would have had some cover, however modest. Those who will suffer by the postponement are not those who have good pension schemes now but the most vulnerable sections of the community, and there is nothing that the right hon. Lady can do to alter that unhappy fact.

Who will pay? The right hon. Lady talks about catching up in some years' time. Already, towards the basic scheme under the Social Security Amendment Bill, to which we have just given a Second Reading, the employer will have to pay 8½ per cent. on payroll, and the employee will have to pay 5½ per cent. on payroll. There must be a limit to the extra contributions which can be put on employers without prices going up. There must be a limit to how much one can put on employees without pay going up.

There is another lost opportunity in the tax credit scheme, which, had my right hon. Friends been in office, would have been well on the way to the statute book. That held out one of the most hopeful ways, in time, of removing a substantial number of people from supplementary benefit. Here is more delay, not only in the Social Security Act but in the Labour Government's intention not to follow up the tax credit proposals which we had worked out in considerable detail.

My third point is closely related to the pensions scene. We cannot go on nationalising companies, be it 20, 100 or 4,000, without at the same time nationalising pension rights. It is as well that that should be generally realised outside. It is no accident that the right hon. Lady is one of the foremost supporters of the Secretary of State for Industry in his crusade for more nationalisation. If the right hon. Lady tries in this way to tamper with the pension rights of 12 million people and their families she will light a fire of opposition which will be felt from Land's End to John o' Groats.

What must be emphasised is that the nationalisation campaign is doing damage to investments. We are talking not primarily about rich individuals or companies but about life assurance premiums and pension contributions. Millions of people of modest earnings are salting away something for a rainy day or for their retirement. Thanks to wise investment and sound schemes, many pension schemes have been able to go on improving cover for existing members and pensions for existing pensioners, and they are still doing so. But this progress is bound to be at risk if the present uncertainty and depressed state of the market continues for long.

We are dealing here not only with an important consideration from the point of view of the security of existing and future pensions schemes but with the ramifications of the extreme Left-wing policy of the Labour Government in other fields which will ricochet on today's pensioners and also on tomorrow's pensioners.

It is easy to destroy, easy to sow uncertainty. The right hon. Lady the Secretary of State for Social Services has sown uncertainty. She has not yet destroyed—and it is up to us, and present and future pensioners, to see that she does not have the opportunity to destroy.

8.12 p.m.

Mr. George Cunningham (Islington, South and Finsbury)

The hon. Member for Somerset, North (Mr. Dean) began his remarks by declaring his interest. Now, in Opposition, he holds a position in the pension industry outside. Those of us who fought with him on some aspects of social security legislation are not surprised that, having left the Government, he should have been picked up by the pensions industry outside. I congratulate him on his appointment, and I think that he has been only properly rewarded for the valiant efforts he made while Minister, supposedly responsible for looking impartially at these matters in the interests of that industry.

The hon. Gentleman's support of the industry was limitless. He was even prepared to take over the taxation system and rig it to give an unfair advantage to the private pensions industry against the Government's own State reserve scheme. I can now see on the Opposition benches three hon. Gentlemen, members of the Conservative Party, who felt the hon. Gentleman's action on that point so abhorrent that they were prepared to vote against him upstairs and downstairs when he "whipped" his hon. Friends into the Lobby to undo the amendment which was carried in Committee upstairs. Therefore, I have no doubt he will continue outside to be the spokesman of the pensions industry, and, if the Conservatives, unfortunately, ever return to power, will continue to be the spokesman for the private pensions industry if restored to his position as Minister.

The hon. Member for Somerset, North referred to the Secretary of State for Social Services "sneaking around" the statute book finding ways in which, without the approval of the House, she could postpone or put off indefinitely the coming into effect of the State reserve scheme. It must be extremely galling for Conservatives that my right hon. Friend has used a statute which was wished on us against our wishes by the Conservative Party. If they botched up the statute so that its working can be undone by an order not subject to either affirmative approval or negative approval of the House, they have only themselves to blame. One well understands that they might feel irritated at the incompetence displayed in leaving such a provision in the statute. I sympathise with them on the fact that this is a point of substance and that it should not be possible to undo an Act of Parliament by an order which is not subject to the will of the House. I see the hon. Member for Somerset, North—who was the Minister in charge of that legislation—nodding his head. Either it was intentional, in which case he has changed his mind, or it was an oversight, in which case he was incompetent.

Mr. Paul Dean

I hope that the hon. Gentleman will join those of us who feel that it was a mistake. I freely admit that I now feel it was a mistake to allow that sort of provision to go into an Act. I hope we can count on the hon. Gentleman's support to ensure that this does not happen in future legislation.

Mr. Cunningham

I am always in favour of Governments not having powers to make orders without the approval of the House. I moved an amendment in a different context only the other week to stop the Labour Government from having that sort of power. The hon. Gentleman said it was a mistake. It was not a mistake; it was a botch-up. He did not look at what he was doing.

The hon. Gentleman spoke feelingly about those people who will retire during the period of delay. He talked of a delay of four or five years. I would be upset with my own Government if the delay approached that sort of dimension. I should have thought a maximum of two years was the most we could tolerate in terms of delay in bringing our scheme into effect. However, let us say that the delay is as much as three or four years. Has the hon. Gentleman worked out how much pension under the State reserve scheme anybody at the end of his working life would receive from a period of contribution of three or four years? The sum would be utterly derisory. It is better than nothing, but it is little to give up as the price of a much improved scheme.

Nobody will deny—certainly I shall not deny it—that the termination of the 1973 Act was a serious step to take. I am sure the argument was a balanced one of, at best, 65: 35. There are certain disadvantages in putting off the scheme. The obligation is on Labour Members to show what features of the 1973 scheme were bad and the matters which could not be corrected within the confines of that scheme. I hope to suggest a few respects in which it could not have been properly corrected.

The basic fact is that a pension scheme has an extremely long period of maturity. It has a maturity of 45 years—the length of a man's working life. Therefore, it is important to get a scheme as right as possible to start with, because jigging around with it half way through is a complex process. If the State reserve scheme had been just a little better in a number of respects one could have put up with its disadvantages for a short period and with the inconvenience of changing those features in midstream, but the scheme was so seriously wrong that it is better to put up with a couple of years' delay to get a better scheme right from the beginning.

The faults of the 1973 scheme were as follows. First, the percentage contribution was far too low to provide a pension which would bear any relationship to anybody's likely final salary. A total contribution of 4 per cent—1½ per cent. from the employee and 2½ per cent. from the employer—does not provide a good scheme at the end of one's life, except possibly for the person who has a level standard of earnings throughout the whole of his life. In those circumstances, 4 or 5 per cent. might give a person a bearable pension, but those are unusual circumstances. In normal circumstances a total contribution from both sides of about 10 per cent. is what is required to buy a decent pension. We should remember that the total contribution in respect of the pension scheme for Members of Parliament amounts to well over that figure; namely, to about 13 per cent. That is what is provided in good occupational pension schemes.

I accept that that is a feature of the 1973 scheme which could have been changed as we went along. That is a fault of it, but that could have been put right in time without changing the very basis of the scheme.

Another fault was its treatment of women. I shall not go on about that at any length because it has been dealt with by my right hon. Friend, but there has been no indication from the Opposition Front Bench that the Opposition are now prepared to treat women on an equal basis with men in this respect. Surely it is no longer justifiable, as we said in Committee when we were considering the 1973 Bill, to penalise women for their longer lives. They do not ask to live longer than men. In a general sense, they suffer grave consequences to their incomes for doing so. To say to them that because they live longer they must draw smaller pensions than men is unacceptable.

It is right to say that, so long as women choose to retire or simply do retire earlier than men, they must draw smaller pensions. There is no justification for paying women at the age of 60 the same pension as that paid to men retiring at 65. I hope that there will not be pressure on us to move to a retirement age for men and women of 60. If anything, we need to move in the opposite direction, with people being free, if they wish, to retire at later ages than 65, because the plunge from working life to total retirement is one which many people find literally killing. But to penalise women only for living longer than men is no longer justifiable. We might as well give people suffering from bronchitis a higher pension on the ground that they will live for a shorter period than other people.

Again, I accept that in this respect, though the treatment of women would have been more difficult, it would have been possible to alter the 1973 scheme as we went along.

Thirdly, there was the tax treatment in the State reserve scheme. The hon. Member for Somerset, North bears total responsibility for the gross, manifest unfairness of giving no tax deductibility for contributions to the reserve pension scheme. The hon. Gentleman resisted all efforts in Committee, unsuccessfully, but on the Floor of the House just successfully, to have that put right.

Mr. R. A. McCrindle (Brentwood and Ongar)

If the hon. Gentleman is concentrating rather more on what we intend to do about pensions rather than on what might have happened under the previous administration, remembering that there were many Conservative Members who joined the hon. Gentleman and his colleagues in voting in favour of tax relief on contributions to the State reserve scheme, if the Government had chosen to move in that direction now they might have been surprised at the support which they received.

Mr. Cunningham

I remember the debates and votes very well, and the hon. Member for Brentwood and Ongar (Mr. McCrindle) was one Conservative Member who both in Committee and in this House voted against his Government in that respect. That third point of mine is a characteristic in respect of which we would have been able to change the scheme as we went along, but today we are invited by the Opposition to treat the 1973 scheme as though it was perfect, and, in my view, it is legitimate, before I come to what I want to see brought about, to point out the many defects in the 1973 scheme.

The fourth one was what was to happen to the contributions. They were to be invested in the market. This was a feature of the 1973 scheme which could not easily have been treated differently. The contributions were to go on to the market to be invested, like any normal fund in a private pensions scheme. The effect would not have been simply to increase the amount of money available for investment, which is the purpose of pumping money into the stock market. The effect would have been to blow up share prices. Every year it would have been a godsend to those who wanted to sell. That feature could not have been corrected as we went along.

I should prefer the new scheme to be at least partially funded. The difficulties of complete non-funding are even greater than the difficulties of funding, but we have to do something useful with the money and not just pump it into the stock market to inflate prices.

The most serious aspect of the 1973 scheme and the one which could have been altered sufficiently without tearing the scheme apart was transferability. The Conservatives admitted that they had found no solution to transferability. The reason was clear. They insisted on basing their legislation upon the freedom of the private pension industry to provide its chosen model for each profession. The result was that they ordained minimum standards for the recognised pensions to meet, but they did not ordain a model with which a private pension scheme had to comply. The consequence was that transferring from one pension scheme to another presented such great difficulties that they could not find a way of insisting on it. We all recognised that. I see the hon. Member for Kensington (Sir B. Rhys Williams) does not agree. However, I think that that was recognised in Committee as being the principal disadvantage of the Conservative scheme.

With that scheme in operation, even for someone who was in one or another private occupational pension scheme all his life, it would still be possible for him to reach retirement age with no provision from those private schemes. If he moved from one job to another, spending less than five years in each job, he could have ended his working life without any entitlement from those private schemes. The preservation features in the 1973 Act would have been very unsatisfactory compared with normal transferability.

Those are the features which ought to characterise any new scheme. First, we must distinguish between the long term and the short term. We should try to create a scheme which, when it has fully matured, when people are retiring who have contributed to it throughout the whole of their working lives, is adequate. Then, having thought about it in isolation, we should go on to think about how we treat those people who are retiring in the meantime. If we muddle the two, we shall fail to get a good scheme in the twenty-first century, which is what we should have our eyes on in devising this scheme.

Secondly, the benefits must be such that the recipients are not only above but way above the supplementary benefits level. Otherwise people will be forced to pay for what they would be given if they did not choose to save in this manner. Though we often stress, particularly from this side of the House, that social security, supplementary benefits, and so on, are no disgrace, they are felt as a disgrace by those who receive them. That is an inevitable fact. It is desirable not only when we look at individuals, but from the point of view of society as a whole, that we should get rid of dependence on social security after retirement.

Thirdly, we must provide for a contribution of about 10 per cent. If we feel that that is imposing too high a burden on contributors in the early stages, moving from no contribution to a contribution of 10 per cent.—I think that would be the situation—we must stagger it, but build in the staggering from the beginning so that gradually, perhaps every decade, we move from 4 per cent. to 8 per cent. to 10 per cent.

Fourthly, we should fund, but make sure that the funded contributions are available for the people who are paying the contributions. It is interesting to think that the people who will tend to contribute to a State reserve scheme are, on the whole, those who do not own their own homes because they cannot afford mortgages. It should not be beyond the capacity of this House to evolve a scheme which allows that money to be used to assist people on and below average earnings to afford houses just like other people in society.

Finally, there is the relationship of the State reserve scheme, the new one, whatever it is called, to private occupational schemes. I stress again that we require a model for the private schemes. They ought to be able to vary their content. They ought to be able to have different provisions for widows, children and life insurance. These are the frills around the basic scheme. If we could get a consistent central core to which all private schemes must adhere it would be possible to have transferability on that central core with the frills not being transferable. I suggest that only in that way will we avoid people reaching retirement age without full cover.

We are still in a situation where the population can be divided into two great halves. On the one hand, there are basically the professional people who reach retirement age and are about as well off in retirement as when they were working because their houses are paid for, their children have left home and they have pretty high pensions. On the other hand, we have the wage earners, many of whom do not own houses and therefore must go on paying high council rents, who, when they retire, receive only the basic State pension. There is an urgent call on our social policy to correct that situation. I hope that the Government can bring forward a scheme to do that along the lines that I have suggested and coming into effect no more than two years after the date when the State reserve scheme would have been introduced.

8.33 p.m.

Sir Brandon Rhys Williams (Kensington)

The hon. Member for Islington, South and Finsbury (Mr. Cunningham) has, as usual, made an interesting and useful contribution on the subject of pensions. I did not seek to intervene in his speech and I will not attempt to follow him now, as we are short of time, but I should like to register the fact that I did not agree with his point about transferability. The manner of his speech encourages us to feel that if an all-party committee were set up we could enjoy the co-operation of Labour back-benchers in seeking satisfactory answers to the problems. I hope that the Government will not be stiff-necked and wooden about it.

The Secretary of State's speech did not encourage us. The problem is that she has never quite taken the trouble to understand the potential of the 1973 Act any more than she took the trouble to understand the possibilities of the tax credit scheme. She is still pleased with her handiwork in destroying—or delaying for a year—the coming into effect of the 1973 Act. But I believe that when she looks back over her career that will be one action of which she will not be proud.

I should like to point to the ways in which I believe that the 1973 Act could he improved. All the points made by the right hon. Lady and by critics of the scheme on both sides could be met within the context of the 1973 Act. We must not allow the Secretary of State or her advisers to believe that the 1973 Act could not meet her four criteria, because it could. I hope to demonstrate how it can be done.

The Act appears to leave a large proportion of pensioners without sufficient income to lift them above the supplementary benefit level. The only way to put that right is to find more money from taxation or contributions. To try to raise the whole mass of the insured pensioner population simultaneously so that they are all above the supplementary benefit level, even in the most adverse circumstances—for instance, regarding rent—is a foolish endeavour because it will mean going beyond our objective in many cases. We ought to break up the mass of the retired population and ensure that our money reaches the people who are most exposed to need.

We should begin by considering seriously the whole structure of housing allowances. I should like to see a housing allowance included as part of the tax credit scheme. We already have the beginnings of a housing allowance in the structure of the existing national insurance pension, and we must now study ways in which that allowance can be adapted to the actual housing outgoings of the pensioner or pension couple. We ought to bear in mind too that not all pensioners live in their own accommodation. Many live with families or have made other arrangements for their housing.

We should look at the age increment. The Conservative Government scored a great success with their policy of separating the over-80s for special treatment. We ought to deal with the over-70s or the over-75's, because an age increment would again go to the people who are most in need.

We ought to abolish the earnings rule, so that in the first five years after retirement people are given the maximum encouragement to look after themselves. When that rule has been abolished employers will gradually come round to making better use of part-time workers, and this is where pensioners could come in and make a useful contribution to the national product. I recognise, of course, that will not happen overnight.

We must do more about sickness and disability allowances, and here, too, if we are generous enough in our provision for the sick and disabled, we shall be reaching the people who, when they are coming to the end of their lives, are in the most desperate need.

We must do more to encourage assistance in kind for pensioners, through meals on wheels, home help and services such as that which pensioners do not find humiliating, whereas many of them feel humiliated if they have to apply for supplementary benefits, and one can understand that.

We must recognise that the time has come for increments for postponed retirement to be increased. From an answer to a Parliamentary Question I learned that the cost would be only £25 million by the end of the century to offer a fair actuarial return for the benefits forgone by postponed retirement. If that figure is correct, what is the House waiting for? This is obviously something else that should be done to encourage pensioners to look after themselves.

It is obvious that the administration of the national insurance pension scheme is on the verge of breakdown. During the election the Conservative Government undertook that they would introduce six-monthly upratings, and with inflation as it is such upratings are clearly necessary. Equally clearly, however, it cannot be done under the old system. I understand the feelings of those who are expected to operate the old system. Let us get rid of it and bring in computers, which do these jobs so easily in continental countries. What are we waiting for?

With regard to the earnings-related pension, one recognises that there is a campaign for women's benefits to be put on the same basis as men's with regard to the annuities they draw if they retire at the same age as men—and the scheme can give them that. Annuities are not the only benefits that pensioners draw from their second pension schemes, and if necessary there can be adaptation of the other benefits for survivors, or one could introduce lump sum benefits which would equalise the value of a man's and a woman's retirement asset at any particular retirement age.

I mention the possibility of introducing lump sum benefits advisedly, because we shall have to consider the situation that arises when a pensioner wishes to bequeath something to a housekeeper, a close relative or someone who has cared for him out of wedlock. It also belongs to another recommendation I am coming to.

I accept that the level of benefits under the Act as it stands is not high enough, and therefore the build-up of entitlement is not high enough. The reason is that the level of contributions which it was felt the public were willing to bear is not high enough. One cannot get out of a scheme more than one puts in.

The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)

There is one further fundamental difficulty which my right hon. Friend mentioned. The hon. Gentleman understands pension schemes, and he knows that to produce adequate benefits under a money-purchase scheme for older workers one has to pay an unacceptable level of contributions. That is what is basically wrong with the structure of a money-purchase scheme.

Sir B. Rhys Williams

There is, unfortunately, all too wide a frame in which to argue about the meaning of the word "adequate". We have to consider the expectations which people have for retirement in the last years before retirement. A large number of people who have made virtually no provision for retirement are now getting earnings of £60, £70 and £80 per week in the closing years of their working lives, and they will nosedive to £16 per week, which is a serious matter for them. The suggestion that other taxpayers' money should be used in subsidising people in retirement has to be debated. I am coming to a recommendation which I hope will make a contribution to solving the problem.

We must contemplate at an early date the doubling of the rate of contribution under the 1973 Act. I could contemplate the rate rising from 4 per cent. to 8 per cent. forthwith, if only because it would enable the Government to reduce the general level of taxation because of the higher rate of capital formation involved.

I believe that to give people better pensions, contributions must be higher—and we need more saving for investment at the same time. Complaints might be made that the Act as it stands increases the funds for investment in equities but not in the gilt-edged market. I hope that what I have to suggest may remedy that difficulty. I recognise that nationalised industries need capital just as much as the private sector, and the instinct to save for retirement is the strongest motive for creation of capital that we have. We should exploit it.

It may be said that private schemes have a tax advantage against the State reserve scheme. We do not need to go all over this again, but the passage of time since the 1973 Act was passed has shown that it is unnecessary to give private schemes this special selling point. Good schemes sell themselves and bad schemes should not be sold at all.

The most significant point that might be made against private schemes is that they cannot undertake to give full post-retirement protection against inflation. Some schemes which are not based on final salary or do not have some built-in guarantee may not even give pre-retirement dynamism; but that can be remedied. While an employee is in an employer's service he might feel fully entitled to expect pre-retirement dynamism. But how to give the best protection against inflation after retirement needs study. I understand that the scheme in course of being introduced in New Zealand, which obviously the right hon. Lady and other Ministers will be fully informed about, meets the problems involved. As I understand it, it runs on lines which I shall try briefly to outline. In spite of snags, I believe that there is a will in the House to find a consensus.

I should like to make one or two suggestions. Firstly, we should dynamise the bricks in the Boyd-Carpenter scheme. We have there an accurate record of employment earnings during the past 10 years which would otherwise be lost; and the money for the same object will have to be found from somewhere. Therefore, let it be applied on a strictly fair and arithmetical basis in the light of the records which the Department retains.

Secondly, we have to find some system of index-linking for private occupational schemes in the light of the conditions of inflation we have at the moment, which seem all too likely to continue. Should we allow private schemes to buy an indexed stock issued specially for them as they go along? My answer is categorically "No" because it seems to be a sort of benzedrine for the private schemes which gives them an appearance of life and independence whereas it weakens them all the time.

Should we revert to a Crossman-style abatement scheme, which is what I fear the right hon. Lady has in mind? She gave no inkling of any ideas she may have in her extraordinary speech. I would be deeply opposed to that. Abatement makes private schemes purely subordinate and superfluous as against the State scheme and inevitably introduces an element of incomprehensible complexity. A suggestion which might be worth further study is that schemes which have contributed by putting, say, half their contributions into the gilt-edged market, which I would not oppose, should acquire the right to transfer the eventual accrued asset of each employee at retirement into a Government-guaranteed fund which would then give dynamised benefits afterwards. That suggestion would allow the retention of the sound actuarial principles of private schemes but at the same time would introduce the element of repartition which is inevitable in conditions of inflation.

Why, one might ask, should private schemes have Government support in this way? My answer would be that in return they must support the Government during the working life of the employee by putting at least half the money raised through contributions into the gilt-edged market. It would be a tonic to that market and it would also give them a claim for an element of support in giving post-award dynamism.

There are two final points. We should permit private schemes to offer invalidity cover without losing their tax concessions. Finally, we should now require all schemes that wish to continue to benefit from tax concessions to give transferability of existing accrued rights on change of job. This was the subject of the first speech I made in the House in 1968. I hope that I shall not still be calling for it when I make my last.

8.47 p.m.

Mr. R. A. McCrindle (Brentwood and Ongar)

I am sorry that the Secretary of State and the hon. Member for Islington, South and Finsbury (Mr. Cunningham) have left. I wanted to underline the seeming split between the two. The right hon. Lady had great fun finding real and imagined splits between the Conservative approach tonight and that during the period of the Conservative Government, and further entertained us by trying to set off the Liberal attitude and voting intentions tonight against those of the Conservatives.

The right hon. Lady should now be asked how it is that she should be able to say by implication that she is not attracted to a funded scheme, whereas the hon. Member for Islington, South and Finsbury could say that he hoped that when the Labour Government scheme was introduced it would have a large element of funding. That seemed such a fundamental difference of approach that it would be helpful to find out from the Minister upon which basis the Government's proposals are likely to be introduced.

Mr. O'Malley

The Secretary of State did not denigrate funding. All she said was that in the present climate of inflation and investment performance there were, as the insurance and pensions industries are now discussing, formidable problems.

Mr. McCrindle

The right hon. Lady said, I think, that there would be difficulties in funding a scheme, whereas her hon. Friend said that it should be funded notwithstanding the difficulties. One could take that as a difference of emphasis, but I would suggest that it is a basic difference of approach. I shall be interested to see the proposals when they come forward.

I want to concentrate on four points. First, was the approach of the previous Conservative Government to the Social Security Act the right one? Second, was the Act inadequate in its provisions and if so how? Third, notwithstanding the defects, if any, were the present Government right to overthrow the reserve scheme? Last, following the theme of several hon. Members, is there some middle way in pensions to prevent the undoing by Governments of their predecessors' legislation?

I am quite unrepentant about the support that I gave to the Social Security Act in broad principle. Although it is an exaggeration, perhaps, to describe it as a social revolution, the introduction of a second pension, no matter how meagre it was likely to be, marked the beginning of a new period in pension provision. Whatever else the Government may seek to change, I hope that we shall be assured that they will not seek to alter that basic change in direction which the Conservative Government took.

The emphasis that was placed on the development of occupation pension schemes was absolutely right. It gave people the best promise of a buoyant income during retirement. I am the first to confess that, in a period of hyperinflation, for occupational pension schemes to continue to guarantee this buoyancy of income is something which is questionable, but at present I am looking back on the basic philosophy. At the time of the introduction of a second pension, I accepted that it would be a travesty if the opportunity of a second pension were not extended to all in employment. Recognising that demonstrably, by the nature of people's jobs, it was impossible to extend the provision of an occupational scheme to all of them, a State fall-back scheme—as it was described—was absolutely right and proper.

I believe, too, that a move towards funding of a second pension was something which people understood and supported. It was recognised then, and is still recognised, that the borrowing from Peter in employment to pay Paul who has already retired was something which had been maintained for so long that there was need for a change and some sort of basic funding was clearly desired.

The other provisions of the Social Security Act—a move towards the preservation of pension rights, an attempt to deal with widows, and some basic form of inflation-proofing—were, and are, important parts of the deal that was extended to the nation under that Act. The broad approach embodied in that Act was right.

I now ask the question: Was it adequate? Hon. Members on both sides of the House will recall that I argued for a better reserve scheme. The timidity of my hon. Friends in keeping the provisions of the reserve scheme as low as they did was, in retrospect, a mistake. It was not necessary that that should be done to encourage the development of occupational schemes.

I am also persuaded, particularly with regard to women, that we did not aim high enough. Perhaps we could, and should, have placed them in a position identical to that of men and worked gradually, in various ways, to a common retirement date. Here I echo a remark of the hon. Member for Islington, South and Finsbury—one cannot extend to women the right to the same pension while they retain the right to a preferential retirement date. However, whether that is done in one move or gradually over the years is a matter for debate. Perhaps we should have encouraged women to come into the scheme at an early age and should have allowed them to build up some preserved benefits before they retire to marry and to raise a family. In all those ways, perhaps, we should have been more ambitious in both the occupational pension provisions and the State reserve scheme.

Reverting to some of the things that I have said in Standing Committee and in the House, I consider that we were wrong not to extend tax relief to the contributions to the State reserve scheme. I led something of a revolution within the Conservative Party when, on a Division, the Government of the day survived by a majority of only four—an experience for which they were loth to extend any gracious thanks to me. That is, perhaps, why I continue to occupy a position on the back benches. Nevertheless, the reserve scheme clearly could, and should, have been better. It could, should, and still can, be improved. Why revoke the whole thing, causing damage and uncertainty, postponing even the minimal provisions of the Act—which the Government concede would have materialised—and pushing the whole business of pensions provision back into the party dogfight? I cannot stress the latter point too much, because I deeply regret it.

Why did not the Government improve the scheme? Why rescind it? I do not accept what the Secretary of State said tonight. It would be possible, although difficult, to build upon the provisions of the Social Security Act and to achieve some, at least, of the objectives she has in mind without necessarily eliminating for all time her ability to develop a different approach to social security provisions.

So it is more in sorrow than in anger that even now I ask the Secretary of State, certainly in no partisan spirit, whether she will not think again. The Government can improve on the position of women. They can introduce tax relief under the State reserve scheme without throwing the whole scheme into the melting pot.

Mr. George Cunningham

Transferability?

Mr. McCrindle

That is, by the hon. Gentleman's own admission, a much more difficult proposition. I believe that, with the preservation of the provisions which were built into the 1973 Act, it would not be impossible to move at least some way. It made my heart bleed as I listened to the Secretary of State this evening and heard her sheer rejection of any spirit of compromise or of national unity, about which we read so much in the Press. I believe that if she were to listen to such an appeal it could mark the beginning of a new approach to pensions as free as possible of party bias.

If the Secretary of State is to maintain the attitude that regrettably she showed to the House tonight, she must answer three questions which the House and the country will want answered. What is it in- the reserve scheme that causes her to reject the principle of the scheme when we contend that, if she were so minded, she could build on and improve that scheme? Secondly, why could she not have introduced improved provisions in those areas which grieve her most and allowed the whole Act to go forward? Lastly, how does she justify postponing even the minimal pensions benefit for perhaps three or four years, because it is optimistic to suggest that it could be done within two years?

These are questions which my electors and the Secretary of State's will ask. If we do not get satisfactory answers in terms of pension provision we shall reluctantly have to assume that the right hon. Lady's approach to pensions is such a doctrinaire one that the House will wish to criticise her for it. However, before we reach that point of criticism, I hope that the Minister, having listened to the pleas which have been made from both sides that she should build upon the scheme rather than reject it, will understand that this is the feeling of perhaps the majority of people in the country and that she will respond to it.

8.58 p.m.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

My intervention in this debate takes me back to the debates we had in Committee on the Crossman plan. I believe that the Government's decision to abandon the State reserve scheme under the 1973 Act cannot be considered without reference to the background and delay over many years in securing substantial improvements in pension arrangements.

The right hon. Lady devoted a considerable part of her very long speech to asserting the right of her administration to reverse the legislation of their predecessors. No one disputes that constitutionally. However, we are a practical nation and each decision should be considered against what went before. The previous Labour administration in 1964 took an unconscionable time producing their proposals for improving pension arrangements. They took such a long time that the Crossman Bill, as we call it, was only in Committee at the Dissolution in 1970. The last Conservative administration in a much shorter period placed the 1973 Act on the statute book after lengthy preliminary discussion with those interested in occupational pension schemes. I am not referring only to those whom the hon. Member for Islington, South and Finsbury (Mr. Cunningham) might say had a direct financial interest and not a lot else; I am talking of direct consultation with companies and firms.

The difference between the 1973 Act and the Crossman Bill is that on the whole the Crossman Bill was not understood, was not liked and was not accepted. I believe that the 1973 Act was understood and was generally accepted. It is against that background that the decision to reverse it and to put the whole issue into the melting pot must be considered, and it is because of that background, because of a 10-year delay in introducing an improved pension structure and because of what was an abortive attempt in 1969–70, that the last Labour administration did not carry the country with them. I am satisfied in my own mind about that, and we all have constituency contacts. I am sure, too, that the 1973 Act did carry the country with it, that it was accepted.

Mr. George Cunningham

By whom?

Mr. Hall-Davis

By the great majority of people concerned with pension negotiations which, in the background in which I have been involved, embraced employees and employers.

There is no doubt that as a result of the 1973 legislation there was a considerable quickening in the pace of provision of occupational pensions. What worries me about the Secretary of State's attitude is that she does not appear to understand why the House of Commons is falling into disrepute in the eyes of the electorate. She chided my hon. and learned Friend the Member for Surrey, East (Sir G. Howe) because Conservatives had actually used the word "improvement" with regard to our arrangements. I believe that the people of this country are having less and less regard for all hon. Members because we are concentrating too little on improvement and construction and too much on destruction and reversing the decisions of our predecessors.

The issue before us is an outstanding example of just that kind of negative destructive attitude which brings Parliament into disrepute. We were told at the General Election over and over again that we did nothing but slang each other as politicians. I was never sure whether I was meant to take that personally or whether it was just a general remark, but it certainly embraced a political genre generally. People can be slanged by actions as well as by words and the Government's reversal of the decision on the 1973 Act is just the type of approach that the electorate objects to and which brings Parliament into disrepute. I believe that the suspension of the reserve scheme has dealt a damaging blow to the improvement and expansion of occupational schemes, damage which may prove permanent and irreparable.

I am open to be proved wrong by events but there sometimes comes a tide when things are flowing favourably for a particular course of action. There is no doubt that at the beginning of this year the tide was flowing favourably for the expansion and improvement of occupational pension schemes. The provisions of the statutory pay code, whether one liked them or not, encouraged the improvement of pension schemes. The approach of the reserve scheme had focused employers' attention on the need to give the matter consideration.

I believe that two things will now happen to reverse that tide. First, I believe that the Labour Party is to introduce some form of pay-as-you-go scheme, which is not easily understood. Until employers understand a scheme, they will not saddle themselves with additional commitments. Secondly, I believe that the impact of inflation on occupational pension schemes, whilst perhaps appreciated by those hon. Members on both sides who have taken part in the debate, is not yet appreciated not only by the country at large but by many of those responsible for the funding and benefits of occupational pension schemes.

Scheme after scheme will have drawn to its attention by its actuarial advisers, whom many schemes employ far too infrequently to examine ther commitments and liabilities, that there is a large potential deficit in the scheme. The advantage of the reserve scheme was that it drew attention to a pensions structure that was particularly suitable for the small employer. The employer of small numbers is reluctant to introduce a final-salary pension scheme, because he knows that it gives him a liability for what is in effect an open-ended commitment. I know that all pension schemes have the right to be wound up provided that the obligations are met.

The right hon. Lady said that the only scheme in which one could meet one's obligations in an inflationary age was a pay-as-you-go scheme. I go along with that to the extent that it is the only scheme in which one can meet them for one year. That is one's only obligation—to meet them for one year. It is the strength of a funded scheme that at any one time it can be wound up and be asked to meet the obligations accumulated up to that date. Otherwise, it would not receive the actuary's certificate. That is the sort of fear that inhibited the introduction of occupational pension schemes by small employers.

The advantage of the reserve scheme was that it served as a model. The hon. Member for Islington, South and Finsbury talked about the need for a model for occupational schemes. He may not have liked that model, but it was one that was particularly suitable for the employer with a small number of employees. That was recognised because a number of chambers of commerce were offering facilities to employers in different parts of the country, or any part of the country in some instances, to join an occupational scheme similar in structure to the reserve scheme but with the flexibility and additional advantages that could be written into a private occupational scheme but could not, certainly in the initial stages, be written into a State scheme.

If the Labour Government destroy the State reserve scheme based on money purchase, they will have discouraged from getting adequate occupational pensions many people who would otherwise have got them.

I find it extraordinary that at one and the same time Labour Members attack the 1973 Act and draw attention to the need to overcome the transferability problem. The State reserve scheme of the 1973 Act is the only type of pension arrangement that I have come across which offers total transferability. Under that arrangement the individual owns his own pension. For that reason, I think that many small employers in occupations where people move frequently would have been well advised to consider whether it was not in their employees' interests to let them enter the reserve scheme, in which they would be assured of full transferability.

When people draw attention to the inadequacy of the State reserve scheme it is worth asking them to cite a few examples. Of course, examples can be as misleading in this area as in any other. We must demonstrate the relative positions of a man who stayed in the State reserve scheme all his working life and a man who moved into five, six, seven or eight occupational schemes with the best transferability arrangements that have been devised.

I believe that we have our pension arrangements the wrong way round. What we should have is a personally owned pension on the lines of the State reserve scheme with the only obligation being for the employer to contribute to some form of approved pension arrangement and then to top it up with some sort of State approved scheme.

Mr. George Cunningham

But that is not in the 1973 Act.

Mr. Hall-Davis

The Government give the impression that they will make some accelerated provision for the person who is now near retirement. If they are to make such provision and if it is within the context of this Government's scheme, whatever it may be, it will be accelerated provision by a subsidy from the young for the benefit of older people as has taken place in almost all occupational pension schemes. Presumably, there will be a subsidy from the young in the State reserve scheme which would not be paid by employers and employees who are not concerned with the second State scheme. If it were to be paid by nonmembers there is no reason for that subsidy not to be given to occupational pension schemes to help them to get off the ground and to help meet some of the problems that arise when introducing such schemes. If that is the intention, it could have been done perfectly well under the State reserve scheme as envisaged by the 1973 Act.

For all the reasons that I have given, I think that the Government's approach shows a total disregard of the attitude that the country wants the House to take towards its conduct of affairs—namely, to build on what has been done before and not to pull everything to the ground every time there is a General Election. Further, I believe that the right hon. Lady's time scale is totally impracticable. I had the impression at the end of her speech that she could not guarantee whether we would get the White Paper before the Summer Recess. I do not know whether she intends to publish it during the recess. That would be unusual but not unknown. How she thinks that she will get adequate consultation to allow her to introduce legislation in the next Session I do not know. It seems in this day and age that the time scale in everything gets longer and longer. Therefore, it will be a long time before the alternative scheme is produced.

It will give me the greatest pleasure to vote against the Government amendment and to support the motion of my right hon. and hon. Friends.

9.14 p.m.

Mr. Timothy Raison (Aylesbury)

We have had today a serious debate on a serious topic. I think that the debate as a whole has been thoroughly constructive. The one exception was the speech of the Secretary of State. The right hon. Lady had the least right to approach the debate in such a way. She came into the House and treated us with a great deal of contempt. She spoke at great length and with the minimum of serious content. She made it clear that it is her intention to scrap what is by any standards a major piece of social legislation, however one may argue about its components. However, she gave no indication of what should take its place. All we learned from the right hon. Lady was that we are likely to have her plans some time after the recess.

The right hon. Lady has adopted her present attitude in an area where continuity above all else is vital. I believe that her speech was a completely cynical piece of politics. I do not want to say more about it now, but I will return to it later.

The right hon. Lady's approach stood out in marked contrast to the rest of the House in the debate. I think that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) made a serious contribution, arguing his case fully. I believe that the improvements he talked about could all be brought into being under our scheme. Indeed, he himself said that the bulk of them could be. He said, fairly, that transferability is a very great problem. All of us who have studied this problem know that that is true, that transferability is one of the most difficult ingredients. But we should not despair. I do not think that it is necessarily impossible to find some further development in that area.

The hon. Gentleman was also right in wanting to see some kind of funded scheme. I have no doubt that the psychology of the country, represented in the overwhelming majority view of those who think about this problem, is that a funded scheme would be preferable. That is one of the merits of our approach. But it appears that the right hon. Lady is against a funded approach. The indications that we have had from her—she has not told us formally of what her answer is—seem to suggest that we are likely to see some kind of pay-as-you-go scheme. I think that the hope of the hon. Member for Islington, South and Finsbury that something could be produced in two years is wishful thinking. I should be surprised if the Under-Secretary of State could give him any serious consolation or support on that point.

We have had an extremely good debate with a very high level of contributions. All of us who have followed pensions debates over the years know that my hon. Friend the Member for Somerset, North (Mr. Dean) talks to us with enormous knowledge and in an extremely balanced way. I had perforce to spend a large chunk of the weekend reading through the Committee stage of the Social Security Act 1973. I do not think anyone would choose that as a way of passing a June weekend in Buckinghamshire, but I had to do so. Not having served on that Committee, I was profoundly impressed by the way in which, day in and day out, my hon. Friend battled on without a mistake and in a most reasoned way.

My hon. Friend the Member for Kensington (Sir B. Rhys Williams) is probably the most original expert on this subject in the House. He always has something new to say. I, as a layman, never cease to be astonished by the freshness of his mind. He did a great deal to answer the hon. Member for Islington, South and Finsbury.

My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) talked eloquently about ways, of building on our scheme in the 1973 Act. He asked "Why rescind the scheme? Why not improve it?" I believe that the scheme was the fundamentally right basis for the future. Nevertheless, I think that when my hon. Friend used those words he did catch the flavour of the debate. In other words, he expressed the view that we have something which should be developed, and that the notion of casting the whole thing to the winds is contrary to the mood of the House as expresesd in the debate.

My hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) made another extremely interesting speech. I am sure that he was right when he said that, by and large, the Act was understood and accepted. I think this has been the sign of a very sensible approach. I have no doubt that my hon. Friend was right to condemn the damage which has been done by the right hon. Lady's wanton action, and it is clear that the House does not support her in it.

The 1973 Act provided something which we had needed for a long time—a long-term basis for pensions—and I am sure the system is the right one for this country. It consists, firstly, of a basic pension which is a pay-as-you-go scheme and has in it an element of redistribution, brought about through the ingredient of variable contributions but flat-rate benefits. It also has a State contribution. I believe that the redistributive scheme provides the best basis upon which we can look at pensions in future. If there are sharp changes in the value of money and so on, at least we have that measure with which to take immediate steps. It is notable that so far the Government have not rejected this ingredient.

Then we have the second pension, the choice between the occupational scheme or the State reserve scheme. It is important to remind the House of some of the things which this system has brought in. It has brought in a compulsory level of personal provision, death benefit cover and pensions for widows. It has brought in a measure of protection against inflation. I acknowledge that these things are not final and for all time. I remind the House that they all represent important improvements upon what we had before. It is the essence of social policy in so many areas that we proceed by building and improving upon what we have got. That is what our important Act did.

The second pension is to be financed by contributions, whether through the occupational schemes or the State reserve scheme. The essence of it is that it provides independence. I have a strong feeling that, more and more, the future of social policy will lie in the notion of giving people a feeling of independence. It is right that the State should be there to make sure that certain standards are upheld. That is a proper rôle for the State here. But psychologically, and in many other ways, what people want now is not an ever-increasing dependence on the State and what it has to provide for them, but an ever-strengthening feeling that they can stand on their own feet, that they have rights that they have bought.

The underlying philosophy of our 1973 Act was entirely in accord with the way in which social policy is bound to develop. It will take time for the State reserve scheme and the occupational schemes to come to fruition. It is nonsense to pretend that there is any easy way to produce quick results. The Secretary of State seemed unable to face up to this. The truth is that we cannot pluck a pensions policy out of the air and say that suddenly everyone will have the kind of level we would all like to see available in the fullness of time.

I have no doubt that one of the strongest objections to what I suspect the Secretary of State has in mind is that it will be susceptible to political jiggery-pokery in a way in which our type of scheme is not. We do not know what the right hon. Lady has in mind but it seems likely that it will entail substantially increased contributions on the part of industry. There is a widespread feeling at the moment, since the Budget and in the past few weeks, that it is completely intolerable to go on believing that we can pile more and more on to the back of already hard-pressed industry.

I turn to some of the objections put forward to the 1973 scheme. The first had to do with the time lag before the reserve scheme pension reaches its full level and also the level of benefits. At the moment, as I understand it, about 1,800,000 pensioners are drawing supplementary benefit. This is a substantial number. We ought to remember that when our tax credit scheme comes into being, as it unquestionably will, that in itself will take a substantial number of retirement pensioners off supplementary benefit level. I cannot say how many, but one figure I have seen is 800,000. There is no doubt that the tax credit scheme, if allowed to develop, as it will do when we come back to power, will be of great help. As time goes on, more and more people will be drawing benefit from their pension schemes, and that in itself will reduce the number of people who are dependent on supplementary benefit. That answers at least part of the point.

The Secretary of State was unfair when she was describing the benefits under the reserve scheme in ignoring completely the fact that there will be bonuses. Admittedly, if we have a Labour Government dedicated to the sort of policies we see at the moment, the bonuses will not be very large. We have seen the effect on British industry of a Labour Government in power. That is a point we have to consider. But it is to take a profoundly gloomy view of the longer-term future to ignore any possibility of the fund behind the reserve scheme increasing in value over the years. An important part of the scheme is that its funds will be invested for the benefit of those who belong to the scheme, and the Secretary of State might have taken notice of that factor.

We had a reasonable discussion about the position of women in the scheme. The question was raised whether women should be regarded as retiring at an earlier date than men. I believe that at present women, by and large, accept the notion of earlier retirement, but I am not for one moment saying that this will be so for all time. Social habits and social attitudes change with time, and it may be desirable to look again at this. That is exactly the kind of matter that we believe can usefully be discussed by the Select Committee which we propose.

The hon. Member for Islington, South and Finsbury said that the scheme penalises women for living longer. The scheme is based on arguments which are actuarially perfectly sound, but if there is an increasing feeling in society that women are being penalised in this way—and more and more people may express this feeling in years to come—this again could be looked at, and there is no reason why an appropriate adjustment should not be made. That argument does not justify the scrapping of the whole of our scheme.

In the reserve scheme widows get 50 per cent. of the pension for men. Much has been said about this. The 50 per cent. represents an enormous advance on what has gone before. For most people there has been nothing, and 50 per cent. is very much better than nothing. We believe that this was one of the most important achievements of the 1973 scheme. But that does not mean that in future this question should not be looked at.

It has been argued that the whole pattern of provision in the 1973 Act is biased towards occupational schemes rather than towards the State reserve scheme. We certainly want to see occupational schemes developing strongly.

It has been said that tax relief is not provided for under the reserve scheme for employee's contributions. The arguments put forward in Committee by my hon. Friend were powerful. Many people who will be paying into the reserve scheme will not be taxpayers. It does a person who does not pay tax no good to receive tax relief. The argument for the 1½1 per cent. is based on a solid foundation. In Committee my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) raised the possibility of a scheme similar to the mortgage option scheme, and that, again, might be considered by the Select Committee. The answer is to accept the structure we offer and in time see how it can be improved.

Mr. George Cunningham

Will the hon. Gentleman say categorically whether the Opposition stand by what they did in refusing tax relief on contributions to the State reserve scheme for those who pay tax, or have they changed their mind?

Mr. Raison

No; I am simply saying—

Mrs. Castle

Answer.

Mr. Raison

Allow me to do so, and I will. I am saying that we believe that what we did was right in the 1973 scheme, but there is no reason why in time one should not take a fresh look at these things. The whole essence of social policy is that it must be allowed to develop.

Mrs. Castle

Now we know.

Mr. Raison

I assure the House, and particularly the Secretary of State, that one of the great merits of occupational schemes—and this is one of the reasons why we support such schemes very strongly—is that they are the most flexible way of meeting a variety of needs and desires which exist among different employees. We believe that that is the right structure for the future. Therefore, we are convinced that the 1973 Act provides the best basis for a pensions pattern for this country. There is an extremely strong case for reaffirming this policy, while at the same time setting up a Select Committee to examine the possibilities of some form of improvement in the fullness of time.

I have no doubt that many people in the country as well as in this House resent the Secretary of State's attitude to this problem. Time and again she speaks as though she, and she alone, knows what women want. She seems to believe that she has a kind of divine right to speak for women. She acts as a sort of high priestess. We cannot believe that this magical power lies with her. She comes to this House not to argue or debate, but to assert and rant. That was her attitude this afternoon. That is a deplorable way to approach this topic.

We believe that the way in which the right hon. Lady has flouted the House of Commons in refusing to put forward the two parts of the scheme is a disgrace. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) set out this argument in the course of his speech. I reiterate that it is a travesty of parliamentary government to use a commencement procedure to scrub a major piece of legislation. It is a particularly blatant travesty for a minority Government to take this course with an election clearly in the offing. Above all, it is a tragedy to do so without offering the House or the country any indication at all of what the right hon. Lady has in mind to put in place of this policy.

We believe that the right hon. Lady has shown arrogance right across her social policy. We believe that one of the gravest objections to the social policy which she has put forward is that time and again she has aroused expectations which she knows she cannot fulfil. She likes to see herself as a kind of Lady Bountiful. She goes round the country making vague promises. She knows perfectly well that the background against which we are operating is one of tough financial stringency. She well knows that any sort of scheme of the kind she apparently has in mind will cost the country a great deal more at a time when it is totally irresponsible to think in terms of increasing public expenditure.

In short, the Secretary of State's speech was pure fairground stuff. It was a blemish on this debate. I believe the country as a whole will bitterly resent her approach to this matter. I hope the House will reject the Government amendment and support our motion as being the right basis for a sensible long-term pensions policy for this country.

9.33 p.m.

The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)

The two speeches we have heard from the Tory Front Bench in this debate have been among the most flimsy, reactionary, divisive and backward-looking we have heard in this House for a long time. I had hoped, more in optimism than in belief, that today's debate could have been a vehicle for a sensible discussion of pensions policy.

The Conservative Party could have used the debate for a constructive examination of pensions needs now and in the future. Instead, the right hon. and learned Member for Surrey, East (Sir G. Howe) concentrated the same keen intelligence as created the Industrial Relations Act, and the same blindness to social tensions as is an inevitable concomitant to this and as runs throughout the whole of his policy, on defending, first, a pension structure, about which there has been no argument across the Floor in this debate and which would condemn millions of pensioners now and far into the twenty-first century to dependence on means-testing, and, secondly, a reserve pension scheme which has been expressly denigrated throughout the pensions industry and which was designed, as the hon. Member for Somerset, North (Mr. Dean) knows better than anyone, purely as a vehicle for contracting out. To express it more bluntly, it was designed as a pension dustbin for those whose employment or employers prevented membership of a private occupational pension scheme.

The hon. Member for Somerset, North opened a market for insurance com panies and others, about whose activities I do not complain, to sell rubbish. It is no wonder that the hon. Gentleman is now a director of such a company. He opened every factory door to slick insurance salesmen selling schemes which would have been a disgrace to the second half of the twentieth century.

Mr. Paul Dean

The hon. Gentleman must know that he is talking absolute rubbish. For a responsible pensions Minister to make disgraceful remarks of that kind from the Dispatch Box shows how flippantly the present Government treat the serious matter of making better provision for pensions.

Mr. O'Malley

Not only will I make those allegations; I shall prove them before I sit down. It is on that that my speech will be concentrated.

It is no wonder that the right hon. and learned Member for Surrey, East and the hon. Member for Somerset, North did not go into any details of the State reserve pension scheme or about the minimum conditions of recognition. Had they spelled them out adequately, they might not even have had the support of the Liberal Party.

I understand why the Opposition are anxious not to discuss the details of the State reserve scheme. Their contributions show no understanding that it is intolerable and unacceptable to continue a system of two nations in retirement, the two nations being those fortunate enough to be in good occupational schemes, in both the public and the private sector, with half pay in retirement, with post-award dynamism and with a lump-sum when they retire, and the remainder being those who would have been condemned to the inadequate levels of the State reserve pension scheme and the minimum levels set by it.

How could the managing director of any company in the future defend a situation where his white collar employees were in a final salary scheme whereas for his manual workers on the shop floor any old thing would do? That is what the Opposition were trying to perpetuate in their legislation when they were in government. The very existence and creation of the tax credit scheme was an open admission that their pensions policies were inadequate to provide enough for people to live on in retirement after a lifetime of service.

After months of insisting that the country was wrong and he was right, the Leader of the Opposition, under the pressures of electoral reality, is now sitting on the penitent's stool and agreeing to bury the Industrial Relations Act. The right hon. and learned Member for Surrey, East should now lay to rest the State reserve pension scheme and the associated low levels of minimum ocupational pensions.

There are hon. Members on the Opposition benches who know something about pensions. We had some thoughtful speeches from them today. I have in mind the hon. Member for Brentwood and Ongar (Mr. McCrindle) and the hon. Member for Kensington (Sir B. Rhys Williams). They regard the State reserve scheme as unsatisfactory. They made their views known throughout the Committee proceedings on the 1973 Social Security Bill.

How has the right hon. and learned Member for Surrey, East the intolerable arrogance to speak of seeking national unity, of seeking an agreed policy on pensions and of stopping them from being a political football when his last pronouncement in very strong terms was that if the Conservative Party was returned to office after the next General Election the State reserve scheme would be reintroduced? The Opposition have now made their pensions policy very clear, and we welcome the right hon. and learned Gentleman's statement today.

The Labour Party rejects as completely unacceptable the minimum levels of provision for occupational pensions laid down in the State reserve scheme. I will tell the hon. Member for Hazel Grove (Dr. Winstanley), who apparently did not appreciate the argument, why it was that the present Government were unable and remained unable, as would any Government, to modify suitably the State reserve scheme in order to attain the objects of policy which my right hon. Friend the Secretary of State set out today and to which the hon. Gentleman nodded his agreement.

The reason is simple. The hon. Member for Brentwood and Ongar (Mr. McCrindle) should know this, because he asked the question in his speech only half an hour ago. If we are to provide a reasonable level of benefit for older workers—the forgotten generation; not only those in their sixties, but men over 45 and women over 40—we can do it in a money-purchase scheme only by imposing levels of contributions which will be totally unacceptable both to employers and to employees. Therefore, it is not only a question of the level of the accrual set in the scheme, it is also a question of the structure of the scheme. The structure itself precludes the measure of improvement which the Labour Party would find acceptable and which the Liberal Party should find acceptable if it meant what it said in its election manifesto.

In addition, the low levels of total pension provision envisaged through both the basic and the reserve pension scheme in the Social Security Act are not in accord with the manfesto commitments of the Liberal Party, the SNP or the Welsh National Party.

The present Government have begun to carry out their manifesto commitments on pensions, and to carry them out not only to the letter, but in the spirit of those commitments.

It is significant and interesting, as my hon. Friends who have read the Tory motion will have noticed, that there is no mention of the basic flat-rate pension set out in the 1973 Act. There is a simple reason for that. There is something which the Conservative Party must hide.

Again I turn to the Liberal Party. The finances of the basic scheme were inadequate—the Government Actuary pointed this out in his report on the Social Security Act—to provide a pension greater than the £7.75 pension which was operative at the time or a pension at about that level in real terms. That is why we have had to introduce the Social Security Amendment Bill to put up the level of contributions to a higher rate than the level at which they were set. We could not have paid the £10 and £16 pensions, let alone the higher figure which other parties have mentioned for a flat-rate pension. We could only have provided for a much lower pension. Therefore, the move towards a better pension provision for the present generation of retirement pensioners envisaged by all ether parties except the Tory Party was precluded by the financial arrangements in the basic scheme of the Social Security Act 1973.

Why have not the Opposition had the guts to admit that today? They did not oppose the national insurance uprating which brought in those £10 and £16 pensions, but when we bring in a Bill to levy the money to pay those pensions they start to oppose. They are in favour of the pensions but they are not in favour of paying the money for them. [Interruption.]

The hon. Member for Somerset, North nods his head. He and I have spoken across these benches for too many years. He knows that on the very eve of the election he told me that £10 and £16 pensions were extravagant and that they would mean too great an increase in contributions from the working population to pay for them.

Mr. Paul Dean

rose—

Mr. O'Malley

I will not give way again because of the time. The hon. Gentleman knows that that is an accurate reflection of the situation.

Mr. Dean

I am trying to follow the Minister's argument. From what he is saying it might be thought that the Opposition voted against the Bill this afternoon, but patently we did not.

Mr. O'Malley

Before the hon. Gentleman makes comments on proceedings in the House of Commons he should either be present or have read those proceedings. If he had been here earlier today he would have heard some of the nonsense spoken by his hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) in her winding-up speech.

I now turn to the Conservative reserve scheme which is so dear to the hearts of so many Opposition Members and particularly the right hon. and learned Member for Surrey, East. I say in unequivocal terms that the Government make no apology for their decision not to implement the reserve scheme.

Mrs. Jill Knight (Birmingham, Edgbaston)

Shame.

Mr. O'Malley

The hon. Lady says "Shame", but it ill-becomes a political party to say one thing when in opposition and another when in Government. [Interruption.] Hon. Gentlemen opposite are rather touchy on this. We all remember the pre-Selsdon Man period and what happened after that. Hon. Gentlemen opposite need not laugh at me. On pensions we are keeping our commitment, and I challenge anybody to show that we are not. Our actions in not bringing that scheme into operation are consistent with every criticism that we made of and every statement that we uttered about the reserve scheme when in opposition, and those criticisms are still valid.

It is noticeable that those who now commend the reserve scheme are those who would not have been members of it. To those who this afternoon have defended the scheme I ask whether they would be happy if they thought that their pension cover was at the level set out in the reserve scheme and if their families had that kind of cover. All that I am getting are inane middle-class grins from some of the back benchers of the Conservative Party. No figures have been given of what would be the magnificent level of pension provision for which the Liberal Party will vote tonight.

Over the three years between 1975 and 1978, to take a period quoted by the Tory Front Bench, a man of 62 on £25 a week would earn a pension of 28p, and that is if the bonuses matched prices. We are told about the difficulties of investment. A man on £30 a week would get 34p, a woman aged 57 on £20 would earn 19p, and on a wage of £25 she would earn 23p. I agree that we ought to take note of the best in occupational pension provision in the private sector and see how much of that we can provide for others who do not have the good fortune to belong to occupational pension schemes.

Let us see what would be provided under the State reserve scheme. A man of 55 who paid into the scheme for 10 years would receive on retirement not half pay, not 50 per cent. or 66 per cent. but 4 per cent., and his widow would get 2 per cent. A man of 45 who retired in 1996 would get a pension not of 50 per cent. but of 8 per cent. and his widow would receive 4 per cent. Anyone unfortunate enough to pay into the scheme until the year 2019 would draw a pension of 19 per cent, for himself, or his widow would receive a pension of 9½ per cent. I invite the House to compare that with good occupational pension provision.

Mr. Robert Boscawen (Wells)

rose—

Mr. O'Malley

I shall not give way.

Mr. Boscawen

rose—

Mr. O'Malley

I have only 10 minutes in which to reply to the debate. I normally give way, but I shall not do so tonight.

A woman aged 50, after paying into the reserve scheme for 10 years, would get a pension of 3 per cent. on retirement. A woman who joined the scheme when she was 40 would get a 6 per cent. pension, and if she joined when she was 22 she would get a final pension of 13 per cent. of her earnings. I invite the Opposition to compare that with good occupational pension provision. The trouble with the Opposition is that they want one level of pensions for themselves and their wealthy friends, and a different level for others.

Mr. Boscawen

rose—

Mr. O'Malley

No. If the hon. Gentleman allows me to continue, I shall give way later if there is time.

We were always criticised for the complexity of the Crossman scheme. We want a pension scheme that is capable of being understood by the public. The State reserve scheme was of such mathematical complexity as to make any large-scale explanation of individual entitlement absolutely impossible.

Mr. Boscawen

The hon. Gentleman has spent 20 minutes talking about the State reserve scheme. Will he say what his scheme is to be? What sort of system will he adopt and who will cross-subsidise whom in that scheme?

Mr. O'Malley

I said that I was going to give the Opposition some answers, but my first answer was to the Front Bench and to one of the creators of the Tory reserve scheme. It was not only the reserve scheme which was wrong. There were also structures and standards in occupational pension schemes which were as low as those in the State scheme. There were options where there were to be no increases in pensions after they were put into award, no revaluation during working life, and even on the best assumptions the levels set in the Tory legislation were far below any reasonable standards in occupational pension schemes today. Those are the reasons why we opposed the Tory pension strategy and why the TUC, representing the millions of workers in this country, opposed that strategy.

I do not know why the hon. Member for Cornwall, North (Mr. Pardoe) spoke as he did in November 1972. Whenever the Liberals voted on the Social Security Act they did not once support the then Government, but now they tell us, after all the difficulties and disadvantages, that they intend to support the Conservative Party. I can only assume that they take this attitude for electoral reasons. There are no valid pension reasons why they should act in this way. They want to get in bed with the Conservative Party because some members of the Liberal Party realise that had they not made the decision that they made a few months ago they could now be riding around in ministerial cars. The attraction is now too strong for them.

We must also refer to other parties in the House. I have read the SNP manifesto, but the SNP would not, under the basic Tory scheme, get the level of pension provision which has been talked about for millions of people in 2019. Similarly, the Welsh Nationals say in their manifesto that the people of Wales have always had a deep-rooted concern for social justice and social equality. The Welsh Nations will not find social justice from the Tory Party—any Welshman knows that, no matter what he may think of my party.

I shall now deal with the future. First, it is essential to end the situation of "two nations" in old age, to get rid of means testing in retirement and to bring to an end the sharp change in an individual household's income which is a tragic hallmark of retirement for many millions of people and would remain so under Conservative proposals. It is also essential that there should be a proper partnership between the State and occupational pension schemes. The TUC, the pensions industry and members of occupational pensions schemes will welcome the Government's intention to recognise the importance of occupational pension provision in this country.

Further, it is essential to use the occupational pensions board, which will, clearly, have an important rôle in the future, with a large body of expertise. I do not know why the hon. Member for Rushcliffe (Mr. Clarke), who is new to the Opposition Front Bench, should sneer at mention of the occupational pensions board. That attitude will not represent the general policy of his party. [Interruption.] If he stops shouting I will give him an answer.

What kind of social justice should there be and what have been the Government's guidelines? First, there must be a rate of accrual adequate to look after the older generation of retirement pensioners who could never be brought off means-testing and never be given an adequate pension under the kind of Bill envisaged in the Tory scene. Second, pensions which are generations out of date even before they are paid have no future and there must be the type of pre-award dynamism which one finds in good final salary schemes in both the public and the private sectors. Third, there should be some post-award dynamism so that there can be protection against inflation.

Fourth, we should get rid of the enormous social problem of poverty among widows. On any count, they are among the most deprived sections of the community. Almost half of all elderly widows in 1974 have to rely on means-tested benefits to be able to live at all. The policies which the previous Government brought forward and the type and scale of widowhood provision would certainly not have met the needs of widows in the twentieth century, even if they had begun to deal with them in the twenty-first century. Last, there must clearly be a build-up of invalidity cover, which is too often lacking.

So the Government's intention—and, I would have hoped, that of the House—is that there should be the speediest implementation of our pensions policy. We shall introduce our White Paper in the near future setting out the structure

to achieve our aims. This will be the basis of consultation both within Parliament and without. Our policy will be aimed for the widest possible support in the country. The Opposition must realise when they ask for a Green Paper what they are doing and what would be inevitable in the production of such a paper. It would set back the implementation of any new pension scheme for much longer than the time scale which we are prepared to envisage.

Our aim simply is for better pensions. On the basis of what has been said tonight we have had no measure of agreement with the Conservative Party either before or during the election. Our decisions so far are in pursuit of the aims I have described. We seek the support of the House in working to achieve them, and in the end it will be not only this House tonight which judges the policy and record of the Government on pensions but the electorate. We shall be delighted to put proposals to the electorate and let them make the comparisons with the shabby arrangements that the previous Government have said they will defend—not only past but future arrangements.

One of the most disappointing features of the debate is that, while we could have had a realistic and forward-looking debate on pensions, that has not been possible. The country will accordingly take note. I have no doubt that it will choose the policies of the Labour Party, aimed at reducing poverty in old age, as against the policies of the previous Government, which are designed to perpetuate it.

Mrs. Knight

The Minister made much of the fact the he was sympathetic to widows. If he is as sympathetic as he said, why is he making widows pay—[Interruption.]

Question put, That the amendment be made:—

The House divided: Ayes 282; Noes 280.

Division No. 61.]	AYES	[9.59 p.m.
Abse, Leo	Barnett, Guy (Greenwich)	Blenkinsop, Arthur
Allaun, Frank	Barnett, Joel (Heywood & Royton)	Boardman, H.
Archer, Peter	Bates, Alf	Booth, Albert
Armstrong, Ernest	Baxter, William	Boothroyd, Miss Betty
Ashley, Jack	Benn, Rt. Hn. Anthony Wedgwood	Bottomley, Rt. Hn. Arthur
Atkins, Ronald	Bennett, Andrew F. (Stockport, N.)	Boyden, James (Bishop Auckland)
Atkinson, Norman	Bidwell, Sydney	Bradley, Tom
Bagier, Gordon A. T.	Bishop, E. S.	B[...]oughton, Sir Alfred
Brown, Bob (Newcastle upon Tyne, W.)	Hart, Rt. Hn. Judith	Padley, Walter
Brown, Hugh D. (Glasgow, Provan)	Hattersley, Roy	Palmer, Arthur
Brown, Ronald (H'kney, S.& Sh'ditch)	Hatton, Frank	Park, George (Coventry, N.E.)
Buchan, Norman	Healey, Rt. Hn. Denis	Parker, John (Dagenham)
Buchanan, Richard (G'gow, Springb'rn)	Heffer, Eric S.	Parry, Robert
Butler, Mrs. Joyce (H' gey, WoodGreen)	Horam, John	Pavitt, Laurie
Callaghan, Rt. Hn. James (Cardiff, S.E.)	Howell, Denis (B'ham, Small Heath)	Perry, Ernest G.
Callaghan, Jim (M'dd'ton & Pr'wich)	Huckfield, Leslie	Phipps, Dr. Colin
Campbell, Ian	Hughes, Rt. Hn. Cledwyn (Anglesey)	Prentice, Rt. Hn. Reg
Cant, R. B.	Hughes, Mark (Durham)	Prescott, John
Carmichael, Neil	Hughes, Robert (Aberdeen, North)	Price, Christopher (Lewisham, W.)
Carter-Jones, Lewis	Hughes, Roy (Newport)	Price, William (Rugby)
Castle, Rt. Hn. Barbara	Hunter, Adam	Radice, Giles
Clemitson, Ivor	Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)	Rees, Rt. Hn. Merlyn (Leeds, S.)
Cocks, Michael	Irving, Rt. Hn. Sydney (Dartford)	Richardson, Miss Jo
Cohen, Stanley	Jackson, Colin	Roberts, Albert (Normanton)
Coleman, Donald	Janner, Greville	Roberts, Gwilym (Cannock)
Colquhoun, Mrs. M. N.	Jay, Rt. Hn. Douglas	Robertson, John (Paisley)
Conlan, Bernard	Jeger, Mrs. Lena	Roderick, Caerwyn E.
Cook, Robert F. (Edinburgh, C.)	Jenkins, Hugh (W'worth, Putney)	Rodgers, George (Chorley)
Craigen, J. M. (G'gow, Maryhill)	Jenkins, Rt. Hn. Roy (B'ham, St'fd)	Rodgers, William (Teesside, St'ckton)
Crawshaw, Richard	John, Brynmor	Rooker, J. W.
Cronin, John	Johnson, James (K'ston upon Hull, W)	Roper, John
Crosland, Rt. Hn. Anthony	Jones, Barry (Flint, E.)	Rose, Paul B.
Cryer, G. R.	Jones, Dan (Burnley)	Ross, Rt. Hn. William (Kilmarnock)
Cunningham, G.(Isl'ngt'n, S & F'sb'ry)	Jones, Alec (Rhondda)	Rowlands, Edward
Dalyell, Tam	Judd, Frank	Sandelson, Neville
Davidson, Arthur	Kaufman, Gerald	Sedgemore, Bryan
Davies, Bryan (Enfield, N.)	Kelley, Richard	Selby, Harry
Davies, Denzil (Llanelli)	Kilroy-Silk, Robert	Shaw, Arnold (Redbridge, Ilford, S.)
Davies, Ifor (Gower)	Lambie, David	Sheldon, Robert (Ashton-under-Lyne)
Davis, Clinton (Hackney, C.)	Lamborn, Harry	Shore, Rt. Hn. Peter(S'pney & P'plar)
Deakins, Eric	Lamond, James	Short, Rt. Hn. E. (N'ctle-u-Tyne)
Dean, Joseph (Leeds, W.)	Latham, Arthur(City of W'minster P'ton)	Short, Mrs. Renée (W'hampton, N.E.)
de Freitas, Rt. Hn. Sir Geoffrey	Lawson, George (Motherwell & Wishaw)	Silkin, Rt. Hn. John (L'sham, D'ford)
Delargy, Hugh	Leadbitter, Ted	Silkin, Rt. Hn. S. C. (S'hwark, Dulwich)
Dell, Rt. Hn. Edmund	Lee, John	Sillars, James
Dempsey, James	Lestor, Miss Joan (Eton & Slough)	Silverman, Julius
Doig, Peter	Lever, Rt. Hn. Harold	Skinner, Dennis
Dormand. J. D.	Lewis, Ron (Carlisle)	Small, William
Douglas-Mann, Bruce	Lipton, Marcus	Smith, John (Lanarkshire, N.)
Duffy, A. E. P.	Lomas, Kenneth	Snape, Peter
Dunn, James A.	Loughlin, Charles	Spearing, Nigel
Dunnett, Jack	Loyden, Eddie	Spriggs, Leslie
Dunwoody, Mrs. Gwyneth	Lyon, Alexander W. (York)	Stallard, A. W.
Eadie, Alex	Lyons, Edward (Bradford, W.)	Stewart, Donald (Western Isles)
Edelman, Maurice	Mabon, Dr. J. Dickson	Stewart, Rt. Hn. M. (H'sth, Fulh'm)
Edge, Geoff	McCartney, Hugh	Stonehouse, Rt. Hn. John
Edwards, Robert (W'hampton, S.E.)	McElhone, Frank	Stott, Roger
Ellis, John (Brigg & Scunthorpe)	MacFarquhar, Roderick	Strang, Gavin
Ellis, Tom (Wrexham)	McGuire, Michael	Strauss, Rt. Hn. G. R.
English, Michael	Mackenzie, Gregor	Summerskill, Hn. Dr. Shirley
Evans, Fred (Caerphilly)	Maclennan, Robert	Swain, Thomas
Evans, Ioan (Aberdare)	McMillan, Tom (Glasgow, C.)	Taverne, Dick
Evans, John (Newton)	McNamara, Kevin	Thomas, D. E. (Merioneth)
Ewing, Harry (St'ling, F'kirk & G'm'th)	Madden, M. O. F.	Thomas, Jeffrey (Abertillery)
Faulds, Andrew	Magee, Bryan	Thorne, Stan (Preston, S.)
Fernyhough, Rt. Hn. E.	Mahon, Simon	Tierney, Sydney
Fitch, Alan (Wigan)	Mallalieu, J. P. W.	Tinn, James
Flannery, Martin	Marks, Kenneth	Tomlinson, John
Fletcher, Tea (Darlington)	Marquand, David	Torney, Tom
Foot, Rt. Hn. Michael	Marshall, Dr. Edmund (Goole)	Tuck, Raphael
Ford, Ben	Mason, Rt. Hn. Roy	Urwin, T. W.
Forrester, John	Mayhew, Christopher (G'wh, W'wch, E.)	Varley, Rt. Hn. Eric G.
Fowler, Gerry (The Wrekin)	Meacher, Michael	Wainwright, Edwin (Dearne Valley)
Fraser, John (Lambeth, Norwood)	Mellish, Rt. Hn. Robert	Walden, Brian (B'm'ham, Lady wood)
Freeson, Reginald	Mikardo, Ian	Walker, Harold (Doncaster)
Galpern, Sir Myer	Millan, Bruce	Walker, Terry (Kingswood)
Garrett, John (Norwich, s.)	Miller, Dr. M. S. (E. Kilbride)	Watkins, David
Garrett, W. E. (Wallsend)	Mitchell, R. C. (S'hampton, Itchen)	Watt, Hamish
George, Bruce	Molloy, William	Weitzman, David
Gilbert, Dr. John	Moonman, Eric	Wellbeloved, James
Ginsburg, David	Morris, Alfred (Wythenshawe)	White, James
Golding, John	Morris, Rt. Hn. John (Aberavon)	Whitehead, Phillip
Gourlay, Harry	Murray, Ronald King	Whitlock, William
Graham, Ted	Murton, Oscar	Wigley, Dafydd (Caernarvon)
Grant, John (Islington, C.)	Newens, Stanley (Harlow)	Willey, Rt. Hn. Frederick
Griffiths, Eddie (Sheffield, Brightside)	Oakes, Gordon	Williams, Alan (Swansea, W.)
Hamilton, James (Bothwell)	Ogden, Eric	Williams, Alan Lee (Hvrng, Hchurch)
Hamilton, William (Fife, C.)	O'Halloran, Michael	Williams, Rt. Hn. Shirley (H't'd & St'ge)
Hamling, William	O'Malley, Brian	Williams, W. T. (Warrington)
Hardy, Peter	Orbach, Maurice	Wilson, Alexander (Hamilton)
Harper, Joseph	Ovenden, John	Wilson, Gordon (Dundee, E.)
Harrison, Walter (Wakefield)	Owen, Dr. David	Wilson, Rt. Hn. Harold (Huyton)
Wilson, William (Coventry, S.E.)	Woof, Robert	TELLERS FOR THE AYES:
Wise, Mrs. Audrey	Wrigglesworth, Ian	Mr. Thomas Cox and
Woodall, Alec	Young, David (Bolton, E.)	Mr. Walter Johnson.
NOES
Adley, Robert	Fletcher-Cooke, Charles	McAdden, Sir Stephen
Aitken, Jonathan	Fookes, Miss Janet	MacArthur, Ian
Alison, Michael (Barkston Ash)	Fowler, Norman (Sutton C'field)	McCrindle, R. A.
Allason, James (Hemel Hempstead)	Fraser, Rt. Hn. Hugh (St'fford & Stone)	Macfarlane, Neil
Ancram, M.	Freud, Clement	MacGregor, John
Archer, Jeffrey	Fry. Peter	McLaren, Martin
Atkins, Rt.Hn. Humphrey (Spelthorne)	Galbraith, Hn. T. G. D.	Macmillan, Rt. Hn. M. (Farnham)
Awdry, Daniel	Gardiner, George (Reigate & Banstead)	McNair-Wilson, Patrick (New Forest)
Baker, Kenneth	Gardner, Edward (S. Fylde)	Madel, David
Balniel, Rt. Hn. Lord	Gibson-Watt, Rt. Hn. David	Marshall, Michael (Arundel)
Banks, Robert	Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)	Marten, Nell
Barber, Rt. Hn. Anthony	Gilmour, Sir John (Fife, E.)	Mather, Carol
Beith, A. J.	Glyn, Dr. Alan	Maude, Angus
Bell, Ronald	Goodhart, Philip	Maudling, Rt. Hn. Reginald
Bennett, Dr. Reginald (Fareham)	Goodhew, Victor	Mawby, Ray
Benyon, W.	Goodlad, A.	Maxwell-Hyslop, R. J.
Berry, Hon. Anthony	Gorst, John	Mayhew, Patrick (Royal T' bridge Wells)
Biffen, John	Gow, Ian (Eastbourne)	Meyer, Sir Anthony
Biggs-Davison, John	Gower, Sir Raymond (Barry)	Miller, Hal (B'grove & R'ditch)
Blaker, Peter	Grant, Anthony (Harrow, C.)	Miscampbell, Norman
Boardman, Tom (Leicester, S.)	Gray, Hamish	Mitchell, David (Basingstoke)
Body, Richard	Griffiths, Eldon (Bury St. Edmunds)	Moate, Roger
Boscawen, Hon. Robert	Grist, Ian	Money, Ernie
Bowden, Andrew (Brighton, Kemptown)	Grylls, Michael	Monro, Hector
Boyson, Dr. Rhodes (Brent, N.)	Gurden, Harold	Moore, J. E. M. (Croydon, C.)
Braine, Sir Bernard	Hall, Sir John	Morgan, Geraint
Bray, Ronald	Hall-Davis, A. G. F.	Morgan-Giles, Rear-Adm.
Brewis, John	Hamilton, Michael (Salisbury)	Morris, Michael (Northampton, S.)
Brittan, Leon	Hampson, Dr. Keith	Morrison, Charles (Devizes)
Brocklebank-Fowler, Christopher	Hannam, John	Morrison, Peter (City of Chester)
Brown, Sir Edward (Bath)	Harrison, Col. Sir Harwood (Eye)	Mudd, David
Bruce-Gardyne, J.	Harvie Anderson, Rt. Hn. Miss	Neave, Airey
Bryan, Sir Paul	Hastings, Stephen	Neubert, Michael
Buchanan-Smith, Alick	Havers, Sir Michael	Newton, Tony (Braintree)
Buck, Antony	Heyhoe, Barney	Normanton, Tom
Budgen, Nick	Heath, Rt. Hn. Edward	Nott, John
Bulmer, Esmond	Henderson, J.S.B.(Dunbartonshire, E.)	Onslow, Cranley
Burden, F. A.	Heseltine, Michael	Oppenheim, Mrs. Sally
Butler, Adam (Bosworth)	Higgins, Terence	Orr, Capt. L. P. S.
Carlisle, Mark	Hill, James A.	Osborn, John
Carr, Rt. Hn. Robert	Holland, Philip	Page, Rt. Hn. Graham (Crosby)
Chalker, Mrs. Lynda	Hordern, Peter	Page, John (Harrow, W.)
Channon, Paul	Howe, Rt. Hn. Sir Geoffrey (Surrey, E.)	Pardoe, John
Chataway, Rt. Hn. Christopher	Howell, David (Guildford)	Parkinson, Cecil (Hertfordshire, S.)
Churchill, W. S.	Howell, Ralph (Norfolk, North)	Pattie, Geoffrey
Clark, A. K. M. (Plymouth, Sutton)	Howells, Geraint (Cardigan)	Percival, Ian
Clark, William (Croydon, S.)	Hunt, John	Peyton, Rt. Hn. John
Clarke, Kenneth (Rushcliffe)	Hurd, Douglas	Pink, R. Bonner
Cockcroft, John	Iremonger, T. L.	Price, David (Eastleigh)
Cooke, Robert (Bristol, W.)	Irvine, Bryant Godman (Rye)	Prior, Rt. Hn. James
Cope, John	James, David	Pym, Rt. Hn. Francis
Cormack, Patrick	Jenkin, Rt. Hn. P. (R'dge W'std &W'fd)	Quennell, Miss J. M.
Corrie, John	Johnson Smith, G. (E. Grinstead)	Raison, Timothy
Costain, A. P.	Jones, Arthur (Daventry)	Rathbone, Tim
Crouch, David	Jopling, Michael	Rawlinson, Rt. Hn. Sir Peter
Crowder, F. P.	Joseph, Rt. Hn. Sir Keith	Redmond, Robert
Davies, Rt. Hn. John (Knutsford)	Kaberry, Sir Donald	Rees, Peter (Dover & Deal)
d'Avigdor-Goldsmid, Maj-Gen. James	Kellett-Bowman, Mrs. Elaine	Rees-Davies, W. R.
Dean, Paul (Somerset, N.)	Kershaw, Anthony	Renton, Rt. Hn. Sir David (H't' gd' ns' re)
Deedes, Rt. Hn. W. F.	Kimball, Marcus	Renton, R. T. (Mid-Sussex)
Dixon, Piers	King, Evelyn (Dorset S.)	Rhys Williams, Sir Brandon
Dodds-Parker, Sir Douglas	King, Tom (Bridgwater)	Ridley, Hn. Nicholas
Dodsworth, Geoffrey	Kirk, Peter	Ridsdale, Julian
Drayson, Burnaby	Kitson, Sir Timothy	Rippon, Rt. Hn. Geoffrey
du Cann, Rt. Hn. Edward	Knight, Mrs. Jill	Roberts, Wyn (Conway)
Durant, Tony	Knox, David	Ross, Stephen (Isle of Wight)
Dykes, Hugh	Lamont, Norman	Rossi, Hugh (Hornsey)
Eden, Rt. Hn. Sir John	Lane, David	Rost, Peter (Derbyshire, S.-E.)
Edwards, Nicholas (Pembroke)	Langford-Holt, Sir John	Royle, Sir Anthony
Elliott, Sir William	Latham, Michael (Melton)	Sainsbury, Tim
Emery, Peter	Lawrence, Ivan	St. John-Stevas, Norman
Eyre, Reginald	Lawson, Nigel (Blaby)	Scott-Hopkins, James
Fairgrieve, Russell	Le Marchant, Spencer	Shaw, Giles (Pudsey)
Fell, Anthony	Lester, Jim (Beeston)	Shaw, Michael (Scarborough)
Fenner, Mrs. Peggy	Lewis, Kenneth (Rtland & Stmford)	Shelton, William (L'mb'th, Streath 'm)
Fidler, Michael	Lloyd, Ian (Havant & Waterloo)	Shersby, Michael
Fi[...]berg, Geoffrey	Loveridge, John	Silvester, Fred
Fisher, Sir Nigel	Luce, Richard	Sims, Roger
Sinclair, Sir George	Temple-Morris, Peter	Wall, Patrick
Skeet, T. H. H.	Thatcher, Rt. Hn. Margaret	Walters, Dennis
Smith, Dudey (W'wick & L'm'ngton)	Thomas, Rt. Hn. P. (B'net, H'dn S.)	Weatherill, Bernard
Spence, John	Thorpe, Rt. Hn. Jeremy	Wells, John
Spicer, Jim (Dorset, W.)	Townsend, C. D.	Whitelaw, Rt. Hn. William
Stainton, Keith	Trotter, Neville	Wiggin, Jerry
Stanbrook, Ivor	Tugendhat, Christopher	Winstanley, Dr. Michael
Steel, David	Tyler, Paul	Winterton, Nicholas
Steen, Anthony (L'pool, Wavertree)	van Straubenzee, W. R.	Wood, Rt. Hn. Richard
Stewart, Ian (Hitchin)	Vaughan, Dr. Gerard	Woodhouse, Hn. Christopher
Stodart, Rt. Hn. A. (Edinburgh, W.)	Viggers, Peter	Worsley, Sir Marcus
Stokes, John	Waddington, David	Young, Sir George (Ealing, Acton)
Stradling Thomas, John	Wainwright, Richard (Colne Valley)
Tapsell, Peter	Wakeham, John	TELLERS FOR THE NOES:
Taylor, Edward M. (Glgow, C'cart)	Walder, David (Clitheroe)	Mr. Walter Clegg and
Taylor, Robert (Croydon, N.W.)	Walker, Rt. Hn. Peter (Worcester)	Mr. Paul Hawkins.
Tebbit, Norman	Walker-Smith, Rt. Hn. Sir Derek

Question accordingly agreed to.

Main Question, as amended, put:

The House divided: Ayes 282, Noes 279.

Division No. 62.]	AYES	[10.16 p.m.
Abse, Leo	Delargy, Hugh	Hughes, Robert (Aberdeen, North)
Allaun, Frank	Dell, Rt. Hn. Edmund	Hughes, Roy (Newport)
Archer, Peter	Dempsey, James	Hunter, Adam
		Irvine, Rt. Hn. Sir A. (L'p'I, Edge HI)
Armstrong, Ernest	Doig, Peter	Irving, Rt. Hn. Sydney (Dartford)
Ashley, Jack	Dormand, J. D.	Jackson, Colin
Atkins, Ronald	Douglas-Mann, Bruce	Janner, Greville
Atkinson, Norman	Duffy, A. E. P.	Jay, Rt. Hn. Douglas
Bagier, Gordon A. T.	Dunn, James A.	Jeger, Mrs. Lena
Barnett, Guy (Greenwich)	Dunnett, Jack	Jenkins, Hugh (W'worth, Putney)
Barnett, Joel (Heywood & Royton)	Dunwoody, Mrs. Gwyneth	Jenkins, Rt. Hn. Roy (B'ham, St'fd)
Bates. Alf	Eadie, Alex	John, Brynmor
Baxter, William	Edelman, Maurice	Johnson, James (K'ston upon Hull, W)
Benn, Rt. Hn. Anthony Wedgwood	Edge, Geoff	Jones, Barry (Flint, E.)
Bennett, Andrew F. (Stockport, N.)	Edwards, Robert (W'hampton, S.E.)	Jones, Dan (Burnley)
Bidwell, Sydney	Ellis, John (Brigg & Scunthorpe)	Jones, Alec (Rhondda)
Bishop, E. S.	Ellis, Tom (Wrexham)	Judd, Frank
Blenkinsop, Arthur	English, Michael	Kaufman, Gerald
Boardman, H.	Evans, Fred (Caerphilly)	Kelley, Richard
Booth, Albert	Evans, Ioan (Aberdare)	Kilroy-Silk, Robert
Boothroyd, Miss Betty	Evans, John (Newton)	Lambie, David
Bottomley, Rt. Hn. Arthur	Ewing, Harry (St'ling, F'kirk & G'm'th)	Lamborn, Harry
Boyden, James (Bishop Auckland)	Faulds, Andrew	Lamond, James
Bradley, Tom	Fernyhough, Rt. Hn. E.	Latham, Arthur(City of W' minster P'ton)
Broughton, Sir Alfred	Fitch, Alan (Wigan)	Lawson, George (Motherwell & Wishaw)
Brown, Bob (Newcastle upon Tyne, W.)	Flannery, Martin	Leadbitter, Ted
Brown, Hugh D. (Glasgow, Provan)	Fletcher, Ted (Darlington)	Lee, John
Brown, Ronald (H'kney, S. & Sh' ditch)	Foot, Rt. Hn. Michael	Lestor, Miss Joan (Eton & Slough)
Buchan, Norman	Ford, Ben	Lever, Rt. Hn. Harold
Buchanan, Richard (G'gow, Spring b'rn)	Forrester, John	Lewis, Ron (Carlisle)
Butler, Mrs. Joyce (H'gey, WoodGreen)	Fowler, Gerry (The Wrekin)	Lipton, Marcus
Callaghan. Rt. Hn. James (Cardiff, S.E.)	Fraser, John (Lambeth, Norwood)	Lomas, Kenneth
Callaghan, Jim (M'dd'ton & Pr'wich)	Freeson, Reginald	Loughlin, Charles
Campbell, Ian	Galpern, Sir Myer	Loyden, Eddie
Cant, R. B.	Garrett, John (Norwich, S.)	Lyon, Alexander W. (York)
Carmichael, Neil	Garrett, W. E. (Wallsend)	Lyons, Edward (Bradford, W.)
Carter-Jones, Lewis	George, Bruce	Mabon, Dr. J. Dickson
Castle, Rt. Hn. Barbara	Gilbert, Dr. John	McCartney, Hugh
Clemitson, Ivor	Ginsburg, David	McElhone, Frank
Cocks, Michael	Golding, John	MacFarquhar, Roderick
Cohen, Stanley	Gourlay, Harry	McGuire, Michael
Coleman, Donald	Graham, Ted	Mackenzie, Gregor
Colquhoun, Mrs. M. N.	Grant, John (Islington, C.)	Maclennan, Robert
Conlan, Bernard	Griffiths, Eddie (Sheffield, Brightside)	McMillan, Tom (Glasgow, C.)
Cook, Robert F. (Edinburgh, C.)	Hamilton, James (Bothwell)	McNamara, Kevin
Craigen, J. M. (G'gow, Maryhill)	Hamilton, William (Fife, C.)	Madden, M. O. F.
Crawshaw, Richard	Hamling, William	Magee, Bryan
Cronin, John	Hardy, Peter	Mahon, Simon
Crosland, Rt. Hn. Anthony	Harper, Joseph	Mallalieu, J. P. W.
Cryer, G. R.	Harrison, Walter (Wakefield)	Marks, Kenneth
Cunningham, G.(Isl'ngt'n, S & F'sb'ry)	Hart, Rt. Hn. Judith	Marquand, David
Dalyell, Tam	Hattersley, Roy	Marshall, Dr. Edmund (Goole)
Davidson, Arthur	Hatton, Frank	Mason, Rt. Hn. Roy
Davies, Bryan (Enfield, N.)	Healey, Rt. Hn. Denis	Mayhew, Christopher (G'wh, W'wch, E.)
Davies, Denzil (Llanelli)	Heffer, Eric S.	Meacher, Michael
Davies, Ifor (Gower)	Horam, John	Mellish, Rt. Hn. Robert
Davis, Clinton (Hackney, C.)	Howell, Denis (B'ham, Small Heath)	Mikardo, Ian
Deakins, Eric	Huckfield, Leslie	Millan, Bruce
Dean, Joseph (Leeds, W.)	Hughes, Rt. Hn. Cledwyn (Anglesey)	Miller, Dr. M. S. (E. Kilbride)
da Freitas, Rt. Hn. Sir Geoffrey	Hughes, Mark (Durham)	Mitchell, R. C. (S'hampton, Itchen)
Molloy, William	Roper, John	Tinn, James
Moonman, Eric	Rose, Paul B.	Tomlinson, John
Morris, Alfred (Wythenshawe)	Ross, Rt. Hn. William (Kilmarnock)	Torney, Tom
Morris, Rt. Hn. John (Aberavon)	Rowlands, Edward	Tuck, Raphael
Mulley, Rt. Hn. Frederick	Sandelson, Neville	Urwin, T. W.
Murray, Ronald King	Sedgemore, Bryan	Varley, Rt. Hn. Eric G.
Newens. Stanley (Harlow)	Selby, Harry	Wainwright, Edwin (Dearne Valley)
Oakes, Gordon	Shaw, Arnold (Redbridge, Ilford, S.)	Walden, Brian (B'm [...]am, Ladywood)
Ogden, Eric	Sheldon, Robert (Ashton-under-Lyne)	Walker, Harold (Doncaster)
O'Halloran, Michael	Shore, Rt. Hn. Peter (S'pney & P'plar)	Walker, Terry (Kingswood)
O'Malley, Brian	Short, Rt. Hn. E. (N' clle-u-Tyne)	Watkins, David
Orbach, Maurice	Short, Mrs. Renée (W'hampton, N.E.)	Watt, Hamish
Ovenden, John	Silkin, Rt. Hn. John (L'sham, D'ford)	Weltzman, David
Owen, Dr. David	Silkin, Rt. Hn. S.C.(S'hwark, Dulwich)	Wellbeloved, James
Padley, Walter	Sillars, James	White, James
Palmer, Arthur	Silverman, Julius	Whitehead, Phillip
Park, George (Coventry, N.E.)	Skinner, Dennis	Whitlock, William
Parker, John (Dagenham)	Small, William	Wigley, Dafydd (Caernervon)
Parry, Robert	Smith, John (Lanarkshire, N.)	Willey, Rt. Hn. Frederick
Pavitt, Laurie	Snape, Peter	Williams, Alan (Swansea, W.)
Perry, Ernest G	Spearing, Nigel	Williams, Alan Lee (Hvrng, Hchurch)
Phipps, Dr. Colin	Spriggs, Leslie	Williams, Rt. Hn. Shirley (H'f'd & St'ge)
Prentice, Rt. Hn. Reg	Stallard, A. W.	Williams, W. T. (Warrington)
Prescott, John	Stewart, Donald (Western Isles)	Wilson, Alexander (Hamilton)
Price, Christopher (Lewisham, W.)	Stewart, Rt. Hn. M. (H'sth, Fulh'm)	Wilson, Gordon (Dundee, E.)
Price, William (Rugby)	Stonehouse, Rt. Hn. John	Wilson, Rt. Hn. Harold (Huyton)
Radice, Giles	Stott, Roger	Wilson, William (Coventry, S.E.)
Rees, Rt. Hn. Merlyn (Leeds, S.)	Strang, Gavin	Wise, Mrs. Audrey
Richardson, Miss Jo	Strauss, Rt. Hn. G. R.	Woodall, Alec
Roberts, Albert (Normanton)	Summerskill, Hn. Dr. Shirley	Woof, Robert
Roberts, Gwilym (Cannock)	Swain, Thomas	Wrigglesworth, Ian
Robertson, John (Paisley)	Taverne, Dick	Young, David (Bolton, E.)
Roderick, Caerwyn E.	Thomas, D. E. (Merioneth)
Rodgers, George (Chorley)	Thomas, Jeffrey (Abertillery)	TELLERS FOR THE AYES:
Rodgers, William (Teesside, St'ckton)	Thorne, Stan (Preston, S.)	Mr. Thomas Cox and
Rooker, J. W.	Tierney, Sydney	Mr. Walter Johnson.
NOES
Adley, Robert	Clark, A. K. M. (Plymouth, Sutton)	Goodhart, Philip
Aitken, Jonathan	Clark, William (Croydon, S.)	Goodhew, Victor
Alison, Michael (Barkston Ash)	Clarke, Kenneth (Rushcliffe)	Goodlad, A.
Allason, James (Hemel Hempstead)	Cockcroft, John	Gorst, John
Ancram, M.	Cooke, Robert (Bristol, W.)	Gow, Ian (Eastbourne)
Archer, Jeffrey	Cope, John	Gower, Sir Raymond (Barry)
Atkins, Rt. Hn. Humphrey (Spelthorne)	Cormack, Patrick	Grant, Anthony (Harrow, C.)
Awdry, Daniel	Corrie, John	Gray, Hamish
Baker, Kenneth	Costain, A. P.	Griffiths, Eldon (Bury St. Edmunds)
Balniel, Rt. Hn. Lord	Crouch, David	Grist, Ian
Banks, Robert	Crowder, F. P.	Grylls, Michael
Barber, Rt. Hn. Anthony	Davies, Rt. Hn. John (Knutsford)	Gurden, Harold
Beith, A. J.	d'Avigdor-Goldsmid, Maj-Gen. James	Hall, Sir John
Bell, Ronald	Dean, Paul (Somerset, N.)	Hall-Davis, A. G. F.
Bennett, Dr. Reginald (Fareham)	Deedes, Rt. Hn. W. F.	Hamilton, Michael (Salisbury)
Benyon, W.	Dixon, Piers	Hampson, Dr. Keith
Berry, Hon. Anthony	Dodds-Parker, Sir Douglas	Hannam, John
Biffen, John	Dodsworth, Geoffrey	Harrison, Col. Sir Harwood (Eye)
Biggs-Davison, John	Drayson, Burnaby	Harvie Anderson, Rt. Hn. Miss
Blaker, Peter	du Cann, Rt. Hn. Edward	Hastings, Stephen
Boardman, Tom (Leicester, S.)	Durant, Tony	Havers, Sir Michael
Body, Richard	Dykes, Hugh	Heyhoe, Barney
Boscawen, Hon. Robert	Eden, Rt. Hn. Sir John	Heath, Rt. Hn. Edward
Bowden, Andrew (Brighton, Kemptown)	Edwards, Nicholas (Pembroke)	Henderson, J.S.B.(Dunbartonshire, E,)
Boyson, Dr. Rhodes (Brent, N.)	Elliott, Sir William	Heseltine, Michael
Braine, Sir Bernard	Emery, Peter	Higgins, Terence
Bray, Ronald	Eyre, Reginald	Hill, James A.
Brewis, John	Fairgrieve, Russell	Holland, Philip
Brittan, Leon	Fenner, Mrs. Peggy	Hordern, Peter
Brocklebank-Fowler, Christopher	Fidler, Michael	Howe, Rt. Hn. Sir Geoffrey(Surrey, E.)
Brown, Sir Edward (Bath)	Firtsberg, Geoffrey	Howell, David (Guildford)
Bruce-Gardyne, J.	Fisher, Sir Nigel	Howell, Ralph (Norfolk, North)
Bryan, Sir Paul	Fletcher-Cooke, Charles	Howells, Geraint (Cardigan)
Buchanan-Smith, Alick	Fookes, Miss Janet	Hunt, John
Buck, Antony	Fowler, Norman (Sutton C'field)	Hurd, Douglas
Budgen, Nick	Fraser, Rt. Hn. Hugh (St'fford & Stone)	Iremonger, T. L.
Bulmer, Esmond	Freud, Clement	Irvine, Bryant Godman (Rye)
Burden, F. A.	Fry, Peter	James, David
Butler, Adam (Bosworth)	Galbraith, Hn. T. G. D.	Jenkin. Rt. Hn. P. (R'dgeW'std & W'fd)
Carlisle, Mark	Gardiner, George (Reigate & Banstead)	Johnson Smith, G. (E. Grinstead)
Carr, Rt. Hn. Robert	Gardner, Edward (S. Fylde)	Jones, Arthur (Daventry)
Chalker, Mrs. Lynda	Gibson-Watt, Rt. Hn. David	Jopling, Michael
Channon, Paul	Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'rn)	Joseph, Rt. Hn. Sir Keith
Chataway, Rt. Hn. Christopher	Gilmour, Sir John (Fife, E.)	Kaberry, Sir Donald
Churchill, W. S.	Glyn, Dr. Alan	Kellett-Bowman, Mrs. Elaine
Kershaw, Anthony	Mudd, David	Skeet, T. H. H.
Kimball, Marcus	Neave, Airey	Smith, Dudey (W'wick & L'm'ngton)
King, Evelyn (Dorset S.)	Neubert, Michael	Spence, John
King, Tom (Bridgwater)	Newton, Tony (Braintree)	Spicer, Jim (Dorset, W.)
Kirk, Peter	Normanton, Tom	Stainton, Keith
Kitson, Sir Timothy	Nott, John	Stanbrook, Ivor
Knight, Mrs. Jill	Onslow, Cranley	Steel, David
Knox, David	Oppenheim, Mrs. Sally	Steen, Anthony (L'pool, Wavertree)
Lamont, Norman	Orr, Capt. L. P. S.	Stewart, Ian (Hitchin)
Lane, David	Osborn, John	Stodart, Rt. Hn. A. (Edinburgh, W.)
Langford-Holt, Sir John	Page, Rt. Hn. Graham (Crosby)	Stokes, John
Latham, Michael (Melton)	Page, John (Harrow, W.)	Stradling Thomas, John
Lawrence, Ivan	Pardoe, John	Tapsell, Peter
Lawson, Nigel (Blaby)	Parkinson, Cecil (Hertfordshire, S.)	Taylor, Edward M. (Glgow, C'cart)
Le Marchant, Spencer	Pattie, Geoffrey	Taylor, Robert (Croydon, N.W.)
Lester, Jim (Beeston)	Percival, Ian	Tebbit, Norman
Lewis, Kenneth (Rtland & Stmford)	Peyton, Rt. Hn. John	Temple-Morris, Peter
Lloyd, Ian (Havant & Waterloo)	Pink, R. Bonner	Thatcher, Rt. Hn. Margaret
Loveridge, John	Price, David (Eastleigh)	Thomas, Rt. Hn. P. (B'net, H'dn S.)
Luce, Richard	Prior, Rt. Hn. James	Thorpe, Rt. Hn. Jeremy
McAdden, Sir Stephen	Pym, Rt. Hn. Francis	Townsend, C. D.
MacArthur, Ian	Quennell, Miss J. M.	Trotter, Neville
McCrindle, R. A.	Raison, Timothy	Tugendhat, Christopher
Macfarlane, Neil	Rathbone, Tim	Tyler, Paul
MacGregor, John	Rawlinson, Rt. Hn. Sir Peter	van Straubenzee, W. R.
McLaren, Martin	Redmond, Robert	Vaughan, Dr. Gerard
Macmillan, Rt. Hn. M. (Farnham)	Rees, Peter (Dover & Deal)	Viggers, Peter
McNair-Wilson, Patrick (New Forest)	Rees-Davies, W. R.	Waddington, David
Madel, David	Renton, Rt. Hn. Sir David (H't' gd' ns' re)	Wainwright, Richard (Colne Valley)
Marshall, Michael (Arundel)	Renton, R. T. (Mid-Sussex)	Wakeham, John
Marten, Neil
Mather, Carol	Rhys Williams, Sir Brandon	Walder, David (Clitheroe)
Maude, Angus	Ridley, Hn. Nicholas	Walker, Rt. Hn. Peter (Worcester)
Maudling, Rt. Hn. Reginald	Ridsdale, Julian	Walker-Smith, Rt. Hn. Sir Derek
Mawby, Ray	Rippon, Rt. Hn. Geoffrey	Wall, Patrick
Maxwell-Hyslop, R. J.	Roberts, Wyn (Conway)	Walters, Dennis
Mayhew, Patrick (Royal T'bridge Wells)	Ross, Stephen (Isle of Wight)	Weatherill, Bernard
Meyer, Sir Anthony	Rossi, Hugh (Hornsey)	Wells, John
Miller, Hal (B'grove & R'ditch)	Rost, Peter (Derbyshire, S.-E.)	Whitelaw, Rt. Hn. William
Miscampbell, Norman	Royle, Sir Anthony	Wiggin, Jerry
Mitchell, David (Basingstoke)	Sainsbury, Tim	Winstanley, Dr. Michael
Moate, Roger	St. John-Stevas, Norman	Winterton, Nicholas
Money, Ernle	Scott-Hopkins, James	Wood, Rt. Hn. Richard
Monro, Hector	Shaw, Giles (Pudsey)	Woodhouse, Hn. Christopher
Moore, J. E. M. (Croydon, C.)	Shaw, Michael (Scarborough)	Worsley, Sir Marcus
Morgan, Geraint	Shelton, William (L'mb'th, Streath'm)	Young, Sir George (Ealing, Acton)
Morgan-Giles, Rear-Adm.	Shersby, Michael
Morris, Michael (Northampton, S.)	Silvester, Fred	TELLERS FOR THE NOES:
Morrison, Charles (Devizes)	Sims, Roger	Mr. Walter Clegg and
Morrison, Peter (City of Chester)	Sinclair, Sir George	Mr. Paul Hawkins.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Question accordingly agreed to.

Resolved, That this House notes that the financial provision made under the Social Security Act 1973 was insufficient to support an adequate level of retirement pension; welcomes the prompt improvements in pensions made by the present Administration; endorses the determination of the Government to ensure that employees are relieved from contributing to a scheme which would have provided inade quate pension cover, especially for women and older workers; recognises that the pension arrangements under the Act could not have served as a sound foundation for an effective and fair pensions policy directed to relating the living standards of pensioners more closely to their earnings and avoiding reliance on means tested benefits; and calls upon the Government to bring forward as soon as possible proposals for public and Parliamentary discussion which would meet the legitimate aspirations of workers in modern conditions and merit the widest possible support.