LUMP SUM PAYMENTS TO PENSIONERS (Hansard, 17 November 1977)

§ Mrs. Lynda Chalker (Wallasey)
We welcome the Government's reintroduction of the Christmas bonus or lump-sum payment for pensioners and others. As my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said: We note with pleasure that the Government have turned their back on all the various criticisms that they addressed to a comparable proposal that was introduced by the Government of which I was a member".—[Official Report, 4th November 1977; Vol. 938, c. 251.] He was referring to the time when he was a Minister in the Conservative Government.
I have only one argument with my right hon. Friend. It is his description of the lump-sum payment as being "comparable". Compared with the £10 paid in 1972, the 1977 bonus of £10 is less than half the true value. To be truly equivalent in spending power this year's bonus should be about £21, working on the retail price index. Even comparing it with the £10 bonus in 1974 it should be £16.
Although we say that it is welcome, we must keep its value for the recipients in true proportion. We well remember being accused of being unrealistic when we kept the 1973 bonus at £10. At that time it would have had to be increased to about £11 to keep its original value.
Over the last few weeks, I have asked potential recipients what use they will make of the bonus. Most of them say that they will buy a few Christmas presents but they will save as much as they can for fuel bills this winter. We know that there are other means of helping towards fuel bills, but they are an everlasting worry for the elderly, the handicapped and disadvantaged in our society. Their attitude is not surprising.
906 Let us look at the retail price index for fuel and light. Taking December 1972 as 100, that retail price index is now 230.45.
In spite of our realisation that the bonus can be only small—and we must be grateful for small mercies—we must realise why it is being reintroduced. We know how much this tax-free bonus is appreciated. The House will know that every market research survey conducted on benefits has shown the recipients' great appreciation of it. It is not, therefore, surprising that this Government have tumbled to the popularity of the benefit at the beginning of their fourth year in office. They know that this help is very well received by the public.
We welcome the extension of the bonus to new categories of people—those receiving invalid care allowances, those receiving non-contributory invalidity pensions and, from this week, disabled housewives. The new recipients amount to only about 160,000 but they will be grateful for the bonus, small as it is. However, now that the bonus has been extended so far, there must be a little questioning about those not included.
The hon. Lady the Member for Halifax (Dr. Summerskill) spoke in 1972—in c. 1024 of the Official Report of 20th November of that year—about "glaring exclusions", and there were more then than there are now. But still there are some questions I have to put to the Minister, of which I have given him notice. First, how much would it cost to give the £10 bonus to men aged between 60 and 65 who are on invalidity pension and at present seem excluded? They are people who cannot work but do not benefit from the bonus. Also—and I recognise that this is difficult for the Minister to answer—can anything be done for the couple with the man aged 65 or over but the wife under 60? Perhaps unreasonably but certainly undeniably, this group feel angry about their exclusion. Finally, will the Minister confirm that war pensioners, regardless of age, will have their Christmas bonus? I gather that there has been some doubt about this in the past.
We recognise that this benefit, although introduced for one year in the first place, then repeated, and taken up by the present Government in 1974 and now again, 907 is fast becoming much more of a universal benefit than was originally envisaged. The provision for it is so widely drawn now that any group outside it are saying "Why not us as well?" This is so especially among the long-term unemployed who are excluded.
It is clear from earlier debates that the Minister's thought was not to have a bonus again this year. This should be noted. On 29th April, he replied to my hon. Friend the Member for Uxbridge (Mr. Shersby) in terms which showed that the Government had fundamental doubts about the payment of the bonus. When asked whether it was his intention to pay a bonus to retirement pensioners at Christmas 1977, he said: No. A bonus payment is bound to be arbitrary in coverage, and to exclude many deserving groups. A general uprating of benefits, such as will take place in November, is an altogether fairer method of distributing the resources which are available."—[Official Report, 29th April 1977; Vol. 930, c. 462] We understand that, but no one will deny the pleasure with which the announcement has been received. So the question remains: why have the Government suddenly made a change of course? In 1973—this is column 580 of Hansard for 19th October 1973—the right hon. Lady the Member for Blackburn (Mrs. Castle) levelled at us the accusation that the introduction of the bonus had been very much a matter of last thoughts, and she went on to say that the bonus was not really the appropriate answer.
We are well aware of her view, but she spoke then of lifting pensions and other benefits. We acknowledge that the Government have had to lift pensions and other benefits, against the background of mammoth inflation, but the Government have still returned to the bonus. I draw the Minister's attention to the comment of his right hon. Friend the Member for Deptford (Mr. Silkin) in 1973, that a pension of £10 and £16 would obviate the need for a repetition of the once-and-for-all £10 bonus".—[Official Report, 19th October 1973; Vol. 861, c. 578.] The Secretary of State has proudly patted himself on the back this week now that we have reached pensions of £17.50 for the single person and £28 for a couple. Yet the bonus is here again—for different reasons, I suspect. What are 908 the reasons for the change of course? Plainly, the Government have realised the popularity of this bonus.
Finally, on this clause, we must express our thanks to the Post Office staff for making it possible for the bonus to be paid. Without their assistance it would be utterly impossible, and we recognise that it must cause a quite heavy additional strain on them.
Clearly, the bonus is welcome. Certainly, no one will say that the pensioner's payment is not welcome. But it must be seen for what it is—great as an idea but very small in purchasing power now.

§ The Minister for Social Security (Mr. Stanley Orme)
My hon. Friends will have noted what was said by the hon. Lady the Member for Wallasey (Mrs. Chalker) in welcoming the payment of the Christmas bonus, which was in sharp contrast to what was said in the previous debate on public expenditure. I cannot let this opportunity pass without saying that this is public expenditure. The Government find themselves in a position to pay the Christmas bonus this year to pensioners to give them that extra purchasing power at a time when they need it. The Government's action will be widely welcomed.
I heard what the hon. Lady said about a decent pension. When this Government discontinued the payment of the bonus, there were two upratings of the pension in one year. This year the pension has been raised to £17.50 for a single person and to £28 for a married couple—an increase in real terms since the last increase by a Conservative Government in 1973. Although it is never enough and my hon. Friends will be pressing for more, we can be proud of the actions of this Government on pensions. This week I met a very formidable and respected deputation of pensioners. This Government have not neglected pensioners.
The hon. Lady said that many pensioners will use this bonus to assist in paying fuel bills. She is probably correct, but in heating allowances this year the Government will be paying to supplementary benefit and FIS recipients £88 million in heating additions. In addition, £22 million will be spent, this time by the Department of Energy, in meeting 909 one-quarter of the cost of certain electricity bills and making cash grants of £5. That is another indication that the Government are aware of the problem of fuel costs. It does not behove the hon. Lady to criticise us. She and her party have pressed us to remove all restrictions on the public sector so that prices can rise to the market level.

§ Mrs. Chalker
The right hon. Gentleman is well aware that it has been only because of the high fuel bills and the rate at which fuel prices, particularly electricity prices, have risen since the Government came into office that we have had to resort to these measures to help pensioners. We do not decry the efforts that are made. We simply point them out for what they are—benefits to help those most vulnerable to cope with mammoth increases in fuel charges.

§ Mr. Orme
We could become involved in a much wider debate, but that would not be allowed on this clause. I leave the Committee to draw its own conclusions from the Government's records.
The long-term unemployed are excluded as recipients. We have examined this problem, but there is an administrative difficulty about identifying them. It would involve a colossal job throughout the whole of the United Kingdom. Had it been possible to identify them, we would have paid them the benefit. This year the categories have been widened as far as possible.
The hon. Lady asked how many women aged under 60 who are wives of retirement pensioners will not qualify for the bonus. We estimate the number to be about 150,000 in round figures. The reason for excluding this category is again the question of identification. There is no record either of such a woman drawing benefit or of her age. All one has is the husband's record as he draws the pension. It would be impossible. It is not just that we do not want to do it, but we could not identify that category. I hope the Committee will recognise that it would be an addition to the work that goes on when such payments are made—and here I should like to echo what has already been said about the terrific job that the Post Office does. Such a task could not be put on my Department. It would be extremely unsatisfactory for the Department to do this work of identifica- 910 tion, and it could lead to thousands of anomalies occurring without covering the point in the way that hon. Members would wish.
10.15 p.m.
I have been asked whether those aged between 60 and 65 who are on invalidity pensions will be excluded. They will not. Everybody who is entitled to an invalidity pension can qualify for a bonus provided all the other conditions are satisfied. That includes those on contributory and non-contributory pensions. I was also asked about war pensioners and war widows. Age is not relevant in the case of a war widow, who will get the bonus automatically, nor will it be relevant in the case of a war-disabled pensioner who is entitled to unemployment benefit, retirement pension or other qualifying benefit. War pensioners will be put on precisely the same footing as retired pensioners.
We have considered these categories not in order to restrict them but to extend them, and that is what we have done. I regret that it has not been possible to extend them to the two categories that have been particularly mentioned today. That is unfortunate.
I hope that I have answered all the points that have been raised.