§ 5. Mr. Higginsasked the Secretary of State for Social Services to what extent contributions paid by those already in receipt of national insurance pensions cover the increase due from 14th November 1977.
§ Mr. OrmeNational insurance is on a pay-as-you-go basis, so that the present generation in work pay for the pensions of the present generation of pensioners.
§ Mr. HigginsThat is an unbelievably evasive answer. Will the Minister please answer the Question that is on the Order Paper? Is it not the case that the national insurance pension increase is not covered by the contributions of those already retired, and on that basis are not those now in receipt of part pensions—particularly the over-80s who were helped by the previous Conservative Government—entitled to the full amount of the increase and not merely the same percentage increase?
§ Mr. OrmeI do not know whether the hon. Gentleman is advocating a change of basis for the whole scheme. As I understand it, his party supports the present scheme. Regarding the over-80s, it was decided in 1970 to provide pensions for those who were too old to enter insurance when the present scheme began in 1948, and in 1971 this was extended to people over 80 who either had no entitlement to a retirement pension or whose existing pension was less than the standard rate of the non-contributory pension. The non-contributory pension has always been set at around 60 per cent. of the standard retirement pension rate, although the 25p age addition is paid on top of that. It seems right to preserve the upratings in exactly the same way as we give proportionate increases to those whose retirement pensions are reduced due to a contribution deficiency.
§ Mr. HigginsIn view of the quite unsatisfactory nature of the Minister's reply, I shall seek to raise the matter on the Adjournment.