HC Deb 03 April 1979 vol 965 cc1155-8
12. Mr. George Rodgers

asked the Secretary of State for Social Services if he will now make a statement on the current shortfall in retirement pension payments when related to earnings.

14. Mr. Madden

asked the Secretary of State for Social Services what representations he has received in favour of an increase in pensions.

Mr. Ennals

I wish to give as full a reply as possible to these questions.

As my right hon. Friend the Prime Minister indicated in the debate on 28 March, the Government expect to raise the basic pension rate next November to about £22 for a single person and about £35 for a married couple—that is, an increase of about £2.50 for a single person and £4 for a married couple. As he made clear, we shall not only raise pensions in line with the forecast movement of prices or earnings up to next November but will take account of the shortfall in last year's forecasts.

We shall of course uprate all the other long-term benefits, including war pensions, widows' benefits and invalidity pensions on the same basis as the retirement pension, and we shall increase the long-term rate supplementary benefit by the same amount as these pensions.

We shall also met our statutory duty to protect short-term benefits, such as unemployment and sickness benefit, against the movement of prices. In doing so, we shall provide for increases that take account of the 1 per cent. shortfall in last year's forecast of prices movement.

The November 1979 uprating will contain two new features. Both earnings-related additional pensions, paid from this month under the new pensions scheme and now worth up to £1.30 a week, and mobility allowance, now worth £10 a week, will be included in the general up-rating for the first time.

Mr. Rodgers

Is my right hon. Friend aware that his statement will be warmly applauded by every pensioner in this country? Does he agree that the Conservative Party has never supported the principle of linking pensions to increases in earnings? Does that not give a clue about where cuts in public expenditure will be made should the Conservative Party ever come to power?

Mr. Ennals

The increases in cash announced for single and married couple pensioners will be the biggest ever. My right hon. Friend is correct in saying that the Conservatives do not deny that they are committed only to protecting pensions against inflation and not to ensuring a steady rise in the living standards of pensioners. If we had followed Tory commitments rather than Labour commitments in the past five years, married couple pensioners would be £5 a week worse off.

Mr. Madden

Is the Secretary of State aware that he can be forgiven for making a full reply, since some newspapers did not see fit to publish the Prime Minister's statement last week in which he announced the seventh uprating of pensions since the Government came to power? Can my right hon. Friend confirm that the November uprating will result in a real increase in the retirement pension of more than 20 per cent. since 1974? Can he also confirm that, if the linking of pensions to prices or earnings were abolished, it would offer the clear prospect of pensioners' incomes falling very much behind those of other sections of the community?

Mr. Ennals

We included in the 1975 Act a provision that Parliament should have the right, not just to protect pensioners from the rise in the cost of living, but to ensure that they share in rising living standards. We have always believed that that was right and we have followed it in each of the past five years. Pensioners' incomes have increased by 20 per cent. in real terms in the past five years.

Mr. Patrick Jenkin

Does the right hon. Gentleman recognise that, whatever promises may be bandied about in the House, the people of this country realise that the wellbeing of pensioners depends, in the last resort, on the ability of the country to generate the wealth to pay for pensions? Is he aware that pensioners, along with many other deserving groups, will cast their votes on 3 May for the party that they believe will be successful in getting our economy moving again?

Mr. Ennals

The Government are concerned not with promises but with commitments that were established in the 1975 Act. I thought that the right hon. Gentleman was about to correct the impression, rightly held by the public, that it is no part of the commitment of the Conservatives to ensure that pensioners share in rising living standards, rather than simply being protected against inflation.

Mr. Rooker

Is my right hon. Friend aware that we welcome the announcement that the Government are keeping faith not only with the pensioners, but with their own legislation by making the promise—a promise that the Tories have never made and have failed to make today—that pensions will rise in line with prices or earnings, whichever is the higher? Does my right hon. Friend remember that an Opposition Front Bench spokesman promised before Christ- mas last year that the Tories would means test the Christmas bonus? Will my right hon. Friend give a firm commitment that that will never be the policy of the Labour Party.

Mr. Ennals

The hon. Member for Walsall, North (Mr. Hodgson), who made that remark during the passage of last year's Bill, is probably making his last appearance in the House today. It is not simply that the Conservative Party has not committed itself to going beyond inflation proofing. Its policy document "The Right Approach" says: we must do our best to keep the purchasing power of pensions and other long-term benefits in line with prices. We know from the past what their best is.