PAYMENTS FOR 1979

HC Deb 29 June 1979 vol 969 cc819-26

Question proposed, That the clause stand part of the Bill.

1.5 p.m.

Mr. J. W. Rooker (Birmingham, Perry Barr)

The Opposition wish to hold a short debate on clause I stand part. I realise that the amendment has not been selected. Nevertheless, there are some points that we wish to raise, some of which we knew about yesterday, and others which we have discovered today.

The Bill and the provision of the £10 bonus are, obviously, welcome. In one of my previous incarnations, when I sat below the Gangway as a supporter of the previous Government, I suggested that a previous Bill should contain a carry-on clause so that we should not have to waste the time of Parliament every year in legislating on a Bill containing 3,000 words just to pay a £10 Christmas bonus.

The basic issue is the £10 provided in clause I. That is a mean amount. This year its cost will be £108 million. I compare that with the £660 million in tax cuts in the Budget for the few thousand rich, those earning over £250 a week. Millions of pensioners will share the niggardly amount of £108 million, and we can therefore see the Government's priorities.

The value of the bonus will soon become meaningless at present levels of inflation. The Government forecast that the inflation rate will be 17½ per cent. by November. Those words may ring a bell somewhere. The £10 value may soon become meaningless as a result of the present inflation level. Similar words were used by the Member for Wallasey (Mrs. Chalker) in 1977 when she described the £10 bonus paid by the Labour Government. At that time the inflation level was different. It was coming down. We now have an inflation level of just over 10 per cent., which is forecast to rise in the next few weeks to 17½ per cent. Therefore, we think that the position is different from what is was under the Labour Government. It is fair to make the point that £10 is not enough. The Government should pay more.

We do not seek to divide the Committee on the Bill. In some ways we should have preferred a general enabling pensioners' payments Bill, without an amount specified for this year, and an order for later this year and subsequent years. I suspect that pensioners' payment orders will not come in the middle of the year in future, but in November, as in the past.

The last sentence of clause I raises issues to which we should like answers from the Government. They say that the £10 shall not be counted in respect of Income tax, and we accept that. The bonus has always been tax free. The Bill says that payments under this clause shall be disregarded … for the purposes of any enactment or instrument under which regard is had to a person's means. The Government clearly state that there is no intention to means-test the Christmas bonus, but that is not what the Tories said when they were in Opposition.

In November 1978 the spokesman for the Tory Party, when pressing my right hon. Friend, said: It would be useful if the Minister could tell us what thought, if any, has been given by his Department to finding ways of concentrating payments on those really in need."—[Official Report. 13 November 1978; Vol. 958, c. 131.] What does that mean if it is not an implication that the bonus should be means-tested? Mr. Robin Hodgson said that at his one appearance at the Dispatch Box. The Opposition are pleased to note that he is no longer a member of the House, but he spoke with the full authority of the Tory Opposition that night in making that point.

Mr. Patrick Jenkin

I do not think that the hon. Gentleman's own conduct in the matter bears careful scrutiny or is such that he should be particularly proud of it. My then hon. Friend, Mr. Robin Hodgson, put a question. There was never any question of his stating a policy. He put a question to the Minister. He was perfectly entitled to do that. I wrote to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) within a few days stating clearly that there was no intention on his part to lay down policy. The hon. Member has chosen consistently to ignore that statement. He and a number of his hon. Friends went round the country during the election frightening pensioners with the thought that this would be a means-tested benefit, when he knew perfectly well that he had had a categoric assurance from me that it was not. Will he belt up?

Mr. Rooker

The Secretary of State is obviously a little too sensitive on this issue. The reason why we repeated what had been said by the then official Opposition was that we did not accept the denial. It is as plain as that.

The hon. Lady referred to the death grant at about 3 a.m. on Tuesday last. The clear implication of what she said was that the Government were planning to consider means-testing the meagre death grant. No one is saying that there is an intention in the Bill to means-test the Christmas bonus, but doubts have been raised.

Mr. William Hamilton

I hope that my hon. Friend will give the Minister a chance to repudiate them.

Mr. Rooker

I am a fairly liberal Member in this House—and I emphasise the small "l". I shall always seek, whether at the Dispatch Box or on the Back Benches, to be as courteous to other hon. Members as they have been to me. If anyone wishes to intervene I shall be only too happy to give way, but it appears that the hon. Lady is not seeking to intervene. One must therefore assume that my interpretation of her recent remarks is correct.

Mrs. Chalker

The hon. Gentleman is very free with his interpretations. He well knows, as does every Member of this House—and, I should think, the entire country—that there is a major problem over the death grant and its present level for a group of pensioners.

Mr. Dennis Skinner (Bolsover)

It is not high enough.

Mrs. Chalker

It is not high enough, as the hon. Member for Bolsover (Mr. Skinner) says, once again from a sedentary position. What I said on Monday night can be examined in detail when Hansard is printed again. We are all suffering without it at the moment. What I said on that occasion was that we must look at the whole problem of the death grant and see how we can best help those who need it. I have given no undertaking in this House of what we shall do. We are examining the problem. I am quite sure that the House would not wish to press the issue further, since it is distinctly out of order.

Mr. Rooker

I was the first person to mention the death grant, and we shall have to await the Government's review of its operation.

The other question that I want to raise on clause I concerns the £10 as part of the package of the pensioner's income. The Government have told us that it is a bonus. At the meagre figure of £10 it cannot be anything other than a bonus, but we should like a categoric assurance today from the Government that, not withstanding the changes that they are to make to section 125 of the Social Security Act 1975 to cut the earnings of pensioners or to cut the pension in real terms, as compared with what the Labour Government were doing, in no way will any bonus payment be included in the Government's thinking about how it will operate when they come to deal with it each year.

1.15 p.m.

The Government are on record as saying that they will raise pensions only in line with prices. It is a well known fact—it has been repeated here today—that, taking the rises in pensions and the increase in cost of living and earnings since 1973, the married couple's pension would have been £5 less a week if we had stuck only to prices. That is £250 a year, not £10. That is the measure of what the Labour Government were doing, as compared with what the Conservative Government claim they are doing with their meagre £10 bonus. We should like, therefore, to have an assurance, within the terms of clause 1, that there will be a disregard of the £10 in relation to the general operation of pensions.

I want next to mention a matter which has already been raised once and may be raised again when we come to clause 4. I refer to the fact that pensioners are affected in different ways by the cost of living. The Government have chosen to put in clause 1 a sum of £10, exactly as has been done in previous years. They could easily have chosen to put in a different sum, and it would not have affected the operation of clause 4. Bearing in mind what we have seen in the press this morning, we should also like an assurance from the Government that, before any change whatever is made in how the retail price index is put together and operated, there will be full consultation with the advisory council concerned with the retail price index. There ought to be a full public debate on how the pensioner index is constructed. There is, of course, a pensioner index, quite separate from the general household index. It is incumbent upon the Government to be a little more forthcoming today, rather than waiting for the Prime Minister to return from the Tokyo summit.

I want to ask the hon. Lady about how the sum of £10 is put together. I feel that it is legitimate for me to do so, bearing in mind what she said when in opposition with regard to the idea of a 53-week pension. She said then that it was only an idea. It may be something that the Government will look at. What she said was that the idea of a 53-week pension has much to commend it, though it might mean that people had a little less each week during the year."—[Official Report, 17 November 1977; Vol. 939, c. 929.] That is what we are really worried about. If the bonus ceases to be a bonus and becomes involved in the generality of the total income of the pensioner, the clear implication is that the pensioner will not gain anything. We shall only be dividing a grand sum by 53 and saying "You are getting a big bonus". The implication of this was not lost on the hon. Lady in 1977, and it is not lost on anyone today. It would mean less each week for the pensioners than they would otherwise be entitled to receive. This is an important point that the Government ought to deal with today.

Mrs. Chalker

I welcome the hon. Gentleman's probing comments on clause 1, but I repeat quite clearly that the Government have no intention of means-testing the bonus. It is quite clearly listed in clause 1(5). Anything that may have been said by other spokesmen in the past—or misinterpreted very liberally by current Opposition Members—has gone. It is there in print in clause 1 and I draw the attention of the House to it. I say again that it is not to be means-tested.

When any Government are in power it is their duty—as I said in answer to a previous intervention—to look at every method of improving the payment to the elderly and the needy. It is also this Government's commitment to look at the simplification of our entire social security system. That is why I would be totally wrong—and so would my right hon. and hon. Friends—in failing to examine any possible way of making the method of payment to our pensioners and to our disabled a good deal simpler than it is under the system that we have inherited.

I will tell the hon. Gentleman that we are not considering a 53-week year. That is also something of the past. Perhaps we can say that the bonus stays a bonus, that we can lay the 53-week argument to rest as from today, and that the £10 Christmas bonus and the provisions in clause 4 are not considered part of the annual uprating of other benefits but are a separate matter. As clause 4 says, the Secretary of State has regard to the economic situation and the standard of living in the United Kingdom. It is a separate matter, carried out separately.

In commending clause 1 to the House, there are two further matters that I wish to raise. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) has time and again, both inside and outside the House, talked about the Government cutting the pension. We have no intention of cutting the levels of pension, as the uprating announced by my right hon. Friend on 13 June indicates. We have not only uprated the pension in line with prices; we have made good the shortfall in the pension which occurred under the Labour Government last November—a shortfall of 1.9 per cent. My right hon. Friend the Secretary of State is bound to look at the estimates for inflation. He is bound to look at the inheritance left to us by the previous Administration. That is why the increases are 19.4 per cent. up from this November.

As regards future changes, when we came to power, less than two months ago, the state of the economy was much worse than even the previous Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), was honest enough to tell the House. When one considers that the then Government, the present Opposition, when uprating the pension in 1976–77, managed to leave out the months of high inflation of 29 per cent. in the summer of 1975 by changing the method of uprating pension, it is not their right to be mealy-mouthed about the present situation, when this Government will do their very best for pensioners. This Government have started not just by uprating the pension as already announced, but by trying to get the Christmas bonus made a permanent feature of our benefits system.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.