HC Deb 29 June 1979 vol 969 cc792-819

Order for Second Reading read

11.35 a.m.

The Secretary of State for Social Services (Mr. Patrick Jenkin)

I beg to move, That the Bill be now read a second time.

The Bill has two purposes. The first is to pay the Christmas bonus of £10 this coming Christmas and to provide for the payment of bonuses in subsequent years. This carries out the commitment in our election manifesto, where we said The Christmas bonus, which the last Conservative Government started in 1972, will continue. The Bill's second purpose is a little more complicated. It is to deal with the earnings limit for the wives of retirement or invalidity pensioners. I will explain this point in a moment, but let me deal first with the Christmas bonus.

The House will remember that on 13 June I announced details of the pension upratings and other social security benefits, which will be paid from next November. In my statement I said that we would pay a £10 bonus this year, and would take powers to pay it in subsequent years, fixing the amount in those years by order. Clause 1 provides for this year's payment, and clause 4 provides for the laying of orders for subsequent years.

This year the Christmas bonus will go to over 10 million people, and the Bill sets out the categories of people who will be entitled. They are exactly the same categories of people who received bonuses in each of the last two years. As before, the. Bill extends to Northern Ireland by agreement with my right hon. Friend the Secretary of State for Northern Ireland. The relevant week for determining entitlement will be the week beginning 3 December. To qualify for the bonus a person must be present or ordinarily resident in the United Kingdom, or any other member State of the Community at any time during the week beginning 3 December, and also be entitled to payment of a qualifying benefit for at least one day in that week.

Let me remind the House of the people who will qualify. They are those in receipt of retirement pension, supplementary pension, widow's pension under the national insurance, war pension or industrial injuries schemes, invalidity pension—including non-contributory invalidity pension—attendance allowance, or unemployability supplement under the industrial injuries or war pensions schemes. The bonus will also be paid to war disablement pensioners over pension age who are retired but who are not receiving any of these benefits.

The House may have noticed that there is a sweeping-up clause at the end of clause 2(2), which says, after the definitions: includes any payment which the Secretary of State accepts as being analogous to it. This might be of interest to the hon. Member for Bolsover (Mr. Skinner). I have made inquiries in my Department about this clause, because it seemed to me to give some very sweeping powers. I was intrigued to find that it is known in the trade as the Skinner's Horse clause. The hon. Member for Bolsover will no doubt remember that Skinner's Horse was a senior irregular cavalry regiment of the Indian Army; these historic regiments do not always fit tidily into the Ministry of Defence's pattern of war benefits. Therefore, the words are necessary to ensure that all who are entitled, whether they have been members of Skinner's Horse or of another regiment, get their Christmas bonus. I inquired whether the hon. Member for Bolsover's pony might have been included but was told that, for a number of reasons, it was not.

A man who is receiving a qualifying benefit with an increase for his wife will, where they are both over pensionable age, be entitled to a bonus for his wife as well as for himself. The bonus, as in previous years, will be tax free and will not affect entitlement to other benefits or allowances. All that is the same as in recent years.

The cost of paying the bonus this year will be about £108 million. The money will be paid either from the national insurance fund, the Northern Ireland national insurance fund or from the Consolidated Fund, depending on the source of the qualifying benefit that gives a person title to the bonus. I anticipate that about £100 million will be borne on the national insurance fund, £2½ million on the Northern Ireland national insurance fund and £5½ million on votes.

Turning to clause 4, which gives the Government power to pay the bonus by order in subsequent years, that will enable the Government to increase the amount of the bonus if that is considered appropriate at the time. The House will see—and I understand that there may be discussion about this in Committee—that I am required to have regard to the economic situation and the standard of living in the United Kingdom and such other matters as I consider relevant in determining whether a larger sum should be paid. The existence of that power in the Bill carries no guarantee as to when or by how much future Christmas bonuses may be increased. The important thing is that the power is there and we shall not need a new Bill each year to enable us to pay the bonus.

Mr. Dan Jones (Burnley)

That is an interesting and arresting statement. Is it qualified?

Mr. Jenkin

It is qualified only in that the Bill gives the Government power to lay an order—and the House to accept it—to make the payment each year and to increase the amount above £10. I have made it clear that at this stage there can be no commitment whatever whether and by how much there could be an increase. In our manifesto we said that the Christmas bonus would continue. That was taken, and intended to be taken, as a continuing obligation to pay the bonus.

Turning to clause 5, that deals with the earnings limit for the wives of invalidity or retirement pensioners or of disablement pensioners with an unemployability supplement. As I said in the Budget debate, we intended to hold the current earnings for these wives at the present cash level of £45, even though we are increasing the retirement pensioners' personal earnings limit to £52.

The earnings rule for pensioners goes back to the beginning of the national insurance scheme and was always necessary to reinforce the retirement rule. In 1971 when my right hon. Friend the present Secretary of State for Industry introduced new benefits for the long-term sick and disabled he proposed, and the House accepted, that a relaxation in the earnings rule for wives would be useful to help the non-working wife of a chronically sick man to take up employment if her domestic circumstances and her husband's condition allowed. That became the basis of the earnings rule for dependent wives and put them on the same basis as retirement pensioners. In subsequent years the earnings limit has been raised substantially for both groups.

However, on the last occasion when the limit was raised to £45 it became apparent to the previous Government—and the right hon. Member for Salford, West (Mr. Orme) carried responsibilities in that field—that quite different considerations apply to dependent wives of pensioners and other categories than apply to pensioners themselves. For pensioners, the earnings rule and the earnings limit related to the entitlement to their main pension—their main source of income. For the wives, however, the earnings rule was intended as a test of dependency. The hon. Member for Waltham Forest (Mr. Deakins) is not in the House at present, but he dealt with the matter on a number of occasions from this Dispatch Box.

On 23 January of this year he said: In the case of retirement pensioners, the function of the earnings rule is to support the retirement conditions. But in the case of an increase of benefit for a wife the earnings rule is a test of dependency. He went on to say: In tackling the earnings rule, therefore, it is necessary to separate the effect of rules on the retirement pension from the effect on benefit for the dependent wife.—[Official Report, 23 January 1979; Vol. 961, c. 334.] In 1971, when the rule was applied to dependent wives, the dependency increase—the extra benefit that a married man got for his wife—was £3.70, and the earnings rule started to bite at £9.50. That amount was rather less than the earnings that a woman could expect from full-time employment. Today a man can get the full £11.70 increase for his wife if her earnings—net of working expenses—are £45, and a reduced rate of increase if she is earning up to £58.70.

It did not seem sensible to our predecessors, nor does it to this Government, that a woman is treated as dependent upon her husband when she may be earning substantially more than his total benefit as a married pensioner. My Department in recent years has received a growing volume of complaints from nonworking wives who felt that the provision for working wives was unduly generous, in the way that I have described. These matters were also dealt with at some length in the report on the earnings rule presented to Parliament by the right hon. Member for Norwich, North (Mr. Ennals) on 24 October 1978.

I have taken time to rehearse the history to demonstrate that we are justified in doing this and that there is no difference of view between the two sides of the House. Entirely different considerations apply to the earnings rule for pensioners from those that apply to the earnings rule for wives. We are committed to phasing out the earnings rule for pensioners over the period of this Parliament. The November uprating will increase the pensioners' earnings limit from £45 to £52, but the Bill holds the earnings limit for the wives of pensioners, invalidity pensioners and others to the present cash limit of £45.

Mr. A. P. Costain (Folkestone and Hythe)

Can my right hon. Friend clearly state that a pensioner who is getting a pension from a firm does not count for the earnings limit?

Mr. Jenkin

That is quite clear. It is a matter of earnings and not occupational pensions.

There is no intention to reduce the £45 figure for wives, but one could understand an argument that even at £45 as a test of dependency that figure is slightly odd. We shall hold it at the present level, and that is what the Bill does.

The change in the law will reduce the amount that would have to be paid out in future years if the amount had gone up from £45 to £52 next November and so on. In the early years, and particularly in 1979–80, the saving will be small but will grow in later years depending on how quickly married women's earnings go up in relation to the £45 figure.

We are in a postion to use the savings that will accrue over the next few years to fulfil a closely related obligation that we have under the EEC directive on equal treatment for men and women in social security by December 1984. Later in this Session we shall introduce a Bill giving details of the changes in our socal security scheme that will be needed to satisfy the EEC directive. There will be some cost involved. That arises from payments to married women contributors for non-earning husbands and for their children, sometimes referred to as the "sole several" cases.

It therefore seemed to the Government to be sensible and right, when looking somewhat critically at the payments being made for married women as dependants—the operation of the earnings rule—to use any savings to give breadwinner wives better benefits for their dependants when their own earnings are interrupted. That is the intention of the directive and what we are intending to do.

That is the general purpose of the Bill. We need to get the arrangements for the Christmas bonus going as swiftly as we can. That is why we tabled the motion to allow the House to take all stages of the Bill today, and I am grateful to the right hon. Member for Salford, West for his readiness to assent to that course. I believe that the Bill is entirely uncontroversial, although no doubt there will be matters that we shall want to discuss in Committee. I hope that I have adequately explained the purpose of the Bill and its effect, and that the House will therefore think it right to give it a Second Reading.

Mr. Donald Thompson (Sowerby)

Is there provision to safeguard against industrial action? Certain people might see this measure as a good way of introducing industrial action, thereby delaying the implementation of the Bill.

Mr. Jenkin

I hope that very careful thought will be given by anyone who may be contemplating what my hon. Friend suggests to the fact that it would be bound to have an effect on the payments made to pensioners, not only the Christmas bonus, but the general measures of uprating, and so on. These are enormously important payments for the individuals concerned, and any question of their interruption or even delay would be of grave consequence to some of the hardest pressed members of our society.

My hon. Friend will recognise that we cannot give an absolute, unconditional guarantee that there will be no interruption. There will be certain problems, as my hon. Friend the Under-Secretary of State explained at Question Time on Tuesday, but I hope that those in my Department responsible for carrying out the necessary procedures will think very carefully about the effect of their actions on pensioners and on others who depend upon these payments for their livelihood.

11.53 a.m.

Mr. Stanley Orme (Salford, West)

I understand the desire of the Secretary of State to proceed with the Bill, because of the time factor. We are prepared to facilitate its passage through the House today, but I cannot raise two cheers or even one for it, because it has to be set against the current record of the Government and their treatment of pensioners and other groups.

Under this Government, the pensioners will suffer, despite the increase in their pensions scheduled for next November. An inflation of 17½ per cent. has to be met by pensioners between now and November. The £10 Christmas bonus will not assist because it, too, has to be set against a 17½ per cent. inflation.

Mr. Patrick Jenkin

I am sure that the right hon. Gentleman does not intend to mislead the House. There may have been an elipse in the language that he used. The figure of 17½ per cent. to which I referred when I made my statement covers November to November—a full 12 months—and not the period between now and November.

Mr. Orme

By November the inflation rate will be 17½ per cent. and there will have been an increase of about 5 per cent. or 6 per cent. between now and November. That is the gap that the pensioners have to meet. The £10 Christmas bonus will not be sufficient.

The Labour Government paid the Christmas bonus over the last two years, and it is interesting to recall what the then Opposition had to say about it. The present Under-Secretary of State—the hon. Member for Wallasey (Mrs. Chalker)—has many statements on the record. I will not weary the House with details but she suggested in opposition that the way to deal with the matter was by giving a fifty-third week payment to the pensioners. If the Government of which she is a member were now proposing such a payment, it would mean that a married couple would be getting £36.10 as a Christmas bonus, and not £20. That is quite a gap.

It appears that the enthusiasm of the right hon. Gentleman and of the hon. Lady has waned in the transformation from Opposition to Government. We have to judge this Bill against the other changes proposed by the Government. We cannot, for example, set aside the proposal, now before the House, for a change in the assessment of pensioners' upratings from earnings and prices to earnings only. The Labour Government based upratings on earnings and prices, and since 1973 that has made a difference of about £5 a week to pensioners—an extra sum that they would not have got if the uprating had been linked to prices only. That must be made clear.

The Labour manifesto at the general election also included the proposal to phase out the television licence for pensioners and to extend cheaper travel facilities to them where it does not exist already in various parts of the country. Those proposals would have been of genuine benefit to pensioners.

Another important point arises in clause 4. The explanatory and financial memorandum says that it is providing for a further payment of £10, or a larger sum, if the Secretary of State considers a larger sum appropriate having regard to the economic situation, the standard of living and such other matters as he deems relevant. He has already told us in vague terms today that we are not to know what the Government's future thinking on this matter is to be. These things are merely to be taken into account.

In a report from Tokyo in The Guardian today, John Palmer writes: Mrs. Thatcher is considering removing the price of energy—including petrol and heating fuel—from the cost of living index as part of a move to get the British people to accept a period of lower living standards. We shall want a clear answer to the question whether that is to be proposed by the Government, and how they will proceed to do it. Having already proposed to change the basis of assessment, if the Government start interfering with the cost of living index a serious situation will arise.

In effect, it would mean that although prices had increased pensioners would be told that they would not get an increase in their pension because the cost of living index had been altered to exclude petrol and fuel prices. That is an exceedingly serious proposal, which would affect pensioners, families, the low-paid, the sick and the unemployed. It would be an extraordinary proposal, and we give solemn warning that in no circumstances would we accept a change in the basis of the cost of living index as such.

Against that background, the Government's proposal to pay £10 at Christmas is miserable, especially considering the rising cost of living and other factors. The pensioners will be well aware that the many benefits that they achieved under the previous Administration will not continue under the present Government. We shall watch very carefully the points that I have raised and explore them further in Committee today. While we shall not oppose this Bill, we shall seek to improve and defend the rights of pensioners between now and November and beyond.

12.1 p.m.

Mr. Tim Brinton (Gravesend)

As this is the first time that I have tried to catch your eye since I was sent to this place, Mr. Speaker, may I thank you and all the Officers of the Palace of Westminster for the great courtesy and assistance shown to me in a few short weeks?

The people of the constituency of Gravesend have sent me here. In the tourist books Gravesend is best known as the burial place of Princess Pocahontas. It is a big parliamentary seat with 90,000 electors. It covers the banks of the River Thames and part of the Medway borough and stretches out to the Hoo peninsula. The constituency is known as a microcosm of the whole of the United Kingdom. We have heavy and light industry, farming, a refinery, and commuters—in fact, almost everything.

Gravesend used to be called a marginal seat. I hope that in my work here I can prove that that situation has changed. However, I have a great target ahead of me, because since the war the seat has been held for 21 years by a Labour Member and for 13 years by a Conservative. My predecessors have made their mark in various ways. Sir Richard Acland was well-known for his individual and determined views, as was Sir Peter Kirk, who died so tragically recently. Albert Murray, who is now Lord Murray, and Roger White also represented the people of Gravesend. My immediate predecessor was Mr. John Ovenden, whose views I can in no way share but who was most assiduous in looking after the individual needs of his constituents. I thank him for the attention that he paid them and I know that I have a great task ahead.

We have a large group of pensioners in Gravesend. As I am only in my fiftieth year, perhaps I should explain my personal interest. It goes back 15 years, when I found myself, for the benefit of a television programme, living in a pensioner's room in a Brixton basement on the then basic old-age pension of £2. 17s. 6d a week. I learnt a great deal. I should have bought cracked eggs at more reasonable prices and I should have marketed more carefully. As a result of my lack of knowledge I lost a great deal of weight. I then faced Members of Parliament from all parties to ask them what could be done about this sort of pensioner.

The right hon. Member for Salford, West (Mr. Orme) spoke of a large section of pensioners in this country—the very section of which I had experience those years ago—who had no other means or very little. However, there are others who receive old-age pensions, and if taxation on what has been called unearned income—now better known as savings income—could be altered we could have a great deal of money and perhaps help those really unfortunate pensioners who have nothing else. I sense that I may be digressing a little from the main point of the debate, Mr. Speaker.

The £10 bonus, when first introduced by a Conservative Government, seemed to me to be almost an admission that we were not doing enough for the pensioners with no other form of income. It was a sop to the sentimental view that I am afraid the media and others often take in discussing this emotive problem. We must look further than £10 bonuses and free television licences. I suppose that the ultimate cure is some form of tax credits, so that those really in need can be properly looked after. From my personal experience I do not believe that this is happening now. I thank you for your indulgence, Mr. Speaker.

12.7 p.m.

Mr. Dan Jones (Burnley)

I pay the usual homage to the hon. Member for Gravesend (Mr. Brinton) and hope that he will continue to make similar contributions to our debates. It has been my privilege to visit Parliaments all over the world. I have not yet been in a Parliament that equals the British Parliament. I say that with pride, and I have no desire to conceal it.

I agree with the hon. Member for Gravesend that there are certain points in this Bill which could be looked at again with greater sympathy. Before dealing with them there is one point that I wish to draw to the attention of the Secretary of State. My right hon. Friend the Member for Salford, West (Mr. Orme) referred to a report in The Guardian about the Prime Minister. If this report is correct I urge the rest of the members of the Cabinet to look at her proposal again. If it were to eventuate, all radical forces in this country would regard it as a form of deception. I shall not dwell on that now; I leave it to other members of the Cabinet to prevail upon the Prime Minister.

My one point in common with the hon. Member for Gravesend is that I, too, believe that there are discrepancies that put a marked emphasis on politics. In Burnley during the days leading up to the general election I did a tremendous amount of canvassing. I do a lot of canvassing between elections because it is my custom that when people cannot see me I go to see them. It pays handsome dividends. On one such occasion I came across a set of circumstances, involving television licence fees, which upset me greatly. My right hon. Friend said that it was our intention, had we been returned to office, to phase out television licences. These licences are a harsh imposition, particularly for one section of society, namely, those who are ill, disabled and living on the very minimum standard and who, for reasons of ill health, cannot go out unless the weather is genial.

I know several cases involving people who cannot go out at all, including one lady, intelligent and a true Christian, who has been housebound for 12 years. She cannot go over her doorstep. Her friends live nearby, in what is called a protected household. There is another name for it but the one that I have used will convey to the Minister precisely what I mean. Their television rental fee is 5p a year under the protection scheme. The lady who cannot go out pays £25 a year. That is inequality.

Mr. Orme

It is called "board and accommodation".

Mr. Jones

My right hon. Friend whispers to me that it is called "board and accommodation". For that the lady's friends pay 5p television rental a year while she pays £25. One is worse off than the others and she asked me to explain why that should be so. I could not explain, except to say that if the Labour Party were to secure power it would phase out these fees. It is only too obvious that we did not secure power, so the anomaly still exists.

The Minister said that under clause 4 further benefits were possible. He will recall that I asked whether that statement was qualified. He gave me the honest reply, which I very much appreciate, that it was not qualified. Will the Minister look at this with more compassion than I received from Lord Belstead when I wrote to him at the Home Office? The noble Lord said that the cost of removing such inequalities would be between £100 million and £110 million. I agree that that is a substantial figure. I am not unaware of the need for economy in the future. We have nothing to throw away. I do not need any Minister to tell me that. Therefore, we approach this problem with great care. How can we resolve this anomaly with regard to the older members of society, some of whom, as I have said, are infirm to the point where they cannot go outside the door? Nothing disturbs me more than that.

If there is room for compassion within society, surely this is the avenue that we ought to be exploring. To ignore these people is something that I could never forgive, imperfect creature though I am. I therefore beg the Minister, if there is any latitude under clause 4, to use it for the people about whom I have spoken.

I could suggest various ways to do this. In his letter Lord Belstead, quite properly, said that many old-age pensioners were reasonably well off and that to them the £25 would not in any way be an extraordinary burden. I would not ask any Government to give those people further assistance. The people of whom I am talking are living on the bread line.

I have a letter here from a lady. I do not intend to read it, though I know its contents to be true. I intend to see her over the weekend to find out whether the local office can help her. I would happily be prepared to pass the letter to the Minister, though from experience I know that Ministers are busy people, with hardly enough time to pay proper homage to their own families, never mind to constituency obligations. I notice that the Minister is smiling. He knows that what I am saying is true. I do not want to overstate my case, but I appeal to the Minister to examine the situation to which he himself referred and in respect of which he implied that he had a certain latitude.

At present, we are asked to consider costs at the BBC. This is only a related problem, though it is an important one. I believe that the BBC is to apply for a further increase in the television licence fee. Have the Government ever applied a truly efficient standard to the BBC? Is the Minister aware that there is a trade union—Equity—for which I have a certain respect, and which I helped to form in London more than 48 years ago, when I was unemployed in London? Of the 16,000 members of Equity, two-thirds are unemployed.

In the meantime we are importing absolute television rubbish from the United States. There is no doubt about it. The actors in those programmes cannot even speak the English language. They have no idea at all about vowels. They slur one into another. Consonants are part of an archaic language to them. One cannot understand them. Why is it that a responsible Government—I criticise the Labour Government as well—allow this to continue? Time after time we have heard the present Government and the previous Government placing emphasis on the need to export, yet we are importing this stuff when two-thirds of the members of Equity are unemployed.

Do we have to indulge in such uneconomic ventures? Can we not in future apply a standard of efficiency, particularly to the bureaucracy, about which I know something, and do something about the employment of our own trained people? They could give the British public a far higher standard of television entertainment than we are presently getting. Will the Minister please look at that?

I ask the Minister to look first at the situation of the people to whom I have referred, who are at the lowest end of the economic scale in the country. If clause 4 can enable the Minister to take remedial action on their behalf I implore him to do that.

12.20 p.m.

Mr. John Carlisle (Luton, West)

I wish to thank you, Mr. Speaker, for giving me the opportunity to make my maiden speech. I wish to thank you also for calling me by my correct name. When I took the Oath you threatened that, because of the number of hon. Members who share my surname, you would call me "Mr. Newcastle-upon-Tyne."

I wish to say how much I have enjoyed the few weeks that I have been in the House, and I wish to thank everybody for their kindness and courtesy. To an outsider, this seems an awesome place. However, once one gets into the Chamber one is struck by the friendship shown by other hon. Members.

I have the honour to represent the newish constituency of Luton, West. Luton was well represented for many years by Lord Hill, a man who was well known to this House and who served the House and his constituency well. The constituency was later represented by Mr. Charles Simeons, but I took over from Mr. Brian Sedgemore, a robust man who had some interesting opinions on the economy. His absence will leave a gap which my right hon. and learned Friend the Chancellor of the Exchequer will find somewhat difficult to fill.

Brian Sedgemore and I share little in common in our opinions, bar the fact that we have a great love of rugby football. Indeed, to judge from the numbers present for this debate, one regrets that there are probably not enough Members present to make up a team. Since rugby football is the peer of games, I must remind the House that Brian was a very good second-row forward, and as such he was the one who got the ball. He has now passed that ball to me. I am a fly half, I intend to accept the ball with pleasure, and I hope that I shall use it to the best of my ability to score many tries in this House and to kick many goals in the years to come.

I apologise to the House for not wearing a hat, since I represent a constituency that saw the origin of such apparel. The constituency contains a great deal of interest. We have one or two large factories, including Electrolux and SKF. We have a fine hospital, which my right hon. Friend the Secretary of State for Social Services visited last year, the Luton and Dunstable hospital, which deals with many of the terrible accidents that happen on the motorway. We also have several large modern housing estates. Probably two of the most famous parts of my constituency are the football ground, where we are hoping for some improvement—not in the ground but in the standard of play next season—and Caesar's nightclub. I recommend the club to hon. Members as they travel back to their constituencies in the North as a most humorous club offering excellent hospitality.

Luton is probably not the most beautiful place in the world, but it contains genuine and hardworking people. Certainly nowhere will one find more friendly people. We have many varied cultures within the town, which bring their own problems, but I am proud to say that we have an active Conservative council, which, among other things, has reduced the rate burden in each of the past three years. It has made several internal economies. I fear a little for the economies that it may still have to make under the new regime, but I believe that it will play its full part in those economies.

We also have in the constituency many industrial workers who are enjoying their retirement, some of whom are drawing Service pensions. I pay tribute to some of our larger companies, such as Vauxhall, which have been most generous to their ex-employees and provided good facilities, excellent clubs, outings, and so so, and a very good pension scheme.

We have a large number of pensioners in Luton—men and women—who, over the years, have built up the town's prosperity. They certainly deserve the attention that this House is now giving them. In the few minutes that I have at my disposal in this debate, I feel privileged to speak on behalf of those pensioners. They comprise a sector of the community which all politicians of all political persuasions have somewhat neglected over the years. When I meet them, I sometimes have a sense of shame over what has happened. Many pensioners are struggling to make ends meet. Many have fought one world war, if not two, and have made a great contribution to our nation's prosperity and pay their share of taxes.

The pensioner asks for little. He asks to be left alone, for peace and for a few small comforts so that he is able to look after himself. He also seeks care. It is a small price for us to pay to these proud people if we in this House can give them some help. They do not ask for charity, and some are reluctant to receive it. I feel humble when I am shopping with my wife and see the joints of meat that pensioners are forced to buy. I also feel humble when I go into a supermarket and find that there is little choice for the pensioner, because they need only a few luxuries. Many pensioners are lonely and depressed, and anything that we can do in this House to help them will be welcomed.

For that reason I sincerely applaud the Government's commitments set out in the Queen's Speech and in this debate. I applaud the fact that we intend to increase pensions by a greater percentage than Labour proposed to do if they had been returned to power. I applaud the fact that we have brought in this Christmas bonus and that we are intending to abolish the earnings rule. Pensioners should be encouraged to work if they want to do so and to take a fuller part in community life.

Many hon. Members, on both sides of the House, regret that the Christmas bonus is only £10, but we must remember that it is a bonus, and better than nothing. We all know that after the bonus began in 1972 there were two years under the Labour Government when the bonus was not paid at all. It must be galling for some pensioners at Chirstmas time to see the nation thoroughly enjoying itself when they have not enough money to pay for the price of a meal. For many of them 1979 will be the last Christmas that they will enjoy, and for several thousands there are not many Christmases left. This bonus will give them some small comfort. Christmas is a time when people want to be with their families, and with the ever-increasing cost of transport the bonus will again assist pensioners.

I welcome the fact that the payment is to be permanent and that clause 4 gives the Secretary of State the power to raise the figure, if necessary. I remind the House that the bonus was first introduced by a Conservative Government. Despite the fact that the Labour Government withdrew the bonus for two years, Labour made no mention of that fact in its manifesto. One was sorry to see some of the sarcastic comments made by the previous Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), on this subject. A bonus of £10 is a small price to pay from this House for a happy Christmas. I salute the courage and determination of the present Government to continue to pay the bonus so that pensioners are able to have a full share in our nation's life.

I remember in the election campaign being in the centre of Luton when a little old man came up to my wife and squeezed her arm. He said "Do not worry my dear. If there are further economies to be made to help the nation back on its feet, I will make them" That aged gentleman could make few such economies, but he at least wanted to help the nation.

There was great relief among pensioners at the return of a Conservative Government. Pensioners will welcome the fact that early in the life of the present Government we have brought this legislation before the House. Let us hope that we can continue to move forward with assistance for pensioners, and possibly to shift the emphasis which I believe has been for far too long at the wrong end of the age scale.

There are Members here who will think it to their benefit as they approach the end of their parliamentary terms, but we have a real responsibility to shift that emphasis on to the old, whose lives are almost past, rather than on to the young, who have their lives in front of them. I thank you, Mr. Speaker, for the courteous way in which you have received what I have had to say.

12.31 p.m.

Mr. Thomas Cox (Tooting)

It is with great pleasure that I follow the hon. Member for Luton, West (Mr. Carlisle), who made an excellent speech. His speech contained humour and also a great deal of serious content. When his constituents, especially the pensioners, read that speech they will feel that they have a worthy champion in the House of Commons looking after their interests.

Hon. Members will be delighted with the comments that the hon. Gentleman made about the friendship that he has found in his short time as a Member of Parliament. Many people outside the House cannot understand that although we argue seriously at times about fundamental issues there is a bond of friendship between us. We are all trying, in our respective ways, to do the best that we can for our constituents. I am sure that the hon. Gentleman, in his time in the House, will do that.

We on the Opposition Benches were pleased to hear the hon. Gentleman's comments about his predecessor, Brian Sedgemore. Although there was obviously a hard fight in that constituency, there was respect between the two contestants. I am sure that many hon. Members will look forward to the speeches that the hon. Gentleman will be making in the future.

I welcome the announcement of the payment of the £10 bonus. I congratulate the Minister on the commitment that the bonus is to be a permanent feature. In about August or September every year hon. Members start to receive letters asking whether the bonus will be paid. Although there may not be many occasions on which I congratulate the Government, I am pleased to congratulate them on this commitment, which will be warmly welcomed up and down the country. Of all the payments made by the Department of Health and Social Security, the £10 bonus is the most popular among pensioners. My constituency has a large percentage of elderly people. Many, now retired, were working when conditions were much harder. They cannot understand why, after a lifetime of work for the benefit of this country, they have not received what they regard as just rewards for the efforts that they have made.

Although the standard of life for pensioners has improved in recent years, the announcement of the payment of the pension increase later this year will help a great many of them. Figures of a national average wage of £100 a week are often bandied about in the House. We in the Labour Party have long been committed to the retirement pension being related to a percentage of the average national wage. Even in November, when the pension becomes £37.30, there will still be a long way to go before pensioners in this country start to receive half the national average wage of £100 a week of working people. That is why the £10 bonus is so welcome.

I regret, however, that there is to be no increase in the amount. I recently asked the Minister what would be the amount of the bonus if one took into account the inflation that has taken place since it was first introduced in 1972. I was told that to take account of the inflation over that period the figure would have to be over £24. There will be great disbelief among pensioners that no increase has been made. I fear that unless there is a general upgrading a time will come when, whichever party is in Government, pensioners will expect the bonus to be increased.

At what level will that increase start? Are we talking of a jump from £10 to £15? I cannot believe that any Government would announce an increase from £ 10 to £20. It would have been better if the Minister had said that there is a limit to the amount of money available to his Department but that he concedes that the bonus, which has never been increased since it was introduced, should go up to £12 this year. That would have been accepted by pensioners. They would realise that there were problems and many claims on the resources of the Department but that a start had at least been made in bringing the bonus up to the level at which it should have been.

Many people may say that pensioners will simply go out and spend the £10. In my experience, the vast majority save the money to meet other commitments. There are the problems of heating costs, which go up under whichever Government are in power. I am not attacking the Government. Nothing annoys pensioners more than to hear hon. Members talking about what one party did compared with another. They ask me what I am trying to do for them as their Member of Parliament.

Last winter there was week after week of cold, snowy weather, when many people kept on their heating. I was one of them. I feel the cold, and I am comparatively young. I have great sympathy for elderly people who were unable to get out of doors and had to keep on their heating. Another problem of the modern society in which we live is that the gas and electricity meters which showed people how much gas or electricity they were using have long since gone. Now, they turn the switch on, the meter goes round and round, and the next they know is that they get a bill and cannot believe that they have used the amount of gas or electricity that is shown. In many cases, however, they are called upon to pay those amounts. Many pensioners put away the £10 bonus to overcome heating charges during the most expensive quarter of the year.

Mr. Orme

I am listening with great interest to what my hon. Friend is saying. Setting aside the Christmas bonus, I am sure he will agree that there is no substitute for a decent pension to meet these basic costs. He says that he does not want this matter to become a political issue, but he must be aware that the proposed changes in the assessment will directly affect pensioners, not least his own constituents.

Mr. Cox

I agree with my right hon. Friend. When he is leading our party from that Dispatch Box in speaking on behalf of pensioners, he can rely on my wholehearted support. There can be no substitute, whatever we get, for a proper pension being paid to the pensioners of this country.

Pensioners have great pride. If one tells them that they should apply for a specific benefit they are reluctant to do so because many of them regard such benefits as charity. The only solution is to pay them a decent pension. The average national wage is about £100 a week. The Labour Party commitment is that the pension should be between one-half and two-thirds of the average wage.

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

My hon. Friend has made a powerful case for the bonus of £10. Is there not an analogy with the death grant, which is the same as it was years ago? Is it not possible that the £10 bonus will remain the same for the next 20 years?

Mr. Cox

I was going to make that point. I met a group of pensioners on Tuesday. They were most anxious about heating costs and the death grant. My hon. Friend the Member for Burnley (Mr. Jones) talked about television licence fees. That issue was not brought to my attention on Tuesday, although it has been on other occasions.

These matters must remain under constant review. I congratulate the Government on their commitment to pay the bonus permanently, although I hope that it will not remain at £10 for long. People will be looking to the Government to introduce further benefits. An increase in the death grant is one improvement that should be made.

The tragedy is that after Parliament introduces a meaningful benefit it takes years to upgrade it. The last increase in the death grant was made in the late 1960s, and yet the cost of funerals, even without the elaborate flowers and hearse, is about £200.

The hon. Member for Wallasey (Mrs. Chalker) is always willing to listen. I am a member of the all-party group for pensioners. The hon. Lady has attended many of those meetings and heard the comments. For many pensioners there is nothing more degrading than the thought that they may not have sufficient money for a decent burial. Many pensioners put aside the Christmas bonus for that purpose. When asked why, they say "I am not going to be buried in a pauper's grave". Some people may laugh at that and believe that in 1979 people do not think like that, but some do. That is why we must improve not only this Christmas bonus but such benefits as the heating allowance and death grant.

The public are often amazed at the issues that we discuss in the House. I think of the Crown Agents. What a scandal that was. Millions of pounds were wasted. The pensioner who is struggling to pay an electricity bill and to put money by for his burial is amazed that we allow millions of pounds to be wasted in that way.

The number of pensioners increases each year. Throughout the country there will he farewell parties today for those who are retiring after years of working for one company. There will be speeches of appreciation, and gifts. Today those people finish working for their companies, and on Monday they begin their retirement.

The problems of retirement affect men more than women because women still have their homes to look after. But the man's daily routine of getting up and going to work suddenly stops. At one time there was plenty of part-time employment for men, but in my area, for example, part-time work is not available. Those men and women still have to buy new clothes, the men still want to go to the pub with their mates for a drink and to spend 20p or 30p a week on the football pools. Many learn very quickly that their income will not allow that expenditure.

This issue will command the attention of the House more often as more and more people retire and look for a continuation of the better standards of living that they have enjoyed recently. Whichever Government are in power, we are responsible for ensuring that retired people receive a pension that will allow them to continue to enjoy life as they are entitled to do after a lifetime of service to the country.

12.47 p.m.

Mr. William Hamilton (Fife, Central)

I wish to raise only one matter. It is based on the report on the front page of The Guardian today. The Prime Minister is reported to have said, in Tokyo, that because of the escalating costs of oil and energy generally she proposes to strike out of the cost of living index the whole of the cost of energy. That will have important consequences for the old people.

This cooking of the books that is threatened by the Prime Minister, as reported in The Guardian, will destroy all credibility in the cost of living index. The Government have said that they will renege on the previous Government's proposition to tie pensions to the cost of living or average earnings, whichever is the greater. The present Government say that the pension will be tied only to the cost of living, and now the Prime Minister says that she will cook the cost of living index.

All hon. Members know that, especially in the winter, complaints and anxieties are expressed by pensioners about the cost of their heating bills, whether they use coal, oil or electricity. If this damnable policy change is perpetrated by the Government they may as well cease publishing a cost of living index altogether, because nobody will believe that it is relevant to the real costs that old people in particular will have to bear in the coming months.

Mr. Orme

My hon. Friend was not in the House when I mentioned this issue. I said that if the report proved to be correct the Opposition would oppose it with every power at their command.

Mr. Hamilton

That goes without saying—I had already assumed that. I am sorry that I did not hear my right hon. Friend the Member for Salford, West (Mr. Orme) refer to it. The Minister must categorically deny the accuracy of that assertion when she replies. I quote from The Guardian: Mrs. Thatcher is considering removing the price of energy—including petrol and heating fuel—from the cost of living index as part of a move to get the British people to accept a period of lower living standards. If that is true, the Prime Minister is saying "We are going to cook the books and con the people that their standard of living is not going down". The British people were taken for a ride on 3 May. If we held a general election next week, the result would be vastly different. Already people are beginning to understand how they were conned a few weeks ago, and the Prime Minister's words are an indication of that. I hope that the Minister will say forthrightly that it will not happen, otherwise we may as well scrap the cost of living index altogether.

The Labour party accepts the proposition behind the Bill. The Government are giving a little charity to the old folks. I am not enthusiastic about that sort of proposition. The basic solution to the old folks' problems is to give them a pension properly indexed to the cost of living or average earnings. That is the only way to protect them. However, we have to be thankful for small mercies.

The Secretary of State made great play with the fact that the cost will be £108 million this year. That is chickenfeed compared to the allowances made to those at the top end of the pecking order in the Budget. We are thankful for the Bill, and for any minutia of generosity that comes from the Conservative Government, especially if it helps the elderly and those on low incomes.

We do not intend to oppose the Bill, but I hope that my right hon. Friend the Member for Salford, West will make it clear that if the proposition of the Prime Minister, as reported in The Guardian, goes ahead, we shall oppose the Bill with every legitimate, or even illegitimate, means at our disposal.

12.53 p.m.

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)

I congratulate my hon. Friends the Members for Gravesend (Mr. Brinton) and Luton, West (Mr. Carlisle) on their maiden speeches. My hon. Friend the Member for Luton, West gave us a great deal to think about. My right hon. Friend the Secretary of State recalled that he, too, was a second-row forward and would have been a very good match for the previous Member for Luton, West, Mr. Brian Sedgemore, and indeed was on many occasions. My hon. Friend's was a capable maiden speech and many of his ideas will be considered in greater detail.

It has been an interesting and wide-ranging debate. It has dealt with a number of wider issues with which the House is frequently concerned. I assure the hon. Member for Burnley (Mr. Jones) that I shall draw the attention of my right hon. Friend the Home Secretary to his comments. The Bill has no power to affect television licence fees or the types of programme shown on television. I share with the hon. Gentleman some grave doubts about programme content, but that is a matter for the Home Department. I am sure that he will understand that.

The hon. Member for Tooting (Mr. Cox) referred to a number of wide-ranging issues affecting the elderly. We are agreed that it is the Government's duty to reduce waste. The Government are determined to give that priority. Only by conserving the money that we earn for the needy in our society shall we overcome some of the present problems.

I replied to my hon. Friend the Member for Huddersfield, West (Mr. Dickens) in Monday's Adjournment debate on the level of the death grant. I said that the matter was being studied and that we should make an announcement as soon as possible. We realise the great concern over the death grant. It is not a part of the Bill, but it is worth repeating for those hon. Members who may have missed a very early morning Adjournment debate.

My right hon. Friend the Secretary of State, when introducing Second Reading, went through the various clauses of the Bill. Therefore, I shall respond only to the matters raised upon it.

The right hon. Member for Salford, West referred to a previous speech of mine in 1977 in which I said that we might consider a 53-week year. That was in the context of overall simplification of all benefits. It was no firm proposal and has never been the policy of the Conservative Party, whether in government or in opposition. It was a suggestion made by many hon. Members, including some on the Opposition Benches, and was worth investigating.

A number of hon. Members referred to the bonus as though it was intended to be a maintenance payment to pensioners. That is not the intention. It is meant to be a little extra, a bonus as its name implies. I was delighted that the hon. Member for Tooting felt as pleased as the Government that, with the help of the Opposition, it will soon become a permanent feature on the statute book.

We all regret that the bonus cannot be more than the £10 laid down in the Bill. However, by taking power to review in the Bill we are indicating our awareness of the fact that the £10 bonus will be of value only so long as it maintains a true value.

Mr. Orme

Will the hon. Lady attempt to answer the question put both by my hon. Friend for Fife, Central (Mr. Hamilton) and myself on today's report in The Guardian? It is strictly relevant to clause 4, which deals with the standard of living. We are concerned and would like a reply this morning.

Mrs. Chalker

I was coming to that. During the bonus debate of 1972 the previous Member for Blackburn, Mrs. Castle, said that the bonus must be judged against the wider background. That is what we have to do today.

I, too, read The Guardian report, but only after the debate had begun. Right hon. and hon. Members will be as aware as I am that not all reports in newspapers are proved accurate. Right hon. and hon. Members must await developments. I ask them to read a little further down the column than the passage that was quoted, where it states that the President of the Common Market Commission said that it was important that the cost of dearer oil was passed on in higher prices. It was he, not the Prime Minister, who said that.

Mr. William Hamilton

Will the hon. Lady continue?

Mrs. Chalker

Yes, I will continue. The report uses the word "advises". No decision has been made. A responsible Government have to consider every eventuality. That does not mean that a decision has been made. I can assure the hon. Gentleman that I am well aware of his anxiety, and the anxiety of all hon. Members in the House, about the state of our economy.

However, I remind the House that the Conservative Government have been in office barely eight weeks. That which is happening in the British economy now is the result of five years when Britain spent money that it had not earned.

Until the country learns to live within its means—with everyone, especially earners who pay contributions, doing as much as possible to increase production—and thereby earn the resources necessary for the elderly and dependent persons, we shall not be in a position to use the increase provision in clause 4 to improve the Christmas bonus.

We stand by our election pledge, which we make again, that we shall protect the pensioners from cost of living increases and, in upratings, do better than that, when the economy allows.

Mr. Orme

I note the vague reply given by the Minister to the points raised by my hon. Friend and myself. I give notice that obviously we shall pursue this matter with the Prime Minister when she returns from Tokyo.

Mrs. Chalker

Not being a member of the Cabinet—and as no decisions have been made—there is no way in which I can give a detailed answer to the points raised by the right hon. Gentleman and his hon. Friend the Member for Fife, Central (Mr. Hamilton).

Not everything that we read in the newspapers is found to be true.

Mr. Dan Jones

Thank heaven.

Mrs. Chalker

As the hon. Member for Burnley says, thank heaven. I wish that less of it were true. Very often ours would be a happier society.

As in every previous period of Conservative Government, we intend to protect the pensioner from the increased cost of living. To some the bonus may seem only small, but this is now a continuing feature of life for pensioners. When the economy improves and we begin to overcome some of the problems inherited by the new Government we shall be able to use the clause 4 provisions. I hope that the House will give the Bill a Second Reading.

Mr. William Hamilton

Before the Minister sits down, will she express her opinion on the question whether she or her right hon. Friend would oppose in principle the idea of striking energy costs out of the cost of living index? That answer would be helpful to Parliament and the country.

Mrs. Chalker

I had sat down. I am as fervent as anybody in my wish to help those who need it. As the hon. Gentleman's question was hypothetical, I can give him no answer.

I ask the House to give the Bill a Second Reading and give it a fair wind on its way, so that the pensioners may have their bonus from the time of the debate—earlier than ever before. It will allow the staff to prepare to pay the bonus. I commend the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a committee of the whole House.—[Mr. Peter Morrison.]

Further proceedings stood postponed pursuant to the Order of the House this day.