HC Deb 06 March 1979 vol 963 cc1075-8
5. Mr. Ovenden

asked the Secretary of State for Social Services what would be the administrative cost of making a cash payment to all pensioners to cover the annual amount by which the November 1978 pension increase falls short of the increase in average earnings.

Mr. Orme

The administrative cost of making a single payment of the same amount to all pensioners would be about £3 million, but such a payment could not be varied to cover each individual case. The Government think it more appropriate to take the shortfall into account, together with the general economic prospects, when the time comes to decide the new rates of benefit which will take effect from next November.

Mr. Ovenden

Will my right hon. Friend reconsider that answer? Does he not accept that some action should be taken to recompense pensioners for the lower than justified pension increase that they received in November due to the miscalculations of his Department? Does he accept that the higher than expected increase in earnings has boosted the national insurance funds and that some way ought to be found to return this money to national insurance beneficiaries?

Mr. Orme

I take my hon. Friend's point. As I have already said, the Government will take this into account when we look at the next uprating. I should like to draw to the attention of the House the fact that because earnings were higher than prices—by 3.3 per cent. last year—pensioners received an increase in real terms.

Mr. Marten

Would it not save a certain amount of Government expenditure if pension increases were made at the same time as the Budget so that the new pension rate could equate almost exactly with the new tax allowances in the Budget? Would not that save a lot of work for the tax inspector and the collector of taxes?

Mr. Orme

That sounds an attractive idea, but the administrative problems would be immense. We have now moved to a November uprating. We need about five to six months' forecast because of the tremendous amount of work that has to be done in making adjustments to the pensions. We are dealing with over 9 million pensioners, and it is a very big task indeed.

Mr. Madden

Bearing in mind the large heating bills that many pensioners are facing this winter and, indeed, the increase in television licence fees, would not my right hon. Friend accept that pensioners are owed about £20 and that a lump sum payment of that order would be extremely useful to many pensioners in meeting these bills?

Mr. Orme

I accept what my hon. Friend says. But if we were to make a lump sum payment, some people would get more than they were entitled to and some would get less. It would be a very difficult operation. The safest way to deal with this would be for the Government to take into account in the uprating. I emphasise that the pensioners have not lost this year. In fact, they have gained quite substantially.

Mr. Patrick Jenkin

Does not everything that the right hon. Gentleman said indicate that he is conceding that once again, for the second time in three years, the Government have missed the target that they set themselves in the 1975 Act? Was the Secretary of State correctly reported when, in "Pensioners' Voice", he was reported as saying that there was a statutory requirement to take these things into account but no statutory requirement to get it right? Does not that strike the right hon. Gentleman as a rather cynical approach to this statutory obligation?

Mr. Orme

I am sure the right hon. Gentleman is aware that the forecast which my right hon. Friend made last summer is the best that is available. There is no statutory obligation, as a recent court case proved, to carry that out. Obviously a Government would want to take this into account. The right hon. Gentleman reminded me about the 1975 Act. In that Act, this Government put the uprating of pensions in line with either earnings or prices. I should like to know whether the right hon. Gentleman's party will stick to that if, unfortunately, it came into office.

7. Mr. Jessel

asked the Secretary of State for Social Services if he can now announce arrangements for retirement pensions to be paid on request direct into pensioners' bank accounts.

Mr. Orme

The findings of a joint working party of representatives of the banks and my Department are being studied and I will make an announcement as soon as possible.

Mr. Jessel

As such an arrangement would save 40 per cent. of retirement pensioners with bank accounts from going out to collect their pensions in bad weather, and as there would be a considerable saving to public funds, why do not the Government get on with it? It is now 18 months since I raised the matter with the Minister. What is the reason for the delay?

Mr. Orme

I am expecting a report by the end of the month. There is a great deal of work to be done. As I have said, we are dealing with nearly 9 million pensioners. I am much in favour of the principle, and the introduction of such an arrangement would cover child benefit as well as retirement pensions. There are certain snags and administrative problems to be overcome, but I hope to make some progress in the near future.