§ Mr. Tom Benyon (Abingdon)
I am grateful for the opportunity to raise what I regard as an important topic on this last Adjournment debate in this Session of Parliament before Christmas. It is especially appropriate that I am addressing the House on the fact that war widows over the age of 80 do not qualify to receive the State old person's pension. That is a considerable injustice. That injustice arises out of the complications and anomalies that currently abound in the social security system.
The Ten Commandments had the virtue of clarity and simplicity. If we do not obey them, we cannot pretend that we did not understand what Moses meant. If Moses had reappeared carrying the Ten Commandments amendment legislation, many of us would have had the excuse of incomprehension in mitigation for our failures on the day of judgment. Since 1945, the social security system has been amended and reamended piecemeal so that the original simplicity of the concept has now been lost. Claimants are faced with a maze of benefits, directions, limitations and qualifications which even the experts find confusing. Frequent injustices appear where claimants in great need do not receive what Parliament must have intended them to receive because of some loophole that creates inequity in the system. Until Parliament finds the energy and political will to overhaul the entire system, and remould it to complement the taxation system, those anomalies must be created, as has become apparent.
The most glaring example of what I regard as great injustices is that war widows do not receive the old person's pension because of the overlapping benefit regulations. The essence of those regulations is that there should be no duplicate payment for the same broad purpose. On the face of it, that would not seem to be unreasonable, but is the application of the regulation always reasonable and fair? As I say, there is one instance in which it most certainly is not because it denies war widows the old person's pension.
A war widow is awarded a war widow's pension if her husband's death is attributable to a disability which, in turn, is attributable to his service to the Crown. Under the overlapping benefit regulation a war widow cannot receive the national insurance widow's pension since both pensions are regarded as being for the same broad purpose—the death of her husband. However, the regulation does not specifically prohibit receipt of the widow's pension. It does not state that a war widow cannot receive that pension but that it will be abated by the war widow's pension. As the latter is always at a higher rate, it follows that duplication can never occur.
However, although a war widow is unable also to receive the national insurance widow's pension, she can receive the retirement pension provided that it is based solely upon her contributions and is in no way dependent on those of her husband. Obviously, the use of any of her husband's contributions would invoke the application of the overlapping benefit regulation since the portion of the pension based on such contributions would be regarded as a beneficiary provision, thus duplicating the war widow's pension. At September 1981 it was estimated that about 75 per cent. of all war widows over 60 were in receipt of a retirement pension based solely on their contributions.
1137 In 1971 the Government of the day introduced the old person's pension, better known as the over-80s pension. Although it may well have been the original intention for that payment to have been confined to those who were too old to contribute to the national insurance scheme on its inception, in the event, the Act is not so limiting, the only criteria of eligibility being the attainment of the age of 80 and certain conditions in respect of residence. It is not a beneficiary award, but is received by each individual in his or her own right, provided the necessary conditions of eligibility are satisfied. Thus, even if the husband is in receipt of this pension, on his death his widow will receive it, not automatically but only when and if she satisfies the qualifying conditions. In that respect it is, therefore, similar to the retirement pension which can also be received by a man or woman only if he or she satisfies the conditions of eligibility.
Furthermore, if a reduced retirement pension is in payment, and its rate, when the recipient qualifies for the over-80s pension, is below the rate of that pension, the over-80s pension is paid in lieu. There is, however, one vital difference in the treatment of those two pensions. While a war widow can receive a retirement pension in full, provided that she has earned it solely in her own right—in other words, it is not abated—the over-80s pension does suffer abatement. Thus, the latter pension is denied to any war widow, even if she is otherwise eligible to receive it.
Why is there that differentiation in the treatment of the two pensions? Since the over-80s pension can be received only by an individual in his or her own right, it cannot possibly be classified as a beneficiary provision. It is not, therefore, for the "same broad purpose" as a war widow's pension and there is thus no question of its being a "duplicate payment." On the other hand, as the Act makes pension provision for those outside the normal national insurance scheme, or for those who have an inadequate contribution record in which case the over-80s pension replaces the retirement pension, it clearly takes the place of that pension for such individuals.
In the face of such arguments, how can the Government logically persist in denying the over-80s pension to that very small group of elderly war widows? The application of the regulation in this instance is not only wholly wrong and unreasonable but utterly irrational. The Government, of course, put forward various arguments which even in my most charitable frame of mind—as my hon. Friend the Minister knows, that is my usual frame of mind—I must regard as excuses to support their refusal to end the discrimination against those very elderly war widows.
For example, the Government point to certain advantages that are accorded to war widows. I am sure that my hon. Friend will do that again this afternoon. For example, the Government refer to the age allowance at 65 and 70. I have even had the £10 Christmas bonus thrown at me, as if it somehow makes up for the fact that they are denied the old person's pension. However, such arguments have nothing whatever to do with the point and are a complete red herring.
The issue is purely a matter of principle. It is whether the over-80s pension is, in effect and practice, an extension of, adjunct to, or replacement or alternative for the retirement pension and should, therefore, be treated in 1138 precisely the same way. To my mind, there is no doubt about the matter and I do not believe that any right-minded person would think otherwise.
As is only to be expected, the Government also use the objection of cost. I accept that cost is important, particularly in the present economic climate. However, it should not, in principle, be the governing criterion for upholding the blatant misuse of a regulation. Let us see what the cost would be if the over-80s pension were paid to those widows. In September 1981 it was estimated that about 18,000 war widows over the age of 60 were not in receipt of a retirement pension and that 5,300 of them were then over the age of 80. At November 1982 rates, the cost of paying the over-80s pension to those widows would be £5.4 million.
There are, however, only about 13,000 potentially eligible war widows within the 60 to 80 age bracket, while the total number of all war widows under 60 is only about 51,000. Therefore, payment of this pension is a diminishing commitment. The sum of £5.4 million is very small when compared with expenditure on pensions, let alone overall public expenditure.
However, the initial impact could be confined to introducing the payment of this pension in two stages. In the first stage, the overlapping benefit regulation would initially be amended to abate the over-80s pension by only the amount of the age allowance payable with a war widow's pension. That would reduce the immediate cost to about £3.1 million. The second stage would be to amend the regulation to permit the over-80s pension to be paid in full.
To the elderly person on £42 a week, an extra £2.80 is a substantial sum sufficient to pay for the extra warmth, food and clothing that old age requires. War widows aged over 80 are not constituents who are likely to lobby their Members of Parliament. Their lobbying days are well over. The mark of a civilised society is whether we as politicians are prepared to advocate their case, although they cannot advocate their case to us. Our urgent priority is to ensure that the needs of that non-vocal group are satisfied.
If for some reason it is impossible to amend the regulation, the over-80s pension could at least be abated in the form of an increased age allowance at 75 and 80. It is estimated that if the £5.4 million were used in that way, it would provide an extra allowance of £280 a year for ladies aged 80 years and over. That small group of elderly widows deserves better and fairer treatment than has hitherto been meted out by the House and by successive Governments for a long time. The discrimination that they suffer is unjustifiable and should be ended. If the Government have any sense of justice, they should end it within a specific period, not just when the economic position permits. I have grown accustomed to hearing that phrase from the Government, but what it means is that they cannot do anything about the matter. I hope that the Government can do something about it, and will give those ladies a much-needed Christmas present in the form of a financial provision so that they can look forward to 1983 with optimism.
I hope that I have not put my hon. Friend in too difficult a position, because obviously he cannot announce this afternoon that the Government will do what I suggest. However, I hope that he will make representations to my right hon. and learned Friend the Chancellor of the Exchequer to build the matter into his plans for March. I 1139 hope that my hon. Friend will show that he and his Department will support the cause that I have attempted to advocate this afternoon. I shall listen to my hon. Friend's words with considerable interest.
§ The Minister for Social Security (Mr. Hugh Rossi)
I am grateful to my hon. Friend the Member for Abingdon (Mr. Benyon) for initiating a debate about elderly war widows. It almost goes without saying that we are greatly concerned about war widows, especially those who are elderly. Indeed, the provision that we make for them compares very favourably with what we do for other elderly people under our benefit arrangements.
Hon. Members will wish to know just what elderly war widows receive. First, there is the basic war widow's pension, which is currently set at a rate of £42.70 a week. That is the rate for the widow of a private soldier, but other widows receive rank additions as well. When the war widow reaches the age of 65 she receives a further age allowance of £4.15. When she reaches the age of 70, that allowance is doubled to £8.30. So by age 70, the war widow has at least £51 a week. As hon. Members will know, one of the first acts of the Government was to free completely those war widows' pensions from income tax.
We must compare that with what other elderly widows get. Under the national insurance scheme, a widow receives a basic £32.85 a week. On top of this, she gets 25p at age 80, but so does the war widow of that age. Those who do not qualify for a national insurance widow's pension must wait until they are 80 before they can receive a non-contributory retirement pension. That is set at a rate of £19.70 a week, plus the small age addition of 25p. So the elderly war widow has a lead already of more than £18 a week over the national insurance widow, and she gets more than twice as much as those who must rely on the non-contributory over-80s pension.
I think that it will be helpful, especially in view of what my hon. Friend has said, if I briefly outline the grounds for the introduction of the non-contributory over-80s pensions and their place within the framework of our social security scheme. Having done so, I think that my hon. Friend will realise that he has based his argument, although persuasive and heart-rending at this time of the year, on a false premise.
The first element, known as a category C pension, was introduced by the National Insurance Act 1970, which provided for a non-contributory retirement pension to be payable to some 250,000 very elderly people—at that time the minimum age for an eligible man was 87 and for a woman 82—who were excluded from the pre-1948 pension schemes and who, because of their age at the time when the 1948 national insurance scheme was introduced, were excluded from that too. These "left out pensioners" were very elderly. They were mostly living on fixed incomes and had seen the national insurance pensions, which they lacked through no fault of their own, grow steadily in real value and importance. The 1970 Act provided some very belated arrangements for those "left out" of the 1948 scheme.
There were really three groups covered: those who were both excluded from the pre-1948 scheme and, because they were over retirement age when the 1948 scheme was introduced, were excluded from that legislation also; those who under the 1948 scheme did have the chance to pay contributions but did not take that 1140 chance; and, thirdly a very small group who were covered by pre-1948 Act pension schemes but who for one reason or another, due mainly to deficiency of contributions, were entitled to less than the standard rate of contributory retirement pension, whose reduced pensions would be topped up by these provisions.
The category C pensions first became payable in November 1970. They were fixed at a lower rate than the contributory retirement pension and the level equated with the 60 per cent. level payable to a dependent wife. The condition for receipt of a category C pension is that the person must have been over pension age on 5 April 1948 and have been resident, and ordinarily resident, in Great Britain for at least 10 years since that date. A woman married to a man in receipt of this pension is also entitled to it provided that she is over pension age and has retired.
The second kind of non-contributory pension scheme is known as the category D pension and was introduced by the National Insurance Act 1971. This extended the scope of non-contributory pensions to all persons over 80 irrespective of the reason for their exclusion from the 1948 scheme. The pension is payable, subject to a 10-year residence test, to any person over 80 who either has no contributory retirement pension or a deficient one.
The category D pension benefits any elderly person with a deficient contribution record irrespective of cause and is of particular benefit both to immigrants and to British citizens returning from abroad who have not been obliged to pay contributions during their working life.
As one would expect, the number of elderly people receiving these pensions has declined steadily over the years. At December 1971 there were about 132,000 category C and D pensioners of whom 112,000 were women, while in May of this year this had fallen to 45,000, of whom 40,000 were women. The numbers receiving these pensions have therefore declined by almost two-thirds, and this is not to be wondered at since the intention behind the pension was to give something to those who had no State pension at all because, for instance, they were too old to enter the national insurance scheme as long ago as 1948.
I hope that it will be clear that the over-80s pension was introduced to meet a particularly well-defined contingency, that is that the beneficiary had no other pension on which to live.
Social security arrangements provide for many and varied contingencies, such as sickness, unemployment, retirement, widowhood and so on. It is, of course, perfectly possible for someone to satisfy the conditions for two or more sets of benefits. To prevent the award of benefits becoming something of a lottery, there have always been rules that prevent the duplicate payments of benefit provided for the same broad purpose, usually the maintenance of the beneficiary. The over-80s pension is provided not as some sort of recognition that a person has reached four score years but as a contribution towards that person's needs where no other pension is available.
Clearly, a war widow is already provided for through the war pensions scheme, and, as I have said, the preferential rights at which a pension is paid to her already gives her a substantial lead over other groups of widows. I can well understand that the validity of comparisons between different groups is often open to question, but some comparisons must be made if we are to achieve a degree of even-handedness in the way resources are distributed.
1141 I do not wish to quarrel in any way with my hon. Friend's assessment of the cost of extending over-80s pensions to war widows. Like him, I think that the cost would be about £6 million, though there would be a small reduction from this because we would save on supplementary benefit. That would not be much, however—no more than £¼ million—because the vast majority of these elderly war widows have an income under the war pensions scheme that lifts them above supplementary benefits scales, unless they have exceptionally high rents or something of that sort. Though this £6 million would have to be found from somewhere, I do not wish to base any argument on grounds of cost.
To concede the over-80s pension to war widows would offend against the rationale of the scheme. For example, we would find it difficult to resist demands from national insurance widows that they, too, should receive the over-80s pension when they reached that age or, for that matter, that war widows should receive national insurance pensions on their husbands' contributions. We allow a war widow to supplement her widow's pension with any retirement pension for which she has contributed herself, and we feel that we cannot go beyond that.
1142 As I have said, the over-80s pension was introduced to meet a particular contingency, that is, to provide a State maintenance pension to those people who had no pension at all. Neither war widows nor national insurance widows meet that criterion and the Government take the view that the best use of any extra resources becoming available for war pensioners would be to improve the war pension provision generally.
Therefore, I am sorry that I must disappoint my hon. Friend, but I think that he will realise, on reflection, that there is a sound basis to the reason for my having reluctantly to refuse his earnest request on virtually the eve of Christmas.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
Before I adjourn the House, may I wish the hon. Member for Abingdon (Mr. Benyon), the Minister of State, the Whip and the staff of the House a happy Christmas.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-three minutes past Three o'clock till Monday 17 January 1983, at half-past Two o'clock, pursuant to the Resolution of the House of 20 December.