HC Deb 15 February 1983 vol 37 cc141-3
2. Mr. Bowden

asked the Secretary of State for Social Services whether he expects to bring forward legislation to adjust the 1983 pensions uprating.

15. Mr. Stallard

asked the Secretary of State for Social Services if he will make a statement on his plans for the 1983 pensions uprating.

The Secretary of State for Social Services (Mr. Norman Fowler)

Primary legislation would be needed to adjust the 1983 pensions uprating to take account of the overshoot at the 1982 uprating. A decision on this will be taken at the time of the Budget.

Mr. Bowden

Does my right hon. Friend agree that there is a strong case for making no adjustment to the increase in the level of the pension next November, not least because the retirement pension is still lower as a proportion of male earnings than it was in 1977?

Mr. Fowler

I do not accept my hon. Friend's view. The standard basic pension has increased by about 68.5 per cent. over the four upratings since November 1978. That compares with a rise of 6l per cent. in the RPI. It also compares well with the pensioner price index.

Mr. Stallard

Does the Secretary of State accept that had the Government not severed the link between pensions and wages or the cost of living, whichever was the higher, a married couple would now be £2.25 better off? Is that not a sufficient reason for a more generous approach to the clawback?

Mr. Fowler

We had a debate on prices and earnings. The decision has been taken. The pledge that the Government have made, and which they are keeping, is to price protect pensions and other related long-term benefits. We shall continue to do that.

Mr. Nicholas Winterton

I recognise what the Government have done for the elderly and other deserving groups, but is my right hon. Friend aware that a number of Conservative Members could not support the proposed clawback from the pensioners in the next round of awards to them? Does my right hon. Friend accept that many Conservative Members believe that the benefit from the Government's underestimate of their success in reducing inflation is well and truly deserved by the pensioners, who should not suffer in the future?

Mr. Fowler

I hear what my hon. Friend says, but I think that he will also accept that such adjustments are inevitable with the forecast method that was introduced by the Labour Government as a saving in the social security budget.

Mr. Andrew F. Bennett

Does the Minister agree that there is no excuse for robbing pensioners or any other beneficiaries in November? Will he make it clear that all beneficiaries will be treated the same and that separate treatment will not be given to any one category?

Mr. Fowler

There is no question of robbing pensioners. I have just given the figures of the way in which pensions have kept ahead of prices. That is the Government's record and we intend to keep to it.

Mr. John

There is nothing inevitable about a clawback of 2 per cent. If the Government decide not to claw it back, they can perfectly well increase pensioners' standard of living by that amount. Would it not be intolerable if there were a give-away Budget for taxpayers and at the same time 2 per cent. were clawed back from pensioners?

Mr. Fowler

In that case I am not at all sure why the previous Government went over to the forecast method.

Mr. Rooker

No clawback.

Mr. Fowler

The hon. Member for Birmingham, Perry Barr, (Mr. Rooker) says "No clawback". Surely an adjustment one way or another is an inevitable consequence of the forecast method? The previous Government changed from the historic to the forecast method for one reason only—to save £500 million.

Mr. John

It is inevitable only if the Government choose it to be so. Let it be clearly understood that the Chancellor need not claw 2 per cent. back. If he does so, the Government will be indicted.

Mr. Fowler

When the previous Government introduced the legislation, no one thought for one moment that in such circumstances there would be no adjustments. The point being made by the Opposition Front Bench is, frankly, hypocritical.