HC Deb 08 December 1988 vol 143 cc426-7
5. Mr. Ronnie Campbell

To ask the Chancellor of the Exchequer if he expects to allocate resources from the Contingency Fund in 1989–90 to (a) pensions and (b) education.

7. Mr. McFall

To ask the Chancellor of the Exchequer if he expects to allocate resources from the Contingency Fund in 1989–90 to (a) pensions and (b) education.

The Chief Secretary to the Treasury (Mr. John Major)

I assume that the hon. Gentlemen are referring to the reserve. In the case of pensions, the answer is yes. Other allocations from the reserve will be made as the need arises.

Mr. Campbell

Given the break in the earnings-linked update for pensions, is the Chancellor aware that pensions now are £11 lower for single people and £18 lower for married couples, which has given the Treasury a net saving of £5 billion a year? That has robbed British pensioners of £2,000 a year since 1979. How does the Chancellor feel about being voted the No. 1 Scrooge this Christmas by the pensioners?

Mr. Major

The hon. Gentleman's remarks are wholly misleading, for a variety of reasons. The first point that I want to make is that pensioners' average real incomes have risen by 23 per cent. from 1979 to 1986, compared with only 3 per cent. in real terms between 1974 and 1979. Frankly, we need no lectures from the hon. Gentleman, whose party, when in government, savaged pensioners' living standards.

Mr. McFall

As skills shortages are believed to be the main impediment to the growth of industrial companies, and as a CBI survey shows that over 20 per cent. of industrial firms believe that skills shortages are the primary impediment to growth, why is it that in the White Paper published by the Secretary of State for Employment the Chancellor of the Exchequer did not see fit to allocate an extra penny from the contingency fund to further education and training?

Mr. Major

Substantial increases were allocated to education and training in the recent public expenditure round. The hon. Gentleman may be aware that, in particular, there were substantial increases recently over the whole range of university and other education-related areas of expenditure.

Mr. Brazier

Does my right hon. Friend agree that it is only because of the increase in growth that has occurred as a result of the successful economic policies of this Government that there are extra resources and that we can have discussions about how they ought to be allocated?

Mr. Major

That is right. There were substantial increases in a series of priority programmes during this year's public expenditure round.

Mr. Adley

Will my right hon. Friend consider the significance of the figures that he has just given to the House? There has been a 23 per cent. increase in the real value of pensions, compared with the miserly sum that the last Labour Government managed to give to pensioners. In particular, there are now more than 1 million additional state pensioners since this Government were elected in 1979. Will my right hon. Friend point out to the people of this country that it is possible to contemplate that a Government such as might emerge if the Labour party were elected would reduce the real value of pensions for state pensioners?

Mr. Major

It is perfectly clear that in the event of there being a further hypothetical Labour Government, and of that Government being as successful as their predecessors, they would undoubtedly, given the increase in the number of pensioners in the last few years, reduce the living standards of pensioners. That is not taking into account the effect of inflation under the last Labour Government. The Opposition would do well to recall that they twice denied the Christmas bonus to pensioners and that a considerable number of pensioners suffered a negative loss on their hard-earned savings as a result of their policies.

Mr. Ron Brown

Does the Minister not understand that today's sick society—also known as the "tick society"—suffers greatly because of Dr. Lawson's quack medicine? Pensioners in their droves in Scotland are backing the mass movement against the poll tax. That is something that the Government will have to face next year in Scotland—as well as in England, in due course.

Mr. Major

My right hon. Friend's policies have led to eight successive years of quite substantial growth, which is both a creditable and a remarkable record. As for pensioners, the hon. Gentleman and all his hon. Friends have neglected to mention the further substantial assistance that has just been announced in respect of older pensioners. I should have thought that they would welcome that announcement.