HL Deb 25 March 1965 vol 264 cc821-30

8.30 p.m.

VISCOUNT BARRINGTON rose to ask Her Majesty's Government how many persons, including wives and widows of persons of pensionable age, are not eligible to receive pensions under the existing scheme, and what steps are being taken to alleviate such hardship or injustice as these persons may be suffering in consequence. The noble Viscount said: My Lords, finding myself in a position probably as difficult as I have ever been in, with the danger of making myself more unpopular, if it is not contrary to your Lordships' Standing Orders I should like to begin the very few things I have to say with a devout, personal vote of thanks to the noble and learned Lord on the Woolsack for at least two things he said at the end of the last debate in his(if it is not impertinent for me to say so) particularly lucid statement. One was that, generally speaking, he disapproves of retrospective legislation, because I now need not put forward more than a formal prayer or hope that, if speaking in your Lordships' House after such a marathon debate as we have just had is made not only illegal (as it probably should be) but retrospectively punishable by dismemberment, sentence will be carried out as painlessly and as reverently as possible on my dead body rather than on my living one.

The other thing is that the noble and learned Lord introduced into his judgment (if I may so call it) a great many times the word "equity" when speaking on the principle of what is equitable. I mention this only because I am in the position of asking a Question in which I have used the words "hardship" and "injustice". The Question is very loosely worded, but I want to make it quite clear that when I used the word "injustice" I did not mean injustice in the sense in which it is rather commonly used now, simply to mean inconvenience. If I may take an example, were I debarred through some purely technical fault regarding my title from plaguing your Lordships' House at this hour of the night or any other hour, that might be a hardship for me (though it certainly would not be for your Lordships), but it would not be an injustice. What I should call an injustice would be if some noble Lord were debarred from exercising the right of speaking, which I am rightly or wrongly exercising tonight, owing to some technical fault regarding his title, based not on the fact that it was less ancient or less broadly based than mine but that it was more ancient and that, instead of having only one right to sit in this House, he had two. Because it has been suggested to me that that is the case that applies to a large number of people. In asking for a number in my Question, I expect only a very rough answer, but I have asked for it because I feel this is a subject which demands to be looked into more than it has yet been.

The persons about whom I am asking this Question—and this is why I used that rather extravagant example—are persons who, I am told, are not receiving old-age pensions for many technical reasons, and they are highly complicated reasons. I entirely sympathise with the need for the complications, and of course we cannot go into that to-night, but they all rest on the fact that those persons are too old—that is to say, persons who were born later are entitled to rights which these persons are not. Very roughly, I understand that, under the Pensions Act of 1926 (I believe it was) contributions were not compulsory, and indeed could not be made if one had an income of over £200; but when the 1948 Act was introduced there was a floor figure of £425. I also understand (and this is one of the points on which I should like to be corrected if I am wrong) that a very large number of people were thus affected.

I have received information which I am merely stating without in the least knowing whether it is true; but I have interviewed a man of 84 who spends a great deal of time collecting information on this subject from persons who have sent him letters. I am not going to plague your Lordships with the letters to-night, but this gentleman gives the number affected as being 250,000 persons, the youngest being over 80, and he says that these people are being denied all the usual benefits and privileges except medical benefits; that is to say, they are not entitled to old age pensions, widows' pensions, funeral allowances, and various other privileges which go to the older people by way of free or reduced price seats in parks and in cinemas and other such minor things. I am not going to argue or attempt to argue any of this on the grounds of legal technicality, but am merely going to ask whether it is not possible to alleviate the hardship to these people, because I have satisfied myself by interviewing this man, although I cannot necessarily hope to satisfy your Lordships, that these people are treated unlike other people in what should be the same class, and, if anything, they have a priority.

I do not know if it is contravening your Lordships' Standing Orders to mention an article in the New Statesman this week. I am quite aware that to noble Lords opposite the New Statesman must be in rather the same position as Lord Beaverbrook's Press, perhaps, would be to certain noble Lords on the other side—that is, that, while not denying or doubting the vigour, energy and devoted loyalties of their pursuit of the Party line, they must occasionally wish they would go and help somebody else.

THE LORD PRIVY SEAL (THE EARL OF LONGFORD)

My Lords, if I might interrupt the noble Viscount, I was only going to say, having come into the debate rather late (and I apologise to the noble Viscount for not having heard him in full) that I think most Labour people feel that, over the years, the New Statesman has been a great source of enlightenment. Therefore I should not like it to be regarded as a nuisance to the Labour Party.

VISCOUNT BARRINGTON

I apologise to the noble Earl if I have said anything derogatory. There is an article in it this week. I do not know if I am in order quoting from it two short extracts.

THE EARL OF LONGFORD

Yes.

VISCOUNT BARRINGTON

It is only to point out that I am not fabricating this case. The writer says: On March 26 the Tory M.P. for Abingdon is presenting a Bill designed to provide retirement pensions for the over-age people who were excluded from the National Insurance Scheme in 1948. The writer then gives his own views as to what the Government will do about it. That is clearly something I know nothing about, and it would be entirely out of order, I imagine, if I were to ask about it. But the writer makes the surprising remark that: If politics were about truths and reason divorced from reality the Government might have a fair debating case in doing …"— what the writer presumes they are going to do. I am not quite clear what is meant by the term "truths divorced from reality" but it seems to me to be a philosophical point hardly worth discussing.

But when the noble Lord, Lord Bowles, comes to reply, I should like him to give us some light on the steps that are being taken other than those which have been suggested a great many times; namely, that these people should go on National Assistance—which, of course, is not the same thing as a pension, in that a means test of some sort is applied. I understand that a great deal of hope is placed on what I think is the Bill of the Chancellor of the Duchy of Lancaster, which may take a considerable time to come in, for guaranteed incomes. I hope that we shall hear something about that measure, because my own feeling is that this is an urgent matter—for this reason: there are a limited number of these people, and soon there will be very few of them left. If something is not done for them in the very near future it will be too late. All that is assuming that my information is correct.

I know that the noble Lord, Lord Bowles, will correct me if I am wrong about this; but I have interviewed one of these persons and I am satisfied that this man was sincere. He showed me a great many letters which, owing to the lateness of the hour, I will not quote. I should feel much happier if I could be told, in so far as it is possible to know it, the immediate policy for dealing with these people. As it is rather late I will not go on to introduce a number of questions, mainly minor ones, which I should have done had the hour been earlier. I apologise to the House for keeping it so late, and I will simply ask the noble Lord to discount the deficiencies of presentation, to concentrate on the equitable side and to explain so far as possible in words that can be clearly understood the steps which the Government propose to take.

8.44 p.m.

LORD DRUMALBYN

My Lords, may I ask just one or two questions, because there is a matter that I should rather like to put to the noble Lord who is to reply. We are indebted to the noble Viscount, Lord Barrington, for asking this Question. I think it was not by any means wrong for the Government of the day to exclude certain people, in 1946, from the operation of the pensions scheme. Most of these people were those whose incomes had been above the level for the previous insurance schemes and who were too old to come into the present scheme. It was presumed at the time that their savings would be enough to see them through.

But the great problem, as we all know —and I am not trying to make a Party issue of this—is that since the war the cost of living has about doubled and many of these people's incomes have actually fallen in terms of pounds, shillings and pence, and they are very much worse off than they were before. I think we are all aware that the Government have an incomes guarantee scheme in contemplation. Of course it is very hard for these people who were excluded, because they see in the meantime that not only have earnings risen (and I note that average earnings have risen from £6 9s. 0d. a week in October, 1946, to £18 2s. 2d. in October, 1964), but the pensions have kept pace with the earnings and have tripled since 1946—or will have done so, more or less, by next week. It is very hard for them to feel that they are deprived of this payment as of right.

The incomes guarantee scheme, as I understand it, may be a payment as of right, but it has a built-in means test because it is a kind of deficiency payment. My own feeling about this is that the Treasury, naturally, tend to regard hardship in absolute terms, in terms of £s. d. and the lack of a certain amount of £. s. d., whereas, in reality, hardship is very much a relative term. What one has to hear in mind is the tremendously sharp fall in the standards of living of people who in 1946 had saved enough to see them through and who now find their standards of living gravely affected.

While those most in need obviously need helping first, when we consider the increase in the standard of living that has taken place for most of the rest of us, most of those who have been earning since those days, it does not seem to me too much to expect those who have benefited from the rise in the standard of living to contribute in some way (I am not suggesting in what way it should be) to those whose standards of living have seriously fallen because of the increase in the cost of living and the decline in the value of money.

The incomes guarantee scheme—and we have discussed this before—has, I think, many defects. My purpose in intervening is to say that I see one particular defect: that it will not benefit those suffering a comparative hardship but who still have an income above the level of the incomes guarantee.

THE EARL OF LONGFORD

My Lords, may I intervene? This is an extarordinarily interesting point. I am intervening only out of personal curiosity Does the noble Lord consider that it would be possible to work out a scheme under which people who had suffered most in terms of expectation were given a kind of extra compensation for the expectation that they had lost? I can see it in human or psychological terms; but it is difficult to see it in administrative terms.

LORD DRUMALBYN

I think that, broadly, the choice must be whether some kind of flat-rate payment is given to all who feel they need it, or whether there is something like an incomes guarantee with deficiency payments only up to a certain level. In other words, are you to compensate everybody who suffered a sharp decline in standards of living to the point where he needs some assistance (and this hardship is a relative term) or are you going to sustain them up to a certain standard of living, leaving those who admittedly suffered a sharp decline in the standard of living, but who still have a little more over the level of the incomes guarantee, without anything at all? I think that that is the broad question and that is what I am suggesting to the noble Lord might be worth looking into.

8.50 p.m.

LORD BOWLES

My Lords, may I first of all say to the noble Lord, Lord Drumalbyn, that as my noble friend the Leader of the House is a member of the Cabinet, he will have his points looked at in connection with the examination of the minimum income guarantee scheme? May I congratulate the noble Lord, Lord Barrington, for his charming and graceful speech?

I am sure that your Lordships were very interested to hear the views which have been expressed on what is undoubtedly a real problem. I shall do my best to answer the various questions which have been put, but, in view of the lateness of the hour, I hope that I shall not detain your Lordships too long. The noble Lord, Lord Barrington, asked in his Question how many persons, including wives and widows of persons of pensionable age, are not eligible to receive pensions under the existing scheme. The short answer is that it is estimated that there are about 450,000, of whom about 210,000 are receiving payments from the National Assistance Board.

It may be convenient if I give your Lordships some further information about these people and show how they come to be in this position. The figure of 450,000 is made up of two groups of people, numbering 250,000 and 200,000 respectively. The first group, of 250,000, are people now living who were over minimum pensionable age—which, as your Lordships will know, is 65 for a man and 60 for a woman on July 5, 1948, which is the date on which the existing National Insurance scheme began. These people are not eligible for a pension because they were too old to pay contributions to the existing scheme and, for reasons with which I will not trouble your Lordships to-night, since this is a very complex matter, they did not qualify for a pension under the old schemes of insurance. About 120,000 of the 250,000 are estimated to be receiving payments from the National Assistance Board.

The other 200,000 people who are without National Insurance pensions for one reason or another include several different groups of people: first, the wives and widows of men over pensionable age in July, 1948, who, although they were not themselves over the age of 60, did not become insured, though they could have done; secondly, people who, although they have paid some National Insurance contributions, could not have paid sufficient to qualify for pension and who have had their contributions refunded; and, thirdly, those "late-age" entrants who, under the special rules designed for these people who were within ten years of pensionable age in 1948, chose at pensionable age to take a refund of the pension element of their contribu tions rather than go on to complete the full ten years of contributions and qualify for a pension. About 90,000 of these 200,000 are estimated to be receiving payments from the National Assistance Board: and the figures add up, as I have already said, to 210,000 receiving payments from the National Assistance Board out of a total of'450,000.

The noble Lord, Lord Barrington, also asked what steps are being taken to alleviate such hardship or injustice as these persons may be suffering. As your Lordships know, there has been considerable interest recently in the subject of people without pensions, and a Private Member's Bill is due to be moved in another place to-morrow. I should not like to anticipate anything likely to be said in that debate, but I think I may say that the Bill seeks broadly to provide for a pension to be paid out of the National Insurance Fund to the 250,000 elderly people without National Insurance pensions who were over pension age and not insured in 1948, and to their wives or widows. There are, however, as I have said, another 200,000 old people without a National Insurance pension, and there are also nearly 300,000 other people who have paid some contributions, but not enough for a full National Insurance pension, and who thus get one at a reduced rate. I must tell your Lordships that the total cost of paying full pensions to all these people is estimated to be about £60 million in 1965-66, even after allowing for the savings to be expected on payments by the National Assistance Board which I have mentioned.

This expenditure from the National Insurance Fund would have to come from the pockets of the present contributors to the Fund—and I would remind your Lordships that, as from next Monday, the combined flat-rate contribution to the National Insurance Scheme for a man and his employer will be at least 26s. 7d. a week. A charge would also be imposed on the Exchequer through the Exchequer contribution to the Fund. And the expenditure proposed would be to people who have not paid the necessary premium to qualify for pension. That cannot, by any stretch of the imagination, be described as insurance in any accepted sense of the word.

I should not like your Lordships to think, however, that my only answer is a negative one. Her Majesty's Government recognise that there is a real problem here. Some of these people without pensions are undoubtedly not well-off, as the National Assistance figures which I have quoted show. But, equally, others are quite well off, including ex-businessmen and land-owners. Her Majesty's Government think that it would be neither right nor financially sensible to pay out large sums of contributors' money from the National Insurance Fund indiscriminately and without regard to the recipient's income to people who have paid nothing. In our view, the right way to tackle this problem, which is one of the topics that is being considered in the major review of the schemes of social security, is through our plans for a guaranteed minimum income scheme for persons of retirement age whose incomes are small. I would here say to the noble Lord, Lord Drumalbyn, about a built-in means test, that we just cannot pay pensions to millionaires merely because they happen to be of this particular age. I cannot say more on this to-night, but I can assure your Lordships that Ministers are now actively studying the best way of putting their plans for a guaranteed minimum income into effect. It will cover pensioners and non-pensioners alike and will represent something new in the history of social security in this country.

In the meantime, there is National Assistance, which I would remind your Lordships is paid entirely out of the Exchequer and has no contribution tests at all. If there were more time, I could give your Lordships details of the great efforts which have been and will continue to be made by the Ministry of Pensions and National Insurance and the National Assistance Board to try to bring the National Assistance scheme to the notice of everyone who might be entitled to benefit from it. Post offices, doctors and health workers are given leaflets with the necessary details, to enable them, if they come across anybody who looks as if he needs National Assistance, to show him how to go about getting it. I can stress that the Government attach great importance to this. I may add that the National Assistance scale rates are themselves going up substantially on Monday next. They are going up by 12s. 6d. a week for a single person and 21s. a week for a married couple.

Moreover, there are all the other benefits of the Welfare State to which the non-pensioners are entitled in the same way as everyone else in the community. The fact that they do not receive a pension does not affect the matter in any way. There are the benefits of the National Health Service, which are so important to old people, particularly, and the various local authority and voluntary services, such as "Home helps" "Meals on Wheels", and there are the income tax age exemptions and reliefs. I should also like to make it clear to your Lordships that the fact that an old person has not got a pension book does not in general debar him or her from getting such concessions as are available to old people in any particular locality. In conclusion, I hope I have not detained your Lordships too long, and I welcome this chance of saying a few words on this subject.