HL Deb 22 November 1972 vol 336 cc956-94

2.46 p.m.

LORD HALE rose to call attention to the economic problems of retirement pensioners and of retired persons mainly dependent upon the income from long dated or undated Government securities; and to move for Papers. The noble Lord said: My Lords, with permission, I propose to "randomise" to the extent of taking the second half of the Motion first. There are, of course, two separate points, closely allied. I ventured to put down a Question on the Order Paper some days ago about the position of persons of 65. It has been said that man never really recovers from the shock of his birth, and I remember myself, when I came into the world, feeling some annoyance at finding that I had been born in a year with a £50 million deficit and called upon to bear not only the sins of my forbears but their improvidence to the extent of a national debt of £750 million, and that I should therefore be called upon in due course to pay the costs of the Boer War.

Those who survived two World Wars and the invention of the internal combustion engine and reach the age of 65, arrive at a point of some very real financial shocks which can endanger the health of the unwary man who, whether by folly, patriotism, or earnestness, undertakes to continue to work in the interests of the country. The Question I put down was answered by the noble Baroness, Lady Young, presumably because of her wholly unblemished political past, and she was good enough to come clean and blow the whole gaff so far as the Question permitted. So far as the self-employed person is concerned, at 65 this is what happens: he has fully and over-contributed because he does not, and indeed cannot, derive from the National Insurance Fund some of the benefits which are available to the worker; he has fully and wholly contributed to provide for himself a pension of approximately £10 a week, which over the five-year period, if he works until he is 70, amounts to roughly £2,500. He loses every penny of that. Quite frankly, he is robbed of it.

I do not propose to make any Party points in the course of this debate. My impression is that no Government has a very healthy record in relation to the old-age pensioners, and if the noble Lord, Lord Aberdare, wishes to claim some credit to this Government for one or two decisions they have taken, I give him the credit. But the pensioner loses the whole of his £2,500 pension. He contributes a little over £1 a week—something like 25s. or 26s. a week—to get increments. So during those five years he also contributes some £320, and then starts at the age of 70, with a much reduced expectation of life, to draw increments for himself and his wife, if both have survived the period, of about £2 a week, a sum which bears no relation to the actuarial value of his contributions. That is not all, and that is why I develop this matter further. He is called upon to pay income tax and surtax on the earnings which he is getting, so he is making a contribution to the national finances all through that period in addition to the contributions which I have mentioned, and when he finally relinquishes work he finds that, because it is alleged that surtax is paid in arrears, he will go on paying surtax for 18 months after he has retired, and indeed may literally be called upon to pay in tax and surtax in the final year more than his total income.

That is not the whole story, because there is the question of capital: and on that subject I ventured to put down a Question for Written Answer which was dealt with a few days ago. On the matter of Government investments, I took what was perhaps one of the largest financial operations ever performed by a Government; it was the refloating, or the redemption on re-issue, of the 5 per cent. National War Bonds which were issued during the First War. The sacrifice of life which that war involved might well have justified at that time calling upon the whole community to bear infinitely greater sacrifices than that of money. But the Government of 1918 is not my pigeon to-day. The whole House rejoices that we have among us, and in the Chamber to-day, the noble Lord the former honourable Member for Bradford, South, who is an asset to the House, both personally and politically, and who can answer for the deeds of that Government.

I come to December 1, 1932, when the new flotation took place by a Government which was called a National Government. If the House will forgive me, I will take a metaphor from the terminology of turf-cutting and say that I always think of it as the Government of odds and ends—a lot of squares and not many triangles. The operation was to float a title over £1,900 million of former 5 per cent. stock and to reduce the interest to £3½ per cent. That was satisfactory enough at the time and no one would grumble, but they used a phrase which certainly meant nothing to the trustees who, on bank advice, invested their money. They said that the stock was redeemable in 1952 and after. It was a very sinister phrase, because of course it means that it will never be redeemed at all, unless the Government buy up their own stock at present rates; and the figure at present rates is so surprising that I shall not dwell upon it.

It is a matter of common knowledge that around 1946 or 1947 that stock was standing above par. It was standing at £2,000 million. I think I am right in saying that the value to-day, in terms of relation to par, is about £600 million. The actual value in terms of purchasing power is 7.14p per £, and I doubt whether, in the whole history of crime, a more disgraceful financial operation was ever effected. When I raised the matter in another place the Minister used to say, "But nobody has held it all that time." In point of fact, of course, trustees do hold it. Trustees who see their stocks going down hang on in the hope that they will get them back, and then there comes a credit squeeze which means that the banks say, "This stock is no longer worth enough to cover the mortgage." Accordingly it is sold at a complete loss, and the tragedies connected with that are very serious indeed.

There is one other aspect of this matter which I should like to mention. It is a strange thing that when a man has paid tax and, if he is liable, surtax for 40 years and has managed to accumulate modest funds for investment, the moment those sums are invested the Government say, "That is unearned income" and he may be taxed a very substantial sum, because over the years the difference between earned income and unearned income from the limited savings which have already been taxed and over-taxed for so many years, has widened. The position of the man who remains in this country, who tries to support Government investments and who tries to do a bit of work—often he has to work—is really very serious indeed.

I turn now to the even more serious problem of the old-age pensioner. I remember that when the original old age pension of 26s. a week, which I think was 6s. better than the Beveridge recommendation, was introduced, I used to make perfectly sincere speeches in my constituency—because I was always a financial "sap"—saying, "Of course the country is burdened with £25 million of national debt and we are doing our best. We have done what we promised. We hope to increase the pension but, first of all, we must reduce the national debt. We really must face the enormous financial problems of rebuilding destroyed houses and so on, which this war has left." I turned the other day to see how much of the national debt we have paid off and found that we have increased it by £8,000 million. That is a crime the responsibility for which bears on all Parties since about 1948. Year by year, more money has been allowed to accumulate in the form of debt, and the result has been that when the Government have wanted to borrow money they have had to offer more interest. I know that many considerations affect the rate of interest, but I think that the last flotation of Government stock was at 9½ per cent. Of course the Chap who has retired cannot benefit from that, because if he wants to sell his 3 per cent. Gas stock—words which are written upon my heart—he finds that the price has gone down so much that not only will he lose a substantial amount of his original investment, but the ultimate return from a reinvestment will be a slight loss. That is the main financial structure which has applied.

My Lords, I promised to deal with old-age pensioners, but I am afraid that I have wandered a moment: I have "randomised" again. In 1954 my wife and I tried the experiment of living on the diet lived on by old-age pensioners; and I am happy to find that at least the calculations we made are those now adopted by the Government. The pension then was £2 19s. 0d. a week, and we said that roughly 50 per cent. of that went on food. We made it quite clear that we enjoyed many advantages, living in a well-furnished flat with a cooking stove, and so on; but we did try to do it honestly, and we were wise enough to say that we should do it for only four weeks because I do not think we could have stood much more. Some of the discoveries we made were rather surprising. The first, of course, was that the cheapest meat is nearly always the most expensive. Breast of mutton contains so much wholly inedible matter that it works out expensive; and it was even then. I remember that the first week's diet included a sheep's head at 1s. 6d. But our calculations were that, buying a minimum of bread, potatoes, margarine (1 1b. a week), and so on, the cost, for the two of us, was 13s. 7½d. a week out of the 30s.—and that 30s. was for two.

My Lords, I do not want to weary the House. We had a solemn repast of tripe and onions—a dish which, if properly cooked, still remains one of the best known. But some of the others have gone. It is impossible to buy pig's fry now. Pigs have become animals which do not appear in their entirety in the butcher's shops. I am told that it has been worked out by computer that a large modern Frigidaire in a butcher's shop costs so much to run that you just cannot afford to put the skirt of pig's fry in a Frigidaire at all; the cost is ruinous. Expert medical advisers, expert veterinary surgeons and so on have now perfected the pig's health and the pigs housing to such an extent that, despite the complete absence in most of England of pork butchers, the pig has become a noble animal. It always was a noble animal. I agree with Mr. Stanley Baldwin when he said there is no happier, contemplative procedure than scratching the back of your own pig, or cooking it with mushrooms grown in your own cellar.

My Lords, I have taken the present Government figures about the cost of the diet of the old-age pensioner. As I can never use notes—I prefer to try to commit them to memory—I took the figures from the Monthly Digest of Statistics, but I found when I got here that they were dated May, 1952, which gives a slight advantage to the Government. I do not know whether later figures have been published since, but I thought I had brought the latest ones. The figures they give now show again, that about 50 per cent. of the pension goes on food—£2.80 a week each for an old-age pensioner couple living alone. The figure they give in a separate column for two people under 55 living alone comes to well over £3 a week. This is quite a substantial difference, because of course, those two people under 55 will do a good deal of eating out; they will probably benefit from a works canteen; and, of course, they may well consume commodities like alcohol, and so on, which are not included in the figures. My Lords, £2.80 is to-day the amount which is available to a retirement pensioner—less than £6 for two people living together. Those of your Lordships who do the shopping will know how difficult it is to deal with such a sum. I notice that one of the items listed is 7 oz. of fish a week. Another is 14s. 8d., I think, on all kinds of meat, including bacon. The task of simply trying to live on that diet is considerable.

My Lords, I sought to find out what are the comparable figures in other countries, because we have been lulled into the illusion that we are rather well off. I was rather attracted to this. I have not sought any controversial matter, but in the Nouvel Observateur last week I found an article on the general problems of inflation in relation to Common Market countries. They say that in France, of course, as nobody pays taxes—and they quote the French Budget Commission for saying it—as there is complete dishonesty about the arrangements for collecting taxes, they have to do more by way of a V.A.T. tax and place it on the individual. They say that the industrialist is largely exempt from some of the consequences of inflation because he pays back his loans in deflated money, and that he avoids paying income tax and similar taxes. They also say, in a single pregnant phrase, that the only people who really suffer are retirement pensioners and rentiers. They are the only two—and why should we worry about them? They say that we have to worry about them now because the United States has managed to control its economy, and once you find the United States on a 3 per cent. control then the result of this inflation will spread.

So, my Lords, I saw the House of Commons expert on the Common Market yesterday to try to get some figures which would give us the comparable positions. Figures are never wholly and fairly comparable—and one must admit that—but I will conclude with some figures, and I will put the position as fairly as I can. The two systems are not fairly comparable; we have some extra allowances, and so do the other countries. But from the House of Commons I obtained a copy of a social survey which has only just come in and in which a private research organisation has tried to give, in pounds and new pence, the normal retirement pension figures for a man who, at the age of retirement, was earning £30 a week, and was a single person. The figures they give are surprising. Italy, which we are told is hopelessly bankrupt—and where, incidentally, the retirement age is 60—heads the list with £1,000 a year; and I should add that I believe that in Italy there is no additional pension for a wife, if there is a wife. The same applies to the next country, Austria, for which the figure of £900 a year is given.

The figure for West Germany is £650, as is that of Luxembourg. Switzerland is quite low at £375 but they have a canton system of supplements, which means that in different cantons the figures vary considerably. Bottom but one is the United Kingdom with a basic pension of £312 a year. I doubt whether many people will be surprised to find—and it may be of importance to those taking part in the plebiscite in Northern Ireland—that the Republic of Ireland is the lowest with £260 a year, just about a quarter of the figure for Italy and far lower than any other figure. It is time that something was done.

My Lords, in conclusion, and I am sorry if I have been a long time, may I say that much of my political training came from Aneurin Bevan who, I think, had the most well stored, almost card index, mind of financial reforms that I know. He was a man to whom justice was done, as so often happens in political life, only in his obituary notice. But he used to say that if you are going to try to deal with inflation then the first thing you must protect is small savings and old-age pensions. They must be payable in terms of the cost of living. By fixing a rate of pension in terms of the cost of living you have done two things. You have made it impossible for the Chancellor to perpetrate these reckless expenditures the burden of which bears so greatly upon us; because the Chancellor, in order to make his Budget figures balance, will be compelled to have regard to the cost of living since the cost of living will be showing the way to an imbalance of the Budget. Guarantee the people who put money in the Post Office Savings Bank and those holding National Savings Certificates—the people who draw less purchasing money at the end of their investment than they put in at the beginning—their investment; guarantee retirement pensioners at least the value of their pension in real terms, and you will have made a substantial step towards dealing with inflation and towards doing justice, or (shall I say?) some sort of justice, to the most overburdened section of the community. My Lords, I beg to move for Papers.

3.12 p.m.

LORD TANLAW

My Lords, I am sure that we are all grateful to the noble Lord, Lord Hale, who by this Motion has drawn attention to the economic plight of the retirement pensioner. I feel, after what the noble Lord has said, that there is nothing much that I can add to the first part of his Motion. I hope that he will allow me to concentrate on the more technical side of the second half of his Motion because there is, I believe, a relatively simple answer to this perennial problem raised by the noble Lord. First, may I say a short word about long-dated and undated Government securities. With regard to long-dated securities, this is where perhaps I am in slight disagreement with the words of the Motion. I do not see long-dated securities presenting much of a problem to those retirement pensioners who still hold them; because (shall I say?) unsophisticated investors can obtain both income and capital appreciation, perhaps in an undramatic fashion as the years go by, simply by hanging on. By this I mean that they cannot lose the book value of their investment in the end whatever happens. They can also switch, with relative ease but only after proper advice, into equities or nearer dated stocks.

If I understand the motivation behind Lord Hale's Motion—and I think I do—our concern should be, as his was, for those who invested for patriotic or other reasons in War Loan or similar undated stock and who have seen their capital, not their income, diminish over the years. It is these people who are faced with an economic problem to-day, as they may be unaware of how to improve their position.

Before offering a simple solution to alleviate this category of investor, I think it may be worth while reminding, beside myself, some other noble Lords about the position of undated stock in general. The Government of the day, besides being the country's largest employer and largest spender, are also the largest borrower. In a free capitalist society the Government have to raise their money on the open market at the most economical rate they can. They do so by issuing paper, including gilt edged securities. In times of war, which the noble Lord, Lord Hale, mentioned, when the future is uncertain or when interest rates are low, the Government have issued such undated stock as 3½ per cent. War Loan, 2½ per cent. Consols, 3½ per cent. Treasury Bond, and so on. These stocks in these conditions offered a good running yield and were considered good securities—good enough for the Trustee Investments Act 1961, if I understood it correctly, to restrict investments in stocks in this category.

My Lords, what has gone wrong that these stocks are now the subject of the debate this afternoon? Two things, Interest rates have risen; and, of course, inflation. The Government of the day, whatever they may say, now have little control over these two factors and are unable to raise money by issuing more undated stock for the simple reason that no one would take it up because of the falling value of money. My only contribution to this debate is to advise anybody covered by the terms of Lord Hale's Motion to get out of undated stock, regardless of what its value is to-day, into something not subject to the pressures of inflation. For instance, War Loan could be switched into 7¾ per cent. Treasury Bond 2012–15, with a minimum loss of income; and capital appreciation would begin in about five years from now.

Some noble Lords, I am sure, are aware that War Loan stock could be exchanged for high income unit trusts, as can other undated stock in the category that we are discussing this afternoon. But as it is most unlikely that retirement pensioners take their financial advice from the columns of Hansard or that they have a tame stockbroker or a friendly bank manager, I suggest that the Government can at small cost put this matter to rights for this forgotten section of the community. The Public Trustee, which the present Government wish to wind up for reasons which are most obscure to me, would really be fulfilling the function for which it was created by producing a special pamphlet to advise those holders of these stocks who are uncertain what to do. An explanatory pamphlet, which would cost virtually nothing in terms of Government spending, could be distributed by the Ministry of Social Security to reach all those in need. I feel that if this were done this particular ghost which caused the Motion to be raised could be laid once and for all. The Government have an opportunity of proving that they have a heart, that they do care; and, what is more, they would become the first Government since the First World War to take positive action on this problem. I hope to hear this afternoon that they are going to do so.

3.20 p.m.

LORD DAVIES OF LEEK

My Lords, I wish to congratulate my noble friend, Lord Hale, on having raised this vital issue. I am also grateful for the speech of the noble Lord, Lord Tanlaw, because, while his advice is excellent, I must say, from my practical experience extending over 25 or 26 years when I had to deal with constituents when I was a Member of another place, this was one of the problems which came before me at my weekend interviews, or "surgeries" as we call them. The trouble was that many of the people who were involved—I do not say this in any derogatory sense—were not at home with the language of finance or familiar with expressions like "randomisation" or the arithmetic of rates of interest. Consequently I was delighted with the constructive suggestion made by the noble Lord, Lord Tanlaw, about the possibility of using the Public Trustee. Some of us are talking too quickly about abandoning the Public Trustee.

Your Lordships will remember that I asked a Question about the future of this Office some months ago, and one of the subjects in my mind was these stocks. My noble friend and also the noble Lord, Lord Tanlaw, have given us enough information to cause concern about these loans, which were made with a patriotic motive. The whole gamut of our finance, particularly when we go into Europe and the entire system of our national debt will be looked at from a different viewpoint. In 1926 we were still paying for the Battle of Waterloo at the rate of 6d. in the pound; in fact, Waterloo has not yet been paid for. One of the miracles of finance is the power of the tomb over the living, the power of the dead over the unborn. In 1900, at the time of the Boer War, the debt per head of the population was about £40. This thing does not work in arithmetical progression—Oh, No!; it works in beautiful geometrical progression: it multiplies itself. On the eve of World War I the debt per head of every man, every woman and every child with bonny blue eyes, or eyes of any other colour, was about £150. After World War II the figure had reached something in the neighbourhood of £500. Now we have reached a pitch—with "Concorde" and other things—when the figure is many thousands of pounds per head.

Here we see one of the paradoxes of high finance: that we shall have generations born who will be millions of pounds in debt before they draw one drop of their mother's milk. That may sound funny, but it is one of the secrets of high finance that the present generation throw the burden resulting from the mismanagement of their day-to-day affairs on to the unborn. They could not fight a war if they had to pay for it on the nail. It is time that someone saw through the power of print. It is one of the actual riddles of the modern industrial and financial world which no economist likes to face. Do not ask me for the answers; no one has found them yet. But the day will come when the whole world will have to discuss this problem, because the national debts of all the nations of the world are moving in the same direction.

What are the implications of all this to the pensioner? We have reached the pitch where we must go beyond Beveridge. Because I think that my noble friend Lord Brockway intends to speak I will not quote the figures that my noble friend Lord Hale was good enough to give me as a result of his researches about, for instance, the Italian pensioners who retire at 60 with a pension of £1,000, compared with our rate of £330-odd. When I was a Minister at the Ministry of Pensions I remember reading an excellent little book by David Marsh entitled The Future of the Welfare State. It is time that Britain knew the facts. David Marsh wrote: There are in our own country today people in high places and at the seats of power who believe that the burden of social service expenditure in Britain is heavier than it is in any other country, and yet numerous official reports from international governmental organizations, and even articles in reputable national newspapers, have shown conclusively that the financial burden is in fact far less here than it is in many other countries. Equally it has been shown that social service benefits are often provided at a higher level in other countries than they are here, and that employers abroad bear a heavier burden of the share in financing social security than they do in this country. Yet the Labour Party spokesman on social security could say publicly, in an interview on B.B.C. sound radio on 2 April, 1963, when giving his views on Labour's New Frontiers for Social Security, that ' he had been surprised to find how much employers abroad contributed'. My Lords, I knew this as a Minister because it was my duty to know it. Politicians cannot be expected to read all that is published, but surely they ought to be aware of what goes on elsewhere…Thus Conservative politicians who persist in their belief that the welfare state in Britain imposes intolerable burdens on the nation's economic effort and is responsible for our slow rate of economic growth would at least have been given food for thought in an article by Mr. Andrew Shonfield in the Observer on Sunday, 22 January, 1961. After having examined comparative data on labour costs Mr. Shonfield stated categorically, so much for the myth that it is the sheer volume of taxation in Britain required for the support of the namby-pamby welfare state which is responsible for our lack of competitive power and the slow growth of the nation's wealth. Germany, which has the record for growing fast, carries a bigger social burden—and does not seem to be slowed down…' That quotation speaks volumes. For years now generations have been told, in the vicious propaganda which has been used (it may be sometimes not politically but in supposedly economic lectures and high theories on economics advanced even by professors of economics) that the burden of the Social Welfare State is slowing down our progress. This is a myth. Are we going to leap out of it in the 20th century? I have taken both sides, I have put the Labour and the Conservative points of view. All of us have been misled for too long. It is our duty, a part of living, to see that the people in old age do not suffer from the economic misery that many of them have had to suffer and are still suffering.

In September, 1935, The Times, in one of its euphoric but nevertheless thunderous leaders, said: We are well in sight of the time when every person in this country will look forward to an old age free from harassing cares. That is a long way off yet, and as inflation increases, whatever Government are in power, these people will suffer in their old age. Since doctors have discovered how to make us live longer and nutritionists have told our mothers how to cook better, men are living longer and, God help me!, women are living longer still; and one of the troubles about all this—

BARONESS PHILLIPS

God help you?

LORD DAVIES OF LEEK

Yes, my Lords, He must help me. He must help me to leave enough for my widow to live on.

BARONESS SUMMERSKILL

The noble Lord should be buried after this speech!

LORD DAVIES OF LEEK

What is our concept of the future? Is it for social insurance or security? Because there is an economic and social difference between them. There is the difference of being prepared to bear the social security of the nation, or we can enter into economics and the accountancy of old-age pensions and social security. Any nation that can raise with a stroke of a pen another £600 million or £700 million to build Concorde can easily find £10 for a lump sum at Christmas without noticing it, because it can print the money. It must be careful how it prints it, of course, because of the inflation possibilities.

The old are more reluctant to die. The doctors who have made efforts to raise us from a C3 nation have been successful, despite our moaning. We are better fed and better nourished. Nevertheless, the loneliness of old age to-day, because the family is breaking down as a unit, is part of the problem. I believe that loneliness now is greater than I knew it as a child in the 1920s, and in the First World War. The family then felt a responsibility for its aged. We passed the old man around the sons; my uncles took the old grandfather and grand- mother. That is not done to-day. We had not, like the Eskimoes, to "Oslerise" the old—to finish them off quietly by coldness of heart. When I was a Minister I went round an old folks' home in Nelson and Colne. I could see the chimney pot of one old man's house not 500 yards away (I think I have told this story to your Lordships before), and the matron told me that the son had not put his foot inside that home for two years. We have to try, apart from the economics, to deal with the loneliness of the old without being condescending towards them.

In their Annual Report for 1931 the London Advisory Council said: One in every ten girls becomes a servant, and when they become grey they move from the status of servants to charwomen. In the 1931 Census, one woman in four in London was a charwoman because there was no other way to earn a living. Now that is not undignified. But these charladies were then in their late 50s or 60s, and they were considered old ladies. That was a favoured profession in the hungry 'thirties. To-day the charwoman has a more dignified place in our social accountancy and makes a contribution, but in those days she was a domestic navvy. The widow of to-day has not had the square deal that she should have had in her loneliness and from the accounts of this nation. I hope that we shall go beyond Beveridge so far as the widow is concerned.

The time has come for me to finish this speech with these points. First, there is no truth in the assertion that the Welfare State is responsible for our slow rate of economic growth. Second, my noble friend Lord Hale has raised one of the important points: the yardstick of a civilised nation to-day is not only how it treats its children but how it treats its old people. I hope that in this House to-day, without trying to make any Party political point, we shall seriously bear in mind our duty to those who are old in a society that is brittle, hard and growing more and more materialistic. If there is one thing for which at one time Britain was considered great it was its sense of neighbourliness. Do not let us lose that sense of neighbourliness when we tend our old, our sick and those who are unfortunate in their economic circumstances.

3.34 p.m.

LORD MAYBRAY-KING

My Lords, I would begin by congratulating the noble Lord, Lord Hale, on initiating this debate. Some years ago I went to Oldham, his old constituency, to express the gratitude of Parliament for a lifetime of service that the then Mr. Hale had given in human causes in the House of Commons. To-day we have heard the noble Lord speak with his characteristic wit, humour and emotion on the bitter problems of old age pensioners.

I welcome that at last there is to be an automatic annual increase of pensions, including public service pensions. When I was a Back-Bencher in the House of Commons, and free to speak, I was one of a group, the redoubtable Dame Irene Ward among them—indeed she was the leader of them—who pressed constantly the claims of those who live on fixed incomes, and with the Old Age Pensioners' Association and the Public Service Pensioners' Council we constantly asked for an annual review of pensions, instead of the long, humiliating campaign that we had to run for two or three years to get a Public Service (Pensions Increase) Act or to get an increase in the old-age pension. I remember in this connection some splendid work done by the 1922 Committee, with the former Attorney-General, Sir Lionel Heald, on one side of the House, and Mr. Douglas Houghton and some of his colleagues on the other side, always pressing the claims of the pensioner faced with a fixed income against an inflationary society.

I am delighted to know, my Lords, that the old age pensioners this year are to receive a Christmas gift. In my days as a Back-Bencher in the other place every year we asked for this Christmas box for old-age pensioners, without success. I congratulate the Government on carrying out the spirit of A Christmas Carol in this gift that they are providing for the old-age pensioners this year.

It is the pensioner who feels most the rise in the cost of living. Other groups can offset inflation by wage increases, by increasing the prices of the goods they sell or the profits that they make. As an utter non-Party man, I cannot enter into the merits of the Government's present attempts, or those of the last Government, to control inflation. I only know that waiting on the side-lines anxi ously are those with fixed incomes. I know that to-day old-age pensioners are outside the Houses of Parliament demonstrating against their present condition and against the inadequacy of the income they receive.

One of the great problems of old age is loneliness. I would pay tribute to those who take care of their ageing parents, some of them at great sacrifice to themselves. Others find it impossible to do so for various reasons, and some do not care to look after their parents. One of the sad experiences that I have when I visit old peoples' homes is to find old folk there whom nobody visits. In the matter of the treatment of old age, I remember what we have achieved in my lifetime. When I was born there was no old age pension, and there were plenty of workhouses. When Lloyd George introduced the first old-age pension of 5s. a week at the age of 70 some people thought that this would sap the thrift of the working class. Indeed, in this House on that occasion in 1908 Lord Rosebery said: It might be dealing a blow at the Empire almost mortal. Those days have long gone. In an earlier debate I suggested to your Lordships that there is a pattern of social progress: first, voluntary help; then State recognition of the need; and then—and this is where we are now in this field, as in so many—State help, plus voluntary help. For example, round the National Health State hospitals every hospital has its group of friends doing wonderful work.

In the field of the handicapped, people like the noble Lord, Lord Grenfell, and the noble Baroness, Lady Elliot of Harwood, call attention to a need, the State comes in, and the voluntary help goes on supplementing what is done by the State. This is true, my Lords, about the aged. All over the country to-day are Darby and Joan clubs or senior citizens clubs. In my city, there are such clubs founded by a war-time Mayor of the city, Mr. Stranger. They are usually housed by a church, and here I should like to pay tribute to the churches and chapels of Britain for the facilities they provide for the old folks' clubs in every corner of the country. Sometimes these clubs are lucky enough to have a club room of their own. We have three such clubs in their own premises in Southampton where not only are they able to meet and be entertained but hot meals are provided at cost price by voluntary workers. It is impossible to speak too highly of the good work that goes on in Darby and Joan Clubs. And what is inspiring is the way in which the old folk help themselves, often providing their own concert parties and often—as I have noticed in my own city—seeming to have their own marriage bureaux. The number of marriages that take place between widowers and widows belonging to these clubs is quite significant. They themselves visit their own lonely old folk and they appoint someone to visit the lonely old folk who are sick.

Then we have special housing for the aged, and I want to say a word about its various aspects. Most local authorities (with the exception of some thirty, I understand) are providing some of their old folk with a home of their own, the pattern of which is a room of one's own for the old person or old couple with certain communal services provided. The old workhouse has indeed gone. I have visited buildings which were at one time workhouses and have seen how they have been transformed. They have wardens and they provide comfort and security for the old person. It has been my joy also to visit such local authority homes in places as far apart as Northumberland and Hampshire. There are also homes provided by voluntary organisations.

Some of your Lordships may have seen references to the Help The Aged Fund, which raised over £1 million last year for old folk. This Fund was founded by Mr. Jackson Cole. And of the million pounds raised last year, my noble friend Lord Soper will be delighted to know—indeed, he probably knows already—that £100,000 was raised by Christian Youth for the Help The Aged campaign. This group has provided already special housing: what they call sheltered housing. The pattern is the same. There is the individual flat, the individual home, the individual room, but with certain communal services and the services of a warden. There are already over 2,000 units for needy and aged folk who cannot afford the expense of the nursing homes I will refer to in a moment. They provide clothing and blankets not only for old folk in Britain but for old folk all over the world. Help the Aged has an illustrious patron, one of the greatest ladies living to-day, Dame Sybil Thorndike, and in her name we shall be making the Christmas Appeal to 100,000 voluntary donors this coming Christmastide.

There are also the Methodists, the Anglicans, the Catholics, the Church Army, the Salvation Army and the Jewish community—all providing old folks' homes. My father was a Methodist. He spent the last part of his life in a Methodist home for the aged, and I know how much it meant to him. Last year I opened a home for retired teachers, the average age being between 84 and 85. This home was provided by gifts of members of the teaching profession. Similarly, last year I opened a home provided by 2 million members of the Club and Institute Union, representing the working men's clubs of this country. At the opening, the group who invited me described the home as "a Hilton Hotel for the aged". Then there is BLESMA, the British Limbless Ex-Servicemen's Association, who maintain homes for aged and limbless ex-Servicemen.

In my own district of Christchurch, as my noble friend Lord Monck will know, there is a Mr. Kermode who since the war has devoted himself to providing flats for old people. He has built some 500 of them at cost price and he also maintains, together with a group of volunteers, what we might call, "halfway" homes—three homes which keep people out of hospital: those who are not yet weak or ill enough to be in hospital, yet need a little nursing. These people are accommodated in a "halfway" home. Again, I recently opened in Hampshire a voluntary home for old folk provided by another voluntary body, the Hampshire Old Folks' Housing Association. Some days ago, I saw with not a little distress a television programme on private nursing homes for the aged, where old people were paying from £20 to £25 a week in conditions providing little care and comfort. I have no doubt that that programme was factually accurate and that it did something to spotlight the perilous condition of some old folk who are paying up to £25 a week and getting very little for it. I wish there could be another programme showing the wonderful work that is going on in this country now in a hundred ways in caring for old folk. Two weeks ago I visited a great psychiatric hospital in West Sussex, in Grayling. There I saw a thousand old folk, most of them senile or terribly physically handicapped, being cared for with a love, devotion and skill that moved me very deeply.

In geriatrics we are making tremendous progress, here and abroad. For example, this summer I visited a place in America called Moosehaven, which is a city of old folk. Here, there are people living again in a community with a room of their own, communal services, a warden, and one of the finest geriatric hospitals in the world—all provided by voluntary gifts from an American organisation called The Loyal Order of the Moose. In our own hospitals and geriatric wards many of us who know hospital work realise what progress we are making, thanks to geriatric physicians and the care of devoted nurses.

My Lords, the number of old folk is increasing. This is one of the triumphs of the Welfare State. My grandfather died an old man at the age of 56. But this prolongation of the life of old people makes for ever and ever increasing demands. I pay tribute to the work of all who care professionally for the old: to the social service workers, to the doctors and nurses, to the volunteers who provide Meals on Wheels—a wonderful service. I pay tribute also to those who visit lonely old people. In my own city, the Young Samaritans go round to lonely old people, doing odd jobs in the house.

I also wish to pay a tribute to the local authorities who are providing special, housing. One of the earliest of these authorities was a little urban district in Hampshire called Eastleigh, which provided its first special housing for old folk more than fifty years ago. I pay tribute to all who, by giving, make the expansion of this work possible. But, after all, Britain and all that Britain enjoys to-day depends to a large extent on the labours of the past two generations, who worked and lived in much harder times and who now have to struggle to maintain even a small share in the increasing affluence of this society of ours. We have done much. Nobody, however, can be complacent: so much more has to be done—by Governments, by local authorities and by men and women of good will who will supplement what the State provides. My Lords, I am indeed grateful to the noble Lord, Lord Hale, for having given me the opportunity to speak in this debate.

3.50 p.m.

LORD BROCKWAY

My Lords, as an old-age pensioner I must express my appreciation to my noble friend Lord Hale for initiating this debate. I suppose that I must also declare my interest to this House: on Monday mornings I stand in a queue to draw my old-age pension at the post office. I am very much relieved by what my noble friend Lord Hale said, that those who have contributed to our retirement pensions over a period of years have met its current cost, because I have been contributing ever since the contributions began. I am relieved because of this fact: when I stand in that queue I have tended to be a little ashamed that I should be drawing an old-age pension when I know the conditions of many others in the queue. Not only from our reading of social surveys which have been carried out, but in our personal experience nearly all of us must know the wretchedness of many old-age pensioners to-day. They suffer in two ways: first, from sheer physical need for food, clothing, housing and amenities. Secondly, as my noble friends who have previously spoken have emphasised, there is their personal loneliness, and their need for nursing care as they grow older.

I welcome the fact that there is to be this Christmas box to old-age pensioners. I hope that it will not be regarded as an alternative to a substantial increase in the old-age pension rate in this coming year and later years, equivalent to, and progressively more than, the increase in the cost of living. Old-age pensioners, like all others, are human, and it is very likely that at Christmas time especially a large proportion of that welcome bonus will be expended. But their permanent needs will remain very deep.

I want to refer to a table from which my noble friend Lord Hale quoted regarding a comparison of our payments to old-age pensioners compared with other countries. This is a social survey that was distributed by Charles Barker City Limited who carry out research work of this character. So far as I know, they are a reputable firm—they certainly have reputable directors—and this is the latest information which can be obtained from the House of Commons Library on the subject.

I want to make it clear that the comparisons are not equal and must not be accepted as the last word. As the noble Lord, Lord Hale, said, they refer only to single men after 40 years' employment; and in the case of a number of countries no pension is paid to the wife of the pensioner. Thus it is that the figures are not always comparable. The cases of the two countries with the highest pensions, Italy and Austria, are those when no pension is paid to the wife. I remind your Lordships that this table refers to single men. Nevertheless, I should like to see an examination of these figures, for this is the disheartening fact: that of 16 nations, the United Kingdom is the second lowest in the rate of pensions which it pays. In percentages of the final pay of the recipient before he obtains a pension, our figure is only 21 per cent., while in a large number of cases it rises above 40 per cent., and even 50 per cent. It would be of value if this table were sent to the Ministry so that there could be a more accurate and detailed analysis of it.

I went through the Lobbies of the House just now to the House of Commons Library. The Lobbies are crowded with old-age pensioners. It is extraordinarily appropriate that my noble friend Lord Hale should have introduced this Motion to-day. I went into the Inner Lobby and there the pensioners surrounded their Members of Parliament. In the corner of the Inner lobby is a statue to Keir Hardie, the founder of our Labour Movement. I am not more proud of anything in my life than the fact that I presented that statue to the House of Commons. Keir Hardie used to say that after the needs of the general population were met, before a halfpenny was spent upon luxury, the national income should be devoted to children, the sick and the old-aged. I say to the Government that we shall fail terribly, if we are to be regarded as a civilised society, if we do not ensure that all those of old age have the means by which they can live not merely in comfort but in happiness in their last days.

I want particularly to refer to the problems of loneliness, and of the nursing needs of the older folk. I appreciate very much the tribute which the noble Lord, Lord Maybray-King, paid to the Churches' charitable organisations, and to voluntary workers for what they are doing. I was particularly interested in his tribute to the British Limbless Ex-Servicemen's Association. I was associated with this society in Slough when I was a Member there; it was contributing very much to the home which I believe is in Southampton.

LORD MAYBRAY-KING

Portsmouth.

LORD BROCKWAY

Portsmouth. I know of its value. Yet it is extraordinary that, with all this voluntary service, there are still thousands of old-age pensioners who live not merely in physical want but in want of human companionship. Sometimes their only visitor is someone bringing meals-on-wheels. I feel that a great deal still has to be done through the Churches and through all kinds of humanitarian organisations, through trade unions for their older members, to see that this loneliness, which makes those last days so wearisome, shall be eased.

I recognise, too, that much has been done by voluntary societies in providing bungalows and housing. But here we begin to enter the field of public activity which must supplement voluntarly service. I have seen some of the bungalows for single people which local authorities have built on their housing estates, and they are delightful, particularly when they are supplemented by a woman officer who visits the tenants and ensures that their needs are dealt with. But there is also the problem of homes for the aged. This is becoming an increasing problem. It used to be said that young people should look after their parents as they grow old. The problem now is that we are all growing old and continuing to live so long, and that often it is quite impossible for those who are younger to maintain their aged folk.

It may be (I can think of such a case at this moment) that the wife becomes ill and the old lady has to be removed to a home. I saw that television picture. I have not had experience of homes where they exploit old-age pensioners as that picture showed, but there are some homes where conditions are very wearisome. There are also some splendid homes provided by local authorities as well as those provided by voluntary organisations. I would suggest to the Minister, first, that there ought to be a more adequate inspection of these homes, to ensure that minimum conditions which are humane in every respect, apply to the old people. Secondly, I want to suggest to Her Majesty's Government that it is desirable that there should be added to the monetary increase in pension some grant to local authorities who carry out these services in an adequate and humane way.

My Lords, I conclude by saying this. As one looks at the problem of the old one sees two opposite philosophies. There was the philosophy of Hitler, who took the view that the old were a burden on society and that society should get rid of them. In his institutions in Germany he quite deliberately starved those of old age so that they should die. I went into Germany immediately after the war and visited one of those homes. I was shown into a room where old men and women stood. I could not bear to see their starved, haggard, suffering faces; and I turned and left. That is the Hitler philosophy of the old. The other philosophy is that, not merely because of family affections, not merely because the old have over the years done some of the hardest work in our society, but also because their human personalities are precious and sacred, it should be the first duty of the community to ensure that in their last days old people are able to pass on without the suffering brought about by poverty, loneliness and lack of attention. I thank my noble friend Lord Hale for initiating this debate. I hope that it will have some value in improving the conditions of the old in our country.

4.5 p.m.

BARONESS PHILLIPS

My Lords, we are indeed all grateful to my noble friend Lord Hale for introducing this debate to-day and for doing it in such a splendid fashion. He drew attention in a quite brilliant way to some of the financial rearrangements which are far reaching in their long-term effects. I have several times raised in this House the question of the self-employed, because not only do they suffer, as he so rightly said, when the point of time arrives when they want to draw some of their money, but they also suffer during their working life. A small shopkeeper, as we know, cannot collect some of the normal benefits which other workers do, although he is of course part of the contributory scheme. Unfortunately, many citizens now are beginning to consider that there is no inducement to save, particularly in the State. This is what I feel, and this is something we should be looking at if we are to encourage long-term investment as well as the use of some of the savings movements.

In a brilliant and practical speech the noble Lord, Lord Tanlaw, gave us a number of ideas of how the elderly could cope with some of their difficulties. I have made a note of some of those suggestions which I shall certainly pass on to those who are in the situation we are discussing to-day. I was interested in the reference of my noble friend Lord Davies of Leek to the fact that the family "passed around the old man". They probably also passed around the old woman. I think we should overstate the case if we suggested that this was necessarily an ideal circumstance. A son or daughter forced to care for his or her parents is not likely to do this with any great love or affection. Surely what we aim to do is what several noble Lords have emphasised: to enable every human being to live out his life in dignity, surrounded by some comforts and certainly by love and affection. This does not necessarily come, I would suggest, from the family circle unless it is the right family circle.

I well remember a leaflet which was published by the National Council of Social Service entitled No One Came. One old lady sent us a little letter which said, "No one came—thank God!" Perhaps she has been suffering from some "do-gooders" who were not all we should want. I liked the phrase of my noble friend Lord Davies which epitomises what we are talking about to-day: what we have to be concerned with in old age is social security and not social insurance. I believe we have become bedevilled by a scheme which is now so complicated, and all Governments—I do not exempt the Government of which I was a member; I think we were preparing an even more complicated scheme than that of the present Government—seem to have added more and more complex ways of controlling the money and stipulating the various needs which the elderly will have to try to meet.

The noble Lord, Lord Maybray-King, in a sensitive and compassionate speech, drew attention to the work of the voluntary and statutory social services, and I am delighted that he did. I am delighted, too, that he made reference to the fact that the elderly can of course help themselves. When I saw that dreadful film to which the noble Lord has referred, the first thing that struck me was that people complained bitterly of the shortage of staff in the old people's homes but at the same time they did not allow the old ladies to do something for themselves. To me, the great point is that we all want to be independent and to look after ourselves, and we should not be forced, either by some arbitrary age limit or for some other reason, to have that right taken away from us.

I agree with my noble friend Lord Brockway on the question of loneliness. Loneliness sometimes stems from something within ourselves. If we want to be surrounded by people who love us when we are older, perhaps we should pay all due attention to this when we are younger. I am never quite certain how far one seeks to have everybody running to see one when elderly, although one has not sought to attract people when younger.

To-day is the day when the pensioners are rallying, and I am delighted, as are other noble Lords, that the noble Lord, Lord Hale, chose this day for his debate, even though it meant that some of us were unable to get into the Palace of Westminster because of the pensioners' enthusiasm. I had to point out to some of them that I was on their side and I was going in to make a speech for them; otherwise I think I should have been debarred from entering the building. In the last five years between October, 1967, and October, 1972, the basic State pension has been raised in three steps, and I think it works out at about 50 per cent. This sounds impressive until one realises that in the same period average earnings have increased by something like 58 per cent. I note that one of the demands of the campaigners to-day will be for old- age pensioners to have seven good meals a week. Seven good meals per week; one meal per day. How do we feel in this year of grace, 1972, that people have to make just a simple demand in order to live in some degree of dignity?

I realise more and more that we have to look at this question—and several noble Lords have underlined this—as about what we are prepared to give; and when I say "we" I mean those of us who are still lucky enough to be able to work. We must be prepared to give, not only to the elderly but to anyone who is not in a working bracket, a much greater share of the national cake. I have said before that we no longer give tithes of what we get to anyone except waiters and possibly cab drivers, but it was a basic rule in the Old Testament to give a tithe of what one received. I think we must look carefully and solemnly at whether we are really allocating a big enough share of the national income to those who can no longer work for themselves.

I do not wish in any way to pre-empt the discussion on the two Bills that are to come before us, other than to say—and I hate to sound ungenerous in this regard, since the noble Lord, Lord Maybray-King, referred to a "Christmas gift"—that I find that the gift of £10 has an ominous ring. To me it signifies that prices are going to rise dramatically in January. I hope I am wrong in this. Apart from that (and I am no economist), I cannot quite follow the logic of putting £80 million into the economy when we are supposed to be doing a counter-inflation manoeuvre. I can think only of the analogy of a tyre and it seems to me that if you want to deflate it you do not pump air into it. However, as I have said, I am not an economist and no doubt the Government have found some way in which they can deal with this apparently contradictory way of handling the situation.

We have discussed the retirement pension before. This is a generation of proud people; this is a generation who have been through two world wars, periods of depression, and have contributed to our community in a way which possibly those who are young to-day will not be called upon to do; and this generation will accept offers only if they are made in the right way. Last week I met an ex-member of my staff who I think is a splendid example of the kind of people we are discussing. She is a woman of 67 and I would say to the noble Lord who is going to reply to the debate that she is a supporter of his Government and not of my own Party. She receives the State pension and a small pension from her husband's firm; therefore she comes just above the figure where she would be likely to receive any supplementary benefit. She wants and tries to live in dignity. She recently had to go to hospital and now has to go three days a week, her fares being about £1.20. She was told that she could get her fares paid. She said to me, "I went to ask and I was told—quite politely—that I had too much money; and I shall never, never, ask again".

I am appealing for the way in which people can get their rights made simpler. You can get concessions on your fares only if you live in certain boroughs, and this is not fully understood. You can get concessions for television licences if you have a scheme of wardenship. Your rents may be higher in one place than another—certainly in London—and they may even be above the limits at which assistance is available. Electricity, gas, heat all cost the same for the millionaire as for the elderly pensioner. To get your prescriptions free you have to be over 65, and I cannot miss the opportunity of mentioning again that the single woman retires at 60 but still has to pay for her prescriptions. If you are an outpatient needing special things—let us say support hose or something of that kind—if you receive supplementary benefit you will equally receive all these things free. But thinking of the kind of woman about whom I am speaking and the kind of people we are thinking about to-day, the people who have saved and who have just a little above the basic figure—how do they find out what they can get? I note this marvellous phrase—and we have been speaking about phrases— if your income, after paying rent and rates, is less than £1.50 above supplementary benefit level". This applies also to optical, dental and other services. It presupposes, first, that you have the necessary leaflet in your possession and, second, that you can work all these things out. My experience of the elderly is that, above all, they do not find it easy to work these things out, nor indeed do they find it easy to read the very small print in which it seems to be found necessary to print these leaflets. Nor indeed do they find it easy to go from one office to another in order to get the necessary information.

I have a letter from a director of social services, in which he says In my opinion there is a tremendous shortage of opportunity for retired people to know their rights. I myself, having been involved in work for the elderly for more years than I sometimes care to remember, find considerable difficulty in interpreting official information. If we are to help not only those who are living on their basic State pension and supplementary benefit but the other people about whom we are talking to-day, those who are just a little above it, let us see to it that they do not have the humiliation of having to go from one place to another and then in the end of being refused. We are deeply grateful to the noble Lord, Lord Hale, for having introduced this debate to-day, and if we can do anything to make a little happier the lot of many of the people I know—splendid people—then I feel sure that this debate will not have been in vain.

4.19 p.m.

LORD ABERDARE

My Lords, I should like to echo what has been said by other noble Lords in congratulating the noble Lord, Lord Hale, on having chosen a most appropriate day to move this particular Motion. I would also, with respect, like to say how much I appreciated the attitude that he took to the debate, which has been followed by other speakers throughout the afternoon. We have not turned it into a statistical debate, with figures being hurled from one side to the other and nothing but Party points being made. I am sure it is right that we should criticise each other for the kind of provision that we are making for retirement pensioners and those who are living on fixed incomes. Obviously, it is up to any Opposition to criticise and to any Government to defend their record. I think we have approached this particular debate in a constructive fashion, and I am grateful for that.

The noble Lord has always taken a great interest in the self-employed man and he referred again to the rule governing deferred retirement, which he mentioned in a Starred Question the other day. I was glad, as he was, that the Question was answered by my noble friend Lady Young. He referred to her "unblemished political record", and I hope that he was not intending to suggest that my political record was therefore blemished. These matters of deferment of retirement pension and other matters that have been raised in this debate we shall of course have an opportunity of discussing when the new Social Security Bill reaches this House. This Government, like their predecessors—and I include all their predecessors—are anxious to do everything they can to help retirement pensioners. After all, they include among them some of our most worthy citizens, one of them having spoken to-day—namely, the noble Lord, Lord Brockway—and certainly we should like to see them well provided for in their old age.

The noble Lord, Lord Hale, has drawn attention to their difficulties, in particular at a time of severe inflation, and this goes to underline the first priority of our policy, which must be to cure inflation. We have no need to be ashamed of what we have already done to help retirement pensioners—I will say more about that shortly—but we should like to do still more. What we can do will depend very much on the economic situation of the country. If we can control inflation and obtain a 5 per cent. rate of economic growth we shall then be able to devote more resources to help the pensioners and it is as an earnest of our wish to do just this that we are making a £10 lump-sum payment to pensioners this Christmas.

Pensioners are, of course, individual human beings who must be treated as such. I was very grateful to hear what the noble Lord, Lord Maybray-King, had to say about the very many services, both voluntary and statutory, which try to meet individual need. However, in treating the whole problem, as a Government must, we are bound to deal in overall statistics. On taking office it was our commitment to review basic pensions and related benefits every two years and to increase them by amounts sufficient at least to maintain their purchasing power.

In September, 1971, the standard rates of retirement pensions, widows' benefit, sickness and unemployment benefits were increased by the largest amount ever. The single rate of pension was increased by £1 from £5 to £6 a week and that of a married couple by £1.60 from £8.10 to £9.70. These increases fully met the effect of rising prices and not only restored pensions to their level when they were previously increased, in November, 1969, but gave a small real improvement of 3 per cent. as well.

In December last year we decided that the best way to reassure pensioners and other people in receipt of Social Security benefits that their living standards would be adequately protected, and wherever possible improved, would be a definite commitment to an annual review of pensions and related benefits in future. This is something that no previous Government have felt able to concede. Again, I was grateful to the noble Lord, Lord Maybray-King, for mentioning this. The first of these annual upratings took place last month, when the single rate of retirement pension was raised by 12½ per cent., from £6 to £6.75, and the married rate from £9.70 to £10.90. On this occasion the increases were tax free. They do more than compensate for price rises between September, 1971, and October, 1972, despite the increase in prices in October. The increase in the pension rate was 12½ per cent., whereas prices rose by 8½ per cent. This represents an improvement of pension purchasing power of 3.7 per cent. I am sure that this is the answer to the noble Lord, Lord Hale, in following the advice of Mr. Aneurin Bevan, that we should keep the pensioners' retirement pension in line with the cost of living.

The noble Lord, Lord Maybray-King, pointed out that things had improved over the years, and certainly, if one looks back to 1948, to the beginning of the National Pension Scheme, this is so. The single person's pension has increased between 1948 and the new rate in October by 419 per cent. Against this, the rise in prices over the period up to October, 1972, was 182 per cent. As regards earnings, the latest figure we have shows, for average industrial earnings less tax and National Insurance contributions, an increase of 282 per cent. up to October, 1971, and even the increases since then would make the current figure still much less than the percentage pension increase.

Furthermore, since we have been in power there have already been three increases in the rates of supplementary benefit. Not only have we increased the basic level but in the case of pensioners and some other long-term claimants there has been a long-term addition of 60p to cover the extra expenses they are likely to incur, and a further 25p to the over-80s, making a total for them of 85p for the long-term addition; and we have also increased the rates for extra heating by 20 per cent. Also to help the elderly and indeed to help some of those whom the noble Baroness, Lady Phillips, has in mind—those who are just above the supplementary benefit level and who may be liable for tax—we have made substantial improvements in the special tax reliefs for the elderly with modest incomes. The limit of the age exemption relief which gives those aged 65 or over a higher starting point for tax than younger people has been increased since 1970 from £475 to £634 for a single person and from £740 to £929 for a married couple. This means that an elderly married couple can now have a total income, including pension, of up to £18 a week and an elderly single person up to £12 a week without having to pay any tax. Moreover, we have made pensions available for all people over 80 even though they do not qualify for a contributory pension. I hope that these figures will convince your Lordships that it is simply not true that we have neglected the needs of retirement pensioners and we hope very much to make further improvements once the economic situation is more favourable.

Several noble Lords drew comparisons with other European countries and I was interested in what they said. It was freely acknowledged by all of them—I was grateful to the noble Lord, Lord Brockway, for being fair about this—that it is extremely difficult for all sorts of reasons to make comparisons between this country and other European countries. The conditions are so very different. Noble Lords referred to one such difference—that in certain cases the payment is made regardless of whether or not the pensioner is married. I have studied the figures, though I will carefully look at any figures that the noble Lord, Lord Brockway, cares to give me. Having looked at the figures, my general impression of the situation on the Continent of Europe—and it is difficult to generalise here—particularly in the health service but also in their social security system, is that they work very much more to the arrangements we had before 1948, of an insurance system, than to the national system we have now. In other words, contributions, very often much higher than ours, are made by the man at work and by his employer, but the benefits go to the employed man. Very often these may be higher than ours but this does not cover, in many cases, the wife who is not working or other people in the population who do not get a sufficient earnings record in their employment. If one were to get figures for the average pension paid in those countries, I believe that we should not find ourselves as low down in the league as has been suggested by the figures we have heard this afternoon. The fact of the matter is that in this country 95 per cent. of all our pensioners get the standard rate of pension. I do not believe that would be so in Europe.

LORD DAVIES OF LEEK

My Lords, I am grateful to the Minister for giving way. I have followed him attentively. But in using those European figures which my noble friend Lord Hale and my noble friend Lord Brockway gave, may I say that my emphasis was in trying not to over-emphasise the cost of the Welfare State in relation to our search for markets. On both sides of the House we have accepted the idea that the burden of the Welfare State impedes our economic and competitive position. I agree that it may be looked at, but we must not over-emphasise it. That was the point I wanted to use the figures to emphasise.

LORD ABERDARE

My Lords, I understood that perfectly well from the noble Lord when he was speaking, but that is not the attitude of the Government. We are anxious to do as much as we can to improve these benefits as the general economic situation of the country improves. The point I am trying to make is that our system is a more national system. The systems in other countries depend much more on the man in employment and his insurance record. Certainly this is true of the Health Service. There is no equivalent to our Health Service. When it comes to the supplementary benefit system, so far as I know there is no exact equivalent in a European country; no safety net, such as we have, to prevent anybody falling below a certain level.

LORD DOUGLASS OF CLEVELAND

My Lords, is that because there is no need for supplementary benefits in those countries because they have higher benefits under their system than we have in this country?

LORD ABERDARE

No, my Lords, I would not say that that was so at all. I would say that there are certain other reliefs given to people: more of a local system of relief. The whole system is more like the system to which we were used before there was a national system. I would suggest to the three noble Lords who raised this matter that if they really think that conditions are so very much better on the Continent of Europe, they might be welcoming the fact that we are shortly to join the European Community.

LORD DAVIES OF LEEK

My Lords, I thought the noble Lord was going to tell us to go and live there!

LORD ABERDARE

As for the future we have now introduced in another place a Bill to make improved provision for retirement pensioners on the lines of the White Paper entitled Strategy for Pensions under which employees will have two pensions: a flat-rate basic State pension which will be reviewed annually to keep up with rises in prices; and an earnings-related pension, earned preferably through an occupational scheme, but failing that, a new State Reserve Pensions Scheme. We shall have plenty of opportunity to discuss that Bill when it reaches us.

I listened with great interest to what the noble Baroness, Lady Phillips, said on the subject of people knowing what their rights are under these various schemes and we have indeed done our utmost to publicise them all. We have also done our utmost to simplify them. The fact is that certainly those on supplementary benefit or on family income supplement have a passport to all the other benefits. We are equally well aware of the difficulties of people living just above the supplementary benefit level, but one simply cannot do everything at once and we are trying to improve matters as best we can within the limits of the resources available.

May I quickly turn now to the other part of the noble Lord's Motion on those who have money invested in undated Government stock. The Government have a great deal of sympathy with those who have suffered from the depreciation of their investment in certain types of Government stock, but there is no course that we can take which does not pose insuperable difficulties. It is clearly a vital national interest to preserve a sound and workable market in all Government stocks in order to finance the Government's requirements and manage the economy. Like all orderly markets, this depends on the sanctity of contracts and on people being able to buy and sell in the full knowledge of the facts. Therefore, the very last thing any Government can do is unilaterally to change the terms of a stock once it has been issued. Thus, we cannot change interest rates, bring in obligations about maintaining market values at certain levels, convert undated stocks into dated ones, redeem at less than par, or arrange partial and discriminatory redemptions of undated stock if the terms of the original issue make no allowance for such changes. Such actions would be rightly resented by the people who had bought the stocks concerned on the understanding that their terms were fixed and would upset the whole of the gilt-edged market by implying that the terms of other Government stocks could likewise be unilaterally altered.

It may not be legally binding upon the Government to treat all the holders of one of its securities alike. But this has always been an unquestioned assumption and a firm principle of all Government borrowing. Preferential treatment for a special class of holder, however defined, means discriminating against other holders. Discriminatory action breaches the accepted principle of parity of treatment. Once the market value of a Government stock was changed by altering the terms upon which it was issued, people might expect that such action could be repeated on future occasions.

With regard to war loans, it is true that in the case of the major block of undated stock—3½ per cent. War Loan—the terms of issue allow redemption to be spread over a period of time. We have looked at this very carefully, with the position of the elderly long-term holders very much in mind, but we have concluded that we could not discriminate in favour of any particular group. It would be inequitable. If we did it, we should be bound to repay some who were in no sense suffering hardship, while excluding many others in real need. It would create as much injustice and anomaly as it was designed to correct. Moreover, we should face demands for compensation from the many who have sold their holdings at considerable loss in the past on the assumption that no such action would be taken. The only possible course, therefore, would be full redemption at par. Together with other undated stocks which we should be obliged to treat in the same way, this would make it necessary to raise about £3,000 million, and such an operation cannot be contemplated at the present time.

The Government's inability to act in this matter of undated stocks does not result from lack of concern nor from detailed study. War Loan in particular has occupied the attention of Governments of both major Parties for almost twenty years, but all Governments have come to the same conclusion that there is nothing that can be done in fairness. I listened with interest to Lord Tanlaw's suggestion and I will certainly see that it is passed on. I had some hesitation at first, I must say, in any Government giving investment advice but I shall certainly see that this is looked at. The best service that the Government can render to the holders of Government securities—and indeed to all sections of the community—is to do everything in their power to maintain stability of the currency both at home and abroad. It is to be hoped, therefore, that the important measures we are now taking will succeed: if we can get the better of inflation, not only will the purchasing power of the interest on all gilt-edged stock be stabilised, but we could also hope to see a sustained improvement in the gilt-edged market which would do far more for the holders mentioned by the noble Lord than any direct action in favour of a particular group. I hope that I have answered both parts of his Question to the best of my ability, and that the noble Lord will feel able to withdraw his Motion.

LORD BROCKWAY

My Lords, before the noble Lord sits down, could he take the two suggestions I made: the first was that there should be standard inspection of old people's homes, and the second was that Her Majesty's Government should make a special grant to local authorities in regard to the provision of homes and other amenities for the aged.

LORD ABERDARE

Yes, my Lords, I am sorry not to have mentioned those points; they were slightly outside the main course of the debate. Certainly local authorities have powers, I believe, with regard to old people's homes that are voluntarily run; I will confirm and make sure that that is so. On the second point, we have already made greatly increased sums of money available to local authorities through the rate support grant, which is the only way in which it can be got to them.

LORD TANLAW

My Lords, I wonder whether the noble Lord could clarify one point. The Public Trustee Department surely has a duty to advise the public of small means as to how to invest their money. The suggestion I tried to put forward to the Minister was the suggestion of alternatives, not any form of direction. I think the Public Trustee Department has a duty to advise people, and I hope the Minister will say something about it.

LORD ABERDARE

My Lords, I can only say that I will most certainly see that the suggestion is brought to the attention of my right honourable friend the Chancellor of the Exchequer. I should not like to give a direct answer.

4.42 p.m.

LORD HALE

My Lords. I do not think it is necessary for me, I having had the good fortune to provoke so many better speeches than my own, either to comment upon them, which might seem presumptuous for me as a new Member, or to prolong this debate. The noble Lord, Lord Tanlaw, to whom I am grateful for a most constructive speech, made a point about holders of long-dated securities, a perfectly fair point and 90 per cent. correct in its application. I had intended to say that they are limited to the rate of interest prevailing at the time of their investment, and if they have to face a new problem of life—the seeking of a home on the coast or something like that—they have to dispose of part of their investment, possibly at a very considerable loss.

I would say to the noble Lord, Lord Aberdare, that with a name like that, I did not intend to impute anything to his personal character; I merely suggested, perhaps incorrectly, that, because of the authority and distinction with which he speaks he has probably been on the Front Bench for a longer period than the noble Baroness and therefore has had the possibility of political experience which has not been open to her. One expects anyone of his name to play a straight bat, and he has done so. The only comment I would make is that on the whole in relation to the words "1952 and after" I think the words "sanctity of contract" are not precisely the mots justes. Of course I recognise the enormous problems which would confront the Government in this connection.

Two of the speakers on this side are old and valued friends of mine; for over thirty years I have enjoyed the benefit of their eloquence, their assistance and their comradeship. So indeed is the noble Lord who spoke from the Cross Benches and who occupied with distinction the Chair of the House of Commons; I was particularly grateful for his speech and the honour he did me in his personal references. I ought to say one word of apology. There have not been any speeches from the other side. Many Members on the other side have expressed their interest and their regret that they did not know sooner about the terms of this debate. I believe some blame for that falls on me. I am told that I ought to have been rousting up a few speeches—no easy task for a young and unassuming Member. I am particularly grateful to the noble Baroness, Lady Phillips, who deputised at the last minute. I owe her an apology for not having discussed with her the terms of the debate, because I had discussed it with the distinguished noble Lord for whom she deputised.

My Lords, I am grateful for your Lordships' courtesy and attention and for having provoked a useful discussion. I think one can say, in view of 600 Amendments accepted in the last few weeks, that what this House says to-day another place may well say to-morrow. Therefore I hope that this discussion will bear a little more fruit and will be borne in mind by the Chancellor of the Exchequer when he produces his next Finance Bill. With those comments I beg the leave of the House to withdraw the Motion.

Motion for Papers, by leave, withdrawn.