HL Deb 24 October 1973 vol 345 cc678-90

4.56 p.m.

LORD ABERDARE

My Lords, I beg to move that this Bill be now read a second time. Your Lordships will I am sure be familiar with the purpose of this Bill, which is to enable a special payment of £10 to be made to some 8 million pensioners during the last week of November. Our intention to make this payment was announced by the Prime Minister in connection with Stage 3 of our counter-inflation policy, and of course it follows the example of the similar lump sum payment made this time last year.

As was last year's payment, it must be seen in the context of our anti-inflation policy and as an additional payment in the exceptional circumstances of 1973. It has no part in our long-term strategy for pensions which, as your Lordships are well aware, is based on an annual review designed at least to keep pace with the rise in the cost of living. This annual review has resulted in considerably increased pensions from the beginning of this month, an extra £1.60 for a married couple, an extra £1 for a single person. That is an increase on the former rate of almost 15 per cent. compared with an increase in the cost of living from October, 1972, to September, 1973, of just under 8 per cent. Like the previous increases of 1971 and 1972 this is a considerable real improvement in purchasing power—almost certainly a higher rate than in either of those two years, and possibly higher than in any previous period of 12 months. The lump sum payment therefore has nothing whatever to do with our long-term strategy of increasing pensions to keep them at least in line with the increase in the cost of living, but it has a lot to do with one of our objectives in countering inflation; that is, to improve the position of pensioners. Last year this was generally accepted as a welcome provision and I trust that once again your Lordships will welcome it.

I doubt whether I need to go through the clauses of the Bill in detail, but perhaps I should draw attention to one or two aspects. So far as Clause 1 is concerned, I need only say that the payment is not taxable and will be disregarded for any means test. Clause 2 sets out the various qualifying benefits and Clause 3 the method of payment. Clause 5 concerns the "nitty-gritty", the method of financing most of this payment by increased weekly flaterate contributions from employers, the self-employed and the non-employed. And, of course, these higher contributions will attract the usual Exchequer supple- ment. We estimate that these increased contributions, which are due to come into effect on January 21 next, will yield about £14 million in the present financial year and about £90 million in a full year. The yield of these higher contributions and the Exchequer supplement by the autumn of next year will approximately equal the £80 million which these special lump sum payments will cost.

The only other clause to which I would draw attention is Clause 6, which ensures that, as at present, disablement benefit will continue to be awarded in all cases in which pneumoconiosis as defined in the Industrial Injuries Act is diagnosed by a pneumoconiosis medical board. A recent report of the Industrial Injuries Advisory Council has concluded that they can no longer support the view expressed in 1953, that virtually everyone in whom pneumoconiosis is diagnosed ought to have an award of disablement benefit. We have carefully considered the Council's report and have decided that, because of the special nature of pneumoconiosis, it would be wrong to make a change in the present position with regard to the diagnosis and assessment of this disease. I can only say that as one who comes from the coal mining area of South Wales I confidently recommend this clause to your Lordships, and I am sure that it will be welcomed not only by my friends from Wales but also by all those who come from coal mining areas.

In conclusion, may I again express the Government's gratitude to the Post Office staff, to sub-postmasters and to the staff of my own Department on whom will fall the burden of implementing the major provision of this Bill. My Lords, I beg to move.

Moved, That the Bill be now read 2ª.—(Lord Aberdare.)

5.1 p.m.

BARONESS PHILLIPS

My Lords, I thank the Minister for introducing the Bill in his customary straightforward manner. After some of the long speeches that we have had on other matters, we are dealing here with a very important matter in a very practical and commonsense way. Of course on this side of the House, as in all parts of the House, we welcome the payments to the pensioners. I am intrigued to see that we refer now to "lump sum" payments. Perhaps £10 is not as good a lump sum as the sum which the chairman of a meat company received recently; but nevertheless it is of course welcome by those who are fortunate enough to collect it; those who come within the somewhat arbitrary lines which have been drawn by the Bill. The Prime Minister mentioned this recently, but I should like to draw attention to the question of who is giving this cash—if it is a gift at all—to the retirement pensioners.

The total cost of the special payments, according to the Preamble, will be £80 million, and the noble Lord has confirmed this. I used to teach mathematics (and I know that I will be told that my calculations are wrong) and I calculate that the increase in the flat rate contributions will yield £90 million in a full year. If we are to have an increase after an annual review, I feel certain that the Government will again come back and ask for an increase in the flat rate contributions to pay for it. I think we can assume that on this occasion, as on any other occasion in connection with Insurance, the employers or employees or some section of the working population, are paying for anything given to the pensioners. This may come from the National Insurance Fund, but I remind your Lordships that this is not a fund which comes by magic; it is a fund to which people are contributing. I am not suggesting that people would not wish to contribute, but it must be clear that this is no magic godmother or godfather gift—this is something which comes from the National Insurance total.

I notice that the administrative cost of implementing the Bill is substantial—about £1 million—but that it will have no effect on manpower. I also notice that the Minister in another place said that there was no need for any pensioner to make a special application; that this sum would be paid at the Post Office as was the case before. I am rather intrigued to know what costs £1 million. If we are not employing any extra staff and there is no special application to be made, one can only assume that it will cost £1 million to print the books. I suggest that there must be an easier and cheaper way of doing this. I do not wish in any way to look a gifthorse in the mouth, and I would not want to rehearse the arguments that there are other people who need this £10 as much as those who will be receiving it: the young widows, the younger men or women on invalidity pension. I will not cover that ground again.

There is one clear anomaly which the Government should have looked at from last year; namely, that the spouse of somebody living on retirement pension does not receive this benefit if she is not over 60. I would remind the Government that the actual retirement pension is paid jointly. In our debate on the Social Security Act—as it is now—there was great emphasis placed on the fact that the wife is still described as a dependant. If somebody has retired and is living on retirement pension—or existing on retirement pension—and is receiving a joint pension for himself and his wife, it seems reasonable that whatever her age, if she happens to be 59½, she should equally be given the £10 and should not on this one occasion only be regarded as a single assessment.

I wholeheartedly congratulate the Government on one clause—the Minister will he delighted to know that. I can hand him one accolade, and that is the one on pneumoconiosis. I am delighted that the Government have resisted any suggestion that there should be a change. I remember many years ago resolutions which came to me from the mining areas on a disease which until quite recently was not accepted as one which ranked for any consideration tinder the Industrial Compensation Acts. It was a disease which killed many people but which was never diagnosed as the reason for their deaths.

My Lords, we wish great joy to all those who receive this benefit, and the Government have very sensibly allowed it to be given a little earlier this time. I am happy to see that, unlike a widow, a gentleman who cohabits, provided he is over 65, may also receive £10 for himself and his cohabiting lady.

5.7 p.m.

LORD BEAUMONT OF WHITLEY

My Lords, neither do I want to look a gift horse too much in the mouth, and we should be grateful for small mercies. But this is an occasion when one or two of the inadequacies which are implied by this Bill should be brought out. In fact I find three real inadequacies. First of all, I find the amount inadequate in that it is, by my reckoning, which may be a little out, 16 per cent. less than last year which I think is a great pity. If the Government were going to repeat this £10 gift, it should have at least kept pace with the rise in the cost of living over the past year. We all know that one of the reasons why this is not done is that it would draw undue attention to how much the rise in the cost of living has been.

Secondly, I find an inadequacy of extent in this Bill. The noble Baroness, Lady Phillips, touched on this, but there are also a few other categories. I would particularly mention the people on disability pensions and people receiving chronic sickness allowances under this particular age. I do not see why, given that the Government have planned this in plenty of time and not, like last year, had to do it rather suddenly, something should not have been done to help the really poor in those categories, and that the benefit should not just be confined to retirement pensioners.

Thirdly, the main inadequacy is the inadequate way in which we treat our old people. For Mr. Heath or Mr. Barber to play Santa Clause is not enough. I pay tribute to the Conservative Government's decision to have annual reviews of pensions, even though I do not pay tribute to the amount of inflation that has made it absolutely essential that they should do so. The fact remains that our State pensions for the elderly in this country are among the lowest in Europe. In real terms they are probably lower than anywhere except Ireland and Italy in the European Economic Community. Pensions are well below the level of weekly income guaranteed by the Department of Health and Social Security for survival in this country, which is the reason why one-third of all pensioners qualify for supplementary benefits.

I think there are many things that can be done about this. There are many ways of helping the pensioners which we do not sufficiently explore. I was particularly interested in the idea put forward by Des Wilson recently at Hove, that possibly there should be a special rate support grant, for those towns which attract a large number of the elderly in retirement, in order to enable them to produce better facilities for the elderly. But when we get down to the root of it, that root is: what is the pension going to be? What is it going to be tied to, and how adequate is it going to be, compared with other people's incomes? I think we have not yet gone far enough. I honour the Government's pledge that they will try to ensure that pensions keep pace with the rise in the cost of living, but it is no use merely keeping pace with the rise in the cost of living if the base from which they start is totally inadequate.

My Party have said that the only real basis for pensions is to tie them to 50 per cent. of average male earnings for a couple and 33⅓ per cent. for a single person. This is expensive, and the cost in a full year would probably be £1,100 million. That is a very great deal of money. We would raise it as a social security tax, with a larger proportion from the employer than at present, as is the custom on the Continent most of the time; and we would make the graduated tax continue as a percentage of income, however big a person's income or salary was, right up the scale. My Lords, £1,100 million is a lot of money: perhaps this country cannot afford it. Perhaps we can afford to pay £800 million on Maplin, £800 million on the Channel Tunnel, £600 million on Concorde but not £1,100 million a year on old age pensioners. Of course I take the point that those three things are "one-off" ventures, but we appear to be having at least one of these "one-off" ventures every year, if not two every year. I shall also be told that these are productive investments.

The question which society as a whole, and Parliament on behalf of society, must eventually decide, and must decide in a different way from the way it has done so far, is what is really the return that we want on our investment in this country? I should have thought it was a comfortable old age, relieved of the distress and real poverty which now exists, and that that was probably the best investment we could ever make. This Bill shows a welcome flexibility from the Government in producing a special bonus at this particular time, and I welcome it. When I first proposed it, four years ago, I was told by the Government that it was impossible, but I am delighted that the Government now find it is possible. But that it should be necessary to pass this "Santa Claus" Bill each year for two years seems to me to be a dreadful indictment of the whole pensions scheme and of the priorities that we give to the old in our society.

5.15 p.m.

LORD TAYLOR OF MANSFIELD

My Lords, I apologise to the House for not having put my name on the list of speakers, but I was listening to the news last Saturday morning on the B.B.C. and then to the proceedings of the previous day in Parliament, when a reference was made to an inclusion in one of the clauses of the Bill, which I will mention in a moment. Before coming to that, may I say to the Minister, joining my noble friend Lady Phillips, that we welcome this Bill. We welcome the payment of the Christmas bonus to the retired pensioners. I notice that the Minister was careful to say that it was a payment to pensioners. That is not quite the case: the adjective needs to be put in because so many other pensioners are excluded and it is a payment to retirement pensioners under the National Insurance Act.

There is one thing I should like to say to the Minister on the question of finance. I notice that additional contributions are to be levied on the employers, the self-employed and the non-employed, with a contribution from the Exchequer; and the total of the two figures, as I understand it from the Bill, will be £113 million, or something of that nature. The cost of the bonus, payment, benefit, or whatever you like to call it, is in the neighbourhood of £80 million and I should like the Minister to make an observation on the amount that is to be collected in the way that I have indicated, plus the amount that the Exchequer is going to pay. May I also make this observation: that while the payment is welcome, I do not think we are giving enough attention to the needs, particularly, of the retired pensioners. I should like to see the pension so increased as to bring it up to £10 a week for a single person and at least £16 a week for a married couple, and I hope that when the Government come to make their annual review they will think in more substantial terms than a yearly bonus at Christmas time.

The other thing I want to say is in reference to Clause 6. I must confess that when I heard that programme on the radio, and when I arrived here yesterday and received the Bill, I was somewhat surprised to see that the question of the pneumoconiotics was embodied in a Bill of this kind. But when I read what the Minister said in another place last Friday, I perfectly understood the reason. The reason he gave was that the National Industrial Injuries Advisory Council had been examining respiratory diseases for quite a long time and had made a certain recommendation. May I say that, like the Minister, I come from a mining area and I have been wrestling for many years with this question of respiratory diseases. I was astounded to discover that the Minister in another place said last Friday that this clause was included because of a certain recommendation that had been made by the National Industrial Injuries Advisory Council. It was to the effect—and this somewhat alarmed me—that if this clause was not put in this particular Bill, and if the medical people who made the assessments for pneumoconiosis followed the recommendations of the Advisory Council, it would mean that those with very small assessments might lose them and that those who might be assessed in a similar way, so far as size is concerned, might not get any pension at all for the disease of pneumoconiosis. The reason Clause 6 is inserted in the Bill is to preserve the status quo.

I want to express a note of gratitude to the Minister who announced the Government's decision, in contradistinction to the recommendation of the Advisory Council on Industrial Injuries. I see people every week who suffer from this disease. Those of us who have been looking at this problem and grappling with it for many years know not only the physical disablement that it causes, but the mental distress, and I am extremely grateful that at any rate for the moment, until we can perhaps debate, discuss and apply our minds to the Report put out by the Advisory Council on Industrial Injuries, those who are in receipt of pensions because of small assessments (and I will not go into the question of how it works) will have those pensions safeguarded, and those who come up for examination before pneumoconiosis panels will not be jeopardised either.

My Lords, in conclusion may I say that it is unfortunate that this Report was not in our hands some time ago? It was available only yesterday, I believe. It is an interesting document. One of the things that disappoints me about the recommendations, or non-recommendations, of the Council is the question of other respiratory diseases than pneumoconiosis. I have for a very long time been of the opinion that what is needed is that both emphysema and chronic bronchitis, like pneumoconiosis, should become prescribed diseases. I am not a doctor, but a very ordinary layman. I know that the doctors argue that the general population can become victims to these two diseases, but I say this: those who work in dusty conditions, particularly coal miners, are not only facing the hazards of the polluted atmosphere, as put forward in evidence by the medical profession, but something plus as well; that is, the dust of the coal mines.

While expressing my gratitude for Clause 6 in this Bill, I hope that the Government will give some attention to the prescription in the not too distant future of emphysema and chronic bronchitis.

5.22 p.m.

VISCOUNT AMORY

My Lords, I rise with extreme diffidence to make two brief observations. I say "diffidence" because I have reached such an advanced age that, so far as I can see, I am likely to be numbered in the category of beneficiaries under this Bill. I have one point to make in regard to what the noble Lord, Lord Taylor, has just said. I am sure we shall all be delighted to see that sufferers from pneumoconiosis are included in this Bill because it is one of those diseases about which I think everyone in the country feels particularly deep sympathy, because so many who suffer from it have given honourable and continuous service over a long period to their industry and to their country.

My second point is in reference to what the noble Lord, Lord Beaumont of Whitley, said. With the tone of his speech we shall be in sympathy, and particularly when he said that his desire, and that of everybody else, was that the elderly should be treated with generosity. That is something that public opinion in this country desires very much. Every Gallup Poll on this matter shows the high priority that people generally wish to be attached to this objective. There- fore the noble Lord will forgive me if what I have to say now may at first sound a little harsh, though it is not intended that way. The noble Lord mentioned the £1,100 million as being a very large sum. I thought from the way he mentioned it that he was fully conscious of the difficulty of giving effect to the particular proposal he made, at any rate all at once. My only point was that, apart from being a very large sum, if a sum of that order were to be added to the total expenditure in this country at the present time it would be wildly inflatory. So, if that objective he seeks becomes possible—and I am sure he will agree it would have to become possible—it would have to be done in a way that would not necessarily add a very large sum to the total of consumer expenditure at the time; that is to say, some other priority would have to be left to make room for it. With his aim, if it is regarded as feasible, and one to be achieved, I would not quarrel at all, but I do not believe that it is practical politics at present. In the present circumstances we must be grateful that the Government have found it possible to go as far as they have done, and to make once again this symbolic payment to show their sympathy with the objective.

5.25 p.m.

LORD ABERDARE

My Lords, I am grateful to all those who have spoken in this debate, at least for not opposing the Bill, even if in some cases they gave it a fairly lukewarm welcome. The noble Baroness was kind enough to give it a fairly reasonable welcome to set it on its way, and I am most grateful to her. So far as the method of raising money and where it comes from are concerned, the noble Baroness, no doubt moved by a spirit of non-discrimination between the sexes, referred to there being no magic godfather, whereas we generally refer to a fairy godmother; but in this case, unfortunately there is neither a godmother nor a godfather. The money has to come either from the pocket of the taxpayer or from the pocket of the contributor. In this particular case, however, the bulk of the contribution comes from the employer and not the employee. I am sure the noble Baroness would think that was right in present circumstances.

BARONESS PHILIPS

My Lords, my only point, to have it on the Record, was that it is not the Government who are the godfather, but the contributor.

LORD ABERDARE

The contributor, not the taxpayer; the Government are at the mercy of people whether they be taxpayers or contributors; in this case those people are the employers.

The noble Baroness asked me about the administration cost: mainly cost of the administration by the Post Office in making payments on my Department's behalf. She spoke of an anomaly with the wife getting the payment only if she is herself over 60. I do not think it is really an anomaly; if you are drawing a line, of people over a certain age at a point when they normally retire, that figure is 60 for women. This is the same figure as we relied on last time, and I think it is a justifiable figure.

The noble Lord, Lord Beaumont of Whitley, in an interesting speech, chose to widen the debate somewhat beyond the modest scope of this Bill into rather wider matters of pension policy. I did, I hope, seek in my own speech to make it quite clear that this extra £10 was part of our counter-inflation policy rather than our main pension policy, of which we are proud; since we came into office we have increased the pension by 55 per cent., which is quite a considerable achievement. Also he talked about the limits of the extent of this particular payment. It is difficult to draw a line at a particular point, but it is much easier to draw the line at the point of retirement than to give extra to other well-deserving people below that line. Again, I think we have done a great deal, with the invalidity pension, and helping the chronic sick with the attendance allowance. I do not think we have anything to be ashamed of there. Our pension, the noble Lord said, is lower than elsewhere in Europe. These are very difficult comparisons to make, because in comparing pensions I think one ought also to take into account other forms of social benefit, particularly perhaps the free Health Service, which is not enjoyed by people in other member States of the Community.

My noble friend Lord Amory spoke about doing more and facing up to the cost of the £1,100 million, and my words will merely echo what he said about the difficulty of doing so in present circum- stances, though we would all wish to do more for the elderly if we could.

VISCOUNT AMORY

My Lords, if the noble Lord will allow me to emphasise what he has said, the present Government's record in this matter is extremely good relatively. The substantial increase in three years to which he referred is something of which I think the Government can feel very proud.

LORD ABERDARE

My Lords, I am extremely grateful to my noble friend.

With regard to the figures mentioned by the noble Lord, Lord Taylor of Mansfield, he mentioned overall receipts of £113 million. That would be in a full year; but between January, when the contributions first come in, and autumn of next year the contributions will raise about £80 million. So the sum does in fact balance.

I am very grateful to all of your Lordships who have welcomed Clause 6. It was not so much that the Industrial Injuries Advisory Council Report was not available before the Bill came in; it was rather the other way round; that we saw an opportunity of putting this in the Bill quickly in order that we could put the matter right at the earliest possible moment. The Report was published as soon as possible, and, as the noble Lord knows, it was available yesterday. I hope I have answered most of the questions which noble Lords raised.

On Question, Bill read 2ª: Committee negatived.

Then, Standing Order No. 44 having been suspended (pursuant to the Resolution of October 15), Bill read 3ª, and passed.