HL Deb 02 April 1974 vol 350 cc898-905

7.41 p.m.

LORD FRASER OF LONSDALE rose to ask Her Majesty's Government whether they have any further Statement to make about war pensions and allowances, especially for the severely disabled; and in particular whether they will say at what time of the year they propose to make an annual review. The noble Lord said: My Lords, following custom, I declare an interest, indeed two interests: I am myself a beneficiary of the activities of the Ministry of Pensions, because I have been concerned with this matter since 1916, when I was wounded. Nevertheless, I am not moved, and never have been moved, to raise this matter in Parliament on that account. But I have another interest to declare; that is, that I have been, and still am, Chairman of St. Dunstan's for some 50 years; I was at one time President of the British Legion for some 11 years, and I have been 50 years in Parliament. During all that time I have pursued Ministers of Pensions, as they used to be called; they are now called by some other name, which is not important—I mean the name is not important. I have pursued them in all Parties over this very long time, with, I think, some measure of success.

My main purpose is to thank the Ministry concerned, and the Government and the Minister, for the recent Statement about war pensions, and I will be exceedingly brief in view of the late hour. First of all, the Ministry has raised war pensions and the allowances that are paid to the severely disabled by some 29 per cent. That is a good and generous adjustment to modern circumstances. Whether it will prove to be enough to take care of an inflation rate of 15 or 20 per cent. in a year I do not know, but I will come to that point later.

Secondly, the Ministry has advanced the time of these awards to July, whereas hitherto we had expected them to be made in October. I should like to thank the Ministry for that, too, because the sooner the money gets into the hands of the people who are entitled to it, the better. The Minister in another place has said that in future war pensions and allowances are to be related to wages: her actual words were "to the average national earnings". I have a question or two to ask about that. What are the average national earnings—and whose earnings? Is it everybody's earnings, including the rich and the poor, the domestic servants and the managing directors, or is it the earnings of certain classes of people? If so, who are they?—because a great deal depends upon this basic figure. I imagine that it will be the so-called average wage which we have all read about in the old Ministry of Labour publications. I do not even know what that Ministry is called now, but that again does not matter. Why must we change all these names? It makes it so difficult for the older people. But instead of the cost of living they are going to relate pensions to wages.

I have a firm question to ask the Minister who is to answer this Question. Have the Ministry changed it to wages from the old cost of living figures for administrative convenience; have they done it because the trade unions asked them to and they want to please them if they can, or have they done it to benefit the pensioners? That is a plain question and I hope I will get a plain answer to it. I can see that if wages go up quicker than the cost of living, it is better to adjust the man's pension to wages. But we have been told that wages have not been going up quicker than the cost of living, so I am not quite sure where we are. Let me repeat my question. Has the change to wages from the cost of living as the basis for this calculation been made for administrative convenience or because it is going to be better for the war pensioner? I hope I can get a plain answer to that question.

There must inevitably be a delay between the time when you take a figure—for example, the figure of average national earnings or the cost of living, whatever the figure is—and the time when you are able to put the money into the pensioner's pocket. The delay may be some weeks; it may be some months. It may be less now than it was before because they have advanced it to July. But I want to emphasise that this inevitable delay, especially with inflation rising as fast as it is now, means that by the time the man gets the money the figures upon which it was based may be out of date. I therefore want to know what will be the datum line upon which they take the figures out and how many weeks or months after that the man will get the money in his pocket and, in view of the inevitable delay, whether the money he gets will be augmented above the calculations to take account of the fact that otherwise the war pensioner will always be at a loss compared with the wish of Parliament that he should not be at a loss. He will always be getting paid on last year's figures or the last six months' figures, never on to-day's figures—he cannot be—and until the next review comes along he will be at a disadvantage. Therefore, always the Government, whichever Government it is, must give more than the figures would suggest; otherwise you will not be doing what Parliament wishes you to do and I believe you want to do.

My next Question is: when will this annual review take place? This year it has been done between March and April 1. It was to have been done by the previous Government by next October. Until quite recently they were going to do it every October, and they then said they were going to do it every six months. I do not know whether it is really practicable to do it every six months. If it is done annually and it is done generously and there is this loading or uplift, which I have referred to, I do not think it very much matters if it is done once a year. May I underline this word "loading" for the Minister's ears. It must be loaded up. When, therefore, are they going to do it in each year?

I am glad that last October the Ministry assimilated the pensions for widows, about which Lord Shinwell and I asked some Questions in July of last year. I am glad to pay a tribute to my noble friend Lord Aberdare and the previous Government, and to Mrs. Castle, for having confirmed this. Widows are now to get the same—except for their old age—no matter what war their husband was in, whether it was the First World War or the Second World War, or whether their husbands are killed in Ireland to-morrow.

I have no more to say except that this has never been a political question. Along with many other friends, in another place and in this House, I have done everything in my power to pay a tribute to all. Governments because, with my knowledge of 50 years, I can say that the civil servants and the Ministers concerned, of all Parties, have always been approachable, kind, generous and sensible. We have had to push them along a bit; and we have not hesitated to do that. We shall go on doing it. But my main purpose in speaking to-night is to say, "Thank you" to the Government, "Thank you" to Parliament, and "Thank you" to the people.

7.51 p.m.

LORD ABERDARE

My Lords, I am not on the list of speakers, but I would beg your Lordships' indulgence, as my noble friend mentioned my name, so that I may pay my tribute to him for his harrying of successive Governments, and for the effective way in which he has always represented the views of the ex-Servicemen. Certainly he has put some extremely penetrating questions to the Government this evening. I have the deepest interest in hearing what the answers are to be, because they will be of interest not only in the context of ex-Servicemen's pensions but also for pensioners in general.

He has asked about the definition of earnings, the dates of implementation, and so forth. May I tell him that we ourselves would never have suggested a review of pensions at six-monthly intervals if we had not thought this practicable. In fact, we believe that it would be in the better interests of pensioners in general, at a time of this very severe inflation, to have reviews at six-monthly intervals, rather than any system of loading, which I believe would be extremely difficult to work out in practice. We shall certainly he pressing the Government to make six- monthly reviews of pensions in the future. I am sorry to intervene in this debate without having put my name down, but I felt that after his 50 years of service in Parliament I should like to pay my tribute to my noble friend from these Benches.

7.53 p.m.

Loup WELLS-PESTELL

My Lords, it is perhaps typical of the generosity of the noble Lord, Lord Aberdare, to say what he has said about his noble friend Lord Fraser of Lonsdale. I have known the noble Lord, Lord Fraser, for something like 40 years. He will forgive me if I remind him of the fact that it was about 40 years ago that he and I debated in Regent's Park one Sunday morning our respective political philosophies, when he was Member of Parliament for St. Pancras, North, and I was doing my best to unseat him. Having said that, I would add that I think that everybody, both in this House and in the other place, would wish to take an opportunity like this to say how very much we admire what he has done for ex-Servicemen over a great many years. If he will not think it impertinent of me, I should like to say how many of us have a tremendous affection for him and for the way that he has overcome his own personal difficulties. Perhaps there is no man alive to-day who has overcome them and done more for the community, and particularly the ex-Serviceman, than the noble Lord, Lord Fraser.

I am delighted that we have been able, as a Government, to do something to mitigate the difficulties which a good many ex-Servicemen have experienced over the years. I am not unmindful of what the past Government also did in this particular matter. It is true that we have decided to gear pensions to wages rather than to prices. I can only say that the latest available figures give the national average earnings of the working population as a whole (and I hope that the noble Lord will not ask me what I mean by "the working population") at the present moment as £40.33 a week. The noble Lord will know that it is possible for a married war pensioner without children to receive £35.05 a week; and if he had title to normal maximum constant attendance allowance he could receive as much as £43.05, which, if I may say so, is slightly above the national average earnings.

With regard to the assessment, I think your Lordships will know that the various Government Departments are able to assess trends. It has not been a difficult thing, with the knowledge that we have had, to assess the trends in prices. The Department of Employment has not had any real difficulty in assessing the trends in wages. As I understand the situation, the annual review of war pensions will take place some time in March and April with those trends in mind, and the amounts will be fixed and will be payable each year, as the noble Lord says, in July. I do not foresee any difficulty in assessing what should be the right amount, having regard to the competence of the appropriate Departments in making an assessment of trends.

My Lords, I think that I have answered the three major questions put by the noble Lord, but it might be of interest to the House to know exactly what has taken place. I do not propose to go into any great detail—

LORD FRASER OF LONSDALE

My Lords, before the noble Lord continues, will he allow me first to congratulate him on being a Lord in Waiting and on coming here for the first time to help us. Secondly, may I make it clear that this loading, which the noble Lord, Lord Aberdare, thought was not possible, has in fact been done all the time. They always have loaded it up a little bit above the real figure; but it is necessary to load it quite a lot to allow for a whole year—especially a year with a 15 or 20 per cent. uplift in inflation. I want him to tell me not merely that the Government will look at the trend for the past year, for the missing months, but that they will look at the trend for the forthcoming year; otherwise the pensioner will always be a year behind.

LORD WELLS-PESTELL

My Lords, I think it can be said that the factors affecting the general cost of living, and the cost of things generally, will be taken into account. I do not foresee any great difficulty, because, as I said a moment or two ago, the rate of inflation, together with the trends in increases in prices and wages, and so on, can be reasonably accurately assessed these days. If a review is carried out in March or April, it ought to be possible to fix a sum which can be payable the following July with some certainty that it will be adequate until the next review.

As the noble Lord has pointed out, all rates of war disablement pensions, war widows' pensions and supplementary allowances, have been increased. As he knows, the 100 per cent. rate of disablement pension will go up from £12.80 to £16.40 and the lower rates of supplementary allowances will go up in proportion. The war widow's rate will increase from £10.10 to £13. All these increases will take effect from July 22.

In addition, the Government are doing something about special age allowances. The terms of the new revised Ministry of Defence scheme which was introduced last year, like other occupational pension schemes cannot be applied retrospectively. This, combined with the heavy cost involved, would mean something like £250 million a year, and clearly makes it impossible to apply the new provisions to pensioners of mainly the two world wars. It is in this light that the Government have taken the opportunity to provide special additional help for the elderly and more severely disabled war pensioner and the elderly war widow. This will be achieved by doubling the age allowance to which war pensioners aged 65, with at least 40 per cent. disablement, and war widows aged 65 and over are entitled. The allowance for the 100 per cent. disabled man will go up from £1.80 to £3.60, and for the war widow of 65 from 65p to £1.30 and from £1.30 to £2.60 at 70. This means that over 40,000 disablement pensioners and over 50,000 war widows will benefit, the net cost being in the region of 4½ million.

The noble Lord's Question is directed particularly towards the severely disabled, and I am sure noble Lords will be interested in the following examples which demonstrate how the proposals will affect that category of war pensioner. The single 100 per cent. disablement pensioner will receive a basic pension of £16.40 and, if his injury is such that he is unable to work, he would receive in addition an unemployability supplement of £10.75 plus comforts allowance of £1.40—in all £28.55 a week. He might also require attendance because of his disablement and would qualify for the appropriate rate of constant attendance allowance—the normal maximum will be £6.60 a week. If aged 65 or over he would, of course, qualify for age allowance of £3.60 as well.

The married man in the same category without children would receive £35.05 and, if he had title to normal maximum constant attendance allowance, the payment could be £43.05. If aged 65 he again would receive age allowance of £3.60 in addition. With constant attendance allowance the same married man would receive £40.33 if he had a child and £44.70 if he had two children. Perhaps it is not generally known, looking at the figures for 1973, that there were no fewer than 140,000 children who received allowances.

Apart from the allowances I have mentioned in these examples, there are other supplementary allowances for clothing and other things which a disabled pensioner could receive in addition, provided the facts of his case satisfied certain conditions. The effect, of course, would be to provide him with an even higher weekly income. Finally, my Lords, it is important to recognise that none of the war disablement pensions or supplementary allowances is subject to tax.

Speaking on behalf of the Government, we are glad that it has been possible to do this. We recognise the plight of the ex-Serviceman and the widow and the contribution they have made to their country's need, and we are glad to be able to take an early opportunity to recognise it. This means that in 1974–75 the total cost will be in the region of £170 million, and the increases to which I have referred, which come into effect in July of this year, will mean finding another £46 million, bringing the total to some £216 million. I am grateful to the noble Lord, Lord Fraser, for expressing his thanks to the Government for what they had been able to do. We on our part recognise, as I said earlier, the contribution that he himself has made, not least the very wise counsel that he has brought to the Central Advisory Committee of which I believe he is a member. We shall understand if he goes on pressing the Government to discharge their responsibility to the war disabled, a responsibility which I think this Government or any Government would be pleased to meet.