HL Deb 21 November 1978 vol 396 cc899-908

2.59 p.m.


My Lords, I beg to move that this Bill be now read a second time. This is a very short Bill, and it is one which I feel sure your Lordships will welcome unreservedly. I do not think there is any need for me to go into any great detail about it, as it is much the same as the Bill which I introduced before your Lordships about a year ago today. Its purpose is to pay a bonus of £10 to over 10 million people, which is a larger number than ever before. Christmas, we hope, will be pleasanter for these persons because of the Bill.

The Government have decided that, despite limited resources and other competing priorities, it is appropriate to pay a bonus this year. The Bill provides, in effect, that the payments will be made this year to the categories who received last year's bonus in accordance with the provisions of the Pensioners Payments Act 1977, the only difference being that the relevant week for determining entitlement will be that beginning 4th December next. As before, the Bill extends to Northern Ireland. I am confident that this wholly beneficial Bill will receive general support among your Lordships and that it will be afforded a swift passage in order that the payments can be made promptly.

To qualify for the bonus, a person must be living or ordinarily resident in the United Kingdom or a member State of the European Economic Community at some time in the week beginning 4th December and be entitled, or treated as entitled, to payment of a qualifying benefit for at least one day in that week. The Bill provides for payments to people receiving retirement and invalidity pensions, including non-contributory invalidity pensions; supplementary pensions; widow's pension under the National Insurance, industrial injuries or war pensions schemes; attendance allowance; invalid care allowance; or unemploy-ability supplement or allowance. The bonus will also go to war disablement pensioners who have reached pension age, which is 60 in the case of a woman and 65 in the case of a man, and can be treated as retired, or who have attained deemed retirement age, 65 for a woman and 70 for a man. Generally speaking, where a married couple are both over pension age they will receive £20 between them. As I said, these categories of people are those who received the bonus last year. The bonus will be tax free and disregarded when a person's means are assessed for purposes such as supplementary benefit, rent allowance or rent rebate.

The vast majority of payments will be made by post offices, and I am sure that your Lordships would like me to express our gratitude to the staff of the Post Office and to sub-postmasters who will be carrying out the additional work involved at a time when pressure is beginning to build up just before Christmas. It means a substantial amount of additional work. I am also grateful to the staff of my Department who will be arranging for payment in cases not covered by the Post Office. The great majority of people entitled to the bonus will receive it in the week beginning 4th December, and nearly all payments should be made by Christmas.

Finally, let me say something about the financial provisions of the Bill. The bonus payments will cost about £106 million. This will be met out of monies voted by Parliament and, in respect of beneficiaries in Northern Ireland, from the Consolidated Fund of Northern Ireland. I do not think there is need for me to say anything more at this stage. Therefore, I commend the Bill to your Lordships and move that it be read a second time.

Moved, That the Bill be now read 2a. —(Lord Wells-Pestell.)

3.5 p.m.


My Lords, I should like to thank the noble Lord for the explanation he has given to the House of this very short Bill. The Bill is warmly welcomed by my noble friends and myself. I should like to join the noble Lord in thanking the members of the Post Office and his own Department's staff who make the purpose of this Bill administratively possible. I am glad that the bonus is to be paid to the same categories as last year.

I said last year—and I should like to repeat it—that the payment of this bonus does not in any way solve the problem of providing an adequate week-by-week income for those who have already retired and those who are shortly to retire and who will receive little advantage from the earnings-related scheme which has recently been introduced. That problem remains, and on other occasions I have put forward suggestions for dealing with it. Nevertheless, the bonus provides a welcome extra at Christmas.

However, I should like to ask whether it is not now time to consolidate the bonus. To pay it in some years but not in others seems to be purely arbitrary and not related to need. If the bonus is to be paid every year, then it seems to be unnecessary to have an Act of Parliament each year. If the principle were once approved, then each year all that we should have to do would be to discuss the amount, as we do with National Insurance benefits.

If I may speak about the amount, I understand that a sum of £22.50 would be necessary to maintain the value of the bonus at its 1972 level, and I hope that the Government do not intend to let the bonus reduce in value year after year, as has been the case with the National Insurance death grant. May I suggest to the Government that they should put the bonus on a permanent basis and that at the very least they should index-link it for the future. In the meantime, I am happy to support the Second Reading of the Bill.

3.8 p.m.


My Lords, the structure of the Bill is to reproduce for operation this year the arrangements that were made last year. It is with this particularly in mind that I want to repeat a question which the noble Lord may recall I asked him on last year's Bill but to which, despite his habitual courtesy, he was not in fact able to give a satisfactory answer.

My point concerns the position of war pensioners, in particular of war pensioners below the age of 65, in the case of a man, and 60, in the case of a woman, who are not in receipt of ordinary social security benefits. Although the noble Lord on the Government Front Bench referred a moment or two ago to payment under the war pension schemes, he went on later to spell out specifically that the bonus would be paid to war pensioners aged above 65 and 60, with the clear implication that it would not be paid to those war pensioners who were below that age and who were not in receipt of benefits under any other social security scheme. The first question I want to ask the noble Lord is whether I am right in drawing that inference and, if I am—as I understand he last year subsequently admitted that I was—why such discrimination is exercised against this particularly worthy and admirable section of holders of public pensions.

Some years ago, when I was Minister of Pensions and National Insurance, it was our proclaimed policy—and, as I then understood it, the policy of all Governments—to give priority in our system of social benefits to those who had suffered injury in war in the service of their country. That priority was quite emphatically marked by the payment to them of higher rates of benefit for comparable injuries than were paid under the generality of social security schemes. It therefore seems quite extraordinary that, first last year and now, apparently, this year, a measure of discrimination in respect of this very welcome bonus should be exercised against war pensioners. This is made the more conspicuous by reason of the fact that, if I understood the noble Lord aright, a bonus is to be paid to those who draw their benefits under the Industrial Injuries scheme—the casualties of industry but apparently not to those who are the casualties of war unless they have reached retirement pension age.

I understand that, should the Government wish to rectify this apparent anomaly or injustice, it would not be necessary to amend this Bill to do so because, if I recall the matter aright, they could in fact pay this bonus by administrative act, by Royal Warrant under the War Pensions Scheme. Unless the noble Lord can satisfy me that my construction of the provisions of this Bill is wrong (as it may well be, because the House knows how difficult it is for those of us who have not got official support to know the whole technical structure of these measures) I really must press him very hard to go back to his right honourable friend and ask him not this year to discriminate against the war pensioners but to use the powers that he has under the Royal Warrant, however late in the day, to make a similar payment to them. There are still a considerable number of war pensioners below the ages concerned. The sad tragedy of Northern Ireland is in all our minds; one saw a picture in the Press only the other day of a guardsman in his early 20s who has suffered appalling injuries in a bomb explosion. There are plenty of cases of that sort. I shall take —and I think the House will—a great deal of satisfying that it is right to dis- criminate against this particularly worthy section of public beneficiaries to whom we all owe so much.

3.12 p.m.


My Lords, I should like to add my thanks to the noble Lord, Lord Wells-Pestell, for his clear explanation of the provisions of this Bill. As he explained, it is a carbon copy of the 1977 Bill and it has been drafted in such a way that it is not practicable to amend it, so that all we can do today is to pass or reject it. From these Benches we welcome the Bill and I doubt whether there are many, if any, noble Lords who would not also extend a warm welcome to it. Apart from a couple of hiccups in 1975 and 1976 and much hesitation last year—or perhaps I should say that in April it was decided not to pay the bonus and after the autumn Budget it was decided to pay it—the Christmas bonus has been paid by Governments of both major Parties since it was initiated by the Conservatives in 1972. It has been welcomed in another place and I hope the Bill will be speedily passed by your Lordships today.

I should like to make one suggestion, which is that next year we should have a debate on the Christmas bonus well before November. Both in 1977 and again today we have debated this subject at the eleventh hour, just in time for the Post Office to make the payments in time for Christmas. Last year utterly divergent opinions were expressed. My noble friend Lord Drumalbyn asked why we were only legislating for a single payment, and I think he took the view that if it was a good idea to pay the Christmas bonus for one Christmas it must be good for each Christmas. The noble Lord, Lord Banks, has just said much the same today. The noble Lord, Lord Houghton of Sowerby, took quite the opposite view and said it was undesirable that the Christmas box mentality should be repeated as a feature of our social benefits. However, whatever his views, no noble Lord wished to oppose the payment of the bonus and the debate fizzled out.

When replying for the Government last year the noble Lord, Lord Wells-Pestell, while agreeing with the views expressed by the noble Lord, Lord Houghton, explained that the Chancellor was paying the bonus because he was in a position to put a very substantial amount of money back into the community. I hardly think that that is the position today, but it is still intended to pay the bonus. There seems to be a lack of clarity about this issue and that is why I think it should be properly threshed out in debate. Is it right that the bonus should be dependent upon the whim of Government? Should it depend on the state of the economy? Are the right people receiving it? An example relating to this point was raised by my noble friend Lord Boyd-Carpenter last year and again today. Should the bonus be discontinued when pensions have reached a certain level or should it be paid annually in accordance with what I am authorised to say is the present Conservative policy? I think this is the kind of issue on which a consensus is desirable and I hope this may be achieved in a future debate which is not rushed. In the meanwhile, I hope that your Lordships will support the Bill.



My Lords, I am grateful to the noble Lords who have participated in this debate. The only comment I want to make on what the noble Lord, Lord Banks, said about the value of the bonus now as compared with 1972 is that, of course, it is considerably less. I accept that, but I think I must point out to the noble Lord and to your Lord-ships that the Government have been much more concerned about the level of pensions week by week and it was this Government that decided to increase pensions according to the level of prices or earnings, whichever was the highest. Also, as your Lordships know, it is only a matter of days since all pensions were substantially increased, at a cost of no less than £1,700 million. This is a substantial amount in the times in which we are living. We have given increases across the board to people in our community who are in need of being helped amounting, as I say, to a sum of £1,700 million.

The noble Lord, Lord Boyd-Carpenter, puts me in some difficulty. It may well be that when I was standing at this Dispatch Box, I think a year ago today, my reply to him was not satisfactory and might have been a little confusing, but I did write to him a very long letter on 28th November setting out the position in full, to which the noble Lord replied on 6th December.

Then the noble Lord tabled a Question for Written Answer which in fact I dealt with on 17th January this year, and in which I set out very fully the position with regard to war disabled. As I now understand the noble Lord's point, he is complaining —that might not be the right word, but he is commenting on the fact that this bonus is not going to every war disabled person. If that is the substance of the noble Lord's point I would ask him, with the greatest respect, why he did not do something about it in 1972, in 1973—


My Lords, would the noble Lord allow me to answer that question very simply? In both of those years at this time of year I was the holder of a Crown appointment which inhibited me from any partisan or controversial activity in this House.


My Lords, I knew that the noble Lord was going to say that, because I took the trouble to find out what he was doing in those years. It may well be the same answer applies to 1974.


It does, my Lords.


But the noble Lord is an experienced Parliamentarian. If he had thought this was a very important matter he could have got somebody to raise it for him in this House or the other House. This is something that is quite frequently done. This was not done. In 1972 and 1973 no one under pension age, whether a war disablement pensioner or anybody else, received the bonus. In 1974 recipients of unemploy-ability supplement or invalidity benefit below pension age were brought in, thus covering war pensioners whose disability prevented them from working. But, if I am judging the situation correctly, what the noble Lord is saying is that a person who is a war pensioner suffering from a disablement and getting some disablement benefit and who is able nevertheless to work—otherwise he would probably qual-fy for some addition—should, notwithstanding the fact that he is under 65, receive the bonus. I cannot accept that.


My Lords, if the noble Lord cannot accept that, can he explain why under these proposals an industrial injury pension holder who is fit to work does receive it? While I am on my feet, is his argument that this should have been raised, even by those of us under some inhibition through somebody else, in the 1970s? Is it really a very good argument by a member of the Labour movement that this has never been done and therefore cannot be done?


My Lords, I am merely expressing surprise that somebody waited until 1977, when the first bonus was given in 1972. What I am saying is that the war disabled pensioners who are able to work, and therefore have another income apart from their pension, as many of them have—many war disabled pensioners are able to follow full-time employment—if under 65 should not expect to get the Christmas bonus.


My Lords, would the noble Lord now answer my question as to why, if that is so, the industrial injury pensioner does?


Because, my Lords, the industrial injury pensioner is not in a position to be able to follow his employment.


Some of them are.


My Lords, I think the only other comment I want to make is on the point made by the noble Lord, Lord Cullen. I hope he will not mind if I say that I think it is a year ago today that he made his first speech from the Bench opposite and we on this side would like to congratulate him for surviving so long on that Bench. The short answer to the noble Lord, Lord Cullen, is this, that the Government remain of the view that a bonus is not the best way to help social security beneficiaries. I think there is a strong case to be made out for saying that at certain times of the year or at a certain period of the year the extra money will come in useful; but I would have thought—I am expressing a personal point of view here which is a view, I know, held by the Government—that the best way to help people who are receiving pensions is to see that the amount that they receive every week is really adequate for their needs. I said that the £10 Christmas bonus this year will cost no less than £106 million. I would prefer to see it given through an increased amount every week than to have this Christmas bonus, but, as I say, that is a personal point of view. As I say, the Government would prefer to be able to increase pensions than perhaps to assist in this particular way. My Lords, I think I have dealt, perhaps inadequately, with some of the questions which have arisen, and therefore I beg to commend this Bill to your Lordships.

On Question, Bill read 2a; Committee negatived.

Then, Standing Order No. 43 having been suspended (pursuant to Resolution), Bill read 3a, and passed.