Orders of the Day — Retirement Pensions

Part of the debate – in the House of Commons at 12:00 am on 20th April 1959.

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Photo of Mr Richard Crossman Mr Richard Crossman , Coventry East 12:00 am, 20th April 1959

I am sorry. The right hon. Gentleman was not.

I have been trying to find references to the active participation of the Tory Opposition at that time with those of us who were pleading the cause of the old-age pensioners. If it is true that the Tory Party is so passionately engaged in the concerns of the pensioners it is surprising to find that its concern was so muted during those years when, in retrospect, the right hon. Gentleman finds the conduct of our Government so unsatisfactory.

Lastly, we come to his curious accusations about our conduct as an Opposition. It was at this point that the right hon. Gentleman worked himself up until all the instruments of the orchestra and all the wind were playing full blast. I have never heard a man speak more passionately in denunciation of electioneering.

Whenever I hear a person "tear a passion to tatters" on the subject of electioneering, I suspect that he may be engaged in it himself. It is remarkable that when the Opposition put forward a long-term scheme for reforming old-age pensions, which includes a short-term proposal for a £3 a week minimum, they should be denounced in the most violent terms as a wholly unworthy, utterly vulgar, hypocritical, vote-catching gang.

I had the feeling, during this magnificent orchestral performance, that the right hon. Gentleman was playing his tuba for a very long time to fill in the interval before a more senior colleague arrives on the stage, orders the spot light and says, "Pensions shall, after all, be increased". When the Prime Minister has come to do that, then the right hon. Gentleman will have fulfilled his function of making loud noises while the Prime Minister is making up his mind whether it shall be 3s., 4s., or 5s.—i.e. what is the minimum price the Tory Party will have to pay in order to avoid defeat at the polls. That is my view of the real rŵle of electioneering on this issue.

And now I will get down to the serious topic of this debate, which is our Motion and the Amendment moved by hon. Members opposite. I am glad that the Amendment is on the Order Paper, because it enables us to present both sides to the people of this country. For I, too, am very much aware that we are speaking in the presence of our electors who are being interested in what we are saying—and why not? Elections are supposed to be about vital topics, and I see nothing wrong in discussing a subject in which the electors take a vital interest and about which they know enough to tell whether some of us are talking nonsense or not. That seems to me to be an excellent thing.

I know no subject better than pensions for the electors to test out politicians to find out whether parties are putting forward practical working policies and doing something solid or not. I am glad that we have not only the Motion putting forward the policy of the Opposition, but a counter Amendment which, quite ostentatiously, takes the offensive and says, "We the Government are proud of our record, we the Government are proud of rejecting the Labour Party's plans for the old people, and we, the Government, are thoroughly satisfied for the people to judge us on our record on pensions".

To repeat something which I said in one of our earlier debates, the question of how a democracy treats its old people will and should be one of the great issues of the 1950s. We on this side feel that the poverty of which many of my hon. Friends have spoken in moving terms—and I am thinking particularly of the admirable maiden speech by my hon. Friend the Member for Norfolk, South-West (Mr. Hilton)—the poverty with which we can claim more people on this side are closely related than hon. Members opposite, is now intolerable, occurring, as it does, in the expanding economy of the 1950s.

The reason why we have tabled this Motion of censure is because when we saw the Budget and the Government's decision about how to allocate the surplus we felt that it was not only economically unwise; it was an allocation of resources totally out of touch with the moral conscience of the British people in the 1950s. I speak not only for myself, but according to the polls which have been taken by the Daily Mail and even by the Daily Express Even the Daily Express poll suggested that the subject on which the British people were far more interested than the price of beer was whether justice had been done to the old people. It was a gross miscalculation by the Government to believe that they could get away with a device for distributing £366 million overwhelmingly to the better-off people while finding no room for a single piece of assistance to the aged, to the sick, or to the unemployed.

I want to make one statement about our Motion and to put it in the right perspective. There are some people who believe that the case for increasing unemployment benefit and sickness benefit is only a corollary to the case for raising the rate of the retirement pensioner. By an accident we on this side started our work of research on the social services on the old people and we published our scheme for national superannuation first of all. It was inevitable, therefore, that in recording what should be done about unemployment and sickness we should seem to treat them as auxiliaries to our main purpose of finding a solution of the old-age pension.

Had we started the other way round, however, and begun on unemployment and sickness and then moved to old-age pensions, we would have found as overwhelming a case for relieving the short-term suffering of those who are unemployed often sick, and the widow, as we found for improving the long-term suffering of the old people. That is why I want to make it quite clear that in our Motion the 10s. increase to the £3 basic retirement pension applies equally to unemployment and sickness benefit. The increase of these benefits is not something which is accepted as a corollary to raising the retirement pension. It is something which has as overwhelming a moral case for it as the improvement of the benefits for the old people.

Therefore, when the Chancellor of the Duchy of Lancaster challenges us and says that to the £116 million which the 10s. increase for the retirement pensioner would cost there must be added also the money for the unemployed, for sickness benefit, for the widows and for the consequential increase in National Assistance, of which my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) spoke so movingly, we welcome his saying that. Of course, I accept from the right hon. Gentleman that the sum comes to £160 million and £200 million if the question of wives, which we have left out, were included. We accept the right hon. Gentleman's figures and we say that in a Budget of 1959, which claims to be a prosperity Budget, a surplus Budget and a giveaway Budget, the first priority should have been given to raising by 10s. of the rate of benefit for the unemployed, the sick and the retirement pensioners.

It is not for us to discuss precisely how that is to be done. We are making a statement that that should have been the top priority in the Budget, come what may. If and when we win the next election, one of the first actions of the Labour Government will be to do precisely what the Tory Government have failed to do in this Budget. We shall raise these benefits and create the £3 basic rate which was not created in this Budget.

I am interested to try to put as objectively as I can the real issues which have divided us in this debate. There were, as always, a number of extremely thoughtful and serious contributions to the debate, not only from this side but the other side. I want to try to answer those serious speeches.

What is the Tory case for not making this concession of the £3 pension this year? In order to he non-contentious, I want to consider what Viscount Hailsham. the Tory spokesman, who is, I believe, the party manager as well, said for the Government in another place in laying down Government policy. He said that there were two objections that the Tories had to raising the old-age pension, and continued: Let us examine in a little more detail the merits of this criticism. The object of the Budget is to inject, as we have agreed, £360 million into the economy of the country and so to help full employment. Let me ask the Opposition this question. The cost of raising the retirement pension by 10s. is, with consequentials, in round figures, £220 million. That is approximately the same amount as the value of the relief on income tax. He also said: … unless it were to be done, in effect, by borrowing (which I do not believe is suggested) the net injection into the economy would be nil, and the object of a Budget which is to inject £360 million into the economy would be frustrated"—[OFFICIAL REPORT, House of Lords, 15th April, 1959; Vol. 215, c. 674.] This is an extremely interesting statement of Tory economics. It is highly significant that the Chairman of the Tory Party believes that to raise the purchasing power of old-age pensioners, the unemployed and the sick, by £200 million is not an injection into the economy. The only injection into the economy in which he believes is an injection into the pockets of the backers of the Tory Party. When we propose to raise the purchasing power of the masses, he replies that that is not the kind of injection into the economy that he, Lord Hailsham, has been referring to.

Having heard this remarkable exposition of Lord Hailsham's economics, let us examine the second reason why he feels that one should not raise the old-age pension. This is even more choice. It is perfectly true that this year tax reliefs and other benefits amounting to £360 million have been granted, and it is also true that the Budget itself has contained no general increase in retirement pensions. But I would say this. One reason, at least, for that is that we put the old-age pensioner at the head and not at the base of the queue."—[OFFICIAL REPORT, House of Lords, 15th April, 1959; Vol. 215, c. 670.] I hope every old-age pensioner hears this quoted to him as Lord Hailsham's view of what they have done. By "putting the old-age pensioner at the head of the queue" is meant that the Tories increased the pension the year before last and to such an extent that "now the pensioner has never had it so good".

This is the first serious issue which divides the House. It is not quite a party division, because a good many Government supporters below the Gangway were not convinced. The hon. Lady the Member for Melton (Miss Pike), for example, after making an extremely searching examination, discovered that a large number of old-age pensioners do not have it so good after all. But the prevailing Tory doctrine is that they should feel proud that the pensioners are at the head of the queue, and that two years ago, long before the Surtax payers received any benefits, they had a premonition and gave the pensioners their present magnificent standard of living.

This view is held not only by hon. and right hon. Gentlemen opposite, but by nearly all the top people. The Times, the Manchester Guardian, and the Economist have the same view. The Times had a most powerful passage on 9th April, which read: Whatever price index is used, the same conclusion emerges…Pensions have in fact shared in growing prosperity since 1948. It is fair to say that The Times added: …periodic readjustment has been somewhat spasmodic. Is this estimate right? Can we rest content and say that destitution and grinding poverty have been abolished by seven years of Tory Government; that they can be proud of their record, and that apart from minor adjustments we now simply have to maintain the magnificent living standard which the Tory Party has given to the pensioners?

On this issue, I prefer the first thoughts of The Times to the second. Although The Times has been writing leaders this year telling us that everything is perfect, I took the trouble to look up a leading article which appeared in it in November, 1957, when the new pension rate was first introduced, and when it said: The purpose is not to secure for the retired a share of the improved living standards…but, more modestly, to vouchsafe them pensions of the real purchasing power promised in 1946.The Times then makes a deliberate calculation and says: An index of 'working class' living costs, allowing for big rent increases, suggests that pensions of the 1946 value would have to amount to 47s. (single) and 76s. 6d. (couple) in 1958. The rates proposed are 50s. and 80s. I agree that The Times in 1957 slightly underestimated the increase. It may well be that the real purchasing power of pensions is now between 4s. and 5s. more than the 26s. pension in 1946.

What divides the House is the Government's complacency with a pension which, in 1959, is between 4s. and 5s. higher than that which was created in the first year after the war, when rationing was worse than in any of the war years. In the worst austerity year, we had the courage to give what seemed to be a very great deal. But now after seven years of free enterprise prosperity, with everybody getting rich as quickly as possible, it is a little cruel to say, "Look how wonderful we are. We have insured that the pensioner in 1959 is slightly better off than he was in 1946."

Our first reason for moving the Motion of censure is that we believe that is not good enough. As my right hon. Friend the Member for Battersea, North (Mr. Jay), said—and we are putting this to the country; we hope that it will be one of the great issues at the next election—we believe it is necessary that the pensioners, the sick and the unemployed should be guaranteed by our community a substantial increase in their share of national income. That is our case, and we put it forward saying, "Whatever the history of the past has been"—[Laughter.] Yes. I say that in all seriousness to hon. Members opposite. It is about time they were prepared to learn from their mistakes. I believe that the British public prefers politicians who have the courage to learn from experience and to say, "Right; we have learnt about inflation. We shall cope with that problem", to those who smother their mistakes under the loud-voiced noise that we heard from the Chancellor of the Duchy of Lancaster this afternoon.

On this question I should like to add one other thing. We on this side find it difficult to be content with those who talk as though poverty had been abolished in our country. I was very glad that my hon. Friend the Member for Paddington, North (Mr. Parkin) asked for more information. It is a striking fact that we know virtually nothing in detail about the condition of old people in this country except in the Boroughs of Salford and Bethnal Green. It is a striking fact that about the condition of the unemployed and the chronic sick there is the same appalling lack of precise information.

Only last week there was brought to my notice a remarkable survey carried out in Bristol in 1958—"Study of families in which earnings are interrupted by illness, injury or death." This study of people in Bristol corresponds to what was done in Salford and Bethnal Green. But it deals not with old people but with the families of the sick and the unemployed.

I will read out one passage which is not in favour of my argument. This survey was done by the Bristol University with a subsidy from the Joseph Rowntree Charitable Trust. In the author's remarks at the end it states: No family was in physical want. No family had lost its home because the rent could not be paid. Housing standards were on the whole all right and the children clothed and shod. The bare-foot child of a generation ago was not encountered. I suspect that when they read that many right hon. and hon. Members opposite will say, "You see, it is all right. There is no more destitution, there is nothing to worry about." But poverty is not something absolute. Poverty is relative. Poverty is comparative. If we improve the general level of society, even from a radio society to a television society, or from a bicycle society to a motor car society, then the nature of poverty changes.

What was discovered here, as in all the other reports, is that whereas mass destitution has been abolished in this country —and thank heaven that it has—what has survived and is actually growing is pockets of grinding poverty. These are psychologically as painful, if not more painful, than the mass destitution of the pre-war years, because those who suffer are now isolated from their neighbours. At least before the war people shared in their suffering as a community. Now, on a modern housing estate in Bristol or in Coventry, one often finds a chronic sick man with no hope of ever working again, or an unemployed young man who is too proud to admit defeat, or old people who are too proud to receive National Assistance.

They are lonely people—people who have to conceal their poverty from their neighbours. They do not make much impression. It is one of the troubles of the prosperity of the 1950s that poverty is concealed and one can easily omit seeing the social problem which we have to face if one wishes. Our indictment of the party opposite is their readiness to omit seeing the suffering existing among unemployed, the sick and the old.

The Conservative Party holds the view that for the sake of stopping inflation some responsibility for creating unemployment must be assumed by the State. But if a party creates unemployment, it should at least make sure that it makes the conditions tolerable for those who are, as we hope, only transitionally unemployed as a result of its policy. That a Government should give away £366 million in its Budget and yet refuse 10s. to the unemployed whom they have deliberately thrown out of work reflects a curious sort of social conscience. I will say another word about widows with children, because every survey shows that they have the hardest battle in this country. In many cases they battle best, but with a terribly low standard of living.

We believed that it was essential that all those people—the unemployed, the sick and the widows—should be helped in the Budget. The amount of money required for this would have been relatively small. I cannot help looking back to a remarkable Answer which the Financial Secretary to the Treasury gave to one of my hon. Friends who asked for the breakdown of the Budget concessions. These are striking figures. They show that 200,000 people with £3,000 a year or more received £3 a week out of the Budget, whereas 6,400,000 people with under £500 a year received less than 1s. a week out of the Budget. That is the kind of Budget it is even for the active earners.

But consider the chronic sick and the aged sick, who had been charged prescription charges because there was an economic crisis two years ago. The Government did not even think of providing the £5 million which would have been required to abolish those iniquitous prescription charges. I am glad that the people will soon be able to judge between the two sides of the House as to who is in earnest about looking after the old, the sick and the unemployed.

I come to the reasoned objections to the Motion which have been made by Tory speakers in the debate. One most powerful objection was argued ably by the hon. Member for Leeds, North-East (Sir K. Joseph) and the hon. Member for Bournemouth, West (Mr. J. Eden). Both of them put forward a new, arresting kind somewhat alarming argument, and we should very much like to hear from the Minister how far he agrees with it. Both indicated that we should not waste taxpayers' money on anybody who does not need it but that we should concentrate the aid where the shoe pinches hardest. They said that the best way to find out where the shoe pinches hardest is to have a test of hard-pinching shoes, although whether for the family or individually is not clear. What a tempting argument it is for the administrator! Would it not be sensible, instead of increasing the flat-rate old-age pension they asked to increase National Assistance or to extend the functions of National Assistance so that everybody who was proven poor could be helped while all those wealthy pensioners would not be helped at all.

This was put forward by the hon. Member for Leeds, North-East in one of his graphic and graceful speeches. He described the elasticity and flexibility with which he would do it. He told us how wonderful were the National Assistance Board and all its officials. But there are three major objections to his plan. First, it is hard for me to listen to Members of a Tory Party which believes in individual enterprise and in freedom saying that they believe at the same time in the extension of National Assistance, which requires the subjection of those who take it to a means test. It seems to me almost intolerable to hear hon. Members opposite saying that it is kinder to do that when all the evidence of everybody who studies the problem shows that one of the things from which people suffer most in the 1950's is the sense of isolation and separation from the community which receiving National Assistance implies.

I shall pay my own tribute to the National Assistance Board. I believe that its officials do a miraculous job and do everything possible to avoid causing offence, but the fact remains that the decent, ordinary Englishman, or any man who has any pride, wants his benefit as of right—something which he has earned—not as something for which he qualifies by his need as ascertained by the gentlemen in Whitehall. These young Conservatives evince a keen interest that the gentlemen in Whitehall should be more and more active about the poor and less and less inquiring about the rich. We shall reverse the process we shall increase their inquiries into the rich taxpayer and resume their inquiries into the poor by raising the standard of living of the old-age pensioner as far as we can above the National Assistance level.

We can say from our side that we reject altogether any idea of extending the activities of National Assistance, and we hope we shall hear from the Minister that he fully agrees with us and that any idea of saving money by raising National Assistance scales and leaving the scales of the old-age pensions steady is something which he repudiates altogether, now another Tory objection.

It is true enough that in the case of the old-age pension an increase of 10s. in the flat rate does benefit a great number of people who do not need it whereas this does not apply to unemployment or sickness or widow's benefit. With the growth of private pension schemes the division of the country into the privileged minority on superannuation and the unprivileged majority who rely on National Assistance has created a situation in which merely to increase the flat rates does not solve the problem of the two nations.

This is precisely why, over two years ago, we put forward our plan for national superannuation. This is precisely why we urged that as a long-term policy we should seek to superimpose on the flat-rate pension another pension. Our plan ensured that everybody should draw from the private employer, the public employer or from the State a graded pension earned by his own savings and those of his employer, in addition to his social service pension. The whole essence of that was to try to whittle away the difference between the two nations in old age by building up a national superannuation for those who are excluded, and always will be excluded, as most of them will, for any private pension scheme. This is a long-term plan, and we have introduced the £3 a week pension as a short-term interim measure.

Let me tell the Minister why we did that and why we hope for approval from the Government. The right hon. Gentleman, as we well know, is now engaged upstairs in putting through Committee a very complicated National Insurance Bill introducing very complex machinery for superimposing on the flat-rate pension certain limited graded pensions and contributions. We said to him that if we are to improve the lot of the future pensioner, the first thing we must do is to give justice to the 5 million existing pensioners. The essential basic fundamental of any pension reform must be justice to the existing pensioners written into the actual Bill. That is why we insisted on trying to write £3 minimum pension into his Bill as well as a guarantee against inflation.

The Prime Minister, in a speech on Saturday last, said that he thought that the Government had done better than we had. I think he missed the point. There are two things we can do. We can decide to raise the real value of pensions, in which case we do not deny that an Act of Parliament will be required. Alternatively, we can create machinery for automatically adjusting the value of the pension if it has been whittled away by rising prices. This "inflation guarantee" would render it unnecessary to introduce a Bill in Parliament every time the pension has been whittled away. We had hoped that the Prime Minister, with his background of interest in social problems would have seen the point.

For example, since the Pensions Bill was introduced on Second Reading the value of the pension has fallen, not by a lot but by 1s. 3d. a week. Why should a pensioner be cheated of 1s. 3d. a week? Because it is not worth introducing a Bill? If we write into the Bill an automatic adjustment, we could ensure that pensioners would not be cheated in this small way year after year.

I should now like to say a brief word about the Government's scheme. The Government have now revealed their plan to keep everyone earning under £9 a week on a flat-rate pension and to give those earning from £9 to £15 a week a graded pension, but the Minister himself does not deny that of the graded contribution only 42 per cent. will go for pension, the rest being "swiped" by the Chancellor of the Exchequer to make up his liability. That is the kind of great reform the Government are introducing.

Quite bluntly, it means that the Government accept that there will be in the future, as there has been in the past, a division between the privileged in old age —the fortunate ones who are in the private schemes or have private incomes and the unprivileged. The benefits of the Government graded scheme are so pitiable that even in the year 2005 the young man who has been earning £15 a week for all his working life will be getting only £6 a week in pension. That is the sort of princely sum envisaged in the Government's scheme.

We say to the Government, "Your scheme is not a pension scheme at all. It is a scheme for transferring the burden of paying the cost for existing pensioners from the taxpayer to the contributor and, as such, we must reject it altogether. Your short-term plan, also, is cynically wrong. You intend to "keep the situation under observation, until nearer to an election, you can judge whether or not some increase of pension is electorally profitable."

So much for the charge that it is we who are playing politics with pensions! On this I agree with the Minister of Labour, who ended a previous debate by saying that the argument would not finish then but would go on to the General Election. All I say to that is, "The sooner the better."