National Insurance and National Assistance Benefits

Part of the debate – in the House of Commons at 12:00 am on 13th March 1962.

Alert me about debates like this

Photo of Mr William Ross Mr William Ross , Kilmarnock 12:00 am, 13th March 1962

The figures are not vital, but it shows that we were right. We appreciate the hon. Lady's statistics, but we do not like her figures—in the plural. The answer that we got is the one that we expected, and we shall no doubt get it again from the Minister.

Reference has been made to the fact that the Minister has been in his present position for about six years. He is now in his seventh year and almost qualifies for a Ministerial pension. I would describe him as a man who has had a varying brood of Parliamentary Secretaries who are now scattered throughout the Ministries in the Government. They have come and they have gone, but he has waited. He is the head waiter. He is going to dish us out tonight his usual dish of cooked statistics, selected, slightly stale perhaps, rehashed, but they will be incomplete and most of them will be quite irrelevant to the real issue facing the ordinary people.

The comparison is not with the increase in the cost of living since 1946. The comparison is with what people who have retired and are retiring today consider are the hardships that they have got to face—the unemployed man and the man who is going to be unemployed next week. It is the drop from his present earning power and the purchasing power of has weekly wage to managing on National Insurance benefit.

If we take the relevant statistics from 1946 onwards we find that that gap has widened and widened, and never was it wider than it is now. In that respect, there is today greater hardship than there ever was. We should be moving away from the ideas of Beveridge, away from what was thought right in 1942 or 1944 when we were looking back at the prewar years, and the years of hardship and unemployment. Surely, we set ourselves better standards now—or are we to tell people who are retiring that there are certain things that other people take for granted as part of the livelihood of every individual but which they must forgo?

There was a time when a wireless set was a luxury. Then it became a necessity. Now it is a nuisance when it is carried around. We have not yet got to the stage of carrying round the television set, but would not everyone agree that television is no longer a luxury but, for retired people particularly, a necessity? Yet the cost of a wireless and television licence is £4 a year. In addition, there is maintenance. Everybody knows what maintenance in respect of one single item alone can mean. All that, of course, changes our whole attitude to pensions and, indeed, to the allowances necessary for what old people should have.

I am surprised and shocked that hon. Members opposite are prepared to be fed with this dished-up statistical argument. It just does not meet the case. There was little change in the relative value of the pension from 1946 right through to 1957 or 1958. At times, of course, we reached—as we always do when the Minister brings in a new Bill—a new peak, but before many months had passed the rising sea of prices had made that new peak look pretty small.

That is happening today. We have this Government Amendment signed by the Prime Minister himself—he did not sign this the day after he made the Guildhall speech: noting with approval the substantial improvements in the value and standard of National Insurance and other social security benefits which have been made since 1951 … What improvements have been made since 1951 that are worth crowing about?

The only real improvements in relation to a share of rising prosperity that went beyond the cost of living were those made in the last increase—and let us remember what The Times said about that. This is the one statistical quotation that I hope to inflict upon the House. When the pension was raised by 10s., a leading article in The Times of 19th November, 1957, said: An index of working-class living costs allowing for big rent increases suggests that pensions of the 1946 real value would have to amount to 47s. and 76s. 6d. in 1958. That is for a single person and a couple respectively: The rates proposed are 50s."— that is 3s. more: and 80s."— that is 3s. 6d. more: The higher figures have come about because the Government in addition to making the adjustment to higher prices have had the courage to abolish the tobacco subsidy for pensioners who happen (or claim) to be smokers. In other words, if we take into account the wiping out of the tobacco subsidy the net increase in the 1958 rates over those of 1946 could be measured in pennies. Therefore, in order to examine the validity of this Amendment that has been signed by right hon. Gentlemen opposite, we have to look at what happened in the case of the last increase. It was on 2nd November, 1960, that the Government announced that they were going to fulfil their election pledge by giving the old people, including the existing pensioners, a share in the rising prosperity of the country. The then Parliamentary Secretary, on Second Reading, said that pensions now had a new look, thanks to the sound policies of the Government, and after three months we were in an economic crisis.

Here is the point. The hon. Lady and the right hon. Gentleman today told off one of my hon. Friends for saying that we related the changes in the cost of living that happened since that time to the date of the announcement and the Second Reading, when we really should start with when the pension came into force, which was the first week in April, 1961. Let me remind her what the right hon. Gentleman said and what the last Parliamentary Secretary of her own sex said when we discussed this matter in this House. They said that, of this great new increase of 7s. 6d. for a single person and 12s. 6d. for a couple, 1s. 1d. for the single person and 1s. 9d. for the couple related to the previous rise in costs. That was said, I think, on 12th November, 1960, and on 24th November, when we were at another stage of the Bill, we got new figures. The 1s. 1d. had risen, I think, to 1s. 9d., and the 1s. 9d. had risen to 2s. 5d.

If the right hon. Gentleman is to trot out to us, as did the hon. Lady today, the argument that the cost of living had risen by only just over 2 points, that was the period to which those two points related, and we are entitled to point out to them that since the increase was announced on 2nd November, 4s. of the 12s. 6d. has been eroded by the cost of living. If we left it there, the couple would receive an increase at today's prices of 6s., but we cannot leave it there, and, with due respect to the hon. Lady, I think she was most unfair to people who are applying their minds to the needs of the old people. She did not quarrel with their statistics. She did not refute any of their statistics. What she did was to say that she would have preferred them to have taken others. She did not like them, but their statistics were very relevant, because we cannot get from the present index of retail prices a proper picture of how old people are affected in regard to their expenditure.

Let the hon. Lady go into the Library or ask the Minister of Labour to supply her with the Ministry of Labour Gazette published at the end of February, which gives details about the rise in the cost of living for the month of January, and see what it shows. It shows that the increase in the cost of potatoes and vegetables has been partly offset by the decrease in the prices of tomatoes and fresh fruit. Will she tell me how much fresh fruit old-age pensioners are buying? It also states in another section that the increased cost of haircutting and of cinemas has been partly offset by the seasonal decrease in the cost of dry cleaning. What relevance has dry cleaning to old-age pensions? All that we can get from a retail price index is a trend. It does not measure the cost of living of any person. Every old-age pensioner has a different budget, and in different parts of the country there are different problems.

I warn my English colleagues that Scotland has a problem which they have yet to face. I want to quote from a letter I received from one of my constituents who lives at 31, Main Road, Gatehead, near Kilmarnock: Dear Sir, Old-age pensioners and the new valuations … I got the rates demand note today as under. The County rate, the Kilmarnock District Council rate, The Gatehead Drainage rate, lighting, scavenging and water rate—total, 19s. 7d. in the pound. … Total paid on the old rates, in 1960, £9 10s. In 1961, £33 5s. 10d. Extra over the old rate. £23 15s. 10d.—an increase of 9s. 1½d. per week. The 12s. 6d. per week increase in pension has been reduced by this one thing to 3s. 4½d. I have another letter from a constituent who is very much more meticulous. He gives the date, the item of increase, the amount, and what it means weekly to him. He says that on 8th February, 1961, the coal price was increased by merchants by 3d., which cost him 6d. extra weekly. Electricity was up so much per unit. On 1st March local and Sunday newspapers went up by 1d. per week. He also refers to the fact that National Health prescriptions were increased from 1s. to 2s. an item. Do the prescription charges and their increases enter into the retail price index? If the hon. Lady will consult the Ministry of Labour index she will find that doctors' and dentists' fees and the like are not included. Before the much-heralded increase of 7s. 6d. for an individual and 12s. 6d. for a couple came into force the prescription charge was raised from 1s. per item to 2s. per item.

If the right hon. Gentleman looks up his report from the National Assistance Board he will find that in 1960, of £1 million spent in relation to prescription charges, only £32,000 related to people who were not receiving National Assistance. Therefore, for the great bulk of people who are on retirement and other fixed incomes this is a considerable burden. Indeed, taking that amount off the 6s. that was left, there is little left of these new high-level payments.

The Government have every reason to be concerned about the position of the pensioners, because every one of these items is needed by them, day by day. My constituent has a little additional pension, upon which he pays Income Tax of 2s. 10½d. He says that haircutting and dress collars are up, and that cigarettes are up. He says that he is giving them up. Whisky is up—this was on 3rd July, 1961—by a 1d. per nip. He says that he has not quite given this up. This amounts to 3d. The Reader's Digest has gone up by 6d. per issue. Are these things all luxuries? They constitute part of these people's standard of living.

My constituent recalls that the Chancellor of the Exchequer's austerity Budget came in July, and that on 1st August there was an increase in bus fares. Then the Postmaster-General helped things by putting up the cost of telephones, and on 1st October increased postal charges. On the 7th October there was an increase in local rates. On the 1st January last, the insurance companies put up the cost of insurance against fire.

We have not yet mentioned in these items, which amount to 19s. 3d. a week, the increases in the prices of food, clothing and many other items. My correspondent writes that when he handed this list over to his wife she assured him that the 5s. increase granted to wives last year did not cover the higher prices of groceries, vegetables and other food.

The pension has been whittled away and many old people are considerably worse off. This applies not only to pensioners but to those on fixed incomes. When hon. Members opposite say that some of these people do not rely only on a pension but have a small income besides, they should remember that these fixed incomes are also being eroded. There is, in effect, a double attack on such people.

Government supporters have no reason to be complacent about what has happened since November, 1960. The number of points by which the cost-of-living index has risen is seven. The National Insurance Act, 1960, received its First Reading on 2nd November, 1960, and the figure on which the Minister worked was the September figure of 110·5. What is the figure today? We do not know, because today is the day on which the Ministry of Labour is calculating the current month's cost of living. It is calculated on the Tuesday nearest to the 15th of the month. The figure will not be published until February's issue of the Ministry of Labour Gazette.

The latest figure we have is for January, when it was 117·5, an increase of 7 points over September, 1960. In the Ministry of Labour Gazette, there are pages and pages listing wage increases in the printing and steel industries and others related to the cost-of-living increase. Under the arrangement of a sliding scale, there is an automatic increase when the cost of living rises 2 points.

We are here dealing with the most helpless people—but they are still told by hon. Members opposite that they are in affluence at 57s. 6d. for a single person and 92s. 6d. for a couple. A great many have no other income. The average payment of National Assistance covers rent, with about 2s. more. Last year the average overall National Assistance payment was 34s. 4d., but the weekly supplement for old people alone averaged out at 22s. 6d. The average rent allowance is just over £1. People are stepping down from a reasonable income and are losing the purchasing power of their money because they are losing their earning power. But their liabilities remain the same. Many of their liabilities are increasing as a result of the Government's action, supported by hon. Members opposite.

A footnote to the letter which I have received from Kilmarnock is that a rent increase is imminent. I should have been discussing that in the Scottish Standing Committee upstairs tonight. Many may wonder why there have been so many vacant benches today. The reason is that members of two important Standing Committees, namely, those on the Transport Bill and on the Housing (Scotland) Bill, were denied the right to participate in this debate and to state their feelings about the increases which will arise from current legislation.

We are here concerned with over 7 million people. It is not good enough for hon. Members to say, "There are some people in need". The hon. Member for Uxbridge (Mr. Curran), in a speech which was certainly worth listening to, said that we should do something about certain specific categories. He underrated what it would cost to deal with some of those categories. He seemed to think that the matter could be dealt with just like that. Other hon. Members have put forward their points of view to show the measure of restive-ness that there is about this matter, even on the benches opposite.

However, far too many hon. Members took refuge by saying that the matter should be dealt with by increases in National Assistance. Let us face it: that is the cheapest way to deal with it. The only thing settled by the Government in this matter over the past few years has been their contribution to the financing of pensions. They have settled it to the satisfaction of their friends by limiting the Exchequer's liability and passing the burden to the employer and to the employee, both through his wages and through unpaid wages.

The Joint Parliamentary Secretary spoke about the contribution made in this matter by the 400,000 Surtax payers. But has she examined the contribution to pensions made by ordinary individuals during the past ten Tory years? The Government do not raise and support pensions. They have never once raised pensions without making a profit out of it in the first year. The Minister seemed to deny this today. I do not know why. Perhaps it was because he knew that I would have the relevant quotation ready. [Interruption.] The hon. Gentleman need not worry. I did not need to find it; I have quoted it so often. Like the Minister, I know it by heart. The date of it is 13th November, 1957. The Minister pointed out that by 1964–65 the pension burden on the country and on the Treasury would be £357 million. Then he said this: … we think that it is right that the country should assume the burden, although it is a profound mistake to under-rate the magnitude of the liabilities which … the taxpayers are assuming."—[OFFICIAL REPORT, 13th November, 1957; Vol. 577, c. 976.] The right hon. Gentleman interrupted my hon. Friend the Member for Sowerby (Mr. Houghton) today and denied that the taxpayers were assuming that burden In fact, what has happened?

The Government's most recent report shows that, this year, their contribution is £189 million. The Joint Parliamentary Secretary spoke earlier about the growing cost of insurance benefits and she cited the year 1981. Today the Government's contribution is £189 million. By 1981–82 the Exchequer supplement will rise to £238 million—representing even less in 1981–82 than they were prepared to face in 1964–65 under the old régime. How is it done? What is this wizardry, this graduated wizardy?