It will be for the convenience of the Committee also to discuss Amendment No. 20, in page 24, line 10, at end insert:
Provided that the increases in retirement pensions awarded under this Act shall be paid retrospectively to 1st January 1965.
The Parliamentary Secretary said in his concluding remarks on the last Amendment that he hoped that we could speed ahead and get the Bill as soon as possible. The last thing I want to do is to delay it. I think, however, that if we can spend until five o'clock this morning arguing about caviar and birds' eggs, we can spend a little time this evening on the needs of the retirement pensioners. That is what I want to address my remarks to now.
Before I say anything else, I want to give hon. and right hon. Gentlemen opposite credit for introducing the Bill. I think that if the Tories had still been in power, we should not be discussing it today. Whatever I may say later I want that to be borne in mind. I am grateful to the Government for bringing forward this Bill so early in the lifetime of the present Parliament. That has been appreciated by all hon. Members.
This Amendment deals with a very important point which I think is of equal concern to hon. Members on both sides of the Committee, whether we can improve these benefits for the retirement pensioners and others who are to receive increases under the Bill at a date nearer than the end of March. For the purposes of discussion we have proposed 1st January, 1965. I should prefer to bring that date forward to before Christmas, but we have been reasonable and put down an Amendment in terms which we think it possible to obtain.
I start from the proposition that every hon. Member believes that these increases should be paid as soon as possible. I am quite certain that no one would dissent from that. I think it particularly hard that pensioners should have to bear the rigours of another winter, when their expenses are bound to be at a maximum, without the benefit of the proposed increases
Only this morning I received a letter from the Biggin Hill branch of the National Federation of Old Age Pensioners' Associations. I am sure that the remarks in the letter would be echoed by all other branches of that Association in the country. The writer states:
From now to the end of March there will be many aged persons suffering from the cold weather due to lack of fuel. Yes, remind Mr. Wilson about those he mentioned, suffering poverty behind lace curtains. Now is the time for him to do more than use propaganda slogans.
This is what I am appealing to the right hon. Lady and her hon. Friends to do for these old people. I do not know whether she has read the leading articles on this subject which appeared in the Sun during the last two days, but I think that the writer put his finger on the nub of this problem. On 1st December the leading article began:
Winter kills from 20,000 to 100,000 old people in Britain every year. And this winter will be no exception.
The article goes to say that thousands of old people will die during the winter because of the cold, lack of nourishment and fuel, and means either to heat their dwellings or to buy proper food to live on. It states:
It is a horrifying state of affairs in Britain, 1964.
I do not agree with the conclusion drawn in the article:
What can the Government do to ease the hardship this winter? The sad answer is—not much.
I consider that to be an utterly defeatist conclusion and one which my colleagues and I are not prepared to accept. I would go a long way with what was said in the leading article on the following day about the help which could be given to retirement pensioners by voluntary organizations
through visits and through assistance in various ways. I commend the ideas contained in the leading article which appeared on 2nd December.
I should also like to draw the attention of the right hon. Lady to a similar article which appeared in the Daily Mirror of 1st December, in which we were told:
Many of the old folk spent only 4s. 6d. a day on food, which is too little to enable them to buy enough meat, fruit and vegetables.'
I hope that the right hon. Lady will appreciate that these views expressed in our leading dailies are shared by the vast majority of people, who are much concerned about this problem.
I could understand the delays which are occurring in the payment of improved benefits were the Tories still in power. From yesterday's discussions it would seem that port wine is more important to them than the problems of old-age pensioners. The hon. Member for Gospot and Fareham (Dr. Bennett) the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport) and the hon. Member for Chigwell (Mr. Biggs-Davison) argued strongly yesterday afternoon about the hardships that will be suffered by port wine drinkers.
As we have had a change of Government in the last few weeks I expected that something would be done to reduce the amount of time between bringing forward a Bill of this type and putting its benefits into effect, particularly when I look back at some of the remarks made by hon. and right hon. Members opposite when they were in Opposition. I shall not recite them all, but I might just remind the right hon. Gentleman the Chancellor of the Duchy of Lancaster that during the Second Reading debate of the National Insurance Bill on 15th November, 1960, he said:
To delay these benefits "—
that is, the benefits provided by that Measure—
until the firt week in April is intolerable. 'He gives twice who gives quickly'.
How heartily I echo that sentiment:
The right hon. Gentleman also said:
I am very glad that the right hon. Gentleman has not taken refuge in administrative
difficulty, because we should not have believed him if he had."—[OFFICIAL REPORT, 15th November, 1960; Vol. 630, c. 238.]
I am sure that the right hon. Gentleman will not blame some of us on this side of the Committee if we now refuse to believe him if he takes refuge in administrative difficulties.
What alternatives has the Minister examined? What suggestions for getting over what I admit to be a difficult problem have been put forward by hon. Members opposite and considered by the right hon. Lady? I understand that at a two-and-a-half-hour meeting of the Parliamentary Labour Party on 18th November she dealt with a number of questions put by her right hon. and hon. Friends, but I do not consider that a private party meeting is the right place to discuss matters of supreme public importance. If the right hon. Lady gave an explanation that satisfied her hon. Friends, it is only right and proper that she should now repeat that speech for the benefit not only of the Committee, but of the country's retirement pensioners—
If that was all the explanation that the right hon. Lady gave to her hon. Friends, I am extremely surprised that they should have accepted it so meekly.
I shall not rehearse all the various alternatives there are, and which the right hon. Lady might consider. That is not up to me I am not the Minister. The right hon. Lady has the resources of her own Department to call on. I should like, however, to comment on some of the suggestions that various newspapers have reported to have been made by her hon. Friends. I do not claim any originality for these at all, but they have some force, and they have not so far been answered. I believe that the hon. Members for Penistone (Mr. Mendelson) and for Ashfield (Mr. Warbey) have made various suggestions which the right hon. Lady has not been able to counter.
We read in the Daily Mail of 19th November, 1964:
A group of veteran M.P.s"—
I am sure that that refers to length of service rather than to age—
suggested that one alternative might be to back-date the pensions increases to the beginning of last week and then pay out the extra money in lump sums after the new scales of benefit came into operation.
I understand that the right hon. Lady has claimed that the real difficulty is in altering all the books, but that suggestion gets over that hurdle quite neatly.
Another suggestion also seemed to avoid that difficulty. This appears to have emanated from the hon. Member for Ashfield and is reported in The Guardian of 20th November. The report said:
Mr. Warbey wants Miss Herbison to short-circuit the administrative difficulty involved in paying out the new benefits before 29th March by the simple expedient of declaring double benefit payments in three separate three weeks between now and the end of March. This would give pensioners more or less what they would receive if the new scales came into force at once.
Those are just two suggestions among the many which might have been made. I dare say that the right hon. Lady will hear a few more from the benches opposite tonight. This leads me to the conclusion that the administrative difficulties are by no means as insuperable as we were told at the beginning.
We come now to the second objection which the right hon. Lady certainly did not deal with in her speech, because I think that it has only emerged since then. This is that the "gnomes of Zurich" might be displeased if these increases were brought forward to an earlier date. If that is so, if the gnomes of Zurich are the problem and it has nothing to do with administrative difficulties, then the Committee and the pensioners should be told that that is the reason. I might remark about the gnomes of Zurich—a wonderfully evocative phrase—that I have always imagined the international bankers in Zurich with brush cuts and lederhosen rather than as the diminutive types that the First Secretary of State seems to imagine.
If this proposal worries international bankers, however, then, providing we increase the contributions at the same time as we increase the benefits, and draw this to their attention, they will surely not worry about the economic situation, since, in the financial memorandum to the Bill, the right hon. Lady explains that the 2s. increase in contributions almost exactly balances the amount of the benefits that will be paid out.
It might be argued that most of the pensioners who receive the 12s. 6d. increase will spend most of it whereas those who pay the extra contribution are, on balance, savers and, therefore, that the transfer of spending power from one class to another is likely to be inflationary. But one must examine the sums involved. By paying the increases three months earlier we should be transferring about £70 million from people who pay contributions to the recipients of the benefits, but only a small fraction of that sum would actually be turned from saving into spending, because one might contend that the vast majority who pay the contributions are those who are in receipt of less than £16 to £17 a week, which is roughly the average national earnings, and that they are most unlikely to save a great deal of money.
Therefore, one should not consider the whole of the £70 million as being transferred from saving to spending but only some fairly small fraction of it which the right hon. Lady, with all the resources of her Department, is better able to assess than I am. But if the international bankers really think that this transfer from saving to spending would ruin the economy, then the situation is even more desperate than it has been painted by the Government.
I appeal to the right hon. Lady to make a gesture tonight to the retirement pensioners, who have to face another winter on the existing benefits. Even if she cannot go all the way with me, let her give them some earnest of her sympathy with the plight they have to suffer over Christmas and the New Year. Then we shall await the forthcoming review of social security arrangements as a whole with more confidence. By all means and above everything, let the right hon. Lady be completely frank with the Committee in the explanation of the difficulties which have prevented her from paying these increases earlier.
The hon. Member for Orpington (Mr. Lubbock) referred to the explanations that my right hon. Friend gave during the course of the discussions of the administrative difficulties. I assert that these administrative difficulties are genuine. When my right hon. Friend, either in Parliament or in discussions with her colleagues, gave an outline of the administrative circumstances, she was merely giving an account of the facts as they exist. It is important to start on this basis. I shall in due course make suggestions to my right hon. Friend which will not greatly differ from those made by the hon. Member for Orpington, but it should be established that we face a twofold problem and that when my right hon. Friend outlined the administrative obstacles she was describing a difficult position which would have faced any Minister of Pensions on taking office.
The discussion has moved on from there, because all over the country people are giving a general welcome to the Bill. The correspondence which I and all other hon. Members have received proves this conclusively. The Bill is regarded by all those who have written to me as an excellent piece of social reform and improvement. It is a piece of social legislation which the Tory Party, had it been by some mischance returned at the General Election, would never have introduced and never intended to introduce. Whilst accepting it as a most important Bill which is bringing long overdue relief to old-age and other pensioners, many thousands of people have expressed their deep regret that in introducing the Measure it has so far not been agreed by my right hon. Friends in the Cabinet that we can find a way of either paying the increased pensions from a much earlier date in full, or, if that were to be proved to be administratively impossible, reducing by some other method the long waiting period of 20 weeks.
My right hon. Friend was again correct when she pointed out that no machinery for speeding up the process was left behind by the previous Administration which she could have used. Having found herself in that position, my right hon. Friend, as was obvious to all her colleagues who have worked with her on this subject for many years, was as anxious as any one of us or as any hon. Member on either side of the Committee, and certainly more anxious than some hon. Members opposite, to bring in these increases at the earliest possible moment. There is no dispute about that. I want to put it on record that this is clearly understood by people who write to their Members of Parliament.
We as Members of Parliament have a further duty. It is estimated that during the next 20 weeks a great many people will suffer severe hardship. When we were on the other side of the House it was the main burden of our case that these increases had been long overdue, and it is quite clear that whilst it may not be possible to bring into action the required administrative machinery to start paying the increases before Christmas, it is equally common ground—and here I agree with the hon. Member for Orpington—that it would be possible to devise some other method which would give rough and ready justice.
I am here quoting a phrase which was first used not by me, but by my right hon. Friend the Minister of Pensions and National Insurance herself. She coined the phrase in her search for a method of speeding up the process, and that is another earnest of her anxiety to try to find a solution.
In making certain proposals to my colleagues in the Government I am fully conscious that when one is giving rough and ready justice to the pensioners there are bound to be left some rough edges administratively. The proposal that I commend particularly to the Committee and to the Cabinet is perfectly straightforward. It was first developed by my hon. Friend the Member for Ashfield (Mr. Warbey), but it will interest my hon. Friend to know that several pensioners with long experience have written to me making similar proposals after their own scrutiny of the difficulties surrounding the situation. Other hon. Members will have had similar experience.
It is not too late to consider this proposal seriously. I am proposing that, given the fact that the full increases cannot be paid immediately or at the beginning of the year, the Committee should agree, on the recommendation of the Government, that not later than 1st January, on three particular dates, three lump sums—double payments of the pension—should be paid to each old-age pensioner. This would leave a number of people—it is estimated a rather small percentage compared to the bulk of the pensioners—in receipt perhaps of a slight over-payment or a slight under-payment. I would remind my right hon. Friends in the Cabinet that this is nothing unusual. The Inland Revenue works on this principle and has done so most successfully for many years. In fact, it allows a period of six years during which people either owe money to the Inland Revenue—and very large sums; not the small sums that we are considering tonight—or are owed considerable sums by the Inland Revenue.
My proposal is that after the three lump-sum payments have been made during the following nine months the staff at the Ministry should then make up the account. This would have the great advantage of bringing an additional income to the pensioners. It would also—we do not want to underestimate it—have the advantage of improving the credit of the old-age pensioners. It is important that they should be able to look forward to three additional payments during these bitter winter months. It is the small additional sums and the certainty that they will come to the old-age pensioners that will make a great difference to them. I am completely convinced that all my colleagues are with me in wanting to do this if it can possibly he done.
There are some other difficulties which I will consider briefly. It has been clearly found that among the real difficulties facing an Administration who would want to adopt the kind of proposal I have made are, first, a financial difficulty at home, and, secondly, a problem of international monetary finance and politics abroad. I agree with the hon. Member for Orpington that it is the duty of hon. Members to look at these problems, to take the people into our confidence and to let them judge what can and what cannot be done.
It is clear that my proposal would involve an additional sum of money which must be raised by the Government. Esti- mates have been made. I have made my own and it differs little from others which have been made by people who are officially advised and better qualified to make such estimates. I will give my own figures and they can, if necessary, be criticised.
I estimate that these three lump-sum payments would involve an additional raising of £66 million. I suggest that methods have already been proposed for raising this amount, and in this I am in no way ahead of my right hon. Friend, for to my certain knowledge many of the things about which I am speaking have been in her mind and have been considered by her before they were considered by me. I further suggest that it should be possible to raise the money in this way. First, the National Insurance Fund should be asked to make a contribution of £17½ million. Next, the Treasury should be asked to make a contribution of £13 million.
I suggest that we should then decide, as a House of Commons, on the recommendation of the Government, that those who are to pay the increased contributions of 2s. per week as planned from next April should be asked to pay the increase from 1st February. I am confident, from the experience I and other hon. Members have had, that those who are at work earning wages, salaries and other incomes would agree to do this if we decided to take that decision. There is no doubt in my mind about that.
This would produce just over £60 million and it would be divided into the three sections I have indicated. It would, I suggest, be a policy which Ministers would be in a position to defend at home and abroad as not being inflationary, because if we examine the figures I have mentioned it will be seen that we would be withdrawing from those who are to pay the higher contributions a little earlier the precise equivalent of the sum that would be paid a little earlier to our old-age pensioners.
It is certain that many of the things which the old-age pensioners would then be able to buy with the additional small sums which they would receive a little earlier would not be items that would have to be imported from abroad. They would be the very necessities of life, as we all know. They would be able to increase the amount of warmth they are able to provide for themselves during the winter, as well as being able to buy a certain amount of extra food. In this way we should have a policy which would stand up not only on moral, but on ethical grounds, a sensible policy which would not add to any potential inflationary problems.
At this stage of the argument there is introduced another quantity. It is the question, "Would it be wise or politically advisable in this serious stage of our international financial position, at a time when we are to some extent dependent on confidence, not only in sterling but in the way the British economy will be strengthened and built up, to bring in any additional Estimate or contributions which could then be held by people, perhaps people who are ill-informed about our affairs, as not being in the direction of adding firmness and stability to the British economy?"
My answer to that—and it ought to be the answer of my colleagues in the Cabinet—is this. If it is a matter of allowing our old people to have a slightly better and healthier period over the winter which is to come, then I would accept a certain amount of misunderstanding by the bankers abroad. But I do not think that it is even necessary, or that it is likely to happen.
It is quite possible so to accept my proposal and to implement it with the general approval of the nation that no one would really dare to oppose the proposal if it were introduced by the Government and they were to say, "We are in a difficult situation. It is true that we must see to it that our credit is maintained by the actions we take and also by the actions which we do not take, but in this case we are making to our own people an appeal that those who at work and in employment should make a slight additional contribution earlier than they were originally called upon to do. This is a mere transfer of a certain amount of spending power from one section of our people to another section of our people who are particularly in need of that additional small amount of spending power." I believe that these measures, in the long run, would not be misunderstood.
There are many colleagues of mine who wish to speak in this debate. I therefore conclude with this point. There may be some argument advanced, perhaps by members of the Executive, maybe even by senior members of the Executive, that this matter has been discussed on several occasions; decisions have been come to; the hour is late. But here the matter is raised again in some detail, and a new appeal is made to them. I give them this advice. This is the House of Commons. It is not a weakness to listen to the counsel of the House of Commons. It is a traditional strength of our Parliamentary democracy; this is how we work to reach agreement—as Members of the Commons, to reach agreement with one's own supporters. It is the national process of advancing our democratic discussions.
This is a Government who have the confidence of the whole of the Labour movement and a great part of the electorate. This is an Administration to whom we look to make our economy sound and to lead us to an age of improved social legislation. They have the strength, even at this late hour, to listen to the voice of the House of Commons; they have the strength to say tonight, "We cannot do all you want us to do, we cannot do all we ourselves want to do, but it is possible to find a way to make some improvements in the position, and to bring some aid and comfort to our old people before the winter is over."
I hope and pray that they will receive this request in the spirit in which it is put to them, and respond accordingly.
The hon. Gentleman the Member for Orpington (Mr. Lubbock) began his speech with some emollient words to this side of the Committee, and I think that that is a very good way to begin any speech. He congratulated the Government on the introduction of this Measure. I believe that his Amendment is a greatly beneficial one. I think it is very good for the Government, for the Labour Party, and for the Committee that this matter should be fully debated in the open, so that the whole country can hear it.
I think that it is good, first of all, because it puts the whole argument in a proper perspective, and, perhaps, in a somewhat different perspective from that in which the newspapers have put it. If we read the accounts in the newspapers of what has happened on this question in the last two or three weeks we find that they may give a very different account from the true account of what is the opinion of my hon. Friends about the Bill as a whole. It is, therefore, a very good thing that we should have a discussion so as to remove any such impressions, and my hon. Friend the Member for Penistone (Mr. Mendelson) went very far towards doing so.
This is an extremely good Bill, first, because of the increased scales of benefit, the biggest-ever single increase except that passed by the Labour Government in 1946; it is an extremely good Bill because of the varied number of pensioners covered by it; and it is an extremely good Bill because there is to be no jiggery-pokery this time by which people were given increases in pensions but did not benefit because there had not been a satisfactory increase in the National Assistance rates. On those three counts, and many others which we could recapitulate, it is an extremely good Bill.
Moreover, my enthusiasm for the Bill has been greatly increased by sitting here most of the day listening to the further debate. I have been gratified to hear it stated so clearly that the Government will not wait for the kind of inquiry for which hon. Members opposite have asked. The Government have said that they will govern and will have their own survey. The Government will decide what will happen, and they will not be content with the kind of rigmarole proposed by hon. Members opposite. The Government will not have an interminable inquiry. Some Members opposite asked for a Royal Commission to examine what we should do about the review. When I was a small boy, following the affairs of the House of Commons as closely as I could, I asked my father what a Royal Commission was. He said, "It is a broody hen sitting on a china egg". Yet that has been recommended by hon. Members opposite as a method of dealing with further reviews. We think that this is a very good Bill, and that is why we want to get it into operation as quickly as possible.
Secondly, it is important that we should have this debate. It is proper for political parties to have discussions and private meetings. I dare say that even the Liberal Party has one, if we can call it a meeting. That is quite proper. But it is in the House that we are answerable to our constituents. It is in the House that we must explain to our constituents our attitude to Bills, why we vote in a particular way, what is our attitude to a general Measure, what are our qualifications and why we have reached particular conclusions. I believe that a Labour Government are all the more eager to do that than anyone else. It is, therefore, right that this matter, which has caused such anxiety, not only to back-bench Members but to the Government, to my right hon. Friend, and to the Joint Parliamentary Secretaries, should be revealed clearly in the House so that the whole country can understand the position.
The third reason why it is so important that the debate should take place is that it would have been utterly intolerable if. after there had been so much discussion and disturbance of mind both among Members of Parliament and among the public outside, there had been no debate. It would have looked like a conspiracy and it would have done grievous injury to the Government and to the House of Commons. For all those reasons, I am grateful to the hon. Member for Orpington for having put down the Amendment. Having said all that, because it is an extremely good Bill we want to get it into operation as soon as we can.
I think that anyone who listened to the speech of my hon. Friend the Member for Penistone would agree that he made an extremely serious and well thought out case. It was made with absolute earnestness and thoroughness. He made many points much better than I could have made them, and I do not propose to go over them again because I know that many of my hon. Friends wish to take part in this debate.
I wholeheartedly support the proposal made by my hon. Friend, which, I think, was first proposed by my hon. Friend the Member for Ashfield (Mr. Warbey), that this idea should be considered afresh by the Government. I say considered afresh because we know that they have already considered it. My hon. Friend the Member for Penistone elaborated the proposal with further financial details, and when my right hon. Friend replies we would like to hear her detailed comments on the figures given by my hon. Friend.
Old-age pensioners can work these things out for themselves. They are capable of debating these matters. Those of us who have been to meetings of old-age pensioners, and meetings of the National Association of Old-Age Pensions' Federation know that they are very well informed, as they have a right to be, on all financial matters concerning their pensions. They are quite capable of carrying on the debates which we have in this House. I hope that the proposal will be seriously considered by the Government.
When Bills are going through the House there is a special procedure which enables the Government to consider matters and come back at a later stage to give their opinion on matters which have been raised. We are debating this Bill in the same terms as we debate other Bills. When proposals are made, in Committee, it is open to the Government, if they cannot give an opinion immediately, to say that they will come back on Report and give a further account to the House. I hope, therefore, that we will have a full reply on that score.
There is another possibility, although I do not think that it is as good a one as that proposed by my hon. Friend. If it is thought the combination of factors referred to by my hon. Friend will prevent this operation being put into effect on the date suggested, there is a further alternative. If there were some form of retrospection, possibly, of course, to before Christmas, but if not to then, to some other date, it would be an advance on what we are offered now.
One of the objections to doing that might be that the money will not have been secured from the extra contributions. If that is the case, let us see what retrospective payments could be made by, say, £30 million of contributions from taxation which would be introduced in the next Budget. It would be an undertaking given to the pensioners now that they were going to get it then.
A number of pensioners know about putting things on the slate, and they can put things on the slate if they know that they will receive the money later.
No doubt many of my hon. Friends will have other proposals to make, but those are two serious proposals about which we ask for a reply.
We have all heard rumours and hints—and the hon. Member for Orpington referred to them—about the gnomes of Zurich and their part in this affair. Indeed, my right hon. Friend the Member for Sowerby (Mr. Houghton), the Chancellor of the Duchy of Lancaster, referred to the matter in his Second Reading speech, when he said:
I am bound to say that if we had not made the announcement when we did, it would have been very difficult to make it now, having regard to the worsened economic situation.
I am not blaming him for making such a statement, but it aroused some concern. He went on:
That, again, is an indication of the coverage and determination of the Government to see that the poor and needy shall not suffer, come what may, and if the international financiers do not like it they must lump it."—[OFFICIAL REPORT, 25th November, 1964; Vol. 702, c. 1404.]
That is what we want to say from the House of Commons today. We want to say it not only in relation to the Bill, but in relation to the earlier payments which my right hon. Friends have themselves said that they would like to make.
It is difficult to know how the minds of the international financiers work. Apparently the proposition is that because they are very stupid people we must take a lot of stupid actions to impress them. I gather that that is how international finance works. Even though the payments that we would make to the old-age pensioners under the scheme put forward by my hon. Friend the Member for Penistone, or under the retrospective payments scheme that I have proposed, would obviously not be inflationary to any great extent, if at all, these international financiers detest the idea of a Government in this country, in the midst of a crisis, deciding to pay more to old-age pensioners.
The Daily Telegraph has been objecting, too. It asks how we can expect people in foreign countries to approve when we are giving out largesse—as the newspaper puts it—to people who do not need it. It is disgraceful that the newspaper should have used such words as this. I t may be that the best way in which we can show our determination to these curious gentlemen who apparently have some control over our affairs is to ensure that as quickly as possible we are relieved of any necessity of having to take their opinion into account.
If these people object to the payment of a small number of millions of pounds to help the neediest people in the country, what must their minds be like? I hope that the Government will not be deterred from considering the proposals made on that account, and that they will give the most serious consideration to the proposals which have been put forward. I can assure the Government—speaking for myself and many other people—that because we press this case as hard as we can it does not mean that we do not understand what the Government have achieved, and what they are determined to achieve in the future.
I have heard some people comparing this crisis with that of 1931, in the sense that the international financiers are bringing pressure to bear on a Labour Government. But there is a great difference between this Government and the Labour Government of 1931. That Government were pushed out of power reducing benefits; this Government, as one of their first acts, have increased benefits on the scale that they have described, and which we shall be glad to defend throughout the country.
I say to my hon. and right hon. Friends on the Front Bench that this debate and the disturbance of mind inside the Parliamentary Labour Party, and the Labour Party throughout the country, are not things of which the Government need be afraid. They are things of which they can be as proud as the rest of us.
To my mind the question is simple: the Government think that they can afford the increase in pensions. I take their word for it. It is their decision, and to me that is the end of the matter. But since they are able to do so, why are they unable to make the payments before next March?
On this matter, as on the question of the earnings rule, I have criticised my own Government when they have stated that administrative difficulties have meant that increases in pensions have had to be delayed. I have refused to be impressed. I am no more impressed when such an excuse is given by the other side than when it is put forward by my own Front Bench. I hope that the right hon. Lady will throw a little more daylight on these administrative difficulties. As I understand her, we are dealing with about 6 million pensioners. Except for about 250,000, all these are entitled to the full increase—12s. 6d. for the single person and 25s. for the married couple.
About a quarter of a million of the 6 million are not entitled to the proposed increase because they have not a sufficient contribution record. That means that, of the 6 million, 23 in every 24 are entitled to the full increase, and one in 24 is not. What is the administrative impossibility about paying the straight increase to the whole 6 million, and then making an abatement later in respect of the one in 24 not entitled to that full increase?
I never understood the answer to that question when it came from my own Front Bench, and I very much hope that the right hon. Lady will be able to do better than my own Ministers in explaining it to me. I have never been able to understand why we should not pay the full increase to everybody, and then jog backwards to the tiny minority whose contribution records make it necessary to pay them less than the full sum.
I also want to take up a question that has been lurking in the background of this debate. I am very glad that it has been brought into the daylight. The question is: are the administrative difficulties the real obstacle, or are the Government delaying the pensions increases because of the gnomes of Zurich? That question deserves an answer, and it is also being asked outside this Chamber.
We are a capitalist society, and if we put a capitalist society in the hands of a party that proclaims that it does not believe in capitalism, wants to overturn it, and has no confidence in it, is it any wonder that the capitalist countries should lose confidence in us? If anyone is surprised at that I do not think it can be the Labour Party. What else do hon. Members expect? If we put into power a party that proclaims that it is determined to bring capitalism to an end, why should we expect capitalist countries to have any confidence at all in what we are doing? I therefore decline to make any critical remarks about these gnomes of Zurich.
The fact is that this country cannot afford to be put under Socialist management. It is like putting a "pub" in the charge of a fanatical teetotal prohibitionist; obviously, his heart is not in the business. To suppose that foreigners are to be criticised or condemned because they refuse to have confidence in a party that is trying to run a capitalist country without believing in capitalism is completely idle.
I was glad to hear the hon. Member for Ebbw Vale (Mr. Michael Foot) lay another ghost. It is quite true that, whoever else it may surprise, this situation should not surprise the Labour Party. The party found that out in 1931, when there was a massive withdrawal of confidence in a Socialist Government, just as there was a massive withdrawal of confidence in a Socialist Government in Britain last month.
We are now asking—and the hon. Member for Ebbw Vale is not the only one who is asking the question—whether history is beginning to repeat itself. Have the foreign banks refused to bail out the Socialist Government of Britain unless the Socialists hold up the pensions increase? This is a question which has to be answered. Are the Government holding up this increase in obedience to a banker's order? I hope that members of the Government will give a plain answer to this question. It is being asked extensively outside the House as well as inside.
I was going to suggest the answer. It is beginning to look as if the Labour Party has now changed its tune. It is no longer singing the "Red Flag"; it is singing "Gnome, Sweet Gnome". If the Government intend to tell us that the reason they cannot increase the pension now is simply because of administrative difficulties, then I urge them to clear up in plain English the question that lies at the back of a good many people's minds—whether the reason is not administrative, but the pressure of the foreign bankers.
There is a third question. I have put down an Amendment suggesting that, if the administrative difficulties make it impossible to pay this increase on 1st January, when we do pay them at the end of March we should backdate them. Again, I ask the question—and I hope that the Government will give an answer. Is there any administrative obstacle about backdating? If the Government are saying—as I think they are that they could afford to pay this increase now, were it not for administrative difficulties, then can they tell us what possible objection there can be to paying the increase at the end of March and backdating it?
I have spoken about opinion outside this House. We have been discussing—not on the Floor of the House, but among ourselves—the proposal for increasing our own salaries. I do not know whether this is accurate or not, but I have read that when we do increase our salaries we shall backdate them. I ask the Government to remember that if they are prepared to backdate our own salary increases, there are many people outside this Committee who will ask why they cannot similarly backdate the pensions increase. Why should there be one rule for the politicians, and another for the pensioners?
I hope that we will get tonight not a fog of words, but some plain language. Let us have plain English about these administrative difficulties, plain English about whether—
I have listened so long to the hon. Member that his hypocritical attitude is becoming intolerable—absolutely damned intolerable. If this country is in any economic or financial difficulty, that has been inherited through the lack of economic policy and the lack of guts of his own party in not going to the country 12 months ago instead of playing politics.
The point which the Parliamentary Secretary should remember is that when his Government came to power, and for several weeks afterwards, sterling was strong and confidence was strong. It was only the conduct of him and his right hon. and hon. Friends which confiscated foreign confidence in this country.
What on earth has China to do with the question of whether we should backdate pensions? I am simply asking the Government to clear up the three points I have put. I want to know, in plain English, whether a banker's order has been made about the pensions increases and about backdating. I am asking for information.
I am glad that the Government feel confident that they are able to afford these increases. If they are able to afford them, good luck to them. I am just as anxious to give more money to the pensioners as they are.
I wonder whether we might abandon the rather extraneous subjects which have engendered a little heat during the last few minutes and the attempt of the right hon. Member for Leeds, North-East (Sir K. Joseph)—who ought to know better—to divert the course of the debate from the matter we were discussing seriously before he introduced a rather silly piece of political propaganda.
Let us get back to the serious matter which, I am sure, is deeply felt by all Members of good will on both sides of the Committee who are not conducting this debate for the purpose of showing off or for making propaganda, but out of deep feelings.
I echo what was said by the hon. Member for Orpington (Mr. Lubbock). All of us would like, if it were possible—and I hope that it is possible in some form or other—the old people to get a little earlier the benefits of the very fine Bill which my right hon. Friend the Minister of Pensions and National Insurance is putting forward.
This is a serious subject. We are talking about several millions of hard-up people. I do not know how other hon. Members feel about it, but in my early life I lived in a hard-up condition and I remember hard-up parents and hard-up grandparents. I wish that people would not make jokes or party propaganda out of it.
I have the honour now to represent, after some vicissitudes, a not very prosperous part of East London, where many people are much worse off than you, Sir Samuel, or I, or any other hon. Member. They will be worse off between now and 29th March.
I do not believe there is any monopoly of feeling for these people on this side of the Committee. I do not believe there is any monopoly of feeling about them on the Front Bench as against the back benches, or on the back benches as against the Front Bench. Please let us deal with this as a human problem and with a sense of the responsibility we have.
Since I say these things, I hope that I may add, without any allegation of unction, that, in the discussions there have been about this during the last few weeks—mostly in the Press because this is the first occasion on which we have debated the matter in full in this Chamber, which, I agree passionately, is the right place for it—a picture has been built up of my right hon. Friend the Minister of Pensions and National Insurance as being a sort of "hard hearted Hanna", resisting pressure from her hon. Friends because she did not care.
I think that it is no secret that some of my hon. Friends and I have had a little battle with her these last few weeks; but, having said that, I most bitterly resent this picture which some people have tried to create of the Minister, and the Chancellor of the Duchy of Lancaster, not caring anything at all about the old people. There is not one word of truth in it.
My right hon. Friend the Minister of Pensions and National Insurance I have known for a long time. She is only a "little girl"; indeed, I have a daughter bigger than she, but she has a heart as big as a football and if she could find an opportunity to do what we are asking, then she would find it. All we ask is that she, and the Chancellor of the Duchy, should think just a little harder in an effort to find some way out of this difficulty.
I thought that we were listening to a good debate and I was somewhat diffident to intervene in it; but after the speeches of my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot) and Penistone (Mr. Mendelson), which were powerful and formidable contributions to the subject, I considered that it was a pity that the hon. Member for Uxbridge (Mr. Curran) should have introduced extraneous matter and rather spoiled the situation.
Do please not let us have any hypocrisy about this matter. The facts of life are hard; the facts of economic life are hard, and when one is defending a difficult economic situation—and we all now know that the economic situation of the country which the present Administration inherited is a good deal worse than was thought—one has no right to demand expenditure unless one sometimes is prepared to support also the unpopular measures for getting the money necessary for that expenditure.
I say that some hon. Members opposite—and in this instance I would put "honourable" in inverted commas—who demand that we should pay without collecting the means for payment are—well, in deference to you, Sir Samuel, I will not end the sentence. This is the only objection I have to the question before us, as outlined by the hon. Member for Orpington. If I may say without impropriety, I have a soft spot for the hon. Gentleman. I thought that he moved his Amendment in characteristic fashion, with moderation, with restraint, and with an obvious sense of conviction. We all respect him, and for my part I would say that when the time comes for him to apply for membership of the Labour Party I shall be very happy to sponsor his application.
At the same time, what I have against him is that even his party voted down half of the proposal—not the whole, as did the Conservative Party—seeking the means for paying for the supplement he is now demanding; and if it was only on that ground I could not support his Amendment if he carried it to a Division. There is, however, another ground. Some of us on this side of the Committee, if I may employ the now conventional expression, "having done our homework", know that the method he proposes for achieving the result we all want to see is not practicable.
I was one of those who talked of putting computers on to this job, but to do that one has to prepare the data for the computers; and that is a big job. It is a standing shame on those hon. Members opposite to know that they never prepared that data in such a form that this operation could be carried out.
I am amazed that even one of the less responsible hon. Members of the party opposite, the hon. Member for Uxbridge, should have the effrontery to get up and address the Committee on the Amendment when hon. Members opposite know that they left the situation in such a state when they went out of office that the old-age pensioners could not have got a rise for 12 months, never mind four months. So let us clear the hypocrisy and all the smears and cant out of the way.
The hon. Gentleman has just said that under the previous Administration there would not have been an increase of pensions in 12 months. Is he suggesting that at any time we claimed that administrative difficulties made a 12 months' delay necessary because the necessary machinery would take that long?
No, I am not suggesting that the machinery takes 12 months. What I suggest is that the intention and the machinery together take 12 months. The machinery takes four or five months; the intention takes seven or eight months.
What is manifestly clear is that when the present Government came to office right hon. Gentlemen opposite had not even started to think about the intention. That is what I suggest, and the right hon. Lady, had she still been in office—she left it some time ago, and, therefore, one cannot hold her responsible for all the misdeeds of her right hon. Friends—would have known that this was the case.
Having said all this, I come back to the point from which I started, which is a lot of old people in Poplar. In Chislehurst, if may say this to the right hon. Lady, they are not, on the whole, averagely so hard up as in Poplar, in Ebbw Vale, in Penistone and in Uxbridge. Anywhere one looks there are many people, even those on National Assistance, who are very hard up. There are hundreds of thousands of them—I am sure that the right hon. Lady knows this, because she has first-hand experience of it—who would be entitled to National Assistance supplement if they applied for it, but who do not so apply. Some of them do not apply because they are too proud, perhaps wrongly too proud, or because they do not understand that National Assistance is not largesse, but a right.
Some of them do not apply because they just do not know the law, and there are hundreds of thousands of them who are below the minimum standard laid down in the National Assistance regulations as being the minimum necessary to sustain life in a reasonable state of health, and who are, therefore, entitled to claim National Assistance supplement, but who, for whatever reason, good or bad—let us not be superior about this—do not claim. They are the people about whom I am talking. I am not talking about computers or about the gnomes of Zurich. I am not talking about clever things, but about those people. Hundreds of hon. Members, not all on one side of the Committee, care about them.
It is on these grounds that I say to my right hon. Friends that, happily, the date of operation of these arrangements is not in the Bill. If it were, then when we depart from here tonight, or in the small hours of tomorrow morning, the situation would be committed and the Government could depart from the Committee without loss of face. We shall all have to shrug our shoulders and tell our constituents, "We have done our best, but there is no change". Happily, that is not the situation. The date is to be laid down by regulation and, therefore, the Minister will have jurisdiction over this question.
As I understand the situation, it is not a question of either administrative difficulties or financial stringency. It is a bit of both. There are administrative difficulties about some methods of doing what we would all like to do. The administrative difficulties in doing the job in the precise terms of the Amendment moved by the hon. Member for Orpington are quite overwhelming. Therefore, if he chose to divide the Committee I could not be with him.
But there are ways of doing the thing administratively which would be rough and ready and create some injustices and might involve some overpayment. We have had a revolution this week. Some workers in the dockyard in my native City of Portsmouth were, between them, paid £6,700 more than they were entitled to. A few years ago the Treasury would never have said for a moment that it would not claim every penny back. This week we had an unparalleled revolution in the history of the financial administration of this country and the Treasury has said "All right, forget about this £6,700".
I understand that it is possible, with a bit of give and take and a bit of blurring at the margins, by some such method as proposed by my hon. Friend the hon. Member for Ashfield (Mr. Warbey), or some retroactive payment which would enable old folks to get a bit more "on tick," to get over the administrative problems. We are all agreed about that.
Then comes the problem of paying for it. Here we come to those people in Zurich. I do not know why Zurich is always picked on. There are "bods" in Amsterdam and Tangiers who are just as bad. The people in Zurich, described as leprechauns, are supposed to say that they will not allow the British Government to spend any money they have not collected in advance in taxation. I do not propose to go into whether that is right or wrong. My right hon. Friends know more about that than I do. The hon. Member for Uxbridge talked about it as though he knew a lot more, but he does not. My right hon. Friends know a lot more. They estimated, and I am prepared to take their judgment about this because they know more about it than I do, that to maintain confidence in foreign holders of sterling it was necessary, in introducing these pension increases from 29th March, to increase revenue from 29th March by an amount at least equal to, probably greater than, the amount we were giving. I accept that from them.
If they now say to us that the demands which my hon. Friends and I are making involve another £60 million—I take that figure used by my hon. Friend the Member for Penistone—over and above that additional taxation which they have already levied, and that they are to take another £60 million, whether by a bit more on the stamp, as the hon. Member for Orpington proposed, or as I would prefer by way of other forms of direct taxation, not regressive—if the Government now say to us that to do this they would have to increase taxation beyond what they have already proposed, then I am sure my hon. Friends would be prepared—I know I certainly would—to support them up to the hilt. I ask hon. Members opposite whether they would be so prepared, because anyone who answers "No" to that question has no right to demand what is being demanded in this Amendment.
We are prepared to support my right hon. Friends on this. I apologise for having detained the Committee so long, especially after we had a late night last night, but I end as I began. I entirely share the view of my hon. Friend the Member for Ebbw Vale, although I do not always agree with him, that the Government are to be much commended for the Bill. I entirely share the view that the suggestion that the Government has been withholding or hard-hearted in the matter of this date is entirely without foundation.
But, happily, this date is not in the Bill. It is not Holy Writ, it comes out in a regulation. It is not the Bible, it is apocryphal, and this gives my right hon. Friends time to think a bit more. We are not going to have any fancy business, any demonstration, any demagoguing, because nobody is trying to get any credit out of this, or give anyone else discredit, but I beg them in all sincerity to think about this again. If any of my right hon. Friends can get up and say tonight, "We have said what we have said, but between now and the time we bring in the regulation we will consider the matter", we on this side of the Committee will be very happy; and I think the hon. Member for Orpington and his hon. Friends will be very happy, and almost all the Committee will be very happy.
If that happens I think that we shall have seen the House of Commons in its best and in its greatest form, and true to its greatest traditions.
Like my hon. Friend the Member for Orpington (Mr. Lubbock), I would like to start by saying that I welcome the Bill, as indeed we all welcome it on this bench. It is one of the best pieces of legislation which has come before this Parliament so far. Indeed, it is one which has given great satisfaction and great relief to people throughout the length and breadth of the land.
In supporting the Amendment, I recognise, also, that there are real administrative difficulties. I do not want to minimise that fact, or to suggest that this is capable of easy solution. But, nevertheless, there seem to be two real issues in the mind of the Committee tonight, issues which may be regarded as possible objections to this Amendment.
The first is the cost. I would like briefly to say this about that. The cost may be £66 million, as one hon. Member has suggested, and on my calculation I agree with him. I think that that is about right, although it may be a shade more or a shade less. But one thing is certain. Whilst there is a reluctance on the part of the Government to enter upon an expenditure of £66 million at this time, nevertheless they are to receive the benefit of the increase in the fuel tax immediately, and the benefit of the 15 per cent. surcharge immediately. Therefore, it is not unreasonable to ask that, as they are to get money in the bank, they should be prepared to write a cheque against that credit.
The second problem appears to be one of administration. I would like to put this thought to the Committee. If at this moment this country were facing a grave international crisis, or if there were a national emergency, I am quite certain that the ingenuity of the Government would be sufficient to deal with it, no matter what it might be. I believe that many thousands of old people are suffering an emergency. I do not think that that is overstating the case. I have seen in my constituency, as I believe every other hon. Member has seen, cases which, while they may not have brought tears to our eyes, have caused us some loss of sleep. The adoption of this proposal would he a measure, a small gesture, that would help to ease the suffering which we all dislike and against which we all want to fight.
The answer to the question whether the administrative problems are insuperable is quite simple. If the Committee decides that the payment of the increased pension is to begin on 1st January, it will begin on that date. There is no doubt about that at all. The administrative machinery will be devised. A way will be found of doing it, because there will be no alternative once the proposal has been accepted by the Committee. That is the power which is vested in right hon. and hon. Members.
I do not want to sentimentalise about the situation, but as I enter the Chamber—and, indeed, it is only a few weeks since I entered it for the first time—I am always conscious of a statue just outside the door, a statue of the architect of the National Insurance and welfare system—indeed, the architect of the old-age pension system. I believe that if he were here in this Chamber tonight he would not be prepared to tolerate a proposal which embraces the idea that Members of the House of Commons should have their own salary increases backdated whilst the old-age pensioners should not have their increased pensions in time for Christmas. That, I believe, is the one thing above all else which is causing unrest, disquiet and dismay in the minds of so many old people.
It would be improper to argue now—indeed, I should be out of order—whether the fact that we are prepared to do this for ourselves is right or wrong; nevertheless, this is a point that has been made to me in letter after letter from my constituents—that we are prepared to do this for ourselves but are not prepared to do it for the old people. I know there is a great deal of difference in the cost involved, but I still believe that the argument is sound, and I believe that there is a great deal of sympathy for that point of view.
We have heard the hon. Member for Ebbw Vale (Mr. Michael Foot). If I may say so, for me his speech was rather moving, because it reminded me so much of his father, whom I always regarded as my political godfather. We have heard the hon. Member for Penistone (Mr. Mendelson) advance reasonable arguments and ways in which this objective could be achieved. We know that it can be done. We on this bench believe that it must be done, and I hope that the Committee will so decide.
If, as has been suggested, the right hon. Lady is not able to accept this Amendment—I cannot believe that she will not; but if she is unable to do so—and if the matter is pressed to a Division, I would urge one thing. It is this. I urge hon. Members to remember, as they go into the Lobby, that if the Amendment is carried the old-age and retirement pensioners will receive this additional money in time for the Christmas holidays. They will, as the hon. Member for Ebbw Vale said, be able to use the credit that that will give them before Christmas.
One final point. For thousands of old-age pensioners this will be their last Christmas on earth.
I hope that the speech of the hon. Member for Bodmin (Mr. Bessell) will not be taken as representative of the view of the Liberal Party. The hon. Member for Orpington (Mr. Lubbock) showed great understanding for the difficulties which are involved in the problem we are discussing. The hon. Member for Orpington was, I believe, trying to assist in bringing before the Government some of the ideas and suggestions which have been adduced from many quarters in the last few weeks in an effort to find a way of overcoming the difficulties of performing a simple act of social justice to our old people.
If, as the hon. Member for Bodmin said, the Liberal Party is contemplating forcing this issue to a Division he is making a serious mistake. To begin with, my right hon. Friend is bound to tell the Committee, when she replies, that the Amendment is impracticable and unnecessary. I will not argue the reasons why it is impracticable. It is unnecessary by virtue of the wording of the part of the Schedule which the Amendment seeks to amend.
As drafted, the Schedule leaves my right hon. Friend completely free to listen to the views which have been put forward today and then to make her own decision about timing, for the Schedule states:
The provisions of this Act shall not come into force until such day as the Minister may by order appoint, and different days may be appointed for different purposes of this Act or for the same purposes in relation to different cases or classes of case".
Nothing could be wider than that. No wider discretion could be given to my right hon. Friend to consider all the suggestions put forward and then to come to her own decision and embody it in the regulations which she will eventually bring forward.
Having thus urged the hon. Member for Orpington to withdraw the Amendment, I now ask my right hon. Friend to do something to assist hon. Members on both sides of the Committee who would like to be helpful to her and to the old-age pensioners. My right hon. Friend will have to say "No" to this Amendment, but I hope that she will not say "No" to all the suggestions which have been put forward to her. She does not need to say "No"—now, anyhow, tonight. There is no need for her to say "No" to any of the suggestions which have been put forward in this debate. I should like her to say, when she replies, that she is taking these suggestions into account and will have them very much indeed in mind when in the order she defines the timing of this operation and the various parts of it. We would not like to see the door closed this evening.
We should like to see time given for further thought, and this is the substance of what we are asked to do by those many old-age pensioners and other constituents. Because it is not only the old people who are interested in justice to the old people; it is every member of the community with a sense of social justice. What they are asking us to do is to think again and to see whether there is not some way of doing an act of social justice.
The old people cannot be fooled. The old people are willing to accept the argument that there were serious administrative difficulties about paying the increase as planned in accordance with the terms of former Acts and along the lines of procedure embodied in former Acts—that there were difficulties about performing this operation at an earlier date than 29th March. They accept all that, but they do not accept the argument that there were overwhelming technical difficulties in the way of introducing some kind of proposal along the lines which have been suggested by my hon. Friends and myself.
I have a letter from one—it is one of many—I would quote:
We have an old-age pensioners' get-together each Sunday morning and although I am totally deaf from the 1914–18 war I have a friend who writes everything down for me. We all realise the hopeless mess left us by the Tories"—
I hope that the hon. Gentleman the Member for Uxbridge (Mr. Curran) will take note of that sentence—
and understand the near-hopeless economic situation. I suggest to the Chancellor that a double-pay week be given to old-age pensioners and war disabled in time for Christmas, and put the date for the official pay out forward from 29th March to 5th April. That is just asking for a loan to help many old people to get in a little more coal and food to sustain them during the coldest months. They could weather the week from 29th March to 5th April.
The hon. Gentleman the Member for Bodmin will be interested in another sentence:
We all appreciate the M.P.s' increase, but wonder why we have been left out.
They do not begrudge hon. Members their increase. I have had other letters which recognise that the increase in Members' pay is an operation which was
deferred for two years by the penultimate predecessor of my right hon. Friend the Prime Minister, Mr. Harold Macmillan, who two years ago recognised that, in social justice, hon. Members should then have an increase, but who refused, for political reasons, to implement it. The old people in my constituency understand this well and they are not tying the two issues together. They are concerned not about the increase in hon. Members' pay, but about the increase in the spending power of the middle classes and the richer sections of the community.
I wonder what they will say when they read tomorrow morning what was reported on the tape this afternoon—that we are heading for the biggest Christmas spending spree on record. The Bank of England announced that the increase in the note circulation compared with the same period last year is already £150 million, and it is estimated that by the time we reach Christmas day the total increase in the purchasing power in the hands of people who will spend it on luxuries in the shops during Christmas week will be £200 million.
It is not only the Zurich bankers who are saying this, but the City of London Banks and even the Bank of England: and if the bankers say that before we give any additional purchasing power to the old people we must mop up some surplus purchasing power from somewhere else, what about mopping up some of the £200 million surplus purchasing power which people who can afford it have withdrawn from their savings in the banks in order to spend it, not on necessities, not on coal, but on luxuries during the Christmas period? That is what could be done.
I am sure that my right hon. Friend the Chancellor of the Duchy of Lancaster will recognise this: the Chancellor of the Exchequer has already taken steps to mop up surplus purchasing power through indirect taxation which, we are told, will raise £95 million in the current financial year before 31st March next. Surely the £65 million which we need is already balanced by that £95 million. If that is not good enough for the bankers, we could do a little more. For example, there is the extra Purchase Tax which will come in as a result of the extra £200 million spending.
How much will that bring in? At an average of 10 per cent., an extra £20 million will come into the revenue from this surplus purchasing power. If that is still not enough, my right hon. Friends have at their disposal the economic regulators, by which at any moment they can increase Purchase Tax and other indirect taxes by up to 10 per cent. If they want to mop up some of this surplus purchasing power which will be spent in this country during the next few weeks on a spending spree, they have the weapons at their disposal.
We have spent a fair time on these Amendments, and I think that it is right that we should do so. It is important that on a matter which is of great concern to the vast majority of Members, and to millions of people outside, we should have had this debate.
I want to deal, first, with the Amendments, and then with the general debate which has arisen on them. Amendment No. 19 would make it mandatory for all the provisions of the Bill, that is all the benefit and the contribution changes, to be brought into operation not later than 1st January. It is totally impracticable for a number of reasons.
Let me consider the contribution increases first. If the contribution increases were to operate from 1st January, the new stamps would have to be printed and available in Post Offices by 28th December. If one were considering ordinary printing—and we all have experience of having leaflets printed during election periods—this could be done almost overnight, but it cannot be done with stamps. These stamps are really money. They have to be printed under security conditions, so there is only one place at which they can be printed. That is one reason why it is impracticable to have the contributions as from 1st January.
After the most intensive examination—and I assure all hon. Members that it was a most intensive and probing examination—I had, most reluctantly, to come to the conclusion that 29th March was the earliest date on which we could pay the increase in retirement pensions without a grave risk of a total break down in the whole system.
I do not think that the Committee wants to be wearied by my giving all the reasons which I gave in detail on Second Reading. Even at this late hour I ask those who have not read my speech on that occasion to go over that part of it in which I gave in detail the reasons why it was administratively impossible to have the retirement pensions paid before 29th March.
The Amendment covers sickness and unemployment benefit, too. Under the provisions of the Bill they are to be paid as from 25th January. That was the earliest date on which we could pay them because Christmas intervenes, and with the intervention of Christmas it is impossible to make it earlier than that date.
The extra cost of increasing all the benefits from a date not earlier than 1st January instead of from the dates in the Bill, that is, 25th January and 29th March, would be about £61 million. But even if it were practicable to advance the date of the increase in contributions a substantial proportion of that £61 million would still be uncovered by those contribution increases, because of the difficulties that I have described in getting the stamps ready. We should not be able to bring in the increases in contributions as early as we would want them.
I now turn to the Amendment dealing with retrospective payment. Again, there are grave difficulties. Retrospective payments would not cover the old people during the winter months. What we are all worrying about is what happens to the old people in the winter. It is clear, in spite of all that has been said, that the contribution increases could not be imposed retrospectively to cover the extra cost.
If the old people knew that the payments were to be made retrospective to an earlier date they would be able to get credit from grocers and fuel merchants, and so on, in anticipation of those payments.
I doubt that very much. We are told that many of our old people are too proud to go for National Assistance, and I think that those old people would also be too proud to obtain "tick".
Having reluctantly had to decide that 29th March was the earliest date on which, in the normal way, we could pay the increased pensions, I tried to discover how we could help the old people best during the winter months. I thought first of all about the 1,300,00 old people on National Assistance. It has been said that 500,000, or even 750,000 people—indeed, we are told that a report will soon be published putting the number at 1 million—do not apply for National Assistance although they could have it. We do not really know the number involved, but we know that 1,300,000 old people are in receipt of National Assistance today.
To help these—and in the main they are the poorest of the old people; the people who really need extra in the winter for food and fuel, for warmth both inside and outside—the Chancellor of the Exchequer said that the National Assistance Board could use £6 million. We hope that these people will have a £4 bonus before Christmas. This bonus could be used to buy coal, although there is already an allowance for coal under National Assistance. This £4 can be used either for more coal or for more food over Christmas, or for warmer clothing. It will be a great help to them until 29th March.
There are other people on National Assistance who need help, also. I was worried about the widows, perhaps with small children, the deserted wives, perhaps with small children, and the chronic sick—what we call the non-ambulant sick. The National Assistance Board have looked at these categories. There are over 200,000 of these people on National Assistance, apart from the 1,300,000 old people who will get this £4 bonus. These people may not get it before Christmas, because, unlike the old people, many of them have to be sifted out.
That was my first attempt to help those who needed help most, although I always keep in mind the old people who, for one reason or another, will not apply for National Assistance when they could have it. I then turned my mind to other ways of helping the 6 million old people with retirement pensions. We were being urged to do something not only for them but also for our widows. It is important that they also should be helped if it is at all possible to do it. We undertook a great deal of investigation to try to find some method of helping them. Finally, we worked out a scheme of three double payments for the retirement pensioners, and for the widows—a few other categories could have been included, but we concentrated mainly on those two.
Each of these three double payments would have cost about £25 million. That was a total cost of £75 million. We would have been doing just rough justice. A pensioner, perhaps with a dependant for whom an allowance had not yet been awarded, would still only have received double his existing pension. I give that one example to show that it would have been just rough justice which we would have been meting out to the retirement pensioners and the widows. The cost would have been about £75 million.
Apart from doing that, and knowing that the cost would be so great, with the help of the Postmaster-General and other Ministries, I considered whether we could, at some risk, bring forward the contributions to 1st February. I want to tell the Committee how the cost would have worked out. The cost would have been roughly £75 million. If we had been able to take the contribution increases hack to 1st February—and there was no absolute guarantee of that—we would have had about £41 million from contributions. The Exchequer would have had to pay its proportion, which would have been about £10 million, perhaps a little more. The remainder would have had to come from the National Insurance Fund.
To operate the scheme would not have been easy. It might have been a bit chaotic in its working. It might have caused great difficulties in the Post Office, particularly as we wanted to give one of the double payments before Christmas—both for those going to the Post Office and for the men and women behind the counter. But we felt that the public and the Post Office workers would be willing to put up with those difficulties.
These ideas were put to the Government for consideration. I have been asked this evening to "come clean". I have been trying not to hide anything at all, because I do not think that we have anything to be ashamed of. The right hon. Member for Leeds, North-East (Sir K. Joseph) spoke indignantly about how strong the £ was when we came to office. What nonsense! No one except the right hon. Gentleman and, perhaps, some others on his side of the Committee would ever believe that for a moment.
I would go further, and say that some of the difficulties that we as a nation have run into in these last few weeks can be put at the door of the right hon. Gentleman and his right hon. Friends. They talk about loyalty—they just do not even begin to know what loyalty means. The speeches they have made have done grave damage to the country. It has been the firmness of this Government that has steadied the £.
The right hon. Lady is casting discredit and disbelief on everything else she has said if she makes such throughly untrue statements. It was her own right hon. Friend the Prime Minister who referred to a failure of confidence over the last few days—10 days ago. And it is the fact that when the right hon. Lady's Government came to power—and it is to the credit of her Government—the £ was strong on foreign markets. But the lack of confidence in the £ is the fault of the Labour Government.
Again, I would say that only the right hon. Gentleman himself and some of his right hon. and hon. Friends would accept that statement. There is no doubt in the minds of those who understand these financial and economic matters that a great deal of discredit lies with right hon. and hon. Members opposite.
Let me now return to the stage that I and my hon. Friends the Parliamentary Secretaries, and others who were helping, had got to. This matter, then, was discussed last Tuesday morning, and by the time these proposals were ready—
If the right hon. Gentleman would just have a little patience, and show, perhaps, more sense of courtesy, he might get all the answers he is waiting for. As I said previously, we have nothing to hide on this matter.
By the time these proposals were ready, the financial situation had seriously deteriorated. They were discussed by the Government on Tuesday last week on the day after the rise in Bank Rate had had to be announced. That was the atmosphere under which they were discussed by the Government. I assure my right hon. and hon. Friends and all who are worried about this that the Government had very regretfully to decide that they could not safely accept further heavy charges on the Exchequer in addition to the large increases already imposed by what I would call the bold measures of this Bill. I would add also that, at that stage—and we have to consider when the decision was made—the Government were most anxious to safeguard the value of the benefits that we shall pay under the Bill—around £300 million in all.
I want to say to my right hon. and hon. Friends that all the members of the Government are as anxious as any back bencher to do good for our old people. All of us understand their hardships. Most of us live amongst them. Last weekend, when I was walking along my village streets, old people were coming to me and saying, "Peggy, if it could possibly have been done we know that you would have done it." I am sure that one could say the same thing of the Government as a whole.
I am grateful to the hon. Member for Orpington (Mr. Lubbock) for giving us the chance to discuss this matter and of showing clearly to the Committee and the country the two different kinds of reasons why we have been unable to help the old people at once.