Orders of the Day — Pensions (Increase) Bill

Part of the debate – in the House of Commons at 12:00 am on 18 November 1965.

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Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East 12:00, 18 November 1965

I intervene for just five minute!) in this debate. I have been sitting here for about an hour and heard a battery of speakers from the other side. My constituency contains the headquarters of the Ministry of Pensions and National Insurance, and quite apart from the normal number of public service pensioners that we find in every constituency I have perhaps a disproportionately large number of them. I have discussed the implications of this Bill with them, and although I think there would be some disappointment in terms of the total sum involved, I am sure that this Measure will be widely welcomed by the public service pensioners who live in my constituency.

The main burden of the argument raised by three of the speakers I have heard this afternoon is that the Government have not been generous enough. This has been a blanket criticism, and there have been particular criticisms of particular ways in which, it was argued, the Government should have been more generous. It seems to me always in these matters that the degree of generosity of the Government is not something which can be measured in absolute terms. It is relative to the current economic position of the country and I would argue that, in terms of the economic situation which this Government have had to face during the period since the General Election, coupled with the legislative Measures which were taken in relation to pensions as a whole some time ago, this Government have shown an exceedingly sensitive conscience about the pensioners, and, indeed, this Measure is relatively generous. I believe it will cost about £20 million more a year.

There was one point by an hon. Member opposite upon which I should like some clarification. He seemed to argue that these increases had been partly eaten away by earlier acts of the Government in relation to increasing the standard rate of Income Tax. I think I am correct in saying that before one can become eligible to pay and to suffer from this increase in the standard rate of Income Tax one would have to have an income of some £700 or £800 a year, and to be showing excessive concern for the position of pensioners on that kind of income is rather odd, I think. I am rather more concerned about those pensioners in my constituency whose income is much smaller than that, and many of them benefit substantially from this Measure.

Another point raised by hon. Members opposite was that, of course, some part of this increase has been eaten away by the rise in the cost of living since last October. This is the current argument being peddled by Conservative spokesmen generally about pensions, that the pensions increases have been eaten away by the rise in the cost of living. This is patent nonsense. It is perfectly true, of course, that in the first six months of this Labour Government there was a quite sharp increase in the cost of living, although I am pleased to say that since last April there has been a marked levelling off in the cost of living, and if this is the effect of the policies carried out by the Government and an indication of the kind we may expect over the next two or three years, I would welcome it. I would go on to argue, if it were in order and if there were time, that a substantial increase in the cost of living in the first six months of this Government was very directly connected with the economic developments from the Government's predecessors.

But it really is not true, and we cannot allow hon. Members to get away with it, that the whole of the increases in pensions carried out by this Government since the last election have been eaten away by the cost of living. It is perfectly true that some of this has been eaten away. I would certainly agree that pensions in future must be more closely linked with the rise in the cost of living than they have been in the last 13 years.

There is one point which does trouble me a little. I have a number of pensioners who compain that they have not been able to draw increased benefits till they are 60. They would prefer to do so at 55. I think it is true in the public services generally that retirement pensions are drawable normally at the age of 60. I think that this also applies to Members of this House. No? Then I am wrong on that point. But I would not have thought this criticism valid except in the case of those who by the nature of their public service have been forced to retire early on the grounds of health, due to service overseas. I have a number of constituents who have retired largely through ill health contracted as a result of service overseas. I am not sure how this Bill covers them, but with this exception I would welcome the general improvement and I would welcome an improvement in this respect if necessary.

There is one thing which was said by an hon. Member opposite with which I agree, that the bargaining strength of those who are retired is relatively weak, relatively low. It is perfectly true that they have no bargaining power any longer. Because there is always a tendency for the pensionable income gap, the gap between pensionable income and average earnings in industry and commerce, to widen, I think that a sensible policy would stop that gap from widening, and when the hon. Member said that we should seek increasingly to adjust pension income to average earnings in industry I would agree with him, although I think that if he was trying to make party political capital—I am not trying to do so—I could show many examples where such a gap was widening rather than closing in the last 13 years.

I hope that with the erection of social security which the Government are undertaking attention can be given to this problem, but given the current economic situation, and given the circumstances in which this Bill is brought in, I would maintain that it is a relatively very generous Bill, and I think it is a Bill which will be welcome. When the economic situation improves, as I think it will as a result of the measures taken by the Government, I hope that this Measure will be looked upon as something of a temporary expedient, leading to far wider-ranging improvements in pension incomes for the public services and others in the years ahead.