Orders of the Day — Public Service and Armed Forces Pensions Commission Bill

Part of the debate – in the House of Commons at 12:00 am on 3rd February 1967.

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Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington 12:00 am, 3rd February 1967

I will leave it to the public service pensioners to decide whether it is I or the hon. Member who is being naїve. If he will do me the honour of reading my speech on the Pensions (Increase) Bill, in Committee on the Floor of the House, on 1st December, 1965, he will find that I said definitely at that time that I did not expect the Government to implement their promise of giving parity to public service pensioners in the prevailing economic circumstances. Had the hon. Gentleman been paying attention to what I was saying he would have heard me say that because of the economic crisis which the country has faced in the last year or 18 months, it would be unreasonable to expect this of any Government. However, I want the Labour Party to reiterate the pledge which they gave prior to the 1964 General Election. I want them once again to say that some sort of long-term plan is being drawn up for putting that pledge into operation.

When I spoke in December, 1965, I suggested a means whereby the Government could approach the principle of parity by taking a number of steps, the first of them being a levelling-up of the pensions which would have been received if a person had retired not later than 1st April, 1956. I considered that to be a reasonable request in view of the calculations which I had made. The cost of my proposals was quite limited—certainly nothing like the total cost of the Pensions (Increase) Act of that year. Today I am not asking, the Government to introduce the principle of parity in the next year or two or even during the lifetime of this Parliament but I want them to reiterate the pledges which they gave prior to the 1964 election.

Increases in the cost of living have already eroded the value of the increases that were given on 1st January, 1966. I received some Answers from the Financial Secretary on this point and about the increase since that date in the level of average earnings per head of the population. From those Answers one can see that, just as between the effective dates of the 1962 and 1965 Pensions (Increase) Acts there was an average annual increase in the cost of living of about 3½ per cent., so already, since 1st January, 1966, the value of pensions has been eroded by about 3½ per cent. That trend can be expected to continue.

Statistics issued by the Ministry of Labour for average earnings between January and November, 1966, again show that average earnings increased by just over 3 per cent. I therefore underline what has been said about the Prime Minister's promise that pensioners would not be subjected, as they had been in the past, to their standard of living being eroded but that their pensions would keep pace with the rising standards of living of the population generally. That meant to anybody that pensioners would be recompensed for the fall in the value of money which had taken place since 1st January, 1966, that regard would be had for the increase in the level of earnings of the working population as a whole and that pensioners would share in the increase in prosperity which the population in general had enjoyed.

I will condense my remarks because many hon. Members wish to take part in the debate. There may be differences of view about the matters which should be considered by the Commission; the frequency with which it should report and so on. I suggest to the right hon. Member for Mitcham that if the Commission's first report is not to be submitted until 1st January, 1969, there will be a danger that the Government will use that as an excuse for not introducing a new Pensions (Increase) Act until some time during that year. I hope, therefore, that if the Bill goes into Committee, as I hope it will, he will consider inserting an earlier date.