Pensions for or in Respect of Persons over Pensionable Age 5TH July, 1948

Clause 1 – in the House of Commons at 12:00 am on 15th July 1970.

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3.34 p.m.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I beg to move Amendment No. 15, in page 1, line 5, at beginning insert: (1) Notwithstanding anything in section 7 of this Act all benefits under this section shall be payable out of the National Insurance Fund.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

It will be for the convenience of the Committee if with this Amendment we consider Amendment No. 1, in page 1, line 10, leave out '£3' and insert '£5'.

Amendment No. 2, in page 2, line 1, leave out '£1 17s. 0d.' and insert '£3 2s. 0d.'.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

As it stands, the Clause provides for pensions or grants for perhaps 100,000 aged persons who were over pensionable age on 5th July, 1948, their wives, or their widows, who are either not receiving the present retirement pension, or who are receiving less than the benefits to be provided under the Bill. The sums provided by the Bill are £3, and £1 17s. for a wife, or £3 for a widow.

The House should have the opportunity to examine the reasons for the decision to fix the amount of the payments at the proposed level. We must also discuss the criteria upon which this use of resources in the manner proposed is based. In addition, it should be established whether other groups in the community are being treated equitably once the principles underlying the Clause are accepted and the sums laid down in it are in payment.

I should explain at the outset that the paving Amendment, No. 15, is merely a procedural device to allow discussion of the subject. The Money Resolution—I do not complain about this; it is not an unusual practice—is so tightly drawn as to prevent Amendments which would involve the Treasury in extra expense. But, by one of those curious circumstances of history, no such limitation is placed upon us if we are discussing payments proposed to be made out of the National Insurance Fund. I make it clear at the outset that the Labour Party believes that the contributory principle is an extremely important principle from which we should not lightly deviate. We shall not press and would not want to press the paving Amendment upon which the discussion of the other two Amendments rests.

The House will have the opportunity to ask why the figures have been fixed at £3 and £1 17s. The Government's case—and we shall hear more during the course of this debate—was briefly explained on Second Reading. We were told that this was rough justice, belated rough justice, that the Government were trying to strike a balance among the existing 7 million retirement pensioners, many of whom had been lifelong contributors to the National Insurance scheme, part pensioners and non-pensioners under the existing scheme, and the specific group of non-pensioners with whom the Clause deals.

If we are to discuss whether these figures are satisfactory and realistic, we have to examine the proposition that this is rough justice and consider the kind of criteria which the Government have taken into account, or ought to have taken into account, in reaching these figures. Are the Government's figures based on the needs of those affected by the Clause?

Under the system of supplementary pensions payable under the 1966 Act—an important Measure passed by the Labour Administration—we have a minimum standard of income, with built-in flexibility, to meet differing circumstances. For example, the amount of rent an old age pensioner might be paying may be taken into account, whatever the age of the pensioner. It is important to take note of the background of the provisions that already apply under the supplementary allowances system before examining in detail the sums of £3 and £1 17s. provided for in the Bill.

Who will gain from the Bill? One assumes that the criterion of rough justice means that justice will be meted out to people generally, according to the standards laid down by the Supplementary Benefits Commission to meet need. Of the 100,000 people affected by the Clause, we understand from the Government that about 50,000 are already receiving supplementary pensions from the Commission. For those of the 50,000 who are receiving the full £3—presumably that number forms a large proportion of the 50,000; can we be told the precise number?—there will be no gain from the Bill. Indeed, those receiving any supplementary pension will get less than the £3 proposed in the Bill.

If the aim of the Bill is to maximise the number of aged persons dealt with by the Clause, so improving their standard of living, then a figure higher than the £3 proposed is required. After all, the payment of this £3 will mean that a considerable proportion of the 50,000 people will still be in need of supplementary benefit, which shows that this sum will not meet the needs of this section of the community.

There is a second group of people who are receiving supplementary benefit, but of sums worth less than £3. They will become better off, not only compared with other retirement pensioners who are receiving supplementary benefit—and who, therefore, must be in need—but better off also than other non-pensioners over 80 who are already receiving supplementary benefit of £3 a week or more.

There is a third group; those who are just not entitled to supplementary benefit because of their income or other capital. This £3 proposal will mean that they will be raised well above the standards of other pensioners who are receiving supplementary benefit, and well above the standards of some people in this group of non-pensioners over 80. It is clear, therefore, that many of these 100,000 people will feel anxious over this, in view of the new inequalities that will be created.

A better way of dealing with this problem would have been to deal with those people just above the supplementary benefit level by changing the disregards. It has been pointed out that there are those among this aged section of the community who will not claim supplementary benefit, even when they are entitled to it. In Friday's debate the Secretary of State asked us to recognise … that this vintage group contains a large number who would be entitled to supplementary benefit".—[OFFICIAL REPORT, 10th July, 1970; Vol. 803, c. 1011.] What evidence is there of this large number to which the right hon. Gentleman referred? In any event, we see that the figure of £3 will not meet, except in the limited circumstances of that section of non-pensioners over 80, the needs of those who are not prepared to receive supplementary benefit.

3.45 p.m.

Although it is said that £3 will give rough justice, when we examine the matter we find that it will not only create new inequalities within the existing 100,000 non-pensioners over 80 but also that it will create inequalities between part of this group of elderly citizens and other groups of elderly people. The result is that a number of retirement pensioners—pensioners drawing the full contributory retirement pension—with an entitlement to a supplementary pension, as well as others with an entitlement—for example, those with resources which take them just above the scale rates—will be worse off as a result of this figure of £3 and the general formula of the Clause than will those who have paid no contributions at all. This is bound to cause grievances.

It is, of course, desirable for non-pensioners over 80 to receive additional help. However, we must not forget that there will be other retirement pensioners, particularly the chronically sick pensioners, of that age and less who have paid contributions but who will be worse off as a result of this Clause, because of the level proposed, compared with other pensioners.

If it is true that there are numbers of these non-pensioners over 80 who are unwilling to draw supplementary benefit, it is equally true that there are younger pensioners and others who adopt a similar attitude. If the Government are prepared to recognise the reluctance of one section of the community to go for supplementary pension, and are ready to find a way round it, they should ask whether they should do something for other sections. So need is not really the criterion which led the Government to fix these figures.

Then is the criterion equity between one set of contributors and another, one age group and another and within age groups? The Secretary of State said that there were three groups within the estimated 100,000 affected. The first was those excluded from both the pre-1948 schemes and the 1948 scheme. A case can be made for bringing these people within the system, whatever their other income. But this is not the only group. It is too late to start establishing the exact numbers, but a second group is those who could have paid under the 1948 scheme but chose not to do so. The third group, which the Secretary of State said was a small group, are those covered by the pre-1948 schemes, who—I am almost quoting the right hon. Gentleman—due to deficient contributions, are entitled to less than the benefits provided by Clause 1, that is, £3.

But some will be entitled to more than £3. Therefore, although they are of this age, they would not benefit from the £3 provision. So, on grounds of equity, we must consider other groups who could have qualified but did not. Once the Government had taken this decision, it was hard to conclude, as the Secretary of State did on Friday about other groups: I emphasise that the benefit is not being extended to those who could have qualified for full pension under hte 1948 scheme but who for one reason or another failed to do SO."—[OFFICIAL REPORT, 10th July, 1970; Vol. 803, c. 1009.] Nothing was being done for those. Some of these people did not pay for 10 years or withdrew their contributions after a brief period and are getting nothing. The reason they did not pay was perhaps that they were very poor and could not afford it.

So if a second group is to be provided for, what about those people, who also had the opportunity? Would £3 be fair to them? Is it equitable that even £3 is paid to this group over 80 if nothing is done for this other very poor group?

Another group which is relevant in view of the 10-year residence qualification are the many elderly people who were abroad for many years—this was quite common in the later days of the Empire—and have deficient contribution records. Can one pay £3 to the present group and do nothing about these people? A third group is those who are deficient in contributions. One example in particular would engage the sympathy of the House—those women, now elderly, who stayed at home as single women to look after an invalid parent. What will the Government do for these other groups?

The criterion is not need and it cannot be equity. I have taken the case presented over the years by the hon. Member for Abingdon (Mr. Neave) that at least some of these people were excluded from the 1948 scheme and the pre-1948 schemes. One then has to decide how much shall be payable to them. The Government could have adopted a number of formulae, but they appear to have adopted none of them. We need a detailed explanation of this figure.

First, the Government could have asked what would be an actuarial pension for a pensioner and his wife aged 65 at the moment, on actuarial calculations and no other. But the figures in the Bill are not actuarial amounts, since they would be much larger. Second, they could have said that these people had not paid contributions but that, in this tripartite system of payments for the National Insurance Fund, about 18 per cent. is the Exchequer supplement so that there was a respectable argument for making it 18 per cent. But that would have been a very low figure and would not have satisfied anyone who thought that these people should have some pension. So the Government have not worked out a formula by any mathematical principles. Instead, they have provided the figures of £3 and £1 17s. by rule of thumb alone.

The Government told us that this was not only justice but also rough justice. We are therefore entitled to ask, "Why £3?" If it is to be £3, and if the payment is so belated, should not there be a backdating? The people concerned have been in this position for 20 years. Nothing has been done until now, when this Bill has been brought before the House. As a recognition of the fact that rough justice is now being done to these people so very belatedly, could not there be a lump sum payment?

4.0 p.m.

It is not possible to argue a case on grounds of need, in fixing a figure of this kind, because the supplementary benefits system is designed to cope with that. It is not possible to argue a case on grounds of equity, because by introducing this system we are creating new inequities within the existing National Insurance system. Since it is the view of the Government that this group of people deserves a pension as of right—because, it is said, they did not have an opportunity of putting themselves within the system—one would have thought that the Government would follow the advice of their own back benchers who have argued for many years that these people should be provided for. One would have thought that the Government would say, "We are not arguing in terms of equity. We know that new problems have arisen, in respect of which we have a certain moral responsibility." I hope that the Government will tell us how they intend to fulfil that new moral responsibility, which they have created by the introduction of this Bill.

Why not give these people the money? Let them have the same £5 as everyone else. That would certainly look much better. The Government have made a political decision and not a decision based on equity. They say that they are providing rough justice. I say that it is very rough justice to take this group of people and to create sections within the group, and also to make comparisons with other groups. The Government have thought it right to give pensions—not based on need—to those excluded as a group. One would have thought that they would pay £5 rather than resort to this mean expedient of knocking the figure down. The Parliamentary Secretary is in some difficulty on this matter, and he has some explaining to do.

Photo of Mr Airey Neave Mr Airey Neave , Abingdon

I hope that the Committee will acquit me of any discourtesy if I leave after making a short speech, but I have to attend a meeting upstairs.

I was somewhat dumbfounded to hear the hon. Member for Rotherham (Mr. O'Malley) advocating that these old people should receive £5, because at the beginning of the year he was a member of the then Government who insisted in talking out a Bill which would have paid these people a full pension. Now that the hon. Member has been converted in this way we are very interested to hear his new views on the subject.

He was right to ask the questions he did ask. I am asking the same ones. I have consistently advocated the payment of a full pension to these people, unlike the hon. Member, who has consistently advocated that they should have no pension. It is remarkable to find the hon. Member, after a brief election campaign, advocating from the opposite side of the House the payment of a pension to these people. I realise that we should not always take the Amendment Paper too literally, but those who do not know our procedures will have been astonished to hear what the hon. Member said.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I understand the debating point that the hon. Member is making. We agree that the Government have a mandate to do this, and since they have accepted the principle we say that they should put that principle fully into operation.

Photo of Mr Airey Neave Mr Airey Neave , Abingdon

Whether people outside the House will understand the reasoning by which the hon. Member arrives at that conclusion after the record of the Labour Party for the last six years is another matter. I think that they will be astonished at the cynicism of these Amendments. If I had time I would produce speeches made by the hon. Member for Rotherham, the hon. Member for Manchester, Gorton (Mr. Marks) and the right hon. Member for Sowerby (Mr. Houghton), who have their names to the Amendment. The right hon. Member for Sowerby is rather an exception in this case, because after he left the Labour Cabinet he showed a compassionate view and spoke generally in favour of the Bill. The wording of the Amendment is rather extraordinary. I hope that it is not a face-saving exercise. I hope that the hon. Member for Rotherham is converted to my point of view. If he is I shall be very pleased.

I was disappointed that a full pension was not obtained. I do not conceal my disappointment. On the other hand. I have noticed that my right hon. Friend the Secretary of State has included other people in the Bill—people whom we shall discuss in further Amendments.

Photo of Mr Michael McGuire Mr Michael McGuire , Ince

The hon. Member mentioned earlier that he had not time to quote from the speeches made by my hon. Friends on the question of pensions for this class of people. Would he refresh his mind in terms of the speech made by his right hon. Friend who is now Secretary of State for Education and Science? She said that to breach the principle of contribution would be very serious, and that one would not do it easily. She rejected the hon. Member's argument in 1962.

Photo of Mr Airey Neave Mr Airey Neave , Abingdon

Before the hon. Member came to the House I began this contest against the previous Conservative Government. I know that my right hon. Friend the Secretary of State for Education and Science held a view about the contributory principle. But on the Second Reading of this Bill it was astonishing to hear Members of the party opposite—which opposed similar Bills introduced over the last few years on the ground that they introduced a breach of the contributory principle—3½ weeks after the General Election speaking in favour of an Amendment that would provide that these people should receive £5 instead of £3. I merely say it is interesting. I shall go no further because, as I have explained, I have not much time.

The hon. Member's point should be answered in full by my hon. Friend. The bulk of the 100,000 people who remain are people who were excepted from the pre-1948 and the 1948 schemes. The point has already been made several times that they should receive priority in any benefits that ensue because they were prevented from contributing by law. That is the point. They were prevented by the National Insurance Act, 1946. In that respect I agree with what the hon. Member for Rotherham said.

My right hon. Friend made his point in the Second Reading debate, but I am disappointed, as are others, and the Committee will await his explanation. With that, I repeat that I continue to be utterly amazed by the wording of the Amendment.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I also was one of the Members who, subsequently to my hon. Friend the Member for Abingdon (Mr. Neave), introduced a Bill on similar lines to his, and I was followed by two others of my hon. Friends who introduced Bills, which were opposed from beginning to end by the Opposition who were then the Government. I have listened very carefully to the hon. Member for Rotherham (Mr. O'Malley) introducing these Amendments, and I think he took a very clever line. I am not meaning that as complimentary—

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I am quite sure of that.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am meaning it as an uncomplimentary compliment. He said his party, as the Government, rejected all the Bills which were brought from this side of the House when we were in Opposition; he went over the entire field.

Following what my hon. Friend the Member for Abingdon said, I also am very disappointed that my right hon. Friend has not found it possible to introduce the full pension which, if I remember rightly, was provided for in the Bills which were brought forward by myself, my hon. Friend the Member for Abingdon and my two other hon. Friends who are now the Chief Secretary to the Treasury and the Minister of State at the Treasury. My right hon. Friend has been able to offer only a limited pension under this new Bill because there is a limited amount of money—I underline, limited amount of money—available in the Treasury at the moment. I have no doubt that in years to come—

Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick

It is not a question of there not being sufficient money available in the Treasury. The hon. Lady should realise that she has been taken in by the Conservative election manifesto, as were the electorate. It did not commit the Conservative Party to pay full pension. It was very cleverly worded—"some pension as of right". The hon. Lady, quite sensibly, took the sense of the manifesto rather than its words.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am not really dealing with that point at all. What I am dealing with is the original Bill introduced by my hon. Friend the Member for Abingdon and reinforced by myself and reinforced further by two others of my hon. Friends. That provided for full pension as of right, not £5. I am not being taken in by anybody. I consider that I am able to stand on my own feet and use the brains which God has given me, which may not be very many, but I am not taken in by anybody, and I should like to put it on record now that least of all am I taken in by the arguments of hon. and right hon. Gentlemen opposite who treated this particular category of pensioners extremely badly indeed. [HON. MEMBERS: "Nonsense."] Certainly they voted against the four Bills and all the time opposed those Bills, and I am perfectly entitled to say what I have said, and I say it again. Possibly I would not have said it had not the hon. Gentleman so smugly intervened. He was merely making a smug intervention and it was a jolly silly one.

4.15 p.m.

There was an interesting point deployed by the hon. Member for Rotherham in moving the Amendment. He referred to the people who had been excused contributions. Contributions to the National Insurance Fund now are obligatory. The people who were excused, to whom he referred, and I am glad he did refer to them, were people whose incomes, whose earnings, were too low, or they were people in the category of those, and there was a large number of them, who gave up work in order to look after their elderly parents. If one wants to be relieved from paying contributions to the National Insurance scheme one has to make an application. The hon. Member for Rotherham may be surprised to hear, now that he has done what he has done, now that his party is in Opposition, that that section of the community cannot, for a variety of reasons, meet the obligations to the National Insurance Fund, and is a section of the community for whom I spoke often when my party was in power. It is worth bearing in mind that the contributions have been ever increasing, and that the increases stemmed, to a very large extent, from six years of Labour Government, who imposed severely increased obligations on individuals within the National Insurance Fund.

I shall be much obliged if my right hon. Friend and the Under-Secretary of State will just remember what I am saying, because I am looking for a great deal more to be done in future for those living on small fixed incomes. This Bill is not the limit of what I expect my party to do. What I do know is that my party is likely to do for them a great deal more than the party opposite. After all, all those explanations which were made by the hon. Member for Rotherham existed at the time the Labour Party was in power governing the country and it did absolutely nothing, except add to the problems of people living on small fixed incomes. I always want more done for people living on small fixed incomes. I have argued that over many years.

Another point which the hon. Member made, and it is a very interesting one, was when he was talking about the impossibility—that is absolutely true—of anybody being able to exist on £3 without drawing supplementary benefit; but then, of course, we do not expect, neither does the Opposition expect, retirement pensioners are going to exist on £5, particularly having regard to the inflation increasing all the time when the party opposite was in power. Retirement pensioners who have only £5 retirement pension when they retire also of necessity have to obtain supplementary benefit. All that part of the hon. Member's argument just falls by the board.

What I am saying is that the hon. Member took a very interesting line bringing in a whole lot of things, which do deserve consideration—I am not arguing about that—but which he brought in in order to cover up what is really a very cynical approach by the other side, because they refused to accept my hon. Friend's Bill, and the good Bills which followed that, refused to do anything at all, and yet now, when we implement, within reason, the provisions in the Bills which we were very proud to introduce in the House, the Opposition come forward saying that the amount of pension ought to be not £3 but £5. [HON. MEMBERS: "Hear, hear."] Hon. Members say "Hear, hear" when they have no responsibility for paying it. I do not like politicians, whether in my own party or the party opposite, who take these cynical approaches politically.

We all have great admiration for the right hon. Member for Sowerby (Mr. Houghton). He and I have worked together on many ploys. [HON. MEMBERS: "Oh."] Hon. Members do not know the whole of my private life, neither do they know the whole of the private life and private beliefs of the hon. Member for Sowerby. One freedom at least remains to the people of this country. They can do in their private lives many things which they do not have to declare on the Floor of the House of Commons. The right hon. Member for Sowerby in his speech on Friday—and I regret that I was unable to be here to try to catch Mr. Speaker's eye—spent a great deal of time explaining the reasons why his Government could not support or introduce the previous Bill on which the present Bill is based. Now that we are introducing the Bill, how is it that he thinks it right to support an Amendment to increase the amount from £3 to £5 when he did not do so previously?

The position of right hon. and hon. Gentlemen opposite is not one which I can accept. As my hon. Friend the Member for Abingdon said, it is a very cynical approach, although I think the hon. Member for Rotherham did his best. I have often heard him speak and he is a very clever individual—and I mean that in the right sense. He is a clever debater and he knows how to try to cover up the objective of the Opposition in putting down the Amendment.

I should like to pay tribute to the Under-Secretary of State. I am delighted that he has been invited to undertake this great responsibility. I have worked with him in my private life over a long period and I know that he has deep humanity for the people whom we are trying to help today. I can think of no one more suited to introduce and sponsor the Bill.

I am glad that the Conservative Party has started straight away to do something to help people living on small fixed incomes, or perhaps I should say trying to live on small fixed incomes, especially having regard to the difficult financial position of the country.

I do not envy the reputation of the hon. Member for Rotherham however clever he may have been. Every single person who will benefit under the Bill knows how the Socialist Government failed to recognise his needs and refused to support the Bills put forward by the Conservatives when they were in Opposition. The hon. Member for Rotherham will not be able to pull the wool across the eyes of those senior citizens. That is why the Conservatives won the General Election. The Labour Party thought that they could pull the wool across the eyes of the British public but thank God they could not.

I am glad to welcome the Bill, even though I would have liked more. I have been asking for more all my life, and I have got more out of my Government and my party than I have out of the party opposite. That is why I am a good sound-based Conservative. I do not accept the explanation of the hon. Member for Rotherham. I look forward to hearing what my hon. Friend has to say about this, and I hope that he has made a little note that when the economy begins to thrive other things will be done to help those who are living at the very bottom because of the ever-increasing inflation which is causing them great hardship and anxiety.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

I will not attempt to answer all the points made by the hon. Member for Tynemouth (Dame Irene Ward).

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

The hon. Gentleman would have a difficult job.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

I hope that she will accept that all those on this side of the House who support the Amendment providing for a higher rate of benefit are not being entirely cynical. It is fair that we should examine the remit which the Government have given to themselves.

Involved in the Amendment is a breach of the contribution principle, which all hon. Members clearly recognise. In fixing the £3 level the Government recognised the repercussions which follow a breach of the contribution principle. We are breaching the princple, according to what the Conservative Party said during the election, for compelling humanitarian reasons. I am completely unencumbered, never having voted against this proposal in the last Parliament, and I favour giving benefits to the people mentioned in the Bill. But will the people benefit from £3 and £4 17s.? I refer the Government to what was said by the Secretary of State: Those people who are living entirely or mainly on supplementary benefit will get no gain from this legislation."—[OFFICIAL REPORT, 10th July, 1970; Vol. 803, c. 1011.] We are all aware of the mental inhibitions suffered by old people with a degree of pride if they have to apply for supplementary benefit. The Secretary of State in his speech on Second Reading took note of this, and said that this was one reason for giving older people a pension as of right. This being so, people who are already receiving supplementary benefit have been driven by such compelling need that they have had to swallow their pride to apply for it, but they will receive not one penny benefit from the Bill. If the Bill is introduced for humanitarian reasons, surely it is not cynical, for the same humanitarian reasons, to support an Amendment calling for £5, which will benefit those people whom the Secretary of State has said are specifically excluded from benefit. If the Amendment is voted upon, I hope that all Conservatives will vote for it, for the humanitarian reasons they talked about during the General Election. The additional amount involved, as I was told in reply to a recent question, is £5 million in the first full year, decreasing thereafter. Voting for the Amendment should not break the back of the national economy, or any principles of three-line or two-line Whips on the Government side.

4.30 p.m.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I should like first of all to congratulate the hon. Gentleman for Rotherham (Mr. O'Malley) on his ingenuity in getting this Amendment in order, although I was amazed when I saw it on the Order Paper in view of the past record of the Labour Party in voting against such Bills as this on every conceivable occasion, and also in view of their record only last Friday.

Last Friday the hon. Member for Rotherham said: We on this side of the House believe that if we are to use an extra £7 million there are many ways in which it could be used."—[OFFICIAL REPORT, 10th July, 1970; Vol. 803, c. 1082.] In other words, he was making the point, as did the right hon. Member for Sowerby (Mr. Houghton) and the right hon. Member for Coventry, East (Mr. Crossman), that if we have £7 million in the kitty we can all find a better way in which to spend it. But today they come to the House and suggest, not that we should spend £7 million, but should spend £7 million plus £5 million. The effect of their Amendment is to increase the cost by something like £5 million, in other words, nearly to double it. It comes ill from the Labour benches, who in the past have voted down this proposal, to say that we should not be spending £7 million, but £7 million plus £5 million.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

Before the Minister's indignation gets the better of him, may I be allowed to say that we had to put the Amendments in this way in order to get any debate at all on the amount. The Money Resolution specified the amounts in the Bill, which left us no room to put down Amendments on the Bill as it stood. Fortunately, this device of shifting the whole of the expenditure from the Exchequer to the National Insurance Fund has enabled us to put down Amendments which were in order and which have been called. As the hon. Gentleman knows, we cannot raise a charge on the Exchequer, but we can bankrupt the National Insurance Fund. That is the extraordinary procedural situation. We wanted a discussion on the amount and wished to be able to ask questions about it. We were advised that if we left the matter to the Question, That the Clause stand part of the Bill, it would be out of order for us to have any discussion on any amount other than that in the Clause. We stand quite innocent of any cynicism or ignoble motive. We just wanted a debate, we have got it, and we are very much obliged to the hon. Gentleman for replying to it.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I am obliged to the right hon. Member for Sowerby (Mr. Houghton), but I thought from the remarks of the hon. Member for Rotherham (Mr. O'Malley) when moving the Amendment that the Opposition were in favour of it and wanted to pay the full £5 pension. But, of course, I accept his explanation and fully understand that procedural devices are sometimes required to get a debate. If the intention is to get a debate, I am pleased to try to deal with it.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Would the Minister of State agree that some of us who have come new to the House are tired of the manner in which words are bandied about? If we are to accept the Prime Minister's statement that this new Government will be working on the basis of deeds rather than words. If they really want deeds, why do they not accept the Amendment and pay the full £5?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The hon. Member for Aberdeen, North (Mr. Robert Hughes) should sort the matter out with his right hon. Friend on the Front Bench who has said that the intention was just to have a debate. Perhaps I should be allowed to get on to deal with the arguments.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I wonder if my hon. Friend would like to test out the argument between the Opposition Front Bench and its back bench by saying that it would be easy to solve the matter by not dividing the House on the issue.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I thank my hon. Friend. It would be interesting to see whether they intend to do that when the debate comes to an end. [Interruption.] Apparently, the Labour Party do not intend to divide the Committee.

I wish now to come to the points which have been put as to why the Government have chosen this particular figure. I will deal with the points in the order in which the hon. Member for Rotherham raised them.

The hon. Gentleman first asked why the Government have selected £3. As my right hon. Friend made clear on Second Reading last Friday, this was a matter of getting what we felt was a fair balance between the demands of compassion for these very elderly people on the one hand and the feelings and situation of those who have contributed to the existing scheme on the other. It was the judgment of the Government that, in trying to balance those two factors, these figures were fairly reasonable. It was on that basis that the figures were decided upon.

The hon. Gentleman went on to say that this was not an equitable proposition that if we were to provide pensions as of right for these people there were other categories within the existing scheme which should also have been brought in. We are dealing here with people who in the majority of cases have no chance of contributing at all. I concede that there are some people within this group who could have contributed but who did not take the opportunity. In a perfect world we would try to distinguish between those two categories, but it is virtually impossible to distinguish between them because records are not available. We faced the practical choice either of making this distinction, which would have been a breach of an election pledge, or of bringing in all these people who were concerned and who were over pension age in 1948. That was the reason it was not possible to differentiate.

There is a third small category which was mentioned by the hon. Gentleman, namely those who are getting a part pension which is less than the £3 and whose pensions will be raised. That seems to be a sensible and practical reason. Therefore, it cannot be claimed that there is any inequity in this proposal. The majority of people in the existing scheme are younger, anyway, and therefore the needs which go with age cannot in the majority of cases be as acute as those who are older and who were not able to join. They had a chance to contribute and therefore in that sense opportunities were open to them which were not open in virtually any circumstances to the other people with whom we are dealing. Therefore, the charge of inequity does not stand up.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

The Minister says that a lot of these people are younger. In fact, many of them would be very elderly people, indeed, for example, people who withdrew their option after a brief period after 1948. They are people in their 80s.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I concede that there are some who are old, but the point is that they had a chance to contribute, though they may have withdrawn their option, in a way in which the particular people we are trying to help in this Clause did not.

The next point made by the hon. Gentleman was that it cannot be said that the people covered by the Clause are in need. We had a long debate on this matter on Friday. In our judgment, we feel that they are in need. I concede that those who are being fully supported by supplementary benefit will not gain by this measure. I fully concede that. They are the people who have already been prepared to accept the supplementary benefit which is available to them as of right if they fall within the terms of it. However, we are dealing with a generation who, possibly mistakenly, look on these matters differently from the existing generation. There are some who were not prepared to bring themselves to accept supplementary benefit as of right. That is the practical situation which we face.

The hon. Gentleman asked how many there are. We do not know, except from our personal experience. I am sure that every hon. Member knows at least one and probably more of these people. We may say that they are mistaken and that they ought to accept supplementary benefit. The fact is that they have not been prepared to do so. The only way in which they can be brought help is by this Measure. That is why we say that we are dealing with need—in some cases, with acute need.

I turn now to the calculation of the £3. I said that, in our view, it was a fair figure in the light of the factors which had to be balanced. I would also make it clear that it is not based on what has been called the uncovenanted or non-actuarial portion of the retirement pension. The £3 is not provided because it corresponds to any such notion. In this, we follow the previous Administration and the earlier Conservative Administrations.

National Insurance finance is based on the "Pay as You Go" principle, and it is wrong to suppose that any division of pension into covenanted and uncovenanted is justified. In a "Pay as You Go" scheme, one is transferring resources in the most equitable way possible from the existing working generation to the existing retired generation. In doing so, one is creating a right to benefit on the part of the working population.

Naturally, some of my hon. Friends are disappointed that it has not been possible to go further, but it is encouraging to know that they have accepted that this proposal is a fair balance in the light of all the circumstances. I am glad to hear, too, that hon. Members opposite do not intend to press the Amendment.

4.45 p.m.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

The Committee listened with interest to the remarks made by the hon. Member for Tynemouth (Dame Irene Ward), who unfortunately is not with us at the moment. The hon. Lady has a rather special place in the affections of the House. I had better not say "of hon. Members", especially after her remarks about private life. I feel that I must reply to some of her points.

The hon. Lady asked why it was that, when the Labour Party was in office, it opposed the Bills brought forward first by the hon. Member for Abingdon (Mr. Neave) and then by other hon. Members. There is no argument between the two sides about the need to help this group of elderly people, along with elderly people generally. The only argument that there has been—and it is continuing today—is about the best way to channel the resources which are available to help people of this age group and retirement pensioners generally. The previous Government chose another formula. They chose, for example, to put up the supplementary benefit rates very substantially in real value from those which were payable by the National Assistance Board in 1964. They chose to expend growing sums of money on rate rebates and on health and welfare services, all of which were mentioned in the Second Reading debate.

The hon. Lady complained bitterly that people on fixed incomes and younger people under retirement age had suffered as a result of increases in contributions imposed by the Labour Government when they were in office. However, the Committee knows, and the Parliamentary Secretary better than most, that, under the National Insurance system that we have—the "Pay as You Go" system which was brought about in 1959—there is no great inherited fund from which pensions can be paid. The only source out of which retirement pensions can be paid is made up of the contributions of working men and women in the community and contributions from the Exchequer. If the hon. Lady indicts us because we put up contributions, we have to admit our guilt. The reason was that there were more retirement pensioners who needed a State pension, and we improved substantially the real value of the retirement pensions being paid when we took over in 1964.

I turn now to the remarks of the Parliamentary Secretary. He began by saying that he was amazed that we had moved the Amendment. I say straight back to him that I am amazed that he is amazed. I thought that he knew what everyone else knows: on these benches, we are a democratic party. When the country gives a mandate to a Government to do something, we immediately recognise that. We are saying that this is the way chosen by right hon. and hon. Gentlemen opposite to help this group of old people. But we are entitled to say that, if the Government intend to do it their way, they ought to do it adequately.

The hon. Gentleman found himself in difficulty in giving reasons for the £3. It is difficult to argue whether it should be £3 or a higher or lower figure. He talked about the balancing of interests, but, with respect, he said nothing new and, obliquely, he conceded many of the arguments advanced from these benches today.

This is the formula decided by the present Government for helping this generation of non-pensioners. It is their formula, and we thought it right for them to justify that formula. On the basis of the amount that they have fixed, we do not consider that they have justified it.

Under this paving Amendment, we have had a debate on Amendments 1 and 2. We do not think that the Government have made their case. If they are to do it in the way that they propose in this Clause, they should do it properly. Nevertheless, it is a matter for them. The system that they propose throws up all kinds of inequalities among other groups in the community. But it is their formula, and it is one for which they have a mandate. I recommend to my hon. Friends that we do not press the Amendment to a division.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

There have been accusations of cynicism from the benches opposite because some of us opposed the Private Member's Bill. However, we cannot be compared with some who were in Government before 1964 and opposed it then, changed their minds subsequently and have now changed them again.

I want to remind the Parliamentary Secretary of a reply that he gave me when I was discussing an Amendment which he and his hon. Friends moved to the National Superannuation and Social Insurance Bill. It was an Amendment designed to cut sickness benefit, and I was extremely indignant about it. The hon. Gentleman said: I am sure that the hon. Gentleman is aware of the procedures of this House. In order to have a debate on a subject in Committee, an Amendment has to be tabled. I hope that at this stage, while the debate is still taking place, he will not read more into our Amendment than just that."—[OFFICIAL REPORT, Standing Committee F, 26th February, 1970, c. 396.] As my right hon. Friend the Member for Sowerby (Mr. Houghton) pointed out, we have had to adopt this procedure to get an Amendment on the Notice Paper. In the case of the present Bill, that has been extremely difficult.

The hon. Lady the Member for Tynemouth (Dame Irene Ward) said that this was a Measure which, like many others, would help those in the greatest need. It is nothing of the kind. However, I congratulate the Government on going over to the idea of universality—of having basic pensions without means testing—which is different from what hon. Gentlemen opposite were saying throughout their period in Opposition and during the election campaign.

If there is to be a universal pension—a pension paid not out of contributions but out of income tax—then I recommend to the Government that in their plans for the future they consider, particularly for the pensions Bill the year after next, the question of paying pensions by this means. It may come as a shock to hon. Gentlemen opposite to note this sum of £3 in the Bill because many Conservatives, including candidates, thought that the sum would be £5. Their repeated assertions that social security should be concentrated on those mainly in need appeared nowhere in the Conservative manifesto. I suggest that it was not included because it would have clashed with this Measure.

Contributions have for years been an integral part of this type of legislation, mainly because my hon. Friends and I, along with the T.U.C. and many others, have felt that a pension paid out of contributions was preferable to one paid out of taxation. If people who have paid contributions for perhaps a lifetime see that those who have not paid contributions nevertheless receive pensions, they may revise their ideas about from where the money to pay for pensions should come.

Amendment negatived.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I beg to move Amendment No. 3 in line 4, after "prescribed" insert "current".

In view of the discussion which took place on the last series of Amendments, it will be clear that this Amendment is a probing one. As I said earlier, a pension or grant payable by the Treasury is fixed at £3 in the Bill. We are told that the wives of such claimants will be entitled to £1 17s., but more vaguely the provision goes on: … and provision may be made by regulations for the payment of widow's benefit or a retirement pension at prescribed rates to a widow whose husband was over pensionable age on 5th July 1948 or to a woman whose marriage to a husband who was over pensionable age on that date was terminated otherwise than by his death. Why is no figure stated for the widow? Is it the intention, for example, in the circumstances which will obviously be defined by the regulations, that the widow will be entitled to a sum other than £3? In other words, may we be given some information about the regulations?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I am glad to respond to the questions of the hon. Gentleman because I know that the Committee would like to hear what the Government have in mind about the regulations and the provisions for widows. It may be helpful, therefore, if I gave an indication of the main provisions which we have in mind for these regulations.

First, a widow whose last husband was alive on 5th July, 1948, and was then over 65 and who died when she was over 50 will be eligible to a widow's pension of £3 a week until she is 65, and thereafter to a retirement pension at the same rate.

The second category is the woman whose husband is eligible for a pension under the new provisions. She will, on his death, be able to qualify for a widowed mother's allowance, a widow's pension or a retirement pension, as appropriate, at £3. In other words, she will be in broadly the same position and have the same rate of benefit.

The third category is the woman who is or has been divorced when she was over 60 to a man who was over 65 on 5th July, 1948. She will qualify for a pension of £3 a week. These are the three main categories in whom the hon. Gentleman is interested. We propose that they should qualify for pension at £3, so that the general effect of these proposals is that, apart from the rate of benefit, widows and divorcees shall be put in a position which would have obtained if their husbands had been insured.

Hon. Members may be interested in our proposals regarding the residence qualification. To be eligible, we propose that an existing widow or divorcee will have to satisfy the general residence condition; that is, of residence in the United Kingdom for at least 10 years since 1948 and ordinarily resident at the present time. In addition, the husband must have been ordinarily resident in the United Kingdom when he died or when the marriage ended. A woman widowed or divorced in future will qualify if her husband satisfies the residence test.

These are somewhat complicated matters. I hope that my remarks have given an indication of the main provisions we have in mind for the regulations under the Clause.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I am grateful to the hon. Gentleman for that explanation and I agree with his remarks about the residence qualification. It is right that Treasury payments of this kind should be confined to people who are ordinarily resident in this country; though the payment of a contributory pension does not entirely rely on this type of qualification.

I am grateful for the hon. Gentleman's remarks about the amount that will be payable to widows under the Clause. If the Government are accepting this formula, then it seems unsatisfactory that widows over 50 should receive a pension of £3 rather than the normal widow's pension. One would have thought that if the Government adopted this sort of formula, they would have thought it preferable to have paid pensions to widows and others under the Clause at the normal standard rate.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The same arguments apply here as applied in the earlier debate.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

In view of the explanations given by the Parliamentary Secretary, for which we are grateful, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question proposed, That the Clause stand part of the Bill.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

The Parliamentary Secretary made a reasonable debating point earlier when my hon. Friend the Member for Rotherham (Mr. O'Malley) talked about the figure of £7 million as against the sum of £12 million. It is fair, though it is not a debating point, to point out that this is an element of Government expenditure which is unlike most elements of most Government revenue expenditures. Most new revenue expenditure falls short in the first full year and grows thereafter, but in this case we have full expenditure in the first full year, and it falls thereafter. It would not, therefore, be fair to say that we want to double the amount. There is not a great deal of money involved here.

The Government's view seems to be that less than the full amount has to be given in order to maintain the equity between contributory and non-contributory pensioners, but perhaps in another place the rate could be made £4 with a pro rata sum for married couples. I am most concerned about the number on supplementary benefit who will not get one penny extra. Members of the Conservative Party will be regarded as people who practise grave deception on thousands of old people if they do not give them more than £3.

We all know of the enormous pressure there now is on the limited resources of people on supplementary benefit. It is they who are most under pressure now. I ask the hon. Gentleman the Under-Secretary to take note of the points I have made, which are not meant as debating points but as a serious request for a contribution towards meeting the needs of this section of people.

5.0 p.m.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

It has been said that people on supplementary benefit will not benefit by this Bill. When there is an increase in the cost of living, which has become a very usual feature of life recently, the amount of supplementary benefit can be raised because that expenditure is controlled by the Government. But a great many of the people who will benefit can be raised because that expen-who are just about at the supplementary benefit level, and comprise the most difficult section of the community to help.

They have to meet such additional expenses as increased rates, fuel, heating, electricity, gas, food, bus fares, and all the other items that have contributed to the rise in the cost of living. They may be living on small investment income, or on an occupational pension which was awarded very many years ago, when in many instances such pensions were not the size they now are. Those to whom I often refer as living on small fixed incomes are the hardest hit when it comes to coping with the increased cost of living. People on supplementary benefit today may not benefit by this £3 provision, but if the cost of living fails to be controlled and inflation continues, the Government can help them to meet that increase.

It is very important to make a distinction between those people, and the others on small fixed incomes. The Government can take action to help those on supplementary benefit, but the section on limited income are those who are worse off. They have the greatest anxiety in life, because their savings are eroded and they do not know how they will meet the future as life runs today. It is fair that they should benefit more by the Bill than do those on supplementary benefit.

[Sir R. RUSSELL in the Chair]

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I do not want to follow the hon. Lady the Member for Tynemouth (Dame Irene Ward) in her desperate last-minute effort to clothe this proposition with respectability. I will only say that she has not convinced me.

This is the first opportunity I have had of personally congratulating the Under-Secretary of State, the hon. Member for Somerset, North (Mr. Dean). It is not that I congratulate him to the exclusion of his colleagues, but just that he and I had a longer acquaintanceship in a Committee which had 20 sittings. While it is not our job to appreciate the hon. Gentleman's difficulties in Government, I hope that he will appreciate ours, in that we have not yet got used to being in Opposition.

I question very much whether the Government have a mandate from the people for this proposal. One of the main points made by hon. Members opposite when in Opposition was that the public did not understand our proposed pensions scheme. In the light of our election experience I concede that they were right. Our pensions scheme was not properly understood, although its principles were excellent. I doubt very much whether many hon. Members opposite know now what they are doing. I do not say that because they are now absent—I would not take advantage of their lack of interest in that way—but I am convinced that they do not know what they are doing.

We hear glib talk of the over-80s, but it is about the over-87s that we are really talking. The Under-Secretary says that the provision applies to widows and says that they will get the widowed mother's allowance. If anyone qualifies for widow's allowance because of the death of a man of 87 I hope that I may be told, because I should like to know the secret of that success. We all know that this is a subject in which all sorts of regulations have to be made so as to deal with individual cases. Here we are dealing with men of over 87. A man younger than that is not on, because he had the right to go into the scheme.

In the Second Reading debate, the Secretary of State stated quite lucidly: Those people who are just above supplementary benefit will get the full gain of the new pension. Later in that debate, the Under-Secretary dealing with the same point, said: Nor do we accept that we are giving these pensions regardless of means or need."—[OFFICIAL REPORT, 10th July, 1970; Vol. 803, c. 1011–89.] Do those words mean that provided a man of 87 satisfies the residential qualification he can just walk in and claim the £3 a week pension? Will any attempt be made to see whether or not he could have been drawing supplementary benefit? In other words, will there be any income test for anyone over 87?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The position is that this is a pension as of right for those who qualify because they were over retirement age at the date concerned; namely, July, 1948.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I am grateful for that clarification.

I have never taken part in any of these so-called "non-pensioner" debates. I have no knowledge of any constituent who has bothered me about it. Perhaps these people come from the more affluent parts of the country like Bournemouth, where there are some people whose only crime is that they have lived too long. But this is not a priority, by my terms of accountancy, in my constituency.

It seems odd that when obviously people must have considerable capital resources, thanks to the Labour Government—[HON. MEMBERS: "Oh!"] Maybe some hon. Members opposite do not know what we did. They might at least be fair and recognise that some of us who know a little about this—[Interruption.]—do not be so arrogant—know perfectly well that the previous Administration made bigger changes in terms of ignoring capital resources than did hon. Members opposite. They should not be so arrogant even though they might have done something in this Bill.

The Temporary Chairman:

Order. The hon. Member is getting a little wide of the Clause.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I thought you said, Sir Ronald, that I was getting a little wild. I do not think I am getting wide of the Clause, because this is relevant. The only point of substance in the Clause is that pensions are now to be given purely on the ground of age without any qualification other than residence in this country. I shall not oppose the Clause, not because it would be unpopular or might be misunderstood, but I think this is a very cheap way of fulfilling an election pledge. Some hon. Members opposite know perfectly well that this is not the section of the community who should have first call on any resources we may have to distribute.

Having had the clarification given that there will be no attempt to query anyone's income, the best thing we can do is to accept the proposal as gracefully as possible.

Photo of Sir Brandon Rhys Williams Sir Brandon Rhys Williams , Kensington South

Survivors from the 28 skirmishes will know how seriously concerned I am about the root of entitlement. Until we are clear on the precise definition of entitlement we shall not be able to make a serious advance in perfecting our Welfare State. I am still not perfectly clear whether the pension for the over-80s is to be given because of their citizenship or because of their special needs as a group of people who are particularly defenceless at the end of their lives. We certainly have got away from the contributory principle and that I take the opportunity of welcoming.

In this Bill we are making a start, but we certainly have not finished our deliberations on the question of entitlement. I am sure that we shall have many opportunities of working together to consider that problem much further. I strongly support what my hon. Friends have done in bringing the Bill before the House in this way and precisely in this form.

As the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) said, it seems that there is very much a question of priorities here. Although one's heart bleeds for those very old people, at all events if they are destitute, or almost destitute, they are able to apply for relief from the Supplementary Benefits Commission. The people most in need are those not eligible even for supplementary benefit because of being in regular work. Possibly the most difficult area is the children of people in regular work and not able to earn enough to keep their families above what we define as the poverty line.

Although one could sympathise with the hon. Member for South Ayrshire (Mr. Sillars) in his view that one should give more, we have to do a painful balancing act here, and I think the Clause should stand as it is.

5.15 p.m.

Photo of Mr James Dempsey Mr James Dempsey , Coatbridge and Airdrie

I apologise for missing the beginning of the debate. I must ask the Minister for some clarification. As my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) said, one has to be 65 if a man and 60 if a woman in the second part of 1948 to qualify for benefit. That is likely to restrict the operation of this benefit to the type of recipient which the Bill has in mind. Therefore, I am anxious to ascertain the reason for the departure from the Conservative Party's philosophical attitude to all these benefits, which was based on selectivity.

We have been told time and again that any benefits should go to those who are in need, and that that should be determined by an incomes test. Time after time we have asked: What about an incomes test for benefits which the farmers get? I am keenly anxious to learn how the Minister relates the provision in this Clause of a direct grant without any reference to the income of the individual concerned. In many respects it is dangerous to depart from the principle of contributory pensions. If one does so in other spheres it obviously creates many contradictions in our efforts to provide for those who are in need of reasonable security in days of economic adversity.

I hope that it is clearly understood that while an exception may be made in this case we still believe principally in the basis of contributions. If recipients do not contribute to any financial pool operated in the form of different benefits to different categories of recipient, such benefits are bound to fall on taxes, directly or indirectly.

I was concerned to hear the hon. Member for Kensington, South (Sir B. Rhys Williams) say that he was glad we had departed from contributory pensions in this sphere. I think that a dangerous tendency for any Government. I hope that the Minister will stand by the principle of contributory benefits. I have heard it argued time after time, both when I was in Opposition earlier and when I was on the Government side, that the Conservatives continually opposed granting aid to any section of society without any form of incomes test. A degree of selectivity as a yardstick was always their argument. They argued that we should be satisfied that those who required benefits did not have sufficient income to meet the ordinary needs of life. The same type of philosophical argument was heard about housing subsidies, but in this case there is a complete somersault and a departure from the attitude of giving benefits only to those whom Conservatives believe need them, only those selected because of the inadequacy of their income to maintain a normal standard of life.

I ask the Minister whether this departure from that principle of selectivity in this case is to be the general approach to the administration of many benefits to recipients in our society. Will he give some idea how many are likely to benefit from this provision? I should also like to know whether there is to be a diminishing effect in the administration of such a benefit and when he expects that benefits of this nature—direct grants to people who have not contributed—are likely to be terminated. If this principle is admitted and the precedent is created of giving benefit to those who have not contributed, why should they not be current benefits? If the principle is good enough, why should not the current standard operate? I look forward to the reply by the Minister.

Photo of Sir Brandon Rhys Williams Sir Brandon Rhys Williams , Kensington South

Perhaps I can comfort the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) if he is anxious about people who have made no contributions to the National Insurance Fund being given benefits. They have made no contributions to the fund, but that does not mean that they have made no contribution to society. If society feels that in the course of their lives these people have contributed to society, we have a debt, and it is right that we should repay it while we can.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

I have some questions about the operation of the publicity in connection with the scheme. I have been trying hard to find people who will benefit from the scheme. Last night I found one. She is the widow of a northern industrialist and a former Member of the House of Lords. So far, this is the only one I have come across.

There are three categories. Will it be necessary in all cases for these people to make application? The first group is obviously the over-87s who did not participate in the pre-1948 insurance scheme and who could not participate in the existing scheme. They will be over 87 if men and over 82 if women. Must the second group mentioned by the Secretary of State—those who had the opportunity to enter the 1948 scheme—be over 87 if men or over 82 if women to qualify for benefit under the Bill? The third group comprises those whose benefit at the moment is less than £3 because they have not had a high average number of contributions. Does this group also comprise only those who are 87 or over if men and 82 or over if women? When the pension is less than £3, will social security offices automatically bring it up to £3 without any application?

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

There are at present 400,000 people receiving benefit but less than full benefit because their contributions were deficient. In many cases their deficiency of contribution did not arise from any deliberate action. It arose through genuine misunderstanding or because the person concerned worked abroad for a period and then returned. I am at present dealing with a case concerning someone who left the country, who returned, and who was advised that he did not need to pay back contributions. He accepted the advice in good faith. The husband of the woman whose case I am dealing with died. Because she has received a lump sum insurance benefit, she is prepared to pay the back contributions now that she has been told that her widow's pension will be affected, but the Ministry refuses to accept the back payment because it is now six years after the event.

I agree that such details can be dealt with only in discussion with the Ministry on particular cases. If the contributory principle is no longer sacrosant, I urge that individual cases be dealt with much more sympathetically and much more flexibly. Where there is a bona fide reason for a deficiency of contributions, this should be taken into account and the full pension paid.

I agree that at this early stage in my parliamentary career the number of such cases who have approached me is small, but there are 400,000 people in this invidious position who are now being dealt with differently from the ordinary over-80s. Compassion for the elderly and those in need should not be fettered by age barriers. I hope that we can have a general assurance before we allow the Clause to stand part.

Photo of Mr Michael McGuire Mr Michael McGuire , Ince

One important thing which has emerged during the debate is that the contributory principle is not being breached seriously. The hon. Member for Kensington, South (Sir B. Rhys Williams) said that he was glad that it was being breached, but it is important for it to be emphasised that it is not being breached, because the only people who will receive this small pension are those who had no chance to contribute.

Photo of Mr Michael McGuire Mr Michael McGuire , Ince

The Minister agrees with me, but my colleagues seem to disagree. As I understand it, this pension will be payable to a man if he is at least 87 and a woman if she is at least 82. Such people had no choice about contributing to the scheme introduced by the 1948 Act; they could not contribute.

In explaining the tortuous logic about the £3, the Minister was imprisoned by the contributory principle; if they had thrown it overboard, the Government could have given the normal old-age pension of £5; but they were limited because they had to have regard to those who had contributed, albeit that their contributions were deficient. The Minister said in reply to an important question asked by my hon. Friend the Member for Manchester, Gorton (Mr. Marks) that the only people who have a deficient contribution record and who will benefit under the Bill are those who were drawing the deficiency allowance and who were a certain age. In other words, anybody who had the choice to contribute but did not will not have his pension made up.

Thus the Tories have rewarded in a very poor way the old people who have made a principle out of not rushing for benefits to receive which they have to make a claim on a means test basis—a principle which is much to be admired. Many of them could have got the full amount of supplementary benefit. What has stopped them has been their pride. They are now to receive £3. I am not one to over-gloss the importance of pride of to demean it. People who draw the supplementary benefit can get the £5 plus the nourishment allowance, and so on. These people are to be given £3—less than people who have not contributed and who can claim the full amount, people whom my party gave the oppor- tunity to have £800 in capital before suffering any diminution in benefit.

The saddest thing that happened to me and to those whom I represent was the defeat of the Labour Government, which had a policy to introduce a proper pension scheme which would benefit the people in years to come and which would have abolished the whole concept of supplementary benefits and the like. If the Tory Government continue to give benefits like this, I look forward with apprehension to the day when they introduce the Family Allowances Bill, because if this is a sign of the times we are in for a very rough time indeed.

5.30 p.m.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I am glad that no hon. Member has opposed the Clause. There has been a general welcome, with some criticisms, but no outright opposition, and I am glad of that. I am grateful to the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) for his kind remarks about me and his references to the battle which we had in the last Parliament. I was pleased that he made the great admission that the Bill which we were then discussing was complex and difficult to understand. I assure him that we shall do our utmost to avoid that weakness in the proposals which we shall in due course bring forward.

My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) is, and has been for a long time, the great battler in the House for the fixed-income groups, and I was glad to hear her say that she regarded this as a useful, albeit modest, Measure to assist that section of the community. I have no doubt that she will keep their problems, of which we are well aware, constantly before the House.

The hon. Member for South Ayrshire (Mr. Sillars) referred to those same problems, saying that he felt that the people most in need would receive no benefit. Perhaps he has forgotten that the rates of supplementary benefit are to be increased in November, to coincide with the introduction of this new pension, so that those fully on supplementary benefit will gain the increases which are to come into operation then.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

Will the hon. Gentleman admit that during the General Election—I certainly had it put to me—the Conservatives insisted that by November it would not be worth much anyway? He is now contradicting what his friends in the country said at the election.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

What was said, and what is still true, is that the increase due to operate in November is very necessary because of the rapid rise in the cost of living which has taken place, notably during recent months under the Labour Administration. We hope to be able to do something to moderate that.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

Mr. O'Malley rose

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I have many question to answer. Perhaps the hon. Gentleman will come in later if I do not deal with the point which he wishes to raise.

The hon. Member for Manchester, Gorton (Mr. Marks) asked about publicity and, in particular, wanted to know how many people we were likely to have no contact with at the moment. The answer is that anyone who is now receiving a benefit from our offices, be it supplementary benefit or insurance benefit, should be known to us. The arrangements for publicity will be primarily directed to the people who are receiving no benefit and in respect of whom we have no records.

Broadly speaking, any man now over 87 and any woman now over 82 may well be in the category likely to benefit, and I hope that any hon. Member who knows such people and knows that they are not in touch with us now will ensure that their names are fed in so that we may see whether they are entitled. This will immensely help us to achieve our target of speedy payment of benefit; namely, early in November at the same time as the new supplementary benefit increases are due to come into effect.

The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) asked how many people were concerned here. The answer is about 100,000. We do not know exactly, for the reason I have just given.

Several of my hon. Friends, as well as hon. Members opposite, asked what effect this Measure had on the contributory principle. It does not breach the contributory principle. I can only repeat what my right hon. Friend said on Second Reading, that this is a once-for-all operation to deal with the particular problem of these very old people who, we feel, are in need and who, in some cases, were not prepared to come forward to obtain supplementary benefit.

My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) asked whether the Government intended to deal with other needy groups. We certainly do. He mentioned the lower in-income families among whom there is family poverty. That is one of the obvious problems. This is merely the beginning, the first part of a three-leg Measure, and others will be unfolded, to try to bring the maximum assistance we can to those sections of our community who are in need and for whom, I am sure, both sides of the Committee wish to see more effective provision made.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

Will anyone below 87 be eligible to claim in either of the first two groups mentioned by the Secretary of State, and will it be people below 87 as well as those above who will receive the £3, whether they have reduced contributions or not?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

That will depend on the categories in which they are. If they are single people, or married couples of which either the husband or the wife is eligible through being the right age, they should be eligible. There are certain cases of widows to be covered. We propose to make provision, for example, in cases—there may be some—where the husband was not eligible on age grounds but the wife was, so that she will be covered for the dependant's rate. The answer, therefore, is that there will be some cases in respect of which the age laid down will not necessarily be a bar to those below it.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.