Pensions (Index-linking)

Oral Answers to Questions — Social Services – in the House of Commons at 12:00 am on 13th November 1979.

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Photo of Dennis Canavan Dennis Canavan , Stirlingshire West 12:00 am, 13th November 1979

asked the Secretary of State for Social Services what representations he has received about the Government's decision to end the statutory requirement to increase pensions according to the average increase in wages or prices, whichever is the higher; and if he will make a statement.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

Representations have been received from pensioners' organisations, the TUC and members of the public. In reply, we have made it clear that we can no longer accept the present statutory provisions which, over a period, would result in pensions increasing by more than prices and earnings, regardless of the country's ability to provide the necessary resources. We shall shortly introduce a Bill to provide that pensions, like other benefits, shall be increased at least in line with the movement of prices. But this will be a minimum requirement. We are determined that, once the economy has improved, pensioners will share in that improvement.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West

Is the right hon. Gentleman aware that some 159 Members, both Labour and Tory, have signed early-day motion No. 89, demanding that the Government reconsider the matter? Will not the Minister scrap this mean proposal? Otherwise not only will he face opposition from us, he may face a revolt from some of his Back Benchers who do not share his desire to launch a vicious Right-wing attack on the living standards of pensioners.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

There has been no vicious Right-wing attack on the living standards of pensioners. Pensions increase this week by almost 20 pence in the pound. That is a rise which is more than the statutory requirement. However, we regard the rise as a minimum requirement on which we can build, as circumstances allow. If Opposition Members want to help pensioners they should persuade some of their trade union friends to modify the wage demands that are now in progress.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West

The right hon. Gentleman is a traitor.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

If those demands are acceded to, they will have a devastating effect on the living standards of pensioners during the coming winter.

Photo of Dr Brian Mawhinney Dr Brian Mawhinney , Peterborough

Will my right hon. Friend give some thought to the early-day motion which encourages him to consider raising pensions every six months rather than annually? That would not greatly increase public expenditure but it would be of great advantage to pensioners, particularly in times of inflation.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

We would all wish to do that. However, my hon. Friend is mistaken when he says that it would not greatly increase public expenditure—it would. The greatest service that we can perform for pensioners now and in the future is to hold inflation in check. That means pensioners, wage earners and others facing the necessity of receiving increases at intervals of not less than 12 months.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

Is the right hon. Gentleman aware that by attacking the workers and the pensioners he is doing a disservice to the House? Is it not a fact that the increase that was given to pensioners by the previous Government between 1974 and 1979 meant an increase in real terms of over £5 a week for a married couple? That is to be removed by this Government.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

No, Sir, it is not, because that would be to assume that the increase would have been only in cost of living terms. If the right hon. Gentleman will look at the earlier years of Conservative Government, between 1970 and 1974, he will find that increases kept pace with earnings, without any statutory requirement. Surely it is constitutionally correct that the Government of the day and Parliament should be able to decide this matter year by year in the light of the economic position and in the light of other priorities.