This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today, including one with the Spanish Foreign Minister and another with M. Thorn, President of the European Commission. This evening I am giving a reception for the Commonwealth Parliamentary Association.
The Prime Minister claimed yesterday that the Budget showed her Government facing their problems with honesty and fairness. Is she so brazen as to tell the House now that that is how she sees the Budget's meanness to old-age pensioners and its neglect of the unemployed and the industrial wastelands of the north?
The Budget has the honesty to cover the vast majority of expenditure by taxation so that we do not have to borrow too much and thus put up interest rates. That will be of great help to the construction industry and all manufacturers who wish to hold stocks.
My right hon. and learned Friend the Chief Secretary dealt with the hon. Gentleman's point on pensions yesterday, giving quotations from the Labour Government to the effect that the historic method is the fairest method that there is. We do not know what the historic or actual increase in RPI will be on 17 June—[Interruption.] We do not know what the historic increase in the RPI will be when it is published on 17 June. That is the latest figure that we can take. Whatever it is, that will be given to the pensioners and in the following year likewise. So they will get an actual increase. [HON. MEMBERS: "Oh."] We shall do away for all time with the undershoot, overshoot, clawback vocabulary that has grown up. Perhaps the hon. Gentleman will remember and acknowledge that one of the Government's first actions was to make good the undershoot to pensioners caused by his Government.
As some doubt has been expressed recently about the Government's commitment to the Gleneagles agreement, will my right hon. Friend confirm that she supported it at the Heads of Commonwealth Governments' meeting and that there has been no change in policy since then? Does she agree that it would be wrong if British international teams or international sporting events were to suffer because some individuals were persuaded to take part in sporting events in South Africa?
The Gleneagles agreement was reaffirmed at Lusaka and Melbourne and we are therefore committed to it. One of the objects is to try to ensure that sports all over the world are multi-racial. We hope that that will eventually come about.
Does the Prime Minister agree that the value of the old-age pension is expected to fall by 2 per cent. between November 1982 and 1983? As that is the fact does she not think that the whole effort of her Government to try to disguise the nature of the clawback is a pathetic failure?
The Prime Ministr:
No, certainly not. My right hon. and learned Friend gave some quotations on the historic, or actual, method being very much better. I do not know what the level of inflation for May, to be published on 17 June, will be. I do not know what the level of inflation in November will be. Every time a Government have tried to predict that they have tended to get it wrong and therefore we have undershoot and overshoot. It is far better to give the increase in actual terms. I cannot say what the inflation rate will be in November 1983 and neither can the right hon. Gentleman, but I hope that it will be low.
Is the right hon. Lady not aware that the Chancellor is assuming that it will be 4 per cent.? Therefore, she is engaged in cheating the pensioners—[HON. MEMBERS: "Withdraw."] As the right hon. Lady seeks to take shelter by referring to the Labour Government's actions, will she now confirm that the value of the pension under the Labour Government was increased by 20 per cent., whereas under her Government, by any reckoning, it will be 3 per cent. or even less?
On 22 December 1981 the hon. Member for Birmingham, Perry Bar (Mr. Rooker) said that the historic basis
is very sensible considering the trouble that the Government have had over the past few years."—[Official Report, Standing Committee B, 22 December 1981; c. 186.]
The hon. Gentleman was referring to the fact that in the past seven years the forecast had been accurate only twice. Therefore, it is better to work on an actual amount rather than a forecast amount.
I believe that the total increase in pensions under the Labour Government was broadly what the right hon. Gentleman said, but will he admit that it would be a great deal fairer, when he tells the National Pensioners Convention that he agrees with its demand for greater pensions and when he gives the impression that those pensions will be given, to give the figures for the increase in national insurance contributions that would be required if pensioners' demands were to be met in full? To be fair, one must consider the burden on the working population. If pensioners' demands were to be accepted it would mean an increase in the weekly national insurance contributions of £20 a week for the man with average earnings.
I am not at all surprised that the right hon. Lady wishes to escape from her shabby treatment of the pensioners by trying to accuse other people. Will she now confirm that under the Labour Government there was never any cut in the uprating? She cut it in 1981 and, under these proposals, will do the same in 1983.