2.31 p.m.
Mrs. Margaret Thatcher (Finchley)
I should like to intervene for a few moments to make some comments on the Bill.
First, I congratulate my right hon. Friend the Member for Mitcham (Mr. R. Carr) on his choice of subject. Secondly, I congratulate him even more warmly on the way in which he introduced it. His [column 975]speech was a model for many Ministers when introducing big Bills from that Dispatch Box, and I hope that it will be very widely read.
I wish that the hon. Member for Bebington (Mr. Brooks) had deployed his analytical capabilities when we were discussing the Selective Employment Payments Bill, because if he had, it would never have passed into law, and he would have prevented many of his hon. Friends from voting for it. I think that the hon. Gentleman and many of his hon. Friends have struggled hard to adduce arguments against the Bill, and in the end they all fell back on the characteristic argument, “Please, we want something much more than this, and therefore we do not think that we will vote for it.” I always think than this, and therefore we do not think far better to take something small if it is within one's grasp, rather than hold back for something which one may never get.
As the hon. Member for Walthamstow, East (Mr. W. O. J. Robinson) said, in all the Pensions (Increase) Acts since the war there have been a considerable number of improvements, not only in rates, but in the way in which the increases have been given. We have not always given increases on the same basis. There have been successive improvements, and my point in raising this is that it would now be a logical and reasonable step to have a different arrangement for pension increases, and this new step which the Bill puts forward follows the previous Acts.
In 1947 and 1952 increases were given only to those with the smallest pensions, on acute hardship grounds. By 1956 the concept of relative hardship was recognised, and much greater increases were given right up the scale. In 1959 the upper limit on increases was further raised, and the increases did not depend entirely on hardship, but more on the right to retain the purchasing value of the pension, and possibly to get some small increase over that. In 1962 we had a new principle. There was a bonus for the over 70s. In 1965 we had what was described by the Government spokesman as a holding operation. Thus, until 1965 we had been embodying new principles all the time, and there is therefore nothing different about having a new principle for determining public service pensions. [column 976]
J. DiamondThe Chief Secretary introduced the 1965 Measure and said:
“This Bill, however, is essentially a holding Measure awaiting the outcome of the fundamental review of social security.” —[Official Report, 18th November, 1965; Vol. 720, cc. 1353–54.]
We have not had the outcome of the fundamental review of social security. Indeed, its chief architect has now left the Government, and very sad and sorry we are that Harold Wilsonthe Prime Minister thought fit to have the right hon. Member for Sowerby (Mr. Houghton) leave the Government, because I believe that he knew more about pensions and Inland Revenue matters together than anyone else in the Government, and as much as anyone else in the House.
It seems unlikely that we shall get very much if we wait for this fundamental review. Indeed, I do not think that it will ever produce very much by way of constructive help in this matter. For a start, I believe that it was meant more for National Insurance funds and matters of that kind than for basic occupational pension schemes in the public service, which is what we are talking about today.
A number of hon. Gentlemen opposite have thrown at my hon. Friends the fact that there was a certain reluctance to accept the principle of the Commission when they were in power, and have quoted the speeches of the then Financial Secretary, now my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), in support of their contention.
May I examine my right hon. Friend's two main arguments, which have also been advanced today. First, that if we have this system we will get a certain rigidity in the reviewing of public service pensions, the implication being that if that rigidity is not there, these pensioners will get their increases more quickly. Because of experience, I reject that argument altogether. Surely we can look to the experience of the last few years. There has not been a faster review without a Commission. Indeed, it has probably been slower. I know that Government spokesmen who reply from the Dispatch Box often have to use any argument that they can lay their hands on. I think that this was just such an argument and I give my hon. Friends the firm assurance that after the next election.[column 977]I shall not when I reply from the Dispatch Box use a similar argument.
The second argument which was used on the occasion to which I referred was that one must have regard to those taxpayers who are living on modest incomes when considering increases in public service pensions. On any matter of public expenditure one always has to have regard to taxpayers living on the smallest incomes, but such a defence would come ill from the present Government because their policy is to put up public expenditure and it will be very sad and sorry if, during a period when they have planned increases in public expenditure, some of the public service pensioners cannot get some of this increase. If they cannot get some, then they never will.
I do not accept the two favourite arguments which are likely to be put up against the Bill. I accept them the less so because, as Niall Macdermotthe Financial Secretary knows, during the last Budget he and his Government refused to increase the age relief which would have reduced the taxes on many of these people whom we are trying to help today.
There would be some analogy with National Insurance if the Financial Secretary and hon. Gentlemen opposite were to feel able to give the Bill a Second Reading today. After all, National Insurance pensions have an advisory committee, the National Insurance Advisory Committee to which points are often referred. It often has referred to it special anomalies or points of principle. The Committee reports to the Minister and he, as in this Bill, can either accept or reject its recommendation. The power of decision must remain with the Government, and the Bill recognises this. This does not prevent the National Insurance Advisory Committee from making some very valuable contributions, and I believe that there is a more careful and objective study of the anomalies of the system because of the existence of this Committee than there would be without it.
There is also an Industrial Insurance Advisory Committee and a War Pensions Advisory Committee from which recommendations are translated in the form of Royal Warrants. There is nothing [column 978]new about having some independent body of distinguished and impartial people such as the Bill recommends.
I hope that the Financial Secretary will advise some of his hon. Friends to allow the Bill to go to Second Reading. He will counter my argument by saying that the National Insurance Advisory Committee cannot study rates of pension. I accept that, but I share the views of a number of my hon. Friends that one of the things the Commission should most earnestly consider is the many anomalies which give rise to so much grievance throughout the public service pension sector. If it made a systematic study of that problem, it would do a very great service, particularly if it studied the conditions and pensions under which the widow must live. That would be a service not only for the widows but for the men who serve, because I believe that every man should be able to make, and be sure that he can make, proper provision for his widow.
We are concerned mainly with the older pensioners, those who are already retired, who are hit badly in two ways, first because their pensions are very small, and secondly, because the value of their savings has dwindled tremendously. They often saved in gilt-edged, sometimes War Loan and sometimes 2½ per cent. Consols. They were often very frugal, and sometimes saved a far higher proportion of their income than people today who have very much higher wages.
I echo some of the points made by my hon. Friends about parity. The proposals of the Conservative Party in our manifesto at the last General Election, which we now repeat, were very modest; that is in keeping with our whole attitude towards election promises. The proposal in the Bill was one of them. Hon. Members opposite had election proposals which conveyed the impression that they had accepted the principle of parity. People said at my election meetings, “The Labour Party has accepted that principle. Will you now accept it on behalf of the Conservative Party?” I had to say, “No.”
Because that impression was conveyed, public service pensioners' hopes were raised very considerably. I think that they were raised falsely, and one of the worst things that can be done is to raise [column 979]hopes falsely, particularly at election time. But they were raised, and I believe that those pensioners are now entitled to expect something from the Government. We know that what they want at the moment is the Commission which the Bill would provide. Many of them will have very heavy hearts tonight if the Bill is not given a Second Reading.
My final point to hon. Members who appear to be thinking of voting against the Second Reading is that we ourselves have done very well by referring our pay and similar matters to an independent Commission. We did very well out of the taxpayers' purse. It ill becomes us to refuse this small Measure which could give hope to so many.