PRIME MINISTER
Child Benefit and Retirement Pension
Q1. Mr. Peter Bottomley
asked the Prime Minister what has been the decrease and increase in the real values of child benefit and the State retirement pension since May 1979.
The Prime Minister (Mrs. Margaret Thatcher)
The real value of these benefits at the uprating later this month [column 422]will not be known until later in December when the retail price index figures up to November will be published. But if we assume, for illustrative purposes, that inflation to November is further reduced to 6.5 per cent. then the real value of child benefit at the uprating will have decreased by about 4 per cent. since April 1979, and the State retirement pensions will have increased by about 4.5 per cent. since November 1978 in real terms.
Mr. Bottomley
I should like to pass on the thanks of pensioners for the increased reduction in the rate of inflation, which is of great advantage to them. Does my right hon. Friend agree that between now and the Budget it will be well worth the Government considering possible adjustment to the real value of the pension? Is she aware that the reduction in the retail price index includes the drop in mortgage interest, which does not affect pensioners, who also find their income from building societies reduced? Does my right hon. Friend agree that an increase in child benefit plays an important part in achieving lower pay settlements, which will determine the rate of inflation in the future?
The Prime Minister
A reduction in inflation is good news for us all, as my hon. Friend recognises. There are perhaps some misunderstandings about the pensioners' price index. If the pensioners' price index had been used as the basis for uprating pensions since the Government took office, the current pension would now be between 3 and 4 per cent. less than the actual rate. Food price increases have been very much less under his Government than under the previous Government.
There is no evidence that wage demands would be reduced if there were a substantial increase in child benefit. A substantial number of wage earners are not eligible for child benefit. I shall, however, bear in mind what my hon. Friend says.
Mr. Foot
Is the right hon. Lady aware that her reply shows that great injury has been done to child benefit by this Government? There cannot be any dispute about that. Can the right hon. Lady explain why she thinks the pension is too high? [Interruption.] How can she justify cutting it next year? Will she say how much money the Treasury intends to recoup by cutting the pension next year? How much extra will the pensioners have to contribute?
The Prime Minister
No one is cutting the pension. If, in the last Budget, we had not over-estimated inflation, the pension for a married couple would have gone up this month to £51.60. In fact, it is going up to £52.55, nearly £1 a week more. That means that this year pensioners will have a bonus of over £50. Next November the pensioners will keep this extra £1 a week, plus whatever further increase is necessary to maintain the value of their pension over the lifetime of the Parliament, as we promised. How the right hon. Gentleman can refer to a bonus of £50 extra this year as a cut is a mystery.
Mr. Foot
The right hon. Lady has not even attempted to answer my question, because if she did she would expose the falsity of her argument. How much money does the Treasury hope to recoup from the clawback? It will be money taken from the pensioners. Will the right hon. Lady recognise that the Government's proposals are an outrage? Will she undertake to put this matter at the top of the Cabinet's agenda on Thursday and to allow the pensioners to gain some advantage from the fall in inflation?
[column 423]The Prime Minister
I shall repeat my remarks, because the right hon. Gentleman clearly did not hear. This year—[Interruption.] I shall answer the question my own way, with figures that will doubtless be unwelcome to Opposition Members. This year pensioners will receive a bonus of £1 a week—which is nearly £52 for the whole year—over and above the amount that would have been necessary to protect the pension from price increases. They will keep that amount next year. It will not be clawed back. They will keep that amount next year and there will be an extra sum added to it for further increases in prices, which, over the period of a Parliament, will protect the pension from prices. That is an advance and a bonus of £50 for this year which would not have taken place if we had stuck to strict price increases.
Mr. Foot
The simple question is: how much will the Treasury get from the pensioners as a result of the clawback?
The Prime Minister
For the whole year, a married couple this year——
Hon. Members
Answer the question.
Mr. Speaker
Order. The Prime Minister must be allowed to answer the question.
The Prime Minister
For the whole year, this year, a pensioner married couple will be £1 a week better off as a result of the uprating than they would have been if the uprating had gone hand in hand with price increases. That is a bonus. A bonus does not give the Government money, but puts more money into the pensioner's pocket. That money is paid for not by Government, but by the working population of our country, who have had their national insurance contributions put up to pay for it.
Mr. McCrindle
To put it more simply—[Interruption]—does my hon. Friend agree that if the clawback next year—[Hon. Members: “Ah!” ]—is less than the overshoot this year, that is another way of saying that there has been an increase in the standard of living for pensioners and other beneficiaries?
The Prime Minister
I note that my hon. Friend prefaced his remarks with “To put it more simply” . I must say that I did not find that promise maintained in his question. There is nothing that I can usefully add. It is remarkable that when many people have not received wage increases of anything more than 4 per cent. or 5 per cent.—and some have received less—the great working population of Britain is providing an 11 per cent. increase in pensions and other benefits. We should thank them and congratulate them on that.
Engagements
Q2. Mr. Joseph Dean
asked the Prime Minister if she will list her official engagements for Tuesday 9 November.
The Prime Minister
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
Mr. Dean
Will the Prime Minister reflect today on the statement made yesterday in the House by the Chancellor of the Exchequer and explain why the three most [column 424]disadvantaged groups in our society—the old-age pensioners, the sick and disabled, and the unemployed—are apparently being called upon to make the most substantial financial contributions or sacrifices to pay for the Falkland Islands exercise?
The Prime Minister
An increase in those benefits of 11 per cent. at a time when many of the working population are obtaining much less means that those groups in our society are receiving preferential treatment, paid for by the working people. I note that the hon. Gentleman wants to put his hand deeper into the pockets of the working population.
Mr. Roy Jenkins
On what basis of economic logic or whatever does the Prime Minister disclaim responsibility for unemployment and take full credit for the decline in inflation?
The Prime Minister
The decline in inflation can in large measure be governed by what Governments do about the money supply and by what they pay to their employees. The level of unemployment largely depends on the type of goods that are produced by our factories and whether they are of a design and price that will ensure that they are bought by the working population. I am amazed that the right hon. Gentleman should even ask that question.
Sir Charles Fletcher-Cooke
Is my right hon. Friend aware that in only a few weeks' time the law of the sea treaty is due to be signed in Jamaica and that we still do not know whether the Government will sign it on behalf of the United Kingdom? Will my right hon. Friend ensure that one of her colleagues makes an early statement on this important subject, because divided views are held and there will be serious results whichever way the decision goes?
The Prime Minister
I am well aware of some of the clauses in that treaty. There is no doubt that the clauses on mining the sea bed would be very disadvantageous to this country, although there are other clauses, such as those concerning freedom of navigation, that would help us. We must consider carefully the balance of advantage before deciding whether to sign the treaty. At the last meeting, we did not vote for it.
Mrs. Renée Short
Is the Prime Minister aware that the Minister for Health recently told me that he intended to see a report about the proposed closure of the breast cancer screening clinic at the Royal Marsden hospital? Will she make it her business to see the report and give an undertaking to ensure that the comparatively small amount of money—about £100,000 per annum—that is needed to keep the clinic going will be provided, so that many women can be cured of breast cancer and so that even more can be relieved of anxiety?
The Prime Minister
I am not privy to the conversations between my hon. and learned Friend Kenneth Clarkethe Minister for Health and the hon. Member for Wolverhampton, North-East (Mrs. Short). I know of the problem of that hospital and it is under consideration at the Department of Health and Social Security.
Q3. Dr. Mawhinney
asked the Prime Minister if she will list her official engagements for 9 November.
The Prime Minister
I refer my hon. Friend to the reply I gave some moments ago.
[column 425]Dr. Mawhinney
Has my right hon. Friend seen the report in today's edition of The Times, saying that members of the National and Local Government Officers Association are threatening mass resignations against the union's hard-line unilateral nuclear disarmament policy? Does that not once again confirm that the British people want their Government to work vigorously for world peace, but on the basis of multilateral disarmament?
The Prime Minister
I wholly agree with my hon. Friend. One-sided disarmament by this country would be an extremely dangerous step. It would imperil peace and jeopardise the freedom and justice that are essential to our way of life. This Government will never enter into one-sided disarmament. They require disarmament to be multilateral, as that is the only way of gaining peace and security.
Mr. Stoddart
In the light of the American vote in the United Nations on the Falkland Islands, and of the CIA's gun-running activities with the IRA, does the right hon. Lady really consider the United States of America to be so reliable an ally that we should have cruise missiles in Britain from the end of 1983? Will she now cancel the programme?
The Prime Minister
I understand that there is no truth in the assertions about the CIA and the gun-running activities. With regard to the United States' vote on the United Nations resolution, I have made clear my views and [column 426]disappointment at the action that they took, but it would be a mistake to fail to recognise that the United States is the final guarantor of peace and freedom and justice on our Continent of Europe. That peace and freedom and justice are safeguarded by the NATO alliance as a whole.
Later——
Mr. Allen McKay
On a point of order, Mr. Speaker. I listened carefully to the Prime Minister's reply to the question of my right hon. Friend the Member for Ebbw Vale (Mr. Foot) about pensioners. Is it right that the Prime Minister should——
Mr. Speaker
Order. The hon. Gentleman knows that he must not involve me in arguments between the two sides of the House on matters of policy.