§ 2. Mr. Meacher
asked the Secretary of State for Social Services what estimate he has made of the income distributional effects in retirement which would be produced for his strategy for pensions proposals.
§ The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)
None, Sir, because of the many uncertain factors involved.
§ Mr. Meacher
Is the hon. Gentleman aware that his Government's pension proposals will still leave roughly three million people in poverty? Is he further aware that a quarter of the men and four-fifths of the women will still be unable, under the State reserve scheme, even after a full working-life contribution, to earn a pension above the State poverty line? Will he not therefore withdraw these proposals before he forces poverty on 6 per cent. of the population 20 years into the next century?
§ Mr. McCrindle
Would my hon. Friend not agree that under these proposals every person will eventually be entitled to two pension incomes as of right? Is that not likely to result in a considerable reduction in the number of people forced to go on to supplementary benefits?
§ Mr. O'Malley
Is the hon. Gentleman serious in suggesting that his Department has made no estimate of the effects of the pension proposals for the rest of this century and the beginning of the next? If he denies the figures quoted by my hon. Friend, will he say what is his Department's estimate of the number of people who will still be dependent on means-tested benefits by the end of the century?
§ Mr. Dean
I could not answer the question because there are so many uncertain factors involved—for example, how successful this Government will continue to be in improving the rate of pension through annual reviews and how rapidly occupational pension schemes will be extended. These are two of the factors of which no accurate calculation can be made at this point.
§ Mr. Eadie
Is the hon. Gentleman aware that all old-age pensioners' associations have expressed disappointment, and some of them anger, at the pension provision for them in the last Budget? Does he agree that when pensioners receive their increase in October its value will have been eroded? Will he consider giving the pension then the same purchasing power as the increased pension would have had when the announcement was made?
§ Mr. Dean
The pension will not have been eroded by the time it comes into 1001 operation in October. There will be a real improvement in its value, on the best estimate we can make of what will happen to prices. Above all, pensioners now have the assurance that their pensions will be increased each year and that they will not have to wait two or three years as in the past.
§ Mr. Bruce-Gardyne
Will my hon. Friend not attach undue weight to the crocodile tears shed by Labour Members about the decline in pension values when they have contributed so much to that decline by supporting inflationary wage settlements in sectors with which they are concerned?
§ Mr. Heffer
It is no argument to talk about what previous Governments have or have not done. [Interruption.] I can say that, because I was one of those who argued throughout the six years of the Labour Government that we were not doing enough to help the pensioners. The pensioners are not interested in these party arguments. Is it not clear to the Minister that what is being done is not enough to assist the pensioners? They feel very humiliated. They have to rely on bus passes and things like that instead of getting a decent pension to meet all their costs.
§ Mr. Ewing
Does not the hon. Gentleman accept that one of the things that disillusioned pensioners was the fact that so much was given to people with higher incomes, those above £5,000 a year, 1002 whereas a miserable pittance of 75p was given to the single pensioner? That has to keep pensioners going until the autumn of 1973. If the pension is not eroded by the autumn of this year, it certainly will be by the time of the next increase, and we have still not tackled the problem of how pensioners are to survive once we go into Europe, if we do.
§ Mr. Dean
There is a firm commitment by the Government that any increase in prices which may occur because of entry into Europe will be taken into account in the reviews of pensions. The hon. Gentleman is not comparing like with like. Tax reductions leave a little more of people's own money in their own pockets, whereas pension increases must be paid for by the contributions of the working population.