§ 3.52 p.m.
§ Debate resumed.
§ LORD WADE
My Lords, we might now return to the main debate. I should like to thank the noble Baroness, Lady Phillips, for having introduced this very important debate on the effects of inflation on the living standard of the elderly. Whatever views one may hold as to the reasons why inflation is so rampant to-day. I think that no one will deny that among the hardest hit are some of the elderly members of society. The noble Lord, Lord Aberdare, referred to the speech of Sir Keith Joseph on February 4 this year when he spoke of the silent nightmare. If it be true, and I think it is, that many elderly people find this rising cost of living a nightmare, then the sooner the causes of that nightmare are removed the better. There are certainly many elderly people who are very worried about this ever-rising cost of living. Almost everything they buy goes up in price: bread, margarine, eggs, in fact the cost of food generally; electricity, gas, paraffin, oil; and one could go on. Even those who manage the daily and weekly purchases often find it very difficult to save sufficient towards replacement—and I am thinking of clothes, new shoes and so on. These can involve very real hardships. Even elderly people need some replacements.
As to heating, it is fortunate that we had a comparatively mild winter, but it is rather pathetic that so much should depend on whether we have a mild or a cold winter. Yet, having said that, the problem is not only one of providing the wherewithal to pay for heating, clothing and food, it is not only a question of making financial ends meet; there are other aspects, such as loneliness and the need for advice. I have not the most up-to-date statistics, but certainly a year or two ago I noted that there were approximately 2 million people over the age of 65 living in private households 931 alone, with no relatives living with them or nearby. That provides some evidence of the degree of loneliness.
Some newcomers to this country have expressed surprise at the way we appear to discard our old people. Whether that be a fair criticism or not, it does emphasise the need for an expanded social service, with trained case-workers. In the future there will be a growing need for more social services of all kinds for the elderly. I think that it will involve the co-operation of the State, the local authorities and voluntary bodies; but again it will require more personnel. Whether one believes the growing need is for more cash or more qualified social workers—and I think the answer is both—one must acknowledge that it all costs money and that the burden will fall directly or indirectly on the working population. The question is: how are this better standard of living and these better services to be financed? I do not think that one can very well separate the needs from the financing of the measures necessary to meet those needs.
I hope that I am not unduly widening the scope of this debate if I spend a little time on the second aspect of the matter, because I think it has to be faced. Furthermore one must take into account the increasing number who are living beyond the present age of retirement. There is an increase in the actual numbers of those retired and in their percentage of the total population. Since the beginning of the century the percentage of those over 65 has more than doubled. Sooner or later we shall have to reconsider the age of retirement; but I do not think it would be appropriate to suggest this at the present time, when we have a very substantial number of unemployed and, let us face it, a number under the age of retirement who do not find it all that easy to obtain employment. If one becomes redundant over the age of 45, it can sometimes be extremely difficult to get another job. But, sooner or later, I think the whole subject of the age of retirement will have to be reviewed.
Meanwhile the Government, we understand, are engaged in this review of the social services, and I should like to offer a few comments. So far as the subject of retirement is concerned, one must look at it from both the short-term and the 932 long-term points of view. In the short term, I believe that there is a strong case for an immediate increase in pensions. I think it would be fitting that this should be announced at the time of the Budget Statement. I am not expecting the noble Lord, Lord Aberdare, when he comes to reply, to anticipate the Budget Statement—I should find it very intriguing if he were to do so—but I hope that he will go a little further towards indicating the mind of the Government on this particular point, in view of the urgency mentioned in the Motion of the noble Baroness. There is a very strong case for the increases to come into effect this summer rather than as late as November. It may be said that this will have a reflationary effect; but there is some case to-day for some reflation.
With regard to the more fundamental and long-term changes which are under consideration, may I first say that the noble Lord, Lord Aberdare, referred to selectivity, but he did so in very modest terms; therefore my fears may be allayed. But I hope that, in their review, the Government will not be carried away by the superficially attractive theory that the State should limit the use of financial resources to helping those who can prove their need. That sounds very plausible, but, if applied to retirement pensions and taken to its logical conclusion, it means a vast extension of the means test. I should not regard that as social progress.
The noble Baroness, Lady Phillips, may agree with me about that perhaps, but with my second comment she may not agree. It is that I have never had much faith in what, for the sake of brevity, I will call the "Crossman concept"; namely, an ever-widening, expanding sphere of State influence and finance in the realm of superannuation. I think it is liable to break down for two reasons: first, because of the erosion by inflation, evidence of which we have seen already; and secondly, because there is a limit to the amount which can be extracted from industry and from the working population—by which I mean all those who are earning—by taxation and compulsory contributions. I think the objections are psychological rather than ideological.
I understand the argument. It is pointed out that some get better superannuation payments from a good occupational scheme; others, unfortunately, are 933 not in such a scheme and are much less well-off on retirement. I appreciate that argument, but I think it is becoming a bit out of date. There is really a silent revolution going on. It is true, I believe, that there are as many as 4 million still not in occupational schemes, but I think that figure could be greatly reduced. Occupational pension schemes are spreading rapidly among employees of all kinds. There, I think, lies the best hope for the future; especially if groups of insurance companies are continually competing to provide better and more attractive schemes. That element of competition is essential. I look forward to the day when we shall have a two-tier system. First, we shall have our basic pension related to the average national earnings. On top of that we shall have the benefit of an occupational superannuation scheme, and, of course, various forms of private saving.
In that event I think there will be less, rather than more, reliance placed on supplementary benefits. At any rate, my Lords, that is the kind of future I hope for, and the Government's main task, as I see it, is to provide a holding operation until that comes to pass. Of course there will always be a minority which does not fit in, which cannot be provided for by, say, an occupational pension scheme. It is the responsibility of the State to fill the gap. Some years ago a Liberal committee dealt with precisely that point. I do not wish to take up time, and I will merely say that it should not be beyond the wit of man to find ways and means of filling the gap. In this way most people in retirement could enjoy a standard of living not far removed from that to which they have been accustomed when working.
Of course, one cannot go to an old-age pensioner and say, "We have worked out an excellent scheme which, over a period of time, will deal with this problem", because one would, or one ought to, get the answer, "But long before that I shall be dead." Therefore, the immediate task is to cushion those who are retired against the worst effects of the present-day inflation. The last point I wish to make is that in dealing with this task and in assessing the amount of any increases, I hope that account will be taken not only of the rise in the cost of living which has already taken place but also the rise which is bound 934 to occur during the latter part of this year. If no account is taken of that, and if, alas!, we have a cold winter, as we may very well have, I can foresee another debate at the same time next year in which speakers will be lamenting the hardship suffered by the elderly in the winter that will have just passed.
§ 4.5 p.m.
THE LORD BISHOP OF GUILDFORD
My Lords, you will be aware that the concern, knowledge and loving of the elderly is part of the daily duty of the clergy of all denominations in England, and for that reason alone we—I speak for the occupants of these Benches—are grateful to the noble Baroness, Lady Phillips, for raising something which is part of our daily job. We gladly welcome the information we have been given by the noble Lord, Lord Aberdare, even if we are anxious to know whether the word "urgent" may become "very urgent". As we all know, rising costs bear differently on older people than on younger people. Older people may not consume quite so much food, but they need more heating in their homes, as we have been hearing. Fuel and heating costs are high, and some old people, as I very well know from personal experience, spend as much as £2 a week on this item alone. As the noble Baroness, Lady Phillips, has said, and as many clergymen could say, the number of old people you may find in bed at 12 noon so as to keep warm is extremely high. It is difficult to see how an old-age pensioner can spend £2 a week on heating alone out of the present pension.
Then, my Lords, turning to a point which has not yet been mentioned, it seems to me much cheaper to enable old people to stay in their own home by paying higher pensions than to take them into care. The cost to a local authority of taking one old person into care is about £13 a week. To keep one such person in a geriatric ward of a hospital costs just over £24 a week. While in some cases it is necessary to make these provisions, the need for them would be greatly decreased if there were a substantial rise in the old-age pension. I know that it is impossible to secure accurate figures on this aspect of the subject, but it would appear that there is a case for saying that a substantial increase in the 935 pension would be an economy as well as being good for the people concerned.
I need not dwell on the subject of inflation. I noticed in the Wilberforce Report the sentence:During the past 12 months the rate of increase of retail prices in the United Kingdom has been faster than at any time since 1951.Such a statement indicates the situation, and we have noted that price increases bear most hardly on old-age pensioners. We also heard the noble Baroness say, and I entirely agree, that old-age pensioners have little organised political power by means of which their needs can be brought forcefully to public attention; and only statutory authorities can watch their interests, hence the need for early Government initiative.
Then we come to supplementary benefits. They are useful as a reserve source of help, but no substitute for higher pensions. I need hardly make this suggestion (it will be well known to those of your Lordships who deal with old people) that old people need to be more regularly informed about supplementary benefits. Hitherto, the Church has helped by circulating information to clergymen who may meet old people in need. I know so well—having four aunts who are over eighty-five and one, a "girl" of ninety-three—just how difficult it is to help old people. Your Lordships will probably have heard of the clergyman of ninety-three (may I say to the noble Lord, Lord Soper, in absentia, that he was a Church of England clergyman) who was still working, and in the same job in which he had been for sixty-three years. He had outlived four Bishops. The new Bishop, a rather more active colleague, thought the time had come to suggest to this gentleman the possibility of an honourable retirement with a pension. This he did. There was a silence, and then the old gentleman looked at him and said, "When your Lordship's predecessor but six offered me this appointment, he made no indication that it was to be of a temporary nature".
I wonder whether I may suggest this to the noble Lord, Lord Aberdare. Would it not be better periodically to insert in all the new old-age pension books a single sheet, which does not easily drop out or turn up, giving the necessary information about supplementary benefits 936 —something as simple as possible, as light as possible, and as charitable as possible and, above all, something that catches the eye? I wonder whether the additional services to old people might not in some cases be given as increased cash benefits. Meals-on-Wheels, which provides ready-cooked food, also provides someone coming to see old people when they are alone. I wonder whether this could be extended, at a cheaper rate?
Youth is a disease, my Lords, too soon cured. Growing old gracefully, I suggest, is a difficult art for all of us. I note that old-age pensions were increased in 1965, 1967 and 1969, and I have risen simply to express the fervent hope that before the cold English autumn and the heating season of 1971, this year might very soon be added to the dates I have mentioned, and that the elderly might be encouraged and helped in the difficult art of growing old.
§ 4.12 p.m.
§ BARONESS GAITSKELL
My Lords, we have had a moving speech from my noble friend Lady Phillips, and from the noble Lord, Lord Aberdare, we have had a moderate and plausible case for the Government. We have also had an extremely interesting speech from the noble Lord, Lord Wade, which I shall examine again in Hansard, and from the right reverend Prelate another really moving speech. I hope I shall be forgiven if I am not quite so bland as everyone who has spoken before me, though I do not wish to be partisan, for the plight of the elderly to-day can only fill us with disquiet and give us uneasy consciences.
This debate, for which we are so grateful to my noble friend Lady Phillips, brings us right up against the problems of the country to-day, and the measures introduced by the Government to cope with them. None of us underrate the difficulties, though some of the measures, after the nine months' apprenticeship of the Government, seem to some of us illogical. I do not wish, as I said, to be partisan, but that 6d. off income tax, offset and justified by the Family Incomes Bill, set the pattern for the Government, giving it with one hand and seemingly taking it away with the other, thus widening inequalities and creating some injustices—witness giving pensions to the over 80s, which the Labour Government failed to do. But I believe it is true—and 937 I should like the noble Lord, Lord Aberdare, to tell me if this is not so—that if they have a pension, they do not get supplementary benefits.
Even if the low income families have gained something, the pensioners watch helpless while the value of their pension is steadily eroded by racing inflation and rising prices. Prices, I believe, have risen twice as fast since January of this year as they did during the previous six months. For pensioners, rises in food, rent, transport and fuel, mentioned by everyone who has spoken so far, are sometimes heart-rending.
There are two standard, and I must say rather petulant answers to some of our criticisms of the Government. The first is that it is all the fault of the previous Labour Government. The second is to refer Labour supporters to the Conservative Party's Election Manifesto. Have they read it and have they seen the Govment's promises to reduce taxation? I think that this is really rather quaint. Of course, we should all like, and welcome, a reduction in taxation but not all of us want to pay for it by higher school meal and prescription charges, no free milk and higher fares and rents. It is really a question of balance.
When a new Government come into office there is usually a period when the previous Government are blamed for all the ills in the world—not only in the country, but the international as well as the national ills. Blaming the misdeeds of the previous Government is an academic exercise and soon becomes irrelevant. Incidentally, I have never heard a Conservative Minister thank the previous Labour Government for the healthy balance of payments inherited by them—and even though the Poverty Action Group said that the poor had become poorer towards the end of 1970, no one can deny that in 1965 the Labour Government introduced the biggest increase in pensions and other benefits than any Government for years.
The urgency of this debate has been shown up by the effect on the cost of living which will result from the Review of farm prices presented in another place by the Minister of Agriculture, Mr. Prior. The Farm Price Review helps the farmers and relieves the Exchequer, but it raises the prices of essential foods such as 938 meat, milk, eggs and cereals. These increases are to be borne largely by the consumer, and that falls hardest on pensioners. I would stress that we on this side of the House do not question the rightness of the Review of farm prices but we do underline that such a Review should have followed, not preceded, a review of pensions.
When there is an increase in the cost of living, one of the irritating things to me about its announcement is that it is presented as a percentage of the cost of food index. I quote the Minister of Agriculture, who said on March 17:The increase in retail prices on the cost of food index which we can expect from the introduction of these levy schemes will be approximately half of 1 per cent.This is what I call the Alice Through the Looking Glass kind of statistics—as you look through it, it seems to get smaller and smaller. But the housewife knows how much the rate of increase of food costs has gone up in the last few months. The Government have a way of treating the rises in the cost of food as only a national problem and again blame the previous Labour Government, whereas they know that it is a world problem.
One of the tragedies of the June Election of 1970 was that the Labour Government could not introduce its earnings-related pensions scheme. It was one of my husband's greatest ambitions in his lifetime for a Labour Government to carry out such a scheme. This is not a measure which would come within the sphere of Party politics at all. As my noble friend Baroness Phillips said, there are several countries in Europe which have such a scheme already, and we could copy them. It is the only way to achieve a fair deal for our pensioners. Any Government which brings this about in the future will have introduced a measure of monumental justice.
At present, even if pensioners sink their pride, submit to the strict means tests, and claim all the potential welfare benefits to winch they are entitled, they are still left with an income at subsistence level. Even at this last moment, I hope that the Chancellor of the Exchequer will come forward with some relief for pensioners: at least, an easing of the earnings rule would help. I hope that we shall not be fobbed off with clichés about 939 restoring confidence and keeping Election pledges, which are quite irrelevant to-day to our country's problems. We need an increase in pensions, as several speakers have already said, as from now. In order to enable pensioners to stand on their own feet we have to give them a helping hand. Finally, I offer the Government a title for the next Bill which they introduce to raise pensions: they can call it In Place of Poverty.
§ 4.22 p.m.
§ LORD BROCKWAY
My Lords, at this moment the noble Lord, Lord Ardwick, should have been speaking. I want to express my gratitude to him for agreeing to allow me to intervene at this point so that I may keep an engagement. It is very gracious of him, and it is typical of the kind of courtesy and generosity which one finds in this House.
First I should declare an interest, because I receive the retirement pension. I am 82 years of age, and I enjoy the contributory pension which enables me to have £5.75 a week which I find very useful; and I suppose that if there were an increase in the retirement pension I should benefit, as I hope others would to a much greater extent. But I am very conscious of the fact that I do not suffer the privations which affect many of those who receive a retirement pension. Indeed, I have been fortunate in my life except for two periods: first, when I began to earn my own living; and, secondly, during a period which I imposed upon myself. Other than for those two periods, I have never suffered from privation.
But there is one value now in being over 80 years of age. It is that one has lived through the period of others and, looking back on life over the last 60 years, one realises that for the great majority of the people of this country who are now old-age pensioners those years have been years of service to the community, of sacrifice for the community and of suffering imposed upon them by the community. I look back over those 60 years, and I know of only three brief periods when the majority of people who are now 70 and 80 years of age have had security or safety in their lives. Those were the early 'twenties, the late 'thirties and the early 'forties. The men concerned had been in the First World War. 940 Those who lived had been to the front. They came out of the First World War, and in the early 'twenties there was one brief period when they had some advantages from our society. But the late 'twenties and early 'thirties were a period of unemployment of which now it is almost impossible to think. I did a social survey at that time, and the only possible title for my report was "Hungry England".
Great masses of our people—miners in South Wales; textile workers in Lancashire; miners in Scotland; engineers in the North-East and the Midlands—at that time were literally on the edge of hunger. We had unemployment and the means test. They went through the 'thirties, and towards the end of the 'thirties rearmament began, for the Second World War—producing a little more security. In the Second World War, not merely did they undergo the bombing and destruction which went on in this country, but their sons were serving and dying. After the Second World War came a further brief period of security; then how early to find that they were to old to work at 40! If your Lordships look at my generation over the last 60 years you see that the vast majority of those who are now old-age pensioners have suffered from our present society, either in war or as a result of our failure to provide employment and a living: they have been the victims of their whole generation.
My first plea, on behalf of those who are old to-day, is this. They have given so much to us during their lives, and we have so failed them during their lives, that the first moral duty upon us to-day is to see that in their years of autumn they do not have to suffer as they are now suffering. If one were to make a social survey of those who are old to-day, I believe one would have to adopt the same kind of title that I was compelled to adopt in the 'thirties for my survey of unemployment: it would be "The Hungry People".
The noble Lord who spoke in reply to the splendid speech of my noble friend Lady Phillips, like Ministers who speak for the Government, placed the major responsibility for our present difficulties upon the demand for higher wages. Unlike some of my colleagues, I am not opposed to an incomes policy. But it 941 would be a very different incomes policy from the one which was introduced by the last Government, or the proposals which are now being considered. I would have an incomes policy that laid down a minimum standard of life for our people below which no one should be allowed to fall, and where the first claim would be for the aged, the sick and the children. Apart from the minimum standard, there would be another standard: that while poverty remained in our nation, no one should be allowed to have an income which reached luxury levels. That would be the kind of incomes policy that I would seek for this country.
I want to put it to the members of the Government that they have no right whatsoever to be condemning the claim of workers for higher wages to-day while they accept the income values which are now in our society. It is not only the high incomes which result from the ownership of companies, of banking and financial corporations; it goes beyond that. There is this extraordinary gulf between the salaries paid to the higher managements, even of our public corporations, and the minimum wages that workers are receiving. This society of ours puts an extraordinary value on the payment of high incomes to "pop" singers, to sportsmen and footballers, compared to the man or woman who is doing the hard routine weekly work which brings our production. We have no right whatever to be condemning men in our present society for asking for a higher level of wages for their productive work, while we accept these utterly wrong values in incomes which are unrelated to service to the community.
I want to say this to those who look upon the demands of the workers as selfish. Whilst in the present scramble for higher incomes, one group that is strongly organised will get more, and often poorer groups who are less organised will get less, it is quite wrong to take the view that this is merely a selfish claim. Who is it at this moment who is leading the campaign for higher pensions for those who are aged? It is that "awful man", Mr. Jack Jones, the General Secretary of the Transport and General Workers' Union. He is regarded now as the enemy of the community because he is demanding higher wages for his members. My Lords, his union, and 942 his members, are not selfish; they are leading the campaign for the old and aged. One has to recognise that workers who are demanding higher wages are also first in the demand for higher standards for those who are old.
I want to make one plea to the Minister before the Budget is introduced. I hope that the Budget is going to be the occasion when greater justice will be done to those who are aged. There is the suggestion that there shall be a reduction of 6d. in the income tax. That would amount to about £350 million. That £350 million is almost the exact sum that would be required if pensions were to be increased by £1 a week. Where are our priorities? Are we to recognise the rights of those who have served the community all their lives for 60 and 70 years, and have had to face the privations that I have described? Or are we to spend that amount on a reduction of income tax which will mean that the heads of our public corporations, and the heads of great companies, will benefit, as a result of the Budget, to the extent of from £20 to £30 a week? The Budget will benefit the rich, but will give a trifling amount to the poor. Is that to be the policy of Her Majesty's Government?
§ LORD ABERDARE
My Lords, if I may say so, we have not yet produced our figures for increased retirement pensions. I think the noble Lord should be a little kinder to us.
§ LORD BROCKWAY
My Lords, I am speaking from precedents, and very many precedents. I am really making an appeal, and I am speaking strongly because I have come to learn that you have to speak strongly if you are going to get results. It is only if you speak strongly that you arouse the kind of opinion which will make an impression upon Governments. My main aim is to make a plea to the Government, before the Budget is introduced, to have financial proposals that will not make the rich richer but will lift at least some of the poverty from the poor. And among those who deserve it most are the old folk for whom we are appealing to-day.
§ 4.38 p.m.
§ LORD ROBERTHALL
My Lords, in rising to support the noble Baroness, like the noble Lord, Lord Brockway, I should declare an interest, as I became 70 years 943 of age this month and I understand that when the delay of the postal strike is cleared up I shall become entitled to a retirement pension. I hope that that will not cast doubt on the sincerity of my support for people who are much less fortunate than I am. We have had a debate so far with speeches which are unusually short, and that shows—as indeed is clear from both the Front Bench speeches—that the House strongly supports the Motion. I hope that I shall be able to keep my own remarks short, too.
The noble Baroness made a strong and moving case which was accepted by the noble Lord, Lord Aberdare. I have looked at the statistics and I think that they make the case abundantly clear. After the increase in early 1965, to which the noble Baroness, Lady Gaitskell, referred, there have been two subsequent increases, but, in spite of those, the real value of the retirement pension to-day is actually less than it was in 1965, and the value is diminishing extremely rapidly, as we all know. If we look at what has happened in other sectors we see that incomes from employment have risen during this period. Towards the end of last year they had risen by 52 per cent.; they have risen by more than that now. Prices have gone up by perhaps 35 per cent. in the period. That is to say, the real value of income from employment during this period has actually gone up by something of the order of 17 per cent., while the real value of pensions has diminished and is diminishing rapidly.
If this debate had taken place somewhat earlier I should have liked to make a case for doing something about pensions in the Budget next week. Whatever we think about the relation between reflation and wage claims, there is a very strong case for some reflation now. An increase in the pensions would have the great virtue that there would not be the slightest doubt that it would be spent straight away. It could not but have a beneficial effect on the climate of wage negotiations which is so important. And, looking at it from a political point of view, we do not know what is in the Budget but, assuming that it makes some concessions which will not be universally popular, it would be advantageous to have something as a sweetener, to put 944 it in the lowest terms. However, unless things have changed very much in recent years I have no doubt that all the Budget decisions have been taken already; and either the noble Lord, Lord Aberdare, has an unusually strong poker face or I have the impression that this one has gone adversely. But I am afraid we cannot flatter ourselves that, in the time span, what we do to-day is going to have any influence one way or the other so far as the Budget is concerned.
I would make two brief points. The first is that the case of the pensioners is only the most extreme case of a great deal of hardship, injustice and suffering which is caused by inflation. I wonder whether I may be permitted to refer to a class of case which has had to come under my own notice. The people in this class are not in nearly such a bad situation as some pensioners are. I refer to elderly people living on small fixed incomes. In many cases they have made provision or, if they are widows, their husbands have made provision. This provision was made in the form of an annuity, taken out at a time when nobody supposed that there would be inflation on the present scale. There are, of course, two elements in hardship: one is the absolute situation and the other the relative situation. These are people whose absolute situation is not so bad, but their relative situation is causing them great agony of mind. They were taught to believe that independence and not going to the State for help was a desirable virtue. There is a gap. Many of them suffer very great hardships before they can bring themselves to take advantage of the various supplementary benefits and aids of that kind to which the noble Lord, Lord Aberdare, referred. Nothing can be done for these people, but they are a class suffering very much indeed.
My other example, which could take us right away from the field of our elderly pensioners, is this. Inflation, in my view, is now beginning to jeopardise our future, because the peculiar nature of cost inflation and of our tax system means that company liquidity has now reached a point where investment is falling and is likely to fall still further. What we do, or do not do, for the pensioners concerns a present but if we really let our investment fall and drift 945 into a recession we shall be damaging the future. Speaking myself as a pensioner, I feel we should all agree that the worst thing we can do is to damage the future.
That brings me to a point which the noble Lord, Lord Aberdare, made: that the real remedy for this problem is to bring an end to inflation. The various measures that have been proposed to-day, apart from extended care of the elderly which is a long-term matter separate from pensions, are palliatives; they are a matter of going round cleaning up some beaches which have been damaged earlier. It is inflation itself which is causing these problems. Inflation is the most iniquitous form of redistribution of income; it causes a great deal of damage. It would take us far too wide of the Motion to go into that question to-day. I gave my views to your Lordships upon it some time ago in a debate on the economic situation. I suggested at that time that we did not have so very much time to deal with this problem. I still feel that very strongly to-day. We are in the grip of very severe inflation which is doing us very great damage.
§ 4.47 p.m.
§ LORD ARDWICK
My Lords, I do not think it is necessary for me to labour too hard at the point of the Motion before us this afternoon. I am sure that there are no skinflints in this Chamber who think that elderly people should be kept only just above the poverty line in order to encourage personal thrift among the young, so that in God's good time they will not be too heavy a burden on the State. Too many of us here are too old for that. Indeed, my noble friend Lady Stocks has called this House "the perfect eventide home", and although I find this memento mori attitude rather depressing I must make the point that we who have lived through the long inflation know from personal experience how difficult it has been for people to save in any substantial way. In fact, we too find that what we have put aside will not now buy what we thought it would buy, and every day is losing its value. Even the more agile among us who were early converts to the cult of equity have found it a somewhat hollow creed in the past year or two. But, although we have a kind of coeval sympathy with the elderly to-day who are the worst sufferers 946 from inflation, I wonder whether we can really appreciate how hard their lot is.
We still tend to carry in our minds an irrational view of the current value of money. Our idea of what a pound is was formed in the period of stable money between the wars. And so, when we are told that a single pensioner gets £5 a week it seems to be quite a substantial sum, although when we bring our reason to bear on it we know it to be quite inadequate. But really to understand how meagre it is we have to divide it by five and think of a single pre-war £1. When we think back to 1939 and visualise a single person living on 20s. a week or a married couple on 32s. per week, which was just about the amount of the dole, we see poverty much more plainly than we do now when we see somebody single living on £5, or a couple on £8, a week.
The pensioner has recently seen his income diminish by what may be only a number of shillings. But I wonder whether we really appreciate how precious every shilling is to him; how every lost shilling is a real deprivation? If any of your Lordships have any doubt about that, I suggest that you go into your butcher's shop this week-end and watch the pensioners making their pathetic choice of the week-end meat. Governments, I am afraid, have grown hardened to the practice of reviewing the pension every two years. In fact, it has been claimed with some pride this afternoon that the biennial review is about to take place. Two years is too long, even in a period of mild inflation. In a period of rapid inflation, such as we have known over the past 12 months and will experience for the next six months, it is cruel. It is sheer cruelty to follow the administrative pattern and to do nothing to raise the pension until the autumn.
The difficulty about doing justice to pensioners—as indeed to schoolchildren, and even to schoolteachers—is that there are so many of them that a modest improvement in their standards makes a considerable impact on the Exchequer. But this we have to face. The noble Lord, Lord Aberdare, was appropriately sympathetic towards the plight of the old in suffering from inflation. But the test of our humanity is not the loudness of our lamentations or the copiousness of our tears; it is the speed and efficacy 947 of our actions. We have to recognise that one of the evils of inflation is that social justice requires us to increase the inflation marginally to protect those who are its worst victims. We cannot refuse social justice because it will add to the inflation.
Another tendency which I think exists among people in all political Parties is to be complacent about the erosion of the basic pension, because we now have a reasonably satisfactory "safety net" in the supplementary benefit system. We face a kind of moral dilemma because the more humane and generous the supplementary benefit becomes, the less concerned we are likely to feel about the diminishing value of the basic pension. In the end, the previous Government acknowledged the total inadequacy of the present scheme.
I should like to quote from the popular version of the White Paper, National Superannuation and Social Insurance, of two years ago. It said:About two million pensioners—that is, about three out of every ten—depend in some degree on means-tested supplementary benefit. Nearly half of all widow-pensioners are on supplementary benefit. The present scheme is basically a flat rate scheme; and it has failed, despite the efforts made in 1961 to shore it up by introducing an element of graduated contributions and pensions.The White Paper continued:The flat rate system failed because the level of contribution could not be set high enough to provide adequate pensions without placing too great a burden on the lowest paid contributors.These were the basic arguments for the introduction of Mr. Crossman's earnings-related scheme. It was a good scheme; it was a logical scheme. I was very keen on it. It would have made a tremendous difference to the living standards of pensioners twenty years from now. But despite my enthusiasm for it, I never was certain that it was "on" politically. For one thing, nobody could understand it, despite the superb clarity of its exposition. People could not understand it because all pension schemes, unless they are a fraud, are complex. But what made it dubious politically was the size of contributions which had to be deducted from the pay packet. I never thought that it would be possible, when deductions for P.A.Y.E. are so heavy, to make the take-home pay substantially 948 smaller by heavy pension contributions. If that scheme were in force now, the weekly contribution on the average weekly wage of £30 would be £2 a week, and that is rather a lot to take.
The new Government are thinking the pension problem out for themselves. Whether they come up with a wage-related scheme with wage-related benefits, or wage-related contributions and a generous flat benefit, I do not much mind. I am concerned to give protection during the intervening twenty years, not only to those who have nothing else on which to live but also to those who can supplement the State pension through company pension schemes. I remember how, just after the war, when I was concerned with the creation of a company scheme, we asked ourselves at the outset "How much would the pensioner draw from the State, and how much more would he require from the company scheme to give him reasonable comfort?" The State scheme was the basis. That is an additional reason for protecting the basic pension. I am told that to-day there are people drawing small company pensions who would be doing just as well—and perhaps even better—if they had no additional income but were simply to throw themselves on supplementary benefit. Most pension schemes give very small benefits. The table given in the White Paper showed that 60 per cent. of occupational pensioners received no more than £4 a week, and 40 per cent. received less than £2 a week. So the basic pension remains of vital importance.
During the past year, I have on one or two occasions referred to the scandal of low-wage earners paying considerable sums in income tax. The pensioner is in exactly the same position. He is taxed as if his total income were derived from employment. Indeed, there is a view that he is lucky to be taxed in this way, and not to be taxed as if it were unearned income. But the tax burden on the pensioner is a heavy one. I will cite just one example. A married couple, fortunate as pensioners although poor relative to everybody else, living on £15 a week will, even at the new reduced rate, be paying £55 a year in income tax. That is 7 per cent, of a rather miserable income. A widow struggling on £12 a week will still have to pay 10 per cent. of her income in tax.
949 In short, the situation is as bad for poor pensioners as it is for low-paid workers, and I hope that these social facts are clear in the mind of the Chancellor of the Exchequer. Nobody has very great hopes of what he will do in the Budget. Indeed, we shall think it a blessing if he brings immediate relief to the pensioners. But one may perhaps hope that (to use the phrase which is never off the lips of Government spokesmen) within the lifetime of this Parliament pensions will be put on a more solid basis and will be less miserably inadequate than they are to-day, and that we shall stop imposing penal direct taxation, both on the poor pensioner and on the poor worker.
§ 4.58 p.m.
§ LORD ILFORD
My Lords, this debate has taken the course that debates on this subject commonly do. I think no one really believes that noble Lords on this side of the Chamber are less solicitous of the welfare of the poorer sections of the population than noble Lords on the other side. Nor do I believe that people really think that noble Lords on this side of the Chamber are less active in their legislation than the noble Lords who support the Labour Party.
The noble Baroness, Lady Phillips, opened this debate with what I hope she will allow me to call a very charming and delightful speech. I have listened to the noble Baroness on this subject on several occasions, and I always look forward to what she has to say. I thought she made an effective and compelling statement on an old-age pensioner's budget. The only comment I wish to make about that is that I should have liked to hear a little more weight given to the importance of electricity in the old-age pensioner's subsistence.
My Lords, when I was a young man in the North of England it was a common practice for the guardians to give an exra half ton of coal in the winter time. When I went to the Assistance Board, I found that that practice was continued by the Board. Outside every working-class cottage in the town was a little pile of coal left over when the half ton had been shot into the cellar. My Lords, coal is no longer of the same significance in the South of England. I doubt whether anybody has a coal fire 950 in a working-class house to-day. What has taken its place is electricity. When I was in the Assistance Board people used to say to me, as they said about coal to my predecessors years before, "What am I going to do about the electric bill? I shall not be able to pay it. There will be no light, no heat; it will be turned off."
The high price of electricity enters most intimately into the pensioners' budget. I wish that some suitable means could be found of either according an additional supply or in some way adjusting the cost so as to make some contribution to the electricity account which the old age pensioners find so difficult to pay.
My Lords, I am very glad that in the early legislation which this Government passed they included a Bill which made old people pensionable beyond the age of 80, which had been the limit before. Of course this limitation was derived, in the first instance, from Beveridge. Beveridge always believed that there would be a contributory pension sufficient for people's needs. There never has been. Whether there ever will be I cannot say, but certainly Beveridge's expectation that one day we should be able to get rid of public assistance altogether and that the pension benefit rate would be sufficient to maintain all the pensioners has never been fulfilled.
I should like to say a word or two about the Supplementary Benefits Commission. It may be that consideration of the supplementary benefit situation will bring some relief to the noble Baroness. It has proved, I think, less unfavourable than the picture she painted. In these debates we speak very readily of the "subsistence level" without a clear conception of what we mean by the expression. "Subsistence level" is determined to-day not by the pension benefit rate but by the scale rate for supplementary benefit. The present situation is that the supplementary benefit scale rate is £5.20 for a single person, the pension benefit rate is £5, so the supplementary benefit has an advantage of 20p. It is not much, but it is something; and the importance of it is this. The supplementary benefit rate is just above the cost of living index so pensioners receive supplementary benefit, an allowance which has not been modified or curtailed 951 by the position of the cost of living index.
§ LORD ABERDARE
Would my noble friend allow me to intervene? On top of that the supplementary benefit person receives his rent. That is over and above the £5.20 that the noble Lord was mentioning.
§ LORD ILFORD
He gets the scale rate, and he gets a payment towards his rent. Sometimes the whole of the rent. My Lords, supplementary benefit is, of course, now the care of the Ministry of Health and Social Security. I have always thought that there were great advantages in having a separate unit enjoying a certain measure of independence, whose sole duty it was to determine need, to find need and to meet it. That is what we did in the old National Assistance Board. It was a large scale organisation, but as these organisations go it was relatively small. It was served by a most devoted staff. I have before in your Lordships' House paid tribute to the sacrifice and sympathy and good will of our field staff who administered to the public.
I had few complaints during the 10 years that I was at the Assistance Board about the work of the staff. They made themselves popular, and I believe they were well liked amongst the pensioners and those to whom they had to bring relief. I have not the least doubt that those qualities still exist in the Supplementary Benefits Commission as it exists to-day, but there is this change. The staff of the old Assistance Board has been integrated with the staff of the Ministry of National Insurance. The last thing I desire to do is to cast any sort of reflection on the staff of the Ministry of National Insurance. But the work that they do is altogether different, and it has to be done without the knowledge and very special training which the staff of the old Assistance Board had.
There is also this disadvantage: it is to-day part of a very large organisation, and the qualities that one seeks in one's staff are less readily obtained in an organisation of the size of the Ministry of Health and Social Security. It is a terrifyingly large Department. Non-industrial staff amount to over 70,000. I think everybody is agreed that sooner or later it will have to be reorganised. Possibly the Health Service will come out 952 and go to an independent authority—we do not know—but even if the Health Service comes out of the Ministry of Health and Social Security it will still be a very large-scale Department. If I had to reorganise this arrangement, one of the things I should consider doing would be to hive off the Supplementary Benefits Commission and see whether they could not be given an independent, or semi-independent position outside the Ministry altogether. I believe that in that way one would encourage those qualities in the staff which are needed for the success of this particular service.
My Lords, having said all that I desire to say on that subject, I should like to turn for a moment to something else. There are, of course, other services very necessary for old people and for chronic invalids which do not consist of the payment of money. We think of the position of the old-age pensioners and others dependent on pensions largely in terms of payments of money and, of course, the payment of money is probably the most important service we can render to them. Nobody, I think, would doubt that. But there are other services which can make a major contribution to the comfort of elderly people: there are home nursing staffs of the local authorities and the Home Help Service which I think has never received the credit which is due to it. The devotion with which some of these women work in the Home Help Service is quite remarkable.
Then there is chiropody. For some reason chiropody is always discounted, but chiropody for an elderly person is a most important service. I hope we shall not continue to underrate its importance, as I think we have done in the past. Then there is the welfare visiting done by the welfare officers of the local authorities. It is a little difficult to define the nature of this visiting, but I see it working pretty well at first hand, and I am bound to say that the welfare workers in the Welfare Service play an important part in assisting the elderly in various ways, in relieving their loneliness, and ensuring that they really obtain all the benefits provided for them.
What are we doing with these services? Your Lordships will recall the Seebohm Report, which we debated in the last Parliament. The Seebohm proposal, briefly, was to group all these services 953 together in a single social service department and place them under a social service officer, a chief officer of the local authority. That process of reorganisation is being actively pursued. Since this Government came in, a great deal of energy has been put into it. Many of the social service officers have been appointed by the local authorities. The committees are gradually being brought together and those services co-ordinated, as Seebohm recommended. These local authority services are, I am quite sure, making a useful and valued contribution to the comfort and wellbeing of the old people.
There is one other matter I should like to mention. Some reference has been made this afternoon to the proposal that the review of benefits and of scale rates should take place not incidentally, as at present, when the Government of the day believe it ought to be done or when there has been a big rise in the cost of living, but at regular intervals, perhaps of one year or two years; and in the interval between the reviews the responsibility for maintaining the benefit at an adequate level will rest with the Supplementary Benefit Commission. I think both political Parties have accepted the view that it would be better if this review of scale rates were to take place at a regularly prescribed interval and not casually, as at present. I think everybody has accepted that position. I believe there is some difference of opinion as to whether it should be every one year or two years. I should have thought probably two years would not be too long. It all depends on the extent to which one is prepared to accept supplementary benefit during the interval. I do not think it matters much tonight whether we say one year or two years. The important thing is that both sides accept the principle of regular review of benefits at stated intervals.
I do not desire to detain your Lordships. I always think of these debates as subjects from which politics is very largely excluded—I might have said wholly excluded, but I cannot say that. But a good deal of benefit flows from them. We have a very wide discussion ranging over a good many different subjects, and a great many different people take part. I am quite sure that that is a good thing, and I hope that the noble 954 Baroness, Lady Phillips, will not keep us too long before she invites us to consider another Motion of this sort.
§ 5.15 p.m.
My Lords, I shall not keep you long, because I think that nearly all the points have been covered this afternoon from both sides of the House. I asked a Starred Question on this subject a few weeks ago, and I hope this debate has developed from that. First of all, I should like to press upon the Government that an immediate increase should be given to old age pensioners. Only last week the Government's new proposals on agricultural prices put up the cost of living, according to the National Farmers' Union, by 5d. per head per week. I think it is going to be more; but even that is the equivalent of 1s. 8d. for a family of four. That is just one instance, from last week to this week, where the cost of living has gone up by 5d. a head. It is no good saying, "We are going to give you an increase of benefit in October, but you can starve till then." I do not believe in that. The old age pensioner wants to go to the shop with the money in her purse and say, "I have got so much to spend", and get on with it.
The other question I would put to the Government is this. I think there are something like 7 million old age pensioners to-day, and on a computation of 10 or 15 years' life for an old age pensioner there are about 400,000 new old age pensioners a year. When you are getting on in years you do not want to bother about getting benefit for your coal, benefit for your rent, benefit for your rates, supplementary benefit and old age pension; you want to know how much you have got every week and how you are going to spend it. I would suggest (although I do not think that you would get all the old age pensioners to come into this scheme) that every new old age pensioner should go to the Post Office and fill in a form saying what his income is, what his liabilities are and what his necessities are, so that he will know what he is applying for. The application may have to go up to higher authority to sanction the benefits, but it should all be done before the man goes on the old age pension. Then, when he does go on his pension, he will know exactly how much he is getting every 955 week to live on. I do not know whether all these benefits could be drawn from the Post Office, but I should have thought it would be of great assistance if everything could be channelled through the Post Office, so that the old age pensioner would get all his money from one source.
I have said everything I want to say, except in regard to public transport. I think that old age pensioners should have either free local public transport or, at least, half price. They could have a disc or something to show that they are pensioners, and when they get on the bus or tube they could show their disc and be passed through. I would emphasise that the old age pensioner needs the money now, and at least £1 a week more should satisfy him until October.
§ 5.20 p.m.
§ LORD DAVIES OF LEEK
My Lords, we are grateful to the noble Baroness for raising this issue. I am accustomed to batting almost last. As an old wicketkeeper who played for my college in other days, and since I am nearly the last to bat this evening, I shall not weary this noble House by reiterating masses of facts that are as well known to every Member of the House as to myself. However, I have decided that there are some things that should be said.
Once again it is my pleasure to mention the noble Lord, Lord Ilford, in this debate, because as a Minister myself for some time in the Ministry of Social Security I knew of the magnificent work that he did. To-day he drew attention to the paramount importance of chiropody. He said "chiropody" but I will say "kiropody", but since the B.B.C. have produced a new book of pronunciation to-day your Lordships can say it as you will; I like the euphony of "kiropody" because it cuts. But, at any rate, I hope that noble Lords opposite will take note of what he said.
Having listened to the debate I will not sharpen my scythe, and I will leave some of the yellow corn waving without cutting it down, because the debate has not been too partisan. Everybody on this side of the House, and I am sure on the other side, too, is concerned about the elderly. There is something about the philosophy of society at the present time that is making some of us forget and 956 some of us unconcerned. I am not going to give masses of statistics, but I feel that I should mention a few. I was delighted that the noble Lord, Lord Ardwick, had made some research into the burden of taxation on the elderly. Since I always like to give my listeners the authority for my quotations, I suggest that they slip into the Library and read the magnificent article on poverty and taxation which appears in the Political Quarterly this month. There will be found all the things I would have said, if so many clever things had not been said before my speech. It will be seen there that it is a fact that the low-income groups, and the old and the lonely, are paying to-day, percentage-wise, more than the tycoons and the wealthy. This is wrong. I am not making a Party point: it happened under us as it is happening now, because nobody had bothered much to study the problem in depth.
What do we deduce from that? Before we can deal properly with much of this, the time has come for a study in depth into the entire British system of taxation. The entire British system of taxation is antiquated, and was built upon wrong ideas. In many ways, I know, it stops initiative and stops enterprise; sometimes in the higher income groups, and often in the lower income groups in terms of overtime. I am not blaming any side of the House for this. This is sin of omission for a long time. As I once said, you do not get into the Kingdom of Heaven with a slide-rule, but everybody gets figures and statistics, and worships them like the Law of the Medes and Persians.
The Help the Aged organisation say that one and a half million old people live alone, and really need sheltered accommodation. I heard the noble Lord, Lord Wade, and the noble Lord, Lord Ogmore, talking about country areas. I heard of this happening, and I knew it happened, in some of the wilder parts of North Staffordshire, on the border with Derbyshire. An old lady had been a month in a country cottage living alone, and she was found dead. The body had been there a month, and nobody seemed to know about it. We are entering into a new kind of society, and we are oslerising the old. That is a lovely old word. Look up the etymology. I love the word, 957 and that is why I had to use it. We are oslerising some people in modern society like the Eskimos used to do. They would push the old man and woman out of the igloo; and this is what we are doing. We are pushing them out of the modern igloo and letting them live unloved and lonely, and often pining away. That is oslerisation of the elderly. About a million of our old people have no piped water in their homes, and they have to stagger out in the winter, if they can, and go out and collect it. We have one and a half million old people, and their number is growing at the rate of 100,000 a year.
We believe that some interim increase in pensions is absolutely necessary, as the noble Lord, Lord Ardwick, dramatically pointed out. I have stopped smoking now, so I can push out my chest and satisfy our medical men who sit on the Cross Benches. But I remember when Woodbines were ld. for five, a tin of Cherry Blossom boot polish was also Id., and many other things like that. A few old people love a Woodbine now and again, but look how they have gone up in price. If you look at the value of money today, compared with the value of it in pre-Beveridge days, you find that in some cases people are in reality getting less than in the 1930s. I say to the noble Lord, Lord Aberdare, that I believe that to be correct. The noble Lord took my middle wicket, but since he took it I have had a discussion with the umpire, and he told me that it was a "No Ball". I have since looked up the statistics, but we will not argue about that; I will get hold of him at another time.
It is a question of relative values of money. Five pounds sounds a lot to my age group, but talk to my grandmother—no, not my grandmother; you would have a job talking to her, although a spiritualist might do it—but to my granddaughter, and you would find she thinks nothing of a £5 note. She came in from school the other day and said, "I want £75 to go on a trip to Czechoslovakia".
§ LORD DAVIES OF LEEK
That is all. My Lords, imagine me, in the old 958 days, when I was in the Pengam Grammar School, in the fourth or fifth form, going back and asking for a fifth of that sum; asking my parents for £15 to take a trip to watch a rugby match in France. To those of us who are elderly, sums like this sound a lot; but let us try to remind ourselves of the relative value of those sums in terms of the 1930s period.
If the House can stand the strain, and I may take a little more time, I want to mention a philosophical point, because most of the statistics have been given. One of the curses of the old, besides pushing them aside, is loneliness; and that is something that I believe should be looked into.
I had better throw down my notes, or I shall go on too long. Dr. Alex Comfort, poet, essayist, scientist, medical chairman of the gerontological research work and the Medical Research Council, is making research into extending vigour in old age. According to his report, which I have read fairly carefully, people are living longer, but we have not stopped people dropping into senescence or senility any more quickly, and probably we have increased it about two years since Biblical times—that is Comfort, not Davies of Leek, speaking.
The question I want to ask is a hypothetical one, but I think that both sides of the House, and the Government, and anyone who cares, or a House that cares, should look into it. My question is: are we asking people to retire too early, and making them old and lonely? I may tread on toes—because you can tread on trade union toes and the tycoons' toes here, since we have reached the stage where there is the apotheosis of the young man behind the director's desk; and they believe that if they have somebody dynamic, who blusters like a machine gun, he must be good. I met an old director—not that I often mix with that type of animal—who said, "Davies, I have had to call back two fellows since I retired them." They had had a golden handshake at 55, and the two fellows who took their places—who had about ten years' experience after they left university—are more useless than that director's personal secretary. In other words, we are throwing away skills; and some noble Lords opposite, 959 who have key positions in great industries that are of mighty importance to this country, should have another think before losing some of these men who are still of value to society.
This afternoon, I was in a laboratory talking to some medicos doing work on pharmaceuticals and drugs. One said to me that Professor X had retired, and he was one of the professors famous in that field in this country. He had deteriorated and was looking for a job, because the university had finished with him at 60 or 65. His mind was as agile as anybody's here, and we are driving some people into senescence years before their time. Therefore, should we not be supporting the work that Comfort and his colleagues are doing at the Medical Research Council on this problem of senescence? The Government now in power may have all the credit they like, if some experimental work is done in this direction.
Years ago, Peggy Herbison and I worked in the Ministry of National Insurance, and we gave £4 to the old people at Christmas time because it is said that 90,000 people die of cold every year. But that created more trouble than it was worth—which is sometimes the case with social security—as people were comparing what they had. The noble Baroness, Lady Gaitskell, said that we ought to get up to a level of income which stops all the indignity of "bits and pieces". Whatever arguments may be made about election promises, this subject should be looked into in depth.
The speech of Sir Frederick Cather-wood on March 14 is relevant. He said:It is the Government's expenditure that takes us into deficit and the off-setting action required to restore a surplus should be taken. The problem arises because, since imports make up one-fifth of total demand, to limit them by, say, £200 million could require an inflation of £1,000 million. It is the combined effect of Government overseas expenditure, which adds little to our national product, and the sterling area that has been the prime cause of slowing down the momentum of Britain's economy to a pace well behind that of its unburdened rivals. It is a staggering amount. Over ten years this item of our overseas expenditure alone has cost us somewhere in the neighbourhood of £4,000 million.There is not the slightest doubt, my Lords, that it is tomfoolery having troops in Germany, and having to bear that bur- 960 den at a time like this in the nuclear age, I ask your Lordships not to think that this is not relevant to the problem, because it is. But, without being Party political (I have views about this but I shall save them for another debate, bringing my fire power in at the right time), I think this problem should be looked into, and that something should be given to these people immediately.
How better can I finish than by quoting my authority once again on the seven corporal works of mercy? First, to tend the sick; second, to feed the hungry; third, to give drink to the thirsty; fourth, to clothe the naked; fifth, to house the homeless; sixth, to visit the fatherless and the afflicted; and, seventh, to bury the dead. The trouble about burying the dead, with land values to-day, is that we have to cremate them all. If my noble friends will look at Matthew, XXV they need not have an election manifesto. I beg of them to try to keep as near to that gospel as they possibly can when dealing with the elderly.
§ 5.36 p.m.
§ LORD RAGLAN
My Lords, there is very little that I can add to what your Lordships have already said about the unhappy plight of so many pensioners. We know that they are badly off, and we know that some are worse off than others, because they are not very able housekeepers; and to cope on such a tiny income, even if you are feeling well, needs housekeeping competence greater than most people possess. To see inflation taking away from them even that which they have suggests to me that retirement pensions should be linked to the cost of living index. Perhaps the noble Lord, Lord Aberdare, can say why this should not be done, and why pensions should not automatically be altered annually, instead of being reviewed biennially.
I hope your Lordships will forgive me if I stray slightly outside the terms of the Motion and come back at it from another angle, because in January last year I had the privilege of introducing a Motion in your Lordships' House on the problems connected with the age of retirement. I wish that my noble friend Lord Davies of Leek had been present at that debate, because I made then many 961 of the points that he has made this afternoon. He would have made some more and I should have valued his lively contribution. But on the strength of that debate, I was asked whether I would become the President of the Pre-retirement Association, in place of my noble friend Lord Crook. My noble friend Lady Phillips is a Vice-President. The Association was started by the Institute of Directors and does an extremely important job. It has what may seem to be an odd name, but at the moment we cannot think of a better one. I hope that by your Lordships' collective wisdom I may find a better one.
What we do is to proselytise on the importance of being prepared for retirement, and we help local authorities and firms to run courses to teach those who are about to retire some new interest to take the place in their lives of the jobs which they are giving up. Some people may have been doing the same job for 50 years, and your Lordships will appreciate that it is by no means easy for them to adjust to new circumstances. Indeed, very often the sudden change causes a decline in health, and even death. What we are teaching is a new occupation or job, which is not easy to acquire at the end of one's life. We are retraining for a new occupation.
The reason why I bring the matter to your Lordships' notice this afternoon is that I think, as does the Association, that it is of enormous importance for us to be aware that by retiring somebody from a job, and then categorising him as retired, we are taking him away from his normal existence of forty or fifty years and putting him into a backwater outside the mainstream of life. At a certain age—and, after all, age is nobody's fault—down comes this gate and over to one side goes someone into retirement, to be classified in our minds as a different person. Dr. Beric Wright, who is the chairman of the Pre-Retirement Association, calls them "displaced persons". I think this describes them very well.
My Lords, if those who are over retiring age were encouraged to be incorporated in the everyday life of the community, in the main stream of life, there would be many fewer poor and unhappy and unhealthy people in that age group. To put it another way, only a little 962 more controversially, if there were 8 million unemployed it would be thought a national disaster. Yet we have nearly 8 million over-65s, and the number is increasing. They have left employment because of their age, and they are not encouraged to be gainfully employed afterwards. The abolition of S.E.T. would help. I am against S.E.T.—I always have been. I think it is appallingly arbitrary, besides being suspect economically. Its abolition would greatly help those who would like to do a part-time job of a light kind, perhaps serving in a shop. The abolition of the earnings rule would also help vastly those who, after 50 years' service to the community, could be said to have earned their pension as of right, without forfeit.
My Lords, if those who are over 65 and are still able of mind and body can be encouraged, and not discouraged, to keep doing things—if they can be encouraged to take jobs, to earn money, to keep on contributing to society, as so many of them wish to do but often do not know how, besides being prevented—then the amount which they can contribute to the economy will be very large, and will go to help their less fortunate contemporaries who cannot work. Above all, my Lords, I urge that we cease thinking of pensioners as people beyond some kind of pale: they are just the same people, only older. Besides their pension, they are entitled to the same opportunities as the rest of us, and if they have those they will be thought of as the same kind of people as the rest of us.
§ 5.43 p.m.
§ LORD SORENSEN
My Lords, my name is not on the list of speakers—I added it late—first, because last week I did not know that this debate would be held, and then whether I should be able to participate in it. I am sure all of us—those who are present and those who are not present—are deeply grateful to the noble Baroness, Lady Phillips, for having initiated this debate, and for the very deep concern which obviously impregnated all her remarks. We are equally grateful to the Government for assuring us of their concern, and for the measures which are being and will be taken, in order to mitigate in some measure the increasing burden on the aged of inflation. All of us here, I think, are particularly concerned because so 963 many of us are ourselves either elderly or of old age; and inevitably those of us who are fortunate enough to enjoy so many of the amenities of life at our advanced age think of the millions who are of our age but are not enjoying the values and the good fortune that we ourselves possess.
For this reason, I would say that, although there is some evidence of a deterioration in moral standards, although crime has increased in recent years and there is much which could fortify the cynic and the pessimist in their criticism of modern society, on the other hand it is well for us to appreciate that, to-day, the country as a whole now accepts in large measure responsibility for looking after what others have called the elderly citizens of this country. In other words, we have embodied in our statutes, in our law, a moral principle which not so many years ago was thought to be quite irrelevant to society. This shows a very great advance. It means that we as a nation have to a very large degree now incorporated this moral principle of responsibility for others. Let that therefore be put on the other side of the scale when we are trying to weigh the pros and cons of our present evaluation of society.
But, though much has been done, a great deal remains to be done. Inevitably, the debate has gone beyond the terms of reference of the Motion to which the noble Baroness, Lady Phillips, spoke at the beginning of the debate. This is because there are other ways in which we can deal with the needs of aged people than merely increasing their pensions. We have to find ways and means by which we can ease their lot even within the orbit of their pensions. It is, for instance, tragic at the present time to think of the multitude of old-age pensioners who are suffering, or are likely to suffer, from hypothermia. About 60,000 people suffer every year from pneumonia, lung congestion, cystitis and similar complaints; and in 1963, during that very cold winter, some 30,800 more died than in a normal year. This means that between 60,000 and 90,000 people perish, directly or indirectly, through insufficient warmth in winter time; and, of course, all of us know, in our own localities, of those who are living in miserable, wretched circum- 964 stances where they cannot find warmth enough in winter time even when they pile clothing upon themselves and retire early to bed.
Here, I must declare some interest in the matter, not financial but because I am the treasurer of the Help the Aged organisation. May I say that this body urges upon the Government that they should find ways and means by which to pressure local authorities to grant land and make financial grants to voluntary organisations desiring to build sheltered housing. By "sheltered housing" we mean housing, very often in the nature of a series of flats, in which there can be central heating, in which there can perhaps be a warden to look after those who fall ill, and in which in other ways, through providing amenities, old people can enjoy their remaining years. Obviously, it is much easier to provide central heating when you have a number of pieces of accommodation rather than that each occupant of a single room should have to do so and rely upon coal which he or she can ill afford, or upon oil stoves with all their dangers. I myself have been to many homes in my old constituency where I have found old people—sometimes alone, sometimes as elderly couples—huddling in winter time over a few burning cinders (hardly more than that) and still unable to keep warm.
It is suggested that sheltered housing of the nature I have so roughly described would go some way towards meeting the needs of an increasing number who would otherwise, as I have said, have to remain in their homes burdened by cold and liable to hypothermia. It is estimated that between one million and three million people over retirement age are in need of this sheltered housing, in places where they could have heated flats less costly in the provision of warmth than their present accommodation; in which other amenities could be provided for them; and in which, above all, they could be provided with warmth in the twilight of their years. Not only that, but Help the Aged also suggests that local authorities should be encouraged to provide day centres in which many who are now living in isolation could from perhaps 10 o'clock to 5 in the afternoon find fellowship with others; again find 965 warmth; may be have their meals provided very cheaply, because such meals can be provided more cheaply when a number are to be provided for than if the meals are simply taken from home to home; and in which, indeed, they can perhaps engage in simple handicrafts, particularly a kind of workshop for the elderly. Some of these already exist and are mentally and spiritually providing great benefit for those engaged in them. I say this because your Lordships' House itself, to those who are aged and elderly, is a kind of day centre and we who enjoy it should expect others to enjoy similar accommodation to that which we ourselves enjoy to-day.
This will sometimes mean a need for extra transport, for many old people cannot get about as they used to; they cannot walk far and sometimes they are in wheel chairs. It should not be entirely visionary to anticipate the time when all local authorities can provide transport for the older people to be taken from their homes to day centres, thus helping them escape being isolated in their own homes. Local authorities provide a great many amenities now, but I hope that they will take it upon themselves to provide means for voluntary associations to help. We need collaboration between the State, the local authorities and the voluntary associations. I believe that more and more the community as a community should be responsible for guaranteeing the old people the means by which they may enjoy life. Nevertheless, there will always be an opportunity for the voluntary organisations to supplement whatever the local authorities or the State can provide. In these ways I submit that we can do a great deal towards easing the burden of the aged.
We must realise that there are in this country a large number of old people suffering severely from a lack of things that other people have in abundance. There are 350,000 old people without the use of baths, kitchens or indoor lavatories. It is estimated that two million are without any kind of inside lavatory and over one million have only piped cold water. These are but three indications out of many of the tremendous need that exists. We must appreciate that the number of old people is increasing every year. This is the result of medical science and better sanitation and greater re- 966 sources in present-day life. We do not want them to pay for those advances by a gloomy and wretched old age; we want them to spend the end of their lives in happiness and tranquillity. Therefore, although I appreciate what the Government are doing towards dealing with inflation, I would press not merely that more than that is required, but that we could do a great deal to make the life of the aged easier than it has been.
§ 5.54 p.m.
§ LORD CHAMPION
My Lords, I must say that when I came into this Chamber at 2.30 this afternoon I was delighted to see that so many people had turned up for this debate. I noticed that some of them disappeared after a certain Introduction took place, and I was sorry that my noble friend Lady Phillips did not get quite the audience that her excellent speech deserved. In my opinion it was an outstanding example to us all. It was brief and to the point, and it was indeed multum in parvo. We thank her for starting off this debate in such an excellent manner. I am grateful to her because she has laid down the basis for our consideration of this matter.
Like some other speakers I must declare my interest in this subject. I share an interest in this debate with over 7 million others, most of whom, I am bound to say, are, like me, very hard up. I am pleading for them and I am pleading for myself. But there is another plea that I would enter at this stage, and that is that my daughter will not push me out of the igloo when she feels that I have got beyond it, in the way mentioned by my noble friend Lord Davies of Leek. I must say that his remarks frightened me and made me think that I was on the verge of being put outside the warmth and comfort of that iced but cosy house.
The noble Lord, Lord Aberdare, reiterated the Government's intention to raise the pension. We are thankful to them for that. The only questions that remain, it seems to me, are: how soon and how much? These are the two questions that this debate must have been about to-day. The reply of the Minister of Social Security to a Question in the other place on March 16 last (col. 1169) as to the estimates of the percentage fall in the purchasing power of retirement 967 pensions since the last increase in 1969 was:It is 9.2 per cent., based on the last available information from the General Index of Retail Prices.I rather think that if Sir Keith Joseph had taken his figures from the indices for pensioner households the figure would have been very much nearer 10 per cent.—which means that those who are among the poorer sections of the community have suffered a cut in their income at the very time that most of those who are in employment are turning up their noses at increases of 10 per cent. This is a fact. They have truly had a cut in their income.
The rising prices which caused the Minister to point to a decrease of pension value by 9.2 per cent. is not the end. It is a continuing process and noble Lords in this House have pointed to this fact and have pointed to the necessity for an urgent review of the amounts which are being paid in retirement pensions. Mr. Prior, in answer to a supplementary question yesterday in the other place, said:I am well aware that inflation bears most heavily on pensioners and others on fixed incomes, and I am continually stressing the urgent need for the country to get this under control."—[OFFICIAL REPORT, Commons, 23/3/71; col. 235.]This was in answer to a Question about the Government's agricultural review of prices—which itself is bound to add to the inflationary trend. Sympathetic noises will not help when at the same time the Government are driving prices upwards by their agricultural policy, by the withdrawal of subsidies on rents, by bus and rail fares increases and by increasing the charges on prescriptions, dentures and spectacles.
I agree with my noble friend Lady Gaitskell here, and I must say that I enjoyed her excellent speech. In this context, it is no good the Minister excusing the price rises in food, fares, rents and increased charges generally by saying that if you increase the prices of these things you lower the taxes. I have heard this said so many times before by Ministers and others. That might be all right for those paying the standard rate of income tax, but it is no comfort for the man whose income is below the tax level but who has to pay the increased prices for the bare necessities of life.
968 Imagine what would happen if any other considerable group in Britain was suffering a 10 per cent. cut in their incomes at this time!—the approach to Parliament would be blocked by the demonstrators, the Lobbies of the Palace would be swarming with angry people sending in green cards for their Members; the newspapers would be carrying banner headlines about it; television news shots would be full of pictures of people outside this Palace and elsewhere calling for immediate action. The trouble is that pensioners are too meek. They were brought up in the conditions that have been mentioned here to-day; they have suffered all that happened in the inter-war years; they have suffered two World Wars, as we were reminded by my noble friend Lord Brockway.
My Lords, F. E. Smith once delivered himself of the truism, "'And the meek shall inherit the earth' is an aphorism which finds no corroboration in the records at Somerset House." How right he was! The meek are not to be found very largely represented in the Wills that are lodged at that place. I suggest that the pensioners ought to take this thought to heart and begin to use the power which undoubtedly they have to exert pressure on Government. I do not care whether it be a Government which I support or some other Government which is pressed. I admit that to some extent the pensioners are impotent because they cannot come out on strike. But they can lobby, and they can get hold of their local Members of Parliament and bring pressure to bear; and in my opinion they ought to be doing so at this time.
The answer to the question I posed, "How soon?" must surely be that there must be an announcement in the Budget. I stress this, despite the pessimism of the noble Lord, Lord Roberthall, in this connection. He said that he feels that minds are already made up. Well, my Lords, if they are, I think they ought to have been made up in such a way as would recognise the fact that it is time—past time—when there should be an increase for the retirement pensioner. I also agree with the noble Lord, Lord Roberthall, that this would be an excellent measure of reflation; and we badly need a stimulus to growth in the economy at this moment. Such an announcement in the Budget as I think 969 there ought to be should be followed as quickly as possible by appropriate legislation, and administrative steps taken to give effect to the increases forecast by the noble Lord, Lord Aberdare. Even if the programme that I have mentioned were adopted, it is bound to take three or four months before the increase will be paid to the pensioners because of the necessary administrative preparations. In the meantime, my Lords, at the present rate of inflation the lot of pensioners will have further worsened.
The noble Lord, Lord Aberdare, rightly stressed the value of the various supplements obtainable by old people, as did the noble Lord, Lord Ilford, who spoke from his exceptional knowledge of this matter. Supplementary benefit is good in many ways but I hate anything—this stems, I suppose, from experience in the inter-war years—which is dependent on a means test; and these things depend on a means test. The right reverend Prelate the Bishop of Guildford rightly drew attention to the fact that many people still do not know about the benefits to which they are entitled. We thank him for the work that ministers are doing to draw these benefits to the attention of old people in their parishes.
In 1969, Professor Prest estimated that between 700,000 and 800,000 old people entitled to supplementary benefit were failing to claim it. I should think that, as a result of what has been done by Government since that time—partly by the Government that I supported and partly by the present Government—supplementary benefits are being increasingly brought to the attention of old people, and that they are being made aware of what they can get. But I am positive that there are still large numbers of people who do not know about them, and are not claiming the benefits to which they are entitled. That is true not only of this country; it is true also, strangely enough, of the United States. On March 17 I read in the Christian Science Monitor that in connection with their "Aid for Family" service, between 30 and 50 per cent. of women who might be eligible for benefit had not yet applied. They were either too proud, or were ignorant of their rights. My Lords, we need to end this failure to apply. So long as we have to have supplementary benefits let 970 us make sure that every person entitled to them receives them.
The second question to which we must address ourselves is, "How much?" I venture to assert that a large proportion of retirement pensioners are living in poverty. I hasten to add that poverty is a relative conception—relative, that is, not so much to bare subsistence standards, but rather to the standards of the people who live around the old people. In this country poverty is a vastly different thing from the poverty of so many of the underdeveloped and underprivileged peoples in other parts of the world. What is poverty here would seem like great wealth to many who are eking out their existence in those countries. What is clear to me, as a result of a lifetime's observation, is that yesterday's luxuries become to-day's necessities, not only for those in employment, but also for those living in retirement.
Even if ill-health and malnutrition may be avoided on a subsistence level of pension—and I think we have a reasonable subsistence level of pension—people can still feel that they are living in poverty if they are deprived of the small comforts enjoyed by others living around them; comforts to which they may have been accustomed when in employment. In this country it is, or certainly ought to be, an accepted principle that the real value of retirement pensions must at least keep pace with the rising standard of living of those in work. Not only must it keep in step with the rising cost of living, but it must keep in step also with the rise in the living standards of those who are in employment. Is this happening? I am positive that the answer is, No; despite the claim of the last Labour Government when they went out of office that they had improved social security benefits, in real terms, by some 20 per cent. As I understood it, that meant that the increase was related to the cost of living index. That is something for which we should be thankful.
But how does the pensioner stand in relation to the criterion of keeping in step with the rise in living standards of those in work? The answer is to be found in figures which I now propose to give. I shall refer to £.s.d. rather than to decimal terms because I am proposing to go back to 1963, and through 1969 to 971 1970. In October, 1963, the average weekly earnings of a manual worker were £16 14s. a week. The pension for a married couple was £5 9s. I estimate that to be about 32.6 per cent. of the manual worker's earnings. In November, 1969, the average weekly earnings of a manual worker were £24 16s. The pension for a married couple was £8 2s. Strangely enough, that is just about the same percentage. In October, 1970, the average weekly earnings of a manual worker had risen to £28. The pension for a married couple was still £8 2s. That indicates a fall to 29 per cent. of the manual worker's weekly earnings; so that although in real terms the value of the pension had increased by 20 per cent., since 1964 its value—judged by the criterion that pensions ought at least to keep step with rising living standards—had declined by 3.6 per cent.
In straightforward money terms, in 1963 the married couple on a retirement pension received £11 5s. less than the earnings of the average manual worker; in October, 1969, £16 14s. less and in October, 1970, £19 18s. less. If we go up by percentages, this sort of thing is bound to happen. We appear to be keeping somewhere in line on a percentage basis, but the gap is widening. Despite the fact that the value of money has changed since 1963, £19 18s. is still a tremendous gap between me, as a pensioner, living in my terrace, and an employed man living next door. So I say that the pensioner's position has worsened since 1963. Earnings have risen since October, 1970, and the gap has further widened. To readjust the position percentage wise to the 1963 and 1969 levels, the amount of pension would have to be increased immediately to something over £9 2s. a week, but that will be not enough for, if wage inflation continues—and it will—the pensioner will be lagging behind. He will be chasing, but never catching up. We can only hope to do something about this if we do something more than just try to catch up. We have to go beyond that.
I admit, with the noble Lord, Lord Wade, whose wise words I liked immensely, and with my noble friend Lord Davies of Leek, that the cost of retirement pensions to the nation has reached a staggering total—£1,500 million in 1969, and this has increased considerably since 972 November of that year, when the pensions for a married couple went up from £5 9s. to £8 2s. The charge on those in employment increases with every person who retires and lives on, as we tend to do these days. Earlier retirement is increasingly the pattern. The figures are striking. In 1959 47 per cent. of men retired at 65. In 1969 the figure stood at well over 70 per cent. This is a big difference. It means that more and more a smaller middle group are keeping the people at the top end and those who are still at school and college at the other end.
I can see the difficulties that this situation creates. It seems to me that we should try to devise some scheme, some incentive, by which men and women can remain in full-time employment after they have reached the age of 65. People are younger at 65 than they were at 55 when I was a boy—very much younger in their actvity, in mental alertness and in everything else. Some little time ago, when I was still Member of another place for South-East Derbyshire, I was talking to a parson who had been looking up some records in his church that were 300 years old. He told me that in those records, opposite the names of people who had been born, were the dates of their deaths and the reasons for deaths. Everybody who died over 40 years of age, he said, had been recorded as having died of old age—a vast difference between the standards in those days and in our own. Although some little thing was done in 1967 to increase the amount of pension that can be earned by additional contributions, the fact is that 1s. for nine contributions is simply not enough to cause people to remain on in employment.
There is much more I should like to say, my Lords. We have had some first-class speeches to-day, and they were so worth while that I should have liked to mention every one of them. But I will end with the plea that we have an increase in pensions soon and that, when it comes, the increase will be of such a nature as to ensure that pensioners will not feel that they are always chasing and never catching up.
§ 6.16 p.m.
§ LORD ABERDARE
My Lords, we have had a most interesting debate and I should like to thank all noble Lords who have taken part in it. If I may 973 speak again with leave of the House, perhaps I can pick up one or two of the points which have been made. First of all, the noble Baroness, Lady Phillips, in introducing the debate, made two points about which I said I would try to say something. One point, which was subsequently made by the noble Lord, Lord Champion, too, was on the pensioners' index of cost in relation to the general price index. There are special indices for one-pensioner households and two-pensioner households, confined to those where three-quarters of the total income is derived from social security or similar pensions. About one-third of all national insurance pensioners live in such households. These indices were first published in June, 1969, and are issued quarterly. Although the weights used for individual items covered by pensioners' indices differ considerably from those used for the general index—for example, more weight on food and fuel and less on other items—the movement of the indices as a whole has been very similar.
From the fourth quarter of 1969 to the fourth quarter of 1970, the general index, excluding housing and other things one cannot compare, went up by 7.5 per cent.; over the same period the index of one-pensioner households went up by 7.9 per cent. and of two-pensioner households by 7.6 per cent. So there was little to choose between these two indices. The noble Baroness also made a comparison between our pensions and those in Europe. It is extremely difficult to make a comparison. The real value of pensions depends upon such varying factors as wage levels, the cost of living and taxation. Moreover, pensions under statutory schemes have to be seen against the background of other statutory and non-statutory provisions for medical care and welfare services for the old.
Contributions for pensions payable in Europe are very much higher—in fact, the figures are staggering. Whereas, as a percentage of earnings, employee contributions in this country are 3.56 per cent., in France the total paid from his earnings by the employee is 6.5 per cent.; in Germany, 13.15 per cent., and in the Netherlands, 17.95 per cent. I mention these figures because they are so startlingly out of line with our contributions, and indicate that the whole problem is much more difficult and takes into 974 account far more than simply the contributions paid, because, as I say, taxation, the cost of living and so many other factors are involved.
The noble Lord, Lord Wade, rightly stressed the value of the social services. I fully accept the need for a fuller development of the personal social services. I mentioned in my opening speech that we have provided more money under the rate-support grant for local authorities, and this is one direction in which we very much hope to see greater development. Like the noble Lord, we wish to encourage occupational pension schemes. For some people it is already established practice to consider a possible job in terms of total remuneration; in other words, to think about pension rights, sick pay et cetera, as about the basic wage or salary. This we believe is a healthy attitude, both for the individual and for industry. The Government's view is that earnings-related pensions are best approached in this way, by the development and consolidation of occupational pension schemes. The end goal of better provision for old age; the desirability of better, because more broadly based, industrial relations; the need for the individual to have some say in his own financial position, and the best use of existing resources all seem to point in this direction. There must, of course, be central State earnings-related provision for those with no prospects of earnings-related provision from their employers.
The right reverend Prelate the Bishop of Guildford made the significant point about how much cheaper it is to keep people in their own homes. I entirely agree with him, and this is entirely our object, too. We want to see only the sick in hospital, and we want to see in old persons' homes only those who cannot live at home.
The right reverend Prelate also drew attention to the need for information, and this gives me an opportunity to thank him and his fellow clergy for the help they give us in making these services known. We have designed a general guide to the supplementary benefits scheme called, The Right to Help, which has been distributed to a number of people who can help to bring it to the attention of those who might be able to benefit from it. Among those to whom 975 it has been distributed are the clergy, doctors, dentists, opticians, hospital management committees, local authorities, probation and after-care services, citizens' advice bureaux, the Council for Social Services, and the headquarters of voluntary organisations, as well as the national headquarters of trade unions, nationalised industries and the social science departments of universities. We have tried to get a wide circulation for that pamphlet.
The right reverend Prelate also asked for a slip in the pensioner's book. I had an argument about this with the noble Lord, Lord Nunburnholme, on a previous occasion. There is in fact a slip in the book. He did not declare an interest—he may not yet be on a book. But for those of your Lordships who may be drawing retirement pension I may say that there is indeed a slip in the book which draws the attention of pensioners to the availability of supplementary pensions and explains how they can make a claim for them. It also includes a form enabling a pensioner to ask an officer from the Department to call upon him to discuss his circumstances and see whether he is entitled to supplementary pension.
The noble Baroness, Lady Gaitskell, raised a point about the new pension for the over-eighties, and said that in certain circumstances this reduced the supplementary benefit which they might have been receiving. This of course is true. It is true of all pensions that where there is an increase in the pension rate it may result in the reduction of the supplementary benefit. This is a safety net, as it were, to ensure that nobody falls below that standard. Of the 120,000 awards that have been made, 40,000—roughly, one third—involved an adjustment of supplementary benefit. But the other two-thirds gained from this award.
The noble Baroness could not resist bringing a partisan spirit into the debate. I will not follow her along that line, although I have plenty of figures here. I acknowledge freely that the pension increase that was made by the Labour Government in 1965 was a substantial, real increase. But their increase in 1967 did little more than restore the position on a prices basis, and that in 1969 just failed even to come up to 976 that standard. So far as the earnings rule is concerned—this was another point mentioned by the noble Lord, Lord Raglan—and the increments for deferred retirement, these are under consideration in our current review.
The noble Lord, Lord Brockway, has gone, and perhaps I can simply say that I did not agree with his prices and incomes policy. It seems to me that the course that we should follow is not a redistribution of wealth. That is not what will really help the elderly in the long run. What we must seek for is higher output, increased resources and a larger cake from which they will receive a larger slice. The noble Lord mentioned the idea of a standard of livelihood below which no one should fall. That is obviously an attractive idea. We are moving some way towards it. We have the supplementary benefit which provides a level below which no person need fall if he is not in work. We have introduced the family incomes supplement, which will help those in work not to fall below a certain standard. And we have introduced a pension for some of the over eighties and are pledged to bring in a pension for all over eighties which will cover those who are not otherwise eligible.
The noble Lord, Lord Roberthall, and subsequently the noble Lord, Lord Champion, had something to say about the value of pensions in relation to prices and wages. The single rate of pensions has floated around 20 per cent. of wages on the dates of upratings, and the equivalent of the married rate is 32 per cent. The lowest figure was 18.1 per cent. in October, 1951, and the highest 21.3 per cent. in March, 1965. The present situation is that there has been no increase in the purchasing power of the pension since October, 1967. The increase in the single rate of pension in November, 1969, from £4 10s. to £5, and from £7 6s. to £8 2s. for a married couple, merely compensated for the increase in prices in the intervening period. In February, 1971, the general index for retail prices was 147.8, and at that point 49p would be needed to restore the purchasing power that the £4 10s. rate had just before it was increased.
The noble Lord, Lord Ardwick, referred to the reconstruction of National Insurance. Any Government taking a 977 fresh look at the National Insurance Scheme must do three things. They must find a sound and equitable way of meeting the large and increasing cost of the scheme; they must make the best use of resources, which cannot readily be stretched to meet all the varied demands made upon them; and they must ensure that the respective contributions made by the State and the private sector are sensibly balanced. The existing contribution structure has been developed in response to changing demands and varying principles. The end product, with its mixture of flat rate and earnings-related contributions, is difficult to explain, complicated to operate and unfair to the lower-paid worker, who contributes a higher proportion of his earnings than the man further up the scale. It has already been announced that we shall be moving to a fully earnings-related system of contributions, at any rate for employed people.
My noble friend Lord Ilford, who in these debates speaks always with unrivalled knowledge, and the noble Lord, Lord Sorensen, both drew attention to the difficulties of old people suffering from cold and the need for some assistance with their fuel bills. I appreciate this point; we have tried to do our best on it. The supplementary benefit scale is intended to include normal heating requirements. Where it does not—and obviously in a period of inflation it does not—the long-term addition is paid to all retirement pensioners on supplementary benefit, and that should help. If it does not, there are the extra payments that I mentioned in my opening speech of 25p, 50p and 75p per week, which can be given to assist with heating requirements. I would stress how sympathetic the supplementary benefit staff are to the difficulties of old people in these cases—for example, they try to help; they work very closely with the Electricity Boards in trying to prevent bad debts.
This gives me an opportunity to pay a tribute to those who work in the Supplementary Benefits Commission—I am sure that the noble Lord, Lord Collison, will forgive me for doing so—and to all those who work in Social Security offices. They had a pretty rough time during the postal strike, and they coped, with the utmost honour to them. They have done their very best, and I 978 Should like to pay them this tribute. May I also say to my noble friend Lord Ilford that I was most grateful to him for his reference to the part that can be played by the social services in assisting the elderly. We hope that the services will develop rapidly under the new Directors of Social Services. The noble Lord, Lord Nunburnholme, asked for simplification of benefits. I hope that I have helped him somewhat in repeating what is in the pensioner's book. I will certainly look at what he has said and to see what we can do to help.
The noble Lord, Lord Davies of Leek, spoke of the tax system. I thought he ought to have come over and joined us, but perhaps he will think about that later. He seemed to share the views that most of us have on this side of the House. He also talked of the relation of the retirement pension to average earnings. If one goes back to the beginning of the present scheme, the figures are quite interesting. If one takes the present scheme from July, 1948, to the latest uprating in November, 1969, pensions rose by 284.6 per cent.; prices by 122.8 per cent.; earnings by 267 per cent. That is, pensions and earnings nearly quadrupled, while prices rather more than doubled. The effect of this was that the purchasing power of the pension increased by 72.6 per cent., and kept pace with earnings over that particular period.
The noble Lord, Lord Raglan, suggested that the pension should be linked to a cost of living index and raised more frequently. The difficulty is that this really is a major operation. There are over seven million retirement pensioners and as well as the pension the contributions have to be raised at the same time.
§ LORD DAVIES OF LEEK
My Lords, on a technical point, I appreciate that that is quite true. This is a problem we always had. We were under the impression that the Department was going ahead with the computer services to speed up progress in the future. Can the noble Lord say whether any progress has been made in that respect?
§ LORD ABERDARE
My Lords, progress is being made. This is really only to speed up the actual process of printing the books and getting all the facts 979 and figures out. I was referring rather more to the difficulties of everybody having to pay increased contributions—employers and employees—which is quite a major matter.
§ LORD RAGLAN
My Lords, it would save having a row every time we think that the pensions ought to go up. We are having an argument now as to whether they ought to go up. The Government are conceding that they should. Cannot we go into it more quietly than this?
§ LORD ABERDARE
My Lords, I see the noble Lord's point. I will come to that at the end of my speech, because that really is what this debate is about. The noble Lord, Lord Sorensen, put his name down late to speak, and we are very glad that he did so. But I do not know whether he noticed that he interrupted a succession of five Welsh Members, and rather spoilt the ending of this debate which was going to be conducted by five Welsh Members. I can only suggest that if he cares to come in again next Wednesday he will find himself in equally good company, for we have a debate on the Welsh reorganisation of local government. The noble Lord made a most valuable contribution, especially by drawing attention to the help afforded by sheltered housing and day centres. I heartily welcome that. I also welcome the very valuable part that can be played by voluntary organisations. Many of them are active in this field and we welcome their co-operation. The noble Lord, Lord Champion, as always, put his finger right on the spot and said that there were really two questions: How soon were we going to raise retirement pensions, and by how much. I have tried already to go so far as I can on this. In answer to, "How soon?", I would say that we are committed to raising pensions this year. In answer to, "How much?" I would say that we are reviewing the situation to ensure that the increase will at least maintain their purchasing power.
My Lords, I see the force of arguments on the side of those who advocate an immediate raising of the retirement pension but, as I have tried to explain, this is a vast and complicated operation involving not only my Department and its local offices, but also employers and 980 individual contributors. We think it right, as the last Government thought it right, to make this major reappraisal every two years, but we fully recognise that, in the interim, in an inflationary situation there may be a need for additional help. It is for that reason that in recent years the rate of supplementary benefit has been raised annually. This is the safety net of the system should any individual pensioner find himself in desperate need.
§ 6.38 p.m.
§ BARONESS PHILLIPS
My Lords, I should like to thank most sincerely all the noble Lords, and one noble Baroness, who have taken part in the debate. I think your Lordships will agree that the quality and variety of the speeches has been quite remarkable. I agree with those noble Lords who advocate a look at the retirement age. This has been one of my ploys for many years. I think it is something that we should be looking at: whether it should be changed; whether people should have the opportunity of retraining, and so on. I am glad that we are not suffering the oslerisation of the elderly at this day centre. It seemed to me that the pensioners who declared that they were pensioners were extraordinarily lively and virile—they certainly showed no signs that they were likely to be put out of the igloo.
I should like also to thank some of the organisations who have helped me: the National Federation of Old Age Pensioners and the National Old People's Welfare Council, groups that I have worked with very closely for many years. I am grateful for the contribution this afternoon from the right reverend Prelate. I entirely agree with him that, for various reasons, it is always better to keep people in their own homes. He is so right, too, in saying there is a monetary consideration. We have coined to-day a number of new slogans—splendid ones. My noble friend Lord Ardwick told us that whatever was social justice must not be impeded by the various reasons that can always be brought forward. I should like to thank my noble friend (if I may call him that) the Minister, Lord Aberdare, for his intervention on two occasions, and for the helpful statements he has made.
981 My noble friend Lord Champion put his finger on the crux of the matter, and although the noble Lord, Lord Roberthall suggested that the Budget proposals are already prepared, my short spell in Government taught me one thing: that anything you want to do you can do, and if there is anything that you do not want to do, you can call in aid all sorts of committees and all kinds of Royal Commissions. St. Francis, one of my favourite saints, told his congregation that the test of a good sermon is that one goes away saying, "I must do something about it". May I hope that this is the test of this debate this afternoon, and that Her Majesty's Government will tell us next week something we shall enjoy hearing? My Lords, I beg leave to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn.