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Graduated Pensions Scheme

Volume 640: debated on Monday 8 May 1961

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7.

asked the Minister of Pensions and National Insurance how many applications for certificates of non- participation are awaiting attention by the Registrar; how many employees are covered by them; and what numbers of new applications are now coming in.

At Friday, 5th May, there were in the Registrar's office 224 elections, covering 2,137 employees, for which certificates had not been issued. Of these, 132 can be dealt with only after further action by the employer. Since 4th April, 1,891 applications for certificates covering 23,650 employees have been received.

Can the Minister make any estimate of the likely flow of applications for contracting out? Does he think that it is now drying up, or are we to expect that the figure may rise to a total of, say, 5 million?

At present, as the figures I have given make clear, the flow is quite small, most of the applications being in respect of very small schemes. I would prefer not to make any long-range forecast.

8.

asked the Minister of Pensions and National Insurance how many letters of protest he has received from or relating to insured persons who are paying graduated contributions from which they cannot derive any graduated pension benefit.

I know of 26 such letters. Analysis of them indicates that only four of them clearly establish that the person concerned has no possibility of contributing enough to earn some graduated pension.

Is the Minister aware that fewer protests appear to have reached him than have reached me and my hon. Friends? Can it be that people consider it a waste of time writing to the right hon. Gentleman?

The hon. Member knows very well that all serious complaints are seriously considered.

12.

asked the Minister of Pensions and National Insurance the total cost to date of providing publicity and information in connection with the new graduated pensions scheme.

While it is not possible precisely to separate expenditure on the necessary publicity for the graduated scheme from that simultaneously effected in respect of the simultaneous increase in flat-rate benefits, the best estimate I can give is about £64,000.

Will the right hon. Gentleman tell us how much money has been wasted on printing expensive booklets twice over because the first were out of date before the scheme began?

There has been very little nugatory expenditure indeed, because, as the hon. Member will understand, leaflets with a large circulation like this in any event require second and third editions.

16.

asked the Minister of Pensions and National Insurance what additional pension he estimates will be earned during his normal working life by a man, aged 42 and earning £10 per week on entering the graduated pensions scheme, making allowance for a 2 per cent., annual increase in earnings; and what, on the same assumptions, would be his weekly earnings immediately before retirement.

About 12s. a week if the man retired at 65, and about 21s. 6d. a week if he deferred his retirement until 70. His earnings by age 65 would, on the assumption made in the Question, be about £15 10s. a week and by age 70 about £17 a week.

Do not these figures reveal that on retirement there will be a very great reduction from earnings to pension? That is precisely what we assumed it was the aim of the Government to eliminate or reduce. Does the right hon. Gentleman agree with the promise of the right hon. Gentleman who is now the Home Secretary that the standard of living would be doubled in 25 years, and, in view of that, does he seriously say that the standard of living of this man will be doubled at 65, as compared with his standard of living at 40?

The hon. Member bases all that first of all on ignoring the flat-rate pension at whatever rate it may be and, secondly, ignoring the rapidly growing body of voluntary provision. It is only by adding those two factors to the third one which he has posed in his Question that it is possible to form any sensible view on this matter.

Was not the right hon. Gentleman extremely successful in the election in confusing the public?

At least when I put a question I put all the facts and not one-third of them.

18.

asked the Minister of Pensions and National Insurance if, in the light of latest figures of persons participating and contracted out of the graduated pension scheme, he will issue revised estimates of future income and payments out of the National Insurance Fund and a revised analysis of National Insurance income.

I will circulate in the OFFICIAL REPORT revised figures for the current year. These figures do not differ significantly from those in the Government Actuary's Report on the National Insurance Bill, 1960 (Cmnd. 1197) and the variation is insufficient to justify at present the production of revised figures for future years.

Following are the figures:

ANALYSIS OF ESTIMATED NATIONAL INSURANCE INCOME AND EXPENDITURE IN 1961–62

Earlier Estimate

*

£ millions Revised Estimate
1. Income
Contributions:
(a) Flat-rate751769
(b) Graduated186165
Exchequer Supplements187189
Interest5050
1,1741,173
2. Expenditure1,1341,144

* "From the Government Actuary's Report on the National Insurance Bill, 1960 (Cmnd. 1197).

20.

asked the Minister of Pensions and National Insurance what is the latest information of the number of persons in non-participating employments as regards the graduated pensions scheme.

Up to 5th May, the number of employees covered by certificates of non-participation was 4,289,000.

21.

asked the Minister of Pensions and National Insurance what he estimates will be the payment from the National Insurance Fund to the Inland Revenue Department for the two years 1960 to 1962 in respect of the collection, etc., of graduated contributions under the National Insurance Act, 1959.

Has the Minister any idea of how many more times this sum it will cost the various firms which have to do the extensive calculations to arrive at how much money must be paid?

I think the hon. Gentleman underrates the resilience and skill of British industry.

22.

asked the Minister of Pensions and National Insurance what will be the additional pension earned at normal retirement age by a man earning £15 a week who enters the graduated scheme at the age of 40 years; and what would be his weekly earnings immediately before retirement assuming a 2 per cent. annual increase in his earnings.

About 22s. a week if the man retired at age 65 (and about 36s. a week if he deferred his retirement until age 70). On the assumption made in the Question, his earnings by age 65 would be about £24 a week and by age 70 about £26 10s. a week.

Does the Minister not think that this addition to the pension, 57s. 6d. on the present basis, is quite derisory? Does he not think that by this time National Assistance must surely have been much more extensively raised than by what may perhaps be the price of a couple of packets of cigarettes? Does he not think something better than this could be done?

I think it is very good value for money, but on scale or size I think the hon. Member appreciates as well as any of us that there is a very deep cleavage of principle between his point of view and mine.

On the question of value for money, can the right hon. Gentleman give us any idea of what this 22s. will be worth by the time this man retires?

Provided, as seems likely, we have a continuation of Conservative Government, at least 22s.

25.

asked the Minister of Pensions and National Insurance what estimate he has made of the total cost to date of the graduated contribution and pension scheme.

It is estimated that the total cost to 30th April, 1961, is about £1,600,000. This includes the costs of the Inland Revenue and other Government Departments.

Does the Minister not think that this is a shocking waste of public money when many of the benefits paid out are not commensurate at all with the contributions paid and when in some cases there will be no return at all on the contributions paid?

I think it is a very reasonable provision, whose amount must be looked at on the basis that the total expenditure to date is less than 1 per cent. of the expected yield of contributions for the first year.