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Pensions (London Weighting)

Volume 885: debated on Tuesday 28 January 1975

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3.

asked the Secretary of State for Social Services whether she will consider introducing an element of London weighting to all pensions paid to persons living in the Greater London area.

No, Sir. The National Insurance Scheme is a contributory one, and people in all parts of the country pay the same rates of contributions to qualify for the same rates of benefit. As regards supplementary pensions, there is already some differentiation in the levels of entitlement in different parts of the country, because these vary directly with the housing costs incurred by an individual supplementary pensioner.

My right hon. Friend will not be surprised that I am somewhat disappointed with his reply. Does he not accept that many of the factors identified last year by the Pay Board as contributing to the much higher cost of living of people living in the London area apply equally to pensioners, particularly having regard to the low take-up of rent rebates? Is there not a case for reviewing the basic pension in this locality?

It is true that last year the Pay Board showed quite clearly that higher costs were incurred by people living in London, but the main additional costs arose in connection with housing and travel to work. Supplementary pensions take account of housing costs, and other pensioners can claim rent and rate rebates. Just as there may be costs which are in some ways unique to London, or which are higher in London than in other parts of the country, so it might be argued that, for example, climatic conditions in other parts of the British Isles could lead to a similar conclusion in those areas.

Will the Minister resist the idea advanced by his hon. Friend? If he were to accept it it would cause bitterness in areas just outside the Greater London area? Will he accept that one of the principal reasons for having London weighting is the necessary use of public transport? Does he not agree that this does not necessarily apply to pensioners?

The extra cost of travel to work does not apply to pensioners in general, but the hon. Gentleman is right to say that if any attempt were made to run a system based on defined boundaries we should run into serious administrative problems, and deep resentment would build up in all parts of the country.