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Pensioners (Cost Of Living Index)

Volume 23: debated on Tuesday 4 May 1982

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asked the Secretary of State for Employment what has been the increase in the pensioners cost of living index in the last 12 months.

The retail price index for one-person pensioner households increased by 10·9 per cent., and that for two-person pensioners by 11·2 per cent. over the year to the first quarter of 1982.

Does my right hon. Friend agree that it is unfair that some pensioners have to spend up to 10 per cent. of their incomes paying standing charges for gas, electricity, water and telephone? Will he take steps to help? How is this factor weighted and calculated in the index?

My hon. Friend asks principally a question that is not for me to answer. Whether standing charges have a disproportionate effect on pensioners is a matter for my right hon. Friend the Secretary of State for Social Services and others. Standing charges are reflected in the pensioner indices both in the price indicators and in the weights, which are based on the actual expenditure of low-income pensioner households, as reported in the family expenditure survey. Indeed, my hon. Friend might like to look back to a full description of the construction of these indices in the June 1969 edition of Employment Gazette.

Does the Secretary of State accept that standing charges are affected by the Government's policies, generally? Is he aware that the standing charges for gas have quadrupled in the two and a half years since the Government came to office, and that electricity standing charges have increased by two and a half times? Will the Secretary of State now accept some responsibility for initiating a review into the effect of the standing charges and other burdens on pensioners?

I thought that I had explained the position clearly to the House, but obviously the hon. Gentleman did not quite follow what I said. I suggest that he reads my answer in Hansard tomorrow.

In considering increases in the cost of living for pensioners, will my right hon. Friend recall that not so long ago Conservative policy was to increase pensions every six months, not every 12 months? Does he realise that at least two member States of the European Community find it possible to increase pensions every six months? If the reason for not doing so is purely administrative difficulty, could not the Government overcome it so that those who die during the last six months of the period have some benefit during the last few months of their lives?

My hon. Friend should consider two matters. First, inflation has been brought firmly under control since the idea was first mooted. It is now only just over 10 per cent. and falling. The prospect of long-term single figure inflation is within our grasp. The position is very different from that during the term of the previous Government. Secondly, by November, on the next uprating, the pension will have been increased by 68 per cent. since we came into office compared with an expected increase in prices over the same period of 65 per cent.