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Benefits

Volume 33: debated on Tuesday 30 November 1982

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11.

asked the Secretary of State for Social Services if he will introduce twice-yearly reviews of retirement pensions and other benefits.

Does the Secretary of State realise that by introducing more frequent reviews he would at a stroke eliminate the feeling of injustice among pensioners because they must wait from March until November for their promised increase? Many of them feel that they will never get it, as they may die in the meantime. Secondly, more frequent reviews would allow the right hon. Gentleman more accurately to forecast the rate of inflation, thereby eliminating his embarrassment at having to steal from pensioners' purses and wallets the paltry sums that he claims to have overpaid them.

I remind the hon. Gentleman that when that suggestion was put to the Labour Government after November 1976 it was always resisted. The only justification for six-monthly reviews would be runaway inflation, which is what we had in the first years of the Labour Government. Fortunately, that is no longer the case.

Does my right hon. Friend agree that pensioners would not welcome such a proposal in the current year, because, if accepted, they would not enjoy the full additional benefit of 2½ per cent. in 1982–83?

My hon. Friend is right. Between 1974 and 1976, when the Labour Government introduced such frequent reviews, inflation was running at a rate of no less than 26 per cent.

Given that inflation under this Government reached 22 per cent., why is the right hon. Gentleman so coy about this proposal? Will he admit that there is nothing technically impossible about a twice-yearly uprating when inflation is in double figures? There is nothing wrong in that. The Labour Government proved that it could be done. As my hon. Friend the Member for Oldham, East (Mr. Lamond) said, it would not then be necessary for the Government to introduce these clawback measures.

No one is challenging whether it is technically feasible. The hon. Gentleman has just said that it could be done if inflation were in double figures, and that was so when Labour was in power. Fortunately, under this Government inflation is not in double figures.