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Pensions And Benefits (Uprating)

Volume 33: debated on Tuesday 30 November 1982

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2.

asked the Secretary of State for Social Services what representations he has received concerning the clawback to be imposed on the 1983 pension uprating.

13.

asked the Secretary of State for Social Services when he expects to introduce legislation to implement the Chancellor of the Exchequer's adjustment to the November 1983 social security uprating.

20.

asked the Secretary of State for Social Services when he expects to be able to announce the Government's decision as to the amount of the clawback which will be deducted from benefit increases in November 1983.

Decisions on what the 1983 uprating should be will be taken, as usual, at the time of the next Budget. Legislation will be introduced as necessary, but I have no specific timetable in mind at this stage. The Department has received about 160 letters on this subject.

Does the Minister accept that those 160 letters represent the views of millions of people throughout the country? Will he confirm that of the £180 million savings from benefits announced by his right hon. and learned Friend the Chancellor of the Exchequer in his recent financial statement, £90 million will come from pensioners, which means that a married couple will lose 90p and single men and women will lose 55p? Is that not the meanest cut that has ever been perpetrated?

I shall not confirm those figures, for the good reason that the decisions on them have not yet been made.

The hon. Gentleman is wrong. I remind the House that the adjustments are a necessary part of the forecast method. That method was introduced not by the Conservative Government, but by the Labour Government, to make a cut in the social security budget.

Is it really the Secretary of State's intention to introduce a Bill to clawback £180 million, which is just one-tenth of the cost of the Falklands war—[Interruption] Yes, it is just one-tenth of the cost of the Falklands war. It is a clawback from pensioners and other people in need. In May 1981 the Minister for Social Security, who is now sitting next to the right hon. Gentleman, as an earnest of his good will when clawing back the last 1 per cent., gave an assurance to the hon. Member for Brighton, Kemptown (Mr. Bowden) that he would never do it again. Is that not duplicity?

The Government have made no decision about the amount of the adjustment of pensions and other benefits. I remind the hon. Gentleman that when the Labour Government introduced the forecast method they introduced it as a saving, but they did not say that they would make good the shortfall and ignore overpayments. That was never their position.

Will the Secretary of State name the occasion when the Labour Government introduced legislation to clawback benefits, as the Conservative Government did in 1981, and as he has forecast he will do in 1983? Will he tell us, because this is crucial for people outside the House, whether, if the legislation comes before the House on a clawback basis, it will include, as it did in 1981, not just old-age pensions but mobility allowance, attendance allowance, pensions for policemen and pensions for military personnel? Will the legislation include a clawback on all those people, as it did in 1981?

The hon. Gentleman knows that those are precisely the issues that are now being considered. It is right that we should consider them in conjunction with the Budget and uprating considerations. The hon. Gentleman has made an important point, which is not generally recognised. The House should remember that, by statute, public service pensions are tied to national insurance retirement pensions as well, so that public service pensioners, whom some would claim are already favourably treated in contrast to private sector pensioners, would receive a bonus if there were no adjustment.

I accept that my right hon. Friend cannot announce a definite decision to the House, but will he assure me and the House that when the matter is being considered he and the Chancellor of the Exchequer will take careful note of the fact that the pensioner index is substantially in front of the retail prices index and is a more accurate assessment of pensioner costs?

Over the lifetime of this Government that has not been so. The RPI has risen further than the pensioner index. The whole purpose of making decisions at the time of the Budget is to enable us to take all those considerations into account. I say frankly to the House that there is no way that we can make improvements in social security benefits, which many of my hon. Friends and Opposition Members would like, and at the same time keep the adjustment to a minimum. Choices will have to be made, but they should be all made simultaneously.

Will the Secretary of State confirm that last November the Government got the inflation rate wrong and, as a result, pensioners lost the equivalent of one week's money. Does he accept, therefore, that they need to have more this year for at least 12 months, if not longer, to make up for the money that they lost during the past 12 months?

The situation that the hon. Gentleman describes is implicit in the forecast method. I repeat that the forecasting method was introduced not by this Government, but by the Labour Government.

Does my right hon. Friend agree that the meanest cuts of all came in the last Parliament when that system of forecasting was brought in and the Christmas bonus was withdrawn for two years? Does he agree that those who, like me, argue that pensioners should in future be able to keep some of the extra benefit that they are having this year would be more likely to get a sympathetic response from the Government if they acknowledged that the Government are doing so well and congratulated them on bringing down inflation and helping the pensioners?

What my hon. Friend has said about inflation is crucial. Nothing could be more important. I hope that the social security team on the Opposition Front Bench will agree with this at any rate: inflation should be brought down and, once it is brought down, it should stay down. That cannot be in question. With regard to the figures that my hon. Friend mentioned, when the Labour Government made their saving it was worth £500 million in social security savings. That is the equivalent of £1 billion now. That was a direct cut in the social security budget by the Labour Government.

I shall ignore the fact that the Secretary of State has distorted his answer by not taking into account the fact that he has taken £1,800 million off social security benefits this year. Will he answer this question? Is he proposing to differentiate between the classes of people who are on pensions from whom he will claw back money? He appeared to say that that matter was for the Cabinet's decision. I warn him that our anger at any clawback will be doubled if he ignores public service pensioners and merely goes for the poorest in the land.

The hon. Gentleman has misunderstood the point. I was saying that in the decisions that we make we must take account of public service pensioners. That is why it is right to take those decisions at one and the same time.

On a point of order, Mr. Speaker. In view of the unsatisfactory reply to my question, I beg to give notice that I shall seek to raise this matter on the