House Of Commons
Friday, 25th June, 1971
The House met at Eleven o'clock
Prayers
[Mr. SPEAKER in the Chair]
Questions To Ministers
Order. On Wednesday, the hon. Member for West Ham, North (Mr. Arthur Lewis) drew my attention and that of the House to the fact that the meaning of a Question which he had addressed to one Minister had been altered by virtue of its transfer to another Minister without any amendment of its text.
It has long been accepted, and is laid down in Erskine May, eighteenth edition, page 322, thatThis power sometimes needs to be used when a Question is transferred; the most obvious example is when the personal pronoun denoting the sex of the Minister requires to be changed. Although the present instance is not quite as clear-cut as this, I am of the opinion that it is of such a nature that the use of the sub-editing power would be entirely appropriate. I understand that the bon. Member's Question is down for answer on a future date, and I accordingly direct that it be amended on the Paper by substituting, for the word "him", the phrase "the Prime Minister ". Although the final decision whether or not to sub-edit in any particular case must remain in the hands of the authorities of the House, it would be of assistance if Government Departments, when instructing the transfer of a Question, could indicate to the Table Office any textual alterations of this nature which they believe ought to be made in order to preserve the sense of the Question. Finally, I wish to make it clear beyond all doubt that in giving this Ruling I am not in any way suggesting that the actual transfer of the Question was improper; it is for Ministers, and Ministers alone, to decide which one of them is responsible for the matter to which a Question relates. All that I am concerned with is to ensure that such matter should remain accurately described."The clerks at the table have full power to sub-edit questions …"
May I first express the thanks of myself and, I am sure, the whole House for your kindness and courtesy in dealing with this matter, Mr. Speaker. May I say how much I should like to record my appreciation of all the Clerks in the Table Office, especially the Principal Clerk at the Table, who I see is present, for his personal kindnesses to me.
I am quite happy about this, because I appreciate that obviously one cannot interfere with transference of Questions, which is a Ministerial responsibility. But, as I now take your Ruling, that if the Table is not advised by the Department, and the Department, either accidentally or, sometimes, Mr. Speaker, with great respect, with malice aforethought, does not advise the Table, I take it that the Member could point out that in the Department trying to switch, if it tries to switch in such a way as to lose the whole import of the Question, your Ruling would mean that we could then go to the Clerk at the Table and point out that the Department had made a slip. My point is that if I were to ask the Prime Minister whether he would pay a visit to my constituency—God forbid—I would not expect him to transfer that Question to the Solicitor-General, because, with great respect to the Solicitor-General, I do not want the Solicitor-General to visit my constituency. Provided that we have this as an understanding, I should have thought that we could say that we are all very pleased.The hon. Member would be quite in order in making the appropriate representations if he thought them necessary.
Orders Of The Day
Medicines Bill
Order for Second Reading read.
11.9 a.m.
I beg to move, That the Bill be now read a Second time.
This is a short Bill which makes a very small change in the provisions about fees for licences under the Medicines Act, 1968. There is no point of policy or substance involved. The need for the Bill arises from the fact that doubts have arisen about the legal effect of the original provisions. The main doubt with which the Bill seeks to deal relates to the power to charge fees in respect of one particular class of licence for which the Act makes provision. These licences, referred to in the Act as "licences of right", arise from the transitional provisions under which medicinal products already on the market on the first appointed day can qualify initially for licences without undergoing the scrutiny as to safety, quality and efficacy to which new products will be subjected. There seems to have been no doubt in anybody's mind when the Bill which became the 1968 Act was going through Parliament that licences of this description would give rise to fees in the same way as other licences. The doubt arises because in Section 128(3) the draftsman has used the word "power" and it is a matter of uncertainty, in the light of certain rulings by the courts, whether a reference to a power in this sort of context can be construed as a reference to a duty. The issue of a "licence of right" is a duty in the sense that if an applicant can show that the conditions set forward in the Act apply in his case the authority is obliged to issue the licence. As I have said, there does not seem to have been any doubt at the time that fees were to be charged in respect of "licences of right" as well as other licences. If fees cannot be charged in respect of this type of licence, it would still be possible to collect substantial sums by way of fees in respect of other types of licences, but at least for the first five years of the licences scheme the result would be highly inequitable and inconvenient in practice. The bulk of the licences issued would be licences of right and the fees would fall upon those firms who had occasion during that period to apply for ordinary licences because they were launching new products. This Bill deals with the situation by repealing the doubtful subsection to which I have referred and replacing it by the new provision contained in Clause 1 of this Bill which refers expressly to licences, certificates and directions instead of using the general term "power" which has led to the difficulty. The opportunity has also been taken to include some other provisions which make explicit the ambit of the regulations which can be made under the power. These provisions, which are contained in Clause 1(1)(b), will avoid any doubt whether it would be possible to include in the regulations provision for fees to be paid by instalments and for fees once paid to be refunded in prescribed circumstances. As a necessary implication of payment by instalments, the regulations can authorise the suspension of a licence which has been issued if the instalments fall into arrear. The other provisions of the Bill are of a formal nature and are necessary in order to apply various provisions of the principal Act. As a result of them, the Health and Agriculture Ministers will, before making the fees regulations, be required to consult bodies representative of the interests concerned, and the regulations themselves will require the concurrence of the Treasury and be subject to enforcement under the negative procedure. The House will not expect me now to go into any detail on questions which will arise in the course of such consultations. Some proposals were put forward before the organisations concerned in April, and since then a good many representations have been received by the Departments concerned. All the points raised are being carefully considered, and I believe that we shall shortly be in a position to put forward revised proposals which will be more acceptable both as to the total amount to be collected in fees and as to the incidence on particular categories. I trust the House will agree that the provisions in this short Bill are reasonable and necessary, and that it will be willing to grant it a Second Reading. The first appointed day under the Medicines Act is to be 1st September, 1971, and it is, therefore, desirable that this Bill should go through quickly.11.12 a.m.
I rise only to say that we on this side of the House do not oppose the Bill. We recognise its necessity. The Under-Secretary has explained clearly what is involved, and the proposals are reasonable.
I would only add that strong criticisms can be made about the operation of the Medicines Act, 1968, and in particular the Medicines Commission. However, the matters covered by this Bill, in that they seek to clarify the legal effect of certain provisions in the Medicines Act, are acceptable.Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[ Mr. More.]
Committee upon Monday next.
Medicines Money
Queen's recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to make further provision as to the fees payable for the purposes of Part II of the Medicines Act, 1968, it is expedient to authorise—(1) the payment out of moneys provided by Parliament of any increase in the sums payable out of such moneys under the said Act of 1968 which is attributable to provisions of the said Act of the present Session relating to such fees; (2) the payment into the Consolidated Fund of any increase in the sums payable into that Fund under the said Act of 1968 which is attributable to those provisions.—[Mr. Michael Alison.]
Pensions (Increase) Bill
As amended ( in the Standing Committee), considered.
New Clause No 1
Other Overseas Pensions
(1) Where it appears to the Secretary of State just so to do having regard to things done by, or to the responsibilities of, the government of any overseas territory at a time when Her Majesty exercised jurisdiction there through Her Majesty's Government in the United Kingdom, the Secretary of State may, with the approval of the Minister for the Civil Service, make regulations authorising the payment by the Secretary of State, in respect of pensions to which this section applies or any class of such pensions, of supplements of such amounts as may be specified in the reglations in accordance with this section.
(2) This section applies to pensions payable wholly or partly in respect of service in the overseas territory, being service rendered to any authority or institution in the overseas territory other than the government of the overseas territory, and rendered by a person who is certified by the Secretary of State, with the consent of the Minister for the Civil Service, as having been an overseas officer in relation to that territory:
Provided that this section does not apply to a derivative pension unless it is payable either by the government of the overseas territory or in accordance with an enactment, scheme or other instrument specified in the regulations as being approved by the Secretary of State for the purposes of this section.
(3) The consent of the Minister for the Civil Service under subsection (2) above may be given generally in respect of persons of such descriptions as may be specified in the consent and subject to such limitations (if any) as may be so specified.
(4) Subsections (4), (5) and (7) of section 11 of this Act shall apply in relation to this section as they apply in relation to that.—[ Mr. David Howell.]
Brought up, read the First and Second time, and added to the Bill.
Clause 1
Present Increases
11.15 a.m.
I beg to move Amendment No. 2, in page 1, line 16, leave out "18 per cent. of the rate as so increased" and insert:
I am sorry to say that we still do not have a Treasury Minister here. This is a point that we raised in Committee, and, since the Bill and particularly this Amendment deals with inflation and the need to protect pensioners from the consequences of inflation, I had hoped that even though a Treasury Minister was not selected to attend the Committee, the deficiency would be corrected on Report. Since this is the first Bill ever to come before the House which seeks to anticipate in numerical terms the levels of inflation which the Government foresee, I should have thought it essential that a Treasury Minister be brought to the House to advise the Under-Secretary of State for Employment on these matters. Of course, we have no quarrel with the hon. Gentleman himself. His ability is known to the House and his work is greatly respected. But these are matters that concern the Treasury. We are vitally concerned in trying to assess what is the level of inflation during the period from April to September. I should like to quote what the present Financial Secretary to the Treasury said in the Standing Committee considering the Pensions (Increase) Bill in 1969. He said:"14·4 per cent. of the rate as so increased further increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970".
He went on to say:"… we are denied the services of a Treasury Minister on a Bill which has traditionally been handled by such a Minister …".
that is the Motion relating to the composition of that Committee—"This is poor treatment. We do not expect any change to be made in the Motion "—
That was on a matter much less important than this. It was on a matter which did not seek to anticipate the levels of inflation. It was a Bill that did not purport to be, as this Bill purports to be, the final Bill of this kind to appear before the House, because we are changing the way in which these increases shall be made. As a result of that, this is the last Bill of this kind, although in another respect it is the first Bill of this kind. It is the first Bill that seeks not only to allay the consequences of inflation but it goes much further than that and specifies what is the Government's view of the future level of inflation. We can see how this is calculated if we turn our attention to this Amendment—"or in the membership of the Committee, but I hope that the Government will take note of the point for the future and feel that it would be appropriate that Bills of this importance, affecting as many people as this one does, should be accorded the proper treatment of a debate on the Floor of the House and correct representation on the Government side in Committee."—[OFFICIAL REPORT, Standing Committee F, 4th February, 1969; c. 4.]
Would the hon. Gentleman forgive me? I had assumed that hon. Members would have read the provisional selection of Amendments. For the record I should say that, with this Amendment, I will allow a discussion on the following Amendments:
Amendment No. 4, in page 1, line 19, leave out '18 per cent. of the basic rate' and insert:
'14.4 per cent. of the basic rate increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970'.
Amendment No. 6, in line 22, leave out '16 per cent. of the basic rate' and insert:
'12.4 per cent. of the basic rate increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970'.
Amendment No. 8, in line 25, leave out '14 per cent. of the basic rate' and insert:
'10.4 per cent. of the basic rate increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970'.
Amendment No. 10, in page 2, line 2, leave out '10 per cent. of the basic rate' and insert:
'6.4 per cent. of the basic rate increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970'.
And Amendment No. 12, in line 5, leave out '6 per cent. of the basic rate' and insert:
'2.4 per cent. of the basic rate increased by five-twelfths of the increase in the average of the general index of retail prices published in each of the three months April, May and June 1971 compared with the average of the same index published in each of the three months April, May and June 1970'.
I am grateful to you, Mr. Speaker, for pointing out that this Amendment is taken in conjunction with other Amendments which seek to change the basis of the increase of the pension in September of this year as a consequence of the level of inflation being rather higher than that which was expected by the present Government when this Bill was produced.
In paragraph 8 of the Explanatory Memorandum it is pointed out thatWe know that the review took in the period to 31st March and that the increase is payable on 1st September. As a result, there is this gap between the Government's decision on the cost of living in the period up to 31st March, and their anticipation of inflation up to 1st September. We see from the Explanatory Memorandum that the Government have allowed for a cost of living increase of 14·4 per cent. up to 31st March, and that they are giving an increase of 18 per cent. which is to take effect on 1st September. The difference between those two figures is 3·6 per cent. That takes into account the movement in the five-month interval, and it works out precisely at an annual rate of inflation of 8·64 per cent. That is the Government's estimate. I do not quarrel with it. Presumably it was made some time in March of this year when the Bill was being prepared. However, paragraph 5 of the Explanatory Memorandum says:"There is thus a gap of 5 months between the latest date to which it has been possible to calculate to movement in the cost of living and the payment date."
That is an unqualified obligation, and no doubt the whole House will readily accept the Government's sincerity in seeking to maintain the purchasing power of the pensions involved. In March of this year, the Government decided that 8·64 per cent. was about the kind of figure which they might allow for the level of inflation in the gap between the date when the estimate had to be made and the date when the pensions came into force. That may not have been an unreasonable estimate at the time. I would have plumped for a higher one. Other hon. Members would probably have picked different figures. However, the level of inflation has been greater than the Government anticipated. Comparing the situation in April, 1971, with that in April, 1970, the cost of living index rose by about 9½ per cent., although the figure was not known by the hon. Gentleman at the time since it appeared after the Government decided that it would be 8·64 per cent. Comparing May, 1971, with May, 1970, it is even higher, at about 10 per cent. It is clear, therefore, that levels of inflation are increasing. These matters are the responsibility of the Treasury. It is not for the hon. Gentleman to advise on levels of inflation. It is for that reason that I wanted to put a number of points to a Treasury Minister. These are not matters where decisions had to be taken in March of this year. The Bill is still before the House. It is an absurd situation to have to rely on a forecast when some of the figures are now known. There are occasions when we have to rely on the best estimate that we can make of what is likely to happen about the cost of living increases in the future. But it is absurd to rely on an estimate when some of the figures are before us. That is what we are doing here. We are relying on an estimate produced in March when we should be using the actual figures produced in May or June. If we are to estimate the increases in inflation, why estimate them five months ahead when we can delay our estimate until three of the five months are known and the forecast of the remaining two months is much easier to make? This Amendment seeks to do just that. It lays down a formula on retail prices which I gather is not wholly opposed by the hon. Gentleman, and how the computation may be made. It has the great merit of taking into account increases in the cost of living and inflation in three of the months before the decision is made and before the Bill becomes law. That is its great advantage. If the Amendment is accepted, the Government will work out on this formula the latest levels of inflation which they can derive from published figures produced by their own Departments. One of the difficulties that we have had and shall have in September is that, in the past, under all Governments, pensioners have suffered from a failure to understand the levels of inflation which are yet to come. Constantly, we have under-estimated future levels of inflation, and pensioners have suffered from that under-estimation. This Government sought to put the matter right and accepted an unqualified obligation to maintain the purchasing power of those pensions. If this Amendment is accepted, the Government will be able to meet that unqualified obligation. If it is not accepted, there is no doubt that, from September of this year, they will have failed, and the level of pension which will begin to be payable will be less than should have been allowed for and less than this House should have made sure that the pensioners received. It is not only the case that past Governments have underestimated the levels of inflation. What is now clear is the way in which this acceleration has taken place. Taking the periods between Pensions Bills, it is clear how this has happened and how it is likely to continue to happen unless other measures are taken. Between the pensions increases of 1st January, 1965, and April, 1969, the increase in the cost of living was 21 per cent. Between those of 1st April, 1969, and 1st September, 1971, the increase is likely to be 18 per cent. In other words, the cost of living rose by 21 per cent. in 4¼ years, whereas by September it will have risen by 18 per cent. in only 2½ years. This illustrates the rapid increase in levels of inflation between Pensions (Increase) Bills which has contributed to the under-payment of pensioners. 11.30 a.m. The present Financial Secretary to the Treasury said in the Committee debate on the Pensions (Increase) Bill, 1969:"With this new Bill, Parliament is invited for the first time to abandon the concept of relief, of hardship and to accept an unqualified obligation to maintain by means of two-yearly reviews, the purchasing power of public service pensions."
We are talking now not about two or three years but about two or three months, and much greater precision should have become possible. The Government's estimates have so far erred. I fully accept the Government's serious intention to pay the increases which I welcomed on Second Reading and which I still welcome, but which have since proved to be inadequate. The levels of increase in inflation were not then known, but they have become more generally understood."Although we cannot forecast inflation it would be a bold man who said that where the Government have so signally failed in the last three years they will be signally successful in the next two or three."—[OFFICIAL REPORT, Standing Committee F, 4th February, 1969; c. 9.]
The Amendment says that between now and the introduction of the increase the three months April, May and June of this year should be compared with the same three months of last year, that the increase in the general index of retail prices should be calculated from those simple figures, and that that rate of increase should be the increase for the five months during which the pensions will be increased.
It is a simple Amendment, administratively convenient, and simple to comprehend. Most important, it ties in completely with the unqualified obligation to maintain the purchasing power of public service pensions. The Minister should find it very easy to accept this useful Amendment, and I hope that the House will accept it.
The Bill is an updating Bill which unfortunately is out of date before it is on the Statute Book. The argument about the 1·6 per cent. is an argument not only about money but about the fulfilment of the spirit of the legislation.
My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) has illustrated how the calculations are based on earlier figures which were themselves based on an optimism which characterised the Prime Minister's "at a stroke" statement. We now know that that optimism has disappeared and that the Government appreciate that they face a very difficult problem in the shape of rising prices. This was acknowledged by the Minister of Agriculture, Fisheries and Food, speaking in the Bromsgrove by-election campaign, when he forecast further rapid increases in prices. It was apparent that he had discovered what he had conveniently ignored in opposition, that increasing world prices have a significant influence on our cost of living. Whatever the reasons, it is clear that the cost of living is increasing very rapidly, more rapidly than the Government expected when the Explanatory Memorandum was drawn up. The difference between us is 1·6 per cent. It is important for the Government to concede that figure so that the public service pensioners will feel that they have been given a square deal. The argument that it is ridiculous to pass the Bill based on forecasts which we now know to be wrong is unanswerable. The Government should accept the principle of the Amendment and update the Bill so that the cost of living increase over the past three months is taken into account. They should tell the pensioners, "We shall restore the value of your pensions in a real sense". There is another reason why the Government should do this. The pensioners had thought that they would receive increases in pensions from 1st April. I have argued that the increases should be back-dated to 1st April. If that cannot be done, at least on 1st September they should receive a pension which has been revalued on the real rise in the cost of living and not on a forecast which has proved to be wrong.I admire the ingenuity of the hon. Member for Ashton-under-Lyne (Mr. Sheldon) in devising the Amendments to raise the percentage increase in pension in such a way as to pass your keen scrutiny, Mr. Speaker, which I understand is directed on these occasions towards avoiding repetitious debate. I have listened with care to what the hon. Gentleman has said today as a further elaboration of the case which he made at length in Committee. I concede the point that he and his hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made that he has lighted upon a slightly different method of presenting that case, but what he has said confirms my initial reaction when I first read the Amendments that we are once again on the same ground.
We are also on the same ground on the hon. Gentleman's point about the involvement of the Treasury and Treasury Ministers in this matter. As I said in Committee, the hon. Gentleman, with others, played a leading part in the creation of the Fulton Report and the Fulton doctrine, which led to the separation of Departments between the Treasury and the Civil Service Department. It is only natural, therefore, that a Minister from the Civil Service Department should have full responsibility for, and be concerned with, all the details of the Bill. If there are particular points relating specifically to Treasury policy and Treasury departmental questions in the narrow sense, I undertake to convey them and their implications to my hon. Friend the Financial Secretary. But the whole point of Fulton and of setting up a Civil Service Department was to create a Department which could deal fully with these matters, and that is why I am here today. The hon. Gentleman's even-numbered Amendments propose a formula which would substitute for the Government's 3·6 per cent. margin on account, or 3·2 per cent. compound, a larger margin based on a projection of the cost of living as measured over the most recent year for which figures are available. This would apparently allow the figure for each end of the period to be based on a three-month average, rather than on the figure for a single month. We are not debating the hon. Gentleman's odd-numbered Amendments, the inner thinking and mathematics of which were not revealed by reading the Order Paper. I have assumed that Amendment No. 1, which raises the standard from 18 per cent. to 19·6 per cent., is also based on a projection of the cost of living, although measured in a rather different way, and instead of repeating the calculation afresh for the graded increases, he simply added the same 1·6 per cent., which was appropriate to the standard increase, to all the other 1971 increases as well. However, it is the even-numbered Amendments that we are considering. When the Government were considering how to provide their margin on account to meet the understandable criticism that the five-month gap was not being met, they considered all sorts of various possible methods, including expert forecasts of various kinds, and a mathematical projection based on various formulae. It was the hon. Gentleman himself who said earlier that no Government would be likely to publish a forecast of the cost of living five months ahead, but there is also the more fundamental objection to that approach which lies at the root of the issue that we were debating in Committee, and to which I shall return in a moment. There are many forms of projection. The two sets of Amendments illustrate two forms. Another form would have been to have projected the cost of living measured over the full two-year period forward to 1st September, to have multiplied 14·4 per cent., which is the cost of living rise over the 24-month review period, by 29 over 24 to have included the five extra months. The answer would have been 17·4 per cent. Or we could have looked backwards and measured the last 29 months' cost of living that was available to us in April. That would have produced 17·9 per cent., and so on. But all those methods miss the main point, which is that we are concerned with a permanent margin on account, and not just a margin for 1971.I understand the reason why one could use the other method of calculating the increase in pensions to take account of the five-month gap. The reason I selected those months is that in a period of accelerating inflation it is the latest figures that are the most suitable.
That really strengthens the emphasis that I placed on the main point, and confirms me in my view that, despite our exhaustive going over of this point in Committee, there is still a misunderstanding in the hon. Gentleman's mind about the central point, and that is confirmed even more by the fact that the hon. Gentleman has tabled Amendments to Clause 1, without any comparable Amendment to Clause 2.
Had the Government wished to proceed by a cost of living projection—and because they did not, this is obviously a hypothetical point—they would have wished to provide for fresh projections at each review so that the spurious precision in the first instance was counterbalanced in a self-adjusting way by an equally spurious precision on later occasions. The fundamental point—and I apologise to the House if this is repeating it, but I must do so, if only for emphasis—is that this margin is not the last word on the increases that pensioners will receive in respect of the rise in the cost of living between April and September of this year. That will be taken up in the review period 1st April, 1971, to 1st April, 1973. Second—and this is the point which worries me most about he hon. Gentleman's intervention, on the first Amendment and about the way that he has put it down—is that it has to be a margin that is reasonably appropriate for present pensioners, not merely at this review, not merely the five months 1st April, 1971, to 1st September, 1971, but at all future reviews stretching indefinitely into the future. That is the point. 11.45 a.m. The hon. Gentleman says that if we take the last three months they will reflect the rapid rate of inflation that confronts us. No one can deny that that is the situation, but that really reinforces my point that we are providing not just for special circumstances, but for a five-month gap-closing device for years ahead. In a sense, to suggest that the percentage should be higher now, that the margin on account should be raised by mathematical projections, reinforces the point about its almost certain unsuitability for five-month periods in future review years. May I explain this to the House once more, because I concede that it is complicated. I concede that it involves difficult and complex presentation, but it is the centre and heart of the matter. The scheme originally outlined in my statement of 17th November held out the prospect of increases in pensions payable this September, which was the first practical moment to bring them into payment, equal to the percentage rise in the cost of living over the first review period. As it turns out, that was 14·4 per cent. What happened was that hon. Members, pensioners' organisations, individual pensioners, and hon. Members' constituents, represented, quite fairly, that this five-month gap between the review date and the payment date would mean that pensions would be five months out of date when they came into payment. I see their point. They had their eyes particularly on this year, as the hon. Gentleman has, but the Government were the more ready to meet the point because they saw that this pointed up not only the immediate situation but what would have been, if we had not corrected it, a permanent weakness in the Bill. The margin on account is concerned with a permanent weakness in the Bill, and that is why, on reading the Amendment, it is clear that the hon. Gentleman is concerned with the immediate situation, and not with a permanent weakness and meeting a permanent situation that will arise whenever there is a review from now on into the future. The Government added to this year's increase, to both the standard and the graded increases payable in the first review, a margin on account.If the hon. Gentleman is saying that what I have suggested is not the most suitable way of dealing in the future with the five-month gap, I should like to have some discussion with him about it, but that is another matter. If he is saying that his only quarrel with the Amendment is that, while being suitable this year, it is not suitable for subsequent years, would he undertake to introduce a suitable Amendment in the other place?
I am not saying anything in line with the hon. Gentleman's second point. What I am saying is that the proposal introduced between the statement in the House and the publication of the Bill to bring in a margin on account was designed to meet a permanent weakness in the Bill, which is that the five-month gap is not provided for in pension increases. We have devised a formula that will meet it year by year by a fixed percentage. In some years it will be too low. In some years it will almost certainly be too high, and in some years it may be just about right. Over the years, therefore, it should just about even out. It may be that over the years pensioners will gain, but, on the mathematics of it, the thing is bound to even out.
As the hon. Gentleman, and others, have said, the standard increase of 18 per cent., when compared with a 14·4 per cent. rise in the cost of living over the review period, reveals that margin to be 3·6 per cent. or, if it is done by compound arithmetic, 3·2 per cent. It has also been said by the hon. Gentleman—and this is the main cause and motivation of the Amendment—that since 1st April the cost of living has risen by 2·8 per cent. equivalent—and I concede this—to a substantial proportion of the margin on account that we have allowed. But quite apart from the fact that the 2·8 per cent. rise so far may not be anything like the whole picture—and anyway the cost of living frequently slows down in the summer months, and even declines—the Government's argument—and I repeat it—is that they never intended to forecast or project the level of the cost of living on 1st September, 1971, or to provide a margin that was precisely apt and suited to 1971, and 1971 alone. That meets the intervention of the hon. Member. That was not our intention, therefore it is not surprsing that it does not appear in the Bill. By April, 1973, pensioners will have been exactly compensated for the rise in the cost of living. They will once again be left with this margin of 3·6 per cent. or 3·2 per cent. to take account of the five month gap between April and September in the review year. So it will be for existing pensioners with every future review. If the cost of living rises by a little more than the margin between April and September this year pensioners will have to wait two years to get this fully corrected.Is the hon. Gentleman saying that the 3·6 per cent. will be the same allowance in each of the review years?
I am indeed. It must automatically be so—or 3·2 per cent. compound. Each review year there will be the 3·6 per cent. boost to carry the pensioners from April to September. This matter must be seen in its true perspective, through time. It is not only that this is a small matter when we reflect on the huge importance of the Bill, and the vast strides that it makes, but it is also small in comparison with the average total increase of 26·3 per cent. which all qualified pensioners, whose pensions began before 1st April, 1969, will receive this autumn.
The fact in the centre of this part of the Bill is that it is to the advantage of pensioners that the permanent margin on account has been calculated at a time of relatively rapid inflation. What I am saying is that, whatever the course of inflation over the past year or during the next year or two, we would all expect that in future reviews the cost of living pattern between April and September will at any rate not be so much worse than the pattern established in the post-war years. If we look at that pattern we can see that there has been an average increase over these five months, April to September, of 1·5 per cent. not 3·6 per cent. or 3·2 per cent. It means that by any standards, and certainly by the standards we are discussing here, the margin of 3·2 per cent. would be and must be more than enough.Can the hon. Gentleman tell us what the average level of pension will be under his scheme and what it would be under our Amendments? I understand that the present average level is about £360 a year. Can he confirm that?
Without notice—without a computer in my head—I cannot give the compound figures. If we take this year alone the various Amendments, including those not being discussed would raise the pension by I think 19·6 per cent. which would give it a much more substantial margin. The Amendments that we are discussing would give it a slightly lower margin, 3·9 per cent. I think. I do not have the exact figures in front of me. The margin for this year would I am sure be higher.
Those of us who have not travelled with the hon. Member in Committee sometimes have a little difficulty in following what he says is a rather complex Bill. As I understand it, what he is saying is that the 3·2 per cent. figure, which will be biennial, will compensate for an increase calculated on the basis of 1.5 per cent. per annum. If that is correct and the 3·2 per cent. will only just cover an increase which in the past has averaged 1·5 per cent. per annum, that must mean that if there is a higher rate of increase, as recent indications suggest, it will fail to cover it.
That is not quite the case. I am the first to concede the point that the hon. Member rightly makes about this being an extremely complicated Bill. Had he been with us in Committee he would have heard me say that I wanted to provide some visual aids to penetrate some of the complexities of the Bill. I must take the blame for not putting the point clearly.
It is not quite as he has described. If we look back over the years since the war we find that in the period 1st April to 1st September there has been an average increase of 1·5 per cent. We are allowing for 3·2 per cent. because the calculation has been made at a time of relatively rapid inflation. From the pensioners' viewpoint it is fortunate that the calculation is made this year and not in a year such as we naturally hope to see in future, when the rate of inflation will be much lower. To that extent the pensioner is the gainer year after year, or rather two years after two years, having a margin of 3·2 per cent. to carry him from 1st April, the end of the review period, to 1st September, the payment date when the average increase has been one of 1·5 per cent. That is why this margin, far from being niggardly, verges on the generous in that it will more than meet the reasonable expectation of inflation over those five-month periods in the years ahead. That is why the hon. Gentleman's Amendment which produces significantly larger permanent margins by combining the 1971 idea with the permanent margin approach which is the Government's idea must end up by being excessively over-generous and that is the reason why I must—Before the hon. Gentleman finishes that point, why should it be over-generous? If, despite all indications to the contrary, the Government succeed in curbing inflation, why should the comparison between any three months, when the review is considered with a previous year, offer figures higher than 3·6 per cent.?
Because the hon. Member's Amendment asks that for this year the increase should be based on a comparison between the average of the index published in each of the three months, April, May, June, as against April, May, June, 1970. That figure would be built permanently into pension arrangements and pensions machinery. If it was higher than 3·2 per cent. or 3·6 per cent., as his calculations and mine show it would be, that would mean that instead of getting a permanent boost of 3·2 per cent. in the years ahead to cover a period when, on average since the war, the average increase has been 1·5 per cent. there would be a figure of 3·9 per cent. or 4 per cent. or whatever. To meet this particular year the hon. Member's Amendment would give a boost in future years which on any reasonable expectations—and I do not share his doubts about the success of our policies for curbing inflation—would still be more than generous and still more out of line. That is why the Amendment cannot be accepted, because it would not help the Bill as the Government conceive it and it would not meet the point which the 3·6 per cent. or 3·2 per cent. margin on account is designed to meet. That is why I must ask the House to reject it.
12 noon
With leave, I should like to take up the crucial point about the pension increases for this year and for subsequent years. The hon. Gentleman failed to deal with the increases planned for this year. I showed that there seemed to be no reason why he should accept for this year a level of inflation worked out in March when it could be worked out in June or even July. He conceded that 2·8 per cent. of the 3·6 per cent. had already been used up by the increases in inflation which had taken place this year. As a result, he failed to answer the point about the increases to be payable at 1st September this year. Our Amendment sought to provide for increases this year.
The basis for the increases in subsequent years could be changed by an Amendment introduced in another place. If the hon. Gentleman would accept my point about the increases next year, I would undertake that this side of the House would accept an Amendment which sought to clarify the position concerning subsequent years.I am grateful for the hon. Gentleman's offer, but it will not surprise him when I say that I cannot be tempted by it. There is a practical obection to the Amendment. In a sense, it is aimed at one thing, the Bill and the Clause are aimed at another. The effect of the Amendment would be to freeze the margin for future reviews on the basis of the unusually high rate of inflation in recent months. One would be setting it at a level which would be over-generous in other than normal circumstances. I must maintain my view and reject the Amendment.
Amendment negatived.
Clause 2
Future Reviews And Increases
I beg to move Amendment No. 14, in page 2, line 15, after 'thereafter', insert:
The purpose of the Amendment is to enable the Minister to decide on the frequency of the reviews by reference to an objective test. Under the Bill as drafted, there is to be a biennial review in March of every other year if the cost of living increases by an amount greater than 4 per cent. It is important for pensioners, when considering their future prospects, to know whether they will get increases as a result of a review. In Committee an Amendment put forward by the Opposition to the effect that there should be an annual review because of the high levels of inflation which we foresaw was rejected. In this Amendment we seek to provide for an annual review if, and only if, the cost of living increases at the rate which seems likely under the present Government. If the cost of living were to be anything like as great as it has been in the last year, there would automatically be an annual review. This is a most important matter for pensioners. They have a number of disadvantages compared with the population at large. One of them is that they have few means of supplementing the income which is known. In other words, they can see ahead more clearly the limitations on their future income. Therefore, they should not have a very large increase every two years with a subsequent decline in the following two years. If the levels of inflation are similar to today's levels —say, about 10 per cent.—then at the end of the second year the decline in the value of the pensioner's income will have been about 20 per cent. One-fifth of his income would have been wiped out before the next increase became due. The House should not accept fluctuations of that kind. It is possible to provide an alternative way so that, rather than have violent fluctuations, we can proceed to a more orderly, ripple-like change in the value of the pension. Consequently, if the cost of living proved to be greater than an annual rate of 5 per cent. in the nine months following the previous review, there should be a further review 12 months thereafter. The period of nine months is chosen so that there will be time for the review body to meet and take account of the various factors which have caused the changes in the cost of living and allow for them. If the cost of living has not risen by as much as 5 per cent. the same increase which it had previously made will continue until the second year. The Amendment would provide for a much steadier flow of income into the household.'except when the cost of living has increased by an annual rate greater than five per cent. in the nine months following the previous review when there shall be a further review twelve months thereafter '.
This Amendment, in contrast with the last Amendment, is fundamentally to do with long-term inflation. The previous Amendment was concerned with the levels of inflation this year and the expected levels of inflation this year and dealt with the question of what we could do to alleviate the increases in inflation. Amendment No. 14 seeks to alleviate the consequences of inflation over a long period ahead.
I understand from what the Parliamentary Secretary said in Committee that the administrative tasks of meeting each year were not very great, although he referred to the clerical difficulties of dealing with these changes, which the Committee, clearly, did not accept, while these matters were under discussion. I hope we shall not today hear that unsatisfactory reply about the administration required to deal with annual increases in pensions.
In a period of high and rising inflation, we must provide means of avoiding the consequences of it. If the Government accept, as they must, the responsibility for creating one of the greatest levels of inflation which this country has known, they must also accept the responsibility for mitigating its effects upon people who find it hardest to bear. We should not seriously consider the difficulties of administration, bearing in mind the disadvantages to which pensioners are subject.
Throughout the century levels of inflation have persisted even in times of severely deflationary policies. It is not readily understood that even in the first decade of this century, with very high levels of unemployment, inflation operated. Between 1931 and 1939, which was one of the most troubled decades of the century, inflation increased by about 10 per cent.
So even in a period in which one of the most stringent economic policies that the country has ever known operates inflation still exists to an extent which will not produce the kind of stability which many people yearn for but few believe in any more. There is something about industrial society which presupposes levels of inflation: it seems that inflation is built into a modem industrial society. Until a way of changing this is found, we shall need to compensate to allow for this.
As a result of this ever-increasing burden, we have always been tardy in changing the basis by which people on fixed incomes are paid, as a result of the inflation, for which Government must accept responsibility but where they tend always to have an optimism in advance of the economic realities. As the Government accept responsibility for inflation and for increasing these pensions, so must they be prepared to do their utmost to compensate those who must sit passively by awaiting the Government's decisions on how much money they will get to live on.
In a matter like this we can have little confidence that the Government will succeed to any great degree in conquering inflation, mainly because they are not even taking the elementary steps that the O.E.C.D. and other international bodies have urged upon them.
We are all sympathetic to the point that the hon. Gentleman is making but, to achieve a sense of balance, he should remember that pension supplements of this sort are not even available for two-thirds of those on occupational pensions as a result of service throughout their lives in the private sector. The public service pensioner has very great advantages over the pensioner who has retired from working all his life in the private sector.
I fully accept that point. It is a scandal that the decline in the value of money, for which the Government are responsible, makes certain people on fixed incomes suffer as a direct consequence.
I do not want to indulge in a debate with the hon. Gentleman now. I merely make the point that in many fields the public sector, as we all agree, on pension arrangements is way behind the private sector. We debated this question in Committee on the Finance Bill. However, in this respect the public sector is miles ahead of the private sector.
I was coming on to that aspect of the hon. Gentleman's intervention. It is disgraceful that others have had their effective pensions reduced in value as a result of the policies of the Government, particularly of this Government, which have elected to stand by while we have had the greatest inflation of recent times.
The hon. Gentleman is right in saying that public service pensioners are better off. In the past, the terms of employment they were offered took into account the considerable advantages they had in pensions. When the Pay Research Unit examines matters of pay and comparability of pay, this is one of the factors that are considered. Clearly, the whole of this must be seen as one. 12.15 p.m. In terms of ensuring that the responsibility of the Government is accepted, clearly one of the earliest signs of that responsibility must be the way in which they treat their own employees. Throughout history, Governments' dealings in matters of labour relations have been, and should be, an area in which they lead and show private employers how they should treat their employees and how they should behave in a modern civilised manner. I would accept any legislation or any action by the Government that sought to provide for the private sector pensioners matters which compensate for the levels of inflation which this Government have accepted and which are the direct responsibility of this Government. As a consequence I seek to provide justice for those who are covered by the Government service and hope that, where similar criteria prevail, they will be handled in a similar manner.The Amendment deals with the levels of inflation and the way in which the effects of inflation can be counted over a long period ahead. If we had confidence that this Government would mitigate the effects of inflation and reduce its extent, biennial reviews could well be a sensible way of proceeding. The O.E.C.D., which is hardly a Left-wing body, has pointed out the values of a prices and incomes policy and has, in its monumental report on inflation, pointed out the value of subsidising consumer organisations for the purpose of reducing the levels of inflation.
These are matters in which the Government have signally failed. They have gone directly counter to the best available advice. They have scrapped the Consumer Council—not subsidised it, as the O.E.C.D. suggests. The Government have scrapped the concept of a prices and incomes policy—not promoted it, as the O.E.C.D. suggests.
In the face of these actions, nobody can believe that the Government will succeed in their long-term aim of reducing the rate of inflation; and biennial reviews will not be a sufficient answer to the levels of inflation which are likely under this Government.
As a result, over this two-year period there is likely to be a decline in the value of money of about 20 per cent., which is the current going rate, before the next pension increase comes along. Such a decline in the value of money is too great. Pensioners ought not to see the value of their pensions decline in this way. Small amounts can be accepted, but it is quite wrong for pensioners to receive their increase and know that two years later they will have available to spend in real terms 4s.—or 20p—in every pound less than they have when they first receive the increase. This decline in their standard of living will occur in the face of increase prices.
The House has no right to pass legislation of this kind, bearing in mind that matters like rent and rates, which are a fixed charge and are increasing, form such a high proportion of pensioners' income. It is clear that the other items in their expenditure—food, clothing, heating, lighting—will have to be very substantially reduced over the remaining stages of these two years because of their commitments to pay so much of their pensions on fixed charges such as rents and rates. So we see that this Government, if they do not accept the Amendment, will be forcing these pensioners into a declining standard of living to a very considerable degree indeed.
The Amendment is a modest one and easily capable of implementation. It allows for not the certainty of annual reviews but annual reviews in those conditions in which the Government's failure to control the economy is manifest. If the Government fail, then the least they can do is to compensate those people who suffer from their failure, and because I believe that this is the least that the Government can do in the face of their present policies, I urge them to accept the Amendment.
I cannot help feeling that the Amendment is not unreasonable. What I think unfortunate is the extravagant statements used by the hon. Member for Ashton-under-Lyne (Mr. Sheldon) in presenting it. It is blatant hypocrisy for the hon. Gentleman to shed what are crocodile tears about the decline in the value of money when for six and a half years the Government he supported indulged in the biggest and most irresponsible spending spree which this country has ever seen. What he has done this afternoon is to spoil his case, because, without doubt, there is an increasingly strong argument for the Government to consider having more frequent reviews of pensions at this present time.
I am one of those who believe that the policies of the Government in curbing inflation will work, but they will take time, after six and a half years of government by the party opposite; they are bound to take time, and it may be another 18 months or two years before we see the full effects of the present Government's policies. Therefore, we have to face the fact that there will be an increase in the cost of living in 1972 of probably between 8 per cent. and 10 per cent., and in 1973 of about 6 per cent. or 7 per cent. By this time, however—We may be in the Common Market.
There is no certainty of that by any means yet.
The fact is that we are to see an increase—and I do not think it will be denied—in the cost of living, and it will be unfortunate if the Government are tied by statutory control and so not able to review these pensions, if they should wish to do so, without bringing forward further legislation. I have a substantial number of Civil Service pensioners in my constituency, and I know that they are extremely concerned about the situation. One cannot blame them, but it is the case that it is difficult for the Government at this point in time to convince those pensioners that the Government's policies in checking inflation will work. If they do work more rapidly than I have suggested, and I sincerely hope that they will, no harm will have been done by the Government having given themselves flexibility in deciding whether or not they will increase pensions again in a period of less than two years. I know that my hon. Friend the Member for Guildford (Mr. David Howell), the Parliamentary Secretary, has a fine reputation for his compassion, and understanding of pensioners' problems. Whereas I totally reject a large part of the manner in which the hon. Member presented his Amendment, I would ask my hon. Friend to bear in mind the real points lying behind it.I was hoping to catch the eye of the Chair on Third Reading very briefly to make a point which I very much want to make, but as there may be some doubt about whether I shall then be able to do so I shall try to raise it now. If I should begin to stray out of order I have no doubt that I shall be prevented from doing so.
I want to give support to the Amendment so ably moved by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). I did not detect any exaggeration in the terms or the manner in which he moved it, and I am sorry that the hon. Member for Brighton, Kemptown (Mr. Bowden), who supported it, felt that there had been and that my hon. Friend had used inflated terms. I did not detect that sort of inflation, although there is no difficulty in detecting the real inflation which has been growing in the last few months. The fact that the hon. Member said that so far we have not seen half of the effects of the Government's policies induces me to add: heaven help us when the full effects are felt, which he forecasts will be within two years. I have a very considerable sympathy with constituents of mine who have written to me about this problem. All of us would agree in welcoming this Measure in general terms, and those of us on this side who have been expressing anxieties about these problems have no objection to the general proposition in the Bill. There is nothing between the two sides of the House on that. What we are anxious about is that if this important measure is taken, it should be done in the right way, and I think that I have the support of the hon. Member for Kemptown on that point. If a change is made, then what we want to see is that it is made in such a way that it will set an example outside the Civil Service sector, set an example to the other public services, an example which public corporations will follow and which private industry, too, will follow and so put its house in order in this respect. So it is important that if this measure is to be done, it shall be done in a manner which sets the right pattern. I would not think that there could be any doubt on this point that at a time of very substantial—indeed, unprecedented—inflation the two-year period of review is too long. As described in the memorandum which was issued originally with the Bill, it was said that the object of the exercise was to ensure that increases in the cost of living were covered. The reason for the objections which we have raised and the reason for the Amendment has been our belief that that object is no longer achieved and that the two-year review is not enough to meet the rapid increase in inflation. In other words, the pensioner gets too far behind in a two-year period. On an earlier Amendment, my hon. Friend was proposing to deal with short-term inflation. What we have in this Amendment is a proposition to deal with the inevitable prospect of longer-term inflation. That is why we regard this Amendment as important, and I hope that the Minister will be able to say that he will accept it, or, if he is not able to say that, that he will be able to say at least that he will reconsider the whole question between now and the time when the Bill goes to another place. I had hoped to move an Amendment to achieve what we on this side wanted to achieve in this matter, which is an annual review. That was the object which we sought and which my hon. Friends sought in Committee on the Bill. I put down an Amendment to try to achieve that end, but you have rightly decided, Mr. Speaker, that that cannot be done now because an almost identical Amendment was fully debated and defeated in Committee. It was defeated only by seven votes to six. The narrowness of the margin in Committee is a factor which the Government might do well to bear in mind in considering whether, between now and when the Bill returns to the House, they will look again at the question of an annual review. There is not much to be lost here. One would hope that the cost would not be enormous, and an annual review would prevent a gradual decline in the standard of living throughout a period and then a gradual recovery; in other words, a see-saw over two years instead of a reasonably stable standard of living. 12.30 p.m. My constituents who are concerned about this have written extensively, and the Government, to do them credit, have replied equally extensively. The representatives of the Merton, Wandsworth and District Group of the Civil Service Pensioners' Alliance sought several improvements in the Bill, but Lord Jellicoe, replying on behalf of the Government in a robust fashion, rejected the proposals, saying that the object of the Measure was inflation-proofing. If this is the object, the Bill does not achieve it. If the Government have this object at heart they should look again at the time over which the inflation-proofing takes place. The proofing is inadequate, and inflation will get in unless the changes which we suggest are made. My constituents, finding that their proposals generally were unacceptable to the Government, returned on one single point, which is the point dealt with by the Amendment, and said this:We are not pressing that last point; we are suggesting simply that there should be an annual review. I hope the Minister will be able to accept the Amendment. If he does not, I hope that he will accept the principle of it and that there will be a movement by the Government, bearing in mind the importance of this not only to civil servants but to all pensioners, towards setting the right pattern."The Bill provides for biennial reviews. Whilst this provision is a considerable improvement on past practice, an adjustment controlled by so long an interval is out of harmony with current practice in relation to wage improvements. Many incomes are revised annually, some more frequently than that. It is important for pensioners most of all in the community not to be subject to a long waiting period for review. It is therefore suggested that reviews should be made annually and pension adjustments be made providing the average rise in the cost of living and rates of wages is not under 2 per cent."
I had intended to speak on Third Reading until I appreciated that there was to be no Third Reading debate. I will, therefore, try to keep my remarks in order within the Amendment. The Amendment goes very wide, since it attempts to protect public service pensioners and others from inflation on the basis of successive pension reviews at shorter intervals.
I very much welcome the Bill, as I know hon. Gentleman opposite do also. It is costing £87 million and, for necessary and obvious reasons, this is one of the largest awards ever made. I say "for necessary and obvious reasons", because this large sum is related to the decrease in the purchasing power of money between 1st April, 1969, and 1st April, 1971. I much prefer my hon. Friend and his Department, rather than the Treasury, to deal with inflation and its effect on pensioners. I do not agree with the comments made by the hon. Member for Ashton-under-Lyne (Mr. Sheldon) on the previous Amendment. It is thoroughly desirable that there should be a group of people, a Government Department, separately responsible for protecting the interests of pensioners and negotiating with the Treasury, rather than leaving the matter to the Treasury alone.The hon. Gentleman will not have heard what I said on Second Reading and in Committee, when I welcomed wholeheartedly this implementation of the Fulton Report and said that the Civil Service Department exercises its managerial functions firmly and fairly. My point was that, when we are discussing inflation, the Minister should have the support and advice of the Treasury Ministers concerned.
It is rather a far-fetched argument. The hon. Gentleman might argue with just as much logic that the Attorney-General should be present because matters of law are in question. Where does this argument finish, and where does it begin? The Civil Service Department is perfectly capable of studying the facts, and there is no need for my hon. Friend the Financial Secretary to the Treasury to be present on the Bench.
I pass to the comments of the hon. Member for Ashton-under-Lyne to some extent with a constituency bias, because my constituency has become more and more of a place for retired people to spend the remaining years of their lives. More and more public service pensioners are coming to my constituency in West Cornwall, and I therefore see the problems which these people face. There is a great concern among a wide section of the population in my constituency about the rise in the cost of living. Most of these people made provision for their retirement, admittedly in inflationary conditions—probably after the last war—but in inflationary conditions which were less severe than those which prevail today. I agree with my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) that the outlook for the 1970s is not at all promising, and in this I agree, but for different reasons, with the hon. Member for Ashton-under-Lyne. Most of the causes of our current high rate of inflation do not lie, as the hon. Gentleman said, within the control of the Government. Admittedly, and this is where I go along with the sentiments expressed by the hon. Gentleman, there are ways in which the Government can help to mitigate the effects of inflation on public service pensioners, and that is why I have some sympathy for the Amendment. Nevertheless, the country is faced throughout the next decade with the likelihood of increasing social and political unrest throughout the western world—it is going on in Italy, Germany, France, Japan and the United States, as well as here. Labour as a factor of production is demanding, and getting, more. This process will continue throughout the 1970s, the price of manufactured goods will rise in world markets and this country will suffer the consequences. It does not lie wholly within the control of the Government to prevent this happening, since we are a trading nation and must remain one, so we shall be subjected whether we like it or not to the inflation which is occurring throughout the western world. Secondly, world commodity prices—and butter and beef were mentioned specifically in the House yesterday—and also the price of raw materials throughout the world are rising rapidly, more so outside the Common Market than within it. Although it lies within the Government's power, as the hon. Member for Ashton-under-Lyne said to endeavour to protect public service and other pensioners as best they can from the consequences of world conditions, the hon. Gentleman cannot extend that argument to claim that the Government have within their control the holding back of world commodity prices such as butter, beef, raw materials and various other food prices. The hon. Gentleman turned a reasonable argument on the need to protect public service pensioners into a harangue that inflation could be stopped by the Government, which is not the case.The point I was making was not that inflation could be stopped, but that the Government could take measures to limit it. I quoted the O.E.C.D. view when pointing out what I thought the Government should be doing.
The Government can take measures which they believe can attempt to isolate this country from the inflation which is rising rapidly throughout the world. On the other hand, the measures which the Government take may well vary from those put forward by the hon. Gentleman. It lies within the Government's responsibility to endeavour to control inflation, but it is a matter of judgment as to what measures will succeed in that objective. It is obvious that the hon. Gentleman disagrees with the Government, but that does not mean to say that the Government are not doing their best to meet a problem which is prevalent throughout the world.
The hon. Member for Ashton-under-Lyme does not help the public service pensioners by coupling a reasonable Amendment to the claim that the Government are doing nothing about the situation. We hear the absurd claim almost every day in the House of Commons—and I do not say that the hon. Gentleman himself made it—that the Prime Minister is supposed to have said that he would cut prices at a stroke. My right hon. Friend said no such thing. I have his remarks in the election in front of me, and I am sure that the hon. Gentleman would like me to read them.indicated assent.
The Prime Minister said. referring to the world price spiral
"This can be done by reducing those taxes which bear directly on prices and costs, such as S.E.T., and by taking a firm grip on public sector prices and charges such as coal, steel, gas electricity, transport charges and postal charges. This would at a stroke reduce the rise in prices."
Does the hon. Gentleman really believe that the Prime Minister on that occasion was conducting a philosophical discourse on the matter? Was this nothing to do with the steps he intended to take?
I have read out what the Prime Minister said.
The hon. Gentleman at the outset of his remarks hinted that he intended to try to make a Third Reading speech. I believe that he has gone far enough.
I will leave that point, Mr. Speaker. I was only seeking to make the point that the Prime Minister is charged with having said that he would cut all prices at a stroke. He has never said any such thing. He said that he would have the ability to cut such things as S.E.T. at a stroke, which indeed is what he will have done from the 1st July.
No.
I have some sympathy with the terms of this Amendment and for a system of annual reviews. I appreciate that the Government have gone a great way to meeting this point by having an "on-account" arrangement under which they are able to take into consideration the increase in the cost of living which arises before the pensions increase takes place. I accept that the Government have gone a long way towards this, but I believe that there is something to be said for annual reviews in respect of the public service pensioner. Although the on-account procedure goes a long way to meet Opposition criticism, an annual review would be so much more simple and straightforward. There is something about an annual review which would satisfy pensioners in a way that some kind of "on-account" procedure would not, since the latter is so much more complicated and can easily be misunderstood.
12.45 p.m. I should like to relate this Amendment to three specific points which arise on the Bill. New Clause I was disposed of so rapidly that a number of hon. Members, including myself, got here too late and were prevented from speaking in the way that was hoped. This is no criticism of my hon. Friend who, I am sure, behaved with the utmost rectitude in moving the new Clause at great speed. It is possible however to bring this matter within the Amendment since the people concerned with new Clause 1, the quasi-Government pensioners are very worried at present about the level of inflation. The Government in new Clause 1 appear to be taking powers which do not, so far as I can see, have any meaning. The effect of new Clause 1 in relation to this Amendment is that it removes from Parliament the power to control the situation and puts it in the hands of the Executive. If the Executive is to act, then one might say that this is an improvement and would help to meet the problems the hon. Member for Ashton-under-Lyne was mentioning. If, on the other hand, all the Government are doing is to include the new Clause as a sop to those who are suffering from inflation, then it would have been better to have left it out. The issue relates to those recruited in this country on overseas terms of service through the Crown Agents and others. In regard to new Clause 1—Order. I must remind the hon. Gentleman that we have passed new Clause 1. He must stick to the Amendment.
I am trying, Mr. Speaker, to relate the problems of those public service pensioners who come within the Bill who are seriously affected by inflation. The hon. Gentleman's Amendment seeks to provide a more frequent review of pensions to meet the hardship facing those people. People such as the Achimota pensioners, who are ex-quasi Government pensioners, are suffering from the sort of problems to which the hon. Member for Ashton-under-Lyne was referring. Achimota College in Ghana was a Government Department until 1924.
I turn to the question of the age at which pension increases are payable. If the Amendment were to go through, these people would not benefit. I believe that they should benefit under the Amendment. The Minister has taken powers in the Bill to bring pension increases down to the age of 55, but the Bill itself does not bring these increases into effect until—On a point of order, Mr. Speaker. Is this not a Third Reading speech? The age of retirement is not a matter chosen for debate under an Amendment and surely should not be debated on this Amendment.
With regard to that point, I will tell the hon. Member when he is out of order. But the hon. Member did say that he intended to try to make a Third Reading speech. As other hon. Members wish to speak and the hon. Member rose at 12.34 p.m., I hope that he will manage to confine his remarks.
Certainly, Mr. Speaker. I shall draw my remarks to a close very shortly. I am relating them to the comments made by the hon. Member for Ashton-under-Lyne. Taking his example, that those public service pensioners who are suffering most from inflation at present are those who were compulsorily retired from public service and who, because they are under 60, will not be entitled, from September, 1971, to the increase provided for in the Bill, I am in broad sympathy with the hon. Member's Amendment; but it would not help. For instance, a gentleman in my constituency, previously a lieutenant-colonel in the Armed Forces, is now receiving a pension of £620 a year—had similar pension increases as those contained in the Bill applied to him now he would be receiving £998. Even the Amendment does not meet the problems of those under 60 who have been compulsorily retired from public service at an early age.
I apologise for speaking so long on the Amendment, but I wished to make one or two points upon the Bill. I did not have an opportunity of speaking on Second Reading. In general terms I welcome the Bill. The Government have gone a very great way to meet the criticism that public service pensioners are not protected against rises in the cost of living by frequent reviews. Although I should prefer an annual review to an "on-account" procedure, nevertheless, I welcome the Bill. But I cannot support the Amendment because there are better ways of achieving the same objective.I put my name to the Amendment because I supported it. The issue is whether inflation is to continue at the present rate. On that we have heard two views. Back benchers on the Government side have forecast, as has the Minister of Agriculture, a substantial increase in food prices in the future. On the other hand, in dismissing a previous Amendment the Parliamentary Secretary to the Civil Service Department saw the increase of the last few months as abnormal. But the issue is whether or not these increases have been abnormal. The Minister should say whether he anticipates over the next ten years an overage annual rise in the cost of living of 5 per cent. or less—that is germane to the Amendment—or whether it is believed that the average increase will be 5 per cent. or higher.
If the Government expect that the increase will be lower, they have nothing to lose by accepting the Amendment because its provisions would not be invoked if the increase were less than 5 per cent. If, however, the Government expect—and it comes to pass—that the increase will be over 5 per cent., they will then have to find arguments to dispose of the pensioners' case for having annual increases, given that rate of inflation. In Committee the arguments used against annual increases were not only that they were administratively difficult but that they could lead to quite small increases of about 2 per cent. If we have a rate of inflation of over 5 per cent. a year, pensioners will be faced with a very substantial problem. Already pensioners of all sorts are beginning to despair. One poor soul—not a public pensioner, I admit—in North Staffordshire in the last fortnight committed suicide because of the increase in the cost of living. Increases in the cost of living can be a nightmare for those with a low level of income. I have ascertained this morning that the average pension at present is roughly £370. I hope the Minister will give the figure following these increases. But that average covers a very wide range, from the retired Permanent Secretary with 40 years' service to the Post Office engineer or postman, whose pension is calculated on low pay and possibly on a much shorter period of service than 40 years. One thing is certain. A substantial number of public service pensioners are living on very low incomes indeed. Even when taking into account their State pension, with its £1.30 deduction, many public service pensioners from the Post Office engineering branch or the postman class are living on very small incomes. These are the people for whom an annual rate of inflation of 5 per cent. is a nightmare, because over a two-year period that is a very big erosion in their income. The fault of the present system is that there could be a very big erosion on the day following a review of pensions, which pensioners would then have to live with for two years. I shall not go into details but, obviously, if there were a devaluation at the beginning of the pension review period, pensioners would have to live with that for two years.The Amendment is very moderate. The Minister knows that we should have preferred annual reviews. We could have asked that pensions be increased when the increase in the cost of living had risen to 4 per cent. We could have asked that increases should be given—not the review but the increase—when the cost of living had risen by an annual rate of 5 per cent. All that we are asking for is that a review should take place, when there has been this substantial increase in the cost of living for these low income pensioners, when the cost of living has risen for them by 5 per cent. That would be entirely reasonable. I hope that the Government will accept the Amendment.
I make a very brief intervention. I have listened to the arguments, as I listened to the arguments of Members opposite during the Committee stage.
One must have some sympathy with the pressure for frequent reviews at a time of rapid inflation. The point about the Bill is that it represents an immense improvement on anything that has gone before, not only in terms of the money now being allocated but because, instead of the previous casual, sporadic increase when the Government of the day got round to it, averaging about every three-and-a-half years between reviews, we now have a system of regular two-yearly reviews. 1.0 p.m. My hon. Friend the Under-Secretary spoke during the Committee stage of the very great administrative task of carrying out annual reviews and the additional cost involved. If it is a question of cost, it seems to me that we must get our priorities right. To me, a very much higher priority is that which was mentioned by my hon. Friend the Member for St. Ives (Mr. Nott), which would bring the effective age down from 60 to 55 so that the large numbers of retired people who live, for example, in my constituency, in Pembroke, who are in considerable hardship and are unable to get jobs at this time of their lives, would get immediate compensation. This seems to me to be a far higher priority. I know that this is a priority which has been recognised by my hon. Friend. I merely urge him to press on with it with all possible speed. My second priority which I put before this proposal of annual reviews is the action to protect those who I think have been referred to—although we have had no explanation—in new Clause No. 1, the quasi-Government overseas civil servants. I am not sure whether this is intended to meet the objections which some of us made in Committee. I hope it is, and I hope also that this proposal will be implemented. These, then, are the priorities. I urge my right hon. Friend to press on with these rather than listen to the pleas from the Opposition for this Amendment.I intervene only to urge the Minister not to be unresponsive to the further representations which will undoubtedly be made to him by organisations which are still concerned to see Amendments made to this Bill. I have heard today, through my hon. Friends the Members for Manchester, Exchange (Mr. Will Griffiths) and Manchester, Gorton (Mr. Marks), who have taken a close interest in the proceedings on this Bill, about possible Amendments. I have heard from the Manchester Teachers' Association about possible Amendments which they and other representative organisations in the city would like to see.
The approach from the Manchester Teachers' Association was made on behalf of constituent organisations—of the National Union of Teachers, the National Association of Schoolmasters, the Joint Four Secondary Associations, the National Association of Head Teachers, the Association of Teachers in Technical Institutions, the National Association of Local Government Officers and the General and Municipal Workers' Union. I know that the Transport and Salaried Staffs' Association is also concerned to see Amendments made to this Bill. I very much hope that the Minister will fully and sympathetically consider the further representations which will be made to him by all these organisations.I do not wish to be drawn by the hon. Member for St. Ives (Mr. Nott) into an argument about what the Prime Minister did or did not say. I do not think that the pensioners care very much what he said. What they care about is what he and his Government are doing to curb inflation. I would be the first to admit that, over the years since the war, every Government has been relatively unsuccessful in curbing inflation. My only comment is that the present Government seem to be worse than the rest of them. I will leave it at that.
As long ago as 1956 I made a speech outside the House calling for a biennial review of all pensions—public service and retirement pensions. As I was not in the House on Second Reading, may I take the opportunity of saying that, in general, this Bill is a good one and that we have established the principle of biennial reviews, for which many of us have been asking for a long time. In normal circumstances, we would be satisfied with this. But we have to consider the rate of inflation in the last year or so and the likelihood of that rate of inflation continuing over the next two or three years. The hon. Member for Brighton, Kemptown (Mr. Bowden) made estimates of 8 per cent. to 10 per cent. in 1972 and 6 per cent. to 8 per cent. in 1973. He may or may not be right. My view is that he probably erred on the low side, and the rate may be rather greater. We are, therefore, in effect in a situation of exceptional circumstances where, for whatever reason—and I do not wish to blame anybody in particular—inflation is going ahead at a much more rapid rate than normally, and therefore we need to take exceptional measures to deal with these circumstances. I strongly support the Amendment. I would have preferred to argue for an annual review, but that is out of order because this was discussed fully in Committee. As we cannot call for an annual review now, I hope that the Government will at least give very serious consideration to this Amendment. It will not go the whole way. It will not go as far as I should like to go, but it will at least do something to help the pensioners in these very exceptional circumstances.Mr. David Howell.
On a point of order, Mr. Deputy Speaker. As we are not to have a Third Reading debate, it occurs to me that the hon. Gentleman who is to reply to the debate might wish to take the opportunity, if you would allow him to do so, to deal with one point which has not been raised but which is closely associated with the discussions which have taken place. I refer to the question of representations which have been made to many of us by people closely associated with transport superannuitants. On Second Reading, the hon. Gentleman said that the Government would not disapprove if the Transport Board, for example, tried to do exactly the same thing—
Order. This is not a point of order.
May I finish my sentence, Mr. Deputy Speaker? Would it be in order if the hon. Gentleman were to say that the Government would not disapprove but would welcome it?
The hon. Gentleman knows very well that that is not a point of order. The hon. Gentleman has used it as a way of expressing a point of view.
I am grateful to hon. Members on both sides of the House and, in particular, to the hon. Member for Ashton-under-Lyne (Mr. Sheldon) for the reasonable way in which they have spoken to the Amendment and for their lucid presentation of their arguments.
This has been called a reasonable Amendment on both sides of the House, and I hope that the House will judge me equally reasonable in setting out the reasons why, despite the persuasive nature of the arguments, the Government must nevertheless reject it. I should like to congratulate again the hon. Member for Ashton-under-Lyne on the ingenuity of his Amendment to Clause 2, which has enabled him to have another go at the Government on inflation and all that in the hope of securing that, instead of the two-yearly reviews provided for in the Bill, the reviews should be annual—at least, in certain circumstances. I also congratulate my hon. Friend the Member for St. Ives (Mr. Nott), who succeeded in raising a number of issues of a wide-ranging nature on this Amendment, even stretching to the question of the so-called quasi-Government pensioners, asking whether they also, if they were included in the scope of the Bill and if the Amendment were passed, would benefit under the annual review instead of the biennial review proposed in the Bill. In passing, as the Chair allowed a mention of new Clause 1, I think I should be right to put on record at this point the fact that this new Clause has been placed in the Bill. It is a technical Clause. I would say straight away that it did not indicate any change of policy whatsoever but that during the Committee stage, as those on the Committee will recall, I gave an absolutely firm assurance that the Bill covered all quasi-Government pensioners whose claims have been pressed in the House since the 1962 Act and who could not otherwise be provided for. Subsequently, arising out of perceptive legal points made by the hon. and learned Member for Northampton (Mr. Paget), I found that there was a residual doubt and that it was necessary, in order to avoid all possibility of doubt, to move the new Clause. It does not represent any change of policy on the part of the Government, but it meets beyond all doubt the reassurance that I gave in Committee. I hope that it will be accepted in this way and that the position is fully redeemed by the insertion of the new Clause, technical though it is. I recognise that the hon. Member for Ashton-under-Lyne, in turning his attention and his genius for Amendments of this kind to the possibility of biennial reviews, has advanced some way from the position that he occupied in Committee and has taken account of some of the Government's arguments. He is now saying that, if the Government feel that to provide for annual reviews is to make too pessimistic an assumption about the future course of inflation, we should provide for annual reviews only when that pessimism is justified by events. I concede that the shift in the hon. Gentleman's position has lent his arguments more force, although I am afraid that the Government will not be enticed by his ingenuity or the underlying theme of conditional pessimism about inflation which is built into his approach and the Amendment. That is one argument why the Government reject the proposal to move to yearly reviews. It is not the only argument. If it were, I should concede that more arguments were needed to support the Government's case. If one is to see this matter in perspective, account has to be taken of a number of factors, including general considerations like the value of the scheme as a whole, the extent of the contribution that we are asking the taxpayer to pay for, and our ability to justify it by any criterion beyond the one that this is what public service pensioners would like. My hon. Friend the Member for St. Ives made this point clearly as well. I must ask hon. Gentlemen opposite to step back for a moment from the details of this precise Amendment and to recall how far we have advanced and the background against which it is proposed to move to a two-year system. Until this Bill becomes law, we still have in force a system in which the pensioners have to pin their faith on periodic and unpredictable Acts of Parliament. They are unpredictable in their timing and in their size, rationale and distribution of the increases that they award. Past Acts have also included a harsh cut-off system which has produced the inflexible result that, besides having to wait for 3 to 3½ years between Acts, many pensioners who retired up to nearly two years before an Act have been precluded from any increase under it and so have had to wait nearly five years for their first award. What is more, when it came, often it was pitiful in size in relation to the amount of inflation that they had had to bear since retiring. In moving to two years, we are making a major advance on anything that has gone before.I am sure that it is a major advance, but, for people to appreciate how great the advance is, it needs to be repeated again and again so that the country understands what the Government are doing. I am sure that it is in order for me to say that it needs repeating in the White Paper on the Common Market which the Government are to publish shortly.
1.15 p.m.
I take note of my hon. Friend's observations, and I have no doubt that others of my right hon. and hon. Friends will also take note of them. I do not know whether I am moving outside the rules of order by repeating it now. I was already demonstrating my support for my hon. Friend's point by repeating that this is a major advance on what has gone before.
Both parties found the previous system indefensible and, as a result, we had the undertaking to which both parties subscribed that two years after the operative date of the 1969 Act the Government should state the extent to which the purchasing power of pensions had fallen, if this was at least 4 per cent., and what action they proposed to take. That was an immense stride forward. But it was not the only one. We have taken two further steps since then: first, in announcing our plans last November, and again I readily acknowledge the substantial element common to the published commitments of both parties. We promised then not merely the two-yearly review to maintain purchasing power and the firm prospect of a reduction in the qualifying age during this Parliament; we added the very substantial extra commitment to once-for-all increases which would bring all pensioners up to a fair base line at a cost of over £20 million a year. That was the second step. The third step came with the publication of the Bill and the Government's acceptance of the criticism, mainly from pensioners' organisations, of the five-month gap between the review date and the payment date, and our addition in consequence of the margin on account which we have debated at such great length both in Committee and again today. In all these matters, one has to look at the total package, which is a substantial advance on what has gone before and replaces the 3½ or 3-year or even 5-year hopeful wait, with no certainty at the end of it, by a two-year automatic, mechanical commitment to review and increase, provided that the cost of living has risen by the basic trigger level of 4 per cent. I recognise that the arguments of the hon. Member for Ashton-under-Lyne in favour of annual reviews stem from new circumstances which are subsequent to these considerations and that his new suggestions are founded on the rate of inflation that we have experienced in recent months. Even so. I am afraid that the Government are not persuaded. We are convinced that the rate of inflation in recent months has been exceptional, and we are committed firmly to bringing it under control. Obviously, the hon. Gentleman is right to make his party point that he does not think the Government's policies will succeed. In reply, the Government must say that they are determined to succeed and that they will succeed. Obviously, we do not intend to legislate for failure. I turn, then, to the point made by the hon. Member for Putney (Mr. Hugh Jenkins) about setting an example. It was also mentioned by my hon. Friend the Member for St. Ives. In putting together the package, we have made the best assessment that we can on the evidence available to us of how the package that we are offering as a whole compares with what other good employers offer. We are satisfied that we are proposing a package which will already put us high up in the league table of good employer practice. It is worth recalling that the Government Actuary's 1968 survey of occupational pension schemes revealed that of 17 million employees in the private sector, only 8 million were in schemes at all and that, ignoring those schemes that had not been in existence long enough to have any pensioners, only 50 per cent. of members were in schemes that had granted post-retirement increases to at least some of their pensioners.With regard to giving an example, if proposals came forward from, say, British Rail or other such organisations, would the Government not merely not disapprove of them but actually welcome them?
In the light of your earlier exchanges with the hon. Member for Putney, Mr. Deputy Speaker, I feel I should be out of order if I replied to that question. If the hon. Gentleman reads what was said in Committee and on Second Reading he will see a perfectly clear expression of the Government's position and the technical position on the point he raises.
The comparison between Government employer practice and outside practice is very favourable. Only about one-fifth of the schemes that I described as providing for increases did so on a predetermined and automatic basis. The rest were based on ad hoc decisions from time to time. We are anxious, as is the hon. Member for Ashton-under-Lyne, as he said on Second Reading, that the Bill should serve as an example of good employer practice which we hope will be copied in private industry. But in justifying what we are doing to the country at large, to those who will have to foot the bill, the taxpayers, we cannot set standards too far ahead of the field. As an example and a device for setting an example, both the Bill and the scheme represent a major step forward. I should like to say a little about administrative difficulties. I share what I suspect is the feeling of the hon. Member for Ashton-under-Lyne about administrative difficulties in general when it comes to pushing forward public policy and carrying out public programmes, which is that although they exist, and it is absurd to pretend that they do not, they should not be advanced as major reasons for not doing things. Whenever they are advanced as major reasons, I believe that it is the hon. Gentleman's natural instinct, and I hope that it would be mine, to suspect that they are not a substantial argument. Of course there are administrative difficulties, but I do not say that they would be a decisive reason for standing in the way of a move of the kind suggested. The real reasons why the Government ask that the Amendment should not be pressed lie elsewhere, in that the two-yearly review system is a major step forward and we are now offering regular and guaranteed inflation-proofing together with the vital assurances that the Bill offers that it will bring about increases which will maintain the purchasing power of pensions. That is as big a step forward as it would be sensible, right and reasonable to justify at this stage. The hon. Gentleman said that we were forcing pensioners to a declining standard of living. That is not so, and I think that on reflection he will accept that.Surely the hon. Gentleman grasped my point, which was that between the pension reviews pensioners' standards of living will decline. That must be obvious to him.
The hon. Gentleman did not say "between pension reviews" at the time. It is conceivable that at any time between one increase and another the movements in the cost of living and the pensions may get out of line. That is inherent in any system, whether there is a six-monthly or yearly review, or any other review.
The Bill represents a major step forward, and we should not reasonably be pressed to provide for annual reviews, with or without qualifications or conditions which we believe in any event to be founded on unnecessarily pessimistic assumptions about the future course of inflation. We bear in mind the points hon. Members have made, including that made by my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), who kindly told me that he could not be here when I wound up the debate. It is precisely by bearing them in mind that we have come to the two-yearly review with automatic inflation-proofing. If hon. Members ask us to go further and say that inflation is to be so terrible in the future that we must bring down and down the regularity of the reviews, there is a further obvious answer, that the aim must be not merely to provide inflation-proofing and protect our pensioners but to check inflation. That the Government are determined to do. I hope that Labour hon. Members will show a little more enthusiasm for that instead of whooping it up whenever excessive wage claims are made. That above all will allay the fears of inflation which all pensioners have. It remains our position that the Bill is a major advance. We believe the two-year review to be right. We believe that inflation-proofing is of great advantage, and that this places the Government's pension increase provisions well up in the league compared with all other practices. On that basis. I must ask the hon. Gentleman not to press his Amendment.Amendment negatived
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 ( Third Reading), and agreed to.
Bill accordingly read the Third time and passed
Pool Competitions Bill
As amended (in the Standing Committee), considered.
1.27 p.m.
I beg to move, That the Bill be now read the Third time.
The purpose of the Bill is to safeguard the position of certain charities and sporting organisations which had derived substantial sums of money from what had become known as charity pools, which had been held by the House of Lords in the case of Singette v. Martin to be competitions which were not lawful pool betting but were unlawful lotteries. The Bill merely provides that for a period of five years those competitions from which those charities and sporting organisations were receiving that substantial income should be allowed to continue, by making the necessary changes to enable those competitions to be treated for that period as lawful pool betting. The Bill is limited to a period of five years because my right hon. Friend the Home Secretary has set in train an inquiry into the whole of the law relating to lotteries and betting, but he felt that it was necessary as an interim measure to pass the Bill to safeguard those charities. I understand that the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) has tabled the Motion, "That the Question be not put forthwith ", not because he is in any way opposed to the principle of the Bill—indeed, he was one of those who pressed that this type of legislation should be introduced—but merely so that he may ask certain questions. Therefore, I propose to say no more at this stage, but will, with permission, answer any questions later.1.29 p.m.
The Under-Secretary of State knows of my deep personal interest in the Bill. It is a close relative, not to say a direct descendant, of my Charitable Causes (Medical Research and Disabled Persons) Bill, which I introduced earlier this Session. The Bill now before the House is in fact the Home Secretary's response to the propositions made in my Private Member's Bill.
The House will recall the serious concern expressed by many organisations, including national organisations working for the chronically sick and disabled, about the consequences of the Singette v. Martin decision. The Lord Chief Justice, in giving his judgment in the Appeal Court against the kind of fund-raising scheme we are now seeking to protect, said that he did so with reluctance because he considered itMy Bill, like this one, was supported by the British Heart Foundation, the Royal National Institute for the Blind, the Muscular Dystrophy Group, the Children's Research Fund, the National Fund for Research into Crippling Diseases, the Semball Trust, the Good Neighbour Trust, the Wan Neste Foundation, and many other organisations. I know that the hon. and learned Gentleman appreciates that the position facing those organisations on the morrow of the Singette v. Martin decision was one of financial catastrophe. It was put strongly by James Loring, the Director of the Spastics Society, as well as by Mr. Duncan Guthrie, the Director of the National Fund for Research into Crippling Diseases, that unless the law was changed, and changed very quickly, the House of Lords verdict could have"a laudable scheme serving an admirable purpose and something which probably this day is very much needed."
The Spastics Society stood to lose about £1½ million a year. The National Fund for Research into Crippling Diseases and the Imperial Cancer Research Fund together were in danger of losing more than £400,000 a year. Although the exact figure is not known, it is believed that the total loss to charities would have been more than £4 million. In practical terms, this would have meant that a vast programme of voluntary care and education and training for many of Britain's handicapped people would have been placed in jeopardy within a matter of weeks, while medical research into crippling diseases and illness, already at an insufficient level, would have had to be cut back drastically. Many existing establishments run by charities would have had to be closed down for lack of funds, and that would have thrown an additional burden onto the taxpayer and the ratepayer. There would have been a long gap in time before the valuable services now provided by these charities could have been reinstated by central and local Government and, in the meantime, as was emphasised to me by the Spastics Society, many handicapped people and their families would have suffered appalling hardship. I am deeply grateful to the Under-Secretary for the courtesy and construetiveness that he showed throughout our discussions at the Home Office when I met him with other hon. and right hon. Members on behalf of the charities to which I have referred. The Bill is of major importance, and not only to organisations working for the chronically sick and disabled. Mr. Edgar Hiley, of the Warwickshire County Cricket Supporters' Association, as well as Sir Matt Busby, the distinguished manager for many years of Manchester United, were both in touch with me about their concern over the House of Lords decision. I know the Minister would agree that the Warwickshire County Cricket Supporters' Association gives invaluable help to cricket on a nationwide basis. The bodies which depend heavily on the grants which they receive from the Association include the Cricket Council, the Test and County Cricket Board, the M.C.C., many county cricket clubs apart from Warwickshire itself, as well as hundreds of village and league clubs. The work of that association would have been placed in total jeopardy but for the initiative taken by the Under-Secretary. I think that it will help the House to appreciate the importance of the Bill if I say something about the projects upon which the money raised by charities is spent. The Spastics Society has been able to spend more than £6 million by way of capital expenditure on schools, centres, industrial work and training centres, family help units, hostels, and hotels, a total of 49 units altogether. The total cost of running national schools and centres is £7,920,000. Medical research, largely the paediatric research unit attached to Guy's Hospital, has cost the Spastics Society £2,214,000, while the professorial Department of Child Development at the Institute of Education, University of London, has received £315,000 from the Society. This important work would have to go on in the absence of the fund-raising activities of the Spastics Society and it is a relief to us all that the immediate financial difficulties facing this and other organisations have been removed. As the Minister made clear in Committee, the Bill is, however, only a holding operation. It is intended only as a holding Measure. The Minister said on 12th May that the Bill introduced"disastrous effects on all the voluntary bodies who rely on charity football pools for a very large part of their income."
Following the Minister's speech on that occasion, I again approached him on behalf of the Director of the Spastics Society. I received a letter dated 24th June from the hon. and learned Gentleman in which he commented on the further representations made to me by the Society, and said:"temporary provisions, in the nature of indemnifying legislation, to enable those charitable and sporting interests concerned, which had come to depend on this form of income, to continue to enjoy it while the whole of the law in this sphere is reviewed."—[OFFICIAL REPORT, 13th May, 1971; Vol. 817, c. 570.]
I know the Minister will accept that many of the organisations which have these fund-raising schemes are already trying to diversify their sources of income by means of charity walks and other activities, but have been told in recent weeks that charity walks are not the best way to raise money. A strong view has been expressed on this subject by, among others, Cardinal Heenan. It will not be easy for these organisations to diversify their sources of income within five years. I accept that the powers in the Bill are renewable annually, and I should like to think that the Minister will establish a close rapport with James Loring, the Director of the Spastics Society, with Duncan Guthrie, the Director of the National Fund for Research into Crippling Diseases, as well as with Edgar Hiley and Sir Matt Busby who acted as representatives for all the sporting organisations involved in this important matter. Finally, I pay tribute to the very large number of thoroughly decent and hardworking voluntary workers who help the charities and the sporting organisations to raise their funds. It is estimated that there are 8 million subscribers to these schemes. This means that the Bill is an extremely important one. I conclude by saying how much I appreciate all that has been done by the Under-Secretary in putting the Bill forward, and I hope that it will soon reach the Statute Book."The point I must emphasise is that, whatever the outcome of the review, the position at the end of it is likely to be significantly different from that which the Bill freezes for five years. In any event charities and sporting associations which benefit at present would be ill-advised not to take advantage of the breathing space the Bill provides by looking for a broader base for their income. The possibility of finding such alternatives and the efforts that have been made to look for them are certainly factors which will be taken into account in the course of the review and of the Government's consideration of the recommendations which emerge."
1.40 p.m.
I thank the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) for what he said about myself and about the approach of the Government to this matter. I readily acknowledge his long concern in these matters. As he rightly reminded the House, he introduced a Private Member's Bill on this subject. I said than that it was the intention of the Government in introduce legislation to achieve the same end and he very graciously agreed to withdraw his Bill after the Government legislation had been brought forward.
I am sure from representations that have been made to the Home Office that the charities concerned are satisfied that their interests have been adequately safeguarded by the provisions of the Bill. I have the permission of the Under-Secretary of State for the Environment, who is responsible for sport, to say that he is quite sure that those sporting bodies which had made representations to his Ministry and on whose behalf he had made representations to the Home Office, are equally, satisfied that the Bill meets their needs. The hon. Gentleman mentioned in particular Mr. Edgar Hiley, and the substantial scheme run by the Warwickshire County Cricket Club. Mr. Hiley has been kind enough to write to me personally and say that the club is satisfied that the proposals in the legislation suit the scheme. Mr. Hiley raised, as the hon. Gentleman has, the comment I made about the temporary nature of this position. It was an appreciation by the Government of the urgent financial position facing the Spastics Society and other charitable societies which made it apparently necessary that we should act immediately. What I said on Second Reading and what I now repeat with regard to the temporary nature of this legislation was that, faced with various decisions of the courts about lotteries and betting law generally, faced with the desire expressed by certain corporations, such as Manchester Corporation, to set up a lottery, faced by repeated suggestions for some form of national lottery, the Home Secretary thought it right to hold a review on the whole of the law concerning lotteries. I cannot commit the Government in advance of the outcome of that review. The intention of the Bill is to ensure that while that review takes place and until permanent legislation can be introduced into this extremely complicated area, the position of these charities will be safeguarded. What I tried to say in my remarks on Second Reading and in the letter which I wrote to the hon. Gentleman this week was that, whatever the result of the review, one thing which had to be made clear was that the position of these charities and sporting organisations will not be exactly the same as it is now. At the moment, we are dealing with a piece of expediency legislation which enables them to continue drawing income from this form of football pool competition, but which prevents any other body which was not in the field prior to the date of the Singette and Martin decision to start a similar scheme. It is a piece of expediency legislation and if the result of the review is that competitions of this kind are made lawful, then the charities and sporting associations must realise that we cannot continue that position merely for them. Other organisations would be equally entitled to take advantage of similar types of lawful competition. I thought it right to point out, dealing with future controls on competitions operated by other bodies seeking money for charitable purposes, that the position held by the charities covered by the Bill is unlikely to remain as a result of the review. I felt it right to warn them in their own interests that they must appreciate that we cannot legislate permanently to allow certain societies to carry on a particular type of competition, but not to allow others to do the same. They have this opportunity for looking for other sources of finance, even if it be to meet the possibility of far more of these types of competitions. I am satisfied that, as a result of the efforts made by all hon. Members, the legislation meets the needs of the charities, and I am glad that it has been welcomed generally by both sides of the House.Question put and agreed to.
Bill accordingly read the Third time and passed.
Rural Water Supplies And Sewerage Bill
Not amended (in the Standing Committee), considered.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 ( Third Reading), and agreed to.
Bill accordingly read the Third time and passed.
Wild Creatures And Forest Laws Bill Lords
Not amended ( in the Standing Committee), considered.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 ( Third Reading), and agreed to.
Bill accordingly read the Third time and passed, without Amendment.
Public Accounts
Ordered,
That Mr. Bernard Conlan be discharged from the Committee of Public Accounts and that Mr. James Lamond be added.—[Mr. Goodhew.]
Property, Norbury (Planning Blight)
Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Goodhew.]
1.46 p.m.
I am glad to have the opportunity to raise on this Motion for the Adjournment the problem that has been created in my constituency by the refusal of the then Ministry of Transport and, later, the Department of the Environment to accept the implications of a blight notice which has been served upon it with respect of a property in my constituency known as No. 1, Acacia Road, Norbury.
No. 1, Acacia Road, Norbury, is an attractive, four-bedroomed property with a garage and garden situated in a quiet, residential cul-de-sac within three minutes' walk of Norbury Station and of a busy shopping thoroughfare. It is a most desirable propeny. It was occupied for many years by a family named Waycott. On 24th October, 1969, Mrs. Rose Waycott, the freeholder of the property, died. Her son, Mr. Ernest John Waycott, who also lives in Croydon, was appointed administrator of the estate and the sole legatee. Very soon after his mother's death, he instructed a reputable firm of Croydon estate agents, Messrs. Deanes of Norbury, to offer the property for sale, and he accepted the firm's recommendation that the value of the property was £6,500. A considerable amount of interest was aroused in the sale because the property is in a very desirable situation. But, unfortunately, no firm offer ensued from the activity of the estate agents. The reason for that will be obvious when I point out that Acacia Road is likely to be demolished. Indeed, in July, 1969, it was made clear that Acacia Road would have to make way eventually for the northern terminal of the M23 motorway. Because of the situation, Mr. Waycott instructed his agents to serve a blight notice on the Ministry of Transport requesting that negotiations for the purchase of the property should be opened forthwith. The notice was sent by recorded delivery on 27th February, 1970, and, with great speed, the Ministry of Transport replied by serving a counter-notice under Section 140(1) of the Town and Country Planning Act, 1962, objecting to the blight notice on the ground that Mr. Waycott's interest in the property to which the blight notice related was not an interest qualifying for protection under Sections 138 to 151 of the 1962 Act because it was not the interest of an owner-occupier. It was pointed out to Mr. Waycott's agents that it was possible for the Ministry to acquire the property if it could be shown that the owner would suffer very serious financial hardship by a refusal to purchase in advance of the Ministry's requirements. But the letter informing Mr. Waycott and his agents of this possibility also carried the specific warning thatThat is a very narrow definition, and it is a very full warning. Because of the warning, Mr. Waycott did not believe that it would be possible for him to make an application on the basis of severe hardship. I came on the scene of this problem after my election in June last year. I entered into correspondence with the Department for the Environment and I received a similar reply to that which had been sent as a result of the original blight notice. I was also told that it is the"While it is agreed that there are varying degrees of hardship you may care to know that in the very few cases where blighted properties have been acquired under section 48 powers from non-occupying owners our enquiries have revealed that the owners were pensioners living in straitened circumstances".
The date of that letter from the Department to me was 16th December, 1970. As far as I am aware, no date has yet been fixed for the commencement of the roadworks for the northern terminal of the M23. That means that I can give Mr. Waycott no indication of the date when the Government will be prepared to acquire the property and that, as he has no possibility of selling the property on the open market, until that date is known the property is likely to deteriorate, to the great inconvenience and annoyance of the adjoining owners. A great question of principle is involved here. This is an example of an individual suffering considerably as a result of Government intention—not even of Government action—and he has no opportunity to correct the situation unless I raise the matter on his behalf in the House. I appreciate the problems which the Government face, and I realise that if the question of owner-occupation is not proved and financial hardship is not proved a vast amount of public money may be involved. But I still believe that the right of the individual is more important than the rule. I have always understood this to be a fundamental principle of the Conservative Party. I therefore raise the matter because I believe that a grave injustice has been done, continues to be done and may be done for a number of years to come unless the law is changed. I hope that my hon. Friend the Under-Secretary of State will be able to tell me that this matter is under urgent review. While I cannot expect the intention of the law to be flouted for a single exception, I hope he will give me the opportunity to indicate to Mr. Waycott that this subject is having the urgent attention of the Government and that they consider that the Town and Country Planning Act, 1962, is working most unfairly in many respects and, in particular, in respect of Mr. Waycott."general policy to acquire property needed for roadworks only when works are imminent. i.e., when a date for the start of works has been finally fixed ".
1.57 p.m.
My hon. Friend the Member for Croydon, North-West (Mr. Robert Taylor), not for the first time, has done a service to his constituent, his area of London and the House in raising this matter concerning Mr. Waycott's difficulties and in widening his remarks to take in the general principle with which he dealt towards the end of his speech. I congratulate him on the way in which he outlined, very fairly and succinctly, the history of this worrying case and on the very moderate and effective way in which he not only presented the interests of his constituent but outlined the need for reforms in our arrangements for compensating people who are disturbed in this way.
I think it right to make clear that the question of the advance acquisition of this property at No. 1 Acacia Road is still open. Mr. Waycott, I am afraid, does not fall within those categories of property owners to whom Parliament has given a statutory right to have their property purchased in advance of need for the purpose of public works. But it has been explained, both to Mr. Waycott and in correspondence with my hon. Friend, that if Mr. Waycott can and will show evidence that he is suffering severe financial hardship necessitating the sale of the property, then my right hon. Friend the Secretary of State, under his general discretionary powers to acquire property for highway purposes, would be able to consider purchase of this property. Obviously my hon. Friend would not expect me to give any commitment as to what decision my right hon. Friend might reach in the event of Mr. Waycott making such an application. If my hon. Friend's constituent is willing to submit such evidence, we will treat it on its merits. I will quickly dispose of the form of words which my hon. Friend read from the letter sent by my Department. I cannot remember the exact phrases, but my hon. Friend's implication was that we were, as it were, confining cases where financial hardship would be admissible to the cases of widows in straitened circumstances. It may well be that that form of words was used, but I assure my hon. Friend that we are in no sense confining the help to those who fall into that category. On the contrary, we will look at the matter broadly in terms of "suffering severe financial hardship necessitating sale of the property." I want now to deal with the matter in a little more detail and bring out some of the principles underlining these matters. To begin with, there is no dispute, and there can be no dispute, that the property as such is blighted—that is, it has been shown on a plan published by the former Minister of Transport in the previous Government to be affected by the proposed northern terminal of the M23. I accept without any argument that as such the property is not saleable. The plans in question were published in July, 1969, but, as my hon. Friend will know, these plans provoked considerable objection and controversy. Parliament has rightly laid down that where there are objections to plans of this kind the statutory procedures for consultations and for providing an opportunity for people to object and to have their opinions taken into account must be followed. The then Minister of Transport announced in December, 1969 that a review of the proposals would be put in hand to take account of objections and various other changes. Regrettably, these are very complicated and difficult questions and, because of such things as the Greater London Development Plan Inquiry and the whole question of roads which may be built in this area, the review has not even now been completed, and I am advised that it may still take some time before it is completed. Therefore, I regret that I am not able to say today when this property will be compulsorily acquired for highway purposes. I accept at once, as my hon. Friend has quite properly said, that this is a very unfortunate situation for people such as Mr. Waycott caught in that position. I fully appreciate that the ownership of an unsaleable property is a responsibility—some might say a cross—which most people would prefer not to bear. However, the Town and Country Planning Aots, which govern the right to serve blight notices requiring advance purchase, do not provide that all owners of such properties shall have a right to require my right hon. Friend or other authorities to purchase such properties. These Acts, as subsequently amended by the 1968 Act, do not provide that all should be so compensated; they lay down a number of conditions which have to be fulfilled so that a blight notice can be served. There can be no question but that the conditions governing the classes of property in respect of which such notices can be served are fully met in the case of No. 1 Acacia Road. However, the law as it stands also prescribes criteria which have to be met, not only in respect of the classes of property but also in respect of the classes of ownership. Only certain specified classes of property owners are entitled to serve blight notices, and, broadly speaking, these are owner-occupiers and mortgagees. They do not include absentee owners or, for example, investment owners. When Mr. Waycott served his blight notice on the Department in March, 1970, he claimed to be able to meet the criterion of owner-occupier. In fact, he had come into the ownership of this property by inheritance from his mother who had died in the previous October.I am certain that Mr. Waycott had no intention of misleading the Ministry. This was inadvertent; it was a question of incorrectly filling up the necessary blight notice. It was not Mr. Waycott's intention to suggest that he was an owner-occupier when he was not.
I accept what my hon. Friend has said on behalf of Mr. Waycott. It may well be that Mr. Waycott would not put forward his blight notice in any other way than by filling up the necessary form suggesting that he was an owner-occupier. The fact remains that there was no evidence that Mr. Waycott himself has occupied the property since the death of his mother, and certainly not for the requisite period laid down in the Statute.
Although, therefore, Mr. Waycott is the owner of the property, he cannot be construed as being the owner-occupier. This is what the law says. As such, I am afraid that he is fairly and squarely outside the classes of person to whom the blight provisions of the Town and Country Planning Acts apply. As such, he is not entitled, as the law stands, to serve a blight notice. That is why the former Ministry of Transport had no option, in these circumstances, except to serve the counter notice refusing acceptance of Mr. Waycott's blight notice. This was done in April, 1970. It is relevant at this point to remind the House that when the Town and Country Planning Act, 1968, was passed through the House an Amendment was moved by one of my hon. Friends and supported by my hon. Friend who is now the Minister concerned, which would have had the effect of extending the right to require advance purchase of property by service of a blight notice to beneficiaries. Such a provision, if accepted, would have brought people like Mr. Waycott within the scope of the blight provisions and entitled them to require purchase. My hon. Friend mentioned the views of the Conservative Party. They were expressed by my hon. Friends in Committee on the 1968 Bill, but I regret that that Amendment was not accepted. That is the present position. Therefore, as the law stands, the simple fact is that Mr. Waycott is not covered. As my hon. Friend is aware, it would not be appropriate, and I doubt whether you, Mr. Speaker, would allow it, in a debate such as this to discuss the merits of amending legislation. However, in pursuance of the pledges we gave at the last General Election, my right hon. Friend the Secretary of State has ordered a comprehensive review of the whole code of compensation and, indeed, of all of the anomalies and unfairnesses which exist. When we took office work was already going on in this respect, but we came to the conclusion that that work was unsatisfactory. It was not going far enough, it was not going fast enough. The Secretary of State, therefore, instructed officials within the Department to go ahead more rapidly and to broaden the review to take in the very many anomalies and inequities which exist not only in cases of this kind but in many others as well. I assure the House that this review is now going ahead with all speed, and the Secretary of State has announced his intention, as soon as it is ready and it has been possible for him and his colleagues to take decisions on this matter, to publish a White Paper setting out the details of the Government's proposals in this matter. He has also said—I think it was in the House—that he hopes to introduce legislation following up that White Paper at the earliest possible date. So on the point of principle, and it is a very real one, I can assure my hon. Friend that this Government are fully aware of the inequities and the anomalies and, indeed, the injustices which do occur when motorways or many other public works are required to be built and blight or injurious affection is placed upon private citizens' property. We are well aware of this, and we are undertaking action to remedy as many of the anomalies as we can, but I am bound, as indeed is my right hon. Friend, as things stand, by the law as Parliament has made it. As I said at the beginning, as far as Mr. Waycott is concerned, he still has opportunity which, so far as I am aware, he has not taken up, to offer evidence that his inability to sell his property is causing him severe financial hardship. I do not know whether this is so or not, obviously, but invitations both from my officials and from my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) have been put to Mr. Waycott and his representatives, and also to my hon. Friend on his behalf. To sum up, the position is as follows. Under Section 48 of the Town and Country Planning Act, 1959, my right hon. Friend is permitted at his discretion to purchase properties not immediately required for highway purposes. My right hon. Friend is not unwilling to exercise these powers in respect of properties like Mr. Waycott's which are affected by blight, but only where an owner is in a position to demonstrate, as I have said, that he needs an immediate sale because he is suffering severe financial hardship. If Mr. Waycott can show that this is so, then his case will be looked at sympathetically but unless such hardship can be shown I am afraid that we would not be justified in using public funds to purchase his property, as the law now stands. To conclude, my hon. Friend has enumerated a point of principle which the Government have pledged themselves to deal with. I cannot say to him that the conclusions of my right hon. Friend's review will necessarily cover every particular case of the kind my hon. Friend has in mind. I cannot, because I do not yet know what that review will throw up or what conclusions the Government will reach upon it, but my hon. Friend has illuminated an injustice in principle which requires to be set right, and it is certainly this Government's intention to do so as soon as we are able.May I please express my thanks to my hon. Friend for what I consider to be a very encouraging reply?
Question put and agreed to.
Adjourned accordingly at fourteen minutes past Two o'clock.