695
Index-Linked Pensions:
[LORDS]
[LORD BOYD-CARPENTER.] therefore, in considering demands for pay increases. in the public sector, take full account, for the purpose of comparability, of the fact that in the public sector the persons concerned enjoy this very substantial benefit not available, on the whole, to their opposite numbers in the private sector?
Baroness Young: Yes, my Lords. We are, of course, aware that public sector pensioners are generally better protected than those in the private sector. The Government have in mind the points that my noble friend has made and will certainly bear them in mind in the current review of the arrangements.
Lord Glenamara: My Lords, can the noble Baroness form any estimate of the cost of indexing in the private sector, where a great deal of it takes place, not by indexing written into the pension scheme but by a decision taken each year to increase the pensions by an amount equal to the increase in public sector pensions?
Baroness Young: My Lords, I have not got the information available on private sector schemes. I recognise that there are private sector schemes which give a high degree of protection to their pensioners, but one must recognise that not all of them do.
Lord Rochester: My Lords, in order to allay public anxiety on this matter, will the Government consider whether there is any practical way of making more widely available information such as that in the Scott Report on the relative value of index-linked pensions to their recipients?
Baroness Young: My Lords, I will certainly take note of that suggestion.
Lord Plant: My Lords, will the noble Minister agree that the figures she has given are the gross cost and that after deduction of tax the net cost would be very much less? Further, will the noble Baroness agree that the average index-linked pension of public servants is less than £30 per week?
Baroness Young: My Lords, the first point the noble Lord made is, of course, quite correct. Pensions will of course be subject to tax. On the noble Lord's second point, it is true that the average weekly pension, after the November increase, will be £36 a week, and that the average extra pension increase will be just about £3 a week.
Lord Orr-Ewing: My Lords, is my noble friend aware that the Scott Report recommended that this burden be added to all pensions, and that that means for all those working in manufacturing industry? Will she bear in mind that manufacturing industry is already carrying many burdens, and it will not be competitive in the export field if this added burden, which is already on the public sector, is added to its responsibilities?
Baroness Young: Yes, my Lords, I certainly take note of that point. As I indicated earlier, the Govern- ment have not yet reached their conclusions on the Scott Report.
Increased Cost
696
Lord Davies of Leek: My Lords, whatever stions may come from either side of the House, will the noble Baroness bring a little compassion to this problem, because many of these people have fought for this country and in their old age deserve to be protected from inflation? Without them Britain might not have been what it was after the war.
Baroness Young: My Lords, I had not recognised that in any of the remarks I have made I was anything other than compassionate about both groups, those who are indexed and those who are not. What we are trying to elucidate in this question is the facts of the case.
Lord Pargiter: My Lords, having regard to the fact that the indexation is for the purpose of providing against hardship among pensioners, will the noble Baroness say whether or not there ought to be a cut- off point where the hardship no longer applies?
Baroness Young: My Lords, that is another suggestion of which I will take note.
Viscount St. Davids: My Lords, will the noble Baroness not agree that the most compassionate thing she can do in this very difficult set of circumstances is to put an end to inflation?
Baroness Young: My Lords, that is a major objective of this Government.
Lord Bruce of Donington: My Lords, is the noble Baroness aware that the amount involved per annum which has been a charge on public funds is a very minute fragment indeed of the vast expense that has been incurred as a result of the pursuit by the Govern- ment of their monetarist policies and the creation of mass unemployment.
Baroness Young: My Lords, I do not think I will follow the noble Lord down that line of argument. I think it important to recognise that the taxpayer cannot afford to pay an unreasonable share of the cost of public service pensions, and that is why the Government set up the Scott inquiry.
Dinner
Lord Denham: My Lords, it may be for the conven- ience of your Lordships if I announce that dinner will be available at the usual time this evening.
2.57 p.m.
British Transport Docks Bill
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.-(Lord Aberdare).
On Question, Bill read 3a.
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1