My thanks to Lleweton for passing along this gem, now buried in late 20th century history: government-provided tobacco ‘tokens’, issued to pensioners between 1947 and 1958.

What follows is part of a long transcript from Hansard, which documents and publishes Parliamentary debates. This is from November 19, 1957; it covers the discussion for repealing tobacco relief.

MPs offered two principal reasons for this, neither of which was health-related. One was that it cost too much and state pensions were increasing to cover cost of living hikes, among them, the price of tobacco. A second was that the tobacco relief was somewhat discriminatory in that it did not cover younger groups at a disadvantage, e.g. war widows, those injured in industrial accidents.

Emphases mine below.

Clause 3.—(REPEAL OF TOBACCO RELIEF FOR PENSIONERS AND EQUIVALENT INCREASE IN PENSIONS UNDER OLD AGE PENSIONS ACT, 1936.)

HC Deb 19 November 1957 vol 578 cc211-95

Mr. John Paton (Norwich, North)  When we adjourned last night, Sir Charles, I was addressing the House in support of the Amendment moved by my hon. Friend the Member for Mansfield (Mr. B. Taylor). Last night, I described this Bill as a mean-spirited Measure, and the proposal that we are discussing now I described as perhaps the meanest in this mean-spirited Measure.

I want now to go a little further and say to the Minister quite bluntly and plainly that in some of the aspects of the proposal to abolish the tobacco tokens the consequences are such that he and the Government ought to be ashamed to put it before Parliament. It is one of the worst examples of penny pinching from the poorest of the poor that we have seen for many a long day. The Minister himself, in his heart of hearts, probably is not too proud to have to stand here today and defend those aspects of the proposal to which I shall shortly refer.

Tobacco tokens were introduced as an offset for old-age pensioners to a very steep rise in the Tobacco Duty. They were introduced by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), when Chancellor of the Exchequer, and they were one of a number of examples of his imaginative insight into matters of this description when he held that office.

The concession that was made by the granting of the tobacco tokens is one that experience has shown all of us to be highly prized by the retirement pensioners who have been in receipt of it. In many cases, there is no doubt whatever that it has only been by the granting of the tobacco tokens that these old men, and, nowadays, some old women too, have been able to have the comfort and solace of tobacco in the last years of their lives.

Not only has this concession therefore attained very great importance in the lives and circumstances of our old people, but through the course of the years it has ceased to be treated as something separate and distinct from the normal family income and has now become completely interwoven into the peculiar pattern of the spending of retirement pensioners—a peculiar pattern imposed upon them, as we all know, by the narrowness and rigidity of the circumstances in which they have to live. Therefore, there is no doubt whatever that this is not an unimportant proposal in the Bill but is of very great importance to the majority of retirement pensioners.

Even some of those who in future will receive a net increase of 7s. 8d. on the existing pension—I am referring to those who do not get any assistance from National Assistance—will find that the abolition of the tobacco token is quite likely to limit them in the exercise of what they have found to be a great comfort in their existing conditions. I believe that many of them, addicted, as most of us have been at one time or another, to tobacco, would sacrifice essentials that are necessary for their physical well-being in order to get their smoke. This is, therefore, an important matter.

My concern, of course, is not so much for those who will receive the 7s. 8d. as a net increase but for that considerable fraction of the old-age pensioners living on National Assistance who now will get a nominal increase of 5s. a week in their scales—a miserable, mean addition to an inadequate allowance—but whose condition will be definitely very much worsened by the fact that the net addition, if they have been in receipt of tobacco tokens, will be only 2s. 8d. on the present scales. That is a completely derisory advance to give to these people at this time.

For them, the abolition of the tobacco tokens will be a heavy body blow and a great hardship and one which, if it is permitted to go through, will be a disgrace to the Government and to the Minister. I am quite sure that all hon. Members of the Committee, on both sides, would not wish to cause grave hardship of this kind to this body of unfortunate people who, having no other resources, are compelled to depend upon the assistance given them by the Assistance Board.

3.45 p.m.

If a reasonable counter-proposal can be made, it should receive the support of all hon. Members. I suggest to the Minister that his proposal is not the only way in which he could accomplish his purpose We ought to ask ourselves whether, without too much disturbance to the Minister’s financial calculations, there is not some other and better way by which we might, in due time, get rid of the tobacco token without hardship to those who now receive it. I believe that there is such a way.

We must all agree that, sooner or later, this anomaly would have to go, but must we accept the Minister’s idea of doing it in one fell swoop, with all the great hardship inevitably caused by it, to this section of people? Could we not temper the wind to these shorn lambs by extending the period over which abolition might be effected? Could we not accept the idea which I am about to suggest, which would give the Minister his result, but not immediately?

Instead of abolishing the tobacco token for everybody when the Bill becomes law, why not put a ban against new applicants for the tokens? Let those who are now in receipt of tokens work out their short remaining time in receipt of them, but do not add any others who have never yet had them. If we adopted this proposal, it would have the effect that a very considerable part of the £16 million that the right hon. Gentleman intends to save in the first year must continue to be paid. We all know, however, that it would be a rapidly diminishing sum. In the natural course of things old-age pensioners die.

Therefore, from the day that the proposal became law, the amount of money having to be provided for the tobacco tokens—[Interruption.] I do not know why the Financial Secretary to the Treasury thinks that this is a subject fit for sniggering. From the very day that the proposal was passed into law, the amount of money that would have to be provided for tobacco tokens would be a diminishing amount; and as everybody realises, before many years had gone the Minister’s objective would be realised and the last recipient of tobacco tokens would have ceased to trouble either the Minister or the Chancellor of the Exchequer.

Mr. Hugh Dalton (Bishop Auckland) I take a rather special interest in this matter since, as has been said several times, it was I who introduced these tokens in my Budget of April, 1947. Very briefly, I want to remind the Committee of the position with which we were then dealing. I had put up the Tobacco Duty by nearly 50 per cent. That was a shock to some people, as I intended it should be, because my purpose was to check smoking and save dollars. I also got much additional revenue, although that was not my primary purpose.

It was reported to me that two Conservatives travelling together in a train said, “This so-and-so has got us whatever we do. If we go on smoking, he will get the money, and if we stop smoking, he will save the dollars.” I was rather delighted to have been enabled to create that dilemma for some.

As a result of that steep increase in duty, with the purpose of which there was broad sympathy at that time, the price of a packet of 20 cigarettes rose from 2s. 4d. to 3s. 4d., or, for cheaper brands, from 1s. 9d. to 2s. 6d. I was pressed by a large number of my hon. Friends to seek some means of cushioning that additional burden—admittedly and deliberately a heavy burden if smoking was continued on the previous scale—for old people whose habits by the time they had reached pension age were well formed and who, if they had been smokers for many years, would have felt it a grievous hardship suddenly and sharply to have cut down their consumption of tobacco.

We therefore set about devising a plan by which that cushioning should take place. My right hon. Friend the Member for Llanelly (Mr. J. Griffiths), at that time Minister of National Insurance, and his and my officials, went into conclave on the matter …

The tobacco token scheme which we have had for ten years has brought great comfort and satisfaction to literally millions of old people, and has been a humane adjustment of our tax law which was bearing very hard and grievously on a certain section of the community. It has always been open to argument that this scheme was anomalous and peculiar and that, while it might serve a transitory purpose, it should not be part of our long-term tax pattern ...

what the Financial Secretary said … was this: It was a complicated scheme, difficult to work out and expensive to operate. It costs about £125,000 a year to operate the scheme. These are the words of which I morally complain: When it came into force about 1,400,000 retirement pensioners benefited from it, about 40 per cent. of the total. That figure has now risen to 2,600,000, or 54 per cent. It is a remarkable but little noticed sociological fact that the proportion of habitual smokers among retirement pensioners has risen from 40 per cent. to 54 per cent. over the last ten years. Or has it? “

… In the first place, at the beginning of the ten years, it was a new and unfamiliar procedure. I have no doubt at all that in the first year a large number of the old people who were fully entitled to these tokens did not realise it or did not know how to obtain them. That will explain why, at the beginning, the proportion of old people claiming was unexpectedly and unreasonably low. Many people should have got them right from the start, but did not claim for some time. That is the first reason.

Gradually, as years passed, the procedure became more familiar, and a smaller number can be deducted on grounds of ignorance of what they were entitled to. That is one factor, and the second is this. The total number of old people has, of course, gone up over the period. Roughly, the number of old-age pensioners has gone up from 3½ million ten years ago to 4,800,000 today, and new age groups in ten successive annual stages have come within the ambit of the concession …

Dame Irene Ward (Tynemouth)All I want to point out is that my complaint against the Socialist Government and the right hon. Member for Bishop Auckland, as a Socialist Chancellor, is that whatever they did they never had the money in the Treasury to meet the obligations of their legislation. The right hon. Gentleman [p]ut that tax on tobacco at that time not only for the purpose of stopping the drain on our dollar resources, but also because the Treasury was beginning to get extremely hard up for money ...

The right hon. Gentleman gave a detailed explanation of his action, but he failed to point out that there were no tobacco tokens for the sick, or for the war disabled, or for the industrially injured, or for the widows who were not drawing retirement pensions but had to pay excessive contributions in order to get those retirement pensions when they reached the appropriate age, or for the spinsters who were still struggling to earn their living and needed to pay for their stamps before they obtained their retirement pensions, or over a very wide field of people who were also entitled to them. Part of the trouble has been that for a very long time there has been a feeling among the sick, industrially injured, war disabled, police pensioners, Civil Service pensioners, Post Office pensioners and railway superannuitants, that not only were they deprived of their little bit of cherishing but that they had to contribute to the cherishing of other people.

This turned into a very human problem. I wish that we could have found some way of meeting the difficulty without producing an injustice in respect of those old-age pensioners who had been drawing tobacco tokens. I want to say, with all the emphasise at my command, that, although old-age pensioners may have got their little comfort from tobacco tokens, consideration was not given to the men who were industrially injured, the men and women who were sick—particularly the men, because they smoke more than women—and whose families were reduced to sickness benefit, and those men who, deprived of doing their daily job, would have dearly loved to have tobacco tokens so as to get that little bit of comfort which other people had. The Socialist Government were always in such an unholy muddle that they had to make discriminations, and when they did so they discriminated against whole groups of equally worthy people …

The saving to the Treasury on these tobacco tokens is quite considerable. I want to tell my right hon. Friend that I hope plans will be so thought out that we shall be able to use the money that we save to put all old-age pensioners in an equal position. This money should be used to meet the position of those living on small fixed incomes. I hope that my right hon. Friends on the Front Bench will remember that. At the same time, I hope that they will sweep away the right hon. Member for Bishop Auckland and blow him out of his seat on the Front Bench.

Mr. Thomas Hubbard (Kirkcaldy Burghs) My argument today is not against the removal of the concession, because I still feel that old-age pensioners are entitled to consider themselves independent of concessions. They have their own pension rights and they should not be dependent on concessions, although I give full credit to my right hon. Friend the Member for Bishop Auckland for taking the action which he did. My complaint is that today the position is completely reversed. The Minister has removed the concession and, at the same time, he is cutting National Assistance by 5s. He has not removed the tobacco tokens at a time when pensioners can feel that their pensions are reasonably adequate ...

I have listened to the hon. Lady the Parliamentary Secretary. On more than one occasion she has, unfortunately, suggested that old people did not spend their money as wisely as they should. I have heard her say that she thought the pension was adequate to the needs of the old-age pensioners at this time.

Mr. Raymond Gower (Barry) … In reply to the hon. Member for Kirkcaldy Burghs, who made such a lot of capital out of what he professed to be the inadequacy of these proposals, I should point out that this has never been a living pension. Although hon. Members opposite in some mysterious way pretend that a person could live on 26s. a week when they were in office, we know that it has never been a living pension. I do not doubt that in different circumstances we could have a sum of money payable to all aged people which would be adequate to their needs.

Mr. W. A. Wilkins (Bristol, South)  I want to recall to the mind of those hon. Members in the Committee today, and particularly to the mind of those who were in the Committee when the tobacco duty concession was first made, the circumstances in which it was granted. It was, let us admit, a unique concession. Members of the Committee at that time were pleading with my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) to make all sorts of concessions to all sorts of people. It was a unique concession, because it was made at a unique time and on a unique occasion.

I would remind the Committee that this concession was granted in April, 1947. We had just come out of a terrible war, a war which had left this country bankrupt, to use the words of the right hon. Gentleman the Member for Woodford (Sir W. Churchill). Those are not the words of any Socialist. Those words are on record in the diary of Henry Morgenthau, who was the American Secretary of State. That was the circumstance in which we found ourselves in Britain at that time.

Mr. R. H. S. Crossman (Coventry, East)  The Minister will agree, I think, that the arguments put from this side have made a very powerful case. I have listened to all the speeches, I think, and I hope he has noticed that no one has said that, in principle, we believe that this type of concession is the sort of way old-age pensioners should be treated. Every single person has said that, in principle, of course, there should be a money payment sufficient to enable pensioners to buy a decent standard of living. The whole case that we put has been that it is outrageous to withdraw a concession in the kind of package deal the Minister is providing in the Bill.

I would emphasise one point made in the very moving speech of my hon. Friend the Member for Kirkcaldy (Mr. Hubbard). The fact is that this concession has been, in the course of ten years, built into the standard of living of millions of old-age pensioners—it now forms part of their standard of living—and if it is taken away their standard of living is thereby cut. It is a cut of 2s. 4d. a week to an enormous number of pensioners who have been accustomed to it …

Although Tobacco Relief was repealed and ended in 1958, what is interesting is the heartfelt and empathetic argumentation on the part of MPs who objected to the sudden withdrawal of this concession benefiting the elderly.

Today, the debate has changed considerably, and not just with regard to tobacco. Today, Britain’s elderly are expected to choose between food and fuel. They are expected to hand over their houses to a company working with the state that effectively puts the equity towards the cost of long-term care.

Oh for the days of the mentions of ‘decency’, compassion and dignity with regard to our elderly, pretty much on the scrapheap in favour of others who have no appreciation of that which they worked and fought for.

However, ending on a tobacco note, Hansard’s transcript of this policy debate provides useful material for the amateur historian and researcher.

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