HC Deb 15 December 1964 vol 704 cc322-44

9.0 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Norman Pentland)

I beg to move, That the National Assistance (Determination of Need) Amendment Regulations, 1964, a draft of which was laid before this House on 2nd December, be approved. After listening to the fluent and exciting speech of my hon. Friend the Under-Secretary of State for Scotland, I feel that I should warn the House that during my speech—or, to be honest, my factual statement—I shall be referring to a wide range of figures and percentages. I am sorry about this, but it is necessary if the proposals embodied in the Regulations are to be fully understood by hon. Members.

These Regulations represent a very substantial improvement in National Assistance standards. The increases in the main scale rates represent about a 20 per cent. increase on current rates. This is the largest increase since 1948, whether taken in terms of cash or as a percentage increase. The proposed new rates represent an increase of 217 per cent. for single households and 214 per cent. for married couples over the original 1948 rates. That has to be considered against an increase of 80 per cent. in the index of retail prices up to October, 1964, and against a 106 per cent. increase in the index of wage rates for the period July, 1948, to August, 1964, and against an increase of 163 per cent. in average earnings of adult manual workers in the period July, 1948, to August, 1964.

The total cost of these improvements will be £23 million in a full year. This is a net figure reached after taking into account the proposed increases in retirement pension and other benefits. If it were not for the increases in pensions and other National Insurance benefits, the cost to the National Assistance Board would be £74 million. This is the estimated cost for existing cases, those now being paid. The ultimate cost will undoubtedly be higher, because there will inevitably be an increase in the number of people eligible for allowances from the Board as a result of the increases which we are now proposing in the scale rates. Therefore, a number of factors have to be taken into account in considering how many additional people will be receiving allowances from the Board after the increased rates have been brought into force. It is not possible at this moment to make any reliable estimate of what the number will be.

The increases will come into effect at the same time as those for retirement pensions. This has been the practice when both National Assistance and National Insurance rates have been increased. In recent years, both sides of the House have considered it very desirable that the increases should operate at the same time in order to avoid the confusion and misunderstandings which occur if National Assistance increases operate before National Insurance increases. We all know that when this happens, or if it happens, National Assistance allowances which have been increased have to be reduced again after a short time for those receiving the National Insurance benefits. Those people would naturally feel disappointed and frustrated when they found that they received no advantage, or less than the full advantage, from National Insurance increases.

In other words, in trade union jargon which my trade union colleagues know full well, what has happened in the past have been occasions when the people concerned have had what is known as a "Paddy's rise"—they have had it in one hand but had it taken away from the other. On this occasion, the proposed increases are being given mainly for the purpose of improving National Assistance standards. That reinforces what I have said about the dates on which the increases are to come into effect. I must make it clear that the Government and the Board are satisfied that it is right that the effective dates of National Assistance and National Insurance increases should be the same, in other words, that they should be synchronised. In the meantime, however, as my right hon. Friend the Minister has already announced, the Board is taking special steps, pending the operation of the increases, to ensure that National Assistance recipients, particularly old people, do not suffer hardship during the winter. I understand that that decision has already taken effect in many parts of the country.

I should like to say a word or two about the various scale rates. I have already mentioned the amounts of the increases proposed in the main rates. As I have said, the rate for the single householder, which includes people living alone, will go up by 12s. 6d. —from £3 3s. 6d. to £3 16. My information is that the majority of allowances are assessed at this rate. There were about 1,190,000 single householders out of 1,925,000 people on assistance at the end of September, 1964. Of these single householders, about 925,000 were old people.

The rate for the married couple will go up by 21s—from £5 4s. 6d. to £6 5s. 6d. There were about 405,000 married couples receiving assistance at the end of September, 1964. About 220,000 of them were old people.

The rate for a non-householder aged 21 years or over will go up by 12s. 6d. —from £2 15s. to £3 7s. 6d. As the House will be aware, "non-householder" is the term used to describe a person who is not himself a householder but is living in the household of another person. We are all aware of the typical cases in this category—old people living with their married sons and daughters and younger single people living with their parents. In December, 1963, there were 304,000 weekly allowances assessed at the "non-householder" rate.

I come to the rates for young people aged between 18 and 20 and 16 and 17 years of age. The rate for the young person aged between 18 and 20 will go up by 8s. 6d. to £2 11s. 6d. The rate for young people between 16 and 17 years of age will go up by 7s. 6d. to £2 4s. 6d. The increase represents about 20 per cent. over the current rates. Relatively few allowances are assessed by reference to those rates. I am informed that in all there were 30,000 at the end of 1963.

The rates for children will go up by 3s. to £1 2s. 6d. for those under five years; by 4s. to £1 7s. for those from five to ten years and by 5s. 6d. to £1 13s. 6d. for those from 11 to 15 years. There were about 529,000 children provided for in weekly allowances in December, 1963, belonging to 228,000 families.

I come now to the special rates. These will go up by the same amounts as for the corresponding categories under the ordinary scale: that is, by 12s. 6d. for single people over the age of 21, by 21s. for married couples and by 8s. 6d. for adolescents from the ages of 18 to 20 and 7s. 6d, for adolescents aged 16 and 17. These increases retain the differential in favour of the blind and the tuberculous at its present amount of £1 4s. 6d.

The scale rate is, of course, only one of the factors which is taken into account in assessing a National Assistance allowance. An allowance for rent may be added, for example. In nearly every case, it is the actual amount of rent paid. The amount added varies greatly between one case and another, but at the end of September, 1964, the average addition for a single person was £1 6s. 2d. and for a married couple £1 9s. 9d. Therefore, a single householder who lives alone and pays the average rent of £1 6s. 2d. would have his income brought up to at least £5 2s. A married couple paying an average rent of £1 9s. 9d. would have their income brought up to at least £7 15s. 6d.

The level to which the income would be brought up would, of course, be higher for families with children. For example, in the case of a married couple with two children aged between 5 and 10, assuming a rent of £1 14s. 6d. a week, the figure would be at least £10 14s. a week. For a married couple with three children aged, respectively, under 5, between 5 and 10 and between 11 and 16 years of age, and paying a rent of £1 14s. 6d. a week the figure for the family would be at least £12 3s. a week. I say "at least" because all these amounts could well be higher since the Board makes special additions under its discretionary powers where special needs exist. Some recipients of allowances from the Board have other income, part of which is disregarded, and this represents additional income.

As hon. Members will probably know, these special additions are an essential part of the National Assistance scheme. The amounts may range from a few shillings a week to substantial sums. For example, they may be only modest amounts for, say, laundry where expenses have to be met for that purpose, there might be an expensive special diet requiring an addition of, say, 20s. a week or still larger total amounts may be involved where the same person has a number of special needs.

At the end of 1963, discretionary additions for special needs were being given in over 51 per cent. of all weekly allowances and in over 60 per cent. of supplements to retirement pensions. The average amount was 8s. 10d. a week and the total cost about £23 million a year. In all, over 1 million persons were receiving discretionary additions from the National Assistance Board.

For the vast majority of persons who are receiving National Assistance supplements to retirement pensions and other long-term National Insurance benefits which will be increased on 29th March, the effect of the National Assistance increases will be to leave their supplements unchanged, that is, their total income will go up by the full amount of their benefit increases. This is in regard to the vast majority of people who will benefit under these proposals, but there will be exceptions, and I should like to give some examples of what these exceptions will be and how they occur.

First, families with dependant children will normally receive a small increase in their Assistance supplements as well as the National Insurance increases. This is because the National Assistance rates for children are going up by more than the benefit rates for children. Secondly, a few people will have a reduction in their Assistance supplements because the increase in benefits and pensions is more than the increase in the Assistance rates.

There are one or two other groups who will not benefit by the full amount of the Assistance increases. These include persons, of whom we are all aware, in Part III accommodation provided by a local authority, or in comparable accommodation, who are allowed a prescribed sum of pocket money week by week. There are also persons living as boarders, paying an inclusive sum for board and lodging. Ordinarily they have their income brought up to a sum sufficient to meet the board and lodging charge, and provide a sum for personal expenses. Then there are unemployed persons whose normal earnings would be less than the amount of assistance which would otherwise be payable. That is the well-known "wage-stop" case.

I might also add that special temporary arrangements will be made under Schedule 7, paragraph 9, of the National Insurance Bill to ensure that increases in short-term National Insurance benefits, which will be payable at the end of January in accordance with that Bill, are disregarded for National Assistance purposes, except to the extent that they will be taken into account when the National Assistance increases come into operation, also on 29th March. Here again this will be done to ensure that the vast majority of recipients of short-term benefits get the full advantage of their benefit increases.

The House should recognise that the cost of this is pretty large, and I think it should be appreciated by hon. Members on both sides that this money is being made available at a time when the Government are having to watch their expenditure very carefully indeed. It shows that the Government are determined to look after the interests of the poorest people in our community. I therefore trust that the House will recognise that the proposals in these draft regulations are a measure of compassion on the part of the Government to meet the needs of the poorest people in our country. I hope that full approval will be given from both sides of the House for their implementation.

9.19 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

I rise to congratulate my right hon. Friend on having the courage to introduce Regulations which give such substantial increases to the neediest section of our community. It takes a great deal of courage to do this when one has regard to the economic mess which my right hon. Friend and the Government inherited not only abroad but at home, and it indicates that this is a Government of action when it comes to looking after the interests of the neediest section of the community.

The increases themselves indicate that the Government are determined to live up to their pledges to that section of our community and, in particular, our old folks. The plight of our old folk has been considered by committees, social research units, the medical profession and by all sections of our sociological service, and all of them are convinced that the old and the chronic sick are living well below the existence line.

It therefore seems to me that in taking this action my right hon. Friend and the Government are demonstrating that they recognise the facts about this section of the community. The increases are very substantial. They are second only to the famous increases of the first Labour Government. We should congratulate my right hon. Friend for introducing these proposals so energetically and for taking such firm measures, in spite of the economic situation which the Government inherited from the previous Tory Administration.

The Tory Government refused to synchronise increases in National Assistance rates with pension rates. That is the tragedy. Time after time, as HANSARD shows, our Tory predecessors actually reduced real National Assistance rates because they insisted that pension increases should not be matched by corresponding increases in National Assistance scales. Time after time we protested. Before I came to Parliament I was the Chairman of the Lanarkshire Advisory Committee on National Assistance, and I led a deputation to Edinburgh to meet the then Tory Minister of Pensions and National Insurance in order to protest at the further widening of the differentials between pension recipients and National Assistance recipients.

On many occasions we discovered that in the case of pensioners who required to have their meagre incomes supplemented by National Assistance not only did they receive no increase; in some cases their global incomes per week were less than the pension increase. It was because hundreds of thousands of our old souls were being treated in this parsimonious fashion that many of us argued that whenever we increased retirement pensions we should make corresponding increases in National Assistance scales.

That is why I welcome the action of the Government in ensuring that National Assistance scales will be increased to correspond to the pensions increases. In this way we shall eliminate the previous anomaly, whereby an old soul may receive a pension increase, on the one hand, and have it taken off him in respect of National Assistance payments, on the other, receiving what we in the North refer to as an Irishman's rise. That was the penalty imposed by our Tory predecessors who ruled this country for 13 years. It was a shame and a disgrace, and we protested emphatically against it time after time.

We even sent to the then Tory Minister of Pensions chapter and verse about the anomalies which his Administration was creating. These representations were made not simply on behalf of the Labour and trade union movements; they were unanimous representations made on behalf of my committee, which represented all sections of the community. This was a miserable way in which to reward the old folks for their toil on behalf of the nation. That is why one finds it difficult to contain oneself when listening to speeches with crocodile tears from hon. Members opposite about the plight of the old folk.

We have consistently said that the welfare of the old people and the chronic sick is of the utmost importance. We have always argued that this section of the community is entitled to receive a great and expanding share of the gross national product. This is the generation to which we owe so much. I am glad that one of the first acts of this new Labour Administration was to recognise the plight in which these people live and to take the ambitious step of offering substantial increases of 21s. and 12s. 6d. respectively to help and protect them during times of economic adversity.

9.25 p.m.

Mr. Gordon Oakes (Bolton, West)

Like my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey), I wish to congratulate my right hon. Friend on her courage in bringing forward these increases. It demonstrates that this Government are vitally concerned about those most in need and determined that they shall receive help.

I should like information from my right hon. Friend regarding the vexed question of the wage stop. I know the difficulties inherent in this matter, that there could be people in receipt of National Assistance who would be receiving more money than they could earn if they were employed. In a previous debate on this question, at the time of the last increase in February, my right hon. Friend had this problem well in mind. Those who are affected under the present scales will receive nothing through the increases. This is an anomalous position. It means that some people, usually people with large families, who do not receive anything more are at present in receipt of less than the subsistence rate. This problem is greater in the North. As I am sure my right hon. Friend will be aware, the further north one goes the less is the amount of the average wage and the greater the incidence of the wage stop.

There are those who are idle and shiftless and who would receive National Assistance while refusing to work. I am sure that the conduct of these people would not be supported by any hon. Member, and I suggest that they may be dealt with not by imposing a wage stop, which affects the welfare of many others in receipt of National Assistance, but by the exercise by my right hon. Friend of her powers under Section 51 of the principal Act, which contains measures to deal with people who refuse to maintain themselves and their families. Their actions bring the whole National Assistance system into disrepute, and I suggest that the Board should prosecute those who refuse to work and who are a burden on society. Other people are affected by their actions and have to suffer because of this iniquitous wage stop.

I am sure that my right hon. Friend is seized of the problem because she mentioned it in our previous debate on this subject, but perhaps she can tell us how many people are prosecuted under Section 51. These people are holding back increases for others on National Assistance who deserve them. I am particularly concerned about this because the wage stop always applies where there are a large number of children, and it is the children who might be hurt by the increases not being applied to those families.

9.30 p.m.

Mr. Charles Curran (Uxbridge)

I want to put a viewpoint different from that of the hon. Member for Bolton, West (Mr. Oakes) who urged more prosecutions. I believe that we need to look at the wages stop principle much more attentively and sympathetically than he did.

The wages stop dates from 1948, and was invented by the Labour Party. It is contained in the Determination of Means Regulations, one of which says that if an applicant is required to register for employment as a condition of seeking Assistance, his weekly income must not exceed his net weekly earnings if he was employed full time in his normal occupation.

That means that the wages stop is applied to families where the husband is unemployed. It is not applied where the husband is sick. The principle is that a man should not be better off when out of work than when doing his normal job, and that if his unemployment benefit, National Assistance and family allowances add up to more than his regular rates of pay his National Assistance should be cut.

It is to that point that I want to direct the Minister's attention. Does she or does she not think it right that family allowances should be disregarded? Suppose we were to say, as we could, that the family allowances should be disregarded, would we not then be helping the people with large families who are now penalised by the wages stop? Would it not be better, instead of talking of prosecutions, as the hon. Member did, to exclude family allowances from the review that the Assistance Board makes of a man's income?

I have not the slightest objection to the wages stop being applied to people who do not have children. But I do not see why we should penalise a man by penalising his children. I suggest that the simple way to avoid that is just to exclude the family allowances. I agree that if we leave out family allowances we may allow a certain number of loafers, if that is the word to use about them, to get money that perhaps they ought not to have—people who would find themselves better off being idle than being at work. But the frank truth is that we cannot run National Assistance and make it do its proper job if we are to surround it with a barbed-wire fence to ensure that there is no cheating anywhere.

If National Assistance is to do the job it was created to do, which is to look after the poor, we must frankly recognise that there will be a certain amount of waste, a certain amount of fiddling and a certain amount of plain fraud. We have to put up with that, especially where children are involved. If we try to stop it by prosecutions, it is true that we shall penalise the loafer who is cheating, but we shall also be penalising the children, who are not.

I would therefore ask the Minister two questions. First, what would it cost to exclude family allowances altogether—from any calculations——

The Minister of Pensions and National Insurance (Miss Margaret Herbison)

If I may interrupt the hon. Gentleman at this point, family allowances are not taken into account at all. The hon. Gentleman will understand that when a man is working he has the family allowances, or his wife has them, over and above, and they are not taken into account for National Assistance.

Mr. Curran

Do I understand the Minister to say that none of the social insurance benefits of any kind are taken into account?

Miss Herbison

The only one taken into account is the family allowance so far as concerns the wages stop.

Mr. Curran

Will the right hon. Lady tell us whether she is prepared to review the wages stop so as not to penalise the man with a large family and to recognise that, as we are doing it now, we are clamping down on the loafer at the expense of his children? I ask whether instead of urging prosecutions she can so rearrange the workings of the National Assistance that, if necessary—I am quite blunt about this—we can put up with a certain amount of cheating and fiddling rather than penalise the man with a large family and thereby penalise his children.

I am glad to see present the Chancellor of the Duchy of Lancaster. I ask that when he makes the review of the social services on which he is engaged the workings of National Assistance will be part of that review. There is nothing sacred or immortal about National Assistance. We can perfectly well take another look at it. This is an opportunity which might be taken to get an expression of opinion by the Government on the matter. I ask whether the time has come to absorb the National Assistance Board in the Ministry of Pensions and National Insurance.

Mr. Speaker

Order. This is interesting, but I find some difficulty in relating it to matters which arise upon this Order.

Mr. Curran

I appreciate that I cannot go very far in pursuing this matter. I should like, nevertheless, Mr. Speaker, without travelling outside the range of the debate, to ask if we can re-examine the structure of National Assistance. We are now making certain changes in it. I wish to ask whether in making those changes we can get an idea of the Government's thinking about the future of the whole structure and whether we are to maintain indefinitely this particular method of helping those most in need or if we can do it as part of the Ministry of Pensions and National Insurance and not as a separate function.

We all know that the National Assistance Board is the creature of the Minister. In theory it is a separate body, but in fact it is not. I do not imagine for a moment that the right hon. Lady first reads in her morning paper that the National Assistance Board has decided to increase scales and says, "I wonder what they will do next". Of course she is well aware of what the Board is doing. I wonder if it is not now time to merge the Board into the workings of Pensions and National Insurance. Also—this is not a small point—I wonder if we could get rid of the name.

Mr. Speaker

Order. I really must make the point because the Minister would be in trouble if she sought to reply to the hon. Member's questions. All that this Order does is to increase certain amounts. We cannot change names or amalgamate systems under it.

Mr. Curran

I appreciate, Mr. Speaker, that we are concerned with an administrative change. I wish to suggest, although I do not want to go outside the rules of order, that we should seek to get the Government's thinking about the future of National Assistance. I hope that when the right hon. Lady replies to the debate she will give us an idea of whether she proposes to maintain the Board as a nominally autonomous body. If she cannot, I wonder whether the Chancellor of the Duchy can say whether some change in the name is envisaged.

9.39 p.m.

Mrs. Margaret Thatcher (Finchley)

This will probably turn out to be a short debate. On other occasions we have had quite lengthy debates on a Friday when different sets of rules of order, with respect, Mr. Speaker, seemed to prevail, and we have had very wide-ranging debate on National Assistance. However, this is not a Friday and, therefore, we have to keep to strictly relevant matters.

We on this side welcome the increases in National Assistance. I thank the Joint Parliamentary Secretary for the details he gave about them. I shall make only one or two comments about them. I want, first, to say a few things about the disregards, which I have mentioned before and upon which the right hon. Lady might be expecting a few words from me. The disregards have been increased only once since National Assistance began; that is to say, they were increased very substantially in 1959 and the increases took effect upon the same date as the then increases in scale rates. They took effect at a time when the scale rates for a single householder had increased by 26s. over those in 1948.

Under these Regulations the scale rates for a single householder will have increased since the disregards were last increased by a further 26s. We have, therefore, reached an identical point for the consideration of disregards. The right hon. Lady might—I hope that she will—tell me that separate Regulations will be laid to increase the disregards to take effect from the same date as these scale rate increases. I shall be delighted if she does, because I think that we have reached the time that the disregards should be increased further.

The right hon. Lady and the many hon. Members who have been present at our debates in the past will know that a good deal of time was taken up during those debates on considering the problem of some people who, it has been thought, are reluctant to apply for National Assistance. Because we have been so anxious to solve that problem, I think that sometimes we have not given sufficient consideration to a parallel problem, namely, that there are quite a number of people who would like National Assistance, but whose capital is just above the level which would permit them to apply.

During the last few weeks, particularly when I was electioneering, I came across many who wanted income help, but whose capital was just above, or in some cases a few hundred pounds above, the present £600 limit above which they are ineligible for assistance. I therefore ask the right hon. Lady to consider increasing this capital disregard and the absolute disregard of £100 of capital at this point in time.

There are other disregards which I think sometimes have a disincentive effect on people who would otherwise help themselves. One which I have come across is the present income disregard of 30s. a week for the person not required to register for work. I would hope that this, too, could be increased as it was in 1959.

A third disregard, about which I have been approached by charitable organisations, is the one of 15s. a week which operates by analogy to the superannuation and trade union disregard, whereby if a grant of more than 15s. a week is made to a person in receipt of National Assistance the extra amount comes off the National Assistance allowance. Again, this amount was increased in 1959 from 10s. 6d. to 15s.

I think that the time has come when we should urge the right hon. Lady to ask the Board to increase it, at any rate to £1, which is a nice round sum and one which many charitable organisations would be very willing to give——

Mr. James H. Hoy (Edinburgh, Leith)

Why did not the hon. Lady do it?

Mrs. Thatcher

I started, I hope very logically and reasonably, by saying that the disregards were increased when the scale rate for the single householder had gone up by 26s. It has now gone up by a further 26s., and I base my argument on that.

We put up the disregards, and when they are increased they usually go up by a considerable amount. Generally, they went up in 1959 by 50 per cent. all round; the capital disregards were increased from £400 to £600 the income disregards went up from £1 to £1 10s. Generally, the disregards go up less often than the scale rates, but when they do they are increased by a considerable percentage. The time has come when they should be increased again by a considerable percentage amount. I hope that the right hon. Lady will consider laying draft Regulations which will take effect on the same day as the increases in scale rates come into operation.

The wage-stop is far easier to debate than to solve as a problem. We have debated it in the House on many occasions, and in listening to the debate today I found myself reaching for the arguments with which to defend the wage-stop because I had to do that from the Dispatch Box opposite on a number of occasions. This came up as recently as the last Question Time devoted to the Ministry of Pensions before the General Election, when, as usual, I was under fire. The right hon. Lady now the Minister defended the principle of the wage-stop. Her right hon. Friend the present Minister of Overseas Development, the only lady in the Cabinet, challenged the principle in a way which only she can challenge any principle; we thus have an example of what must be the only eternal triangle to consist of three women.

An hon. Member who is now in another place and who was then the "shadow" Minister of Pensions also challenged the principle and in a previous debate to which reference has been made tonight a number of other people challenged it. I have only one comment to make on this point. It relates to family allowances, to which my hon. Friend the Member for Uxbridge (Mr. Curran) has referred tonight as he did on a previous occasion.

Family allowances are certainly not taken into account for the wage-stop equation, which says that a person shall not get more when he is out of work than he receives when he is in work, but the allowances are taken into account for the purpose of calculating the resources and, therefore, they have an effect on the wage-stop provision. In other words, if family allowances were to increase all round there would be a reduction in the number of people who are limited by the wage-stop in what they can receive from National Assistance, but it is a difficult and obscure effect and it arose because family allowances are taken into account for the purpose of resources but not actually for the work-stop equation.

This is the eleventh increase in the National Assistance scale rates since they were introduced in 1948. We on this side of the House made eight increases. In five out of the eight blind persons had a preferential rate of increase over and above the increases afforded by the ordinary scale rates. On three out of the eight occasions blind persons received the same increases as those who were on the ordinary scale rate. On this occasion the Board has followed the lesser provision. It has not given preferential increases at all to blind persons, so that a married couple of whom one or both are blind receive exactly the same increases as a married couple neither of whom is blind. There must be a reason for this. It cannot be money because there are only 53,000 blind persons receiving Assistance and, of course, there has been a tendency in recent years to give special allowances to blind persons under the tax system. It is possible that the reason is that the preferential scale rates also apply to tuberculous persons, and it may be thought anachronistic these days to select that particular illness out of many for the giving of preferential scale rates.

One or two other points of detail. The Parliamentary Secretary mentioned people living in Part III accommodation. I wonder whether the pocket money allowance will be going up.

Mr. Pentland indicated assent.

Mrs. Thatcher

On the last occasion, it went up from against the 1ls. 6d. to 13s. 6d., and I expected that on this occasion it would be raised again.

Am I right in thinking that the increases in respect of the children of widowed mothers given under the 1964 Act will continue to be disregarded for the purposes of this increase? We had a special provision in the 1964 Act which made certain that this was done.

The Parliamentary Secretary gave a number of figures about total expenditure on the basis of existing cases. There will be extra people who will become eligible for National Assistance and who will greatly benefit from coming within the National Assistance system. If my calculations are correct, expenditure on National Assistance next year cannot be less than £257 million, and it may be even more.

In conclusion, I pay tribute to the excellent work of the Board and to the sympathetic and understanding way in which its officers never fail to discharge their duties.

I have great pleasure in supporting the right hon. Lady's Regulations.

9.52 p.m.

The Minister of Pensions and National Insurance (Miss Margaret Herbison)

This has been a shorter debate than we usually have on provisions of this kind. I take, first, the question of the disregards which was raised by the hon. Lady the Member for Finchley (Mrs. Thatcher). The hon. Lady hoped that there would be separate Regulations introduced between now and 29th March to raise the level of the disregards. I have to tell her that there will be no separate Regulations. Had we intended to raise the figure for the various disregards, we should have done it now. The Board would have made a proposal and that proposal would have been contained in the Regulations which we are now discussing.

The hon. Lady said that only once since National Assistance began in 1948 had the disregards been changed. She is right; they were changed in 1959. She said that this was done because the National Assistance scales had gone up in total by 26s. over the 1948 figure and, if we take the present increase payable from 29th March next, they will have gone up by another 26s. from the 1959 level. One of the points which the hon. Lady should note is that, of this last 26s., 12s. 6d. is due to the increase which is to be given under these Regulations. This is an important matter to remember.

As the hon. Lady knows, the Board has discussions with the Minister on these matters. It had to take into account—and I fully agreed—that this time we wanted to make for all people on National Assistance the biggest all-round increase we could possibly manage, and 12s. 6d. for a single person and 21s. for a couple is a very substantial increase. It seemed to us that it would be far better to give everybody on National Assistance these substantial increases instead of making a small increase available to all of them and raising the disregards at the same time.

Many of those on National Assistance can be grouped as having identical needs and they may have different amounts of total income. But that does not mean that I do not believe in disregards. I believe, on the contrary, that they have their part to play in these matters. But one must balance, as the Board had to balance on this occasion, and as it will have to balance on each occasion, what is the best way of doing justice to all those for whom the Board is responsible, and I am certain that the vast majority of hon. Members and the country outside would consider, with the Board and me, that this is the best way of doing it this time.

There has been criticism from some sources about disregards. That is why it is important that I should make it clear that I believe in these disregards. It is a matter on which the Board, in consultation with the Minister, will have further discussions to see what should be the future of disregards—where perhaps they should be increased, if they ought to be and so on. I give the hon. Lady the Member for Finchley my assurance that we shall have discussions on these matters.

Dame Irene Ward (Tynemouth)

Am I right in assuming, from what the right hon. Lady says about the Board's proposals for disregards, that no discussions took place? Is it the case that she did not ask the Board whether it had any proposals and that the Board did not itself raise the question with her—that, in fact, it put these proposals forward without discussion and that she accepted in total what the Board recommended?

Miss Herbison

No. I am sorry, but I do not think that the hon. Lady has been listening. I said, in reply to the hon. Member for Finchley, that we had discussions not only about disregards, but on all matters for which the Board is responsible.

I want to deal with the question of the wage-stop. This presents very grave difficulties to any Minister. The latest figure, for September, 1964, shows that 13,000 people are affected. My hon. Friend the Member for Bolton, West (Mr. Oakes) asked about prosecutions. There were 96 in 1963 of the type he referred to. I have raised this matter on a number of occasions in the past. The hon. Member for Finchley made it clear that I had, not opposed the principle when the question was last raised under the late Government. She also knows that it is a matter to which I gave a great deal of thought when I was on the benches opposite.

The fact is that the 13,000 families—it is not only 13,000 individuals who are concerned—are living below what is considered at present to be subsistence level. This is a very serious matter. It is a problem to which I have not yet found an acceptable solution in the short time that I have been Minister. In this instance, however, the Board will examine all cases, because it might be found that with the increase in National Insurance benefit, someone will get a cut in National Assistance supplement because of the wage-stop. The Board is to examine each case individually to make sure that the figures taken as normal earnings are up to date.

I can give the House an example which was taken up by my hon. Friend the Member for Motherwell (Mr. Lawson). I can tell hon. Members that the further north one goes, the more people will be found to be affected by the wage-stop. In the north of England and in Scotland wages are lower than they are in the prosperous Midlands and the South. As a result of my hon. Friend's having taken up an individual case, it was examined and the Ministry of Labour office in the area was consulted. It was found that the normal earnings figure which the Board have operated for the area was too low, so that not only did the individual concerned suffer a wage-stop, but suffered it at a figure lower than it should have been.

I can assure the hon. Member for Uxbridge (Mr. Curran) and my hon. Friend the Member for Bolton, West and other hon. Members that the Board will examine these cases to ensure that the normal earnings figure is up to date. I know from individual cases with which I have dealt as a constituency Member that in this matter the Board is as humane as it can be.

We have to give a great deal more thought not only to the operation of the wage-stop, but to what is happening to the low wage earner and his family. We often talk about the proverty and difficulties of retired people, who do suffer proverty and difficulties, but all the information I am getting suggests that the worst type of hardship and poverty seems—and I do not put it any higher than "seems"—to exist where there is a low wage earner with a fairly big family.

If a wage-stop has to operate, one way in which help could be given in this respect would be to make better provision for family allowances. I can assure hon. Members that this is a matter to which we are giving attention, but it is not a problem to which we can find a solution within a week or two. It must be considered along with all the repercussions which flow from changes in such things. We have to find a solution which will help not only when the wage-stop strikes, but which will help the low wage earner and his family, or we shall be doing less than justice to the children of a big family.

Mr. Dempsey

Will my right hon. Friend bear in mind that certain employers are deliberately paying scandalously low rates of wages, as a result of which men on standard benefit with supplementation from the National Assistance Board are better off than when working? Would she also bear in mind the fact that the Board operates a regulation by which, if a person is employed for six consecutive days, he cannot have his meagre income supplemented to the Board scale.

Miss Herbison

I will deal with my hon. Friend's last point first. Anyone who is working cannot receive National Assistance. Secondly, when scandalously low wages are paid, people are better off on National Assistance. That is the point made by my hon. Friend the Member for Bolton, West and the hon. Member for Uxbridge. The wage-stop ensures that does not happen. If there are employers who are paying scandalously low wages, that is a matter for the trade unions concerned and for the T.U.C. As a back bencher, I brought the workings of the wage-stop to the notice of the T.U.C. So much of this comes back to the very low wages paid in some parts of the country.

Mr. Curran

I appreciate the right hon. Lady's courtesy in giving way. I am glad that she has put her finger on the nub of the matter. We are here dealing with poverty and the situation of the man with low earning power and a large family. I am asking the right hon. Lady—I hope that she will develop the point—whether, instead of prosecuting such a man, we should, until we have found a solution for this problem, which is not easy, treat him with compassion rather than take him to court.

Miss Herbison

I hope that there would be as much compassion as possible in these matters. As I say, because I have not had time to go into the matter sufficiently fully, I cannot give any guarantee tonight that the wage-stop will not continue to operate. I tried to show that the Board is doing its best to ensure that when these increases come into force the normal earnings are ascertained so that people are not penalised too heavily, and I went on to suggest that the crux of the problem was family allowances. These are all matters to which we are giving most serious consideration.

The hon. Member for Uxbridge wanted to develop the matter further than the Regulations would allow. I am sure that he already knows that we made it clear before the election that we wanted a Ministry of Social Security. When the income guarantee is working, we hope that that will take a very great number of people out of National Assistance. It will be at that stage that we shall consider what the future of the Board should be.

I want to add my thanks to the National Assistance Board, not only to its members who do very fine work and who are continually thinking how best they can help the people who need help, as I found when I became a Minister, but to its officers who work in the local offices throughout the country. This is not new for me. As a back bencher, time and again. I paid tribute to the work that the officers did. It is said, and with justice, that there are people who just will not apply for National Assistance, no matter how poor they may be. That is why we gave consideration to the income guarantee. But we do not want that to be any reflection either on the Board or on its officers, who are doing very fine work.

I am happy to be the Minister who is introducing these substantial increases, the biggest ever to be given since the inception of National Assistance. I am very glad, also, that when our retirement pensioners, at the end of March, get their increase on their pension book, they will not at the same time find that they have a cut in their National Assistance. That is a matter that has caused concern for a very long time to hon. Members on this side. Sometimes the neediest of our old people got the smallest real increase of all the old people. By making this increase exactly the same—because it is not only a matter of synchronising the increases—as the increase which we are giving in the pension, we are ensuring that the neediest of our old people will get the full benefit from these increases.

This is the first time, too, that we have given the £4 lump sum, whether one calls it a Christmas bonus or anything else. The old people have already got it. In this difficult time—and I have had some little difficulties over the past few weeks —it has been a source of great comfort to me to get letters about this from old people. It has sometimes almost made me feel like crying when I have opened these letters, written evidently by a very old man or woman, saying what pleasure that they have had in opening their envelope and finding an order for £4 extra. That will be a real help and, I hope, a real comfort to those 1,300,000 old people and to a further 200,000 others including the chronic sick.

I hope that with the combination of the £4 lump sum and the substantial increases, we really will have made a move towards ensuring that the old people, many of whom, because of low wages in the past, because of the difficulties of the 1930s and because these are the people who never had a chance to provide for their own retirement, will now begin to share the increased prosperity of the country.

Question put and agreed to.

Resolved,

That the National Assistance (Determination of Need) Amendment Regulations 1964, a draft of which was laid before this House on 2nd December, be approved.