HC Deb 13 June 1966 vol 729 cc1128-41
Mr. Dean

I beg to move, in page 3, line 39, to leave out "Part I" and insert "Parts II and III".

I shall move the Amendment briefly. It concerns an important but comparatively narrow point in relation to the Amendments which we have discussed and to the many important Amendments which are to follow. The intention of the Amendment is simply to give the Government of the day power to increase disregards by regulation. I view with some suspicion, as no doubt do all hon. Members, any proposals to give any Government more power, particularly more power to change legislation by regulation. We all know how difficult it is to get adequate discussion of regulations and therefore an adequate check on the Executive when they bring forward changes in the law in this way.

But in this case I can see no good reason to distinguish between the scale rates and the disregards. The law continues the present position under the National Assistance Act whereby the scale rates may be increased by regulation, whereas new legislation is required for changes in the disregards.

Even if there may have been a good reason for this when the Act was introduced, I see no good reason for continuing this distinction. It is true that in the past it has been the practice to increase the scale rates more frequently than the disregards. This is right and proper, although I wonder whether in the past the disregards have been increased often enough in relation to the scale rates. However that may be, for many years the concept of relative poverty has been accepted by both sides of the Committee—the idea that the safety net provided for the various sections of the community should be what is called dynamic and not static. Previous Conservative administrations have accepted this principle and have carried it out on many occasions when they have increased National Assistance rates substantially more than would be required merely for cost-of-living purposes. The present Government have done the same.

But this concept of relative poverty involves not only inadequate cash; it also involves a decline in the value of savings. the fruit of past thrift, and some of the hardest cases of relative poverty fall within this second category where the value of savings and an accustomed standard of living have been eroded through inflation.

We have already welcomed the proposals in respect of the disregards, and I do not suggest that the disregards should be increased on every occasion when the scale rates are increased. But I hope that the Government agree that they should at any rate be looked at on each occasion to see whether they should be increased when the scale rates are increased. If this principle is accepted, then it seems to me only right, reasonable and practicable, that the same machinery in putting the proposals before Parliament should apply to the disregards as to the scale rates.

3.15 p.m.

Mr. Braine

Should I be in order, Sir Beresford, in expressing the pleasure of hon. Members on both sides of the Committee, and particularly of this side of the Committee, at your occupying the Chair? I have not seen you in the Chair before. I am sure that all hon. Members join me in expressing our pleasure.

On Second Reading and again today the Minister has argued that the Bill will make for greater flexibility in meeting need, especially among the elderly, and will do so in a way which preserves dignity and self-respect. I agree. But in some respects opportunities exist to make the Bill truly effective in overcoming the pockets of poverty and deprivation which exist. It is interesting to note that the present National Assistance Board Regulations allow for disregards of the kind set out in Part III. The Board, through the discretion of its officers, may allow additional disregards which are not specifically set out in the Regulations.

For example, under the existing regulations the first 15s. of superannuation payments must be disregarded, but under the general power conferred by Regulation 3 of the 1948 Regulations, the National Assistance Board also disregards the first 15s. of any payment from relatives or charitable organisations. The officers of the Board tell me—and they have done this for many years—that they feel that it is reasonable that the recipient should benefit from a charitable source in the same way as he may from a superannuation payment. I am sure that this is in line with the humane and sensible and flexible approach which, within the scope of the Regulations, the Board has practised for a long time.

As my hon. Friend the Member for Somerset, North (Mr. Dean) said, poverty is a relative term and very difficult to define. I think that I am right in saying that it has never been defined in statutory form. Most people would agree that minimum standards should be geared to the current standard of living and that it is morally wrong and wasteful in what is generally regarded as an affluent society to allow too large a gap to grow between those who, for one reason or another, have a struggle to exist and a great mass of the population.

For this reason and bearing in mind the cogent arguments of my hon. Friend, I would have thought that there was a strong case for introducing greater flexibility in the application of Part III of Schedule 2. There should be greater flexibility in respect of disregards given on capital and earnings and also certain payments. It is possible that within a few years it may be thought expedient by the Government of the day to alter the disregards in respect of certain payments to, say, 50s., especially if some step is taken, as I hope it will be, if not now, in the relatively near future, to provide a realistic constant attendance allowance for all categories of the severely disabled.

I support the Amendment, because I think that it would enable the Minister to make suitable regulations much more quickly than if he had to go through the tedious business of amending the main Act. This is a matter of some principle. It will not cost the Government anything, but it is an issue which could be conceded and I hope that the Parliamentary Secretary will be generally sympathetic.

Mr. van Straubenzee

The matter has been so persuasively argued and as we are all anxious to make progress I need not take time. I hope that the fact that the Parliamentary Secretary is on the Bench while his right hon. Friend is having a well-earned breather means that she has left him with power of attorney to accept the Amendment. I am sure that that is the reason, because he is well known to be a highly competent Parliamentary Secretary who is well able to put this course very pleasantly to the Committee.

Quite plainly, to accept the Amendment would cost the Government nothing at present and need not ever so cost the Government anything. The Parliamentary Secretary is not being asked to spend any money tonight. The second thing is that we all know on both sides of the Committee of the appalling difficulties of finding Parliamentary time for amendments to legislation. We all know that, whatever changes are made in our procedures, that may well always be the case.

Here is an example of a very simple Amendment which just gives extra flexibility to future Ministers of Pensions and National Insurance. Obviously, the Parliamentary Secretary does not have much interest in future Ministers of Pensions and National Insurance, but we on this side of the Committee have considerable interest in future Ministers. We would like to give the Parliamentary Secretary the necessary flexibility to be able to operate Part III, calculation of resources. I think that it is incumbent upon him—and he always argues every case persuasively and carefully—to show why if, as I believe him to be, he is right to take these powers for Part II, the calculation of requirements, he does not require the same powers for the calculation of resources.

I should have thought that it was one of the features of a growingly affluent society that it was possible progressively and deliberately to increase the disregards for payments made as of right and that it would be enormous benefit to any Government to have this flexibility and freedom. I hope that the Parliamentary Secretary will listen carefully to the arguments put before him.

Miss Quennell

The Amendment has been debated shortly but extraordinarily persuasively and I can hardly believe that the Parliamentary Secretary will brush aside the gift offered to him across the Table from these benches. It must in the nature of things be of enormous help to any future Ministry of Social Security to have a power which will enable it to operate quickly, effectively and immediately instead of as at present having to return to the House of Commons when an alteration in the disregards is contemplated.

The Committee is offering the Ministry the chance of that sort of flexible power to alter the allowance for disregards in line with the standard of living which the country enjoys, and to do so quickly and flexibly and without having to return to the House, when Parliamentary time is always so short and in such demand, in order to make alterations which could make all the difference to people living on incomes probably too low for them to enjoy those amenities which have become common throughout our society.

I therefore hope that I can see a twinkle in the eye of the Parliamentary Secretary and that he sees the prospect of a delicious power being handed to him from these benches for the use of his Ministry of Social Security for the not too long future.

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

I can assure the hon. Lady the Member for Petersfield (Miss Quennell) that I am renowned, particularly among the ladies, for having a twinkle in my eye at all times, not only in the House of Commons.

Perhaps I can add my congratulations to those already extended to you, Sir Beresford, by the hon. Member for Essex, South-East (Mr. Braine). I hope that you will have a long life in the Chair, although, of course, coming from the Opposition benches.

I can assure hon. Members that the power to vary by regulation the rules about income requirements in Part II of the Schedule has been provided in Clause 5(2) for very good reasons which do not apply to Part III. The hon. Member for Wokingham (Mr. van Straubenzee) may or may not be surprised when I tell him that the Government feel bound to resist the Amendment.

The non-contributory scheme provides benefits for people with few or limited other resources, and the income requirements in Part II set the minimum standard of provision under the social security scheme. The Government must be able to take action without delay when the need arises to maintain that minimum standard. The simple example is when there are rising prices. The Government would not be able to do this if we had to go through the full legislative process to improve the value of the income requirements, or to deal especially with the income requirements of any particular category of claimants. Clause 5(2) enables the Government to act effectively in these matters while at the same time still preserving, under the Affirmative Resolution procedure, Parliament's right to approve or disapprove of the Government's proposals.

None of these considerations applies to the rules for calculating resources, that is, the disregards set out in Part III. Therefore, there cannot be the same urgency about amending them, because, by definition, the people who have disregards already have a higher standard of living than is prescribed by the income requirements.

However, apart from this there are positive grounds for not altering the disregards in any way other than by coming to Parliament with a full scheme of disregards set out in the form of definite proposals for legislation which can he carefully considered. The income requirements apply the same standards to all those who are in the same circumstances—householders get the same, so do non-householders, so do married couples and so do children. There can be no question of inequitable treatment as between one person and another in these groups.

Disregards work the other way. They give preferential treatment to those who have certain kinds of resources. We have found this to be a source of complaint of inequity in National Assistance disregards. For instance, we have the complaint from many people about the preference given to War Savings as against co-operative society dividends. We are putting that right in the Bill. It is recognised on both sides of the Committee that some preferential treatment can be justified in the matter of disregards, up to a point, and the Bill provides what we believe to be the best solution to this difficult and complicated problem. These preferences for some people must mean that less is available for others, and the disregards are not something which we should change in a hurry or without the fullest consideration of what is involved.

The Amendment follows the precedent of the National Assistance Act, 1959, which gave power to increase National Assistance disregards by Order. It would give a much wider power than that given by the 1959 Act, which simply allowed the amounts of existing disregards to be increased by regulation, whereas the Amendment would give power to vary the nature of the disregards.

8.30 p.m.

The Government's view is that the better precedent is that of 1948 which was the last occasion when Parliament considered National Assistance disregards as a whole. On that occasion National Assistance disregards were incorporated in the Statute with no power to increase them. The fact that the Conservative Government, having taken power to increase the disregards by regulation—I think the hon. Member for Somerset., North (Mr. Dean) recognised this in opening the debate—only once, in 1959, operated this power, indicated to us that they recognised also the force of the argument that it is not a good thing to make frequent changes in the system of disregards.

Experience has shown that when changes in the disregards are due it is necessary to undertake a considered revision of the whole, as we have done on this occasion, for the first time since 1948, balancing, on the one hand, claims to preferential treatment of persons with certain kinds of resources against, on the other hand, the case in equity for treating all claimants alike, under a scheme designed to assure all those eligible of a guaranteed income.

The Government cannot accept that any future amendment of a kind which could be done by regulation would he likely to maintain the balance of an equitable system of disregards. It is for that reason mainly that I must ask the Committee to reject the Amendment.

Mr. Dean

May I, first, apologise to you, Sir Beresford, for not congratulating you on assuming the Chair? I am bound to say that you were presiding over us with such an air of authority and distinction that I assumed that you had been doing it for many years. I should like to add my congratulations to those of other hon. Members.

I shall be extremely brief. I am very disappointed with the reply which the Parliamentary Secretary has given. I think it must be very rare for Ministers to get up at that Box and refuse powers which the other side of the Committee is only too ready to give them.

In this debate my hon. Friends, three of them, have put forward very persuasive arguments. They have all emphasised the need for flexibility in this matter. It seemed to me that the Joint Parliamentary Secretary in his reply relied almost entirely on what one may call Civil Service arguments, and he has really missed an opportunity, now that a new system is being introduced—that is what the Government have told us—to see whether it would be very much better to put these two, both the scales and the disregards, on the same basis as far as increases are concerned.

The hon. Gentleman referred back to the original National Assistance Act, 1948. It is astonishing how often we get this. With one breath we are told, "This is an entirely new system which is being introduced and a great step forward and a great reform in our arrangements for those who are most needy". Yet in the next breath we are told, "Sound precedents were established in 1948 and we ought to continue with them". The Government really cannot have it both ways. No full arguments were put forward on that, and the Minis- ter has missed an opportunity on this occasion to put both aspects, both very important aspects, of the needs of the elderly on all fours.

I did not suggest, nor did my hon. Friends, that on every occasion when the scale rates are increased disregards should be increased also. All we were suggesting was that they should be looked at on each occasion, now that we have firmly accepted the concept of relative poverty, involving as it does not only inadequate cash but decline in savings and the money which savings produce, in days of inflation. With those words of disappointment, I beg to ask leave to withdraw the Amendment.

The Temporary Chairman (Sir Beresford Craddock)

I do not know whether I shall be in order in so doing, but before I put the Question may I thank hon. Members on both sides for all their kind remarks. I am bound to say that I find them rather embarrassing.

Amendment, by leave, withdrawn.

Question proposed, That the Clause stand part of the Bill.

Mr. Dean

Before we leave this important Clause I should like to raise just one point. This Clause deals with determination of right to and the amount of benefit, and the point I wish to raise relates in particular to the assurance which we were given by the Joint Parliamentary Secretary during Second Reading, that no one under the scheme would be worse off. He was quite specific when my hon. Friend the Member for Melton (Miss Pike) interrupted his speech and asked for an absolute clarification. The hon. Gentleman replied: I assure the hon. Lady that no one under this scheme will be worse off—no one at all."—[OFFICIAL REPORT, 24th May, 1966; Vol. 729, c. 414.] We accept that assurance and are glad of it, but there are certain aspects which are a little puzzling and which perhaps the Parliamentary Secretary will be good enough to explain. In particular, I wonder how the determination of right to and the amount of benefit will be assessed in the case of those who are getting substantial discretionary additions at the moment.

In the Bill, we have an increase in the scale rates of 5s. single and 7s. 6d. married. We have the automatic 9s. in Place of a discretionary addition which is now averaging about 10s. That will mean that a married couple with a discretionary addition of 16s. 6d. will, as I understand it, be no better off than under the present arrangements.

According to the latest figures which we have, in Appendix 21 of the 1964 Report of the National Assistance Board, it is clear that there are about 75,000 people in that category who are getting discretionary additions of 17s. 6d. or more. So, presumably, special arrangements will be required to ensure that these people are not worse off. From the same table, I see that there are no fewer than 42,000 retirement pensioners who get discretionary additions of over £1.

On the face of it, unless special arrangements are made, a substantial number of people, most of them retirement pensioners, will get less under the new arrangements than they get at present.

There are also the old-age pensioners under the Old Age Pensioners Act. There are about 14,000 of them who are not getting National Assistance at the moment. As I say, we accept the assurance which the Parliamentary Secretary has given, but it would be helpful if we could know how the arrangements are to be made to meet these cases.

In what is a rather complicated Bill I do not see a specific mention of the point, and I should be grateful if the hon. Gentleman can say whether the assurance that he gave during Second Reading is written into the Bill.

Mr. Maurice Macmillan (Farnham)

It is only my fear of adding to your embarrassment, Sir Beresford, that prevents me adding to the congratulations.

I have one specific point to make on the Clause. However, before I come to it, I want to add one short word of regret that, despite the very strong arguments put forward by my hon. Friend the Member for Somerset, North (Mr. Dean), the Parliamentary Secretary was not able to accept his suggestion. Instead, he put forward what I regarded, not without some personal experience, as rather typical Treasury arguments in refuting the case put forward by my hon. Friends. After all, with inflation running at 5 per cent. per year, a discretionary addition of 40s. loses a quarter of its value in the course of one Parliament. That seems to be a fairly urgent reason for trying to maintain the balance of the equity which presumably Parliament intends if it passes the Bill.

I find it extremely hard that, after all that we have heard about the inequities of a means test and how monstrous it was of the Tory Party to try to deal with poverty simply by increasing National Assistance rates, we now have a chance to bring in not only a new version or National Assistance, turning it into supplementary pensions and allowances with requirements varied by regulation, but a new version of a means test; that new version, which is still the old means test, becoming progressively more harsh during an inflationary period.

The point on which I should like a reassurance from the Minister or from the Parliamentary Secretary arises out of a comparison of the wording of subsection (2) of this Clause with that of paragraph 4 of Schedule 2. Subsection (2) says: Regulations under this section may vary the provisions of Part II"— that is to say, the requirements— of the said Schedule 2, but not so as to reduce any amount specified therein. The intention is obviously to allow the Minister to increase the benefits by increasing the level of requirements, and presumably also to prevent the Treasury, without legislation from Parliament, forcing the Minister to decrease benefits when things get difficult. But the intention appears to be frustrated by Part I of Schedule 2, paragraph 4, and I say "appears", because I may be wrong in my reading of it, and it is simply an assurance that I want from the hon. Gentleman.

Part II of Schedule 2 deals with the calculation of requirements. Part III of Schedule 2 deals with the calculation of disregards. Part I really governs the relationship between the two, the method which it is proper to use in bringing the two together to determine the actual sums paid, and it also governs the more general conditions which shall be applied.

In dealing with exceptional circumstances, paragraph 4(1) of Schedule 2— and I hope that I am not out of order in referring to this, because it is relevant to this Clause—says that the benefit may be awarded and can in fact be higher, and sub-paragraph (1,b) says that the supplementary allowance—not the supplementary pension—can in certain circumstances be reduced or withheld. Paragraph 4(2) specifically excludes this last provision from the qualifications which the rest of the sub-paragraph proposes.

I could return to this later when we deal with the Schedule and refer to the wording of this paragraph and the contrast between the supplementary allowances in paragraph 4(1,b) and the wording used in paragraph 4(1,a) and what the precise meaning of that is, and I think that the Committee will probably understand if the Minister prefers to deal with this point at that stage, but we shall want a firm reassurance that it is not possible—not that it is not the intention, but that it is not possible—to use this paragraph to frustrate the intention which Parliament has in passing this Clause; and that the exceptional circumstances in paragraph 4 of Schedule 2 can be applied only to individuals and cannot refer to specific groups of people, or indeed to specific circumstances, to the economic circumstances of the day.

If the Minister can reassure on that point, we on this side of the Committee will support the Clause, with regret that the Government have seen fit to take so rigid a line over the means test and have rejected our suggestion for facilitating keeping the test of means, as well as the test of needs, in line with the rising cost of living.

8.45 p.m.

Mr. Pentland

I can immediately give the hon. Member for Farnham (Mr. Maurice Macmillan) the assurances that he wants. Perhaps it would be best for me to say, first, that Clause 5 enables the Minister, by Regulations which are subject to the affirmative Resolution procedure, to vary the provisions of Part II of Schedule 2. Part II of this Schedule sets out the rules which will enable the Commission to determine itself the level of income requirements in each individual case, covering the rates of requirements themselves, the long term addition and rent.

The Minister will be given power by the Bill to vary these rules but not to decrease any of the amounts specified. This was what concerned the hon. Gentleman. In other words, the Minister can prescribe higher levels of requirements or different levels for new categories, but cannot reduce any of the rates—

Mr. Maurice Macmillan

Am I to understand from that that where the Minister cannot, the Commission can, vary the level and that she is empowered under Paragraph 4 to vary the level of requirement. or is that not so?

The Temporary Chairman

I am sorry to interrupt the hon. Member but we cannot go into the details of the Schedule at this juncture.

Mr. Pentland

Of course, Sir Beresford, I accept your Ruling.

The main thing which needs to be made clear—this was the concern of the hon. Member for Essex, South-East (Mr. Braine) and, I am sure, of the hon. Member for Farnham—is that I reaffirm my categorical assurance on Second Reading that no one will be worse off under the Bill.

Mr. Braine

Would the Parliamentary Secretary go a little further? He will recall that the point I made—it may not have been valid—was that the National Assistance Board has been in the habit of allowing certain disregards which are not specifically set out, using their general powers under Regulation 3 of the 1948 Regulations. This is an indication, I think, of the obvious desire of the Board to stretch its powers in certain cases as widely as possible. I mentioned a case where the Board allowed—although this was not laid down in Regulations—15s. of any payment from a charitable or family source. This was not laid down. All I am asking is whether the Commission will have the same flexibility under the new arrangements as the National Assistance Board had in this case.

Mr. Pentland

Yes, of course.

Mr. Maurice Macmillan

I am sorry to come back to this point, but I am still anxious to learn whether, if the Commission has this power of flexibility, it has greater powers by reason of the wording of the Schedule than the Minister herself—I do not suggest that anyone has any intention of so doing—to vary the Regulations downwards. I accept that, under the Clause, the Minister has not this power, but it seems to me that in withholding this power from the Minister we were in danger of overlooking the fact that the Commission might itself have the power which Parliament is specifically not giving to the Minister. As the Commission is part of the Ministry, this would, in some ways, frustrate the will of Parliament as expressed in the Clause.

Mr. Pentland

I fully understand the hon. Gentleman's concern and the interest which he is showing in the new arrangements for dealing with the exceptional heeds and as to how they will be operated by the Commission.

I am informed that this has always been a most important part of the work of the National Assistance Board. Under the Bill, although the long-term addition will deal with special needs in the majority of cases, there will still be an important sphere for the use of discretionary additions by the Commission. However, I do hot think that it would be right for me to go into detail on this matter now.

It will be seen from the general framework of the Bill and from the White Paper, Command 2997, that it will be one of the first duties of the Commission to consider in what ways additional payments should be made to meet special needs. I recognise that the hon. Gentleman is more concerned with the question of a downward adjustment than that of meeting special needs, but as I have said, those at present receiving National Assistance will not be any worse off. Indeed, nobody will be worse off under the Bill.

Question put and agreed to.

Clause ordered to stand part of the Bill.