§ The Minister of Social Security (Mrs. Judith Hart)
With permission, Mr. Speaker, I would like to reply now to Questions Nos. 30, 51, 52 and 53, and answer them together.
With my full support, the Supplementary Benefits Commission has been making an examination of the administration of the wage-stop, that is, the statutory rule whereby the supplementary benefit of the man who is unemployed or temporarily sick is limited so that his income does not exceed what it would be if he were employed full-time in his normal occupation. The Commission has now reported to me. I am publishing 953 the Report, and copies will be available in the Vote Office now.
The Commission points out that the problems inherent in the wage-stop stem from low wages associated with family responsibilities, and that the wage-stop is not, therefore, in itself a cause of family poverty. It is a reflection of the fact that there are many men in work living on incomes below the supplementary benefit standard. As the House will know, the Government have already taken measures bearing on this problem.
While accepting the necessity for the wage-stop, the Commission is, nevertheless, determined to ensure that claimants who are subject to it, are dealt with as sympathetically and fairly as possible.
Summarised, the Commission's decisions are as follows:
Up to now, estimates of labourers' earnings have where necessary been based on local average earnings. In future, the Commission will, in these cases, use the rates fixed by the National Joint Council for Local Authorities (Manual Workers). This will mean, in many areas, a higher rate than before.
At present, earnings rates are reviewed twice yearly. They will in future be kept under continuous review, to make sure that improvements are fully reflected.
In estimating earnings the Commission at present deducts 7s. 6d. for intangible expenses. This will no longer be done.
The Commission will ensure that there is a full discussion with each claimant about the way in which his benefit, if it is subject to the wage-stop, is calculated, and that he is notified of the details.
At present, if the wife of a claimant with wage-stopped benefit starts work, the full amount of her earnings is deducted; this practice will cease, and the family will benefit from the wife's employment.
As the House knows, the wage-stop is applied in cases of temporary sickness. The present period of six months used as a measure of the temporary nature of sickness will now be reduced to three months. Similarly, the limitation of the benefit paid to a prisoner's wife where the sentence is for only six months or less will in future apply only to sentences of three months or less.
954 For blind people who have been continuously unemployed for two years, the Commission will see whether the requirement to register for work, which carries with it liability to the wage-stop, can be removed.
The Commission will review all wage-stopped cases where there is an element of disability, and will be examining the question whether people who are virtually unemployable should be required to register for work.
The Commission is concerned that some claimants subject to the wage-stop are not taking full advantage of other public benefits, in particular, rent and rate rebates. It will be instructing the staff to make sure that claimants understand their entitlement to these benefits, and also to help them to apply.
As I have said, the Report is a clear indication of the Commission's intention to administer the law on this subject as sympathetically as possible, and I welcome the decisions that it has reached.
§ Mr. Winnick
Although I am opposed to the wage-stop continuing, is my right hon. Friend aware that many of us. certainly Socialists, are grateful that the rules are being relaxed so that people involved will get more money for their families? Will she consult the Minister of Labour about the need to increase wages of people who are so poorly paid that when they are out of work they are subject to the wage-stop?
§ Mr. Eadie
Is my right hon Friend aware that the announcement she has made will be welcomed on this side of the House? Does she agree that the announcement will prove beneficial to the blind, the disabled and women, particularly women who have had all their earnings taken away as a consequence of the wage-stop?
§ Mr. Hooley
Is my right hon. Friend aware that, while we welcome the steps taken for a more humane administration of this principle, some of us object altogether to the operation of the wage-stop? Will she consider the possibility of excluding from calculations for wage-stopping any benefits relating to dependent children, since it is the children who suffer?
§ Mrs. Hart
I think that my hon. Friend will find, when he reads the Commission's Report, that the Commission interprets the reasons for the existence of the wage-stop today in terms very differently from those which existed when it was originally introduced. It was then held on the whole to be necessary mainly as a deterrent to unemployment and as an incentive to a man to take a job. The reason it is now held necessary to continue it is in order to be fair to men in work as against men not in work. This new interpretation makes a great difference.
§ Lord Balniel
Does the right hon. Lady appreciate that her detailed statement will require very careful consideration? It is not rather regrettable that this statement of a change of policy should be made now although the House is not in possession of the Report of the Supplementary Benefits Commission on this subject, which has been in her hands for a fortnight, and we asked that it should be made available to the House before the Committee stage of the Family Allowances Bill?
Am I not right in thinking that only one-eighth of the quarter of a million children living in families below the poverty level are affected by these proposals? Would not a much more valuable step to help the disabled and those chronically sick and therefore, able to undertake only low income work, have been the abolition of Selective Employment Tax?
§ Mrs. Hart
I am very sorry indeed to know that the noble Lord does not share the welcome given by this side of the House to the Supplementary Benefits Commission's Report.
On the question of timing, I am sure he will appreciate that it is remarkably 956 quick to publish a report and to make a statement on it in the House within a fortnight of it coming into the Minister's Hands. This has been done in this case and the Report should be available in the Vote Office now.
As to the noble Lord's question about one-eighth of children in families in poverty who may be affected by the change of practice, I think he will find when he reads the Report that we are not concerned here just with statistics or proportions. He will find this is an immensely human document which the Commission has published about the quality of life of those living on the wage-stop.
§ Mr. Tapsell
Is the right hon. Lady satisfied that the recommendations of this Report, if implemented, will meet the case of agricultural labourers with very large families who fall sick in such low-wage areas as South-East Lincolnshire?
§ Mr. Alexander W. Lyon
is my right hon. Friend aware that much of the injustice in the wage-stop arises because the comparison is with a notional average earnings rather than with actual earnings by the work in, say, the last six months of his working period? Could not the regulations be amended so that he would be given the alternative either of the notional average or of the actual earnings?
§ Mrs. Hart
The practice varies according to the circumstances of the individual. Where he has a record of earnings immediately preceding his unemployment, it is that record which is taken as the basis for calculation of the wage-stop. The Commission proposes now that, where there may have been an increase in wage rates which would have brought his earnings up had he been in work, this will be taken fully into account. In those cases where there is no immediate past record of earnings, the Commission's proposals should be very helpful in many areas because, in arriving at notional earnings, they substitute what tends to 957 be the highest rate prevailing for labourers—the local authority rate—for the various levels of labourers' earnings which may be lower than the local authority rate.
§ Sir S. McAdden
Does not the right hon. Lady realise that she was a little unjust in gibbing at us for not giving a rapturous welcome to a report we have not yet read? Does not she recall that, last week, the House gave an enthusiastic welcome to a letter which it had not read, only to change its mind afterwards?
§ Mrs. Hart
It is perfectly normal and correct for hon. Members to be asked to make at least some preliminary judgment on the basis of a Minister's summary of a report which has not yet been published. My comment was related to the fact that, whereas a number of my hon. Friends, though they may still have some reservations, have welcomed the statement, I have not yet heard one word of welcome from the benches opposite.
§ Lord Balniel
Is the right hon. Lady aware that we certainly now have reservations about Government summaries or statements of reports we have not yet read? We have learnt now to read the small print which come afterwards. The right hon. Lady completely distorted my remarks. I merely said that we wanted time to read the Report. I did not refuse to welcome the statement. I am sure that the Commission has done a most valuable job in this respect.
§ Mr. Alfred Morris
I thank my right hon. Friend for this much-needed help for poorer families, but is she aware of the mean, petty and shabby welfare cuts imposed by certain Conservative-controlled councils? In view of the remarks by the hon. Member for Hertford (Lord Balniel), will she ask him to join her in appealing to these councils to stop their persecuting of poorer people?