HC Deb 24 July 1967 vol 751 cc199-205

10.18 p.m.

The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Charles Loughlin)

I beg to move, That the Supplementary Benefit (Determination of Requirements) Regulations 1967, a draft of which was laid before this House on 28th June, be approved. The Regulations are relatively self-explanatory. I do not propose to make a statement at this stage. If hon. Members wish to put questions, I shall be glad to ask leave to reply later.

10.19 p.m.

Mr. Bernard Braine (Essex, South-East)

I shall not detain the House unduly, partly because we have a deal of business yet to transact and partly because we on this side support the improvements in supplementary benefit authorised by these Regulations. As I understand, the improvements are timed to come into effect at the same time as the increase in National Insurance benefits and contributions authorised under the National Insurance Bill, which we considered recently.

I am sure that the Parliamentary Secretary would be the first to agree that we did not have a lengthy discussion on that Measure. We on this side of the House, paralleled by hon. Gentlemen on the other side, did our best to get the Bill through as quickly as possible. Therefore, he will understand when I say that it is useful to both sides of the House to have this opportunity of discovering how those who will be entitled to increases in supplementary benefit are affected by the Government's proposals. It is all the more important that we should have an explanation at a time when there is increasing public interest in, and scrutiny of, our social security arrangements.

There may be a perfectly good explanation, but there is one query which I should like to put to the Parliamentary Secretary. The new rates of supplementary benefit are to be paid as from the 30th October, at the same time as the changes proposed in National Insurance benefits. However, it is odd that those who draw supplementary benefit and, by virtue of that fact, are clearly most in need, will get a smaller increase. National Insurance benefits will be increased by 8s. for a single person and 16s. for a married couple and supplementary benefits will be increased by only 5s. and 8s. respectively.

At a time when there is so much talk in social service circles of selectivity—and we had an expression of this earlier today—it seems strange that the principal seems to be operating here against, rather than for, the poorest of our people, especially pensioners. Some will riot even get the 5s. and the 8s. increase because of the application of the wage stop. I should like to ask the Parliamentary Secretary, when he comes to reply, to tell us how many people are affected in that way.

I do not wish to detain the House, but all of us have illustrations of the way in which the present principle of universality seems to operate to the detriment of a number of our constituents. I had a letter the other day from one of my constituents who said that her husband was badly disabled and is now capable of working only at a limited form of employment. His normal wage is £9 11s. 8d. per week. From this amount must be deducted the standard insurance stamp, the special sickness stamp and the usual expenses involved in a handicapped person going to work. She says: The position seems to be ludicrous, but he is not entitled to any supplementary allowance from the Ministry of Social Security to bring his income up to the level of an employed person, because he is in full-time employment. She adds, rather sadly: He would, in fact, be much better off financially if he were willing to be unemployed. But if he were unemployed the wage stop would reduce his supplementary benefit.

I am wondering how many people there are like this. Here is somebody badly disabled who, by virtue of that disablement, is earning less than he would if he were physically fit and, because of this, is limited in the amount of supplementary benefit that he can claim when he is unemployed. I am not trying to make a party point—the point has been expressed from time to time on both sides of the House—but it seems hard that some of the poorest and most deserving of our people are left out of these arrangements.

As for those who are eligible to receive the new rates of supplementary benefit, it may be that the discrepancy that I have mentioned as between supplementary benefit, on the one hand, and National Insurance benefits, on the other, is easily accounted for. The House will recall that the supplementary benefit was increased in May last year. I agree that the Ministry of Social Security Act, 1966, also provided a 9s. addition to the supplementary allowance for those who are of pensionable age and have been in receipt of that allowance for two years.

However, there is a psychological point of some substance here and this is the moment to make it. Some people may well wonder why the supplementary benefit increase is not the same as that for the basic insurance pension. I would not have raised the point but for the fact that the Parliamentary Secretary's colleague, the hon. Member for Chester-le-Street (Mr. Pentland), said in December, 1964: In recent years, both sides of the House have considered it very desirable that the increases —that is, the increases in national insurance rates and in the then National Assistance— should operate at the same time in order to avoid the confusion and misunderstandings which occur if … 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."—[OFFICIAL REPORT, 15th December, 1964; Vol. 704, c. 323.] In 1963, the right hon. Member for Sowerby (Mr. Houghton), who speaks on these matters with such authority, made the point very strongly when on an occasion when there had been increases in both of National Insurance and National Assistance he said: I think that it is agreed, by what the Minister is now doing and by what has been done on every previous occasion, that, when National Insurance goes up, National Assistance must go up. The question is not whether it goes up at the same time—because it does and has done—but whether it is to go up by the same amount, which it sometimes has and sometimes has not. The right hon. Gentleman went on to say how odd this would strike the ordinary man in the street when he would naturally expect to get the same rise in his National Assistance as was being received by recipients of National Insurance benefits. He also said: That is the view that hon. Members on this side of the House take on this occasion.…That is how the position strikes the ordinary person on National Assistance. He is not able to distinguish between National Insurance benefits, which are given, as of right, in return for contributions, and National Assistance, which is not—because these two things are inextricably bound together in any thinking about social security at present. When one rate does not rise with the other there is a cry that there is a catch in it somewhere."—[OFFICIAL REPORT, 18th Feb., 1963; Vol. 672, c. 42–4.] It is relevant to ask, therefore, whether it is the Government's intention at long last to ensure that, as from the implementation of these regulations, the point of the right hon. Member will be taken and the rates of both National Insurance and supplementary benefits will rise together, in order clearly to demonstrate that there is no catch in it.

Finally, it is relevant too to make this point since a great many people are applying for supplementary benefit for the first time. The Minister has claimed with some justification that the campaign to make people aware of their entitlement has been highly successful, and I give the right hon. Lady full credit for that. But what are those who are eligible for the increases in supplementary benefit to think when they see that their increases are less than those in National Insurance benefits? I am certain that there is an explanation and I hope that the Parliamentary Secretary can give it. In doing so, I hope that he will be able to give some information of the numbers of persons likely to get the full increase in supplementary benefit, the numbers of them who will be affected by the wage stop, and the numbers of these who though in need, according to the Explanatory Memorandum, may get nothing at all.

10.29 p.m.

Mr. Loughlin

By leave of the House, I should like to deal with two significant matters raised by the hon. Member for Essex, South-East (Mr. Braine). Perhaps I can deal, first, with how many do and do not get it and then deal with the general issue of the simultaneous application of benefit increases. There are about 2½ million families who receive supplementary benefits and who will be affected by these draft Regulations, and about 107,000 cases who will not get the total amount. Breaking down this figure, about 30,000 people will pay an inclusive charge for board and lodgings.

In such cases, their needs are met by the Commission, whatever the board and lodgings paid might be. Over and above that, they have personal allowances which, on this occasion, have been increased by Is. There are in addition to the 30,000 people to whom I have referred, approximately 50,000 of the old cases, under the National Assistance Regulations, who were, for one reason or another, in receipt of an amount higher than that laid down by the Ministry of Social Security.

Here we apply what in industry we used to call the "non prejudice clause" because their benefit under the existing scheme is safeguarded by the level that it was under the National Assistance Board scheme. This is one of those anomalies we get in social security. They will either get part, or none, of the benefits now proposed.

Then we have approximately 25,000 wage-stop cases. Both sides of the House appreciate the inherent difficulties in trying to deal with wage stop problems. I can give the House the assurance that we intend to examine, as far as it is possible, every single case affected in this way, to ensure that the up-to-date earnings are applied in the job or industry in which they were employed, so that there can be no question that they will get the maximum benefit if the earnings have gone up and consequently the wage stop ceases to apply.

When looking at the present proposals, it should be borne in mind that the basic supplementary benefits were raised in November last. These draft Regulations contain proposals for further increases in the rates. The House must see these proposals as an extension of the improvements we then made. The main increase then was 5s. for a single householder and 7s. 6d. for a married couple. These Regulations provide for a further increase of 5s. for the single householder and 8s. for a married couple. It is pertinent to note that these increases represent about a 6 per cent. increase, as against a 1½ per cent. increase in the Retail Price Index.

I realise that what the hon. Member for Essex, South-East says is true. There is bound to be some dispute that the proposed increases in the supplementary benefit scales are less than the increase in the National Insurance benefits, so that at the end of October those on supplementary benefit will generally have a smaller increase at that time than other National Insurance beneficiaries.

I know that the hon. Gentleman can quote statements made by other Members on this side of the House, but we have to be a little careful in this argument. There is an extreme danger of pursuing an argument of this kind too far. If the increases have always to equate, it may inhibit any Government from making an increase to that section of the community which really needs it at any given time. This dispute could have been avoided on this occasion if the Government had taken this point of view.

All those receiving National Insurance benefit with supplementary benefit will have a leaflet explaining these things sent to them. We will do so as quickly as possible. If the Government had said that they would introduce the earlier revisions of the scales, and then, at this time, had made the addition, then instead of getting 5s. and 7s. 6d. in November the supplementary beneficiaries would have got nothing and at this time we could have given them the full increased scale for National Insurance beneficiaries. If we had done that, waiting until we could put up the National Insurance and supplementary benefits at the same time, the increases in supplementary benefits would have been 10s. for a single householder and 15s. 6d. for a married couple, which are virtually the same increases as those given in the standard National Insurance rate.

If we look at the total increases which these beneficiaries have had since the Government took office in 1964 we can disabuse those people who feel, in the hon. Member's words, that there is a catch in it. The National Insurance beneficiaries will have received increases of 22s. 6d. for a single person and 37s. for a married couple and those on supplementary benefits will have received 22s. 6d. for a single householder and 36s. 6d. for a married couple. The hon. Member made my case for me.

While the scales are an important feature of supplementation, we have to recognise that there are additions which increase the total income of supplementary beneficiaries. Since we have been in office the rent allowance has increased and we have consolidated the small benefits which were given to those who had been in receipt of supplementation for two years or more, and instead of their receiving 6s., we fixed it at 9s. Out of the total number of retirement pensioners who received 9s., two-thirds got an increase in consequence of the 9s. addition.

The scale rates proposed in the Regulations made the position of both National Insurance and supplementary beneficiaries as equitable as possible, and I hope that the House will approve the Regulations.

Question put and agreed to.

Resolved, That the Supplementary Benefit (Determination of Requirements) Regulations 1967, a draft of which was laid before this House on 28th June, be approved.