§ The Minister of Social Security (Miss Margaret Herbison)With permission, Mr. Speaker, I should like to make a statement about improvements in National Insurance and industrial injuries benefits, supplementary benefits, and war pensions.
I have presented today a Bill to increase benefits and contributions under the National Insurance and Industrial Injuries Schemes; and an explanatory White Paper and a Report by the Government Actuary will be available later this afternoon. A Financial Memorandum is attached to the Bill.
The main proposals in the Bill are as follows. The standard rate of National Insurance benefits will be increased by 10s. a week for a single person to £4 10s., and by 16s. for a married couple to £7 6s. Increases of benefit for children are to go up by 2s. 6d. a week.
Thus, the weekly flat-rate of benefit including family allowance for a man and wife with two children will be £9 16s.
Widowed mother's allowance and the widow's pension will also be raised to £4 10s. a week. The benefit for a widow with two children, including family allowance, will be £8 15s.
Parallel improvements will be made in the other flat-rate National Insurance benefits. No changes are proposed on this 1739 occasion in earnings-related benefits or in the graduated retirement pension.
Men and women who defer retirement and continue paying contributions after minimum pension age earn increments to their eventual retirement pension. It is proposed in the Bill to improve the rate at which increments are earned in the future by changing the qualification for an increment from 12 contributions to nine.
Death grant is increased by the Bill from £25 to £30.
The industrial injuries provisions in the Bill include an increase of 17s. in the 100 per cent. disablement pension, bringing it to £7 12s. a week. Injury benefit is to be increased by 10s. a week, maintaining the present difference between injury benefit and sickness benefit. The new rate will thus be £7 5s. for a single man, and £10 Is. a man and wife.
The standard rate of industrial injuries' widow's pension is raised from £4 10s. to £5 1s. The addition for each child will be increased by 2s. 6d.
The lower rate of pension payable to the younger childless widow is to be increased from £1 to £1 10s. Constant attendance allowance, unemployability supplement and special hardship allowance will also be increased.
The higher insurance benefits will entail a corresponding increase in contributions. The Class 1 insurance stamp for a man will go up by 4s. 3d. a week, of which the employee will pay 2s. and his employer 2s. 3d.
There will be no change in the graduated contributions. The contribution for employed women will go up by Is. 9d. for the employee and 2s. for the employer. Corresponding changes will be made in the juvenile and other contribution rates: for example, a self-employed man will pay an extra 2s. 4d. a week.
The cost of the improved National Insurance and industrial injuries benefits will be £219 million and £10.6 million respectively in the first full year.
The Government also propose to increase the basic supplementary benefit rates. Draft Regulations incorporating the new rates will shortly be laid for approval by the House.
1740 The main changes proposed are that the scale rate for a single householder will increase by 5s. a week to £4 6s. and the scale rate for a married couple will rise by 8s. a week to £7 1s. Increases will also be made in the rates for other adults and for children.
I will, with permission, circulate a list of the proposals in the OFFICIAL REPORT for the convenience of hon. Members.
I now come to war pensions, which are dealt with by Royal Warrant for the Army and corresponding instruments for the Royal Navy, the Royal Air Force, and civilians and others. War pensioners will, of course, share with the population in general in the National Insurance improvements, but it is, I know, generally accepted that those who have been disabled or bereaved as a result of war service are entitled to something over and above the ordinary provisions.
The basic rate of pension for 100 per cent. disablement will be increased from £6 15s. to £7 12s. and the standard rate of war widow's pension from £5 5s. to £5 17s. The lower rate of pension payable to the childless widow under 40 will be increased, like the corresponding industrial injuries pension, to £1 10s. The additions to pension for war widows' children will be increased by 2s. 6d. for each child.
The main supplementary allowances—rent allowance for widows, and constant attendance allowance, unemployability supplement and allowance for lowered standard of occupation for disablement pensioners—will also be increased.
On this occasion, I propose, in addition. to increase the rates of comforts allowance, which goes to the most severely disabled pensioners, and of age allowance, which is payable both to elderly war widows and to the seriously disabled.
I will, with permission, circulate a list of the principal changes in the OFFICIAL REPORT.
The cost of the war pensions changes will be £12.8 million in the first full year.
The net total cost of the improvements, after taking account of the effect on supplementary benefits of the other benefit increases, will be about £220 million in the first full year.
1741 The Bill includes a Clause giving temporary power to vary family allowances by Order and to make consequential adjustments in National Insurance and industrial injuries increases for children. As the House knows, we intend to announce our proposals for family endowment before the Summer Recess, and we have thought it right to seek this power so that, if appropriate, any interim improvement in family allowances could operate from the same date as the increases in other benefits. The Clause is precautionary, arising from the intervention of the Summer Recess, and in no way prejudges the Government's proposals for family endowment.
The appointed day for the increase in most benefits, for the new contributions, and for the higher supplementary benefits will be 30th October.
§ Miss PikeThe whole House, of course, welcomes these increases, but does the Minister recognise that they do little more than restore the purchasing power of the present benefits, except by a small margin, and that we are running very hard to stay in the same place? Can she say what increase in the Exchequer contribution and the cost to the taxpayer is involved in these proposals and whether consideration was given to concentration of these increased benefits on areas of greatest need?
While these increases are welcome, they bring into even sharper relief the plight of those who are still left behind in remaining pockets of poverty and greater need, which shows the urgency of getting on with the job of bringing the whole of social security schemes into some sort of justice.
§ Miss HerbisonThe answer to the first question by the hon. Lady is that the Exchequer contribution to the funds for the first full year will be £54.8 million. The hon. Lady has tried to make political capital by saying that these increases will equal only what the pensioner has already lost. I am sure that she will be interested and also glad to know the comparison between the increases, including this one, which have been given since this Government came to power and what would be needed on the index of retail prices. For the single pensioner and other single per- 1742 sons, the increases amount to £1 2s. 6d.; £3 7s. 6d. was the highest figure the Tories ever gave, in May, 1963. All that would be needed, going back to May, 1963, on the index of retail prices to bring it to present prices would be 10s. 1d. against £1 2s. 6d., which is the increase we have given.
The hon. Lady asked whether or not we should have been more selective. Perhaps on the Second Reading of the Bill she will tell us where she would be selective. Most of what I have dealt with comes as a result of contributions. In the debate on family poverty I showed where I thought we could be selective, and this Government in certain areas intends to be selective. An interesting point on the question of selectivity is that the survey carried out among retirement pensioners in June, 1965, showed that, of married couples, 50 per cent. were either under the National Assistance level at that time, or were not more than 20s. above it. About 81 per cent. of the single women pensioners were in that position. So it would be difficult to be selective for these people.
§ Mrs. Lena JegerI very warmly welcome the announcement made by my right hon. Friend. Can she assure the House that families which are to benefit by these increases in income will not lose their other sources of benefit? Will she see that they are protected as regards help through rate rebates, differential rents, computations for school meals and by other means outside these benefits?
§ Miss HerbisonIt would be very difficult at this stage to deal with the points which my hon. Friend has raised. Some of them apply to local authorities. My concern is to ensure that the Government do their very best for older people for whom I am responsible.
§ Mr. BraineWhile welcoming the general increase in disablement pensions and the industrial injuries benefits, may I ask what consideration the Government are to give to selective help to permanently disabled people who are not covered by existing National Insurance benefits or war pensions schemes? Will not the most deprived of our people now be relatively worse off than they were before?
§ Miss HerbisonThose who are in receipt of supplementary benefit have already benefited by the increases given in November, including the chronic sick, about whom I know the hon. Member is greatly concerned. They will again benefit by the increases we propose in supplementary benefits. For the other people, including the disabled housewives with working husbands for whom I am very much concerned, we have not yet found a solution, but, just as we have found solutions for so many problems with which we were left in October, 1964, I am sure that we shall find a solution for this one.
§ Mr. HigginsTo what extent are we to understand that the old age non-pensioners who are above the social security level will benefit? Are they to get nothing at all? Can the right hon. Lady tell the House to what extent the increases received by National Insurance pensioners who are already in the receipt of benefit will be covered by contributions?
§ Miss HerbisonI think that there is a great misunderstanding, which I have noticed on a number of occasions, by the hon. Member about contributions. One pays contributions, when one is working, for pension and other benefits, so when one retires one has a pension for which one has paid appropriate contributions.
For those non-pensioners who are in what we consider real need the supplementary benefits, particularly the new scheme introduced last year, have been of considerable help. A single person can have even a little over £2,000 in savings and if he has no other income he can still get a modest pension from supplementary benefits, which is very different from the kind of treatment such a person had before November.
§ Mr. William HamiltonIs my right hon. Friend aware that there will he unanimous support from this side of the House for this massive contribution to clearing up the squalid mess left by the Conservative Government in 1964? Will she give an assurance that this is a forerunner of an even more ambitious and comprehensive scheme of social security in general? In particular, will she give an assurance that in future statements there will be linked to retirement pensions family allowances to restore the position to what it was before 1946?
§ Miss HerbisonI think that my hon. Friend will have to wait for future statements. He knows that we are to announce plans for family endowment before the Summer Recess. There are other big problems on which we are working in our review. We shall bring forward whatever improvements we can.
Dr. OwenIs my right hon. Friend aware that her statement will be warmly welcomed, particularly what she said about the linking of family allowances with this benefit? Although it has not been possible to announce the agreed amount, the principle of linking family allowances with the other benefits is one which we welcome.
§ Sir K. JosephWill the right hon. Lady tell the House the implications for prices and wages, and, in particular, for the Government's prices and incomes policy, of the contribution increases which, she will recognise, will bear particularly heavily on lower-paid workers?
§ Miss HerbisonYes. Whatever contribution we raised would bear heavily on the low-wage earner. This is one of the reasons why we are having such a thorough examination of the new system of pension provision for the future. If this had been done, rather than having the kind of graduated scheme which was brought in, leaving the flat rate as it was previously, we would not have been faced with this problem today.
I cannot give the answer to the first question by the right hon. Gentleman, on what increase I expect in the cost of living as a result of these increased contributions.
§ Sir K. JosephThe right hon. Lady is evading the issue. Will the Government, in their prices and incomes policy, take note of these increased contributions in attempting to judge claims for increased pay and claims for increased prices?
§ Miss HerbisonI am quite sure that the Government, in their prices and incomes policy, always take into account any of the relevant factors that have to be discussed.
§ Mr. Alfred MorrisIs my right hon. Friend aware that we warmly welcome her statement and that there will be particular satisfaction that she is not proposing merely a "Paddy's rise" for those 1745 who are in special need, as was the case when statements were made by the Conservative Government? Do her proposals include one for improving the pension entitlement of widows under the age of 50?
§ Miss HerbisonNo. Apart from those who will benefit from the general increase this year, the only widows who will have an improvement are the young industrial injuries widows and the young war widows whose benefit is increased from 20s. to 30s. The other anomalies of widows—and there are many—we have still to tackle.
§ Mr. DeanDo I understand that the effect of the right hon. Lady's statement is that those pensioners most in need will have a 5s. increase whereas other pensioners will have a 10s. increase? I recognise that there have been increases in supplementary benefits since the last general increase in pensions, but does not the Minister feel that this half increase for those most in need will cause some resentment and difficulty?
§ Miss HerbisonNo. We gave our first increase on both National Insurance pensions and on National Assistance, as it was then. Since then, 5s. has been given to the single supplementary pen-
| PROPOSED SUPPLEMENTARY BENEFIT RATES | |||||||||
| Present Weekly Rate | Proposed Weekly Rate | ||||||||
| £ | s. | d. | £ | s. | d. | ||||
| ORDINARY SCALE | |||||||||
| (a) Husband and wife | … | … | … | 6 | 13 | 0 | 7 | 1 | 0 |
| (b)Person living alone | … | … | … | 4 | 1 | 0 | 4 | 6 | 0 |
| (c)Any other person aged— | |||||||||
| (i) not less than 21 years | … | … | … | 3 | 9 | 0 | 3 | 11 | 0 |
| (ii) less than 21 but not less than 18 years | … | … | … | 2 | 15 | 0 | 2 | 18 | 0 |
| (iii) less than 18 but not less than 16 years | … | … | … | 2 | 7 | 0 | 2 | 10 | 0 |
| (iv) less than 16 but not less than 11 years | … | … | … | 1 | 15 | 0 | 1 | 17 | 0 |
| (v) less than 11 but not less than 5 years | … | … | … | 1 | 8 | 0 | 1 | 10 | 0 |
| (vi) less than 5 years | … | … | … | 1 | 3 | 6 | 1 | 5 | 0 |
| BLIND SCALE | |||||||||
| (a)Husband and Wife— | |||||||||
| (i) if one of them blind | … | … | … | 7 | 17 | 6 | 8 | 5 | 6 |
| (ii) if both of them blind | … | … | … | 8 | 13 | 6 | 9 | 1 | 6 |
| (b)Any other blind person aged— | |||||||||
| (i) not less than 21 years | … | … | … | 5 | 5 | 6 | 5 | 10 | 6 |
| (ii) less than 21 but not less than 18 years | … | … | … | 3 | 15 | 0 | 3 | 18 | 0 |
| (iii) less than 18 but not less than 16 years | … | … | … | 3 | 3 | 0 | 3 | 6 | 0 |
| (iv) less than 16 but not less than 11 years | … | … | … | 1 | 15 | 0 | 1 | 17 | 0 |
| (v) less than 11 but not less than 5 years | … | … | … | 1 | 8 | 0 | 1 | 10 | 0 |
| (iv) less than 5 years | … | … | … | 1 | 3 | 6 | 1 | 5 | 0 |
| Notes | |||||||||
| (i) An allowance for rent is added to the above rates. | |||||||||
| (ii) Both the existing and proposed rates given above exclude the 9s. long-term addition which is added to the requirements of persons over pensionable age and to those of persons under pensionable age (other than the unemployed) who have received supplementary benefit (or national assistance) for a period of two years. |
§ sioner. Not only was that 5s. increase given also to widows and the long-term sick, but also, in November of last year, many of them got a 9s. increase in the standard allowance. Some of them were getting as much as that in discretionary allowances; however, many of the younger non-pensioners were not, and some of them were getting nothing. We must also bear in mind the very generous treatment given in November in respect of the resources of pensioners.
§ Mr. ManuelI warmly congratulate my right hon. Friend on her statement, which will bring much happiness and comfort to the homes in need. Has she considered how near we are getting, among the lower-income groups, to the limit of capacity to pay increased contributions? Will she consider, in future, relating the payment of contributions to earnings?
§ Miss HerbisonYes. In answer to a previous supplementary question I said that I was very conscious of the weight of the flat-rate contribution on the low-wage earner. When we introduce our full scheme, my hon. Friend will find that attention has been paid to this matter.
§ Mr. SpeakerOrder. I must move on.
§ Following is the information:
1747| PRINCIPAL CHANGES IN WAR PENSIONS | ||||||||
| Present rate | Proposed rate | |||||||
| £ | s. | d. | £ | s. | d. | |||
| Disablement pensions (100 per cent, assessment) | 6 | 15 | 0 | a week | 7 | 12 | 0 | a week |
| ex-non-commissioned officers | Increase of 17s. a week | |||||||
| ex-officers | Increase of £43 a year | |||||||
| ex-regular officers—disablement addition | Increase of £43 a vear | |||||||
| Payments for disablement assessed at less than 100 per cent, will be increased proportionately | ||||||||
| Constant attendance allowance | 1 | 7 | 6 | a week | 1 | 10 | 0 | a week |
| 2 | 1 | 6 | a week | 2 | 5 | 0 | a week | |
| Normal maximum | 2 | 15 | 0 | a week | 3 | 0 | 0 | a week |
| 4 | 2 | 6 | a week | 4 | 10 | 0 | a week | |
| Exceptional maximum | 5 | 10 | 0 | a week | 6 | 0 | 0 | a week |
| Unemployability supplement | 4 | 7 | 6 | a week | 4 | 17 | 6 | a week |
| The allowances payable with this supplement (and with treatment allowances) will also be increased: | ||||||||
| Wife or other adult dependant | 2 | 10 | 0 | a week | 2 | 16 | 0 | a week |
| First child | 1 | 2 | 6 | a week | 1 | 5 | 0 | a week |
| Each other child | 14 | 6 | a week | 17 | 0 | a week | ||
| Allowance for lowered standard of occupation up to | 2 | 14 | 0 | a week | 3 | 1 | 0 | a week |
| Comforts allowance: | ||||||||
| Lower rate | 10 | 0 | a week | 12 | 6 | a week | ||
| Higher rate | 1 | 0 | 0 | a week | 1 | 5 | 0 | a week |
| Age allowance: | ||||||||
| 40 or 50 per cent, rate | 5 | 0 | a week | 7 | 6 | a week | ||
| 60 or 70 per cent, rate | 7 | 6 | a week | 10 | 0 | a week | ||
| 80 or 90 per cent, rate | 10 | 0 | a week | 15 | 0 | a week | ||
| 100 per cent, rate | 15 | 0 | a week | 1 | 0 | 0 | a week | |
| Clothing allowance: | ||||||||
| Lower rate | 7 | 10 | 0 | a year | 9 | 0 | 0 | a year |
| Higher rate | 12 | 10 | 0 | a year | 14 | 0 | 0 | a year |
| Widow's pensions: | ||||||||
| Widows of ex-privates or equivalent | 5 | 5 | 0 | a week | 5 | 17 | 0 | a week |
| Widows of ex-non-commissioned officers | Increase of 12s. a week | |||||||
| Widows of ex-officers | Increase of £31 a year | |||||||
| Childless under 40 widow of private | 1 | 0 | 0 | a week | 1 | 10 | 0 | a week |
| For each child (other ranks) | 2 | 4 | 0 | a week | 2 | 6 | 6 | a week |
| For each child (officers) | 122 | 10 | 0 | a year | 129 | 0 | 0 | a year |
| Rent allowance for widows with children, up to | 2 | 0 | 0 | a week | 2 | 5 | 0 | a week |
| Age allowance for widows | 10 | 0 | a week | 15 | 0 | a week | ||
| Pensions for unmarried dependants who lived as wives of men now deceased: | ||||||||
| Other ranks | 4 | 17 | 6 | a week | 5 | 9 | 0 | a week |
| Officers | 279 | 0 | 0 | a year | 309 | 0 | 0 | a year |
| Orphan's pensions: | ||||||||
| Other ranks, under 15 years | 2 | 4 | 0 | a week | 2 | 6 | 6 | a week |
| Other ranks, 15 years and over | 3 | 2 | 0 | a week | 3 | 9 | 6 | a week |
| Officers, under 18 years | 170 | 10 | 0 | a year | 190 | 0 | 0 | a year |
| Adult orphan incapable of self-support | 4 | 0 | 0 | a week | 4 | 10 | 0 | a week |