HC Deb 29 January 1968 vol 757 cc853-7
1. Mr. Gwilym Roberts

asked the Minister of Social Security what changes have taken place in the real value of social security benefits since they were increased at the beginning of November, 1967; and what plans she now has to safeguard the value of social security payments against the direct and indirect effects of devaluation.

4. Mr. Barnes

asked the Minister of Social Security if she will now make a statement on the steps she is proposing to take to safeguard the standard of living of low-income families, in view of current price trends.

6. Mr. Gardner

asked the Minister of Social Security what changes she proposes to make in supplementray benefits to allow for price changes subsequent on devaluation.

8. Mr. Ridsdale

asked the Minister of Social Security what steps she is taking to help pensioners and others on low incomes who will be most hard hit by recent cuts in Government spending.

19. Mr. Hugh D. Brown

asked the Minister of Social Security what estimate has been made of the cost of raising supplementary benefits in the autumn as outlined in Command Paper No. 3515.

20. Mr. Tapsell

asked the Minister of Social Security what steps she proposes to take to protect the poorest families in view of the 2s. increase in the National Insurance stamp, the further 1s. increase proposed, and a rise in food prices since the decision to increase family allowances by 7s.

The Minister of Social Security (Mrs. Judith Hart)

Both National Insurance and supplementary benefits after the increases at the beginning of November, showed an improvement in real value, as measured by the Index of Retail Prices, of about 20 per cent. or more compared with October, 1964. The new rates provide a considerable margin against price increases, which had reduced their value by 1.3 per cent. by mid-December. As to the future, the cost of increasing supplementary benefits must clearly depend upon the amount of the increase. On this, and on other points covered by these Questions, I have nothing to add at present to the statement made by my right hon. Friend the Prime Minister on 16th January.

Mr. Roberts

While we welcome the work done by the Government, in view of the recent sharp price increases, is there not a case for bringing the increase in supplementary benefits forward from the autumn? Will my right hon. Friend remind her colleagues in the Department of Economic Affairs of the need to get something done about prices?

Mrs. Hart

My colleagues in the Department of Economic Affairs are well aware of that last point. On the question of supplementary benefits and the timing of the increase, we shall be watching price developments very carefully, but we have made it clear that the autumn is what we consider to be the correct point at which we should act.

Mr. Barnes

My right hon. Friend gave a specific undertaking on 4th December to low-income families in work as opposed to families on supplementary benefits. In view of the price increases at the present time, should not she implement that undertaking?

Mrs. Hart

I am sure my hon. Friend will realise that, since a 7s. increase in family allowance, which will be kept in full by the families he has in mind, lakes place in April, there is a less immediate degree of urgency.

Mr. Barnes

It does not take account of present price rises.

Mrs. Hart

My hon. Friend is quite wrong. The 7s. increase and the timing take account of what is happening up to the point at which the increase actually operates.

Mr. Brown

While we welcome my right hon. Friend's assurance, may I ask whether she will consider immediate publication of a leaflet, repeating the assurance given by the Prime Minister, in order to allay the suspicions and apprehensions that may be exploited by political sections in the community? If this were sent to existing beneficiaries, it would be of tremendous help.

Mrs. Hart

I am considering what kind of publicity we should issue in relation to a number of changes due to take place in about April. I am fully seized of the point made by my hon. Friend.

Mr. Ridsdale

While the beneficiaries are thankful for small mercies, may I ask whether the right hon. Lady is aware that they realise that these are very different from the kind of promise given in 1964? Does not she agree that the only way in which pensioners and beneficiaries can really be helped is by the resignation of the Government in order to make way for a Government who will look after their interests properly?

Mrs. Hart

I do not think that many of the hon. Gentleman's older constituents would agree with him on the last point. He cannot have heard my original Answer or he would not make such allegations. I said that the National Insurance benefits and supplementary benefits, as increased in October, represent an increase of 20 per cent. in real value compared with the point at which they stood when the Conservative Government left office.

Lord Balniel

The right hon. Lady is referring to insurance benefits put up before devaluation. Would it not be fairer to the people for the Government simply to explain that they have no intention of protecting the benefits from the impact of devaluation except by increasing the supplementary benefits and that this applies only to people who are out of work and does not apply to low-income families?

Mrs. Hart

Low income families are getting the full 7s. increase. As the Government have made clear, we regard the most urgent need amongst other categories of the most vulnerable as being those who can best be covered by an increase in supplementary benefits in the autumn. This we have announced. It is a perfectly fair position and we have stated it clearly.

Mrs. Renée Short

What work is being done in the Ministry with a view to exempting low-income families from prescription charges?

Mrs. Hart

The Ministry will be responsible for identifying those families who will get refunds under the same kind of scheme which operated before prescription charges were ended two or three years ago. Although I have made it clear that there are many difficulties, I am considering whether, within the categories for which I am responsible—low-income families, people on supplementary benefits and war pensioners in respect of their war disability—it is possible to work out a system of exemptions rather than of refunds. But there are many difficulties and I cannot pretend that there are easy answers.

Dame Irene Ward

Is the right hon. Lady saying that she made preparation for a rise in prices before devaluation was announced by the Prime Minister?

Mrs. Hart

Price increases have been taking place continually, although to a lesser degree than happened in other recent years. The price increase due to devaluation, as has been said, is estimated to amount to between2½ and 3 per cent. The family allowance increase does not take account of that but of all the other elements in price rises up to the point at which the increase will operate.

Mr. Tapsell

Is the right hon. Lady convinced that her reply adequately satisfies and meets the Prime Minister's pledge that the most vulnerable sections of the community will be fully safeguarded against the effects of devaluation?

Mrs. Hart

I have said that I have nothing to add at present to my right hon. Friend's statement of 16th January and that for the time being the increase in family allowances to take place in April will give tremendous help to low-income families. For example, such a family with two or three children will collect an extra 7s. or 14s. per week in April, which will be of great help. Beyond that, I have nothing to add to my right hon. Friend's statement.