HC Deb 15 May 1970 vol 801 cc1667-75
The Secretary of State for Social Services (Mr. Richard Crossman)

I will, with permission, make a statement about supplementary benefits.

I have today laid before the House draft Regulations containing proposals for increases in supplementary benefits. These draft Regulations require the approval of both Houses of Parliament by affirmative Resolution. Subject to this approval, the effective date will, as last year, be the first Monday in November.

I propose that the rate for a single householder should be increased by 8s. a week and that for a married couple by 13s. a week, bringing the single rate up to £5 4s. and the married rate up to £8 10s.—plus, of course, rent. Suitable increases will be made in other rates. I will, with permission, circulate a full list of the proposals in the OFFICIAL REPORT.

These increases will more than restore the real value of the scales brought in last November.

The current Estimates provide a figure of £485 million for supplementary benefits this year. The proposed increases, which are as usual to be met from the Consolidated Fund, will add about £70 million in a full year. Some 2,700,000 recipients will benefit.

Mr. Dean

Is the right hon. Gentleman aware that we welcome these proposed increases and were pressing for them in the House on Monday of this week? Would he care to tell the House why he has made the announcement today in view of the proposed starting date of November?

Will he confirm that the prices explosion is hitting hard the most needy families, that half the increase given last November is already eaten away by rising prices, and that if prices go on rising at the present rate a married couple will be 12s. worse off by the coming November? Is he asking the House to accept that position as satisfactory?

What will be the effect on those who are wage-stopped, in particular the disabled, who do their utmost to earn their own living? Has he taken any action on the suggestion of the Supplementary Benefits Commission in 1967 that there should be a review of the disabled wage-stop?

Mr. Crossman

The hon. Gentleman asked me why I am doing it now. I am a little disappointed by that question. Last year I did it in June and was censured for being so late, and so I thought that this year I would bring it forward a little to get the applause of the Opposition.

I think that the hon. Gentleman got the figures of value rather wrong. As I reckon it, the cost of living has gone up 2.8 per cent. in the most recent figures since the rise last November and the increase which we have now made is 8.3 per cent. If he looks at the figures again, the hon. Member will find that his calculation is quite wrong when he says that there may be a 12 per cent. increase in the time allotted.

Mr. Maudling

The right hon. Gentleman is not dealing with the point. The point is the increase in the cost of living over the 12 months' interval. As the cost of living increase is now running at nearly 8 per cent., what will be the respective positions? Is it not true that prices generally are now rising between 7 and 8 per cent. while food prices are rising by more like 10 to 12 per cent.?

Mr. Crossman

I should like to keep to firm facts. From November to now there has been a 2.8 per cent. increase. I am not prepared to speculate and I simply say that in my view this will more than cover any increase which will occur before November this year.

Mr. Spriggs

May I congratulate my right hon. Friend on making a statement which will be welcomed not only by the nation but by those in genuine need? How does the current expenditure on supplementary benefits compare with that in the last two years under the Tories?

Mr. Crossman

I am grateful to my hon. Friend for those kind words. I happen to have the figures which will answer his question. The full figures are that in the last year under the Tories the figure was £217 million. In 1969–70 it was £470 million and I reckon that in this year it will be £555 million.

Mr. Boyd-Carpenter

What rise in the cost of living to next November has the right hon. Gentleman calculated in relation to this increase? Can he say what has happened since last Monday when he rejected my suggestion that he should take this action?

Mr. Crossman

I do not think that anything really has happened since Monday—[Laughter.]—except that, as often happens, a Minister then decides on the date when he will make the pronouncement, and I thought that today would be a suitable day to make it. I was not quite so convinced of it on Monday. It was a growing feeling in my mind during this happy week which we have all been through and I thought that it would be nice to end the week on a happy note.

As to the estimate that we have made, we calculate that in terms of the increase in the cost of living these improvements will more than cover the increase that we anticipate by November.

Mr. William Hamilton

Can my right hon. Friend say what this increase means in real terms since October, 1964, and whether the Regulations will be debated before the Summer Recess?

Mr. Crossman

The advance in real terms since the Tories was 23 per cent., and that is fully restored—and more than fully restored—by this increase.

Mr. Lubbock

May I put a supplementary question which has not been written for me by the Secretary of State? Is he aware that the general cost of living increase is not of particular interest to the people receiving supplementary benefit? For the purposes of comparison, will he give the House the figure of the percentage increase in the cost of food since November, 1969? Further, does he not think that it is time an improvement was made in the 10s. long-term addition, which has remained constant for a very tog time?

Mr. Crossman

The hon. Member has asked a question for which, no doubt, he knew I had prepared but did not bother to tell me about it beforehand. I had prepared for it. With regard to the cost-of-living index, the hon. Member is well aware that my right hon. Friend the First Secretary has now organised a special cost-of-living index for old-age pensioners, and the difference over the last four months between the movement of the two indices is very small indeed.

As to the 10s. long-term addition, I considered doing this and dividing the increase between all the beneficiaries and the four-fifths who get the 10s. long-term addition. I thought that, on the whole, it would be a mistake to exclude those who do not get the long-term addition, who include the long-term unemployed and the sick. I felt it better to give it all round than to concentrate on the long-term recipients.

Mr. Gardner

Is my right hon. Friend aware that, despite the understandable comments from the benches opposite, this increase will be welcomed, particularly by elderly people? When he makes these adjustments, will he look particularly at two categories: those who are obliged to have special diets and who are finding life difficult, and those who live in older houses and have very heavy fuel bills and who do not heat themselves sufficiently in winter?

Mr. Crossman

As I think my hon. Friend may be aware if he has studied our new handbook on supplementary benefits which also deals with the problem of the wage-stop in connection with which we have handled certain matters to which the Opposition have referred—both diets and fuel are matters on which discretionary payments can be and are being made. All people who read the handbook should be encouraged and stimulated by it to ensure that applicants claim these benefits.

Mr. Maudling

I must press the Minister on the important question put by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). The right hon. Gentleman has repeatedly said that in his judgment and calculation these increases will more than restore the real value of the scales introduced last November. He cannot make that statement honestly unless he has worked out a figure for the increase in prices. He must, therefore, have in mind a figure for the increase in prices. Why will he not disclose it to the House?

Mr. Crossman

We can see a factor which is the amount of increase from November to the last figure in March; that is statistically factual and announced. Then one has to estimate how much one thinks it will rise and, on our estimate, this increase will more than cover it.

Mr. Roebuck

Is not this further bonus for pensioners another indication that the Government have been pursuing wise economic policies? Is my right hon. Friend aware that the country will want to congratulate the Government on making this increase to pensioners rather than cutting the higher rates of surtax, as advocated by the Opposition? With regard to the possibility of the erosion of this bonus, has my right hon. Friend made any calculation of what the effect on pensioners would be if, by some aberration, the party opposite were returned to office and introduced the iniquitous value-added tax?

Mr. Crossman

I am grateful to my hon. Friend for those interesting political thoughts, but I do not have a brief on the value-added tax as it would affect pensioners. I have no doubt that the right hon. Member for Barnet (Mr. Maudling) has it and can tell us. I would, however, comment on what my hon. Friend called the bonus for pensioners. I prefer to say that this is what they are entitled to. This is something which we have worked out. We give it not as a bonus but because we have kept a fine record in giving an increase in supplementary benefits every year, whereas under our predecessors there was often a gap of 20 or 25 months between increases in supplementary benefit. I believe that we should do this annually and uprate National Insurance biennially because pensioners like to know that we do it regularly.

Sir G. Nabarro

While I accept absolutely that the contemporary conditions of rip-roaring inflation demand that the poorest section of the community should be partially reimbursed by higher supplementary benefits, will the right hon. Gentleman now apply himself to the question of whether the earnings rule is to be revised on 1st November next and the existing limit of £7 10s. a week for a single person adjusted to a realistic scale of, say, £10 a week in line with contemporary values and figures of earnings?

Mr. Crossman

The hon. Member will appreciate that he is asking me a question not about supplementary benefit but about National Insurance, to which my statement does not relate. We are dealing here not with a National Insurance increase but with a supplementary benefit increase, which does not relate to people with earnings.

The hon. Gentleman seems to suggest that there should be reimbursement of pensioners only in what he calls times of roaring inflation. That is not my view. My view is that even quite small increases in the cost of living undermine the value of the pension and that nothing less than an absolutely regular system, such as we have now introduced for the first time, meets the needs of pensioners.

Mr. Sharpies

The right hon. Gentleman says that he has made an estimate of the rise in the cost of living up to 1st November. Will he tell the House what that estimate is?

Mr. Crossman

I have nothing to add to what I have said. We are confident—and we will see who is right—that when we come to 1st November we shall find that the real value of the pension has been maintained, if not increased.

Mr. Ogden

Has my right hon. Friend noted how hard it has been to please the Opposition during the past week? Will he note that his statement is welcome not only for itself but as another indication that the Government are determined to make sure that the benefits of our increased economic prosperity are shared not only by the strong and powerful but by the weak and needy?

Mr. Crossman

I am grateful to my hon. Friend. The fact is that over these six years we have done this regularly. We did it in times of great economic difficulty. Now, when things are better, we maintain the same policy that we had in times of stress.

Mr. Ronald Bell

Does the right hon. Gentleman's statement this morning mean that the Prime Minister will be announcing a General Election at the weekend?

Mr. Crossman

That would be a deduction which it would be improper to draw from my statement.

Mr. Bidwell

May I congratulate my right hon. Friend on being able to keep the basic old age pension 20 per cent. higher than was sustained under the Tories in real terms? After we get back following the General Election, will my right hon. Friend's Department consider making this an even higher percentage in real terms?

Mr. Crossman

Looking back over the period, I think that this success in maintaining the 20 per cent. real increase has been a real achievement. I was asked whether when we get back we can do better. This will depend on the readiness of the contributor to see that we raise contributions to pay for the pension. I believe contributors understand

Following are the details of the Proposed Supplementary Benefit Rates
Present weekly rate Proposed weekly rate
Ordinary scale £ s. d. £ s. d.
(a) husband and wife … … … … … … … 7 17 0 8 10 0
(b)person living alone or single householder … … … … 4 16 0 5 4 0
(c) any other person aged
(i) not less than 21 years … … … … … … 3 17 0 4 3 0
(ii) less than 21 but not less than 18 years … … … … 3 4 0 3 10 0
(iii) less than 18 but not less than 16 years … … … … 2 16 0 3 1 0
(iv) less than 16 but not less than 13 years … … … … 2 4 0 2 8 0
(v) less than 13 but not less than 11 years … … … … 2 1 0 2 4 0
(vi) less than 11 but not less than 5 years … … … … 1 13 0 1 16 0
(vii) less than 5 years … … … … … … … 1 8 0 1 10 0

that, but it would be easier to do it after we have introduced our national superannuation scheme with a proper earnings-related contribution, with the burden fairly on the higher paid worker.

Mr. Worsley

Will the hon. Gentleman make it clear whether this announcement means that the Government intend to do nothing for the low income families when the father is in work, since they are worse off as a result of rising prices?

Mr. Crossman

It does not mean that. This is an announcement dealing with supplementary benefit. It does not mean that we have closed our minds to the problem of family allowances. As the Minister of State made clear in a long altercation on Monday on the question of family allowances, which we are considering at the moment, we cannot make up our minds finally until we have studied in detail the results of the Family Expenditure Survey.

Mr. Farr

Is the reason that the Secretary of State refuses to disclose the estimate of the rising prices by next November that he believes it will be of the order of about 10 per cent.?

Mr. Crossman

On the contrary. If I thought that it was 10 per cent. I would be very unwise to have made a statement confident that we have given an increase which more than covers the increase of the cost of living.

Blind Scale
(a) husband and wife
(i)if one of them blind … … … … … … … 9 2 0 9 15 0
(ii) if both of them blind … … … … … … 9 18 0 10 11 0
(b) any other blind person aged—
(i)not less than 21 years … … … … … … 6 1 0 6 9 0
(ii) less than 21 but not less than 18 years … … … … 4 4 0 4 10 0
(iii) less than 18 but not less than 16 years … … … … 3 12 0 3 17 0
(iv) less than 16 but not less than 13 years … … … … 2 4 0 2 8 0
(v) less than 13 but not less than 11 years … … … … 2 1 0 2 4 0
(vi) less than 11 but not less than 5 years … … … … 1 13 0 1 16 0
(vii) less than 5 years … … … … … … … 1 8 0 1 10 0
Rent addition for non-householders … … … … 11 0 12 0
Notes (i) an allowance for rent is added to the above rates.
(ii) Both the existing and the proposed rates given above exclude the 10s. 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 for a period of two years.
Back to