HC Deb 27 May 1970 vol 801 cc1997-2004

12.18 a.m.

The Minister of State, Department of Health and Social Security (Mr. David Ennals)

I beg to move, That the Supplementary Benefit (Determination of Requirements) Regulations 1970, a draft of which was laid before this House on 15th May, be approved. The draft Regulations provide for increases to be made in the scales of supplementary benefit laid down in paragraphs 9 and 10, as amended, of the Ministry of Social Security Act. These scales, as hon. Members know, cover basic requirements and are exclusive of rent, an allowance for which is added to the scale rates. This allowance is normally, in the case of the householder, the actual net rent and rates, paid. For the non-householder, a standard rent addition is given; and this is also being increased by these draft Regulations.

This Government, as hon. Members are aware, has brought forward proposals to increase supplementary benefits each year from 1965 onwards. We have been determined to protect the interests of the elderly, the sick, the fatherless families who rely on supplementary benefits.

Turning to the details of the increases, it is proposed 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. Over and above these amounts there will be allowances for rent and, as appropriate, the long-term addition of 10s. which is added automatically to the basic level of supplementary benefit to all over pension age and to those, apart from the unemployed, who have drawn benefit for over two years. There will also be appropriate increases in the rates for other adults, young people, and children.

The beneficiary who is not a householder receives a fixed addition for rent which is the equivalent of the rent allowance. This addition is also being increased by these Regulations so that the amount will go up From lls. to 12s. The effect of this increase is that all non-householders over 21 will be 7s. better off as a result of the changes made by these Regulations.

When my right hon. Friend the Secretary of State for Social Services announced that the draft Regulations had been laid, he made it clear that the increases would more than restore the real value of the scales brought in last November ".—[OFFICIAL REPORT, 15th May, 1970; Vol. 801, c. 1667.] Nonetheless, it was suggested that the Government had failed to make sufficient provision for the possible increases in prices between now and November.

Clearly it is difficult to forecast with absolute precision how prices will have moved by a particular date. For example, price fluctuations can often be caused by seasonal and climatic factors.

In their speeches the Opposition have been making wild and irresponsible predictions about future price rises—as if the pattern of the period from November to April is likely to continue for the remaining months of the year. The Tories, under their present leader, are noted for gloomy prophecies. They tried to mislead the country over the trends in our balance of payments, about our industrial growth, and about the rate of investments.

Mr. Speaker

Order. Even the Minister must keep to the Regulations he is moving.

Mr. Ennals

The Index of Retail Prices for April, 1970, was published on 21st May. This shows that over the period since November, 1969, when benefits were last raised, prices, excluding housing, have risen by 4.0 per cent. But experience shows that over the years prices rise more rapidly over the period November-April than over the year as a whole, and it is usual for the index to stabilise or fall slightly in the summer months before rising in the autumn again. For example, in the year November, 1968, to November, 1969, the index less housing rose by about 5.5 per cent. But just over 4 per cent. of this rise occurred in the months November to April—almost exactly the same percentage as in the present year. Thereafter the index fell marginally in May, rose somewhat in June—July, fell in August, and rose somewhat thereafter. But by far the greater part of the year's increase occurred in the first five months. This was greatly influenced by the seasonal movement of food prices. A broadly similar picture occurred in 1967–68 and in earlier years.

The Government stand by their statement that the increases now proposed will more than restore the value of the scale rates which started last November. And I ask the House to recall that, as I have indicated, supplementary benefit rates have been raised each year from 1965 onwards. On none of these occasions have the Government failed to take sufficient account of price rises, and I am sure that this occasion will prove no exception. In fact, of course, the real value of supplementary benefits rose by about 23 per cent. between October, 1964, and November, 1969—even leaving out of account the long-term addition introduced in 1966.

How have the improvements in supplementary benefits compared with the movement in earnings? Taking October, 1964, as the base, supplementary benefit in November, 1969, had gone up 51.2 per cent, compared with 37.1 per cent. average industrial earnings. The equivalent figures for supplementary benefit in November, 1970, will be an increase of 63.8 per cent., though of course I can give no figure for the movement of industrial earnings by November, 1970.

I have dealt so far with the provisions for help laid down in the Regulations. I should like to refer, briefly, to two changes consequential on the Regulations, which the Supplementary Benefits Commission proposes to make under its discretionary powers. First, it can settle the requirements of persons paying an inclusive charge for board and lodging. Second, it can increase benefit to meet special expenses that arise in an individual case to the extent that these are not already covered by the long-term addition or by other resources which the person may have. If the proposed Regulations are approved, the Commission intends from 2nd November to make appropriate increases in relation to the personal expense allowance for boarders and the additions for extra dietary needs.

As regards increases in benefit to meet special expenses, the amounts of these additions are usually self-regulating, because they are linked to the cost actually incurred, for example, for domestic assistance. In the case of extra heating they are linked to the price of coal. But for special diets amounts are laid down based on medical advice. These are currently 13s. 6d. a week for the cost of a diet in certain specified conditions and 6s. in other cases. The Commission proposes to increase these rates, which were last altered at the time of the 1968 regulations, by 2s. and ls. respectively, so that they will become 15s. 6d. and 7s.

The proposed increases will benefit about 2,700,000 current recipients, making, with their dependants, who include over 750,000 children, a total of over 4 million people in all. All these will therefore benefit from the real increase in the value of supplementary benefits which has been achieved during the period this Government have been in power.

The cost of these proposals will be just over £70 million in a full year, while the cost in the current financial year1970–71—is expected to be about £30 million. This will be on top of the estimated net cost of supplementary benefits for the current year of £485 million. This is more than twice as much as was spent by the Opposition on National Assistance in 1963–64.

Let me say a word about the over-80s who will benefit from the effect of these regulations. In one of the more misleading sections of its manifesto the party opposite talk about pensions for the over-80s who now get no retirement pension at all ". Any reader not used to this technique of double-talk would assume that those over the age of 80 were denied pensions.

Mr. Martin Maddan (Hove)

Non-sense!

Mr. Ennals

As the hon. Member says, it is absolute nonsense. That is what we call being honest with the people.

What are the facts. There are about 1 million people over 80 who draw contributory pensions—that is about 90 per cent. of that age group. Half of the remaining 10 per cent. are in receipt of regular supplementary pensions—bringing them to a level of course above the level of national insurance benefits. So that is 95 per cent. The remaining 5 per cent. are all entitled to non-contributory pensions unless they already have resources above the level laid down by the supplementary benefits scheme. Every one of them has a right to apply for a supplementary pension—and to the long-term addition. If there are any in need who have not applied it is up to all of us—including Members of this House and the Opposition—to see that they benefit from the provisions made available by our compassionate society. They should be reminded that under a Labour Government we have pushed into the past the days of the old poor law and national assistance. The uprating of supplementary benefits will of course help those who do not qualify for a contributory pension both by increasing supplementary pensions and by bringing within the scope of the scheme those whose resources are marginally above the present scale rates.

I have one last question before I complete this presentation. This concerns family allowances—and family poverty is very relevant—

Mr. Speaker

Order. We are debating a proposal that increases supplementary benefits. The Minister must confine himself to that.

Mr. Ennals

I respect your Ruling, Mr. Speaker. It is with pleasure that I move that the House accepts the Regulations.

Mr. Paul Dean (Somerset, North)

Hon. Members on this side of the House welcome these increases in supplementary benefits which the Government propose should take place in November—which has become the normal time for increases of this kind. In introducing the Regulations, the Minister of State tried to make light of the price increases that have taken place in recent months and which, on the present trend, are likely to take place in future. How much these increases in benefit are needed now, and how much more they will be needed by November, in view of the price increases which are taking place!

The hon. Gentleman gave the figure—an increase in the cost of living of 4 per cent. already since last November when increases were last made. It is a rate of rise faster than at any time in the last 20 years, and it means that the £ in the pocket, especially of the poorest sections of the community whom we are now considering, is being devalued at a very serious rate. Clearly, these increases are needed. Since last November, the poorest sections of the community have found that about half the increase in benefits then provided has been eaten away by rapidly rising prices.

The Minister of State has claimed that the increases now proposed will more than restore the value of the benefits. He has failed—as did the Secretary of State on 15th May—to say on what basis of price increase that is calculated. Unless we know, how can we possibly judge whether his claim is likely to be substantiated? The hon. Gentleman has totally failed to tell the House the basis of calculation. I shall have a shot at it myself.

I take the point which the Minister made that there tends to be a higher rise at this time of year than later, but what is clear, taking the fairest possible estimate, is that if price rises go on at a broadly similar rate it is probable that by November next a married couple will find themselves 12s. worse off than at last November. I base that on a rise in the cost of living of about 8 per cent. over the 12 months, which is a reasonable figure to take, in view of the 4 per cent. which the Minister of State has given.

Mr. Ennals rose—

Mr. Dean

If he wishes to assert that 8 per cent. is a miscalculation, will the Minister of State say on what figure the Government have calculated so that the House may judge whether his claim that the benefits will be restored is correct?

Mr. Ennals

The hon. Gentleman's assumption is absurd. It is not borne out by experience in previous years under this Government or under the Tory Administration. The increase during the period from November to April is almost always much more than during the next six months. I pointed this out with facts and figures. The hon. Gentleman's assumption of 8 per cent. does not wash. He is electioneering.

Mr. Dean

I asked the Minister what the Government's figure was, and we have still not had an answer. I am entitled to say that, with 4 per cent. for five months, it is a reasonable assumption to take 8 per cent. for the year as a whole, and certainly so under a Labour Government who have totally failed to manage the economy. By next November, the poorest sections of the community, those living on supplementary benefits, will have felt the effects of it, and, as I say, a married couple will have lost about 12s. in the value of their supplementary benefit.

What will happen in the meantime? Every week, people are suffering because of the steep increases in prices. It is not good enough in these circumstances for the Minister to boast of what the Government are doing to help the poorest. They are doing no more than in a small way trying to repair a little of the damage they have done and the hardship they are causing to these people through the rapid price increases now taking place.

I have two brief questions to put to the hon. Gentleman. The first is with regard to the wage stop. He did not mention those who will not get the full increase owing to the wage stop. I am thinking here in particular of the disabled wage stopped. We all recognise that there is a problem here, but the Government undertook in 1967 to review the difficult question of the wage stop on the disabled. We have had no announcement yet, however, and I hope that the hon. Gentleman will be able to say more than he has done. Here is a case of disabled people who make the effort to go out of work and suffer under the present arrangements as a result of the wage stop when they are away from work sick. These are the sort of people we want to encourage.

My second question concerns cost. The hon. Gentleman said the cost in a full year would be £70 million. Is this additional outlay of supplementary benefits provided for in the Estimates of Government expenditure previously announced, or is it over and above what has been announced already?

I end as I began by welcoming these improvements. They are certainly needed, and because of the quite unusual price increases which are taking place, by November, when they come into operation, they will have been substantially eroded and there will be considerable additional hardship for the poorer sections of our community as a result of the mismanagement of the economy by the Government.

12.37 a.m.

Mr. Martin Maddan (Hove)

I had not intended to intervene but the Minister of State gratuitously took up a very good point in the Tory Manifesto about the over-80s, and since I have in my constituency more over-80s than perhaps any other hon. Member, I feel called upon to comment on what he said and more particularly on the spirit in which he said it.

At the end of a Parliament before a General Election the conventicn is to discharge business which is in the interest of the country as a whole as quickly as we can and not in a partisan spirit, and it is for this reason that I regret the tone employed by the Minister. He talked about the " compassionate " Labour Government, but throughout his speech there were the signs of an understandably bad conscience about the Government's performance towards many people, including the over-80s. It is a pity that he made such a political point. It was a very bad point, and it is sad that he sought to make it in a debate of this sort at this time. He could have spoiled a good Measure by such a dose of sanctimonious humbug.

Question put and agreed to.

Resolved, That the Supplementary Benefit (Determination of Requirements) Regulations 1970, a draft of which was laid before this House on 15th May, be approved.

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