HC Deb 17 June 1971 vol 819 cc837-44

1.25 a.m.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)

I beg to move, That the Supplementary Benefit (Determination of Requirements) Regulations 1971, a draft of which was laid before this House on 17th May, be approved. The Regulations seek to implement the proposed changes in supplementary benefit. The changes include both a general increase in supplementary benefits, in line with the National Insurance increases, and further selective improvements in the rates for young people and the very elderly. They also introduce a new requirement into the supplementary benefit scheme—attendance requirements to match the attendance allowance in the National Insurance Scheme.

Regulation 2(2) is the main Regulation dealing with the increase for the single householder and the married couple. The proposed increase for a single householder is 60p, taking the rate up to £5.80 a week. The married couple rate is to go up by 95p to £9.45 a week. When the November, 1970, supplementary benefit increases are taken into account, these rates will have increased by about 20 per cent. over the November, 1969, level, thus staying in fine with National Insurance benefit rates. Thus the total cash increase for a single householder over November, 1969, is £l-40p last November and 60p this September—which is the same as the increase in the standard rate of National Insurance benefit for a single person.

Other supplementary benefit rates are to go up by a similar proportion, except that the rates for which a selective additional increase is proposed will be higher by a higher percentage.

These increases will benefit about 2.9 million people and their dependants, of whom about 2.3 million are supplementary pensioners.

Regulation 2(4) deals with rent additions for non-householders. Unless the House wishes me to say more, perhaps I can just make that brief passing reference.

Now I should like to say something about the selective improvements. Over and above the general increase, two additional improvements are proposed in the supplementary benefit scheme. These will affect the scale rates for young people aged from 13 to 20 and the long-term addition when it is paid to householders where the pensioner or his wife is over 80.

The new scale rates proposed for the 13–15, 16–17 and 18–20 age groups include selective improvements which have the support of the Supplementary Benefits Commission. The amounts that represent an improvement—that is, the sums over and above a strictly proportionate increase—are 35p for the 13–15 age group, 25p for those aged 16–17, and 20p for those aged 18–20. Both those over 16 claiming benefit in their own right and those who are the dependants of claimants will benefit. The latter are mainly children aged 13–15, but also those over 16 and under 21 who are still in full-time education. This improvement will narrow the present gaps between the rates for adults and those for older children, and will provide additional help for parents on supplementary benefit who have children in those age groups.

This proposed change in the relativities for these age groups corresponds to the common-sense view that their requirements are relatively greater than the present arrangements admit. It is a change which has been suggested from time to time by various people and organisations.

The long-term addition of 50p is paid to everyone over pension age and to all those under pension age, except the unemployed, who have received supplementary benefit continuously for two years or more. It replaces the small additions to benefit under national assistance for those who are most likely to have special needs, though further special additions may also be made if the long-term addition does not meet the cost of a person's exceptional needs. It is a household benefit in the sense that the same rate applies to single people and married couples.

It is proposed to increase the long-term addition by 25p when either the pensioner or someone dependent on him is aged 80 or over. This will provide some additional benefit for those among the oldest supplementary pensioners, mostly widows and single women, whose special needs are not already being met by additions to benefit over and above the long-term addition.

Regulation 4 deals with the attendance allowance, which is to be paid at the rate of £4.80 a week from December. It is intended specifically for very severely disabled people who for six months have satisfied a medical requirement that they need either a lot of attention, both day and night, or continual supervision. The allowance therefore caters for a well-defined category of people and is based upon a recognisable and specific need which they all share at the same level. In these circumstances, the Government considered it right to provide for the same common level of requirements in the Supplementary Benefit Scheme, and this is what Regulation 3 achieves. It will be seen that the new requirements level applies to both adults and children.

The estimated cost of the proposed increases in themselves is, for a full year, just under £116 million. This includes £53.4 million for the increase in the scale rate for the single householder and £30.9 million for the increase in the married couple scale rate. The selective improvements will cost altogether £7.05 million, of which £4.3 million is accounted for by the enhanced long-term addition and £2.75 million by the improved rates for the 13 to 20 age groups.

The purpose of the Regulations is to increase substantially the minimum income guaranteed by Parliament to those who are unable to support themselves and to give some additional help where it is most needed. Our proposals reflect the view, which all of us share, that supplementary benefit should remain a last resort, while at the same time it must at least maintain the standard of living of the neediest people in this country who rely upon it. In addition, as I have said, we have been able to make some modest but real improvements. We have decided to concentrate them on this occasion on the very elderly and on young people in preference to other improvements—such as increasing the disregards in the supplementary benefit scheme—which would benefit people who are already enjoying a standard of Jiving above the basic supplementary benefit level. The increases will help nearly 3 million people and their dependants.

I commend the Regulations to the House.

1.33 a.m.

Mr. Brian O'Malley (Rotherham)

We welcome the increases in supplementary benefit and the increase in the attendance allowance from the proposed £4 to the new figure of £4.80. Regulation 3, which deals with the attendance allowance, comes into effect on 6th December, 1971, while the earlier provisions, which dealt with the normal supplementary benefit scale rates and the scale rates applying to blind people, come into operation on 20th September, 1971.

The supplementary scale rates were last increased in November, 1970. The fact that these supplementary benefit increases or upratings are to come into operation in September amounts to a confession of the Government's failure to contain and control prices. The statement made before the election that prices would be brought down at a stroke was a joke—although we would say a bad joke—and the Government have had little choice but to bring forward the increases in the supplementary benefit scale rates by a couple of months.

The scale rates for married couples, which do not include the rent allowance, go up from £8.50 to £9.45, which represents an increase of 11.2 per cent. The increase for the single householder is about the same—11.5 per cent.

Before approving these Regulations, we should note that in the five months between November, 1970, when the supplementary benefit rates were last increased, up to April, 1971, the last month for which we have figures, there has been an increase in retail food prices of 7.9 per cent. Even taking into account the fact that there is not in many years an increase in summer months comparable with that in the winter months it would not be unreasonable to assume that by the time the present rates come to an end we will probably have increases in prices of 16 per cent. or 20 per cent.

If the Under-Secretary thinks that my figures are wrong, and I put them forward in an exploratory way, although reasonable projections seem to show that this kind of movement is not unlikely, it would be of benefit to have the Government's assessments of the likely movements of prices. I know that the hon. Gentleman will have these because when he was in opposition he asked the then Minister, Mr. David Ennals, for such assessments.

If we look at the increase of 11.2 per cent. for the married couple and then at the price increases we can see the difficulties. Incidentally, the rate of increase in food prices in the first 12 months of Tory Government has been about double the rate of increase in the last 12 months of Labour Government.

Secondly, basic wage rates have been rising by about 0.8 per cent. a month between November, 1970, and September, 1971. If we project these figures it would mean that even before the increases take effect there will have been a movement in basic wage rates of about 72 per cent. What is likely to happen to basic wages rates in the years during which these scale rates are in operation? In these conditions of chronic inflation with which the Government seem to be incapable of dealing we are bound to approach the increases with a certain amount of reservation. In a population which is conscious of price increases— as can be seen from the election result at Hayes and Harlington which has just come in—people receiving supplementary benefit increases will quickly realise that their benefits have been eroded.

It must be recognised that even the level stated in the Regulations represents a sparse standard of living. Perhaps it will always be the case that people receiving supplementary benefit are likely never to have much more than a sparse standard of living compared with the rest of the population simply because of the large numbers on supplementary benefit. If we could reach the position where the supplementary benefit system became a safety net rather than a system which has to deal with such large numbers, including large numbers of retirement pensioners, it would be much easier for a government to meet the problem. What is disturbing in the long-term implications of the scale rate set out in the Instrument is that the Government are not cutting down on the number of people receiving means-tested benefits by the introduction of other schemes but, on the contrary, increasing the number.

As the Minister pointed out, there has been a bigger percentage increase in non-householder rates for people between 16 and 17 and between 18 and 20. We think this is right. Does the Minister believe that in the long term we should maintain, as we are maintaining here in respect of the more than proportionate increases given to the categories I have mentioned, a difference in entitlement between people of 18, 19 and 20 and those of 21 and over? The age of majority is now 18 rather than 21, and it could plausibly be argued that the needs of the 19-year old are not much, if at all, different from the needs of the 21-year old. It may be that we should close up this band now, particularly in respect of young mothers.

The long-term addition, with the exception of people who are over 80, or who have dependent relatives over 80, remains at 50p. The hon. Gentleman pointed out that additional payments could be made, but I should have thought an upward movement of the long-term addition would help administratively, as well as helping a large number of people, including retirement pensioners, who are dependent on the long-term addition.

No rent allowance is included in the 65p for recipients under 18. Will the hon. Gentleman consider whether, for example, a young mother under that age, a non-householder, should get a rent allowance, or a young person not living with parents but with a married brother or sister?

The attendance allowance, the £4–80, is to be disregarded and is on top of the ordinary supplementary benefit scale rates. Why not do the same for invalidity allowances, so that all people who are entitled to an attendance allowance or an invalidity allowance would get an addition to the scale rate after six months?

Lastly, will the Minister explain Regulation 3(4)?

Mr. Dean

With the leave of the House, I will deal with the questions put to me by the hon. Gentleman. He asked, first, how much I thought prices would increase. I think he knows my answer, which is that I do not intend to speculate on this, but assure him that the Government are doing their utmost to moderate the increases in prices, and we are sure that we shall be successful.

The hon. Gentleman asked me to comment on the improvements in the rates for older children and to say whether I felt there was room for further improvement. The changes we have made are in response to modern needs, and we shall continue to watch closely, as will the commission, to see that we match the needs as readily as we can. A young mother over 16 would be entitled to an allowance in her own right, and, of course, an allowance for her children as well.

Mr. O'Malley

Would a young mother who was a non-householder be entitled to the 65p rent allowance?

Mr. Dean

I am not certain. Rather than give an incorrect answer off the cuff, perhaps the hon. Gentleman will allow me to check on that and let him know.

The hon. Gentleman asked me why the invalidity allowance was not included in the Regulations. This is largely for the reasons which I gave on the National Insurance Bill which we have just completed. We feel that the present arrangements in the supplementary benefits scheme reflect individual needs not only through the long-term addition but through the special allowances over and above that.

There is a marginal number of people in the chronically sick and disabled category who are receiving these additional allowances. This is not our last word on this. The whole matter of disability is being considered and the Supplementary Benefits Commission has this matter very much in mind and is shortly to review the operation of discretionary additions to benefits and long term conditions. We are also considering mounting a research study on people of working age who are subject to long term absence from work on account of sickness or disability. The basic objectives of the study now being formulated are expected to include knowledge of the extent to which the handicapped eligible for supplementary benefit are getting it; and, secondly, any reliable pointers as to the adequacy of supplementary benefit for such persons and the direction any improvements might take. I hope that assures the hon. Gentleman we have this point very much in mind.

Question put and agreed to.

Resolved. That the Supplementary Benefit (Determination of Requirements) Regulations 1971, a draft of which was laid before this House on 17th May, be approved.