SOCIAL SECURITY

HC Deb 29 March 1971 vol 814 cc1151-61

The Secretary of State for Social Services (Sir Keith Joseph)

With permission, Mr. Speaker, I should like to make a statement on the Social Security Bill published today.

Section 10 of the Ministry of Social Security Act, 1966, like earlier legislation, provides that during trade disputes persons disqualified on that account for receiving unemployment benefit are not entitled to receive supplementary benefit for their own personal requirements, though it is payable for their dependants and their rent. But for many years it has been customary to ignore the tax refunds and strike pay—and any other personal income—available to the people involved up to the level of the personal requirements of the strikers and others disqualified because of a trade dispute—currently £4.35—when calculating benefit for their dependants. The result is that the total household income is often brought up to the full supplementary benefit level.

The Government believe that the principle embodied in the Act is an important one, generally accepted as fair by public opinion; and they do not think that the present practice, which is totally inconsistent with the principle should continue. The Bill accordingly provides that the personal income of persons affected will be treated in exactly the same way as miscellaneous income is treated in other supplementary benefit claims. The effect will be that, in the great majority of cases, up to £1 only will be ignored instead of up to £4.35.

When a trade dispute is over, Section 10 ceases to apply and the men, as well as their dependants, are eligible, for up to 15 days, for supplementary benefit, though during this period they are earning wages which will normallly at the end of the second week be paid. Because these wages were being earned and advances—or "subs"—were given by many employers upon them, the need for supplementary benefit was in the past fairly limited. But in recent years, and particularly since a strike in 1969 after which employees succeeded in persuading their employer to withdraw an offer of subs, there has been increasing replacement of subs—which are repayable and come out of taxed income—by supplementary benefit which is neither repayable nor taxable. This has played a large part in the rapid increase in expenditure on benefit following strikes. In 1968 it was about £80,000 for large strikes alone. In 1969 and 1970, again for larger strikes only, the figure leapt to £670,000 and nearly £900,000 respectively. If all strikes were included, these figures would be higher still. This cannot be allowed to continue. The proper way of tiding workers over till their pay is due after return to work is by way of advances of earnings. The Bill therefore provides that supplementary benefit paid to men who have returned to work after a dispute during which they were disqualified for supplementary benefit for themselves shall be recoverable—though not at such a rate as to cause hardship—through the employer.

Supplementary benefit paid to the families of strikers and others disqualified during strikes, and to strikers and their families after strikes, amounted in 1970 to £2½ million.

The savings from the supplementary benefit changes I have referred to depend on the number and scale of disputes, but if the changes had been in force in 1970 they would have saved about £1¼ million.

The Bill further provides for a statutory deduction, in most cases of £2.05—compared with 75p usually at present—from the supplementary benefit payable to those disqualified for unemployment benefit because they have left a job voluntarily or been dismissed for misconduct or refused to take a suitable job offered to them. This will save rather more than £500,000 in supplementary benefit expenditure a year.

I have not consulted the Supplementary Benefits Commission about the relevant provisions of the Bill although, as a matter of courtesy, it has been told of them.

Turning to national insurance, the Bill implements the Government's intention, announced by my right hon. Friend the Chancellor of the Exchequer on 27th October last, to end the retrospective payment of benefit for the first three days of a spell of sickness, injury or unemployment. The net saving from this change is expected to be about £19 million in a full year.

Mr. Orme

Disgraceful.

Sir K. Joseph

The Bill further provides for the abolition of Social Security Local Advisory Committees. The committees now number 141 with 4,000 members, and in present circumstances sufficient useful work cannot be found to justify the demand they make on the time of so many busy members of the community. Abolition will save about £130,000 a year of public funds.

I commend these proposals to the House, since they would last year, had they been in force, have saved half the cost to the taxpayer of supplementary benefit in this field, while protecting wives and children.

Mrs. Shirley Williams

May I begin by protesting very strongly about the fact that this statement has appeared in all the morning Press before being made to the House?

The Opposition very much deplore the fact that the right hon. Gentleman has not seen fit to consult either the Supplementary Benefits Commission or the Trades Union Congress. Presumably, if one has a doctrinaire attitude one does not wish it to be altered by those with expert knowledge of what may be the effects of it.

The right hon. Gentleman is aware, as we are, that disqualification goes very much wider than strikers themselves and involves all those in the class or grade of those in a firm on strike.

First, will he justify the fact that disqualification will affect married men only and those with children and not unmarried men, thereby making a very strange distinction?

Second, will the urgency provision under Section 13 of the Ministry of Social Security Act still apply?

Third, when the Secretary of State for Employment has said that it is not intended to discourage legitimate strikes, how can the right hon. Gentleman possibly justify the fact that he is presumably making no distinction whatsoever between strikes which he himself would agree are legitimate and those which he would say are unfair?

Fourth, we are aware that there has been some abuse of subbing by employers as well as employees, but will the right hon. Gentleman define rather more closely what he means by the phrase, referring to recovery of supplementary benefit, "though not at such a rate as to cause hardship"? That could mean almost anything.

Fifth, has the right hon. Gentleman at any stage discussed with employers the difference between those who pay within the first week or two weeks when a man resumes work and those who do not pay for a longer period? In other words, has he made any endeavour to get this on the same basis throughout all employment?

May I ask him next—[HON. MEMBERS: "Oh!"] I am sorry, but if the Government insist upon making Second Reading speeches in the form of statements they will be asked Second Reading questions about them. How does the right hon. Gentleman justify the deduction of £2 from those who are disqualified for unemployment benefit because they have left the job voluntarily or been dismissed for misconduct, when his own Government have not so far taken any powerful steps with regard to unfair dismissal, and when he has set up a committee to look into abuse, but apparently is not waiting to hear its conclusions? The Secretary of State is proposing to abolish Social Security Local Advisory Committees. Will he take any steps to get full representation of trade unionists and employers on whatever machinery he has in mind to replace those committees? We on this side do not accept that his Ministry will act as it should without the expert knowledge that trade unionists and others have brought to bear on local advisory committees.

Sir K. Joseph

I do not think that the Supplementary Benefits Commission would have thanked the Government for consulting it about a matter which must be for the Government to decide, and which is distinctly political—[HON. MEMBERS: "Oh!"]—which has distinct political overtones. The very reaction of the House shows that.

Mr. Frank Allaun

Enoch has won the day.

Sir K. Joseph

This is not the year, following a year in which strikes were more numerous than in any year since 1926, to relax the grade and class conditions to which the hon. Lady referred. I confirm that single men will not be affected, because they are not entitled to supplementary benefit when on strike.

Section 13 will remain for hardship payments—

Hon Members

Go on.

Sir K. Joseph

I am trying to remember the hon. Lady's fifth question. Certainly the Government justify their decision, because all it does is to restore the original intention of Parliament in passing the Ministry of Social Security Act, 1966, which was put to Parliament by the last Administration. The repayment provisions will provide for protective earnings at a level at least £2 above the supplementary benefit level so as to ensure that repayment will not involve any hardship.

The deduction for misconduct at 40 per cent. of the single person rate is not difficult to justify, since the hon. Lady's party suggested that the deduction should be increased from the present level to 33 per cent. of the individual rate.

Local advisory committees have not been conducting any sort of appeals function. There is a whole hierarchy of appeals tribunals and we have literally not been able to find any work to justify their continued existence.

Mr. Bruce-Gardyne

I congratulate my right hon. Friend on the most valuable steps which he proposes to take to deal with an abuse of supplementary benefits in trade disputes. Nevertheless, may I ask him to confirm that if the Bill had been in operation now the subsidy paid through the supplementary benefits system would nevertheless have been payable in the Ford strike and would have amounted to several hundred thousands of pounds to date?

Sir K. Joseph

No. Had this measure been in force the supplementary benefit payable to workers at Ford now engaged in a trade dispute would have been cut to something like two-thirds.

Mr. Concannon

Does the right hon. Gentleman intend to operate the abolition of the three waiting days every time a worker is off sick or on a 13-week basis? Does he appreciate what the disappearance of the three waiting days will mean in the mining industry, in which miners average 28 days a year off through ill health?

Sir K. Joseph

It will be worked as it is at present; for every spell that lasts for more than 12 benefit days the three waiting days now paid retrospectively will not be paid once the Bill is passed. [Interruption.]

Mr. Kenneth Lewis

Is my right hon. Friend aware that the general public will be pleased with the way in which he is proposing to deal with the scrimshankers—[Interruption.]—those who get this benefit when on strike? However, may he not be taking a sledgehammer to crack a nut by introducing this measure? In other words, could not the present difficulties have been dealt with more effectively by clamping down administratively by interpreting the rules in a tougher way?

Sir K. Joseph

No. We are dealing at the moment with a discretion that has been exercised over the years, perfectly within its rights by the Supplementary Benefits Commission. If the Government are to impose their own decision, then they must change the law. We could not ask the Commission to use its discretion as we would wish because its discretion is for it to decide. It is only fair, therefore, that we should change the law, which is what we propose to do.

Mr. Heffer

This is one of the most vicious and mean acts—[Interruption.]—that any Government have ever perpetrated in this country. Is the right hon. Gentleman aware that only Tory businessmen will gain any pleasure from this proposal and that the ordinary working people—not just the trade unionists and the wives and children of strikers—will be affected by the three waiting days decision? This is one of the most disgraceful steps taken by this Government, who have acted disgracefully since they came into power.

Sir K. Joseph

I really believe that the vast bulk of the public who support both great parties in this House would, on the whole, agree with the change which the Government propose in connection with supplementary benefits for those connected with trade disputes.

As for the three waiting days, the hon. Gentleman will surely admit that since that provision was introduced the whole position of the person who is short-term or medium-term sick or unemployed has been transformed by higher wages, increased savings, redundancy pay—

Mr. Orme

Come off it.

Sir K. Joseph

—employers' sick pay schemes, which now cover 40 per cent. of the working population, and earnings related benefits.

Mr. Orme

Shocking.

Mr. Pardoe

While entirely accepting the principle that the State should not have to pay strikers when on strike—[Interruption.]—may I ask the right hon. Gentleman to estimate how much of the £19 million that he thinks will be saved by ending the three waiting days will end up as an extra cost on industry, the employer having to pay this sum?

Sir K. Joseph

The employee often gets the benefit of both industrial payments and National Insurance payments. As a result of this change there will be some more claims on supplementary benefit for those who cannot get by on National Insurance and employers' pay, but we calculate that these claims will amount to only £1 million a year as against the £20 million that will be saved.

Sir S. McAdden

Is my right hon. Friend aware that for some time those whose income has been derived from pensions resulting from war service and so on have felt a sense of disagreement that those sums should be regarded as income liable to tax whereas payments made in the form of supplementary benefits are not added to one's income and are not, therefore, regarded as taxable? The announcement made by my right hon. Friend today is, therefore, justified all round.

Sir K. Joseph

I acknowledge the feeling, but the question which my hon. Friend raises is one for my right hon. Friend the Chancellor of the Exchequer.

Mr. Atkinson

Do the proposals which the right hon. Gentleman has announced differ greatly from those made by various employers' federations and submitted to him some time ago? In other words, would he care to indicate the difference between his proposals and those made to him by various employers' groups?

Sir K. Joseph

I will do better than that. The proposal about disregards has been made by the hon. Gentleman's right hon. Friends—[HON. MEMBERS: "Oh."]—and the one on the waiting days was proposed by the Labour Government.

Sir B. Rhys Williams

Is my right hon. Friend aware that the overwhelming majority of the public want him to concentrate supplementary benefits on those who are in need through no fault of their own, particularly the disabled and the very old, and that they are not so sympathetic towards supplementary benefits being paid to people who are in need in pursuit of their own advantage?

Sir K. Joseph

My hon. Friend has got the point exactly right.

Mr. Orme

Is the right hon. Gentleman aware that he shows his ignorance of what this will mean to millions of working people who have no benefit other than that provided by the State, and that if he thinks that public opinion will be behind this step he is sadly mistaken? Is he aware that he is equally mistaken if he thinks that this will affect workers who are striking for justifiable demands? It will only make disputes more bitter because workers will continue to resist if they believe their case is right.

Sir K. Joseph

The answer to the hon. Gentleman's question about supplementary benefits is that the Government are removing an anomaly that has crept in. As for the waiting days, the hon. Gentleman really must acknowledge, if I am said to be ignorant of the implications, that it was a Government of his party who introduced this proposal.

Mr. Orme

But we stopped it.

Mr. John Mendelson

When the Secretary of State told the House that because of the high level of incomes the change in the three waiting days did not matter, he showed his ignorance in a surprising way, because for the 6 million to 8 million people now on low wages this will be a serious inroad, for they need the money very badly. Does he not realise that, in spite of his attempt to disguise it, his decision to make the conditions of families and children much more difficult is a malicious decision to punish the families of men on strike and fully justifies working people in now taking every kind of action to oppose this class legislation?

Sir K. Joseph

Before making such provocative remarks, the hon. Gentleman should contemplate that the low earner who is involved in a trade dispute and who has no benefit from tax reliefs has had the supplementary benefit protection under which we are now suggesting that the man with a family should be treated.

Secondly, I do not accept that I showed any ignorance about the waiting days. The low earner has not been able to manage on National Insurance sickness benefit. This has meant that from the very first week he has been on supplementary benefit. The retrospective payment for the three waiting days in the third week will not make a ha'porth of difference to him, as it is merely an adjustment between the Supplementary Benefits Commission and the National Insurance Fund.

Mrs. Shirley Williams

May I correct something which the right hon. Gentle- man said earlier and which drew great applause from his own side? He will recognise that I accepted that the Opposition when in Government had moved against subbing, but he will recall that in the Industrial Relations Bill which was mooted by my right hon. Friend the Shadow Secretary of State for Employment a change was made in disqualification in directly the opposite direction to that in which the right hon. Gentleman is now proposing to move.

Sir K. Joseph

I beg the hon. Lady's pardon. I did not realise that I was referring to the Donovan Report in this connection. Certainly the hon. Lady is right and her Government sought to legislate as the Donovan Commission recommended.

Mr. Kaufman

On a point of order. My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) put a question to the Secretary of State to which he did not reply, perhaps recognising that it was a matter not for him but for you, Mr. Speaker, and I should like to make a submission to you about it.

My hon. Friend asked how it came about in that almost every newspaper today there was an advance story in great detail about the statement. It also happens that in almost every newspaper over the weekend there was an advance of the statement that the Minister of Posts and Telecommunications is about to make. This matter was previously referred to by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) when the Secretary of State made a statement about an inquiry into the working of the Abortion Act, and the Secretary of State then implied that it was a coincidence.

It is plain that these Press stories which appear in advance of Ministerial statements are not coincidence but are the result of briefing. No journalist could be asked not to publish a story on which he had been briefed, and clearly any journalist will rightly print a story which he has obtained.

But the present situation when Ministerial statements to the House are being anticipated consistently by Press briefings is fast becoming a contempt of the House. I ask you, Mr. Speaker, to initiate inquiries to discover how this briefing takes place and to ask the Leader of the House, who is responsible for Government information, whether he will arrange for a statement on the matter to be made.

Mr, Speaker

Those are not matters for the Chair.