HC Deb 24 July 1972 vol 841 cc1484-93

12.10 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 1972, a draft of which was laid before this House on 4th July, be approved. These regulations seek to implement the changes in supplementary benefit that were briefly outlined in my right hon. Friend's statement of 22nd March and described in the White Paper published on 3rd May.

The changes include both a general increase in supplementary benefit rates and further selective improvements in the provision made for long-term beneficiaries and young non-householder claimants aged 16 to 20. They also provide for a new rate of attendance requirements where a claimant becomes entitled to the lower rate of attendance allowance, proposed in the National Insurance Bill, for the very severely disabled who need considerable care or supervision either by day or by night.

Regulation 2 deals with the main supplementary benefit increases. Under regulation 2(2), the proposed increase for a single householder is 75p taking the rate up to £6.55 a week. The married couple rate is to go up by £1.20 to £10.65 a week. These figures represent proportionate increases of 12.9 per cent. There are also proportionate increases in the rates for other adults who are not householders, young people and children. A beneficiary who is not a householder receives a standard addition for rent in recognition of his housing costs. This is being increased by regulation 2(4) from 65p to 70p a week. These increases will take effect from 2nd October. As with last year's general increase they will not only compensate for the rise in prices since the previous increase but should also provide some additional margin for the future.

These increases match the increases in national insurance benefits proposed in the National Insurance Bill. Taken together with the Government's decision to move to annual reviews of national insurance and related benefits, thereby bringing the arrangements for reviewing those benefits into line with the arrangements for reviewing supplementary benefits, the regulations will bring an end to the difficulty that used to occur at the biennial upratings of national insurance benefits when those receiving supplementary benefit got a smaller increase because they had already received part of the total increase in the previous year. As hon. Members know from personal experience, this has caused considerable and distressing misunderstanding among many of those who rely on supplementary benefit, and I am sure the whole House will welcome the end of that problem as a result of the change.

I turn to the main selective improvements. The first is an increase, under regulation 3, of l0p in the long-term addition, which is paid to all supplementary pensioners and to those under pension age—except the unemployed—who have received supplementary benefit for two years or more. The standard rate of the long-term addition is 50p and this will go up to 60p;but, as hon. Members will recall, last year we increased the amount of the addition by 25p to 75p where the claimant or his wife is aged 80 or over. This higher rate of long-term addition will also go up by l0p, from 75p to 85p a week. It is intended that this increase should not be offset against any further additions a person may need to cover special expenses. This means that although the long-term addition is being increased to 60p and 85p for those aged 80 or over, the amount taken into account in determining whether a person can be paid special additions remains unchanged at 50p and 75p respectively.

As I mentioned, where the beneficiaries have special expenses which exceed the amount of the long-term addition, these can be met by weekly special additions to their benefit under the Commission's discretionary powers. The Commission has decided to increase the amounts given for extra heating, where there is poor health and/or bad accommodation, and also for special diets where these are medically prescribed.

Mr. Robert Cooke (Bristol, West)

Much is made of this extra help for extra heating, often of very badly organised premises. Can the Commission help seal up some of the draughts which have to be heated at the national expense—which would probably be very much to the benefit of both sides?

Mr. Dean

I take my hon. Friend's point. It is not much good providing additional money if that additional money is to go to heat the street rather than the old person and the house. I assure my hon. Friend that that is one of the aspects of the heating problems of the elderly to which we are giving attention.

At present the additions for heating are 25p, 50p, and 75p, depending on the severity of the case, and these will be increased by 20 per cent. to 30p, 60p and 90p respectively. The standard additions for special diets are 35p and 77p and these will be increased by approximately 15 per cent. to 40p and 92p. These increases reflect the movement in fuel and food prices since the amounts were last fixed. They are not dealt with in the regulations because they are made under the Commission's discretionary powers. They, too, will operate from 2nd October. Pensioners who receive such special additions will receive the increases in them on top of both the l0p increase in the long-term addition and the increases in the main rates—which, of course, provide for normal heating and food requirements.

I turn to the improvements for the non-household claimants aged 16 to 20. These are in Regulations 2(2) and 2(4). The other two selective improvements will benefit young people—claimants aged 16 to 20 who are non-householders, that is, those who are not directly responsible for rent and household necessities, usually because they are living in their parents' or other relatives' homes. First, non-householder claimants aged 18 to 20 who previously qualified for a lower scale rate will now receive the adult non-householder rate of £5.20 a week-hitherto given to those aged 21 or over.

This change recognises the fact that whatever may have been the case in the past there are now no good grounds for setting the needs of a non-householder aged 18 at a lower level than those of one aged 21. Their essential needs—for example, for food and clothing—and their styles of life and consequent patterns of expenditure are likely to be very similar, and the House will appreciate that this argument has particular force now that the age of majority has been lowered to 18.

Secondly, we propose that 16- and 17-year-old non-householder claimants should be eligible for the standard rent addition paid to non-householders which, as I have said, is being increased to 70p a week. This change reflects the fact that a 16- or 17-year-old who is in full-time work nowadays earns enough to make it reasonable to expect him to make some contribution to the rent if he lives in the household of a supplementary benefit claimant—and it is an obvious corollary of this that when he is out of work and receiving supplementary benefit himself he should be enabled to make a contribution to the rent likht any other claimant. I am sure hon. Members will welcome these improvements for young non-householder claimants, which will in particular help the youn unmarried mother living at home.

The other selective increase I want to mention is the new rate of attendance requirements to be found in Regulation 2(3).

Last year we provided for the new attendance allowance of £4.80 a week, paid to the very severely disabled, to be fully reflected in the Supplementary Benefits Scheme by an appropriate addi- tion to the supplementary benefit requirements where a person is entitled to the attendance allowance. We now propose to increase the amount specified for attendance requirements from £4.80 to £5.40, to match the increase proposed in the rate of attendance allowance in the National Insurance Bill. The rate of attendance allowance provides for a new lower rate of attendance requirements, of £3.60 a week, to match the new rate of attendance allowance proposed in the National Insurance Bill for severely disabled people who need a great deal of care or supervision by day or by night. The new lower rate of attendance requirements will apply to persons awarded the new rate of attendance allowance as this is introduced in phases over the period from June, 1973 to December, 1974.

I turn finally to the cost of the proposals—

Mr. Ernle Money (Ipswich)

Will my hon. Friend deal with one specific matter? The increases he has announced represent a major breakthrough in the social services. They will allay the fears of a great many constituents, but only if the maximum publicity is given to them. Will he see that his Department gives as much publicity as possible now so that those most concerned realise what is to come in October?

Mr. Dean

I am grateful to my hon. Friend for that intervention because I can say that those who are receiving benefit at present will automatically have their benefits uprated. They will not have to take any action. But there may well be others to whom some or all of these benefits could be available were they to apply for them. We shall certainly continue our publicity campaign to see that people who are eligible for the benefits in fact receive them.

The estimated cost of the proposed increases, if they were taken on their own, would be about £156.5 million in a full year. This includes £73 million for the increase in the scale rate for the single householder and £42.7 million for the increase in the married couple scale rate. The selective improvements will cost altogether £15.9 million, of which £12 million is accounted for by the increase in the long-term addition, £2.3 million by the increases in the special additions for heating and diet and £1.6 million in the improvements for young non-householders. However it is estimated that about an extra £104.9 million in national insurance benefits will be paid in a full year to supplementary benefit claimants, with the result that the net increase in expenditure on supplementary benefits is estimated at £51.6 million in a full year.

The purpose of these Regulations is to protect the standard of living of all those who rely on supplementary benefit and to give some additional help where it is most needed. We have decided this year to concentrate on selective improvements which will benefit long-term beneficiaries, those with special needs and young claimants, rather than on improvements—such as raising the disregards in the supplementary benefits scheme—which would benefit people who already have a standard of living above the basic supplementary benefit level. The increases will help nearly 3 million people and their dependants including, nearly 2 million pensioner claimants, many thousands of the sick and disabled, widows, the unemployed, fatherless families and others who are unable to support themselves.

I commend the Regulations to the House.

12.24 p.m.

Mr. Brian O'Malley (Rotherham)

The Under-Secretary has moved these regulations as though they were to be implemented in a vacuum, with no price increases and no problem of roaring inflation, which is affecting everyone from the wealthiest to the poorest. The fact that the Government are increasing the supplementary benefit scale rates, as they are, over the rates of both September, 1971 and November, 1970 is clear evidence of the utter failure of the central part of their policies, designed to curb the spectre of inflation and soaring prices. Although there is the increase of 12.7 per cent.—not 12.9 per cent. as the hon. Gentleman suggested, although maybe I have my mathematics wrong—from £9.45 to £10.65 for a husband and wife, there is the prospect that by the autumn of 1973 the supplementary benefit recipient will be worse off, not only in comparison with the working population but absolutely worse off compared with three years previously.

For example, last year—and the hon. Member for Ipswich (Mr. Money) should examine the situation before he expresses surprise—during the debate on similar regulations which brought in the increase in September, 1971, I said, as reported at column 840 of Hansard for 17th June, that over the period from November, 1970, to October, 1972, which is when the new rates come into operation, there could be an increase in food prices of 16 per cent. or more, and I invited the Minister to comment, just as the Under-Secretary invited David Ennals to comment when he was in the hon. Gentleman's position. Not only did the hon. Gentleman not comment, but he implied that it was unlikely to happen because the Government were getting a grip of the situation.

The movement in food prices over that period has been not 16 per cent., but on my calculation rather over 16 per cent. These increases in the general scale rates of supplementary benefit are being made against a background of soaring food prices and a soaring increase in the general price index.

Mr. Money

Does not the hon. Gentleman think it a little grotty to make this kind of political speech when the Labour Government did nothing for people over 80 and did not introduce the annual pensions review?

Mr. O'Malley

The hon. Gentleman is entering into debates of this type too late. We have just had a full debate on the National Insurance Bill. Is not the hon. Gentleman sorry that in opposition his party took the attitude which it did towards the National Superannuation Bill, which reorganised and brought up to dale the superannuation structure?

Mr. Patrick Cormack (Cannock)

Oh!

Mr. O'Malley

It is no good the hon. Gentleman making noises. I will take such noises from the Under-Secretary of State because he understood the scheme, but when other occupants of the Government Front Bench, who are alleged to know something about these matters, say that they did not understand it, I find it hard to believe that the hon. Member for Cannock (Mr. Cormack), who was not even a Member then, is competent to pass a judgment on the scheme.

Mr. Money

Does not the right hon. Gentleman believe that it is a major breakthrough for the Government to have achieved an annual review of pensions for the old-age pensioners and introduced pensions for people over 80 years of age?

Mr. O'Malley

The hon. Gentleman should realise that the breakthrough has been against the Government. His was the party which, when in office, refused, not once, but three times, to accept an annual review, and it was forced into introducing one only when inflation became so rampant as a result of its policies that it had no choice. I made absolutely clear the position of the Labour Party on the question of people over 80 years of age during our debates in 1970, and I recommend the hon. Gentleman to look at what I said then.

It is not only a case of soaring food prices and enormous increases in the price indexes, and not only have we had, taking the period 1970–72, a degree of inflation unprecedented almost in the twentieth century, but the increase in average earnings between September, 1971, and April, 1972, has been over 1 per cent. a month—about 1.03 or 1.04 per cent. Unless the man on average earnings feels that he will receive elementary justice on rents, housing, price levels, this kind of situation and pressures are bound to continue. Everybody, except a few speculators, suffers in an inflationary position, but in a situation of rampant inflation it is the poorest in the community who suffer most—and the poorest are those who depend on supplementary benefit.

What is sad about the situation is that as the hon. Gentleman announces these increases, which are being swallowed up day by day and week by week by price increases, they are matched by increases in the number of people who are on these basic minimum standards. There are now nearly 2,500,000 retirement pensioners, and we shall face a problem in this respect until we get a better scheme into the 1980s. Not only is there an increase in the total number of supplementary pensions for retirement pensioners, but the number of people receiving supplementary allowances has gone up by nearly 150,000. Indeed, nearly a million people receive supplementary allowances, and the number is growing year by year.

I turn to a number of specific points which have been dealt with by the hon. Gentleman. The Opposition are grateful that the Government have consolidated the rates payable to persons of 18 years of age and over. I raised this subject in the debate last year and this step will be welcomed.

Similarly, I raised from these benches last year the question of the long-term addition, and we note with approval that the sum has been increased from 50p to 60p, and from 75p to 85p for men and women over 80. Perhaps the hon. Gentleman would say whether that l0p covers the general movement of price levels and the value of money since the last time the disregard was increased.

Mr. Dean

The short answer is yes.

Mr. O'Malley

I am grateful to the hon. Gentleman.

The hon. Gentleman was right to say that one very useful feature of an annual review rather than a biennial review is that it removes the permanent grievance felt by retirement pensioners that their entitlement to supplementary benefit has been stolen from them because of the way in which the system has worked in the past under biennial rating. It has always been difficult to explain the situation to pensioners and it is therefore right that the situation has been changed.

The hon. Gentleman said that in assessing entitlement for heating allowance the Supplementary Benefits Commission would take into account only the old long-term additions of 50p and 75p rather than the 60p and 85p. I welcome anything that will help elderly people, but it becomes too complicated for a pensioner to understand if he is told that he will get 60p but will be treated as though he is getting only 50p. Each complication means that fewer people understand what they are getting and increases the administrative costs.

After the strong representations made from both sides of the House in the debate just before Christmas last year about the level of heating allowances, I am disappointed that the Government have been able to do so little. A far better and more appropriate solution would have been for heating allowances to be given automatically to elderly supplementary benefit recipients without taking into account the long-term addition. Large numbers of pensioners are able to afford only inadequate heating during the winter, as a result of which some die from hypothermia. While I welcome anything that helps the recipients of supplementary benefit, I feel that the Government have not done enough here and that there is a case for an automatic heating allowance, particularly for pensioners.

12.38 p.m.

Mr. Ernle Money (Ipswich)

It is a pity, in view of the enforced absence of the national Press tomorrow, that the hon. Member for Rotherham (Mr. O'Malley) has had to waste his party points on the barrenness of the empty benches behind him. I echo him in congratulating my hon. Friend on producing a feeling among pensioners that the measure will bring them something effective rather than something which will be eaten up by possible price increases.

Question put and agreed to.

Resolved,

That the Supplementary Benefit (Determination of Requirements) Regulations 1972, a draft of which was laid before this House on 4th July, be approved.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jopling.]

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