HC Deb 07 March 1973 vol 852 cc412-28
The Secretary of State for Social Services (Sir Keith Joseph)

With permission, Mr. Speaker, I should like to make a statement about increases in social security benefits and contributions. My right hon. Friend the Chancellor of the Exchequer has already announced the main increases, to take effect in the week beginning 1st October—that is, exactly 12 months after those of last year. In due course I shall be presenting a White Paper to the House together with a Bill and the Government Actuary's Report, and I shall be laying the associated statutory instruments.

I am circulating details of the new rates of benefits and contributions in the OFFICIAL REPORT. These, with copies of my statement, are available in the Vote Office.

As my right hon. Friend said yesterday, unemployment and sickness benefits, injury benefit and maternity allowance will go up by £1 married and 60p single. The Government feel that it is right to do more for the pensioner. There will, therefore, be increases of £1.60 in the married and £1 in the single rate of pensions and other long-term benefits, including invalidity pensions and widows' pensions, bringing them up to £12.50 for a married couple, to £12.75 where one of them is over 80 and to £13 where both of them are over 80, and to £7.75 a week for a single pensioner or £8.00 for a pensioner over 80. These increases reflect the Government's determination to concentrate resources on the long-term benefits as a continuing measure.

Attendance allowance at the day and night rate will go up from £5.40 to £6.20 and at the day or night rate from £3.60 to £4.15 a week.

The increases in the main scale rates of supplementary benefit will be the same as, and will operate from the same dates as, the increases in the related national insurance benefits. The increases of £1.60 for a married couple, and £1 for a single person, proposed for retirement pensioners will also go to supplementary pensioners and other supplementary beneficiaries who have qualified for the longterm addition—that is, to people under pension age who have received supplementary benefit for two years or more, with the exception of those required to register for work.

For these categories we also propose, since it has given rise to some confusion, to incorporate the long-term addition, of 60p for those under the age of 80 and 85p for those over 80, into new long-term scale rates. But, as at present, 50p of these new long-term rates, or 75p for those over the age of 80, will be regarded as covering any extra expenses, other than heating to which I shall refer later.

Thus a supplementary pensioner living alone who is now entitled to £7.15 a week plus rent and rates—because of course no one has been required to live on the national insurance pension alone —will become entitled from October to £8.15 a week plus rent and rates, or £8.40 a week plus rent and rates if he or she is over 80.

A supplementary pensioner couple now entitled to £11.25 per week plus rent and rates will become entitled to £12.85 a week plus rents and rates or £13.10 plus rent and rates if one of them is over 80. Extra benefits can be paid where there are special needs.

Other supplementary benefit scale rates will go up by £1 for a married couple and 60p for a person living alone, to match the increases in the short-term national insurance benefits. All children's scale rates will be increased proportionately to these latter figures.

The war and industrial injuries disablement pensions for 100 per cent. assessment will go up from £11.20 to £12.30. The standard war widow's pension will be increased from £8.80 to £10.10 and the industrial injuries widow's pension from £7.30 to £8.30.

We also propose certain selective improvements. The invalidity allowance which we introduced in 1971 and which goes with invalidity pension for the chronic sick, at one of three rates dependent upon the age at which incapacity started, will be raised by 40 per cent. in each case, from 35p to 50p, from 70p to £1 and from £1.15 to £1.60 a week respectively. This is a much more than proportionate improvement—in addition to the increase in the basic invalidity pension itself—and will go to the chronic sick and also to unemployable pensioners under the war pensions and industrial injuries schemes. The net cost will be £3 million in a full year.

I turn now to special heating needs for old people and others on supplementary benefit. As from 1st October extra heating allowances will be paid on top of the new rates of supplementary benefit, instead of being offset against the longterm addition. Thus, for the first time, supplementary benefit recipients will be entitled to the full amount of any additional heating allowance awarded because of their individual circumstances. The Supplementary Benefits Commission intends to apply this provision to all cases where a need for extra heating has been identified but offset in the past. This will be done as they come up for normal review. It is estimated that over 400,000 supplementary benefit recipients may benefit, at a cost in a full year of about £6 million.

Upratings of prescribed earnings levels for the family income supplement will in future be made in the general autumn uprating programme, instead of in April. We shall therefore include in the October uprating a small increase in the prescribed levels of income on top of those coming into force next month. Income levels will be raised by 50p a week for families with up to four children, and there will be higher increases, in steps of 50p, for families with five or more children. Further, the maximum weekly benefit will be increased from £5 to £6 for families with three or more children.

These increases in benefits mean that an extra £570 million in a full year will go to the pensioners, the sick, the disabled, the unemployed and other special groups. About £500 million will fall on the National Insurance Funds.

I now turn to contributions. As my right hon. Friend said yesterday, the weekly earnings limit up to which graduated contributions are paid will be raised from £48 to £54. The full rate of graduated contributions for employers and employees will be increased from 44 per cent. to 5 per cent. The flat rate contribution for employed men will be reduced by 4p. In the result, the man earning £54 a week will pay an extra 36p a week; the man on average earnings of £36 will pay 2p a week more than now; and the man earning £18 will pay 2p a week less than he does at present. The employer's share of the flat rate contribution will be increased by 14p for men and 12p for women. In this way more of the contribution increases will fall on employers. These changes will bring us rather closer to the contribution arrangements under the Social Security Bill, which is due to come into force, if Parliament agrees, in 1975.

The Treasury contribution will continue at about 18 per cent. of the other income from contributions.

When it becomes operative, this uprating means that, since the last uprating of the Labour Government in November 1969, pension will have increased by no less than 55 per cent. in money terms. Between November 1969 and January 1973 the Index of Retail Prices had gone up by 28.3 per cent. This is an uprating which redeems our promise of price protection for all the 11½ million people who will benefit from it, and, I would emphasise to the House, in conclusion, much more than redeems it for the elderly, the widows and the chronic sick among them.

Mr. John Silkin

We on this side of the House are glad that the Secretary of State has announced some increase in social security benefits. The Secretary of State will fully understand that his rather long and detailed statement needs a good deal of study, but there are one or two points that I should like to put to him today and to which I imagine he will be in a position to reply.

The first point concerns the heating allowances. We welcome the fact that heating allowances will no longer be offset against long-term addition, but this is a mere correction of an anomaly. Will the Secretary of State confirm that the Fox Report found not that 400,000—the figure which I think he quoted—pensioners were suffering from unacceptably low temperatures, but that 50 per cent were?

My second point concerns sickness and unemployment benefits. These, I think he will agree, lag behind the retirement pensioners' increase. In view of this fact, how can he claim that he is being fair to the long-term 250,000 who, through no fault of their own, are still unemployed?

The third point concerns the right hon. Gentleman's reference to family incomes supplement. As he knows, there has been no increase in family allowances since 1968 and we have faced an utter failure of the family income supplement to reach those in greatest need. In view of this —and if he does not know the answer he might ask the Prime Minister who is sitting next to him—when will he be in a position to honour the Prime Minister's commitment of 1st June 1970 to raise family allowances?

Sir K. Joseph

Certainly our anxiety is to reach those who, through lack of enough money, cannot provide sufficient heating for themselves, because either their housing or their health conditions, or both, make special heating necessary for them. It is our judgment that about 40 per cent. of supplementary pensioners living alone—the most vulnerable group —will benefit from this arrangement which I have announced today.

The right hon. Gentleman asked about the long-term unemployed. Governments of either party have provided an addition for the long-term unemployed and we do not propose to make a change in this. The family income supplement, while not reaching more than about half of those whom it is intended to reach, does reach those who are poorest, and therefore it is quite wrong to write it off as an utter failure. The reason we did not bring in any increase in family allowances was that we found when taking office that the previous Government had so lowered the tax threshold that it was impossible to increase family allowances plus claw-back and give any benefit whatsoever to the poor.

Dame Joan Vickers

As my right hon. Friend mentioned war widows, may I ask what has been done for war widows who were widowed before 1950?

Sir K. Joseph

I think this is a subject that affects my right hon. Friend the Chancellor of the Exchequer as well as myself. Nothing special is being done for them today.

Mr. McBride

Would not the right hon. Gentleman have another think? Does he not consider that retirement pensioners have a right to a pension of £10 for a single person and £16 for a married couple? Does he not think that the pensioners have a prior claim to extra money —a claim much greater than those who are shortly to enjoy tax remissions to which they are not entitled?

Sir K. Joseph

Once again, the Tory record in real increases for the pensioner is better than the Labour record, as it was between 1951 and 1964. We should all like to go faster. The difficulty is that increases in contributions tend to increase prices, and rising prices are the prime danger to pensioners.

Sir B. Rhys Williams

I congratulate my right hon. Friend on his very welcome statement. Is it intended for future years that 1st October shall become established as the date on which upratings take effect?

Sir K. Joseph

I should not like to bind Governments for the future to any precise date, except that it will be in the autumn.

Mr. Pardoe

Is the percentage increase in pension for a married couple as great as the percentage increase in average industrial earnings from October to October? Second, how many pensioners will still be below the poverty line and have to beg from the Supplementary Benefits Commission after 1st October?

Sir K. Joseph

We cannot tell what the rise in average earnings will be between October and October, in an expanding economy under stage 2. But it is our judgment that a significant real increase of buying power will be provided for pensioners. I am not one who exaggerates these things; on both previous upratings, I have spoken of the real improvement in the pension as marginal, and this time I call it a significant real improvement in prospect. As to the hon. Member's second point, just over a quarter of pensioners are drawing supplementary benefit.

Mrs Castle

Does the Secretary of State realise that, if he really wanted to do something about family poverty, he would move now to the position visualised under the tax credit scheme, that is, he would pay now a family allowance of £2 a week in respect of every child—payable, of course, to the mother—and offset that by withdrawing child tax allowances? Does he appreciate that, if he did that, it would cost £350 million, which he could save by withdrawing the tax reliefs to the rich?

Sir K. Joseph

I agree with the right hon. Lady that the initiative of my right hon. Friend the Chancellor in introducing the tax credit idea opens up new prospects of non-means-tested help to the poor and the hard pressed, but while this scheme is being considered by a Select Committee, and while there are wide implications which must be examined by the House, it would be wrong to make any precipitate movement. As for withdrawing child tax allowances, the effect on most wage earners with families would be a sharp fall in their take-home pay; this would need a great deal of consideration before it could be embarked upon.

Mrs. Kellett-Bowman

Will my right hon. Friend take it that many of us on this side, and, no doubt, some hon. Members opposite among those who are quiet, greatly appreciate his concentration of assistance on those needing longterm benefits, such as the elderly, the disabled and people needing the attendance allowance? Will he note also that we welcome, in particular, the additional heating allowance, which is so important in parts of the country such as that which I represent in the North-far more important, perhaps, than it is in places in the South?

Sir K. Joseph

I am grateful to my hon. Friend. I believe that directing particular help to those who have longterm needs will be considered a sensible step in social policy.

Following is the Information:

Proposed Weekly Rate Existing Rate
£ £
Standard rate of invalidity, widows' and retirement pensions, and widowed mother's allowances
Single Person 7.75 6.75
Wife or other adult dependant 4.75 4.15
Standard rate of unemployment and sickness benefits:
Single person 7.35 6.75
Wife or other adult dependant 4.55 4.15
Married woman (normal rate) 5.15 4.75
Persons under 18 4.05 3.70
Widow's allowance (first 26 weeks of widowhood) 10.85 9.45
Widow's basic pension 2.33 2.03
Invalidity allowance payable with invalidity pension, when incapacity began before age:
35 1.60 1.15
45 1.00 0.70
60 for men or 55 for women 0.50 0.35
Attendance allowance:
Higher rate 6.20 5.40
Lower rate 4.15 3.60
Old persons' pensions:
Wife 2.85 2.50
Any other person 4.65 4.05
Guardian's allowance 3.80 3.30
Child's special allowance and increases for children of widows, invalidity and retirement pensioners:
First child 3.80 3.30
Second child* 2.90 2.40
Any other child* 2.80 2.30
Increases for children of all other beneficiaries:
First child 2.30 2.10
Second child* 1.40 1.20
Any other child* 1.30 1.10
*Family allowances are payable for second and subsequent children.

Mr. Meacher

Will the Secretary of State confirm that, even after this proposed pension increase next autumn, the pension will still be worth only about 19 per cent. of national average earnings, compared with more than 21 per cent. in 1967—[Hon. Members: "Oh."]—I am quoting Government figures—and that by the end of the review period it will be worth considerably less than 18 per cent? Will he acknowledge that he has completely failed to give pensioners a fair share in rising living standards?

Sir K. Joseph

I do not quarrel with the general point that the ratio has fallen, but this is so far more because average earnings have risen much more under this Government than under Labour than for any other reason.

Several Hon. Members


Mr. Speaker

Order. This is becoming a debate.

Proposed Weekly Rate Existing Rate
£ £
Injury Benefit 10.10*† 9.50
Disability benefit (100 per cent, assessment) 12.80* 11.20
Unemployability supplement 7.75‡ 6.75
Special hardship allowance (maximum) 5.12 4.48
Constant attendance allowance (normal maximum) 5.15 4.50
Exceptionally severe disablement allowance 5.15 4.50
Industrial death benefit:
Widow's pension during first 26 weeks of widowhood 10.85 9.45
Widow's pension now payable at £7.30 rate 8.30 7.30
Widow's pension now payable at £2.03 rate 2.33 2.03
*Increases will also be made in the juvenile rates.
† Increases for adult dependants and children will be the same as those for unemployment and sickness benefit and maternity allowance—see National Insurance table.
‡ Invalidity allowances and increases for adult dependants and children will be the same as those for invalidity pensions—see National Insurance Table.
All ranks receive the same increases, officers rates being expressed in pounds per annum.
Proposed Weekly Rate Existing Rate
£ £
Disablement pension for private at 100 per cent, rate 12.80 11.20
Unemployability allowances:*
Personal allowance 8.40 7.35
Increase for wife or adult dependant 4.75 4.15
Comforts allowance:
Higher rate 2.20 1.70
Lower rate 1.10 0.85
Allowance for lowered standard of occupation (maximum) 5.12 4.48
Constant attendance allowance:†
Special maximum 10.30 9.00
Special intermediate 7.75 6.75
Normal maximum 5.15 4.50
Half and quarter day 2.60 2.25
Age allowance with assessments of:
40 and 50 per cent. 0.60 0.55
60 and 70 per cent. 0.90 0.80
80 and 90 per cent 1.30 1.15
100 per cent. 1.80 1.60
Exceptionally severe disablement allowance 5.15 4.50
Severe disablement occupational allowance 2.60 2.00
Clothing allowance:
Proposed Annual Rate
High 22 19
Intermediate 14 12
Low 8 7
*Invalidity allowances and increases for adult dependants and children will be the same as those for invalidity pensions—see National Insurance Table.
†The three-quarter day allowance (existing rate of £3.40) will be abolished: those receiving it will become entitled to the new normal maximum rate.

A further change is also proposed which will benefit some disablement pensioners. Increases for dependants with national insurance benefits and unemployability supplement will be paid in full, without deduction of dependency allowances paid with the disablement pension.

Proposed Weekly Rate Existing Rate
£ £
Widow's pension—private's widow:
Standard rate 10.10 8.80
Childless widow under 40 2.33 2.03
Rent allowance 3.90 3.40
Age allowance for elderly widows:
Between age 65 and 70 0.65 0.50
Over age 70 1.30 1.00
Widower's pension 10.10 8.80
Widow's children:
Eldest child 4.00 3.50
Other children with family allowances 3.50 3.00
Other children without family allowances 3.85 3.35
Motherless and fatherless children aged:
Under 15 Eldest child or other children with no family allowances 4.00 3.50
Over 15 5.50 5.00
Under 15 Other children with family allowances 5.00 4.50
Over 15 7.75 6.75
Adult orphans 7.75 6.75
Proposed Ordinary Weekly Rate Proposed Long Term Weekly Rate* Existing Rate
Ordinary scale £ £ £
Husband and wife 11.65 12.85 10.65
Person living alone 7.15 8.15 6.55
Any other person aged:
Not less than 18 5.70 6.60 5.20
Less than 18 but not less than 16 4.40 4.05
Less than 16 but not less than 13 3.70 3.40
Less than 13 but not less than 11 3.00 2.75
Less than 11 but not less than 5 2.45 2.25
Less than 5 2.05 1.90
Blind scale
Husband and wife:
If one of them is blind 12.90 14.10 11.90
If both of them are blind 13.70 14.90 12.70
Any other blind person aged:
Not less than 18 8.40 9.40 7.80
Less than 18 but not less than 16 5.30 4.95
Less than 16 but not less than 13 3.70 3.40
Less than 13 but not less than 11 3.00 2.75
Less than 11 but not less than 5 2.45 2.25
Less than 5 2.05 1.90
Non-householder rent allowance 0.80 0.70
Attendance requirements:
Higher rate 6.20 5.40
Lower rate 4.15 3.60
*These figures incorporate in each case the present "long-term addition" of 60p. Where the claimant or a dependant is aged 80 or over a further 25p is to be added to these long-term rates
(including NHS contributions but excluding Redundancy Fund contribution)
Insured Person
Present Rate Decrease Increase New Rate
Total Flat Rate Graduated Flat Rate Graduated Total
£ £ £ £ £ £
£15 1.04 0.04 0.02 0.96 0.06 1.02
£20 1.16 0.04 0.03 0.96 0.19 1.15
£30 1.64 0.04 0.05 0.96 0.69 1.65
£40 2.11 0.04 0.08 0.96 1.19 2.15
£50 2.47 0.04 0.22 0.96 1.69 2.65
£54 2.47 0.04 0.40 0.96 1.87 2.83
£15 1.18 0.04 0.01 0.84 0.31 1.15
£20 1.43 0.04 0.02 0.84 0.57 1.41
£30 1.90 0.04 0.05 0.84 1.07 1.91
£40 2.38 0.04 0.07 0.84 1.57 2.41
£50 2.73 0.04 0.22 0.84 2.07 2.91
£54 2.73 0.04 0.40 0.84 2.25 3.09
£15 0.87 0.04 0.02 0.79 0.06 0.85
£20 0.99 0.04 0.03 0.79 0.19 0.98
£30 1.47 0.04 0.05 0.79 0.69 1.48
£40 1.94 0.04 0.08 0.79 1.19 1.98
£50 2.30 0.04 0.22 0.79 1.69 2.48
£54 2.30 0.04 0.40 0.79 1.87 2.66
£15 1.05 0.04 0.01 0.71 0.31 1.02
£20 1.30 0.04 0.02 0.71 0.57 1.28
£30 1.77 0.04 0.05 0.71 1.07 1.78
£40 2.25 0.04 0.07 0.71 1.57 2.28
£50 2.60 0.04 0.22 0.71 2.07 2.78
£54 2.60 0.04 0.40 0.71 2.25 2.96
(including NHS contributions but excluding Redundancy Fund contribution)
Present Rate Increase New Rate
Total Flat Rate Graduated Flat Rate Graduated Total
£ £ £ £ £ £
£15 1.147 0.14 0.02 1.247 0.06 1.307
£20 1.267 0.14 0.03 1.247 0.19 1.437
£30 1.747 0.14 0.05 1.247 0.69 1.937
£40 2.217 0.14 0.08 1.247 1.19 2.437
£50 2.577 0.14 0.22 1.247 1.69 2.937
£54 2.577 0.14 0.40 1.247 1.87 3.117
£15 1.287 0.14 0.01 1.127 0.31 1.437
£20 1.537 0.14 0.02 1.127 0.57 1.697
£30 2.007 0.14 0.05 1.127 1.07 2.197
£40 2.487 0.14 0.07 1.127 1.57 2.697
£50 2.837 0.14 0.22 1.127 2.07 3.197
£54 2.837 0.14 0.40 1.127 2.25 3.377
£15 0.981 0.12 0.02 1.061 0.06 1.121
£20 1.101 012 0.03 1.061 0.19 1.251
£30 1.581 0.12 0.05 1.061 0.69 1.751
£40 2.051 0.12 0.08 1.061 1.19 2.251
£50 2.411 0.12 0.22 1.061 1.69 2.751
£54 2.411 0.12 0.40 1.061 1.87 2.931
£15 1.161 0.12 0.01 0.981 0.31 1.291
£20 1.411 0.12 0.02 0.981 0.57 1.551
£30 1.881 0.12 0.05 0.981 1.07 2.051
£40 2.361 0.12 0.07 0.981 1.57 2.551
£50 2.711 0.12 0.22 0.981 2.07 3.051
£54 2.711 0.12 0.40 0.981 2.25 3.231
Present Rate Increase New Rate
£ £ £
Men over 18 1.68 0.25 1.93
Women over 18 1.40 0.21 1.61
Present Rate Increase New Rate
£ £ £
Men over 18 1.33 0.19 1.52
Women over 18 1.04 0.15 1.19
  1. NEW MEMBER 11 words
  2. c428
Forward to