OTHER ADJUSTMENTS OF BENEFIT (Hansard, 14 February 1977)

§ Mr. David Price
I beg to move Amendment No. 5, in page 7, line 19, leave out from 'age' to 'and' in line 21.

§ Mr. Deputy Speaker
With this we may discuss the following amendments:

§ Mr. Price
The House will be relieved to know that as I spelt out the figures in Committee I shall not repeat them now. Where a person in this situation has underlying entitlement to non-contributory invalidity pension, he can switch to NCIP or—which is the same thing—have his benefit made up to the NCIP rate.
The point that I wish to make is that NCIP was fixed at 60 per cent. of CIP, that is, of the basic invalidity pension without regard to invalidity allowance. The person we are concerned with is over retirement age and may have been receiving invalidity allowance, at a maximum of £3.20 per week, for a considerable number of years and in addition be entitled to an additional component which he has earned. I am referring to the new scheme not yet in operation.
9.30 p.m.
At present, it appears to be the Government's intention that both these extras 153 will be taken into account—in other words, that an individual will not be allowed to retain them on top of the basic NCIP rate. That appears to most of us to be a little unfair. I am glad that the Minister for Social Security, in a letter to me, said that this will be considered before new regulations are made.
My second point is rather more general, and I therefore hope that it will be easier to follow. The amendments that were withdrawn in Committee—I admit that they would not have been wholly successful—attempted to ensure that anyone with entitlement to long-term invalidity benefit, whether contributory or non-contributory, should retain that entitlement at a minimum rate equal to NCIP without limit of age. That is the key point.
The Under-Secretary, in Committee, and the Minister, in his subsequent letter to me, claimed that I would have created more anomalies than I would have resolved because, so the argument went, principally the CIP beneficiary without underlying entitlement to NCIP is a very different animal, which is more akin to the retirement pensioner who falls sick after retiring.
The Minister said that if we had a few hundred million pounds the answer might lie in paying everyone, contributor and non-contributor alike, standard benefits with the contributor getting earnings-related benefit on top. I understand that has been DIG's position which echoes almost word for word the submission made by the National Fund for Research into Crippling Diseases to the Royal Commission on the Distribution of Incomes and Wealth. It is a view with which I would find it difficult to quarrel.
We may all be able to agree with this in the long term, but at present a few hundred million pounds are not available. We need not pursue that argument at the moment, although I take the view that ultimately this is probably the answer. I should like the Minister to consider building into the system a 60 per cent. minimum for people whose contributions are deficient because of ill health or disability, whether this has been continuous so as to give them entitlement to NCIP, or has been intermittent. In the latter group, clearly those with entitlement to CIP are easily identified. There 154 is a strong argument for extending to them this safety net immediately. Whether the cognate group that the Minister mentioned in his letter is as easy to pick out I would hesitate to say.
I do not think that the actual expenditure involved would be at all great. We should merely be setting ourselves along the right path, for in most instances what is not paid as of right at the low levels that we are considering would be made up by supplementary benefit.
I know that one of the Department's minor sorrows concerning NCIP has been the low take-up, because for so many it would not raise them above the supplementary benefit level. That is a point which the hon. Member for Feltham and Heston (Mr. Kerr) should take into account when he jeers from below the Gangway. It is a rather complex argument, and those of us who do not want to take up very much time wish to follow our notes rather carefully. It is a point that the hon. Gentleman might take in hand himself. His comments from a sedentary position might then have a little more relevance to the debate.
On these matters I am at one with the Supplementary Benefits Commission, and I quote Professor Donaldson's first annual report for the benefit of the hon. Member for Feltham and Heston: The ideal to which we would like to see policies directed would be a world in which large social groups such as … the disabled … rarely have to rely on a last-resort means-tested labour-intensive service for their incomes. I hope that the Under-Secretary of State will agree that the general tenor of my argument is right, and that he will be able to go further than the Minister's very constructive letter to me, which followed the rather complex points that I made on this clause, when it was Clause 7, in the Standing Committee, so that we can agree on the measures that can be introduced, possibly at another stage in the Bill, to make the clause more coherent and to deal with this rather complicated problem, which I realise that not every hon. Member present has followed in my argument, nor will follow in the Under-Secretary of State's argument.

§ Mr. Deakins
The hon. Member for Eastleigh (Mr. Price) has benefited from the exchange of correspondence since the 155 Committee stage, when we had some very involved arguments about this matter. But there are a couple of points that I want to put to him, because he was, I think, straining at the leash a little in seeking to get me to go beyond my right hon. Friend on this matter. My right hon. Friend and I try to work in harness, and I hope that we shall continue to do so.
One thing that we cannot deny is that there are some odd-looking comparisons between the respective benefit entitlements under the contributory and noncontributory schemes. Certain groups, such as NCIP recipients, over-80 pensioners, and the invalidity pensioners under pension age, have a guaranteed minimum rate, whereas others—the contributory retirement pensioners and the invalidity pensioner over pension age, who gets invalidity pension at his retirement pension rate, do not.
In proposing that contributory invalidity pensioners over pension age, whether entitled to NCIP or not, should be guaranteed benefit at the NCIP rate, not just during their incapacity but for the rest of their retirement, the hon. Gentleman has raised an issue that goes far wider than just invalidity pensioners and that would create far greater disparities in entitlements than those that the amendment seeks to redress.
The pensioner over pension age who already has NCIP is someone who was incapable of work for substantial periods before pension age. We accept that the invalidity pensioner over pension age, on the other hand, with no title to NCIP, and whom the amendment is designed to help, is typically the person without a long history of incapacity before pension age. Such a person is virtually indistinguishable either from the over-pension-age sickness beneficiary, or—and this is the important point—from the very many elderly people who, while perhaps not sick or disabled at pension age, become chronically so soon after retiring.
We cannot accept that it would be right to guarantee a minimum benefit rate for life to a group who, possibly more by accident than anything else, were drawing one benefit rather than another immediately after pension age without extending the same kind of benefit floor to all 156 those over pension age. That would be a very expensive proposition indeed.
There are a number of other anomalies. The hon. Gentleman did not talk about dependency increases but the amendments would be anomalous because the elderly invalidity pensioner with only additional component would get his increase, whereas the retirement pensioner or the elderly sickness beneficiary would not. Furthermore, when the invalidity pensioner retired or was deemed retired and received exactly the same amount of personal benefit, his entitlement to an increase would cease.
There are a number of anomalies. We have not talked much about cost, but we examined the matter in Committee. The cost of this intended amendment at present rates is about £500,000 a year. That is a relatively modest cost, but it needs to be critically examined. I do not think that the anomaly that the hon. Gentleman has explained would in practice present many difficulties.
The second part of the hon. Gentleman's proposals aims to ensure that people obtain the maximum advantage out of existing entitlements, and that is an important matter. However, it is a matter for regulations as to how far somebody can add together the various benefit entitlements. I wish to stress that under the present rules an invalidity pensioner over pension age who has NCIP can draw the balance of his NCIP with his contributory title subject to not exceeding the total rate of NCIP. Any constituent parts, such as the invalidity allowance, are taken into account in assessing whether a balance of NCIP is due.
I must tell the hon. Gentleman that there can be no question of making the kind of change he seeks in the last year or two of the present scheme. Under the new scheme, if the present rules continued, additional components would not be paid on top of NCIP. The point I wish to stress is that no decisions have been taken about the interaction of benefit entitlement under the new scheme. The question of such interaction of benefits, however, goes far wider than just NCIP. It would therefore not be right or sensible to make piecemeal decisions in this area. Obviously we shall consider the matter, and also we shall have to take account of the costs of various alternatives in dealing with this Equally, we 157 shall have to consider the relative position of contributory benefit and fall-back noncontributory benefit which can create anomalies.
We shall bear in mind the hon. Gentleman's arguments. I know that he is arguing for a 60 per cent. minimum entitlement. We shall examine the possibilities of the second part of his proposal, but I can make no promises. I hope that he will take what we have said in good heart, and will bear in mind that what we are seeking to do is to achieve a more socially just social security scheme and certainly a less complex scheme, which will be easier for people to understand.

§ Mr. David Price
I thank the Minister for that reply. I did not expect him to accept my amendment, but the exchanges of view have been useful. The important thing now is to look forward to the regulations that will be issued by the Department under the new system. I hope that the Minister will be able to take account of some of the anomalies which we have discussed.
In view of the assurances which have been given to the House, I beg to ask leave to withdraw the amendment.