HC Deb 09 May 1978 vol 949 cc1145-56

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

11.18 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

The subject that I wish to bring before the House is not likely to stir public imagination. It concerns the problem of what happens to prisoners when they come out of Her Majesty's prisons and have to get back into the stream of everyday life.

I notice that a Minister from the Department of Health and Social Security is to reply to the debate. The matter also concerns the Home Office, and I am a little disappointed that a Home Office Minister is not at least sitting next to the Department of Health and Social Security Minister to listen to the debate.

Prisoners do not have a great deal of priority. Indeed, they have no priority inside prison. Their whole lives are geared to suffering the punishments imposed on them by the courts. I suggest that an injustice is being done to those who are suffering the penalty of a prison sentence.

Prisoners receive little pay. I am not suggesting that they should be paid a lot. They receive certain amounts, almost as pocket money, to enable them to buy a few things. When they come out of prison at the end of their sentences they have little money in their pockets. I believe that they are given £15 or £20 to pay for whatever is necessary during the first week or so of their release.

From the point of view of employment, the most important aspect is that released prisoners have no means of paying their national insurance contributions to cover the term in which they have been in prison. If, for example, they become of pensionable age, they are unable to claim the full pension because the contributions that they failed to pay while in prison are deducted. That does not apply to someone who is unemployed. The unemployed were given the benefit of what used to be called the "franking situation" in the old days. I do not know what it is termed now, because we do not have the card system that used to apply.

A man who is unemployed does not suffer the same penalty as someone who has been in prison. It seems that prisoners are being punished twice. They suffer a sentence of imprisonment, which may be justified in all the circumstances, and they are fined. They are fined heavily, because if they are in prison for a year or two years the whole of the contribution that would normally be paid by them and the employer is withheld. If that is aggregated, it may amount to a sizeable sum over a year or two years.

If the courts had wished to fine those whom they send to prison, presumably they would have done so. It is an involuntary fine that is imposed because of the rules and regulations of the Department of Health and Social Security. A situation is created that means that anyone who comes out of gaol is pushed into social security whether he likes it or not.

One of the aims or objections that we have in this civilised age is providing a prisoner with the hope that when he comes out he will be able to lead a normal life with his sentence put behind him. It is our aim that the ex-prisoner shall return into the normal stream of public activity, get a job and, having been punished, forget about the past. At the moment, the past follows him, because of Government regulations, which do not apply to those who happen to be unemployed.

The Minister will agree that even prisoners work. They work while in gaol whether they are making mailbags or improving the buildings and arrangements that make up an open prison. In so doing they save the Home Office a good deal of money. If it had to spend money employing outside builders to improve the amenities of the gaols it would be a costly business for the Home Office budget and for the Treasury.

Prisoners work, but they do not earn very much. What they are given for the work they do is not the sort of return that they would receive if they were doing the same sort of work outside. If a prisoner happens to be rich because he has ill-gotten gains, a private income, or a family who happen to have money, it makes no difference whether the Government pay his national insurance contribution. Indeed, when he comes out of gaol he can pay, either from his own or his family's resources, what has not been paid for him. That considerable distinction is imposed upon him by the Department.

A poor prisoner is unable to do that. If he is in gaol through circumstances that may be justified in terms of the penalty imposed upon him, but without resources, when he comes out he will have lost the ability to pay the insurance contributions for the period during which he was inside, whether it be one year, two years, or three years.

The Minister may say, as I think the Department says, that in those circumstances the prisoner can always fall back on social security. I suggest that that should not be imposed upon him. If a prisoner, on release, is to reorient himself to the normal activities of life, to become an ordinary member of the public, to take a job, to improve his position and to forget about the past, he should not have social security imposed upon him because he has no choice or chance of avoiding it.

If a man's national insurance contributions have not been paid for him, when he reaches pensionable age he has no chance of avoiding having to apply for social security to make up the difference between the basic pension and his reduced basic pension. He has to apply for social security to obtain the same advantage as anyone who has paid his national insurance contributions and completed his stamp, as we used to know it. If we want to create responsible citizens, those who have been in gaol must be given the same opportunities as those of us who are more fortunate—"But for the grace of God", and so on.

How much do we spend on social workers whose aim is to try to bring back into the community and to do a normal job the less fortunate and those who have been in gaol? It must be an expensive bill in the Minister's Department. Many voluntary organisations also spend a great deal of money on trying to help prisoners. Yet the Government are making it difficult for the individual who is released from prison to have the same opportunities as others.

A man on the dole is covered, however long he may be out of work. The Minister may say that others are not covered. I should like to know who they are. I know of no one who works who is not covered. I repeat, those who are in gaol actually work for Her Majesty's Government while they are inside.

We now have two pensions in our State system. The second pension started in April. Everyone is now paying for a second pension. It will not be of advantage to the population for 10 years or more. I do not suggest that it will be possible to cover prisoners for the second pension, because it is related to income, but the basic pension should be covered.

There are two ways in which that could be done. First, the Department could notionally provide a payment. It would be a charge on the Department. It would not be other than a paper transaction, any more than franking the card of someone who is unemployed is other than a paper transaction. The second method—this is where the Home Office must be involved—is for the Home Office to increase the amount of money that is paid to prisoners and for the increase to be handed over to the Minister's Department to make up for the amount of money that an ordinary employed person would pay by way of contributions.

I gather that the Department has certain objections to both those methods. I understand that there are administrative problems, but I do not accept that those problems need be conclusive. This is a simple matter of providing ordinary justice for prisoners. It is not a good thing that someone who has served his sentence should be disadvantaged as soon as he steps outside the prison doors. I do not believe that it is to the advantage of the community that such a person should be disadvantaged in the way that he is at present. He should not suffer two penalties. It is not to the advantage of the community that someone should come out of prison feeling that he is different from other people.

I am not asking that we should be soft in the administration of justice. I am not suggesting that those who are sent to prison are not committed there for justifiable reasons from the point of view of the need to maintain order in our society. All that I am proposing to the Minister is that the Government should recognise that those who go inside and suffer the punishment that is imposed on them should be able to come out of prison feeling that they have the same rights to social security, welfare and pension as are available to others, and that when they reach the age of 65 they should not suddenly find that everybody else receives the total amount of pension that is due to them while they, because they were in prison for a time, have their pension reduced by the amount that should have been paid while they were in gaol.

I ask the Minister to review the situation and to try to provide for those who at the moment are dealt with unfairly by the system. I ask the Minister to try to put the matter right.

11.33 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins)

The hon. Member for Rutland and Stamford (Mr. Lewis) argued that people who have been in prison should not lose their rights to national insurance benefits on that account. This is a matter within the responsibility of my Department, which explains why no Home Office Minister is present.

Perhaps I may begin—I want to be as helpful as I can to the hon. Gentleman on the points that he made—by saying that the basis of our national insurance scheme is the contributory principle. Employed and self-employed people are required to contribute to the scheme, and in return they receive cover for benefits in such contingencies as unemployment, sickness and retirement. For short-term benefits, such as unemployment benefit, a person's right depends on his contribution record in a recent income tax year. For long-term benefits, such as the basic retirement pension about which the hon. Gentleman is concerned, entitlement depends on his contribution over his working life.

Perhaps I should say straight away that a person undergoing imprisonment or detention in legal custody is not debarred entirely from paying contributions to protect his record for the purposes of basic pensions—widows' benefits and retirement pension. In general, of course, he has no liability for class 1 contributions as an employed earner. Prisoners are not employed earners in respect of any work performed in prison since there is no contract of service, and, in any case, as the hon. Gentleman will appreciate, earnings from such work are well below the limit of £17.50 a week at which liability for contributions arises. However, class 1 contributions are payable where a person is allowed to work outside prison for an outside employer under a contract of service, as may happen during the last six months of a long sentence.

The way in which people who are not in employment normally protect their basic pension rights is by the payment of voluntary class 3 contributions. Any prisoner or detainee whose financial resources are sufficient can arrange to pay these contributions to the extent that they are needed for the purposes of the basic pension.

It has always been recognised, however, that not many prisoners will be able to maintain their contributions whilst they are in prison. In the main, the best that they can hope to do is to pay the arrears when back at work following their release. There are extended time limits within which a prisoner can pay arrears of contributions. I assure the hon. Member that a prisoner does not lose his right to pay by virtue of his being in prison.

If a person has been imprisoned or detained in legal custody for a period of six months or longer, any class 3 contributions that he wishes to pay in respect of the period of detention are treated as paid on the date of payment provided that they are paid before the end of the sixth income tax year following that in which his imprisonment or detention ended. Contributions so paid will count for basic pension purposes. This contrasts favourably with the normal time limit for late payment of class 3 contributions, which is the end of the second tax year following the year in which the contributions were due. Advice to prisoners about avoiding a gap in their insurance record by paying voluntary contributions during imprisonment or after release is provided in prisons on an information card.

I understand from the Home Office that this card is displayed in prison cells. It explains that there is no liability for payment of contributions during detention and goes on to say that contributions may be paid voluntarily whilst in prison to protect benefits entitlement. The various ways in which payment may be made are set out. The card points out that there are time limits for the payment of arrears of contributions if these are to count for benefits and advises prisoners on their release to contact their local social security office, where they can discuss their position in insurance—at a private interview if desired.

So far as my Department is concerned, a statement of account for a tax year is issued automatically by our Newcastle records branch to a contributor whose contribution record for that year is insufficient for it to count towards basic long-term benefit. The statement shows the amount of voluntary contributions required to bring the contribution record up to the qualifying level for that year.

An explanatory leaflet which accompanies the statement draws attention to the fact that there are strict time limits within which arrears of contributions must be paid and invites attention to leaflet NI 48, which gives full details. The hon. Member suggested that the Home Office should increase prisoners' pay to cover this, presumably so that it can pay class 3 contributions on behalf of prisoners. This is not, of course, a matter for me, but the hon. Member put down a Question to this effect last month and was told in reply that it would not be right to give prisoners preferential treatment over other people whose circumstances preclude them from paying national insurance contributions.

As the hon. Member is aware, there are circumstances in which people do not pay contributions, but are credited with them so that their benefit rights are protected. The hon. Member mentioned examples of people who are sick or unemployed. He suggested that credits should be made available for the period of detention.

Suggestions to this effect have been made in the past. As long ago as June 1948, when contributions regulations under the National Insurance Act 1946 were under consideration, the National Insurance Advisory Committee considered a regulation under which persons in prison or detained in legal custody were excused from paying contributions but were allowed to pay contributions as non-employed persons if they wished to do so.

In its report the committee said Representations were also made to us that, since persons in prison will often not be able to pay contributions, some means should be found of maintaining their contribution record to prevent loss of benefit. We do not think that the award of credits in these circumstances would be justified …". In its own considerations of the position, the Department has never concluded that there are grounds for taking a contrary view. In a contributory scheme, rights to pensions and other benefits must be earned by the payment of contributions and the Government see no reason to change the long-held view that to make credits available to prisoners would create a privileged category of contributors. So far as gaps in their record are concerned, other categories of people are in much the same position as prisoners—for example, students over age 18 and some people who are abroad. They have to find the money for voluntary contributions if they wish to protect their record for pension purposes.

Mr. Kenneth Lewis

The important point is that students and others, including people abroad, can find the money. The parents of students find the money and those who are working abroad are probably earning abroad—and, if not paying tax, are probably doing better by working abroad. But there is no way in which a prisoner can find the money. That is the point of my argument.

Mr. Deakins

The hon. Gentleman must be aware of the fact that students may make up the money, even if they do not get parental contribution, by working afterwards, and they can pay the class 3 contributions on a voluntary basis within the period that I have specified, so that I do not think that is a great difference. But I emphasis that these people have to find money for voluntary contributions if they wish to protect their record for pension purposes. It would be unfair to make special arrangements for prisoners who would, in effect, be subsidised by other contributors.

It is relevant to mention at this point that as a result of the changes made in the contributions arrangements of the scheme in April 1975, the contribution conditions for benefits are easier for most people to satisfy than they used to be. There will now be many cases where short terms of imprisonment have little or no effect on benefit entitlement. For example, in the case of short-term benefits, such as sickness or unemployment benefits, where entitlement depends upon the amount of contributions in a single tax year, a person can be in prison for a substantial part of the year and still pay sufficient contributions in the rest of the year to protect his benefit rights. A benefit year for short-term benefits, including unemployment benefit, starts approximately nine months after the end of the relevant income tax year, so that a relatively short term of imprisonment recently completed might have no effect on entitlement to unemployment benefit or sickness benefit.

A prisoner released from detention this week, for example, and claiming unemployment benefit will depend for entitlement to benefit on the contributions he paid on his earnings during the 1976–1977 income tax year. If his earnings on which he paid contributions in that year amounted to £650 or more he would be entitled to flat-rate unemployment benefit at the rate of £17.50 a week, plus increases for any dependants. A reduced rate of benefit would be payable provided that the earnings on which he paid contributions in that year amounted to at least £325. Furthermore, to the extent that his earnings on which contributions were paid exceeded £650 he would normally qualify in addition for an earnings-related supplement to his unemployment benefit.

I should mention here that, should they be needed for benefit purposes, credits are available to a person in respect of periods of unemployment or incapacity after release. Pensions entitlement, however, depends upon a person's record over the contribution years of his working life, which for a man is normally the period of 49 contribution years from the age of 16 to the age of 65. For a person who reached pensionable age before 6th April 1975 a yearly average of 50 weekly contributions or credits was required if he was to qualify for retirement penson at the standard rate. If, therefore, he spent much more than a year in prison and did not pay class 3 contributions in respect of that period he would be unlikely to qualify for the standard rate of pension.

By contrast, people who reach pensionable age from 6th April 1975 onwards are able to qualify for pension on easier contribution conditions. They are required to have paid or been credited with contributions at a qualifying level in at least nine-tenths of the years of working life. Where working life is 49 years, a person can thus qualify for the standard rate of pension despite having neither paid nor been credited with contributions in as many as five years of that period, for example, through having been in prison.

As hon. Members will know, under the new pensions scheme which began last month, an additional, earnings-related pension may also be payable. In calculating the rate of this additional pension, the best 20 years' earnings from April 1978 are used. Young prisoners are unlikely, therefore, to lose any additional pension on account of their imprisonment.

It has been suggested that to fail to pay full national insurance benefits to a former prisoner is to penalise him twice over for the same offence. I cannot accept this. The imprisonment is certainly the punishment for the offence he committed; the lack of benefit is the consequence of not paying his national insurance contributions, in the same way that a failure to maintain premiums whilst in prison may lead to the loss of commercial insurance benefits.

These are, I am afraid, consequentials which a prisoner cannot reasonably expect to escape. But the Department, by providing a period of six years within which arrears of class 3 contributions may be paid, does make it possible for most prisoners who are concerned about their future pension position to safeguard their basic pension rights.

Finally, I must mention the supplementary benefits scheme. Any person who does not qualify for a national insurance benefit or whose resources, including any benefit, are insufficient for his needs is entitled to claim supplementary benefit. People newly released from prison often need this help. It is also available to former prisoners—as to other citizens— who, on retirement, find that their income is insufficient.

I suggest that in giving former prisoners a substantial period during which to pay arrears of contributions to protect their pension rights and in making supplementary benefit available to them on the same basis as to others whose incomes are insufficient for their needs, the Government are giving fair treatment to prisoners. To go further, by making additional concessions under the national insurance scheme which were at the expense of the contributors to that scheme would not be justified.

Question put and agreed to.

Adjourned accordingly at thirteen minutes to Twelve o'clock.