§ Mr. Andrew F. Bennett (Stockport, North)
I suppose that we should be grateful for the fact that the Secretary of State looked in briefly at the beginning of the debate to check on the speech of the Minister for Social Security. He has not stopped to listen to any of the comments of Opposition Back Benchers. Perhaps the right hon. Gentleman is already off on his holiday. If he has not gone on holiday, perhaps he is lobbying hard to make sure that he is promoted to become Chancellor of the Exchequer, rather than pushed sideways to be the new Minister of Agriculture, Fisheries and Food.
The House is clearly in a mood of anticipation of the holiday. If, by the end of the holiday, the Secretary of State has been promoted to Chancellor, perhaps he will show a little more compassion and concern for the DHSS and his successor than the present Chancellor of the Exchequer has shown.
§ Mr. Buchan
Considering how little compassion the Secretary of State has shown for his Department while running it, that is a rather optimistic comment.
§ Mr. Bennett
I hope that if there are some Government changes we shall see much higher priority given to the DHSS and its expenditure needs.
It is ironic that the House is ready to go on its holidays when for many of those affected by these statutory instruments there is either no opportunity to go on holiday or holidays are a mixed blessing. One of my constituents has been out of work for about 18 months. His brother had suggested that as my constituent would not be able to go on holiday this year he would take the family with him to Blackpool, and pay. My constituent was pleased, but he had mixed feelings. He looked forward to going on holiday, but he knew that he would have to work his way through the minefield of Blackpool trying to avoid spending money. He knows that when one is on holiday at almost every turn there are pressures to spend money on oneself or one's children.
I can think of many other constituents who are dreading the summer holidays because their children cost them more when they are on holiday. First, they lose free school meals, which, for many children, are an essential part of a balanced diet. Certainly in Stockport, once the holidays start there is no provision for free school meals. There is thus an extra burden on the family.
In addition, there is the desire to take children out and to give them some sort of holiday. They know that many of their school friends are going on expensive holidays. It is difficult for a one-parent family to find a cheap holiday. It is difficult even to take children out for a day without forking out a lot of money. It is important for the House, when thinking in terms of its holiday, to remember that for many people affected by the orders holidays are something of a nightmare.
I was disappointed that the Minister did not mention the problems caused by the Civil Service dispute. Most of us are concerned that much of the work on the uprating ought to have started already. We have not been told whether it has been delayed by the dispute, whether the Government are in a position to bring the orders into effect in November or whether some of the upratings will be delayed because of the industrial action.
1376 The Minister has to turn his attention also to the attitude that will exist in the benefit offices. I know that in Stockport there is a great deal of bitterness about the dispute and the Government's attitude to it. The benefit officers feel that they have behaved extremely responsibly in trying to shield claimants from the impact of the dispute, but they also feel bitter about the way that the Government have treated them. It is only human nature that some will feel resentment in the next few weeks when carrying out the orders.
I plead with the officers to continue their policy of ensuring that claimants do not suffer and to make sure that if anything goes wrong in the offices no under-payments are made, and that if mistakes occur they should only be over-payments.
It is important that the Department should look at the problems in benefit offices. It is clear that officers are operating under considerable stress. There are many more claimants and some are claiming for the first time. They are upset, nervous and apprehensive and, because of the frustrations they suffer, many hit out at the first person they meet who seems even slightly bureaucratic. There is often short fuse in benefit offices and the staff are put under considerable strain.
Some of the staff are under strain because of their own low pay. Many receive low wages and have to pay out benefits that are considerably more than they earn. That causes much frustration. The low pay in many offices results in many of the counter staff being young. I do not criticise their competence—some are excellent—but a 58-year-old man who has been out of work for 18 months and is moving on to supplementary benefit finds it difficult to explain his situation to a 19-year-old who may look only 16 or 17.
In the same way, a mother who has been deserted by her husband and who is 35 or 40 and has three children finds it difficult to explain to someone who looks as though he has only just left school the difficulties of making ends meet and the problems of budgeting.
It is also difficult for some young benefit officers to imagine that claimants are hard pressed to make ends meet on the benefits that they receive. The officers are probably fairly well off, even on their low wages, because they do not have many commitments. It is a different world to try to live on the same income when one has considerable family commitments.
I hope that the Minister will tell us whether there will be any problem over the upratings and how quickly we can get back to normal business. Everyone has stressed that it is clear that the benefits will not go up by as much as inflation this year. The Minister may claim that it is possible that the Government have got their estimate of inflation right, but no one outside the Treasury believes that. Almost every economic indicator suggests that the rate of inflation will be higher than the Government forecast.
The Government have said that they will make good the shortfall in long-term benefits in November. That is not true. They will never make good the shortfall. They are not saying that in November they will pay, in a lump sum or in some other way, the money for the preceding 12 months that will not be paid out by the orders and regulations before us. The Government say that they will get the long-term rates back to what they should be in relation to the rate of inflation, but they are not making good the shortfall.
1377 I suggest that the Government have a duty to make good the money that will be lost. If the Government overshoot their forecast inflation rate by 1 per cent., we are talking of a benefit shortfall of about £25 in 12 months. If they undershoot by 2 per cent., about £50 will be involved.
It would be difficult and complicated to alter all the order books, but there is a simple way for the Government to make good the shortfall. They can check on 23 November whether they have forecast the inflation rate correctly. A week later they will pay the Christmas bonus to many beneficiaries. They can simply put into the Christmas bonus the shortfall that is then apparent, so that the bonus can be raised from £10 to £35, and when the shortfall is 2 per cent. it can be raised by £50. That would be a simple way of making sure that people do not go short for that 12 months and never catch up on the money that they have lost.
Each year the Christmas bonus is devalued by a little bit more. Having paid lip service so many times to the principle of the Christmas bonus, the Government must decide to put it up from £10 at least back to its real value, not just in the year before the next general election, but now. Most pensioners would be cynical in their attitude to the Government if the bonus were increased just before a general election.
I come now to the long-term unemployed. I welcome to a certain extent the proposal that those between 60 and 65 will be allowed to claim long-term supplementary benefit rates in certain circumstances. However, I have a suspicion that this is a con job to try to bring down unemployment.
I re-emphasise the point that I made in an intervention: how will the Government ensure that all those people who have stopped signing on will actually be able to claim the long-term benefit? I give as an example one of my constituents who feels very bitter. At present he cannot draw supplementary benefit because his wife is earning about £1 a week more than the short-term rate. As I understand it, he will never be allowed to claim the long-term rate, because he will not have been able to draw the short-term rate, yet the long-term rate is considerably more than the amount of money that his wife is earning. This is one of the major pitfalls. When individuals start to inquire about the system, they find that it is harsher than they had expected.
I have already raised with the Under-Secretary the question of the family income supplement regulations. A child of one of my constituents left school on 16 June, but because of the change in the supplementary benefit regulations and the lack of work he cannot draw benefit until 21 September. So, for a three-month period my constituent will have a substantial loss of income. The Under-Secretary of State said in a debate that she thought that the whole idea of family income supplement was that it covered a long period. But a letter to me, sent in her absence, made the point that the whole idea of the FIS was that it was to be a short-term benefit, because it would be ridiculous if a family got on to FIS for another year whenfor nine months they would not require it. The hon. Lady's letter was a total contradiction of the whole principle of the FIS benefit as I understand it.
We are now told that the Government will review supplementary benefit for school leavers. Both the supplementary Benefit for school leavers and the FIS regulations, as they affect school leavers, must be 1378 reviewed quickly, so that we can pass regulations in the House before Christmas and thus enable people to know where they stand for next year.
It is clear to me that there is much bitterness, which have an impact on educational standards next year. More and more young people will realise that it is important to leave school at Easter, if possible, rather than stay on for three or four weeks, because by doing so they may deny themselves benefits for the rest of the summer. If that is not put right, it will have a disastrous effect, persuading far too many young people to leave school and not complete their examination courses. I hope that these regulations will be reviewed quickly.
It is odd that in all the upratings with which we are dealing today we are not looking at the capital disregard.. One of the major anomalies that have emerged from the social security review is the decision to have a fixed amount of £2,000 and no tapering effect. The capital amount, involving the surrender of insurance policies and so on, is causing much hardship.
Again, the Government are carrying out a review. One has the feeling that they will carry out a review, and then a review of the review—anything to put off taking action. The simple thing to do would have been at least to include in the order an increase to take account of inflation over the 12 months while they are carrying out their review. What is really needed is a completely different approach. What we want is not the absolute cut-off but a return to a tapering system, even if it may be complicated to administer.
The Minister claimed credit for the Government for what was being done on child benefit. The truth is that support for the family and the child is steadily declining. As I have said in the House many times, there were many negotiations when the Labour Government were in power before the child benefit was launched. There was much pressure. An argument that was always put to us was "We are holding down the price of school meals. You must take it as a package—school meals and the child benefit." The present Government have encouraged local authorities to raise the charges for school meals and not to revise the means test for free school meals, so that while the Government are giving some extra money in child benefit they are taking much of it back in charges for school meals.
We are told that the Government are carrying out a review of the housing benefit and that discussions are going on between the Department of the Environment and the Department of Health and Social Security about a uniform housing allowance. I very much welcome that, but it must be made clear that it cannot be done, as in the last review, at no cost; it must be at some cost. It is anomalous that people must make up their minds whether to draw a rent and rate rebate or to apply for a small amount of supplementary benefit. There is also the question of those who are being taxed and are drawing supplementary benefit. The Government cannot get rid of such anomalies at no cost without causing increased hardship for some groups.
I share the particular concern for the elderly and the concessions for them. I particularly challenge the Government on the death grant. What will they do about it? Is the truth that they want to make what appears to be a generous gesture, saying that it will go up substantially, but, will then claw it back with a means test? That is what most people suspect, and I share the suspicion.
1379 The Government's problem is to decide who will be means-tested. Is the test to be applied to the person who has died or to the next of kin? Most people who have lobbied for an increase in the grant do not want it to be means tested in that way, because a great deal of bitterness would be caused if it were applied in either of those ways. I hope that the Government will not adopt that approach.
It is a sad reflection on the House that few hon. Members are present. Most of them are away on their holidays. We should be concerned about, and doing something to relieve, the lot of a small proportion of people who live in abject poverty.
§ Mr. Frank Dobson (Holborn and St. Pancras, South)
I agree with the concluding words of my hon. Friend the Member for Stockport, North (Mr. Bennett). This debate is about the relief of poverty. Today we have heard only one speech from the Conservative Back Benches, but when we are graced with the presence of more Government Back Benchers we often hear speeches suggesting that most of the benefits referred to in the statutory instruments are paid to people who are reasonably well off. That is not so.
We are talking about how our society deals with those who are poor, whether poor because they have retired from work, because they are sick or disabled, because they have the expense of bringing up children who are not working, because they themselves are in work but are badly paid, or—and more particularly under the present Government over recent years—because they are out of work. Those are all sources of impoverishment which reduce the incomes of families and individuals to levels far below those which are tolerable to most people in work. Moreover, virtually none of those benefits results in people out of work being as well off as people in work.
A variety of approaches has been adopted over the centuries to the relief of poverty. All of them have been grossly unsatisfactory—measures whereby those in power and those with wealth have attempted to ameliorate poverty merely to the extent that the poor would not revolt totally against those in charge of the economy. Now, certainly in the inner urban areas, people may well revolt in the old-fashioned way against those who are in charge of society and of the economy, because they see no other way of redressing their grievances.
In theory, despite four Acts of Parliament which have been introduced by the present Government, we are still running a type of sub-Beveridge system. I remind the House that the principle of Beveridge wasSecurity against want without a means test".It did not go on to say "if the country can afford it". It simply saidSecurity against want without a means test",on the assumption that society would gear itself to preventing people from falling into want, whatever the state of the economy.
Only the other day, in a plethora of articles about the Royal wedding, a woman journalist said that she was 18 at the time of the Queen's wedding in 1947. In that year, a year of great difficulty for the British economy, the old-age pension went up from 10 shillings to 24 shillings. Under the Labour Government of the time there was no question of whether the country could afford to raise the 1380 old-age pension to a reasonable level. The measure was pushed through, despite all the burdens that it must have put on workers at the time.
Now we have Beveridge in reverse. We have poverty and a means test. Moreover, we have not just one means test but a plethora of means tests, which make it exceedingly difficult to administer our social security and pension system. The administration of that system consumes vast sums and requires vast numbers of people who could be better employed on something else. Above all, it is a complicated means-testing system which deters people who are entitled to benefit from applying for it. As all hon. Members will be aware, when one asks experts on social security matters for explanations about who is entitled to what, where, if and how, they find it difficult to explain. The staff in the social security offices also find it difficult to explain. So the ordinary man and woman in the street, particularly those who most need social security, are at a loss to know whether they are entitled to benefits. In fact, the take-up rate for many of the benefits to which people are entitled is around 70 per cent., and in a few cases above 80 per cent. That means, at best, that one in five of those who are entitled to many of the benefits that we are debating do not apply because they either do not know about them or are deterred by the complexities of the means test system. Moreover, some people still have a sense of humiliation about means testing, and thus do not take up the benefits to which the House decided that they are entitled.
Last year, the Strathclyde regional council organised a campaign—admittedly, it was a fairly crude campaign; it had to be crude, because it was done in a hurry—to publicise benefits. As a result, more than an extra £1 million flowed into the pockets of many people in that area who had always been entitled to the money. If they received £1 million that year, they should have received £1 million in the previous year and in the year before that.
When the campaign was brought to the attention of the House, the response from the right hon. Member for Daventry (Mr. Prentice), formerly the right hon. Member for Newham, North-East, was to denounce the activities of the Strathclyde council in promoting the take—up as being politically motivated. I find it extraordinary that anyone who sits on these Benches and who has been elected to this place should denounce anyone for having political motives. The campaign in Strathclyde was politically motivated in that the people on the council there believe that politics is about the distribution of wealth. They were determined to see that some of the country's wealth was distributed to people living in their region who were entitled to the money, although the Government had not drawn their attention to it.
Following that, though not as a matter of personal pride, I wrote to the Association of Metropolitan Authorities to ask whether its authorities would consider a Strathclyde-type campaign. I received a favourable response. That was not surprising because, being politically motivated and controlled by the Labour Party, the association was likely to be in favour of such a proposal. I also wrote to the Association of County Councils, which replied that it would have no truck with such a campaign. That, too, was not unexpected, because the ACC is politically motivated and is controlled by the Conservative Party. It had no interest, following the line 1381 that had been laid down by the right hon. Member for Daventry, in promoting any increase in the take-up of benefits.
Subsequently, the Labour Party established a working party to formulate a leaflet which would be as uncomplicated as possible without misleading people. Those of us who were involved in that project found it a difficult task. The document has been produced and it is being circulated to all Labour-controlled local authorities. I understand that the AMA will promote its use in its areas.
Once that project was completed, the hon. Member for Wallasey (Mrs. Chalker), the Under-Secretary of State, decided that it was a good idea after all, and that campaigns to promote the take-up of benefits were worth while and should be assisted. Apparently, they were no longer politically motivated and to be denounced. As suggested in our document, she undertook that the DHSS and other offices should collaborate as much as possible with any local authorities which were promoting the take-up. We welcome the hon. Lady's conversion.
May I point out, however, that it is not the job of local authorities to promote the take-up of central Government benefits. It is the Government's job. The authorities have been driven to do it only because the Government have failed in their duty to promote the take-up of benefits. It is noteworthy that last year they spent less on the promotion of take-up of benefit than they have spent even on the television campaign to advertise the so-called right to buy council houses. The Government spent about £1 million on that campaign. They spent less than £1 million on promoting the take-up of benefits. That is a shameful record. The Government should get their priorities right. However, as they were elected on the wrong priorities, I suppose that we cannot expect a change of direction.
The main problem for the Government is the massive increase in unemployment. That has absorbed vast sums of money which no doubt the Government had hoped to spend elsewhere. That, I assume, was the hope of those in the Government who believed that their creation of 3 million unemployed was an accident. I cannot imagine what those who deliberately set out to create 3 million unemployed thought would happen about benefits. I suspect that they had hoped to curtail and reduce the benefit even further. It entirely shot through the old rubbish that has been peddled for years by Conservative Members—and occasionally by Labour Members—that the golden reason for not setting unemployment benefit at a reasonable level was that it would take away the incentive to work. It would need an enormous reduction in the level of unemployment benefit to create an incentive that would find jobs for our 3 million unemployed, who grossly exceed the number of vacancies available.
What does the Minister think the impact of the Government's policies, including these statutory instruments, will have on an inhabitant in my central London constituency? Let us take the example of a building worker. Although many houses need to be built, hospitals to be rehabilitated, schools to be improved and even private industrial premises to be renovated, he may be out of work. He will be reliant on unemployment benefit, which has not risen as much as it should have done. He may have children at school. They would be educated in the ILEA schools—at least, I hope so. That authority wished not to increase—as the Government wished—but to reduce the price of school meals from 35p to 25p. It 1382 thought that to be a socially useful and responsible action that would help to ameliorate the impact of poverty in London.
The ILEA has been advised by lawyers that if it goes ahead with that perfectly sensible and reasonable proposal the councillors involved will stand a good chance of having to meet the cost of it themselves because of the activities of the district auditor and the lunatic interpretation that the courts put on the law. Therefore, there will be no reduction in the price of school meals.
A child above the normal school leaving age, but continuing in education in an ILEA school, receives a relatively generous grant which helps to provde clothing. There is enormous pressure on the ILEA not to provide that grant, even though it helps to ameliorate poverty It helps those from working-class backgrounds to stay on at school. The Government regard that expenditure as optional. They have reduced almost to nothing the central Government grant to the ILEA. If the child stays at school, if his parents are responsible and prevent him from staying out all night, try to keep him at his work, make him do his homework and take a serious interest in school, and the child gains O-levels, what does he then face? Children seeking places in higher education will not find them as easily as they could in the past because the Government, as part of their general social policies, are reducing the number of university places. Yet the number of children wishing to take those places is increasing.
If a child leaves school and does not go on to higher education, although he may have done everything asked for by his parents and teachers and gained the best qualifications that could be expected, the chances are that he will not find work. In London this year, as has happened in other areas already, there is a 50–50 chance. that he will be out of work.
Under the mean-minded set of scavengers sitting on the Government Front Bench, if a child stays on at school to complete his exams but has not finished them before the end of the term, he will not be entitled to benefit until the end of the summer holiday. That mean-minded approach is bearing down on tens of thousands of working-class children throughout Britain, and especially on those in the inner city areas. The child's family will still be faced with massive increases in prices. It does not matter whether one uses the retail price index, the tax and prices index, or any other index; the fact is that prices are rising.
Rents and rates are being driven up in the London area because of the cuts during the past year of more than £400 million. There is constant pressure to reduce other aspects of social services provided by local authorities or area health authorities that, to some extent, ameliorate the impact of the bad state of the economy on the poor in our inner city.
We are facing pressure to increase charges for old people attending day centres. If the building worker's widowed mother wants to go on holiday, she can, I am glad to say, because that is subsidised in Camden. But pressure will come from the Government and all sorts of nutty ratepayers' associations to reduce such benefits that are being provided at a local level in an effort to ensure, in the words of Beveridge,security against want without a means test.Some of the Labour-controlled local authorities want to ensure that those in their areas are secure against want. 1383 They do not want the benefits from central or local Government diminished because of Government policies. We must continue to press ahead with that help.
§ Mr. Mike Thomas (Newcastle upon Tyne, East)
Does the hon. Gentleman consider the ratepayers' associations in his constituency more nutty than Mr. Ken Livingstone?
§ Mr. Dobson
I do not regard either as likely to turn their coats, as the hon. Gentleman did.
My hon. Friend the Member for Stockport, North (Mr. Bennett) referred to the difficult conditions and circumstances in which benefit offices' staff try to do their job. Not long after I was elected to the House, I wrote to the Minister to draw her attention to the appalling conditions that prevail for both staff and claimants in the Tavistock Square office of the DHSS. The answer was not that the Department was carrying out a review. It had gone further than that. It had prepared proposals to improve the circumstances in that office so that the staff could do their job properly and the claimants apply for their entitlements in decent circumstances. Unfortunately, those proposals have suffered under the Government's cuts. To the best of my knowledge, they will not be put into effect, despite blandishments from other Members of Parliament whose constituents have to deal with that office.
We are faced with having to support these orders because they are minor improvements in the current rates of benefit. Those rates are inadequate. The way in which we have dealt with those not working and not receiving a good wage has been inadequate for many years. It is becoming more inadequate. Unlike practically any other organisation in Britain that is involved with social security or disbursement of benefits to the poor, the Government appear to have turned their back on the twentieth century and are opting out and refusing to accept what has been accepted since Beveridge—that we should do our level best to protect the worst-off in our society from all the ills that strike them, even ills such as the Chancellor of the Exchequer and the Secretary of State for Industry.
The Government are different from any preceding Tory Government this century. Neville Chamberlain damaged his reputation at Munich, but in many ways he sought in his own benighted way to extend the level of health, social security and housing benefits. He did not do it in a way that my predecessors supported at the time. However, he saw the enhancement of such benefits as an extension of the protection given to ordinary people. The Government are unique in the twentieth century in seeking to undermine, cut down, take away, withdraw and diminish the protection for ordinary people.
§ Mr. Allen McKay (Penistone)
I intervene in my hon. Friend's speech to draw attention to one of my constituents. There is an ironic twist to the tale. The lady concerned is a genteel person who owns her own bungalow from better days. She is in receipt of a mobility allowance. She is suffering because she has to pay tax on the allowance. It seems that she will have to sell her 27-year old car. She has sold all the items that her mother gave her many years ago. She has had to do so to keep the benefits going. This lady used to vote Conservative. She was one of the greatest charity organisers in the area. She brought hundreds of thousands of pounds into Conservative funds, 1384 but she has now decided that she was wrong throughout her earlier life. She is now a friend of Arthur Scargill and she votes for the Labour Party.
§ Mr. Dobson
I have nothing to add to my hon. Friend's intervention. The story that he has recounted epitomises what has happened in our society in the past two and a half years. There has been a recognition that the Government have ceased to function within the parameters normally accepted in British politics in the twentieth century. We can almost expect the Government to revivify the workhouse as their next step in trying to tread down the poor.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
This has been a wide-ranging debate. The House, if I can so describe a small group of tightly knit, politically motivated hon. Members, will be pleased to know that I do not intend to detain it for too long.
I am sorry that my hon. Friend the Member for Barking (Miss Richardson) was not able to participate in the debate. I note that my hon. Friend has left the Chamber. Privy Councillors tend to insist on using their rights, which are well entrenched. I understand that my hon. Friend had to leave for an important engagement. I know that she wanted to make a constituency contribution.
These measures could not have been introduced before the enactment of the Social Security Bill, which received its Second Reading on 23 February. That was the day after the Royal engagement had been announced. I remember saying that the Government should consider declaring an amnesty in their vendetta against those in receipt of social security benefits. Unfortunately, we have come full circle and there has been no easing of the vendetta.
We are talking about £27 billion. That is a significant sum, to say the least. We would not dream of voting against any of the orders because their effect is to increase benefits. However, benefits that fall within the main range of social security provision are being increased by 1p in the pound less than they should be because of last year's so-called over-provision that made the benefits last November too generous.
The loss of 1p in the pound is not significant to Members of Parliament or the members of the Press Gallery who may be recording our proceedings. However, it means the loss of 40p a week for a married couple, which is near enough £30 a year. It amounts to a television licence and it could pay a gas or electricity bill. It has that significance to those in receipt of benefits. It should not be dismissed out of hand. I hope that we shall never again have to cut 1p in the pound from pension and other benefits.
The Minister made an interesting remark when he responded to an intervention from the hon. Member for Isle of Ely (Mr. Freud). He seemed to suggest that if fewer people collected benefits there would be more money for the beneficiaries. I saw the face of the Under-Secretary of State when she heard her hon. Friend's words. The Minister could not see her expression. She seemed aghast at what he had said. I suspect that even those in the Box took the same view. I shall be interested to read the relevant passage in Hansard. If the Minister is still a member of the Government next year, we shall endeavour to discover what he meant by his response to the hon. Member for Isle of Ely when we consider next year's uprating orders.
1385 These measures are accompanied by a report by the Government Actuary, who has taken account of the cost to the national insurance fund of the increases in benefits that will take place in November. The report was prepared in June. The Government Actuary has estimated that for 1981–82 the national insurance fund will be £690 million in deficit.
Last November we received a report from the Government Actuary to accompany the contribution re-rating order. He then estimated a surplus of £39 million for the national insurance fund for 1981–82. The position has changed since last November. There has been a change of about £660 million in only six months. The Actuary states in his report that if there is a change in the number of unemployed and the total becomes 100,000 more or 100,000 fewer, the national insurance fund deficit will be £200 million greater or smaller depending on whether the movement is up or down.
If the Government Actuary's forecast has changed from a surplus of £39 million to a deficit of about £619 million over six or seven months, that amounts to an annualised change of about £1,200 million. Am I right in drawing the conclusion that that implies an underlying change in unemployment of 600,000? Is that a fair assumption? I am not trying to juggle with statistics. I am not seeking to make a cheap point. I genuinely want to know whether that is a correct assumption to be drawn from the seventh and ninth paragraphs of the Actuary's report.
If the Minister cannot make a detailed reply when she replies, I shall be grateful if she would write to me, preferably early in the recess. Her reply would assist me in preparing my speeches during the 11-week recess. My hon. Friend the Member for Stockport, North (Mr. Bennett) referred to the recess as a holiday. Parliamentary recesses are not holidays. As hon. Members are aware, that is not said enough.
§ Mr. Ennals
Is it not possible that, rather than a wrong or changed estimate for unemployment, the Government are expecting more people to be sick than before? By "sick", I mean sick of the Government.
§ Mr. Rooker
I raised the matter in the context of the unemployed only because the Government Actuary's report refers specifically to unemployed persons in paragraph 7(i).
Many Opposition Members have pointed out that the Government's forecast for inflation is incorrect. My hon. Friends have read various forecasts published in the press and by many forecasting teams. I understand that there is a list in the Library containing about a dozen forecasts for the last quarter of this year. Apart from the Treasury's forecast, only one forecast agreed with the figure of 10 per cent. However, do not wish to argue about the degree to which the forecast may be incorrect.
If there is a shortfall in November, we shall not discover it until January, in the final retail price index. I accept that the December figure for the retail price index is provisional. Anything between ¾ per cent. and 1 per cent. would represent a significant shortfall. The Government are committed to making such a shortfall good next November. If the Government make an announcement next November or at the time of the Budget about pension increases for November 1982 that represents inflation plus the shortfall, and if the Chancellor of the Exchequer—it is a big "if'—only increases personal income tax 1386 allowances in the next Budget in line with inflation, under the indexing provisions attached to my name and that of Mrs. Wise, next November, the single person's pension, without any other income, will be above the personal tax allowance and the tolerance level for the Inland Revenue's collection mechanism.
In other words, the single person's pension would be taxable, in its own right, only for those women aged between 60 and 64. A woman aged over 65 has a higher tax allowance. The Government must be making such decisions because they have announced that they will make good any shortfall next November.
One may argue about the number of benefits to which that promise applies. Following our Committee stage, the Minister provided me with a list. It includes the old-age pension—and that is my basic point. The other day I received an abusive anonymous letter from a widow. The letter was postmarked Wolverhampton and concerned a report of a speech that I had made a couple of weeks ago on the Report stage of the Finance Bill. I devoted 95 per cent. of the speech to the problems of women aged between 60 and 64 and I alluded to the fact that widows were affected in other ways. She said that I should not keep talking about widows because there were single people who looked after their parents, who did not get married, and who had pensions in their own rights. She said that they were affected to the same extent as, or more than, widows. Unfortunately, I am unable to send her a copy of the speech that I made that night, but the fact is that only women will be affected.
If the order is accepted it will trigger off the November pension increase. Those women aged this year between 60 and 64 who receive a graduated pension of 33p per week or more will be subject to a tax liability that ranges from Op to 57p per week. They are in the ludicrous position that it pays them not to collect a small amount of graduated pension. It also pays them to try to defer payment, but that again would lead to problems with the Inland Revenue.
If the Government's pledge, which has been repeated today from the Dispatch Box, is carried out next year and if the Government only index tax allowances in line with inflation, a single person's pension will become taxable in its own right for those women. Indeed, I fail to see how the Government can renege on indexing tax allowances next year. Perhaps everything is part of a Government plan, which was set in motion when the Conservative Party came into power.
On 15 July, during the debate on the Finance Bill it referred to two questions. I refer to Hansard, Vol. 8, c. 1203. One was from the hon. Member for Bedford (Mr. Skeet) and was dated 18 January 1980. The other followed that up and was tabled in January 1981. They showed that the Government had planned from April 1982, within the period of the pension increase, to put on to the national insurance books—basically, retirement pension books—amounts of tax that are collectable, and therefore: deductible directly from the retirement pension.
There may be no problem for the Government if they make the basic State retirement pension taxable in its own right and if they wish to change the system of collecting taxes from pensioners. Do the Government intend to do that? I do not wish to criticise the Minister, but the Under-Secretary of State has been doing the job a little longer. I am sure that the Under-Secretary understands my point. Given the legal requirement to index tax allowances and the pledge given, do the Government intend to make those 1387 single pensions taxable from next year in their own right? We do not want any waffle from the Treasury about a small amount of tax being involved. The amount will fall above the assessing tolerance, subject to the amount of shortfall. It is clear that there will probably be a shortfall of between 1 and 2 per cent. That will be enough to do the job.
I hope that the Under-Secretary will not say that she cannot forecast the Chancellor of the Exchequer's Budget. The chances are that it will be the Secretary of State's Budget. He is supposed to be the Treasury's favourite to come out of the woodwork to replace the Chancellor. As a Chancellor in the DHSS he has done a fair job. If the interaction of the tax and social security systems has now got to the raw meat of the basic retirement pension, that can only be regarded as invidious.
As the hon. Member for Kensington (Sir B. Rhys Williams) is aware, it is ludicrous that those who receive supplementary benefit following a means test should, in many cases, pay income tax. If such a position is reached, the system will collapse not perhaps under its own weight but under the legitimate pressure of 9 million pensioners.
We shall not need the remarks of those outside the House who seek to encourage the erosion of parliamentary democracy by frustrating the Government's actions. It is the job of the Opposition to frustrate the Government by the legitimate parliamentary means of voting, debating, delaying and procedure. We shall not need any messages from outside, regardless of where they come from. If the circumstances that I have described come to pass, there will be enormous pressure from pensioners. Only a few pensioners, and only women, will be affected. Nevertheless, other pensioners will regard this issue as the thin end of the wedge. I hope that we shall be given a clear statement that such a position will not come to pass.
§ Sir Brandon Rhys Williams
I hesitate to challenge the hon. Gentleman, because he has made himself such an expert in this tangled subject. However, does not he agree that, regardless of party, our priority should be to recognise that the net benefit given to those whom we seek to help is the important element? Whether they are brought into the tax system or are, in some way, exempted from tax is not the point. We have to keep sight of the amount they have to spend at the end of all transactions with which they are concerned.
§ Mr. Rooker
The hon. Gentleman is both correct and incorrect. I take the view—I do not think that it is disputed on the Labour Benches—that the tax base should be as wide as possible. It has been eroded over the years, and that presents considerable problems for the Treasury in raising revenue. In making it as wide as possible, it is legitimate to claim that all sources of income ought to be taken into the computation of the total income for tax purposes, and then to ensure that the threshold, the tax barrier or the personal allowance is high enough to keep out of the tax net those people whose income is below what might be called the poverty line. That has not been done, simply because of the interaction of the tax and supplementary benefits systems.
That position is indefensible from any part of the House. It will require a massive job to put it right, and the longer we leave it the worse it will get. The hon. Gentleman was right in the point that he made, but I cannot 1388 accept his implication that we look at the net figure and forget how it is arrived at. It is because the system is so complicated that many people miss the benefits to which they are legitimately entitled.
It should not be the role of a political party to get the local authorities to issue advice to people who are entitled to benefit. That is an executive function of the Government. It should not be left to the Labour Party to do it. But, following the Government's negative initial reaction to the experiment by the local authority in Strathclyde, we considered whether there was any way in which we could help to make the information available, mainly through Labour-controlled authorities, on the assumption that Conservative-controlled authorities would not wish to be involved in such a campaign. But if any other local authorities wish to become involved the Association of Metropolitan Authorities and the other local authority bodies will have all the necessary information.
Our aim is to ensure that every person, regardless of where he lives and regardless of the political control in his local authority, should get the benefits that this House says he should receive. We are talking here today about benefits affecting millions of people. It is surely the role of hon. Members to ensure that we do everything we can to ensure that those who are entitled to benefits receive them.
My last point concerns the regulations dealing with conditions of entitlement and the announcement about two weeks ago in accordance with which the rules are being changed as affecting men over 60. I say "men" over 60. The press reports and the Minister's statement mentioned "people" over 60 who had been unemployed for more than a year, and who wished to cease being registered as unemployed in order to obtain the long-term rate of supplementary benefit. But we are talking only about men. We are not talking about women, because at 60 the women will in any case be retired. The new rule, therefore, does not apply to women; it applies only to men.
I should like to ask one or two questions concerning the figures. My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) has already asked about the figures and I hope that the Minister will provide an answer. How many people are expected to benefit? The Government's press release of 20 July did not state the number. As background briefing, the figure of 45,000 was given. The Government said that the scheme would cost £21 million, and as the increase in benefit is in general about £9.60 a week it is easy to work out that about 45,000 people will benefit. That is the expected take-up nationally.
I do not know what information the Government have put out through the regional offices of the DHSS, but on 21 July the following statement appeared in the Birmingham Evening Mail:A Midland spokesman for the Department of Health and Social Security today said the scheme would apply to about 30,000 people in the region".I know that that is wrong but I want the Minister to stand up and say that it is wrong. If the Government expect about 45,000 people nationally to benefit, even I have to admit that unemployment in the West Midlands, relative to the rest of the country, has not been bad enough to warrant a figure of 30,000 people in that region alone.
I suspect that the Government want to make the best case they can for the new benefit when they are addressing the people to whom, in effect, they are saying "You have been unemployed for over a year, you are most unlikely 1389 ever to get another job, so why not call it a day? We will take you off the unemployment register. You will not have to bother to sign on regularly, and we will pay you another £9.60 a week."
Obviously, the Government want to make the best they can of their scheme, with a reduction in the number of registered unemployed and an increase in public expenditure. That is understandable, but the Government have not spelt out that if a man is not eligible for supplementary benefit he will not get it anyway. If a man's wife has a part-time job, and is earning about £28 or £30 a week, even that can be enough to prevent a man from being able to claim the benefit.
That is the position now for many unemployed men who cannot claim benefit. There are 300,000 registered unemployed who do not get a penny piece from the State, in either unemployment benefit or supplementary benefit. They will not be able to benefit from the new scheme. But, because the Government have not been willing to explain in detail the hurdles that have to be overcome in order to get the benefit, I suspect that the scheme has been misunderstood by the regional office of the DHSS in the West Midlands or by the journalist who wrote the story in the Birmingham Evening Mail.
§ Mr. Andrew F. Bennett
Will my hon. Friend agree that one of the dangers is that the Government are encouraging people not to sign on as unemployed but are not intending to give those people any benefit? The result will be that the Government will gain the advantage of appearing to have reduced the unemployment figures, and it will cost them. nothing. People will stop signing on, they will go to the DHSS office to try to get their benefit, and only then will they be told that, because of the words in small print, they are not qualified to receive it.
§ Mr. Rooker
I hope that the Government will ensure that that will rot happen. The Government must have some idea of the number of people involved. They must know the number of registered unemployed over the age of 60 who have been unemployed for over a year. Being registered, they are on the computer of the Manpower Services Commission. I suspect that it is known from the computer that their entitlement to unemployment benefit has been exhausted. It should not be beyond the wit of the Government to marry the two computers and to feed in a new programme. The information is known.
It should not be necessary for people to fall into the trap that my hon. Friend has just mentioned. The Government know these things several months in advance. The Civil Service dispute is over. One assumes that the computers will start buzzing again next week and that we shall get some sense back into the system. Something new will be added to the work load on top of the existing system. We must search for, locate and find those people, so that they do not make the mistake of falling into the trap. I hope that the Government do not go back on their announced scheme, and that there will be a new leaflet at local offices. We need a commitment that the scheme will draw attention to those who can benefit and protect those who may claim erroneously.
The Government claim that the scheme makes people eligible for long-term relief, but they are not giving early retirement. The unemployed, long-term or otherwise, are not getting early retirement. The Government claim that some of the men who have been long-term unemployed 1390 can get the long-term rate and that many people have been asking for that for a while. I hope that the Minister will not rely on the report "Social Assistance", published by the Department of Health and Social Security in July 1978 after the review team produced the report at the request of the previous Government.
That report cannot justify the decision. At paragraph 4 on page 52, the report states:It will still be necessary to have separate ordinary and long-term adult scale rates. We think: he main desirable change would be to extend the long-term rate to the unemployed on the same basis as other claimaints under pension age. In addition, shortening the qualifying period to one year would be advantageous, but this does not have the same degree of priority.The Government did that the opposite way round. We welcomed it at that time and it would be churlish to deny that. They shortened the period from two years to one year for all supplementary benefit recipients, other than the long-term unemployed.
However, it was the clear advice to the House that, if the change was made, preference should be given to giving the benefit to all the long-term unemployed under pensionable age—it does not distinguish between men over 60. My estimate on the latest parliamentary questions is that it would cost only ½ per cent. of the social security budget. It would cost £100 million—perhaps £110 million—to give all the long.-term unemployed the long-term rate of supplementary benefit.
Just over £100 million is ½p in the pound cut off all the benefit, where the Government have saved about £230 million. The ½p in the pound is about half that, and that figure would just about solve the problem for the long-term unemployed who are forced to live below the poverty line. It would be ½p in the pound well spent, and we advised Government to do that. It is a tragedy that they have not done so. I hope that the Minister will tell us how the Government will prevent people from falling into the trap. I shall accept a letter if she cannot give answers to all my questions today.
§ The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)
We have had a fairly predictable debate, but, none the less, we have heard interesting analyses by hon. Members, particularly by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). I shall read his speech with great interest. I shall answer what I can at the Dispatch Box and write with other answers. Whichever Government are in office, they face exactly the same problems with uprating orders. Uprating is an incredibly large additional cost to the country.
In 1981–82 the uprating alone will cost £763 million and in a full year it will cost £2,156 million. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) was the first Opposition Member to mention the total cost of uprating. It is not only generosity; it is paying benefits as of right to those who deserve them. But we cannot ignore the source of the money. Paying arty entitlement must depend on the resources available. It is my duty to make that point.
§ Mr. Foulkes
Surely, if the increases are only keeping up with inflation in real terms there is no cost increase. The people contribute towards their own benefits.
§ Mrs Chalker
The money put into the national insurance fund does not fund the outgoing. What is paid 1391 in by contributors today is paid out tomorrow, as it were, to our grandparents. The cost of benefits should be taken from increased production, and the hon. Gentleman knows what the level of production is. In budgeting our economy we must take account of the resources available.
The hon. Member for Perry Barr dealt with the differences in the surplus that the Government estimated last year on the national insurance fund and the estimated deficit of £619 million for 1981–82 contained in the table on page 2 of Cmnd. 8296. At the time of the Social Security (Contributions) Bill in December 1980, the Government Actuary estimated that there would be a small surplus of £39 million as a result of the rates set out in the Bill. He now estimates a deficit of £619 million. That is largely but not entirely due to the fact that the unemployment assumptions that he is using are higher than those used when the rates for 1980–81 were set out in December.
The figures are his assumptions. They are not Government forecasts, but we are bound to take note of the large deficit that the Actuary believes is likely to accrue, and, therefore, to take such as action as may be necessary to ensure that the national insurance fund is brought back into balance.
The hon. Gentleman asked whether it was an exact relationship. I shall write to him as early in August as I can with the details.
It is too early to say how the Budget forecast of 10 per cent. in the RPI this year to November 1981 will turn out. The fall in exchange rates since the early part of the year makes the task more difficult. However, the year-on-year rate has fallen steadily this year, and recent monthly increases in May and June have been small.
We have no reason to believe that the figures given to the Chancellor of the Exchequer are doubtful, as hon. Members on the Opposition Benches suggest. The London Business School predicts 10 per cent. to 11 per cent. by the end of the year, and its forecasts have been over in the past. As the right hon. Member for Norwich, North (Mr. Ennals) knows only too well, we must wait and see.
I cannot add to what I said in my letter of 8 April to the hon. Member for Perry Barr about the Prime Minister's pledge on shortfall, when I stated:This Government is committed to compensate pensioners fully for price increases over the lifetime of this Parliament. This was the pledge repeated by the Prime Minister on 25 February, Vol. 999, c. 371.Expanding on a comment that I made to the hon. Member for Perry Barr in the Committee on this year's Bill, I went on to list other long-term beneficiaries in addition to pensioners who would need to benefit by making good the shortfall. I repeat what I said in an earlier intervention. When my right hon. Friend the Secretary of State for Social Services wrote about making good any shortfall the next time round, he was clearly referring to the following November.
§ Mr. Ennals
Is the Minister therefore confirming that it is only the long-term benefits for which any shortfall will be made up in the following November and that this does not apply to short-term benefits?
§ Mrs. Chalker
I am confirming that the pledge was that it will definitely be the shortfall on long-term benefits which is made good. As the House will know, I should 1392 very much hope that we could do more than that, but that will depend upon the economy. The pledge was that the shortfall on the long-term benefits would be made good, which would clearly be in the following November.
§ Mr. Buchan
The simple proposition always looming in the background is that by making a 1 per cent. cut this year the Government have, in effect, issued a declaration that no pensioner will ever be better off. The pledge has been made that the shortfall will be made up, but there is nothing in the pledge to say that it will be more than made up. Moreover, on the one occasion when there was an apparent over-provision, the benefit was cut back. There is, therefore, the declaration and the knowledge of what actually happened, all of which points to the message that no pensioner in Britain will ever become better off under a Tory Government. If their benefit goes over the top, it will be cut back.
§ Mrs. Chalker
The hon. Gentleman seeks to confuse the issue a little. I shall go over it once more. The pledge given by my right hon. Friends the Prime Minister and the Secretary of State for Social Services was to make good any shortfall, should it occur, in the following November. The hon. Gentleman is considering that entirely without the other pledge that we would do better by pensioners as soon as the economy allowed, which clearly means to do better than increasing pensions to keep pace with price inflation. That can be decided only when the economy picks up. I am not prepared to commit anyone to put a promise on record which could not be fulfilled by the economy of this country without causing higher inflation rates. The House would do well to remember that those who suffer most from high inflation rates are often the old, whose savings are eroded. Overcoming inflation must therefore be the first priority. We depend upon the production of this country for further increases in the pension ahead of price inflation.
The hon. Member for Perry Barr asked some penetrating questions about the position of women pensioners between the ages of 60 and 65. I am well aware that making good any potential shortfall in November 1982, plus the cost of inflation, even with the so-called Rooker-Wise increases in tax allowances, would bring such a person into taxation and outside the existing tolerance limits set by the Treasury. I have taken careful note of the hon. Gentleman's questions and shall certainly bring them to the attention of my right hon. and hon. Friends. There is no sense in asserting that this will not happen, as nobody here today can be sure one way or the other. However, I say this to the hon. Gentleman. I am as concerned about this as he is. If he can rest on that for the present, we shall have to see what can be done about a situation which I regard as not at all satisfactory.
The hon. Member for Renfrewshire, West (Mr. Buchan) commented, as he does on every available occasion, on the increase this year which is based at 10 per cent. on that which should have been paid had we got the forecast right last November. Nobody is losing as a result of that. In better times, I am sure that no Government, of whatever political colour, would wish to have made such a clawback. It was done for the sake of the long-term future, not just for the beneficiaries so often trumpeted by the Opposition, and particularly for the long-term good of bringing down the overall rate of inflation. The hon. Gentleman should remember that if the Government had 1393 intended any repetition of such an action, the provision in the Act would not have been limited to one year only. Perhaps we could let the matter rest there for today, although I accept that the hon. Gentleman will return to it on many future occasions.
The question of the Christmas bonus has been raised. At £10, the bonus is still welcome, however small it may be in relation to the value of the original £10 in 1972. We cannot contemplate raising it to the £30 suggested at this time as this would incur an additional and increasing cost of £200 million. Nobody is more aware than I of how much pensioners appreciate the bonus, but an increase could not be accomplished within the present state of public spending, with the large total of £27,000 million for 1981–82.
I apologise for missing the speech of the hon. Member for South Ayrshire (Mr. Foulkes), who referred to the death grant, but I had to slip out for a short time. The death grant review has been going on for some time. I have made no secret of my own impatience to resolve the matter. We have already announced in answer to a parliamentary question that we shall be making a statement. We had hoped that it would be made this summer, but there are some difficulties and it will now have to be made early in the new Session. I must warn the House, however, that to increase the grant to £180 would cost an additional £100 million approximately for a year. On this matter, therefore, my remarks must be the same as they were on increases in the Christmas bonus.
§ Mr. Andrew F. Bennett
I take it that that is the cost without any means test. Does the hon. Lady have figures for the cost if there were a means test?
§ Mrs. Chalker
I should like to help the hon. Gentleman, but I cannot, as this depends entirely on the kind of means test—whether it is on the money and effects left by the person who has died, or on the means of the nearest living relative or the person who has decided to take responsibility for the funeral cost, or whatever. I do not have figures to hand. I am sure that the discussions which may follow the decision eventually taken—I cannot tell the hon. Gentleman what it will be, as I do not know—may bring to light some of those figures, but I certainly cannot give them now.
§ Mr. Bennett
Is the Minister therefore confirming that the problem with the review is the question of how to apply a means test?
§ Mrs. Chalker
No. I am saying that there are many problems with the review. I remember making similar comments to those made by hon. Members today when I was in Opposition. At that time, I had no idea how complicated it was to deal with even a relatively small but none the less important benefit. This matter has proved far more complicated to investigate than I had at first assumed.
I shall now turn to child support. I am certain that the increase in child benefit, which from next November brings child benefit to £5.25 for each child and the one-parent benefit to £3.30 for each one-parent family, is a most important contribution. We can argue about many ways in which it would have been good to spend more money, but when we compare the value of child support in November 1981 with the high peak of April 1979, we shall recognise that those with children have benefited, considerably.
1394 I am aware that making up the child benefit by 50p in November does not restore it to the April 1979 figure, hut it will be higher for families with one child under 11 than in the last 25 years, except April 1979. It will be higher for families with two children than at any time in the last 15 years, except April 1979. It will be higher for families with three or more children under 11 than at any time in the last 10 years, except April 1979, and higher for families with children over 11 than at any time in the last six years, except April 1979.
I ask the House to remember that in April 1979 we were approaching a general election. When the figures for child benefit were fixed by the last Government, they cannot have been unaware of the timetable of the increases in comparison with the timetable of the general election. Therefore, it is not surprising that they sought to make increases at a propitious time—and good luck to them for having improved child support by that amount.
§ Mr. Andrew F. Bennett
Will we have to wait for a rise in benefits until the next election, when presumably the death grant will be announced and the pensioners' Christmas bonus will be increased? Is the Minister hinting that child benefit will also be increased?
§ Mrs. Chalker
I am not giving the hon. Member for Stockport, North (Mr. Bennett) or anyone else any hints. I am saying that it is notable that there was a high peak in April 1979. It is noticeable that that was during the general election period, which must have affected many people's thinking at that time.
§ Mr. Rooker
April 1979 was unique in the sense that it was the beginning of the tax year. The Minister knows the reason why the child benefit had to be changed in any event because that was the last of the third part of the phasing out of the child tax allowances. That would have happened anyway. It is disingenuous of the Minister to seek to imply that because there was an election in the offing—the previous Labour Government did not choose the date—we made those increases. She knows that that was the last part of the phasing out of the child tax allowances.
§ Mrs. Chalker
I am aware that it was the last part of the phasing out of the child tax allowances, but the fact remains that the amount by which the child benefit was improved at that stage marks a high peak in the child support figures. That was the point that I was making to the House.
I wish to say a few words in response to my hon. Friend the Member for Kensington, who gave some interesting figures in his contribution. I shall go into more detail after the debate, but he is well aware that one of the reasons why the supplementary benefit rates of child support have increased notably has been the reduction in scale rates from five to three. That has particularly benefited the under-fives who had the 79 per cent. increase between November 1978 and November 1981. It also benefited the 11 to 12-year-olds who had an 81 per cent. increase in child support over that period. It was entirely sensible and logical that the under-fives should have had that additional support when their parents were on supplementary benefit, and also for the 11 to 12-year-olds in our society when there is fast growth among children of that age and when support for them is needed. Therefore, the increase was 1395 entirely beneficial. I shall go into some of the other figures raised by my hon. Friend in correspondence following this debate.
I wish to say something further about one-parent benefit, as it is now known, and to get it absolutely clearly on the record. In increasing one-parent benefit, we also want to get a better take-up of one-parent benefit. Many hon. Members will know that at present I am involved in seeking to contact single payees on child benefit books—in other words, where there is only one name on the child benefit book—to make sure that if they are entitled to one-parent benefit they make a claim for it.
I regret that, because of the industrial action over the last few months, the start of that scheme, which should have been about two weeks ago, has had to be delayed. Improvements for one-parent benefit and the other improvements to enhance take-up will be put into operation as soon as possible. I shall return to the other questions about recovery from industrial action later on.
With regard to child dependency additions, the other thing that I wanted to say was that many hon. Members have understood that there have been variations in the additions for the national insurance beneficiaries. I believe that we are going in the right direction to make it a priority to increase child benefit, paid to the parents of children, whether those parents are in or out of work. If that has meant that there has been a wearing down of the differences that used to exist for the long-term future of child support, it is a positive step forward. No one likes to accept any reduction, certainly neither in actual nor in real terms. If we are to make sense of child support over the years ahead, we shall have to take some of those measures. I believe that that is moving in the right direction.
Other hon. Members questioned the basis of the uprating of the different elements in family income supplement. I shall explain how we do that each year. Every year, as the right hon. Member for Norwich, North will know, the Department considers how best to spread the money available for improving family income supplement between the different elements in the scheme. Sometimes the emphasis has been on the prescribed levels, and at other times it has been on steps to be taken in regard to additional children and the maximum amounts payable. A requirement to move all those elements in strict proportion would remove a desirable element of flexibility that any Government would wish to retain. As we have flexibility, it allows scope either for concentrating help on the existing beneficiaries or on extending the numbers eligible for the scheme.
I am pleased to say that the numbers on the scheme who are taking up the benefits are improving. They have improved, largely as a result of the publicity last winter, probably to an average of about 110,000 per annum. Those improvements may go further.
I have been asked in many debates, although I do not think that the question was posed today, how many lone parent beneficiaries who are working on shorter hours entitlement level—that is, 24 hours or more a week—are benefiting from family income supplement. I ask right hon. and hon. Members to accept that this is only an estimate. I reckon that now about 18,000 lone parent beneficiaries are receiving the benefit of working for 24 1396 hours rather than having to do the extra six hours and become entitled to the amounts that two-parent families receive for 30 hours per week.
The improvements in family income supplement have been notable. I repeat to the House that the one-child family with earnings of £60 this year and £66 next year will receive a 14 per cent. increase in family income supplement. The two-child family on the same earnings will also receive a 14 per cent. increase. We hope that more people will take up FIS. I shall return to the subject of take-up in a moment.
A number of hon. Members have mentioned housing benefit, which used to be known as unified housing benefit. My Department, together with the Department of the Environment, has done an enormous amount of work in seeking a feasible scheme for the implementation of a housing benefit which would eliminate from the system the lottery, as it has sometimes been called, of whether someone claims supplementary benefit or goes to his local authority for a rent or rate rebate. The discussions between the local authority associations and the Department of the Environment are proceeding well. I cannot say what the eventual outcome of those discussions will be, but I am glad that we have made as much progress as has been made. I regard it as a most important improvement to the system overall.
I shall try to answer all the questions that have been put to me about the take-up of supplementary benefit. One hon. Gentleman said that there were many unclaimed benefits. I have said many times that many of the unclaimed benefits are probably for a small amount. The intimation is that that should be so, but we are taking steps to assist take-up, especially with the rewrite of the supplementary benefit handbook, the notices of assessment that go to claimants and the improved and clearer leaflets.
I remind the House that all retirement pensioners and widows are invited to claim. Unemployment claimants are also issued with a leaflet which draws their attention to supplementary benefit.
The hon. Member for South Ayrshire mentioned his wish that there should be a comprehensive fuel allowance. He also mentioned, with some affection, the long-departed electricity discount scheme that gave benefit only to those with electric heating. I do not think that it will be a surprise to him that a comprehensive fuel allowance cannot be introduced at present because of the large expenditure involved. However, we are planning to spend more than £250 million a year from November on fuel assistance. That is the most generous package of fuel aid ever. It concentrates help on the poorest households—those on supplementary benefit and FIS.
I accept that there is a problem, as there is with every means-tested benefit, for those whose entitlement is just missed because of other income or various other circumstances. For those who are most hard-pressed we are doing as well as we can. The hon. Gentleman knows that the electricity discount scheme was discontinued because it was so unsatisfactory. It came under enormous criticism. The average help given under that scheme was about £7.50 a year, which does not compare very favourably with the £72.80 in a full year in increased amounts that will be given from next November to supplementary benefit claimants who receive the basic rate 1397 heating addition. The discount scheme was not only limited to one fuel but it was given to a few people who did not need it.
The hon. Gentleman also asked about my meeting last week with the chairman of the South of Scotland Electricity Board. We had previously spoken in the House about the £150 limit on debt before that board would accept supplementary benefit people on to fuel direct. I had an interesting and helpful meeting with the chairman and some of his advisers last week. The meeting was constructive and I am hopeful that we can make a real improvement in conditions soon. I hope that the hon. Member will not press me further now, because some delicate negotiations are continuing. It was a most helpful meeting.
§ Mr. Foulkes
I shall not press the Minister further on that because I am glad to hear her comments. However, surely she is aware that many people were grateful for the electricity discount scheme, even though it was a rough and ready scheme. I am sorry that it has been abandoned and as a result some people are less well off. Surely, the pressure is on to introduce a comprehensive fuel discount scheme to cover the other fuels that are now shooting up in cost. The hon. Lady has stated her wish that she would like such a scheme to be introduced. She has given us the cost and explained why such a scheme cannot be introduced, and that is the theme that has characterised all her comments. How long can she and her colleagues continue as Ministers if everything they want to do is being frustrated by the Treasury Ministers?
§ Mrs. Chalker
The hon. Gentleman knows that I shall go on battling as long as I have breath in my body to do so, whether I be at this Dispatch Box or anywhere else, even outside the House. That is beside the point, however. The new scheme will be better, although admittedly going to a smaller number than those who received the £7.50 a year from the electricity discount scheme. He knows that those who are affected are those on rent and rate rebates. I said in answer to the hon. Member for Stockport, North that in working towards a resolution of the housing problem—which will bring the whole of the system into better order—that may be a better and more feasible time for considering other means of helping those in most difficulty.
I am conscious of the length of time that I am taking. I return to the new order which brings the long-term rate to men who are over 60, unemployed and in receipt of supplementary benefit for more than a year. The hon. Member for Perry Barr asked some detailed questions about that. The official in the Midlands who told the Birmingham Evening Mail that there could be 30,000 beneficiaries in the Midlands area was wrong. I do not know where that figure crept in from but I confirm that the figure is estimated to be about 45,000. First, I should explain that the figure does not include those who will qualify because they can count periods out of benefit for up to 13 weeks towards the 12-month qualifying period. Secondly—this explains the difference between the 26,000 at December 1980 and the 45,000 estimated now—unemployment has risen since December 1980 and, therefore, there will be more people to benefit.
Thirdly, the figure of 45,000 is an estimate of those who will benefit up to March 1983. That clears up the questions being asked about the difference between the 1398 figures of those who might have been in that group at December 1980 and the figures announced in a number of news broadcasts, even if not: in the press release received by hon. Members.
§ Mr. Buchan
Will the Minister clarify that she is saying that the difference between the 26,000 at December 1980 and the 45,000 estimated arises because the Department is assuming that the figures will rise from 26,000 in December 1980 to 45,000 in March 1982? Have I misunderstood her?
§ Mrs. Chalker
I shall go over my figures again. The 26,000 figure did not include those who will qualify because they can count periods out of benefit for up to 13 weeks towards the total 12-month qualifying period. That is an awkward part of the regulations but it is fact. There is that further group on top of the 26,000. There are also those who have been out of work, signing on and in receipt of supplementary benefit for more than one year, and that figure will increase. It is a figure for the future, not a figure of entitlement as from November. The additional rate of benefit is the long-term rate and will start from November, when all the upratings take effect.
Concerning these men over the age of 60, I was asked whether I thought that this provision was discriminatory. When we already have an earlier retirement age for women, it is beneficial that at least those men over the age of 60 who are out of work arid have very little chance of resuming work should be given this choice and opportunity.
The hon. Member for Renfrewshire, West cannot have it both ways in saying that it is discriminatory to do it for men, which gives them the choice, when women at the age of 60 can retire—although some of them choose to continue working and so enhance their pensions. The only point I make to the hon. Gentleman is that I believe that this is beneficial. I believe that it is right for that group of people who do not have any prospect of working again over the age of 60. The hon. Gentleman cannot expect to make a message out of that point.
§ Mr. Buchan
The way to avoid any discrimination is to extend the long-term supplementary benefit to all long-term unemployed.
§ Mrs. Chalker
I am well aware that the hon. Member and many other hon. Members would like to do that. I do not believe that the hon. Gentleman was a member of the previous Government's Front Bench. They also found that, for reasons of cost, they could not do this. I hope that the hon. Gentleman will not be churlish and not welcome this provision for those for whom it is important. We cannot do more at present, but this is a positive and helpful step forward.
I was asked a further question about people who become eligible for the long-term rate under the regulation and inviting them to claim. Men who would not be eligible for the long-term rate would not be invited to cease registering, so there can be no question of people ceasing to register and finding themselves without benefit.
The hon. Member for Perry Barr asked about the mechanics. The mechanics and a clear explanation of all the steps need further work by myself and my hon. Friend the Under-Secretary of State for Employment. However, I assure the hon. Member that the month of August will be put to good use. I hope that all right hon. and hon. 1399 Members will draw attention to the fact that there is now a choice for men over 60 who are long-term unemployed and who have been receiving supplementary benefit for more than one year no longer to register to receive the higher rate of unemployment benefit.
I was asked about credits to national insurance benefits and how these might be affected by the change. It is not our intention that this change should have any effect on a person's entitlement to any national insurance benefit, including retirement pension. For the most part, the benefit is retirement pension and credits will continue to be available for this purpose. It may require an amendment to the regulations to ensure that the receipt of supplementary benefit at the long-term rate in these circumstances is counted for credits.
I apologise to the House for the fact that this matter could not be brought forward today. That was simply because I have not had time to go into it. However, it will be brought forward at an appropriate time should it be needed.
Other questions have been raised. I shall seek to answer them in correspondence to ensure that there is no doubt about what is going on.
Recovery from industrial action has been mentioned several times in the House. I am very pleased that the industrial action in the Civil Service is being ended and that those who have been on strike will be returning to work. For the DHSS, this means that we can make a start on the backlog of work caused by the stoppage of the computer which maintains the record of national insurance contributions and the computers which pay child benefit and unemployment benefit.
However, it will be many months before recovery is completed in all areas. We shall give priority to recovery in areas affecting the payment of benefits. The special arrangements for paying benefits which were introduced during the industrial action will continue until normal arrangements are operating. I hope that hon. Members will seek to make that well known to those affected.
I was asked about the completion of the uprating in local offices. We are making every effort to ensure that the uprating is completed on time. I cannot guarantee—just as no Minister before me or, I think, in future, could guarantee—that there will not be a little delay in a few areas, as there has been in the past, for a variety of other reasons. But, if delays occur, no one will lose. We shall backdate the increases to the date of uprating in any delayed cases. I hope that that reassures hon. Members.
I come now to the matter of publicity and take-up. This is very important. It has been raised in conjunction with these orders and regulations. One hon. Member made some assertions about FIS which I think were not right, although I did not take the figures down in time. I shall look at the record and refer back to him if the figures are wrong. The eventual report on the close period of scrutiny during the previous Labour Government showed only a 50 per cent. take-up of FIS. Any Minister would be thoroughly concerned about that. We are taking every measure that we can to improve it.
I should like to tell the House what will happen this year. A £475,000 press and television advertising campaign will take place. That is £135,000 more than the figure last year. Last year's campaign improved take-up, as we well know. Fifty-five per cent. of that £475,000 will 1400 go on a national television advertising campaign, which is one of the most effective ways of getting people to claim FIS, and 45 per cent. will go on a national press advertising campaign.
I ask all hon. Members to make sure that they draw FIS to the attention of any self-employed people with whom they may come into contact. As my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) requested, it will be on the leaflets, but I think that there is sometimes a bigger job to do than simply putting it into leaflets, into national publicity and even on television. Word of mouth is often one of the most valuable means of extending the take-up of a benefit.
For FIS there will also be a permanent display of posters in post offices and citizens advice bureaux—in other words, not one which is confined just to the change in rate period. There will, further, be a new and improved leaflet and claim form, because I believe that the claim form must be improved. In addition, we shall be placing special inserts in child benefit order books, because it may be that mothers will see the need for the claim whereas fathers may not have noted it in the first place.
In total, that campaign will cover about 92 per cent. of low income families with school age children. I hope that every hon. Member will help in that, as in the campaign for the take-up of other benefits.
As the House knows, we produce a very wide range of leaflets on social security benefits. We are making efforts to improve the quality of leaflets. We want to make them easier to understand so that they will be as informative as possible. Starting at the end of this year, we shall be producing a new range of general purpose leaflets for particular groups, such as lone parents and low-paid workers. We have already published the general purpose leaflet for the disabled, "Help for Handicapped People", from the beginning of this year. We shall ensure in every feasible way the take-up of benefit.
Finally, before I commend the orders to the House, I want to say one thing. I saw the press release on Wednesday of this week quoting the hon. Member for Renfrewshire, West talking about campaigns by local authorities to improve take-up. It is obviously up to individual local authorities to decide their priorities for expenditure. I have never been against closely-targeted campaigns, but I am against campaigns that are wasteful of staff time in my Department and campaigns that unfairly raise the expectations of people who have no opportunity to benefit.
However, in certain towns in the North there has already been good co-operation between local authorities wishing to implement some form of take-up and our DHSS offices. My one criticism of the press release issued by the hon. Member for Renfrewshire, West is that it does not encourage consultation between local authorities and local offices of the DHSS. That view is based on a quick glance at the document. I hope that the hon. Gentleman, if he wishes to encourage the campaign, will support such consultation. It is only by working together that the best results can be obtained from the campaign.
§ Mr. Buchan
The matter to which the hon. Lady refers did not appear in the handout. However, the circular that we issued states that local organisations should consult the DHSS. There is a change of climate, for which I thank the hon. Lady. It is our hope that we can work on this matter together.
§ Mrs. Chalker
I thank the hon. Gentleman. I have not seen all the details of the documents issued by his party but I have seen a fair part of them.
These measures are beneficial. They help a wide number of people. They increase public expenditure, but it is an increase that is incurred willingly. The increase of £2,156 million in a full year that results from the orders and regulations brings social security spending to £27,000 million. However much we want to do, we have to live within the realms of reality. Because the orders ensure that we do that, I commend them to the House.
§ Question put and agreed to.
That the draft Social Security Benefits Up-rating Order 1981, which was laid before this House on 3rd July, be approved.