§ The Minister for Social Security (Mr. Hugh Rossi)
I beg to move,That the draft Social Security Benefits Up-rating Order 1982, which was laid before this House on 29th June, be approved.
§ Mr. Speaker
With this it is convenient for the House to discuss the following motions:That the draft Child Benefit (Up-rating) Regulations 1982, which were laid before this House on 29th June, be approved.That the draft Family Income Supplements (Computation) Regulations 1982, which were laid before this House on 29th June, be approved.That the draft Pensioners' Lump Sum Payments Order 1982, which was laid before this House on 29th June, be approved.That the draft Supplementary Benefit Up-rating Regulations 1982, which were laid before this House on 8th July, be approved.That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1982, which were laid before this House on 8th July, be approved.
§ Mr. Rossi
As required by section 124 of the Social Security Act my right hon. Friend the Secretary of State has also laid before the House the Government Actuary's report on the draft order which sets out the estimated effects on the income and outgo of the National Insurance fund.
The other affirmative motions linked with the draft order on the Order Paper are also concerned with the uprating of supplementary benefits, child benefit, one-parent benefit and family income supplement in November 1982; with the provision of this year's £10 Christmas bonus; and with amendments to the supplementary benefit requirement and resources regulations.
§ Mr. Speaker
I am sorry to interrupt the Minister, but I should remind him that he will have to move the other motions formally at the end of the debate.
§ Mr. Rossi
I shall do that, Mr. Speaker. Though the package is substantial, the uprating provisions are relatively straightforward and in the main give effect to the proposals which my right hon. Friend the Secretary of State for Social Services announced to the House on 10 March.
The main proposals were discussed at length in the debates on the Budget which followed my right hon. Friend the Secretary of State's statement and in subsequent debates on the Social Security and Housing Benefits Bill and various stages of the Finance Bill, so the orders and regulations now before the House contain few, if any, surprises and hon. Members will be familiar with the main features and the arguments for them. Similarly, the substance of the main proposals in the draft supplementary benefit requirements and resources amendment regulations was made known to the House when we invited the social security advisory committee to consider them in May.
In broad terms, the uprating instruments before us provide for an increase in benefits in the week commencing 22 November which is designed to give full price protection and to make good last year's shortfall not only for those long-term benefits on which we gave a pledge but also for all the other weekly benefits.
For most benefits the increase is a straight 11 per cent., based on a forecast movement of 9 per cent. in the full 312 retail price index in the 12 months to November 1982; plus a further 2 per cent. to make good an unintended shortfall at the 1981 uprating.
However, in the case of supplementary benefits scale rates, as the House knows, we have decided to change the basis of the uprating to reflect the fact that housing costs are met separately for those on supplementary benefit. As a result, the scale rates are increased by 10½ per cent., rather than 11 per cent., but combined with the amounts allowed separately for housing costs the increase will continue to provide price protection for those on supplementary benefit.
It is four months since my right hon. Friend made his forecast of a 9 per cent. movement in prices in the year to November, so the House now has the opportunity to see if it remains a reasonable forecast, and whether the draft order will, as intended, serve to maintain the value of the benefits covered by it.
At the time of the last uprating the annual rate of inflation was running at 12 per cent. By June, it had fallen to 9.2 per cent., and with the success of the Government's anti-inflation strategy further falls are expected. [Interruption.] So we appear to be well on target. I could have referred to a stronger pound, improved productivity and to continued highly competitive pricing in the private sector. However, Opposition Members would have found that provocative and my objective is to avoid that if possible.
§ Mr. Brynmor John (Pontypridd)
I am truly grateful to the Minister for his lack of provocation. However, if there was a miracle and the Government discovered that they had overestimated for the rate of inflation, would they claw back from benefits the percentage that they alleged had been overpaid, just as they did last time, or would they maintain them? [Interruption.] That may be a hypothetical question, but there is an absence of fact in the Minister's remarks.
§ Mr. Rossi
I am not surprised by the hon. Gentleman's somewhat Pavlovian reaction. As he knows, we considered the matter carefully when we legislated. We legislated for an overshoot on a one year basis only, although it was within our power to enable ourselves to claw back for successive years. However, we chose not to do so. Therefore, if we decide to claw back we shall have to come to the House with fresh legislation. If we had to do that, we should do so with a heavy heart. [Interruption.] Obviously, I cannot—as Opposition Members well know—give any commitment now.
All that I can say is that from what we have done and the way in which we have approached the matter, in not legislating, the Opposition must accept that we have a particular intent, although one cannot predict what circumstances might force us to do in the future.
In the unlikely event that we fall short of the target, which is the converse of the situation that the hon. Gentleman put to us, we stand by our pledge to price protection for pensioners; so in that matter the House can remain fully assured.
We have already demonstrated the strength of our commitment. With the November increase the standard rates of retirement pension will have risen by 68.5 per cent. during our period in office, which will be slightly ahead of the movement of prices, which have risen by about 65 per cent. over the same period.
§ Mr. Andrew F. Bennett (Stockport, North)
How much would pensions have risen if they had been linked to earnings as well as prices?
§ Mr. Rossi
We have debated that matter ad nauseam. I do not propose to go into that subject now. The Government's pledge is to protect pensioners against inflation. That is what we have done. We have more than achieved that. We have gone ahead of inflation. We shall continue to do that. I am not prepared to be drawn into the canard of the earnings link, which was broken some time ago for good reasons, which have been fully debated in the House in the past.
However, the orders and regulations before us do not simply provide for an 11 per cent. overall increase in weekly benefit. They also incorporate other improvements of particular benefit to elderly and disabled people and others. In accordance with statutory requirements, a full written statement on the uprating of mobility allowance was laid before the House on 8 June.
The increase in mobility allowance will mean an overall increase of 83 per cent. since the Government took office, and the Chancellor has made the allowance wholly exempt from tax from April 1982, measures which will help an even larger number of severely disabled people to take advantage of the Motability scheme.
We are also able, for the first time in three years, to propose an increase in the retirement pensions earning limit, from £52 to £57 per week. That represents well over half the level of average full-time earnings for women and rather more than one-third of average full-time earnings for men, so it provides considerable scope for part-time earnings without loss of pension. We remain committed to the abolition of the rule in the longer term.
In family income supplement for low income families in full-time work, the prescribed amounts for larger families will be increased by rather more than the standard 11 per cent. so as to concentrate more help on the very poorest families in work.
These latest increases in FIS mean that during our period in office the prescribed amount for a one-child family will have risen by over 79 per cent. and for a four-child family by almost 89 per cent.—both well ahead of the movement in prices. That is in addition to the 60p increase in child benefit and associated increases in one-parent benefit.
With regard to supplementary benefit, the capital limit is being increased to £2,500, fully restoring its real value in 1980. Supplementary benefit heating additions are to be increased by about 15 per cent. in line with the forecast increase in heating prices between November 1981 and November 1982. As it turned out, the 1981 uprating of heating additions was slightly higher than the movement in the fuel component of the RPI in the period November 1980 to November 1981. But we have decided that it is right not to take account of this extra improvement in calculating the 1982 levels.
Heating additions will therefore be at an even higher level in real terms than hitherto. The cost of the uprating of heating additions will be about £40 million a year, of which about £10 million is attributable to the decision not to recover the overshoot. Expenditure on supplementary benefit heating additions will now be more than £300 million a year from November 1982.
Another welcome change in supplementary benefit is that we are raising from £20 to £100 the amount of 314 occasional payment by way of a gift, for example at Christmas or on a birthday, which can be disregarded for supplementary benefit purposes.
I should like to refer briefly to the Supplementary Benefit (Requirements and Resources) Amendment Regulations. They have Keen considered by the social security advisory committee to which I am grateful. Its observations are to be found in Cmnd. 8598.
The main changes of substance relate to heating additions. They adjust the categories that qualify automatically for the disabled person's heating addition of £4.65 a week and revise the provisions for payment of heating addition; for homes that are heated by an estate heating system.
With regard, first, to the disabled person's heating addition, we are making good an oversight. Automatic entitlement is being extended to disabled people who have chosen a tricycle rather than a mobility allowance and—as a result of the advice of the social security advisory committee—some other disabled drivers with Government vehicles or a private car allowance. About 3,000 people will gain, most of whom are already receiving a lower rate heating addition.
At the same time, we are removing an anomaly by withdrawing the disabled person's heating addition from those claimants who qualified for it automatically under the present rules but, because they are in hospital, local authority residential accommodation, or board and lodgings, already have their heating needs met in the accommodation charge that is met in full in their supplementary benefit assessment. Where the heating provided as part of the charge does not cover the claimant's full needs, or where heating is not provided, a sum to meet the additional requirement may still be payable up to the full amount of the disabled person's heating addition. Altogether, about 3,000 people will be affected by the change.
That change will coincide with the uprating in November so that claimants will be cushioned against the effect of the change. I assure the House that we are taking the fullest account of the social security advisory committee's recommendations on the need to examine the way in which the supplementary benefit scheme operates in heating additions for disabled people and to ensure that the changes in the regulations are operated and monitored carefully.
The second proposal on heating additions substitutes, from 9 August, new provisions relating to estate rate heating additions. They have been difficult to operate and were applied to few estates, as hon. Members who have raised these matters know. Two main changes will be made by the proposed new system. If the House approves the draft regulations, my right hon. Friend proposes to exercise the discretion that the regulations give him to designate as estate heating systems with disproportionately high running costs, central heating systems on housing estates that are oil fired, or operate with on-peak electric central heating or off-peak electric storage heating that uses non-standard off-peak tariffs.
This last type of heating system is found on many estates built around 15 years ago, often with poor insulation and proving to be very expensive to heat. In this context, electrical, under-floor or ceiling heating systems are most frequent problems raised by our constituents. The general aim is that claimants living on an estate with one of these expensive heating systems, which gives them no 315 choice over their fuel expenditure, should be helped, and we shall consider each case most carefully on its own merits in the light of the general principles which I have outlined.
The second change will mean that claimants on an estate such as I have described will receive the new heating additions at one of two rates, set at twice the value of the central heating additions. The lower rate will apply for dwellings of up to four rooms and the higher rate for larger dwellings. There are some claimants for whom these rates will be lower than amounts currently in payment under the existing regulation, in the few cases in which the discretion has been exercised, and the amendment regulations therefore contain a provision to protect their position. Such claimants will retain the full amount of the existing addition when the change takes effect in August. At the November 1982 uprating and subsequent changes which lead to an increase in the requirements of the claimant's household, the heating addition will be reduced by half the amount of the increase until it reaches the new standard levels. This will ensure that claimants in this position will receive at least half the benefit of this November's uprating.
I commend these changes affecting heating additions to the House.
§ Mr. Rossi
The changes relating to the disabled person's heating addition will enable us to concentrate resources on those disabled people most in need. The new provisions for estate rate heating addition will bring certainty into a very difficult area and enable much-needed help to be provided fairly and consistently to many poor households in accommodation with higher heating costs over which they have little or no control.
The proposals set out in the instruments now before the House involve a full year cost of very nearly £3 billion.
§ Mr. Brynmor John (Pontypool)
The Minister reminded me of the soap advertisements in which there is always a new, improved whizz soap powder and the dread brand X. The Minister was like the rather desperate saleman of the inferior brand X. His desperation was justified because, despite his bellicosity of manner—we all know when he is on a weak point because the decibels go up as the generosity goes down—protection is not being provided in these proposals or otherwise for the living standards of people in receipt of State benefits. It is more a competition of who loses less and who loses more.
316 One would never have guessed from the Minister's speech, for example, that unemployment benefit now represents the lowest proportion of average earnings since 1951 and bears the lowest relation to prices since 1969—and this at a time when 3.2 million people are unemployed. In the three-and-a-quarter years in which the Minister and his colleagues have formed the Government, most of those in receipt of State benefit have lost.
Not all of that has been done in dramatic ways, although I suppose earnings-related supplement would qualify for that category. What has characterised the Government, and in particular the Department of Health and Social Security, in that time is the thousand petty meannesses, omissions and the lack of imagination that has added to the lot of those on whom the blight of Tory mismanagement of the economy has fallen most severely.
It is no wonder, when I hear the Minister of State, that the Treasury and the Department of Health and Social Security combined to give evidence to a Select Committee that the number of people caught in the poverty trap has doubled during the lifetime of the Government.
I shall lump together several of the points I intend to make into one general thesis. I begin with the case of the vanishing "S" manual. The story starts in February 1981 when the then Secretary of State for Social Services, now the Secretary of State for Industry, annunced that the "S" manual was expected to be published before the end of the year. When the hon. Member for Hornchurch (Mr. Squire) asked about that, rather tactlessly, on 17 December the Under-Secretary was deputed to answer—and that was bad news because the Secretary of State had by then divested himself of any responsibility. It was then hoped that the "S" manual would be published about the middle of 1982.
Lest the Department of Health and Social Security has run short of calendars, I remind it that we have now passed the middle of 1982 without publication of the "S" manual. We have seen neither hide nor hair of it. When is this great contribution to open government coming and what is the explanation for the delay?
§ The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)
I can answer the hon. Gentleman's question now. I am shortly to announce that there will be a further delay of some months before we can publish the document. The reason for the delay is a simple, practical one. The job of putting it into a form that we are confident will be readily usable by our staff and readily understandable by claimants, which is what we want, has proved more difficult than we had anticipated. I feel strongly, and I hope that the House will agree, that it will be better to make sure that we have the document right before it is published than to rush into print with a document that does not meet the purposes we all have in mind.
§ Mr. John
I accept the Under-Secretary's reply and I acquit him of being the Under-Secretary who in December 1981 had to stonewall so manfully—or in her case, womanfully—with the "S" manual.
I press the Under-Secretary to tell us exactly when the "S" manual will be published. It cannot be true that the Department is concerned that the staffs will be able to use them because the staffs must now be using an "S" manual, or something similar. It must be the effect on the public that the Department is worried about. Therefore, I return 317 to my original question. When will this document be published and when will this great contribution to semi-open Government come about?
I refer to a point I made in an earlier debate. Is the sole criterion of uprating to be the cost of living? The Minister of State dwelt lovingly on whether it will be 9.2 per cent., the 9 per cent. the Government have forecast, or some other E1 Dorado we do not yet know of? The retail price index, and still less the cobbled together Rossi price index that emerged upon a startled world not so long ago, are totally incapable of adequately protecting the living standards of the very people whose benefits are being uprated tonight. By definition, they are among the poorest in society.
Because of the wider range of income groups included in it, the RPI reflects a wider range of goods. By doing so, there is insufficient weight on those items that form the largest expenditure for people covered by these orders. The Government have boasted that, for the public in general, inflation is now in single figures. Judging by all their other disasters, that is the only jewel in their economic crown. However, given the cost of living for the poor, inflation in their case is very much in double figures. According to the Low Pay Unit report, it is nearly 1¼ per cent. above the official RPI. That gives the Minister's 9 per cent. estimate a hollow sound.
I hope that this is not a matter that divides us. I hope that the Minister will see sense. As the Government are in the business of changing price indices, they ought to begin work immediately on an index that reflects the true cost of living for those who must live on these benefits. They should base their uprating on the percentage rise in those figures. Were they to do so, the uprating in these orders would be very much larger, because the protection given by the RPI is insufficient.
We are dealing with a batch of orders that uprate social security benefits. In reality, that is not what they do. They uprate such benefits as the Government of the day choose to uprate. Some benefits have been neglected for so long and to such a point that their present financial value bears little or no relation to their original value.
Two examples of that, which are outside the scope of these orders, are the death grant and the maternity grant. However, the value of a number of grants and allowances within the scope of these orders has been eroded by the Government's failure to revalorise them at regular intervals.
The Minister mentioned the Pensioners' Lump Sum Payment Order 1982, which repeats the £10 Christmas bonus. That was introduced in 1972. I know that the hon. Member for Woolwich, West (Mr. Bottomley) is about to thumb through his well-known script and remind us that the Labour Government, when they increased the pension generally, tried to abolish that grant. I entirely accept that. My point is that the £10 of 1972 is now worth only £2.64 in real terms. It should now be £37.90 to retain its real value. The Government can do many things, but they cannot pretend that a £10 Christmas bonus today confers anything like the same sort of benefit.
Many other supplementary benefit items have the same effect. There is the £4 earnings disregard and the £4 disregard for disablement benefit and industrial death benefit. Had they retained their real value, they would now be worth £4.90 For those who are not required to register for work, the £4 disregard has remained constant since 1975 and would have to be increased to £9.30 to retain its 318 real value. In case Ministers think that that is a trivial example, I remind them that one of the groups most affected by the failure to operate the disregard are the severely handicapped people who are in adult training and day centres, who are surely the sort of group whom the Minister wanted to benefit and protect most strongly.
Next, we have the disregard for education maintenance, which allows £7.50 to someone in school and £9.50 to someone in college. Those figures have not been uprated since 1979, so that the real value is very much less We have the £225 limit for single payments for house repairs, which again has not beeen uprated for a considerable time. Where baths are required on medical grounds, they are still rated at 20p per bath, whereas the real cost is very much more.
One of the most conclusive and sad examples is the blind person's addition, on which my hon. Friend the member for Birmingham, Perry Barr (Mr. Rooker) and I have made recent representations. That allowance was placed at 15 shillings in 1948 and is now, in 1982, £1.25. To maintain the 1948 value, it would now have to be £8 per week. That is a measure of how much the blind person's addition has fallen in real value to what is by now a mere nominal sum.
The best example is probably the capital limit for single payments. The Minister of State talked lovingly about the increase in the capital allowance from £2,000 to £2,500 where there are pensions payable by weekly payments. He ignored the fact that for single payments the capital allowance is still maintained at £300, whereas it should have been increased to £375 to restore its value,. The Government should attend to it urgently as a matter of simple justice, because great hardship is being caused to people by that wholly inadequate single payment capital grant. Where the analogue of a capital allowance is increased, it is inconceivable to refuse to increase the other similar payment The Secretary of State derived great mirth from the Christmas bonus. I said that I did not necessarily make the point as one to divide the House on a yah-boo basis; I hoped to make a rather more serious point about it. It may be that the Government regard some of the payments which have not been updated in value as no longer having validity, in which case we ought to debate whether they should remain in existence on the statute book. But while the Government believe that there is a case for their retention, Governments have a duty to maintain the real value of the benefit and should not allow it, by indifference, to wither away to a purely nominal sum.
Before passing from the question entirely, I should like to press Ministers on a matter which I raised earlier, and on which they seemed to be sympathetic. I refer to our desire to exclude from the capital allowance redundancy payments and life insurances in calculating the capital limit. The Government well know that their inclusion in the capital limit rankles very much with everyone, and we want to have an indication from the Government of when they will put right that terrible anomaly.
Today we have heard unemployment figures which must be truly horrifying even to the rather brutalised senses of the Government. We heard that 3.2 million of our people are now registered as unemployed. About 120,000 have been added to the list in the past month. They will have the dubious pleasure of being the first to have their unemployment benefit subjected from the start to taxation. They will suffer also from the 5 per cent. abatement, cut, 319 swindle or whatever euphemism one chooses to describe the disgraceful dereliction of duty of which the Government have been guilty. The case for abatement has not been made better by the supreme reticence of Conservative Back Benchers in defending the Government's action. In the debates that have taken place on the issue, 16 Conservative Members have participated and only one has defended the Government's action. He did so for less than four minutes. I think that he felt that he had peaked rather early.
§ Mr. Peter Bottomley (Woolwich, West)
My hon. Friend the Member for Grantham (Mr. Hogg) tried to make a speech early on in the first debate.
§ Mr. John
The hon. Member for Grantham (Mr. Hogg) added his name to an amendment critical of the Government and then tried to make a speech in support of them. He became thoroughly psychologically mixed up. The best thing that I can say of his speech is that he fought an honourable draw with himself. That was signified when he subsequently boldly and resolutely abstained in the Division.
We have the right to know from the Government—in view of the voting figures we have moral authority to demand this of the Government—when the time is ripe. If the time is not ripe now for the restoration of the abatement, when do the Government consider that the time will be ripe? Income tax has been imposed on unemployment benefit. Will the time be ripe when an all-beneficent Treasury says that the money is finally available? If that is so, the Minister of State and I will both look even older by the time that we are able to celebrate that minor triumph.
§ Mr. John
I usually do. The Minister usually speaks from a brief.
It is part of the overall tragedy that long-term unemployment has risen during the month to more than one million. The official figures are not available, but it is inconceivable that those who are unemployed for a year or more will not have risen to over one million. The Manpower Services Commission's report, which has been supplied to hon. Members recently, suggests that 40 per cent. of the unemployed during the 1980s are likely to be unemployed for a year or more.
Not the least of the upratings that we want from the Government is one that will allow those who have been unemployed for a year or more to be able to qualify for long-term rates of supplementary benefit. If they cannot do so, they will be placed at a great disadvantage when the length of their idleness or absence of work is determined not by themselves but by many others outside the Government's control and outside their determination. We are talking about the innocent victims of the Government's passion for leanness in the economy. It is indefensible, as the advisory commission on social security has said to the Government, to deprive these people of long-term supplementary benefit.
In our rare moods of bipartisanship on this subject we usually manage to agree for much of the time on how we 320 should treat children under the supplementary benefit and social security system. By this measure child benefit will be uprated to £5.85 a week. That is a loss in the real value of the benefit, compared with April 1979, of 40p a week. It disguises an even worse anomaly and a clear example of sharp practice. National insurance dependency allowances have been scaled down as child benefit has been scaled up.
Those who are claiming child dependency under national insurance have had a bigger loss overall than the 40p under child benefit to which I have referred. That is of a piece, I believe, with the manner in which we deal with the scale rates under supplementary benefit for children. I rely on the powerful work of David Piachaud in "Children and poverty" in which he produced, from May 1981 figures, modest minimum needs for various age groups of children. These varied from £8.32 a week for a child aged 2 to £12.10 a week for a child aged 11. Those hon. Members who are parents can confirm how modest those allowances are. It would require a greater amount, in my view, to maintain children.
The scale rates fail to match even those minimum needs. The rates at the time when David Piachaud made the calculations were £7.30 for a child under 11 and £10.90 for a child aged 11 to 15. Even for a child aged 11, that amounts to not more than 90 per cent. of the child's minimum need. For lower age groups, the proportion is between two thirds and three quarters of the child's minimum needs. What in heaven's name is happening if we are not even providing a sum that is the very minimum needed to maintain a child decently? I hope, therefore, that we shall be longer on deeds and shorter on pious sentiment. Urgent attention is needed to rectify the situation and to translate our concern into practical measures to benefit children.
I should like to deal with two detailed points in the Supplementary Benefit (Requirements and Resources) Amendment Regulations. The Minister drew attention to the two major changes affecting a disabled person's heating addition and the withdrawal of the heating allowance for certain categories. The hon. Gentleman dealt with payment. I wish to repeat what the social security advisory committee has already put to him. To rely on supplementary benefit means budgeting one's income. If an elderly person is admitted to hospital, the heating allowance is to be immediately cut off and the accumulated debt in respect of heating already used may fall as a debt on the basic income of that person. The advisory committee begged the Government to consider phasing out the allowance and so allow a run-on period even when people are admitted to hospital to deal with accumulated debts. I hope therefore that the Government will consider phasing out the allowance rather than ceasing it abruptly.
Regulation 2(15) deals with the heating addition for what are called hard to heat estates. It is true that some estates are hard to heat. I do not oppose in principle the fixed rate heating addition provided that there are sensible criteria for determining what estates are hard to heat. The Department of Health and Social Security has directed to the social security advisory committee some bland and reassuring remarks. But the Department has not yet produced a list of criteria for defining hard-to-heat estates. The Minister appeared to give a definition based on the type of heating. It cannot be right, however, to say that there are certain inherently expensive forms of heating. 321 Some buildings experience extreme heat loss. Even a reasonable form of heating in those circumstances will involve extraordinary expense.
§ Mr. Rossi
I said that each case would be considered on its merits, and gave indications of what criteria would be applied. They would be a guide to the cases in which help would be given and discretion exercised without question. Obviously there are cases other than those that I outlined, and they would be considered on their merits.
§ Mr. John
I cannot understand the Government's philosophy. They introduced the single benefit regulations to reduce the Minister's discretion. He is now saying that they will grant allowances for on-peak central heating systems, oil-fired central heating and so on, but that there may be other criteria that will provide for a discretionary payment. The Minister must decide whether he wants a guided system or a discretionary system. I have seen examples of how some of the single-payment regulations are working, and I do not mind a completely discretionary system. The Minister cannot haver between the two. We want to know in rather more detail what criteria will be applied.
There cannot be rigidity in the amount of the allowance when enormous heating costs are involved. As I understand the Minister's statement, about £6.60 will be added to the £5.10 heating allowance to make a total of about £12. In Sunderland, as he knows because he quoted the example, there is accommodation that is heated by the ceiling panel method. It is a bizarre form of heating that costs the average tenant £18 per week. The tenant will be £6 a week worse off under the new regulations than he was under the old. He said that existing tenants would be covered. What will happen to the new tenants? If someone dies and another hapless person is persuaded to take over a flat is he to lose £6 a week? The Pilton Estate in Edinburgh has a heating system that produces bills of £20 a week. What is to happen to tenants of such estates?
What is the Minister's definition of an estate? Does it include high-rise flats, no-rise buildings or a mixture of both? My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) said that some of the hardships arise where people do not qualify because where they live is not defined as an estate. Will the Government consider individual buildings when they are genuinely satisfied that the heating costs are excessive?
The Government have been remarkably lucky and the recipients of social security benefit remarkably unlucky. I do not accuse the Government over this—it is a quirk of parliamentary life—but little or nothing of tonight's debate will percolate through to the country because of the lateness of the hour.
§ Mr. John
And other events, as my hon. Friend rightly says. They should percolate through. People should realise what the Government's record on these matters is. If they did the condemnation of their truly appalling record would sweep the Government away. It is a record of insensitivity for which the poor have paid, are paying and for which they will continue to pay as long as this miserable Government remains in office. I hope that will not be long.
§ Mr. Peter Bottomley (Woolwich, West)
The hon. Member for. Pontypridd (Mr. John) spoilt an interesting 322 contribution when he felt, towards the end of his speech, that he had to declare his continuing membership of the Labour Party. It would have been better if he had concentrated on building up a greater bipartisanship—plus the hon. Member for Isle of Ely (Mr. Freud)—in getting further advances.
There is no major problem about the draft regulations and we ought to use the debate to start staking out the ground so that we make it possible for the Treasury and the DHSS to work more effectively together in building up a framework in which benefits are unified and the general approach is more consistent with what the House ought to intend to do.
Our general responsibility is not just to bash the Treasury or the DHSS. We should try to make politically possible a mixture of compassion and common sense so that people are not left with inadequate resources or get away with additional help when they do not need it. Most such additional help comes from the narrow tax base and so many tax-free perks and additions.
It is worth consulting ordinary people over a number of changes that might be made. I suspect that I am one of the few hon. Members who have done a random survey of relatively poor constituents about the Government's proposals on the death grant. I worked on the assumption, which many would challenge, that there are no additional resources and I asked whether the resources should be made available universally, at a low level, or selectively, to give substantial help to those who need it and nothing to those who do not—in effect, withdrawing the benefit from 90 per cent. of those who receive it at present.
About 90 per cent. of my poor constituents who were asked that question said that they preferred the Government's proposals. That proves that Ministers, even those in the DHSS, can put forward proposals that the majority of people support.
§ Mr. Foulkes
Does not the hon. Gentleman agree that all the representations from organisations representing the elderly do not accept the basic assumption that no more money is available? Money is available. If seemingly unlimited sums can be found for the task force out of the so-called Contingency Reserve, surely a little can be found to increase the death grant. All those to whom I have spoken have said that that is a major priority and I am sure that the representations that the Minister has received also state that view.
§ Mr. Bottomley
The hon. Gentleman confirms my suspicion that he has not been paying attention. All that he has done is to repeat two of the points that I made. I accept what he said about organisations, but I said that I had consulted individuals. I also conceded that many would challenge the assumption behind the question that I put to those individuals.
I hope that the Under-Secretary, who is to reply, will clarify what the Minister said earlier about help with heating costs on hard-to-heat estates. Does the commitment given by the Minister extend to a ministerial view of each applicant or only to whether particular estates should be included in the scheme? There was a slight ambiguity in that respect.
The second point relates to the proposal for electrically heated estates and storage heating. If electric wires run through concrete, does that count as storage heating, or do they have to look like a storage heater to qualify? Such 323 matters should be clarified, if not immediately, in some other way. I hope that my hon. Friend will tell us how the Government intend to let local authorities know about these matters, so that estates which may be eligible for consideration will be put forward by local authorities. I assume that the initiative will have to come from the housing authority, but perhaps the Minister will confirm that. I hope that the Minister will tell us how the Government and we as Members can encourage housing authorities to come forward.
I come back briefly to the abatement of unemployment pay, which has been mentioned in the debate. The most effective argument that could be made for what the Government induced me to vote for in the last debate—although not in the first two debates—is: if the Government had £60 million available, would they spend it on unemployment pay? I suspect, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) says, that that is not the right question, because £6 million is available, or should be available. With £60 million, the Government could do a great deal for people who tend not to get the consideration that they deserve because the form that our debates take does not include them. When we are debating Supply procedure, or if we get the opportunity each year to debate tax and benefit together, I suspect that many hon. Members could concentrate small sums of money on small groups of people and thereby make dramatic changes in their financial circumstances. I should like the House to have such opportunities so that attention could be given to people whose circumstances are not covered by these instruments.
The most powerful argument for those who did not support the Government in any of the three debates on the 5 per cent. abatement, is that Parliament worked on the assumption that the money would be restored when taxation occurred. When a significant number of members of the party in Government bring forward an issue—not with personal attacks, although a pointed issue was at stake in the first debate—on three occasions within a relatively short time, it is clear that something is deeply worrying Parliament. It is the job of the Government to make sure that they consider the causes of that.
The Treasury Minister who replied to the last debate, did so in the most effective way: he made three brief points, and then he sat down. When the Government have completed the review and restore—I hope—the 5 per cent., I hope that the same Minister will be allowed to announce the increase. It is appropriate that the person whose broad shoulders have been used—this includes my hon. Friend the Minister for Social Security—to give the bad news, should be used to give the good news.
Child benefit is tied to the distribution of resources over the life cycle. I shall not wear my family forum hat this evening and shall make no more than a passing reference to our proposal for a Government green paper on tax and benefit over the family life cycle.
Child benefit raises two important points. First, child benefit should be twice as much as it is. That point was alluded to by the hon. Member for Pontypridd. We must build up the sort of constituency that will make that possible. Child income support is still substantially below what it was 25 years ago.
All hon. Members should stop referring to child benefit as part of the social security system. It is part of that 324 system, but it is far better that it should be referred to as part of the tax and benefit system, otherwise it appears to be a selective benefit by income rather than by circumstance. If we are to raise child benefit to the level desired by many hon. Members, an alliance must be built that will provide the right degree of support.
My second and more controversial point on child benefit is that over the past 20 years there have been many periods, lasting two or three years but no more, when the level of pay increases has dropped because of a formal incomes policy. Each time the incomes policy has broken down on the grounds that the lower-paid cannot support a spouse and children and inflation has been restored to an ever-growing level.
Those who have suffered most have been the lower-paid with family responsibility. During the past two or three years—I am sure that the hon. Member for Pontypridd, who drew attention to conversations continuing during his speech, would like to listen to this as a matter of ordinary courtesy to the House—there has been a reduction in the levels of pay settlements without too much effort to halt that reduction on the grounds that the lower-paid with family responsibilites cannot afford it.
Although 40p has been missing from the level of child benefits since the Government came into office, this has been one of the few periods when the level of child benefit has been nearly price protected. One cannot prove cause and effect, but one can declare an association between maintaining the level of child benefit and making reasonable progress in lowering pay settlements.
I ask the Treasury to look into this and consider what it might expect in terms of saving in public expenditure on the postulation that child benefit was increased by 20 per cent. in real terms at the next Budget, associated with a level of pay settlements about 2 per cent. lower than the level that it would otherwise expect. I believe that the savings to public expenditure of a 2 per cent. reduction in inflation as a result of a 2 per cent. reduction in pay increases, would more than pay for 20 per cent. on child benefit and a lot more as well.
I see no evidence that the Treasury has been willing to do that; nor has the CBI paid any attention to it. However, I have seen some evidence that at least one member of the general council of the TUC believes strongly in what I am saying, although he would not put it in quite the same terms. I would not expect him to. Douglas Grieve of the Tobacco Workers Union did a great service to the trade union movement and to lower-paid employees in Britain when he published his article "Family Policy" in New Society about a year ago, discussing the myth of the family wage.
I value the work of the social security advisory committee. There were several doubts as to whether changing from the Supplementary Benefits Commission system to the new system of running social security payments and the introduction of the social security advisory committee would be wise and acceptable. I believe that the role of the social security advisory committee can be built up and can establish the bipartisanship that I referred to at the beginning. I hope that it will be supported by voluntary organisations and political parties and that the Government will provide the opportunities for the social security advisory committee to be like a continuing Beveridge committee. We need a 325 coherence and structure in tax and benefits. Perhaps in time we should allow an examination of taxation and a narrowing of the tax base.
If we want substantial increases in social security benefits and to bring the family life cycle into socioeconomic policy, we must have a continuing focus on the married man's tax allowance and examine whether personal allowances should be of greater value to the higher paid than to the lower paid. It would be of great advantage to the Treasury and the DHSS, to the House and the people, to have a more unified approach so that the regulations and similar orders are seen in a coherent framework.
§ Mr. Clement Freud (Isle of Ely)
I shall not try to follow the remarks of the hon. Member for Woolwich, West (Mr. Bottomley); I have read the telephone directory. We are discussing the redistribution of benefit. The Minister has told us of the petty meannesses and the limited generosity in the increases.
I am sorry that, after the splendid example of Government rebels in the debate on the 5 per cent. abatement, we seem tonight to have a smaller turnout. I should have thought that the cause was as close to hon. Members' hearts as it was when we came near to showing the country that the mood of the whole House was a fraction more generous than that of the Government.
It would not be impossibly difficult to raise the death grant significantly and to claw back the money from estates in which substantial money is left. A sliding scale could operate. Whenever that is suggested the Front Bench say that it is very complicated. I wish that they would reconsider.
It does not become the official Opposition to chastise and blame the Government for not increasing the Christmas bonus when they, the Labour Party, had plenty of time to increase it in their years in power. The level could have been maintained by small increases, which would have shown willingness—
§ Mr. Foulkes
I am grateful. The hon. Gentleman said that the Labour Government did not uprate the Christmas bonus. Many of us outside Parliament at that time pressed them to do so. The hon. Member was in the House and a member of the party which entered into the pact with the Labour Government. Did he and his hon. Friends make part of the condition of that pact an increase in the Christmas bonus?
§ Mr. Freud
That is a very valid point. Such an increase was certainly not a condition. The hon. Member for South Ayrshire (Mr. Foulkes) will have read in his local newspapers that the loose arrangement that we had with the Labour Government meant that we could not do more than influence a vote. We did not say that our conditions were such and such.
Some years ago I suggested that other more valuable, yet less expensive treats might be given to pensioners at 326 Christmas. I suggested a return rail ticket to some distant place that could be used at a non-peak time. It might be extremely useful for the elderly who want to visit relatives and children. In an off-peak month—
§ Mr. Freud
—at an off-peak hour, it might not be a bad idea to allow such travel. The off-peak month could be in the middle of winter and would certainly be at a time when British Rail had plenty of spare capacity. Many old people would enjoy seeing those whom they love, but are unable to visit because of the expense.
I agree with the hon. Member for Woolwich, West and many other hon. Members about child benefit. It is the most cost-effective benefit and it must be easy to administer. It is certainly immensely welcome. The Minister will know how valuable it is to those who depend on it. Indeed, the take-up is enormous.
The take-up of family income supplement is at least 25 per cent. lower than it should be, because that figure came from the Minister. The figure is probably nearer 50 per cent. It is surprising because we, who have constituents who come to us for advice, have maintained that the non-take up of benefits is often due to the stigma attached, to false pride on the part of the claimant which makes him feel that he should not receive it, or possibly bloody-mindedness on the part of the person behind the post office counter. However, no stigma is attached to family income supplement. It is paid to those who work. Take-up is low simply because only a limited amount of publicity is given to its existence.
If the take-up were higher, I do not know whether the amount of family income supplement would fall. Presumably only a limited amount of money is in the kitty. However, as a result of the previous debate, the Secretary of State is now a considerable authority on incomes policies and he might consider using his talents to advertising family income supplement and increasing the take-up in some way. By all standards it is a lamentable percentage of the potential.
§ Mr. Peter Bottomley
I am most grateful to the hon. Gentleman for giving way and I take back everything that I said about him. However, does he agree that it might be sensible to encourage all employers to put a leaflet about family income supplement in employees' pay packets?
§ Mr. Bottomley
It would no doubt be a shame, but if we are to increase take-up it might be an idea for employers to do that. At least the information would find its way to all employees.
§ Mr. Field
It is an idea, but I would far sooner see a minimum wage Bill enacted or a minimum wage council created.
The Liberal Party established the Welfare State when it was last in Government. The Welfare State and the administration of benefits have become almost impossibly cumbersome. I wonder whether the time will not come in the near future when the Liberal Party will again be in Government. We may then carry out a root and branch operation to introduce a tax credit system or a genuine reform of a system that has become almost impossibly difficult to administer because of the multiplicity of 327 benefits categories, supplementary benefit, unemployment insurances, and family income supplement. I do not envy the Minister's job. I just hope that we shall be able to do it, if not better, at least differently, constructively and radically.
§ Mr. Tim Sainsbury (Hove)
I hope that we do not have to wait for the return of a Liberal Government to get the tax credit system. The system has many attractions. The continuing development of computer technology should bring it within the grasp of the Treasury, not to mention the Department of Health and Social Security, long before the return of a Liberal Government—we cannot contemplate that unlikely occurrence.
I agree with the hon. Member for Isle of Ely (Mr. Freud) that it is a pity that more right hon. and hon. Members are not present for the debate. As the hon. Member for Pontypridd (Mr. John) said, that is attributable not just to the form of the debate but to the time when it is taking place and the other events that took place today.
I thank my hon. Friend the Minister for the way in which he presented the proposals. I discharge him from the accusation of "petty meanness", which is the in phrase on the Opposition Benches.
All of us can find benefits in this enormous range that we would like to single out for generous treatment. In the amending proposals my hon. Friend has shown the care which he and his right hon. and hon. Friends exercise in their regard for the range of benefits, which is perhaps too wide. That could be dealt with more easily if we had a tax credit system.
From a constituency point of view, perhaps a charge of petty meanness—or something not so extreme—can be made in respect of a single payment for home repairs. Our party is committed to home ownership. I am delighted that we are making tremendous strides in furthering home ownership. A generation of the elderly is coming up, far more of whom will be home owners than in the past, whether they own bungalows, houses or flats on freehold or long leaseholds.
I am not entirely convinced that the single payment for house repairs system works satisfactorily, first in the amount that is available, which has not been increased. Secondly, we have the unfortunate system whereby for repairs up to a certain figure, one receives the full payment, but if they are more than that, one does not receive anything. That is an unsatisfactory cut-off. I hope that that matter will be given attention before the next review of the benefits.
The hon. Member for Pontypridd referred to the inflation rate as it applies to the recipients of benefits. I hope that the hon. Gentleman realises how wrong he was when he suggested that the majority of those in receipt of State benefits had lost under the Government. It requires only a moment's reflection to realise that the majority of those in receipt of State benefit are pensioners, who have not lost. We would have liked them to receive more, but we cannot say that they have lost.
The hon. Gentleman rightly said that the retail price index is different for different categories of beneficiaries. That is a point that successive Governments have tended to overlook. We use the all-embracing single retail price 328 index and assume that that is a satisfactory way of looking at the living costs for different groups of people. I suggest to my hon. Friends on the Front Bench that there are two different categories of recipients of benefits who have different potential RPIs, both of which may be different from the national retail price index.
The first group is the pensioners. All hon. Members would agree that food is an especially important ingredient of the RPI for them. Housing and energy costs are also important. I am glad to see that the index for food seems to be rather lower than the national average. That is helpful. I suspect that there is a different RPI for benefit recipients with young children, irrespective of whether they are single.
Perhaps it is necessary to be more sophisticated in our approach to retail price indices to help us to determine which benefits need what increase. We could all use our little pocket calculators these days. I should not have thought that it was beyond the wit of man to do that easily and without needing to gather more information. The information that we already have could be used to reflect the different effects of differential price movements on different groups of beneficiaries.
§ Mr. Sainsbury
It does not matter what shop people go to. The hon. Member for South Ayrshire (Mr. Foulkes) has already made three speeches from a sedentary position and three more on interventions. I do not know whether he hopes to catch your eye, Mr. Deputy Speaker, but I hope that if he does his speech will be better than those that he has made so far.
At long last there is to be an increase from £2,000 to £2,500 in the disregard for capital resources. Any charge of petty meanness against my hon. Friend the Minister falls down here. The change is immensely welcome and long overdue. I hope that the House can be assured that it is only a first step. Once again there is a problem—£2,500 or £2,499 and one is all right, there is complete disregard; £2,501 and one is in trouble. That is rather unsatisfactory, as are the categories of assets that are included or disregarded in assessing whether recipients or potential recipients have £2,500 or more in capital assets.
I know from experience in my constituency that that is a problem. It requires fairly urgent and detailed attention. I welcome the increase but I hope that it will prove to be only a first step in the continuing improvement of the benefit system that I know that my right hon. and hon. Friends are striving to bring about.
§ Mr. Andrew F. Bennett (Stockport, North)
It is nice to hear a representative of the grocers speaking up for the claimants. There is a clear link—if the claimants have a little more money, they can spend it in the grocers' shops. That is a pleasing start.
I agreed with the comments of the hon. Member for Woolwich, West (Mr. Bottomley) about the social security advisory committee. I welcome the start that it has made. I am one of many hon. Members who was disappointed at the abolition of the old commission and who wanted the advisory committee to fulfil at least as good a role in campaigning for decent benefits.
I welcome the committee's first report. I also welcome its comments on many of the instruments. Before we give 329 it too favourable a reception, however, the real test is how far the Government listen to its representations. If it fails to make any impact on the Government, we must see how far it is prepared to campaign in the country to create the type of climate of opinion that clamours for, and demands that the Government do, the sensible things that the committee recommends, especially with regard to the unemployed and the necessary increase in benefits.
We should also comment on the absence of the Social Democrats tonight. Last night, when they were so keen to campaign for their own rights, there was a large turnout. Tonight, when there is an opportunity to campaign for the rights of others, they seem to be completely uninterested. It is amazing that, despite their pretensions about their interest in equality, almost always in social security debates there is either no attendance at all by the Social Democrats or a perfunctory performance by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) who looks in on the debate, says a few words and disappears. Tonight no concern at all has been shown by the Social Democrats and it is a sad reflection on them.
The Minister suggested that there were few surprises in the Government's proposals. That is certainly true, but there are many disappointments. Why cannot the Government afford to spend a little more money? Why do they not restore the £521 million per year that they cut from the social security budget through the Social Security (No. 2) Act and other measures? They claimed that those cuts and the failure to uprate benefits in line with inflation or pensions in line with earnings were necessary to start to get the economy right.
Treasury Ministers keep telling us that things are now starting to go right. In that case, why cannot some money be spent in the uprating orders? If things are going right, November this year would be a reasonable time to start putting back some of the money. Could it be that things are not going right? The best way to convince people that the Government's economic strategy is working would be to start putting that money back into the benefits by considerably increasing the amounts in the orders.
If the Government will not start to uprate, they could at least start to restore some of the cuts. In their first few months of office they made substantial cuts in income tax levels for the highest earners, giving away to them about the same amount of money as they took from the benefits—about £520 million. That was supposed to produce incentives which would get the economy moving so that it would then produce some money for the least well off. Where is that money? It is now nearly three years since those tax handouts were made, supposedly to produce incentives. Where is the money to help the least well off who had to pay for those handouts?
Every hon. Member should be aware that the orders will come into effect at the time when the Government are introducing their new housing benefit which means that most people living on State benefit will lose a considerable amount of weekly flexibility. They will no longer receive their rent money. It will be paid directly by the Government to the local town hall without passing through the tenants' pockets, so they will lose that flexibility. All the groups that campaigned for the combined housing benefit said that the one snag in the scheme was that it reduced flexibility for many claimants. They also said that the advantages could be achieved if only a little extra money could be provided to increase flexibility.
330 What do the Government intend to do this autumn when they remove that flexibility by making direct payments? How will they help people in the short-term, transitional period when claimants suddenly find that they have less money in their pockets to get by during the week, and what do the Government intend to do in the long term? Also, what do they intend to do about people who are accumulating rent-free weeks? Great bitterness will be caused if, as the Government have suggested, people who have accumulated perhaps one and a half rent-free weeks when the new scheme is introduced then lose that money to the Government? I hope that the Minister will say something about that.
The benefits are supposed to be worked out on a weekly basis. Yet people who appealed against decisions about their weekly benefit have to wait an average of 11 weeks. If that is the average, some people must have to wait even longer. How do the Government expect people to manage for 11 weeks or longer while their appeal is being held when the money is due immediately and not at some time in the future? I hope that the Minister will tell us that he is taking urgent steps to cut down the delay in appeals being heard.
The national average for appeal delays is 11 weeks. In Stockport it has slipped to 13 weeks. I hope that the Minister will confirm that he is taking specific measures in Stockport to ensure that appeals are heard quickly and that people get their money when they need it, not many weeks later.
My hon. Friend the Member for Pontypridd (Mr. John) asked about the "S" manual. The Minister intervened to tell us a pretty sorry story. The Government are again putting off the publication of the "S" manual. I suggest that the Government are not the only area of wisdom. Many groups representing claimants, and the claimants themselves, have a great deal of wisdom and knowledge. The "S" manual should have been issued in a provisional form and the Department could have updated it, taking representations and arguments into account. It would then be a document on which everyone has participated and not one that is merely a reflection of the magic that happens, or fails to happen, in the Department.
Will the Minister also tell us what the Department is doing about the computers? His predecessor made great play about the way in which the Department is trying to develop a computer programme so that claimants could obtain their rights. They could use the computers and the computers would be available to give advice. I understand that the Government have run into major problems. I hope that the Minister can say how far the so-called computer programme is going or whether the change of Minister means that the programme is to be scrapped.
I also press the point raised by my hon. Friend about the benefits that have not been improved in the order—the death grant, maternity grant, and the Christmas bonus for pensioners that has not been increased to the £37 necessary to restore it to its original value. Nothing has been done on grants for house repairs or the installation of baths. The blind person's allowance has not been increased. The Government must look carefully at the fact that for all these benefits the administrative cost of paying out the money has steadily increased, but not the benefit. If the Government want to obtain good value for money and for administration the real value of all those benefits must be increased.
331 I turn now to the issue of fuel costs. The Minister said that he was proud that the Government have overestimated the amount necessary to help with fuel bills and that they were not clawing it back. That statement will ring hollow to my constituents who feel bitterly about their fuel bills and are still struggling to pay off last winter's fuel bills. They feel they should be saving for next winter's fuel bills. The Minister then spoke about changes in the heating of high-cost estates. When we read the Minister's words tomorrow we shall see several snags.
There was one major defect. There should have been a joint statement by the Department of Health and Social Security and the Department of the Environment, making it clear that the Government are committed not just to helping people with their heating costs but to ensuring that such estates are converted to reasonably priced heating so that heat is not wasted. We must ensure that when people living on high heating cost estates come out of benefit they are not left to meet the full heating costs from their earnings, because that is a major burden on them. We need an approach from Government that helps with heating costs and at the same time gets rid of these expensive flats or converts them to some other form of heating. Decent insulation must be installed so that they are places where people want to live, not places from which people desperately try to escape.
The Minister should publish a national list of estates that qualify so that people can make comparisons of heating costs and challenge the list. It is difficult to discover which estates and dwellings qualify so that people can make comparisons.
§ Mr. Rooker
This is an important point. About 18 months ago, parliamentary questions were tabled on this subject and Ministers were unable to supply the information. As a result, my hon. Friend and I wrote to certain local authorities. I was informed that no part of Birmingham qualified for extra heating costs under the existing rules. That shows how serious and complex this matter is, given the variety of high-cost heating that must exist in a city as large as Birmingham.
§ Mr. Bennett
Perhaps the Minister will up-date the information on Birmingham and Greater Manchester. I asked the same questions of Greater Manchester and was originally told that there were no high-cost heating estates in that area. Subsequently I was told that that was not quite true, because three appeals were outstanding. I understand that at least one estate in Moss Side was eventually recognised as a high-cost heating estate. If there were a national list of high-cost heating estates, we could establish whether other estates should be added.
Basically, we ought to get rid of those estates by giving local authorities the money to convert so that people do not have to spend large sums of money on what is often inadequate heating.
The Government were pleased to announce an overshoot on fuel bills, but I doubt whether they have taken into account the problem of the fixed standing charge. Indeed, they seem to encourage boards to increase their standing charges. Such charges are a real penalty to those about whom we are concerned—people on low incomes and those who try to keep their fuel costs down by minimising the use of gas or electricity. I suspect that the Government have not taken into account the effect that these steadily rising standing charges are having on these families.
332 I welcome the fact that the Government have increased the amount of the cash gift from £20 to £100. Presumably that is a reflection of their view that people cannot get by on these benefits and need to receive such gifts. However, it is anomalous that gifts in kind have not been taken into account.
I also welcome the fact that the Government have increased the qualifying ceiling from £2,000 to £2,500. It is ironic that although they announced this in March, it will not be introduced until November. As a result, many people who reduced their capital from £2,500 to below £2,000 may find months later that they could have kept their original amount.
It is particularly mean that the Government have not increased the single payment. That should have been increased, especially as many elderly people, realising that the death grant is totally inadequate, want to have savings that will give them a decent funeral. Sadly, many people cannot get single payments because they are providing for their funeral. The Government ought to have increased the single payment in line with inflation.
I very much regret that the Government have not begun to increase child benefit so that eventually we can get rid of child allowances and other benefits. The sad thing is that they have not kept child benefit in line with inflation. Can the Minister give us any idea of the proportion of people who have now opted, where they have the choice, to continue to take child benefit weekly as opposed to monthly? How many people have now had to take it monthly because it is their first child and have been allowed to move to weekly payments because they are on supplementary benefit, and how much hardship is being created in that area?
What will the Government do about unclaimed benefit? The amount of unclaimed benefit goes steadily up and up and the Government are doing very little to ensure that people get that extra benefit. It is all very well to say that the amount of money available from family income supplement has gone up and up, but as far as I can see, the number of people receiving it, and particularly the number of people who apply for it immediately when there is an uprating, is not adequate. The Government ought to be doing much more to ensure that all the people for whom the benefit is designed are getting it.
I very much regret that the Government are not doing anything for the long-term unemployed, the people who need some major help. If there were few surprises in the Minister's opening remarks, I suspect that there will be very few surprises in the reply to the debate. It is about time that the Government surprised the House by showing a little generosity to the unemployed, the people who the Government are demanding should make the sacrifices and who ought to be protected from the hardships of unemployment by getting a decent rate of benefit.
§ Mr. Frank Field (Birkenhead)
I accept the Government's rhetoric at its face value. The Conservative Party often tells us that it is the party of the family. Those present in the Chamber tonight would probably agree that the one crucial ingredient of a family is children. The one element missing from the Minister's speech was any information as to what the uprating does for children. I do not think that the omission was because he was being kind 333 to us and hurrying through the pages of his speech. Of all the groups considered tonight in the uprating, the children have fared the least well.
In three ways the Government have attacked those with children. First, as has been said, the increase in supplementary benefit is undertaken in relation to the Rossi price index. It has meant that the increase has been less generous than it would have been if the old way of increasing benefit had been followed. When one is managing a family on supplementary benefit and when all the needs of the younger children have to be covered on about £1 a day, any change that the Government make which means that the increase is less generous than it should be is a matter of great importance to the family.
The second blow to the family has been through the way in which the Government have increased the child dependency additions for national insurance beneficiaries. The increase this year is about 1½ per cent. No wonder there was no mention of that review by the Minister.
The third cut has come in child benefit, as has already been mentioned by practically all hon. Members who have spoken, except the Minister.
The main point of staying until this late hour is to ask the House not to follow the advice given in one of the briefs which have been prepared for hon. Members speaking in the debate. The brief suggests that a suitable way of finding additional resources for increases in child benefit would be to apply a cash ceiling to the married man's tax allowance and to put that money on to child benefit. The brief says:Had the extra tax relief for married men aged under 65 been frozen in this year's Budget, child benefit could have been increased by an extra 65p with the £360 saved.That is the last thing that we want to see happen to child benefit. The reason for that is to be found in the brief. If we examine how the tax burden has changed for families on three-quarters of average earnings, we find that it has increased the fastest for those with two children. For those families it has increased by 418 per cent. It has risen for the childless couple by 131 per cent. and for single people by 92 per cent.
If we are advocating phasing out the married man's tax allowance and transferring the moneys to child benefit, we are advocating shifting resources to those with children. If we are to reverse the discrimination in our tax system against those with children, resources must come from elsewhere, especially from those who do not have children and from those who are single. That is different from saying that we want the married man's tax allowance phased out and that we want to use the additional revenue to pay a new benefit to families. The example that is often given is paying a benefit to families with children under five years.
There are two arguments being advanced and there is confusion in the brief to which I have referred. It advocates a move that we should not accept if the aim is to redress the discrimination in our tax and benefit system which families have suffered. That is not to say that we do not want to phase out the married man's tax allowance and other tax benefits. Had the previous Labour Government started that process we would have the revenue, by phasing out the married man's tax allowance by putting a cash ceiling on it, and we would be able to pay a cash benefit of £25 a week to families with children under five years. There is a large amount of money to play for. It is an important issue that we need to discuss. If we wish to deal 334 with the discrimination that families have suffered in the tax system, money must come from other sections of the community without children.
§ Mr. Peter Bottomley
Will the hon. Gentleman spell out in writing and in greater detail the arguments that he is advancing so that they can be examined by those who take an interest in these matters? Secondly, do his remarks apply to the many married couples without family responsibilities who enjoy the advantage of the married man's tax allowance, the main group which I thought were supposed to give up some of the increased allowance that the Government, in my view, wrongly allowed them?
§ Mr. Field
That is right, but the hon. Gentleman is muddying the issue. There are many who claim the married man's tax allowance who have children. If we give the Government a let-out by saying that they can make good their shortfall on child benefit by clawing back from the married man's tax allowance, we are asking many people with children to pay for the shortfall. In other words, we shall be robbing Peter to pay Peter. We should transfer money from Peter to pay Paul.
There are two questions before the House. First, where do we find the extra moneys to build up the child benefit system? That must come from those without children. Secondly, we as a nation pay a large subsidy to married couples without children throughout the working lives of the husbands, and perhaps it would be more sensible to make moneys available when families need them most, which is when there is only one wage packet because they are beginning to have families. The brief that is before us does not do that and it does a disservice to the family.
I welcome back to the Chamber the right hon. Member for Greenock and Port Glasgow (Dr. Mabon), who represents the Social Democratic Party. In many of his colleagues' speeches, especially those of his hon. Friend the Member for Woolwich, East (Mr. Cartwright), the question is asked "Why cannot we make more progress on this issue?" The answer is disarmingly simple. The House of Commons is good at dealing with class issues. It is not good at dealing with issues that cut across generations. A great deal is heard about the Social Democratic Party being the mould breakers of British politics. This issue is a mould breaker. It is interesting that speeches in support of that break have been made from the Labour and Conservative Benches. There has yet to be a contribution from the Social Democrats in support of that aim.
§ Mr. Allen McKay (Penistone)
I wish only to emphasise a couple of points. It will be interesting to hear what the Minister has to say about the 5 per cent. abatement. Although the Government won the vote last week, they certainly lost the argument. Their action did not accord with the will of the House. They will probably come to view with shame what has occurred. Even if actual promises were not made, understandings should be upheld. Many people have been severely hurt.
There has been reference to the £2,500 cut-off point in relation to old people who save for their funerals and who are penalised because they cannot receive supplementary benefit. Another class of person is also affected. A company in my constituency, Paramor's, became insolvent and between 500 and 600 people were made redundant. They were paid out of the insolvency fund only 335 to find that notional tax was stopped. However, as it was notional tax and no money went to the Inland Revenue, they found that no rebate was available. I approached the Minister who eventually saw the point.
I understand that legislation will take care of the matter. It does not, however, take care of the men at Paramor's. When they received money for the period of their notice, the unemployment pay they had recieved during that period was deducted. But the unemployment period started from the moment they became redundant and not three months later during the period of notional notice. They have received nine months' rather than 12 months' unemployment pay.
The harm is felt now that they have been unemployed for 12 months. These are people aged 58 and 59 who have redundancy pay and who decided to save for their retirement. Yet they are penalised. They are told that they must spend the money they have saved by thrift—a quality that I had imagined a Conservative Government would applaud. The cut-off point should take account of these matters. When an engineering firm makes apprentices redundant and decides to sell its apprentice workshop, there is no long-term future. That means there is also no long-term future for these people. It is more than likely that they will be condemned to be unemployed for the rest of their lives. They now have to spend their savings to take them below the £2,000 mark when they can claim supplementary benefit. There is something wrong about a system in which people are encouraged to save and are then forced to spend and to live on the pauper's line. Whatever the Government say, unemployment will exist for a long time if these policies are continued. The Government should recognise what is happening in the world, and the fact that people are proud. They are now becoming extremely bitter when they find that the Government's policies are working against something in which they have believed all their lives. Will the Minister answer those points?
§ The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)
I shall certainly try to take account in my remarks later of the broader points that the hon. Member for Penistone (Mr. McKay) made. I hope that he understands that I should like the opportunity to look more carefully at what he said about his constituents. I can read it in Hansard and write to him later with my comments.
I am somewhat relieved that as my hon. Friend the Member for Woolwich, West (Mr. Bottomley) and the hon. Member for Birkenhead (Mr. Field) apparently cannot understand each other on an important point, there is little chance for a mere social security Minister to understand either of them. I have now received a message from my hon. Friend the Member for Woolwich, West to say he believes that the hon. Member for Birkenhead has it half wrong. I am even more confused, and I hope that they will both understand if I stay out of that argument.
Although I had my fears at the outset of the debate, it has been a constructive exchange of views on the uprating and some complicated technical provisions which we had before us. I accept that it is an awkward time of night to be discussing these matters. Apart from the points that the hon. Member for Pontypridd (Mr. John) made, we are 336 discussing a set of proposals and regulations that affect every person in the country. They might have been done more justice at another time of day.
I say to the hon. Member for Pontypridd, who is leading for the Opposition, that I do not want to follow him too far down the track of arguing about the Government's whole record on social security. I believe that he does less than justice—I can perhaps say this more readily than some, as I arrived in the Department only on 5 March and can have had nothing to do with the decisions that underlay the uprating.
§ Mr. Newton
No, I am not washing my hands, to pick up the sedentary interruption of the hon. Member for Birkenhead. He should let me finish my sentence, although it is becoming rather long and convoluted. I believe that the hon. Member for Pontypridd has genuinely done less than justice to the achievements of my right hon. Friend the Secretary of State and my hon. Friend the Minister for Social Security in protecting the social security system at a difficult time. I go beyond that to say that despite all the comments and criticisms that have been made—I understand why they are made, and no doubt if I were on the other side of the House I should say much the same—against the background of the three or four difficult years that we have had, the Government have managed to protect completely the short-term supplementary benefit safety net and the long-term benefits—the pensions—which provide the basic bedrock of the social security system. That is a substantial achievement.
I do not deny, nor do I disguise the fact, that some difficult decisions have had to be taken about some other aspects of the benefit system. I suspect, however, that our achievement in protecting long-term benefits is appreciated more in the country than it is in the House.
§ Mr. Rooker
The hon. Gentleman makes too strong a case. Does he not accept that in the current financial year there has been a cut of £1.5 billion in the social security system? That is the Government's figure. Almost half that sum—£700 million—was directly attributable to cuts and changes in retirement pensions.
§ Mr. Newton
I do not want to take too much time arguing about details. The broad basic achievement is more substantial than is often recognised in the House and it has been brought about at a time of acute difficulty for the country and for many who are not on benefit. It would have been tempting for me to spend time on those matters and to elaborate the best points in the uprating and the associated changes, but the lot of a mere Under-Secretary is less glamorous and it is my task to sweep up the points raised in the debate.
I intervened in the speech of the hon. Member for Pontypridd on the question of the "S" manual and I cannot add much to what I said. There will be further delay before we can get the manual published, for the reasons that I mentioned in my intervention. The hon. Gentleman said that as staff must already be using the document in its present form, together with the guidance issued in various ways, there could be no great objection to our pushing it out in its present form.
§ Mr. John
The hon. Gentleman said that the manual could not be pushed out because there was concern about the form in which it appeared and the effect on the staff and public of reading it in that form. I suggested that as the staff were using an "S" manual anyway, the Government's fear must be the effect on the public of reading it in its present form.
§ Mr. Newton
I resist the implication of the hon. Gentleman's remarks. There were sedentary interruptions earlier from an hon. Member who implied that he has something less than confidence in the quality of DHSS written material, and one of the problems is that the guidance in its present form is not always entirely adequate even for the staff. We are anxious to provide an improved version of guidance for staff and the public. It is important to get it right.
§ Dr. J. Dickson Mabon (Greenock and Port Glasgow)
Can the Minister assure us that the manual will be published in this calendar year?
§ Mr. Newton
In view of the history of ministerial assurances on this matter, I think that discretion is the better part of valour. I hope that it will be possible to publish the manual this year, but there is at least a possibility that it may be early year.
One of the major points raised by the hon. Member for Pontypridd was the question of which indices should be used for the uprating. We are not convinced of the case for shifting from the use of the retail price index. As far as we can judge, it remains the best overall indicator of price rises and is, therefore, the most appropriate measure to determine the rise in the main social security benefits.
I do not rule out considering alternatives if the hon. Gentleman can come forward with some that have not been suggested previously, but the pensioner price index, for example, is published only quarterly and excludes housing costs. That is an imperfect instrument and even if it could be shown to have conclusive merit over the RPI, it has shown little divergence from the RPI over the past few years, especially if one takes the retail prices index excluding housing costs. I shall not weary the House with statistical examples, but I am happy to give the hon. Gentleman the comparison that I have in front of me, showing the movements in that index, compared with the RPI, both with and without housing costs, over the past few years. I think that he would agree that it does not present a conclusive case for an alternative index—certainly not one that has persuaded the Government.
The hon. Gentleman spoke about the number of benefits and disregards that have not been uprated in the statement. He perhaps underestimated the extent to which we have moved on a number of important matters. For example, there was an improvement in the earnings disregard for one-parent families. Separate regulations will be introduced to provide an increase of over 20 per cent. in the therapeutic earnings limit for those in receipt of sickness and invalidity benefits, giving particular help to those who are preparing themselves to return to full-time work after illness or disablement. For those who give up full-time work to care for a severely disabled relative, we propose—again, in separate regulations—to double the amount of part-time earnings that can be earned without affecting entitlement to invalid care allowance. That is the first such increase since 1976. I accept, of course, that we 338 have not moved on all possible disregards this year. Part of the background to that is that, by definition, money spent on improving disregards, rather than raising benefits, goes to people who are somewhat better off than people who have no earnings at all. They obviously help only those who have earnings over and above benefit. We have made these two significant moves, which I hope that both the hon. Gentleman and the House will welcome.
On the lump sum payments and the extent to which they have not been uprated, the hon. Gentleman should accept that, in both the death grant and the maternity grant, the Government have published substantial consultative proposals—in the case of the death grant, it was quite recently by my hon. Friend, and in the case of maternity grant and maternity benefits generally, it was about 18 months ago—suggesting that because of the problem of uprating the existing system, changes could be made to bring additional help to certain categories or groups of people. In both cases, there has been a good deal of disagreement among those consulted—certainly on the maternity benefits, and currently on the death grant—about what is the right way to move. I am not saying that I am now certain about any one solution. However, the Government have acknowledged the problem of the non-uprating of these benefits, together with the problem of finding sufficient resources to do so in the way that is sometimes called for and they have moved to put before the public proposals about how to develop the benefits to help people in particular need. That is a sensible way to proceed, and I hope that as a result of both these consultation exercises, it will be possible in due course to move forward with a reasonable amount of public agreement.
§ Mr. Foulkes
If all the representations—or the vast majority of representations—on the death grant from all the organisations and bodies consulted say that they do not like any of the options, and there is an overwhelming view in favour of a substantial across-the-board increase in the death grant, will the Government accept that result and give an across-the-board increase?
§ Mr. Newton
The hon. Gentleman knows that I cannot give him that undertaking. I shall not attempt to speak for my hon. Friend the Minister for Social Security, although I hope that he would say the same. I have listened to demands this evening that must in total have called for the spending of about £1 billion on aims that most hon. Members present would regard as worthy, not least the claims of the long-term unemployed. I should want to consider whether an all-round increase in the death grant was to take priority over, say, the extension of the long-term supplementary benefit rate to the unemployed. The chances are that we are talking about roughly comparable sums of money.
I normally play a fairly emollient role in these debates, but I am fed up with the extent to which Labour Members will never face up to the question of priorities. They simply demand everything that seems to be desirable, with no real thought to the problems.
§ Mr. John
The Under-Secretary, who is better at being emollient than abrasive, will realise that my point was that one had to decide either not to keep such specific grants or to uprate them, but that one could not do half a job, which is what is being done at the moment.
339 Is the hon. Gentleman saying that the choice now is between giving the long-term supplementary rate to the unemployed and the increase of the death grant? I suspect that he is giving a bogus choice to make a bogus debating point.
§ Mr. Newton
If we are to start arguing about who is making bogus debating points, there has been some pretty stiff competition in the course of the debate.
The hon. Gentleman adopted the same approach at Question Time the other day in relation to the invalid care allowance and the 5 per cent. abatement of unemployment benefit. I do not say that these are direct and definite alternatives. I am simply saying that, if a given sum of money is available, it must be decided what it shall be spent on.
Nobody approaching the matter in a realistic or commonsense way could resist that conclusion. I am rather tired of being confronted with successive demands for all sorts of desirable aims without any attempt to set them in an order of priority.
I accept, and it is implicit in everything I have just said, that there is a problem created by those benefits that have been at their present level for a considerable period—for example, the death and maternity grants. However, it is unreasonable to accuse the Government of trying to bury those when we have gone to some trouble to bring proposals before the House and the country to solve the problems.
I turn to more general matters that have been raised in the debate. First, a great deal of play has been made of the fact that the number of people in the poverty trap has increased over the past few years. One of the principal reasons for that is the substantial increases that the Government have made in family incomes supplement, which, by definition, is designed to help those in work and which therefore creates the situation in which more benefits are lost as earnings rise.
However, if the avoidance of an increase in the poverty trap is the end to be pursued above all others, the logical consequence would be to decline to support further increases in family income supplement. There is no way to increase family income supplement at any given point in time without increasing the number of people in the poverty trap. That may be a dilemma, and I do not pretend that it is particularly pleasant, but anybody attacking the poverty trap must recognise that it partly arises from giving additional help to working families with children, which is something that in general everybody wants.
The 5 per cent. abatement of unemployment benefit has been thrashed over extensively in the past few months in the House, the most recent occasion being only last week. I do not propose to attempt to add to what was said by Ministers in those debates. We shall keep the issue under review, but we do not believe that it is possible to restore the abatement at this time.
I do not want to risk inflaming Opposition Members further by discussing priorities in another context, but when examining benefits for the unemployed we are conscious of the problems of the long-term unemployed and the long-term supplementary benefit rate. I ask Opposition Members to consider where they would put that in their list of priorities.
340 We have moved in an important way in respect of the over-60s who, if they are unemployed and have been on benefit for a year, can go on to the long-term supplementary benefit rate if they cease to register for work. That is a modest move, but it is helpful and sensible. Opposition Members might think that it has merit.
The hon. Member for Stockport, North (Mr. Bennett) talked about housing benefit. I recognise his anxieties. We shall debate the housing benefit regulations fully next week. That will be the appropriate time to take account of his remarks.
I recognise the problem of appeals. I wrote to the hon. Member for Stockport, North about what happens in Stockport and I shall re-examine the position. There is some evidence that the efforts by the commissioners and by chief supplementary benefit officers and chief national insurance officers to speed up the handling of appeals is beginning to have some effect. There is some improvement in the pace of appeals. We are anxious to ensure that that progress is sustained.
Hon. Members are worried about the supplementary benefit capital rules. We have said repeatedly that we are keeping them closely under review—to use the classic phrase. I am not in a position to give commitments tonight, but we continue to be aware of the problem. We have given a clear sign that that means more than it sounds by the proposal in the regulations to raise the £2,000 limit to £2,500 in November.
I made it clear at Question Time recently that we are conscious of the problem, which has been emphasised tonight, of the £300 capital cut-off limit for single payments in the context of payments for fuel. We shall have that in mind when considering what further steps we can take.
I was struck by the letter which my hon. Friend the Member for Hove (Mr. Sainsbury) wrote about the housing repairs limit. His letter stuck in my mind. We are examining that aspect. I cannot give a guarantee this evening, but I assure him that it has not been forgotten.
There is much interest in heating additions. The hon. Member for Pontypridd mentioned the SSAC's report and the position of disabled people in hospital or coming out of hospital. I can do no better than quote the Government's response to SSAC's report. It states:The Committee did not recommend any changes in the proposal, but drew attention to a number of points mainly affecting the position of claimants in hospital and their dependents to which they think further consideration should be given. We shall examine all these carefully … We shall also take steps to see that effect is given to the Committee's recommendations about the position of disabled people in board and lodging accommodation.I assure the hon. Gentleman that those words were used in good faith. We were struck by the points made by the SSAC and we shall consider them carefully. By means of guidance, or if necessary, through changes we shall do our best to meet the anxieties that have been expressed.
The system that we inherited for estate rate heating additions has proved to be virtually inoperable. The method of trying to assess in detail reasonable heating costs more or less house by house and estate by estate has meant that very few estates—little more than a handful—have been designated. However, the two estates in Manchester touched on by the hon. Member for Stockport, North have been designated. The reason for the proposals before the House tonight is that unless there is some simplification along the lines proposed it is 341 extremely difficult to see how the scheme can be made to work. We propose flat rates of heating addition associated with an assessment of estates broadly on the basis of the type of heating system in operation.
As my hon. Friend the Minister said, the general policy is to refer to the type of heating system. After careful study, we have come to the conclusion that that is the best indicator of whether a house is hard to heat. However, these cases are difficult and if we laid down rigid criteria they would simply create more problems, because certain estates have novel and unique systems which we are anxious to be able to cover.
Therefore, we shall proceed on the basis outlined by my hon. Friend the Minister. I confirm to my hon. Friend the Member for Woolwich, West that the consideration applies to estates rather than to individual claimants. It is proposed to include heating systems using non-standard off-peak tariffs—tariffs that are operated by the electricity boards—for systems that require more than the seven or eight hour charge of modern storage heaters. We cannot tell whether individual estates qualify without examining the cases in detail, but I assure my hon. Friend that there is no confinement to estates with storage heaters.
These tariffs are associated with expensive heating systems and that is why we propose to pay higher rates of heating additions to claimants on those estates.
§ Dr. J. Dickson Mabon
Would it not be better to classify schemes according to the working cost rather than to the type of heating? Even within the same system the costs vary. Should there not be some correlation between the Department of Energy's conservation provisions, such as those relating to insulation, and the heating grants given?
§ Mr. Newton
The attempt to tailor-make heating additions to particular circumstances and properties has made the existing scheme virtually impossible to operate. Unless we can attain the sort of simplified system that we have outlined the thing will not work. The hon. Member for Stockport, North also raised a point about insulation, but that would take me beyond the ground that I can properly cover when discussing social security regulations. I shall make sure that the words of the two hon. Members are drawn to the attention of my colleagues in the Department of Energy and especially the Department of the Environment, as it is often a matter for the local authorities—
§ Mr. Newton
If I am not intimidated by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), I am unlikely to be intimidated by the Chief Whip.
§ Mr. Newton
Evidently not, from the evidence tonight.
In conclusion—[HON. MEMBERS: "Hear, hear"]—I shall pick up one strand that has come up in some speeches in the debate, which is about the role of the social security advisory committee. A number of points that have come up in this debate and the regulations, owe a great deal to the work of that committee. A few months ago, when we discussed the new fuel direct regulations, the hon. Member for Pontypridd complained that we had published two sets of regulations that had not been referred to the SSAC. He wondered whether we were going to bypass it. I assured him that we did not intend to. I hope that he will take what has happened in relation to the regulations as a sign of the considerable value that we place on its work.
Those who have read our response to the SSAC's comments on the regulations will find it almost repetitively littered with references to changes in the regulations made as a result of points made by the committee and with undertakings to look further at additional points that it had raised. I hope that that reflects what will be continuing work of co-operation between the Department and the SSAC in trying to achieve what everyone in the House wants to achieve regardless of political difference, which is a social security system that is tailored as well as possible, in detail, to the needs and interests of those whom we are trying to serve.
Hon. Members have played their part in that. The SSAC is playing a continuing part. I hope that we shall be able to go on playing our part and that in that spirit the House will accept the regulations.
§ Question put and agreed to.
That the draft Social Security Benefits Up-rating Order 1982, which was laid before this House on 29th June, be approved.