Death Grant

HC Deb 30 March 1982 vol 21 cc171-8

4.2 pm

The Minister for Social Security (Mr. Hugh Rossi)

I will, with permission, Mr. Speaker, make a statement about the death grant.

As the House is aware, some 14 years have elapsed since the death grant was last increased. Whilst never designed to cover the full costs of a funeral, the grant has now declined to such a low level in relation to those costs that anxiety is being caused to poor families by this ever widening gap. At the same time, social conditions have improved to such an extent in comparison with those that prevailed in the 1930s and gave rise to the concept of a death grant, that this grant is no longer of the same importance to the large majority of families as it once was.

The Government's prime concern is to devise a scheme that will ensure that the grant is increased to a level sufficient to provide a real contribution to funeral costs for those families in greatest need of such help. One solution would be to make a universal increase in the death grant. However, such an increase could not be-made to a level worth while to those in need without diverting additional considerable resources to those with no real need; and there are more pressing purposes to which we wish to devote such resources, it they were available. Although these considerations have occupied us for some months, it has not been possible to find an easy solution, especially as we have been anxious to avoid means-testing people at the time of bereavement.

An alternative to a universal increase is to abolish the existing contributory death grant and to put in its place a non-contributory funeral grant of a substantial sum but of limited availability. The determining factors for entitlement to a new funeral grant would be the size of the estate left by the deceased and the current receipt by the person responsible for his funeral of one of a specified group of social security benefits. Fewer people would benefit, but the size of the funeral grant could be increased substantially and help brought to those most in need.

We have decided, however, that before reaching any final decision on this fundamental change in the nature of the grant we should set out the problems, what seems to us to be the most practical way of overcoming them, and invite comments. Accordingly, we have published today a consultative document explaining the alternatives in futher detail to see whether they command public support as representing a more effective use of present resources than the existing arrangements. We hope that our ideas will be carefully considered by the many organisations and individuals who will be receiving copies of the document, and we look forward to their views.

Mr J. W. Rooker (Birmingham, Perry Barr)

I shall give the Minister a chance to tell the House what the Government intend to do about the death grant. His statement contains no figures and provides no details of the options that are set out in the consultative document. Will he confirm that there is no intention to provide any new money either by the national insurance fund or by the Consolidated Fund? Does he accept that the three options that are mentioned in the consultative document would benefit only 65,000 to 125,000 persons compared with the 630,000 who receive some type of death grant under the present system? Does he agree that all the options set out in the consultative document will involve the means testing of the deceased spouse or of the person responsible for the funeral bill, and that it is intended to ask questions about other close relatives and their resources?

Why is the capital sum of £1,500, which is mentioned in the consultative document, considerably less than the capital sum which is used for supplementary benefit purposes? Has the hon. Gentleman considered the design of the application form to ensure that it will not be a major deterrent to those applying for what will be a meagre grant that will be means-tested in the 1980 style and made available to only 10 to 20 per cent. of existing beneficiaries? Assuming that any one of the three options set out in the consultative document ever gets on the statute book, do the Government have any intention of regularly uprating the new system? Lastly, on what date will the consultation process end and when is it intended to bring firm proposals before the House?

Mr. Rossi

The note of indignation in the hon. Gentleman's voice would have been rather more impressive if the previous Labour Government had sought to tackle this problem. All that we had from them was a series of statements to the effect that there were higher priorities or that there were no resources available. At least we are making a real attempt to bring forward a viable scheme to help those in greatest need.

There are three possible ways in which we can assist those in greatest need. The larger the amount of the grant the fewer people we shall be able to assist. That is because we are subject to restraint in resources. However, there will be marginal administrative savings as a result of the lesser number of claims to be handled. We hope in some of the options to use some of those savings to increase the benefit and make more money available to those who are in need.

The consultation document will be widely available. The speed with which we can implement any of the changes that are suggested in it will depend on the nature of the public's reaction to the proposals that are set out in the document. Legislation will be required and it will be necessary to find time in the legislative programme.

If a person dies and leaves a free estate of £1,500 or more—we exclude from that the value of the house in which he and his family lived and the value of the contents—the assumption will be made that there is sufficient money in the family to pay for the funeral of the person who has died. The figure of £1,500 has no relation to the supplementary benefit capital cut-off level, and it is roughly four to five times the cost of an average funeral. If the value of the estate is below £1,500 and is not sufficient in those terms, and if the person who is responsible for the burial is receiving one of a number of social security benefits or, for one of the options, is receiving rent rebate or an allowance, that person will be assisted by a funeral grant. That will range from anything between £150 to £250 depending upon the number who are admitted into the scheme.

Several Hon. Members

rose—

Mr. Speaker

Order. I hope that we shall have quick questions and answers. I shall allow questions to run until half past four—[HON. MEMBERS: "Oh".] Order. It is difficult for me to tell whether that is a cry of dismay or an indication that the House wants to spend longer on this topic. I shall see how questions and answers go, but half past four is in my mind.

Mr. Donald Stewart (Western Isles)

Since people have paid contributions towards the death grant, does the Minister agree that the Government would not allow an insurance company to get away with such a swindle? May we take the Minister's assurance about the issuing of a consultative document and the hint that legislative time may not be available to mean that nothing will be done about the grant?

Mr. Rossi

It is precisely because the option suggested would take away contributory rights that we want the widest possible consultation. It will depend entirely on the reaction of the British people whether we follow that proposal. On the right hon. Gentleman's reference to contributions, the actuarial assessment is that 2p per week is roughly the part of the national insurance contribution of an employee that goes towards paying the current grant of £30. That is useless to families without money and a waste of time to families who have money.

Mr Paul Dean (Somerset, North)

I welcome my hon. Friend's statement because, for some people, the present grant is not nearly enough and should be bigger. For many people, it is no longer as necessary because they have made their own arrangements. First, will my hon. Friend assure us that there will be no question of any form of means test at the delicate point of bereavement? Secondly, will he confirm that elderly people, presently entirely excluded from the scheme, or who qualify for only a very small grant, will be eligible under the new arrangements? Finally, will he—

Mr. Speaker

Order. We do not need that final point.

Mr Rossi

I assure my hon. Friend that we were determined not to put forward any proposals that would require means testing at the time of the bereavement. The options envisaged that people applying for a funeral grant would make a simple declaration that they were already receiving one of many social security benefits. That is not means testing, but automatic passporting on a simple declaration made. As for the old people, who have no entitlement today to death grant, by changing the basis to a non-contributory benefit, we shall, of course, be bringing them within the ambit and scope of the new arrangements.

Mr Andrew F. Bennett (Stockport, North)

Will the Minister confirm that the Government have been considering this issue for at least 18 months and that it was considered by the Cabinet on at least two occasions? Does he realise that there will be considerable contempt in Britain for a Government who have run away from taking a decision? He is now putting forward three proposals for consultation. They are all totally unacceptable.

Mr Rossi

We have considered the matter for many months and have done something. The previous Administration did not even bother to consider it and did nothing at all. I do not know how many times it has been before the Cabinet because I am not a member of that august body.

Mr Cranley Onslow (Woking)

Will not my hon. Friend agree that the first priority must be to extend this grant to those who, at the moment, are too old to qualify for it? We need not hang about on that aspect. Secondly, would it not be a great deal fairer and much more humane if there was an automatic right to a funeral grant? That grant could be recovered by his Department from the estate of the deceased person if it was justified.

Mr Rossi

I am grateful to my hon. Friend for his remarks. I know of his interest in those who have never contributed to the scheme and, therefore, do not now have a death grant, because of their age. We shall certainly consider this aspect to see whether it is possible to introduce interim help before the present scheme, if acceptable to the public, is brought into effect. On the remainder of my hon. Friend's question, again we will have to consider that. I am not able to give an immediate answer.

Mr Clement Freud (Isle of Ely)

While the House welcomes the consultative document, will the Minister tell the House the timetable for payment? Will he also tell the people who are in desperate need and worrying about realistic help—with the high cost of dying—when they may expect to get this payment?

Mr. Rossi

That depends entirely on the reaction that we get to this consultative document. If it is generally welcomed and is not subjected to the sort of carping or party political points that it has been subjected to this afternoon, the Government will be greatly encouraged to bring the matter forward as quickly as possible.

It would be a matter for legislation and there is no vehicle in this parliamentary Session for dealing with the matter. I cannot help the hon. Gentleman beyond that. However, once we introduce legislation, if everyone is agreed, I can get through the House quickly, as he well knows.

Mr A. W. Stallard (St. Pancras, North)

Does the Minister accept that his attempts to play down the importance of this matter—he said that the death grant was no longer an important subject—is to misunderstand the whole situation? Is he not also aware that there has been constant consultation throughout the country, over many years? He will remember the 1 million signatures handed to his right hon. Friend the Prime Minister some time ago, as a result of that consultation and the consultations we had with his predecessors. Therefore, will he accept that the package proposed in his consultative document—his broadsheet—will be totally unacceptable to all the organisations involved in arguing for the death grant? Nothing short of a flat rate increase, as suggested by the all-party pensioners group and others, will suffice.

Mr. Rossi

It would be a pity if the hon. Gentleman anticipated answers given by voluntary organisations and other interested bodies outside before they had had an opportunity to study these proposals. I refer him to the research document "Families, Funerals and Finances", which showed that 93 per cent. of families had no difficulty raising money to pay for funerals. If we had a flat increase to perhaps £200 per death, it would increase public expenditure by about £115 million.

If the Chancellor of the Exchequer gave me an extra £115 million to play with, I would find far better uses for it than to pay people who do not need the £200 for a funeral grant. I would refer to the invalidity trap, the 5 per cent. abatement on unemployment benefit and the 5 per cent. abatement on invalidity benefit. I would far rather spend money on these and other things than give very rich people £200 when someone in their family dies.

Mrs. Elaine Kellett-Bowman (Lancaster)

Will my hon. Friend accept, that he is mistaken in supposing that this is not a matter of interest to a great many people in a low income area such as I represent? Will he further accept that the old, who are currently excluded, will be greatly relieved to know that they are to be considered in future. Will he give careful consideration before narrowing this matter to the sort of people I represent?

Mr. Rossi

I am grateful to my hon. Friend for her remarks. Of course, I am aware that this matter is of great interest outside the House. Therefore, we dealt with the matter by way of a consultative document, so that we could receive views of the sort she has given before reaching a final decision.

Mr George Foulkes (South Ayrshire)

Surely the Minister is aware that all these options have been known to the Government and voluntary organisations for some time. The organisations have expressed the view that they want a flat rate increase, with the very elderly included. Surely the Minister will agree that this could be achieved by a simple amendment or new clause to the Finance Bill. Will he not agree to that sort of change now?

Mr. Rossi

First, I do not accept the assumption that these options have been worked out and were known to all organisations, as the hon. Gentleman said. In any case, I have already dealt with the financial consequences of a flat rate increase. If it were of a substantial sort, the cost would be significant. I have other uses for that sort of money.

Mr. W. Benyon (Buckingham)

On the question of timing, surely we could shorten the consultation process and try to wrap this matter up before the end of the Session.

Mr. Rossi

I note my hon. Friend's remark. I hope that we have a quick and favourable response to our proposals in the consultative document. If that is so, we shall have a fair wind and can proceed quickly.

Mr. Ioan Evans (Aberdare)

Does the Minister realise that today's statement will be received with great disappointment by the many organisations connected with old age pensioners who are all concerned with the Death in Dignity Alliance? Does he not realise that, while there is anxiety about the cost of living, there is also deep anxiety among senior citizens about the cost of dying? Will he not give that aspect some urgency and priority? His predecessor in the past 18 months to two years has said that he would put a definite statement before the House before the end of this Session about the payments that such people would receive.

Mr. Rossi

I am aware of the anxiety. That is why we are trying to give greater help than has been available hitherto to families whose need is greatest and where the help is required. The speed of the matter depends on the observations that I have already made.

Mr Robin Maxwell-Hyslop (Tiverton)

If it is reasonable to have a cut-off time of three months and two weeks, for response to the consultation document on rates, surely the same cut-off point could be applied to this document? Will that not concentrate the respondents' minds so that they send in their recommendations? If there is no terminal date, will not the response tend to be postponed indefinitely?

Mr. Rossi

If we receive representations after three months from publication they may be too late.

Mr Thomas Cox (Tooting)

Is the Minister aware that outside the House his statement will be seen as typical Government "do nothing" policy on a crucial issue? Is he so unaware of the facts, following the representations that have been made to him, that, in a week when we have discussed the expenditure of millions of pounds on Trident missiles, we cannot even give a realistic death grant? In view of the great play that the Minister has made of his consultative statement, will he personally meet the representatives of the different pensioners' organisations in the United Kingdom, put his points to them and hear their response?

Mr. Rossi

If those organisations wish to see me as well as write to me, I shall try to make myself available to them.

With regard to the rest of the hon. Gentleman's remarks, I cannot add to what I have already said about the indiscriminate nature of a universal death grant and money going to people who do not need it. I am concerned to see that money goes to the people who need it.

Mr Peter Bottomley (Woolwich, West)

I welcome the consultation. Does my hon. Friend accept that the real choice is not whether to have £200 for each funeral, but whether there should be a small increase for all or a significant and real increase for the 10 per cent. who need it? Will my hon. Friend carry out the same process for the birth grant, which affects as many people and is just as important.

Mr Rossi

My hon. Friend is absolutely right in his premise. With regard to the birth grant, having got over this exercise, I am not anxious to go through it again. However, I shall consider the matter.

Mr Mike Thomas (Newcastle upon Tyne, East)

Is the Minister aware that elderly people and their relatives who are seriously worried about the cost of funerals will be almost as pleased about the spinning out of the process that the consultation document recommends as Social Democratic and Liberal Members are about the Government spinning out the business of the House today? Is he further aware that neither of the old parties has anything to be proud of in this matter? While we generally support the approach that the hon. Gentleman is taking in focusing help on those who need it most and while we reject the knee-jerk over-reaction of the Labour Party to his consultation proposals, there are two things that he should do—[Interruption.]

Mr. Speaker

Order. That question is long enough.

Mr. Thomas

rose—

Mr. Speaker

Order. If the hon. Gentleman does that again, I shall order him out of the Chamber.

Mr Rossi

I do not think that there is anything for me to answer. No question was put to me.

Mr Ivor Stanbrook (Orpington)

Why do the Government not know their own mind on this subject after so many years of public discussion of it?

Surely we do not need yet another consultative paper to help us to make up our minds. After all, is not the House the proper place for public consultation?

Mr. Rossi

This matter is not without difficulty. We are taking away a contributory benefit. Therefore, we thought it only right to consult the people whose benefit we are taking away.

Mr David Winnick (Walsall, North)

Is the Minister aware that his statement is unacceptable and that it will cause anger and contempt among the community, who will understand that the Government are extending a means test to the dead?

Mr. Rossi

If the proposals and options are found to be unacceptable, the time when we can give real help towards funeral expenses to people who need it will be postponed further.

Sir William Clark (Croydon, South)

Is my hon. Friend aware that Conservative Members and people generally throughout the country accept that it must be good sense to give more money to people who need it rather than to give a little to all people, some of whom do not need it? The document will be scrutinised and considered by many old people. Consequently, it is essential that it should be in simple terms. It must not only set out the options clearly but make it clear that representations must be made to the Government by a specific date. The document must give a definite date, and not just state that representations may not be considered after three months.

Mr. Rossi

I hope that the document will be written in reasonably clear English, but there will be a great deal of debate about the matter. During that debate, no doubt the matter will be better explained than I have explained it today.

Mr. David Stoddart (Swindon)

Is the Minister aware that all the proposals in his Green Paper were considered in 1947 before the benefit was made an insurance benefit? Is it not a fact that, by proposing to withdraw the benefit, the hon. Gentleman is proposing to defraud the national insurance payer? Will he drop the document and increase the death grant forthwith, as has been suggested?

Mr. Rossi

I shall not drop the consultation document before the consultation has taken place.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

May we hope that my hon. Friend will not be discouraged by that whingeing lot on the Opposition Benches, who, when they could do something about the death grant, did nothing about it year after year, and now suggest that we are reducing it? May we hope that this will be a new start, that we will genuinely get away from the idea of flat increases for everyone and that we will do something to help many of our constituents who need more help than others who are receiving help today?

Mr. Rossi

At a time of limited resources, we must direct those resources where the need is greatest.

Mr. Dennis Skinner (Bolsover)

The Minister talks about giving help to those who need it most. Why does he not tell the Chancellor of the Exchequer that when he is drawing up his Budget so that he can carry out that philosophy? Will he bear in mind that only a few weeks ago my hon. Friend the Member for Dundee, West (Mr. Ross) introduced a Bill to raise the death grant to £190, and he was supported by every Labour Member who spoke that day? The reason why the Bill did not make progress was that the Minister and the hon. Members for Watford (Mr. Garel-Jones) and Grantham (Mr. Hogg) talked it out. As a result, millions of people were deprived of a death grant of £190.

Mr. Rossi

That Bill required a universal death grant to be paid across the board for every death. I have already dealt with that point on a number of occasions this afternoon.

Mr. James Hill (Southampton, Test)

My hon. Friend is entitled to more congratulations than he has received so far today. The document is a good step forward. I take his point that the administration must be in the simplest terms. What would happen if during his lifetime, because he was too proud, a deceased person had not been paid supplementary benefit? How would it be proved that that person was in need? How will my hon. Friend answer my query that there is a disincentive —

Mr. Speaker

Order. I shall bring that question to an end because I want to call one more hon. Member.

Mr Rossi

Whether or not the deceased person is in receipt of supplementary benefit is irrelevant to the scheme. It is the size of that person's estate that is material, as well as whether or not the person responsible for the payment of the funeral expenses is himself or herself in receipt of some benefit or other, which is not necessarily restricted to supplementary benefit. It will be seen from the consultation document that a range of benefits is proposed, with different consequences on the size of the grant.

Mr Rooker

Perhaps I can give the Minister a chance to correct one of the answers that he gave. Having had the opportunity to read the last paragraph of the consultation document just now, I see that the Government are allowing a full four months, up to 31 July, for consultation. Therefore, anyone sending a representation after three months will not be too late. This means that there is no hope whatsoever of urgent legislation, even if there were a consensus on any of the three options in this document, in this Session.

My hon. Friends and I have not been carping; nor have we introduced questions of party, such as the Minister has. Will the hon. Gentleman confirm that, since the death grant was introduced in 1948, it has been raised on two occasions, in 1958 by the Conservative Government and in 1967 by the Labour Government?

Mr. Rossi

When the death grant was introduced in 1949, it represented 60 per cent. of the average funeral cost. When it was uprated by the Labour Government in 1967, the uprating represented only 30 per cent. of the average funeral cost. So, even that uprating was not very helpful to the people concerned. The previous Administration made absolutely no attempt whatever to do anything about this matter.

I confirm that, as I have already said, there is no possibility of a Bill being introduced in this Session. There is no room in the timetable. Whether we have a consultation period of three months or four months, the opportunity will be open to us in the next Session, if the country accepts our proposals as reasonable and if the Labour and Social Democratic Parties give us their full support.