HC Deb 18 June 1984 vol 62 cc20-34 3.32 pm
The Secretary of State for Social Services (Mr. Norman Fowler)

With permission, Mr. Speaker, I should like to make a statement about the annual uprating of social security benefits which will take effect in November. Under the Social Security and Housing Benefits Act 1983, I am required to review the level of various benefits each year, having regard to the movement in the general level of prices in the 12 months up to 31 May. The retail price index for May was published last Friday and it showed a rise of 5.1 per cent. in the year May 1983 to May 1984.

As the House will know, the Government are pledged to maintain the value of pensions. Accordingly, those benefits which are revalued by the increase in the retail price index will rise by 5.1 per cent. This increase will apply not only to the pledged benefits but to the unpledged benefits, like unemployment benefit.

The 5.1 per cent. increase compares with the forecast of inflation of 4.5 per cent. for the last quarter of the year when the uprating will take place. This means that the historic method of uprating—which was introduced to replace the inaccurate forecast method of the last Government — has worked fairly for pensioners and other beneficiaries.

Supplementary benefit is increased by the rise in the retail price index, less housing costs, which are paid in full. This gives a figure of 4.7 per cent. and, again, this will be paid in full.

I should like to mention briefly the main groups who will benefit from the increases in November. First, pensioners. The standard basic rate of pension for retirement pensioners will go up to £35.80 for a single person and £57.30 for a married couple. This means that between November 1978 and November 1984, pensions will have risen by 83.6 per cent. compared with an expected rise in prices of 76.4 per cent. We will also be taking a further step towards the abolition of the pensioner's earnings rule by increasing the limit by 7.7 per cent. from £65 to £70 a week.

Secondly, the standard rates of unemployment benefit will be increased to £28–45 for a single person and £46 for a married couple. I also propose to change the basis of payment of unemployment benefit so that from later this financial year all new claimants will be paid fortnightly in arrears instead of one week in advance and one in arrears, as at present. This change will not affect the amount of unemployment benefit properly paid to claimants, but it will cut out overpayments that are caused now by people returning to work during the advance payment period.

Thirdly, to help families, child benefit will be increased to £6.85, and one-parent benefit to £4.25. This means that both benefits remain at their highest ever level in real terms. For families in work, the family income supplement prescribed amounts are being raised to £90 for a family with one child, and the maximum payment for a family with one child will go up to £23. Families receiving family income supplement will also gain from the increase in child benefit. I am, however, proposing that changes in the prescribed amounts should, like all other changes in circumstances, be taken into account only when a new family income supplement award is made. As from November, therefore, the increases in these amounts will apply only to new awards.

Fourthly, the long-term scale rate of supplementary benefit will go up to £35.70 for a single householder and £57.10 for a married couple. The ordinary rates for short-term and unemployed claimants under 60 will go up to £28.05 for a single householder and £45.55 for a couple. The scale rates for children will go up by 4.7 per cent. Heating additions will be increased in line with the rise in fuel prices since May 1983, which was 3.2 per cent.

I also propose to make a significant further extension in the scope of age-related heating additions. At present these are paid automatically only to supplementary pensioners over 70. From November, these will, for the first time, become payable automatically at the basic rate of £2.10 a week to householder claimants or their dependants between 65 and 70. Also for the first time, the higher rate of heating addition of £5.20 a week will be paid automatically to householder claimants or their dependants over 85.

I also intend to make a change in the "available scale margin" from November. The available scale margin is the amount which is deducted from certain additional requirements of claimants on the long-term rate of supplementary benefit. It was first introduced in 1966 by the then Labour Government and was intended to reflect the fact that the long-term scale rates should cover nearly all additional needs. At that time it was 45p—the then difference between the long-term and short-term scale rates--and it has been changed only once since then, to 50p in 1968, even though the difference between the long and short-term scales will now stand at £7.65.

It is anomalous that the available scale margin has been maintained at 50p for so long, and I propose both to make a 50p increase in its amount and to apply it again to heating additions, which were originally within its scope. The exemption in respect of children's needs, including their heating needs, will, however, continue and will now be extended to cover children's laundry needs and boarding-out fees.

Fifthly, the housing benefit needs allowances will be going up by 4.8 per cent., apart from those for children, which will be raised by 50p more than is required to maintain their value, giving an increase of 8 per cent. The other changes already announced will take place in November, except that the increases in thresholds for high rent schemes which were due to take effect then will now be deferred until April 1985.

Lastly, public service pensions will be increased by 5.1 per cent.; so also will benefits for disabled people and war pensioners. Mobility allowance will rise to a new rate of £20. This will be exactly double the rate we inherited on taking office and will represent an increase in real terms of almost 11 per cent. since then. The war pensioners' mobility supplement will be increased to £22.25 a week and the 100 per cent. disability pension will go up to £58.40 a week.

All war widows' pensions will be increased in line with prices, but I am glad to say that I am able to make a real improvement for the older war widows, most of whom were widowed during the world wars. I shall be increasing the age allowances they receive at age 65 to £5 a week, and at age 70 to £10 a week—increases of over 15 per cent. I shall also be introducing a new rate of £12.50 for the oldest war widows—those aged over 80.

The improvements that we are making—which are within the Government's public expenditure plans published last February — will increase the social security budget by over £1.6 billion in a full year.

The new benefit rates will take effect from the week commencing 26 November. I should make it clear that we intend that the uprating should always take place in the last week in November. Because the year is not divisible exactly into 52 weeks it means that every five or six years there is a 53-week gap between upratings unless the uprating date is to creep forward. This problem was recognised and legislated for in the Social Security Act 1980.

Even so, that timetable for implementation is still very tight. It is a tribute to the staff of my Department that it was achieved on time last year, but I must warn the House that if the strike action which is being carried out by a small number of staff in the Department's computer centre at Newcastle continues, payment of the higher benefits could be delayed.

Details of the proposed new rates, together with some minor beneficial improvements, are set out in a schedule which, for the convenience of the House, I have placed in the Vote Office and is included in the Official Report. I shall shortly lay before the House for approval the draft orders and regulations which give effect to the main uprating proposals and at the same time I shall table the usual report from the Government Actuary on the estimated effects of the changes on the national insurance fund.

All told, the improvements that we are making will increase the social security budget to £39 billion a year. Almost one third of all public spending is now being devoted to social security. At the same time, the Government's success in controlling inflation means that occupational pension and other savings now better maintain their value. In this uprating we have ensured that the basic rates of all the major benefits are fully price-protected and we have targeted the resources available to those in greatest need, such as the very elderly.

Mr. Michael Meacher (Oldham, West)

Is the right hon. Gentleman aware that once again he has demonstrated that under this Government there is one law for the rich and another for the poor? To raise pensions in line with inflation will add precisely £1.75 a week to the single pension. Three months ago the Chancellor of the Exchequer, by abolishing the unearned income surcharge, gratuitously handed out an average extra £26 a week in tax relief to each of 250,000 very rich shareholders. Under this Government, to him that hath shall be given much more, while the poor will have to put up with the crumbs that fall from the rich man's table.

Is the right hon. Gentleman aware that the principle underlying the upratings—indexing merely in line with inflation—is a mean and ungenerous one compared with the Labour Government's uprating in line with prices or earnings, whichever was the higher? Will he acknowledge that, by backtracking on Labour's formula, the Tory Government have so far shortchanged the single pensioner by £2.90 a week and the married pensioner by £4.85 a week? That is the measure of the amount that pensioners have lost under the Government.

Is the right hon. Gentleman aware that even his predecessor, the Secretary of State for the Environment, if he still is, regarded mere price indexing as mean and inadequate? Indeed, he said that it remains the Government's firm intention that pensioners and other long-term beneficiaries can confidently look forward to sharing in the increased standards of living of the country as a whole."—[Official Report, 13 June 1979; Vol. 968, c. 439.] That promise stands broken. Under the five years of the previous Labour Government, pensioners were given a real 20 per cent. increase in the value of their pensions, whereas in the past five years of the Tory Government they have had only a tiny real increase.

Is the Secretary of State aware that, apart from the inflation indexing of pensions, the real meaning of his statement is that yet again a tiny amount of extra funds is being made available to certain very small groups of beneficiaries, while at the same time very much larger sums are being cut from vastly bigger groups in receipt of benefit?

Is the Secretary of State aware in particular—this is a very important point—[Interruption.] Pensioners will regard it as a very important point. Is the Secretary of State aware that the deferring of the uprating by one week next November has cheated pensioners of £60 million to which they are entitled, and that that is a far bigger sum than the total of all the new benefits that he is now introducing?

Is the right hon. Gentleman aware that paying new unemployment benefit claimants, for the first time, fortnightly in arrears is a further unnecessary and mean hardship for the unemployed, which will severely and unfairly penalise tens of thousands of them? As the Secretary of State has now forced open—he has done it more than anyone — the difference between the long-term and short-term benefit scales to a massive £7.65 a week, as he admitted, why is he increasing the available scale margin by only a paltry 50p to £1?

Is the Secretary of State aware that there is a series of omissions from the statement which intensifies the pressure on those in poverty in Britain today, who now stand, according to the Government's own figures, at 9 million? That is 9 million in poverty in Britain today under this Government, or one in six of the whole population.

Why is there no mention in the statement of restoring to those on sickness benefit, and to those in receipt of invalidity benefit and maternity allowance, the 5 per cent. abatement of benefit which the Government so callously stole from them three years ago?

Why is there no mention of raising the £4 earnings disregard, which, if it had been restored to its real value the last time it was raised, would today be worth £11.40?

When will the Government raise the measly £30 death grant, which would be £210 today if it had kept pace with inflation since 1949?

Why has child benefit, which replaced the child tax allowance, been increased by only 5 per cent.—far less than the 12.5 per cent. Budget increase in tax allowances? How can it possibly be justified to worsen the position of children and the families of the unemployed compared with children in better-off families where the parents remain in work?

Is the Secretary of State aware that the Minister for Social Security, four days ago, as reported in Hansard, listed no fewer than 25 benefits which had fallen in real terms since 1979? Why has the Secretary of State not honoured the pledge, of which he made so much, to keep those benefits in line with inflation?

Is the right hon. Gentleman aware that the Parliamentary Under-Secretary of State admitted, in a written answer on 18 November 1982, that by that date this Government had made cuts of £1,500 million in social security? Is the Secretary of State aware that since that date further cuts, in the form of the changed uprating method, the chopping of housing benefit, and the continued shortfall to the pensioners, which we are seeing again today, compared with the rise in earnings, have raised the cuts immposed by the Government on the poor to £3,500 million? Is he aware that those huge cuts are not only fundamentally unjustified in principle, but that it is iniquitous that those cuts on the poor have in practice been used to finance enormous and unwarranted tax handouts for the rich?

Mr. Fowler

The hon. Gentleman's response was exactly what we would expect from him—in short, most of it was arrant nonsense.

The hon. Gentleman talked about shortchanging the pensioners. I have to remind him that he was a member of a Government who, because of the change from the historic to the forecast method, managed to defraud pensioners of about £500 million a year. I must also remind the hon. Gentleman that the Government to which he was a member presided over a rate of inflation of 110 per cent., which was devastatingly bad news for pensioners.

This is the third uprating statement for which inflation has been in single figures. Since 1978 pensions have risen by 83.6 per cent., compared to an RPI increase of 76.4 per cent. that is the record, and the hon. Gentleman does himself no justice in ignoring it. He may wish to withdraw and to reconsider his remarks on the available scale margin, as he does not seem to understand what he is calling for.

The hon. Gentleman says that we are shortchanging and that this is a mean measure. We are increasing spending by £1.6 billion, which means that the total spending on social security is about £39 billion. It means that benefits will increase in November by 5.1 per cent., compared to a 4.5 per cent. inflation rate in the autumn.

There are further changes which we must consider and which we want to look at in relation to the capital cut-off and the disregard, to which the hon. Gentleman referred. That is why we have set up a far-reaching series of inquiries into the whole of the social security budget. The hon. Gentleman has not understood our proposals with regard to the payment of unemployment benefit in arrears. No one will lose entitlement by what is proposed.

It was well understood at the time of the 1980 legislation what was proposed in relation to the uprating date. We have made it clear, and I am making it clear again today, that we want to uprate each year, in the last week in November. The hon. Gentleman may recall that in Committee the right hon. Member for Salford, East (Mr. Orme) suggested that a specific date could be given and that payments could be made around that date. That is precisely what we are doing. The uprating is fair, and I entirely reject the hon. Gentleman's attack.

Mr. Roger Sims (Chislehurst)

Is my right hon. Friend aware that his prompt statement will be warmly received on the Conservative Benches and also outside the House? We particularly welcome the way in which he has understood and reacted to the special problems of elderly war widows. We further welcome his treatment of those below the age of 70 who need a heating allowance. Does my right hon. Friend recall the strong campaign that emerged from the Opposition when he changed the basis on which benefits were calculated? Can he confirm that recipients have not been disadvantaged by the changes that he has made?

Mr. Fowler

Yes, Sir. That was the case that I put when we changed the basis of the uprating and moved to the historic method from the forecast method. I said then that it was a fair change. It has been established to everyone's satisfaction that that has been its effect. The improvements in pensions for war widows mean that about 50,000 war widows will benefit. I believe that hon. Members on both sides of the House will welcome that.

Mr. Frank Field (Birkenhead)

As the increase in child benefit is significantly below the increase in personal tax allowances, and as that will result in an increased relative tax burden for families, both rich and poor, which was against the specific pledges given by the Conservative party at the 1979 and 1983 general elections, and as it reverses the gains made by the Secretary of State in last year's review, can he tell us what argument the Chancellor of the Exchequer put forward in vetoing his lobbying for a full 12 per cent. increase?

Mr. Fowler

The hon. Gentleman can better even my arguments on the subject. Child benefit and, indeed, one-parent family benefit are at the highest ever level in real terms. They are even higher than the level to which the previous Labour Government managed to bring them. I have great respect for the hon. Gentleman's views on this subject and I share his aim to get help to the poorest families in this country. That is why we have set up an inquiry and are considering how to help young people and children.

Over the lifetime of this Government there have been comparable increases in child benefit and personal tax allowances. They have been roughly the same. Between April 1979 and November 1984 child benefit will have increased by 71.3 per cent., while personal tax allowances will have increased by 72.1 per cent. for single people and 73.8 per cent. for married couples. Therefore, there is rough equality of treatment. However, we shall look further at that area.

Mr. Jim Lester (Broxtowe)

I thank my right hon. Friend for his statement and welcome the fact that he has sought ways of improving the position of widows in particular. However, in view of what he has just said about wanting to help the poorest in our community, I should point out that there is grave disappointment on this side of the House at the fact that the poorest in the community—the long-term employed living on short-term benefit—have not been helped and that there has been no move towards assisting them.

My right hon. Friend can take it from me that the many letters that I have received from all over the country show that the most disadvantaged people are those trying to live on a long-term basis on short-term benefit. The descriptions speak for themselves. The Government have already accepted the principle for the over-60s, and I assure my right hon. Friend that the situation is worse for the over-50s and worse still for those with families. Will he assure us that he understands the position and that it will be given high priority in the Government's thinking during the next 12 months?

Mr. Fowler

I understand my hon. Friend's concern and campaign on this subject. An extension to the unemployed would cost around an extra £500 million a year on present estimates. However, the Parliamentary Under-Secretary of State, my hon. Friend the Member for Braintree (Mr. Newton), will be looking at that point, and I hope that my hon. Friend the Member for Broxtowe (Mr. Lester) will give evidence to the inquiry.

Mr. John Cartwright (Woolwich)

Does the right hon. Gentleman accept that his extension of the scope of age-related heating benefits will be widely welcomed but that there will be some disappointment at the size of the increases? For example, 5p a week extra on central heating additions is hardly generous, given current fuel price rises. Does the right hon. Gentleman also accept that some supplementary benefit recipients who have expensive heating systems are denied estate rate heating additions, simply because they pay their heating bills along with their rent to their landlords? Will he look at that anomaly, which gives rise to a lot of resentment on many council estates?

Mr. Fowler

I shall consider the hon. Gentleman's last point. This year we expect to spend about £400 million on heating additions, and that is even taking account of the available scale margin changes which I have announced. That means about £140 million more in real terms than under the Labour Government. The benefits have been uprated because of fuel price rises, and that is only fair. The real increase in aid which the Government have given during their term of office speaks for itself.

Several Hon. Members


Mr. Speaker

Order. In view of the important debate to follow, in which many right hon. and hon. Members wish to take part, I propose to allow questions on the statement to continue until 4.15 pm. If questions are kept short, most hon. Members should be able to get in.

Mr. Timothy Yeo (Suffolk, South)

I very much welcome my right hon. Friend's statement, but is he aware that we are genuinely concerned about the worst-off? Will he undertake to examine with our right hon. Friend the Chancellor of the Exchequer before next year's Budget the most cost-effective way of dealing with those who fall into the poverty trap? Will he bear in mind that he should not be deterred from raising child benefit, despite the fact that it increases public expenditure, if that should turn out to be the best way of tackling the problem?

Mr. Fowler

I do not wish to go into the merits of child benefit now, but the whole purpose of the inquiries is to look at precisely that area. That is why we have set them up.

Mr. Terry Davis (Birmingham, Hodge Hill)

Has the Secretary of State forgotten that when in opposition the Conservative party promised to increase child benefit in line with any increases in personal tax allowances, without any reservations about inquiries, discussions with the Chancellor of the Exchequer or historic statistics? Will he confirm that if that promise had been kept child benefit would have been increased this year by 80p instead of 50p per week? Will he explain why the Conservatives have broken their promise to every parent in the country?

Mr. Fowler

The Conservative Government have not broken their promise of every parent in the country. Such an accusation comes ill from the hon. Gentleman when we are paying child benefit at a rate higher in real terms than that paid by the last Labour Government. If the hon. Gentleman were to examine the figures that I gave earlier for personal tax allowances and child benefit, he would see that the two are comparable.

Mr. James Couchman (Gillingham)

I welcome my right hon. Friend's statement that the earnings disregard for those over retirement age will be raised by more than the inflation rate. Can he speculate on the possibility of abolishing the earnings limit for pensioners who continue in full-time work?

Mr. Fowler

That is the aim and intention. We want to work towards that.

Mr. Stuart Bell (Middlesbrough)

Does the Secretary of State accept the serious disppointment that will be caused because the Government have not seen fit to increase the death grant? That is especially disappointing, as the Chancellor of the Exchequer in his Budget created a disincentive to taking out life assurance contracts by abolishing the tax relief on premiums. Is the right hon. Gentleman aware that hon. Members on both sides of the House receive large quantities of mail about the death grant? Will the grant be reviewed?

Mr. Fowler

The death grant is being reviewed. We issued a consultation document putting forward a number of ways in which the death grant could be changed and the aid available go to families most in need. That document was not universally welcomed. We have to look at the problem again. It is being considered.

Mr. Nigel Forman (Carshalton and Wallington)

I welcome the continuation of full price protection for pensioners and others on related benefits. Can my right hon. Friend confirm that the combination of the historic method of calculation and the falling inflation rate leaves pensioners and others better off year on year?

Mr. Fowler

Yes. The historic method of uprating is fair. We said that during the election and when we introduced it. The public can now see for themselves that it works fairly for all beneficiaries.

Mr. Gordon Wilson (Dundee, East)

What does the Secretary of State intend to do about the earnings disregard for those who are unemployed or in receipt of supplementary benefit, since one of the disregards has been fixed at £4 for a considerable number of years? When will the inquiry initiated by the Minister for Social Security on fuel allowances be completed? Is the right hon. Gentleman aware of the difficulty experienced by those who are disadvantaged by living in colder climes?

Mr. Fowler

I sympathise with what the hon. Gentleman has said about the earnings disregard. We shall see whether that can be improved and the position changed. I shall discuss the hon. Gentleman's second point with my hon. Friend.

Mr. Patrick Cormack (Staffordshire, South)

Is my right hon. Friend aware that, although his statement will be warmly welcomed, many of my constituents who have saved hard but have been put out of work in their fifties believe that their thrift is being penalised? Last year he did something modest to help them. Why has he done nothing this year?

Mr. Fowler

I have increased the capital cut-off. The matter is under consideration by the inquiry into supplementary benefit. I have sympathy with the argument about thrift. We shall seek to make progress and give it urgent attention in the reviews.

Mr. David Young (Bolton, South-East)

How much money do the Government hope to save by making the unemployment payment two weeks in arrears? Does the right hon. Gentleman recognise that that will have a traumatic effect on the newly unemployed? Is he aware that the Government have deprived 4 million people of the right to work? Is it the Government's policy that the least well-off should subsidise those in work?

Mr. Fowler

No one will lose entitlement to benefit. The savings are based upon estimates. In a full year, savings in unemployment benefit will be about £8.5 million. I stress that that is an estimate. Our survey shows that two-thirds of claimants had two weeks' or more wages when they finished work. That is one reason why we have moved to a more logical and more defensible system of paying benefit, and which is more general throughout western Europe.

Mr. Tony Favell (Stockport)

In the review will my right hon. Friend bear in mind the growing feeling in the country that to pay the same amount of child benefit to the best off as to the worst off is socially unjust?

Mr. Fowler

I have heard that view expressed before. Child benefit and benefits for young people are being examined. My hon. Friend's view is not the only view on the subject. We shall need to take time to consider the other arguments.

Mr. Alex Carlile (Montgomery)

When does the Secretary of State propose to take steps to redeem an obvious injustice by extending the invalid care allowance to married women? What advice does he have to give to the many families who are poor because of the failure to increase child benefit, despite the informed advice of bodies such as the Child Poverty Action Group?

Mr. Fowler

I have nothing to add on child benefit. We are increasing child benefit, and have already increased it to an all-time record amount. I have no further plans to improve invalid care allowance, but we shall keep it under review.

Mr. Bowen Wells (Hertford and Stortford)

I congratulate my right hon. Friend on his excellent package for uprating benefits. May I suggest that perhaps next year he should try not increasing benefits, for the parliamentary benefit of the Opposition, from whom he would hear precisely the same comments as we heard today? May we be assured that he will abolish the earnings rule for pensioners next year?

Mr. Fowler

I cannot give a guarantee that I shall abolish the earnings rule next year. However, it is the Government's aim to abolish the rule. We have made that clear. We shall do it as soon as we can afford to.

Mr. David Winnick (Walsall, North)

Why should the unemployed, who are being punished as a result of the Government's economic policy, be denied the long-term supplementary rate when they have been unemployed for 12 months or more? Will the Secretary of State bear in mind the hardship of retired people who live on limited incomes, but who are not eligible for supplementary benefit? Can heating assistance be given to such people, especially if they receive rebates on rents or rates? Do the Government intend to assist pensioners with their television licences if the licence fee is increased? Is the right hon. Gentleman aware of the concern among many retired people that they will have to pay more than they can afford for their television licence?

Mr. Fowler

Television licence assistance is not a matter for me. I have already made clear my position on the capital disregard. Making the long-term supplementary benefit available to the unemployed would cost around an extra £500 million — a substantial sum. We shall examine the case for making the change, but against that cost context.

Mr. Richard Tracey (Surbiton)

My right hon. Friend is to be congratulated on his statement. His words will be warmly received by old people. Will he remind the hon. Member for Oldham, West (Mr. Meacher) that the last Labour Government took away the old-age pensioners' Christmas bonus? Does my right hon. Friend agree that, judged in that light, the hon. Gentleman's words are hollow hypocrisy?

Mr. Fowler

The words of the hon. Member for Oldham, West (Mr. Meacher) are certainly hollow. That comes as a surprise to no one. The last Labour Government suspended the Christmas bonus, which had an effect on pensioners, whose cause the hon. Member for Oldham, West now tries to espouse.

Mr. Ken Eastham (Manchester, Blackley)

The Secretary of State said that there would be additions to heating allowances. Is he aware that the Child Poverty Action Group in Manchester has advised us that hundreds of families are already waiting for existing allowances and for local DHSS offices to make assessments? In my constituency about 1,900 families are waiting for heating allowances. Discounting the additions announced today, will the Minister do something to keep local offices manned properly? They are overworked and undermanned.

Mr. Fowler

I shall consider the matter raised by the hon. Gentleman. I do not accept his general point, but I shall look into his specific local problem.

Mr. Patrick Nicholls (Teignbridge)

Is my right hon. Friend aware that while the indexing of retirement pensions is welcome, many Conservative Members look forward to the time when it will not simply be indexed, but will be raised to another level from which it can be indexed? Is he also aware of the sense of lingering injustice of the old-age pension, in that even if it keeps pace with inflation it provides only for the basics of life, instead of for luxuries, which people in their twilight years are entitled to expect?

Mr. Fowler

We are examining the whole question of pension provision, including the occupational pension provisions. For pensioners, one of the most significant points is that this is the third successive year of single-figure inflation. Low inflation is perhaps the best way in which the Government can look after the interests of pensioners.

Mr. Allen McKay (Barnsley, West and Penistone)

Will the Secretary of State tell the House why unemployment pay which was being received by ancillary workers and others in the mining industry during the present dispute has been stopped, as I understand it on his instructions?

Mr. Fowler

I need to consider the particular point that the hon. Gentleman has in mind. If he wishes to give me the details, I shall do that.

Mr. Meacher

Will the Secretary of State answer two questions which he did not answer earlier? Although child benefit may be marginally higher in real terms — by about 10p—will the right hon. Gentleman recognise that that does not compensate for the cut of about £1.70 a week in child dependency additions which the Government have imposed? Will he acknowledge that child support benefits overall have fallen substantially under this Government, and that that is the background to this lower-than-expected, and lower-than-required increase in child benefit?

Will the Secretary of State spell out the total annual value of the new arrangements or of the increases other than inflation indexing? Will he confirm that that is probably less than £10 million, which compares with the £60 million cut achieved by deferring the pension uprating by one week from November?

Mr. Fowler

I cannot give the exact figure for the hon. Gentleman's last question. As I have already made clear, the increase in spending announced today is about £1.6 billion—it is no use the hon. Gentleman shaking his head—which is a substantial sum of money, which must be financed. That shows the Government's social commitment.

For child dependency additions, the hon. Gentleman will know that it has been our policy to rely more on child benefit and to take that into account for any increase in long-term child dependency additions. We are doing that. However, nothing hides the fact, which the hon. Gentleman seeks to avoid, that under this Government child benefit has increased to its highest ever point in history—above any sum which the hon. Gentleman provided when he was at the Department of Health and Social Security.

Following are the new rates

Main Increased Contributory and Non-Contributory Benefit Rates
Existing weekly rate Proposed weekly rate
£ £
Child Benefit
Each Child 6.50 6.85
One parent benefit
First or only child of certain lone persons 4.05 4.25
Standard rate of retirement* and widows' pensions, and widowed mothers' allowance
Single person 34.05 35.80
Wife or other adult dependant 20.45 21.50
Earnings limit for retirement pensioners 65.00 70.00
Standard rate of invalidity pension
Single person 32.60 34.25
Spouse or other adult dependant 19.55 20.55
Invalidity allowance
Higher rate 7.15 7.50
Middle rate 4.60 4.80
Lower rate 2.30 2.40
Standard rate of unemployment benefit:
Beneficiary under pension age
Single person 27.05 28.45
Wife or other adult dependant 16.70 17.55
Beneficiary over pension age
Single person 34.05 35.80
Wife or other adult dependant 20.45 21.50
Standard rate of sickness benefit:
Beneficiary under pension age
Single person 25.95 27.25
Wife or other adult dependant 16.00 16.80
Beneficiary over pension age
Single person 32.60 34.25
Wife or other adult dependant 19.55 20.55
Widows' allowance (first 26 weeks of widowhood) 47.65 50.10
Maternity allowance 25.95 27.25
Attendance allowance
Higher rate 27.20 28.60
Lower rate 18.15 19.10
Retirement pension for persons over pensionable age on 5 July 1948 and for persons over 80*
Higher rate 20.45 21.50
Lower rate 12.25 12.85
Non-contributory invalidity pension 20.45 21.50
"Therapeutic" earnings 22.50 23.50
Invalid care allowance 20.45 21.50
Main increased supplementary benefit rates
Existing ordinary weekly rate Existing long term weekly rate Proposed ordinary weekly rate Proposed long term weekly rate
£ £ £ £
Supplementary benefit
Couple 43.50 54.55 45.55 57.10
Person living alone 26.80 34.10 28.05 35.70
Non-householder-age 18 and over 21.45 27.25 22.45 28.55
age 16–17 16.50 20.90 17.30 21.90
Existing weekly rate Proposed weekly rate
£ £
Increase of non-contributory invalidity pension and invalid care allowance for a wife or other adult dependant 12.25 12.85
Mobility allowance 19.00 20.00
Guardian's allowance, child's special allowance 7.60 7.65
Rate of benefit for children of widows, invalidity, non-contributory invalidity and retirement pensioners, invalid care beneficiaries; unemployment and sickness beneficiaries when claimant is over pension age 7.60 7.65
* An age addition of 25p is payable to retirement pensioners who are aged 80 or over.
Non-contributory Invalidity Pension and Housewife's Non-contributory Invalidity Pension will both be replaced from November 1984 by Severe Disablement Allowance, subject to the enactment of the Health and Social Security Bill now before Parliament.
Main increased industrial injuries benefit rates
Existing weekly rate Proposed weekly rate
£ £
Disablement benefit (100 per cent, assessment)* 55.60 58.40
Unemployability supplement†‡ 32.60 34.25
Special hardship allowance (maximum) 22.24 23.36
Constant attendance allowance (normal maximum), exceptionally severe disablement allowance 22.30 23.40
Industrial death benefit
Widows' pension during the first 26 weeks of widowhood 47.65 50.10
Higher permanent rate 34.60 36.35
Lower permanent rate 10.22 10.74
* The rates for beneficiaries not over the age of 18 will also be increased.
Invalidity allowances and increases for adult dependants and children will be the same as those payable with invalidity pensions.
The amount of earnings permitted with unemployability supplement will also be increased.
Existing weekly rate Proposed weekly rate
£ £
Any other person aged:
11–15 years 13.70 14.35
Under 11 years 9.15 9.60
Boarders personal expenses
Ordinary—couple 17.70 18.50
—single 8.85 9.25
Long term—couple 19.70 20.60
—single 9.85 10.30
Heating additions to supplementary benefit
Lower rate 2.05 2.10
Higher rate 5.05 5.20
Central heating additions
Lower rate 2.05 2.10
Higher rate 4.10 4.20
Estate rate heating additions
Lower rate 4.10 4.20
Higher rate 8.20 8.40
Main increased housing benefit rates
Existing weekly rate Proposed weekly rate
£ £
Needs allowances
single person 43.05 45.10
couple/single parent 63.50 66.50
single handicapped person 48.00 50.30
couple (1 handicapped) or single handicapped parent 68.45 71.70
couple (both handicapped) 70.80 74.15
dependent child addition 11.90 12.85
Main increased war pension rates
All ranks receive the same increases, officers' rates being expressed in pounds per annum.
Disablement benefits
Existing weekly rate Proposed weekly rate
£ £
Disablement pension for Private at 100 per cent. rate 55.60 58.40
Age allowance with assessments of:
40 to 50 per cent. 3.85 4.05
Over 50 and not exceeding 70 per cent. 6.05 6.35
Over 70 and not exceeding 90 per cent. 8.65 9.10
Over 90 per cent. 12.10 12.70
Unemployability allowances
Personal allowance 36.15 38.00
Increase for wife or other adult dependant 20.45 21.50
Increase for child 7.60 7.65
Constant attendance allowance
Special maximum 44.60 46.80
Special intermediate 33.45 35.10
Normal maximum 22.30 23.40
Half and quarter day 11.15 11.70
Comforts allowance
Higher rate 9.60 10.10
Lower rate 4.80 5.05
Mobility supplement 21.15 22.25
Existing weekly rate Proposed weekly rate
£ £
Allowance for lowered standard of occupation (maximum) 22.24 23.36
Exceptionally severe disablement allowance 22.30 23.40
Severe disablement occupational allowance 11.15 11.70
Existing annual rate Proposed annual rate
£ £
Clothing allowance
Higher rate 75.00 79.00
Lower rate 48.00 50.00
Death Benefits
Existing weekly rate Proposed weekly rate
£ £
Widow's pension—Private's widow:
Standard rate 44.25 46.55
Childless widow under 40 10.22 10.74
Rent allowance (Maximum) 16.85 17.70
Age allowance for elderly widows
Age 65–69 4.30 5.00
Age 70–79 8.60 10.00
Age 80 and over* 8.60 12.50
Adult orphans 34.05 35.80
* New category.
Family Income Supplement
Existing weekly level Proposed weekly level
£ £
Family Income Supplement
Prescribed amount for family with one child (income below which FIS is payable) 85.50 90.00
Increase in prescribed amount for each additional child 9.50 10.00
Maximum weekly amount for a one child family 22.00 23.00
Increase in maximum amount for each additional child 2.00 No change

Minor Improvements

Regulations will be brought before the House to provide for the following improvements in benefit entitlement rules, from 26 November 1984.

To allow periods after people reach age 80 to count towards the 10 year residence test for non-contributory retirement pension. At present people entering, or returning to the United Kingdom after age 70 are usually unable to qualify no matter how long they live in this country thereafter.

In Housing Benefit, to increase the disregard of the Manpower Service Commission's away from home allowance paid to people on training courses from £15 a week to the full amount of the allowance, currently £40 a week.

Also in Housing Benefit, to prevent a double deduction from benefit for amenity charges (eg for heating and hot water) included in the rent where people are moving to a new home and temporarily have entitlement to benefit in respect of both tenancies.