HC Deb 22 October 1986 vol 102 cc1174-90

4.6 pm

The Secretary of State for Social Services (Mr. Norman Fowler)

With permission, Mr. Speaker, I should like to make a statement about the next uprating of social security benefits, which will take place in the week beginning 6 April 1987. This will be the third increase over 16 months, and covers the eight months from January to September 1986. It will complete the process of transition to the new timetable for benefit upratings which, in future, will take place annually in April. This will ensure that pensioners and other beneficiaries receive increases in their resources at the same time as most other financial changes take place.

The Government are pledged to increase pensions and other linked long-term benefits in line with the rise in prices. The retail price index published last Friday showed a rise between January and September 1986 of 2.1 per cent. Accordingly, the retirement pension for a married couple will rise from £61.95 to £63.25, an increase of £1.30 a week, and for a single person the pension will go up from £38.70 to £39.50, an increase of 80p per week. Widows' pensions and invalidity benefit will also be increased by the same percentage, as will public sector pensions. In the 16 months of the transitional period, the pension for a couple will have risen by £5.95 a week as a result of the three upratings and that for a single person by £3.70 a week.

I move on to benefits for families. The Government have made it clear that in considering the uprating of child benefit, account must be taken of priorities within the social security budget — every 10p increase costs over £50 million a year. We have decided that child benefit will go up from £7.10 to £7.25 a week, which is fully in line with the increase in prices. The Government also remain committed to the protection of low income families with children. The prescribed amounts in family income supplement will therefore rise by between 2.1 and 2.3 per cent., depending on the age of the child. This increase will ensure that low income working families with older children on FIS have seen the real value of their benefit increased by some 20 per cent. since 1978.

Over the eight-month period for this uprating, the retail price index, excluding housing costs, rose by 2 per cent., almost the same as for the RPI. The short-term rate of supplementary benefit will therefore increase from £48.40 for a couple to £49.35. There will be corresponding increases in the other scale rates. Additional requirements in the supplementary benefit scheme will be increased in line with appropriate elements of the retail price index. The cost of fuel and light has remained stable so that there will be no change in heating additions, but dietary additions will be increased— by lop a week for someone receiving the higher rate of addition.

As in July, I have decided to link the increase in the basic needs allowance for housing benefit to the cash increase in the basic retirement pension and in child benefit. This will ensure that virtually all pensioners do not lose housing benefit as a result of the increase in retirement pensions. It will also minimise the operational problems for local authorities next April. Full details of the increases in the housing benefit needs allowance and non-dependent deductions, together with the other benefit changes, are set out in a schedule which I have placed in the Vote Office.

I also propose to adjust the rent taper for relatively better off housing benefit recipients — those with incomes above the needs allowance—from 29 to 33 per cent. Those at supplementary benefit level and some way above it will not be affected. This change is subject to consultation with the relevant organisations. The amount of earned income which is ignored in the housing benefit calculation will he held steady for the second uprating in succession. This will ensure that those on low earnings will continue to benefit from last April's tax reductions.

Benefits payable to sick and disabled people, including sickness benefit, invalidity benefit, severe disablement allowance and invalid care allowance, will all rise by 2.1 per cent., as will attendance allowance and mobility allowance. 1 am also taking the opportunity to make a further beneficial change. Funeral expenses will be paid in respect of war pensioners who die as a result of their accepted disablement whether the funeral is arranged privately or by the War Pensioners' Welfare Service.

The House will shortly have an opportunity to debate these changes. I should add that they will apply in Northern Ireland as in the rest of the United Kingdom. The changes that I have announced will add over £700 million to the social security budget next year on top of the £420 million from the July uprating. Since 1978–79, spending on pensions has grown in real terms by over 25 per cent. at an additional cost of £4 billion a year. About £1.75 billion of this reflects an increase of 850,000 in the number of pensioners and the remainder represents a real improvement in the value of the pension. The new rates mean that the retirement pension has more than doubled in cash terms since November 1978 and that we have protected the position of other beneficiaries, including low income families with children, and the sick and disabled.

Mr. Michael Meacher (Oldham, West)

The 80p rise for pensioners is scandalous and miserly. Over the same period earnings have risen more than three times faster. There is to be no increase in heating additions and 80p is a paltry increase with which to face the winter. If I were to use the same crude techniques as the Secretary of State at the Tory party conference, I would throw over the Dispatch Box 10 pages of names of people who died as a direct result of hypothermia between January and April 1986. The statement by the Secretary of State means that pensioners will face the same roll call of premature death this winter.

Is the Secretary of State aware that if Labour's formula to uprate pensions in line with earnings had been used this year the pension increase would not have been 80p but over £2.50? Is he aware that every single Tory uprating, including this one, has pushed down pensioners' living standards in comparison with those in work? That means that this year, the seventh year in which the Government have been in office, a single pensioner receives £8 a week less and a married couple £12.75 a week less than they would receive under Labour's formula, if that were still operating. After seven years of Tory Government the single pension has fallen to precisely 20 per cent. of average earnings. Germany manages to afford a pension worth 50 per cent. of average earnings and France pays a pension of between 60 and 70 per cent.

The Secretary of State's decision not to uprate supplementary benefit in line with the RPI denies extra money to the poorest families. When the index for the supplementary benefit long-term rate rose last year more than the index for the pension, he levelled it down to the pension increase on grounds of administrative cost. Now that its index has risen less than for the pension he refuses to level it up to the pension increase. Is that not grossly unfair to the poorest families about which the Government like to preen themselves on allegedly targeting help?

We welcome the 15p increase in child benefit, but in no way does it make up for the 35p real cut last November, nor does it even begin to compensate for the destruction of the school meals service which has taken place since 1980 and which is gathering pace each month. The further big and highly damaging increase in the rent taper is probably the most significant feature of the statement. It will sharply worsen the poverty trap for low-paid workers who are only just above the poverty line and will work directly against the Government's own restart scheme, new workers' scheme, enterprise allowance scheme and community scheme. Will the Secretary of State tell us the average losses that will be suffered by workers at such levels of earnings? Is it not nonsense for the Government to try to encourage unemployed people to come off the dole and then to undercut their incentives if they take low-paid work?

Overall, the statement will do nothing to reduce the numbers of people condemned to live in poverty. That poverty is a national disgrace and has doubled since 1979, according to the Government's own figures, to more than 10 million people. The statement offers not a penny more than the amount for which the Government are strictly legally liable, despite the fact that one in five British people now live within or on the margins of poverty. That is an official figure. It is also despite the fact that, as each year passes, the divisions between those in and those out of work become an indictment of a civilised society.

Mr. Fowler

The response by the hon. Member for Oldham, West (Mr. Meacher) was derisory and bizarre. He talked about heating additions for the coming winter, but he should have understood that the additions that I have announced are for next April. Surely the hon. Gentleman understands the purpose of my statement. The heating additions are payable from next April and in any event there has been no increase in fuel costs. That means that the hon. Gentleman's first point was entirely daft.

The hon. Gentleman spoke about pensioners. The increases that I have announced mean that pensions have doubled in cash terms since 1978–79. In everything that he said the hon. Gentleman ignored the fact that we have brought inflation under control. In 1976, 10 years ago, inflation was between 13 and 23 per cent. Under the last Labour Government inflation went up by 110 per cent. and no one suffered more from that than the pensioner. The trouble with the hon. Gentleman's plans or proposals, or whatever he wants to call them these days, is that no one seriously believes him any more, not even his right hon. Friend the shadow Chancellor. The hon. Gentleman makes bogus promises and pledges which the public reject.

The changes that we propose in housing benefit mean that there will be an average weekly loss of 10p in the needs allowance for an owner-occupier and 40p for a tenant. There will be some weekly losses as a result of the taper changes and these will average between 47p and 56p.

As for the Rossi index, the hon. Gentleman is right that we did not uprate in line with the Rossi index in July. The difference between the Rossi index and the retail price index this time is only between 2 and 2.1 and it would make a negligible difference to the uprating. The hon. Gentleman ignores the fact that in this uprating we are spending an additional £700 million. The total expenditure on social security is now £43 billion a year, almost one-third of public spending. That shows our commitment to the beneficiaries of the social security system.

Mr. Robert McCrindle (Brentwood and Ongar)

Does my right hon. Friend the Secretary of State accept that there is widespread failure to understand that over a period of 16 months pensions and other benefits will have been increased on no fewer than three occasions? Does my right hon. Friend further agree that as, inevitably, each of those three increases has been comparatively small, he should take every opportunity to repeat to the House and to the country a fact that I believe he mentioned today: that over that period not only has there been an increase in conformity with the inflation rate but that after next April we shall reach the position where pensioners and other social security recipients will have maintained the purchasing power of their incomes?

Mr. Fowler

My hon. Friend is absolutely correct that in the 16 months of the transitional period the pension for a married couple will have risen by £5.95 a week —almost £6—as a result of the three upratings, and that the pension for a single person will have risen by £3.70 a week. To take my hon. Friend's comparisons with the retail price index, between November 1978 and September 1986 the RPI increased by about 91.5 per cent. Pensions, without the increase that I have announced today, have already increased by 98.4 per cent. Including the changes, the increase is 102.5 per cent. In other words, the Government have fulfilled the pledge that they made at both elections to keep pensions in line with and above prices.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

It would help the House if the Secretary of State could tell us how many people are involved in the changes in the rent tapers and exactly how much that will save the Government in the housing benefit account. The Government's policy of price protecting pensions and benefits can be seen to be fair only if two things obtain: first, that the retail price index is an accurate measure across income spectrums. There is now wide evidence and anticipation of the fact that the retail price index does not accurately reflect the needs that have to be met by low income families. Secondly, over the period from 1 January to November 1986, earnings will have increased by 5 per cent., although the retail price index has increased by 2 per cent. At some stage there must surely be some reconciliation of the distance between these two figures.

Mr. Fowler

If we had used the pensioners price index — one of the alternative indexes which has been suggested — the increase would have been rather less than the one that I am announcing, because of the comparison with the retail price index. Many people have gone round this course, and the only sensible conclusion is that the RPI is the best comparison.

The hon. Gentleman also asked me about the needs allowance and the tapers. The effect of the needs allowance on public spending will be a saving of £23 million, and revenue forgone will amount to £17 million. As for the tapers, there will be a saving of about £28 million.

Mr. Roy Galley (Halifax)

There will be a warm welcome on these Benches for the fact that all benefits, including child benefit, have been increased in line with inflation, and more particularly for the substantial increase in pensions over the 16-month period during which these increases have been phased in. Does my right hon. Friend not agree that it is a more preferable policy to have a guaranteed increase in benefits to keep pace with inflation, in a period of low inflation, than to scatter confetti money, as the Opposition would prefer to do, which would do nothing except raise inflation and unemployment and decimate the savings of old people?

Mr. Fowler

I agree absolutely. As I have already said, 10 years ago, under the last Labour Government, inflation was running at between 13 and 23.5 per cent. Nobody suffered more than the pensioners from that lack of control over inflation. Frankly, it is banana republic economics to prefer high inflation so that uprating rates seem to be higher.

Mr. Frank Field (Birkenhead)

As child benefit always appears to be at its most vulnerable at the uprating period, I congratulate the Secretary of State on maintaining its real value since the last increase. However, as I am sure that he does not wish to become complacent on this front, will he remind the House that, had child benefit been maintained in real terms since 1979, it would today stand at £7.60 per child per week? Is the restoration of that cut a major objective of Government policy before the next general election?

Mr. Fowler

As I have always made clear, we shall consider the level of child benefit at each uprating. The hon. Gentleman has given the correct figures. In November 1985 we did not uprate child benefit fully. That is obviously known, and it was announced to the House. However, the hon. Gentleman forgets that at the same time we gave extra help through family income supplement, with the result that there is now a 20 per cent. real increase in family income supplement for families with older children and a 13 per cent. real increase for families with younger children. In other words, the Government have provided general support through child benefit, but they have provided above average support—above real increase support— for low income families.

Mr. Ian Gow (Eastbourne)

Does not the response of the Opposition to my right hon. Friend's statement show the astonishing degree to which the Opposition fail to understand that the greatest fear that pensioners have is the fear of inflation? Will my right hon. Friend confirm that after next April's uprating a pension with a higher purchasing power than ever before will be paid to a much larger number of pensioners than ever before? Finally, it is a measure of my right hon. Friend's achievement that the Government are able to announce pension increases which will make the purchasing power higher than when the "caring" Labour party was in office?

Mr. Fowler

My hon. Friend is absolutely right. He is also right that we are paying pensions to about 850,000 more pensioners than when we came into office. Before the Opposition lecture us too much, they might care to remember that this is almost precisely the 10th anniversary of their pensions fiddle, when they saved over £1 billion at the cost of the pensioners by changing the uprating method. That was perpetrated by the last Labour Government.

Mr. Seamus Mallon (Newry and Armagh)

The Secretary of State has assured us that there will be no increase in the allowances for fuel and light. Surely that implies that, had there been an increase in the cost of fuel and light, there would have been an increase in the allowances. Will the Secretary of State recognise the differential between the cost of fuel and light in Northern Ireland and its cost in England, Scotland and Wales and reflect it in the allowances that are made available to people in Northern Ireland, if he is to be consistent with the implication that he has accepted?

Mr. Fowler

I accept part of what the hon. Gentleman says about the general increase, but I should need to give very careful consideration to the matter before trying to set up regional indices of the kind that the hon. Gentleman suggests.

Mrs. Virginia Bottomley (Surrey, South-West)

I welcome my right hon. Friend's statement, but may I remind him that there remain a great number of families with dependent children among those on the lowest incomes and that, while the increases in family income supplement and one-parent benefit make a great contribution, they can be no substitute for child benefit. There are 7 million mothers and nearly 13 million children who will hear of this uprating with great relief.

Mr. Fowler

I am grateful to my hon. Friend. I agree with her that child benefit is the only recognition in the tax or social security system of the extra cost of having children and bringing them up. It is for that reason that we have fully uprated it at this uprating.

Mr. James Lamond (Oldham, Central and Royton)

When the Minister says that because there has been no increase in fuel prices there will be no increase in fuel allowances, is he wiping from his memory and his conscience all the pain and suffering that went on in previous winters because of the inadequate allowances? Is he also wiping from his memory the fact that places in the north-west, such as my constituency, have many people who suffer from hypothermia? Is he not going to recognise that the present system is totally inadequate? Please, do not rest complacently on the fact that there has been no increase this year.

Mr. Fowler

The proposals on the severe weather allowance have been put to the Social Security Advisory Committee. I understand that it will be responding to them shortly. Obviously, we will lay regulations as soon as possible following that report. On the matter of additional requirements, I must point out that the Government are spending £400 million on heating additions. That is £140 million more in real terms than the previous Labour Government.

Sir Brandon Rhys Williams (Kensington)

I congratulate my right hon. Friend most warmly on maintaining the real value of child benefit. May I remind him that that is in accordance with the decisive vote of the House in June when my motion on this subject was supported by 152 hon. Members and opposed by only three? Will he bear in mind, when settling his policy in regard to child benefit, that it is by far the most rational and humane way of keeping families from the necessity of applying for supplementary benefit? It is also the best way to maintain incentives to work for people with family responsibilities and low wages.

Mr. Fowler

I understand the point that my hon. Friend makes. I admire and pay tribute to the work that he has done for child benefit. I think that my hon. Friend will be satisfied with this uprating since we have given a full price uprating too.

Mr. Nick Raynsford (Fulham)

Why is the Secretary of State so reticent about his housing benefit cuts? Why will he not admit that this is the fourth time in three years that the rent taper has been cut? Why will he not admit that over 2 million households will lose and that this will further intensify the poverty trap? Why will he not admit that he is perpetuating a fiddle that was tried out earlier this year by failing to uprate the needs allowance by the traditional formula which has been used consistently since 1973 when it was introduced by a previous Conservative Government? By departing from that he is surreptitiously cutting the benefit to people.

Mr. Fowler

I did not think that I was being in the least reticent about the changes I have made in the needs allowance or the tapers. I have given the House the figures concerning that, the figures of average losses and the figures of public spending changes that are represented by it. I have to point out that when the Government came to office housing benefit spending was of the order of £1.5 billion and it is now £4.5 billion. Housing benefit now goes to one in three households and goes further up the income scale than any other income-related benefit.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

Would my right hon. Friend remind the House of the cost of Labour's much beloved and, I would suggest, bogus formula? Would my right hon. Friend also remind the House how often the Labour Government manipulated and changed that formula when they had the task of managing it?

Mr. Fowler

On the last point, there is nothing I can add to what I have already said. The fact is—there are many Opposition Members who remember and are deeply ashamed—that 10 years ago the then Secretary of State for Social Services, Mrs. Castle, completely fiddled the system and robbed the pensioners of something over £1 billion. There is no doubt or question about that.

The hon. Member for Oldham, West (Mr. Meacher), appears to speak for the Labour party at times. However, the £5 and £8 increased cost which he is pledging would cost about £5.6 billion. To move towards the half average earnings to which he is now pledging the party would cost at least double that figure. That is why the public do not believe the pledges and promises that he is making.

Mr. Max Madden (Bradford, West)

At a time when the poverty crisis gripping this country is an all-time record, is not this statement thoroughly disgraceful? Does the Secretary of State not realise that pensioners, families in poverty and the long-term unemployed do not want to hear that Ministers care about them? They want more money. Will he understand that many of those people think that the retail price index does not in any way reflect their real needs? When is he going to give those people real increases so that their standard of living can increase in the same way as for those in full-time employment? Does he not accept that that is the problem which the statement does not address itself to?

Mr. Fowler

The people of this country, the pensioners and other social security beneficiaries want increased benefits. The result of this uprating is that we are spending £700 million extra and the total social security spending is now £43 billion a year, which is about one third of all public spending. The pensioners in this country also want low inflation and they know that this is the only Government who will give them that because they can remember only too well what happened under the Labour Government.

Mr. Tony Favell (Stockport)

Will my right hon. Friend remind the Opposition that everything has to be paid for?

Mr. Fowler

That is certainly the case. One of the results of having public spending under control is the low inflation that this country has enjoyed.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

Does the Secretary of State agree that those looking at this statement, especially the strictures on child benefit where it says that a 10p increase costs the country £50 million per year, would get a good insight into the values of the Government when we consider that for the sake of one week the Chancellor was prepared to borrow £4 billion?

Mr. Fowler

It is entirely fair and accurate to say that the cost of increasing child benefit is £50 million on the 10p increases. However, as I have said, we have increased child benefit fully in line with prices, which I hope is what the hon. Gentleman would support.

Mr. Robin Squire (Hornchurch)

I congratulate my right hon. Friend and his fellow Ministers on the child benefit increase. It is in line with the early-day motion that I tabled some months ago, which was supported by many of my right hon. and hon. Friends. I also congratulate him on winning any battles that may have been involved. Does he not find it surprising that, on a benefit, which he and his predecessors in our party, in government or opposition, have long seen to be the prime way to assist in reducing family poverty, there should be any discussion about whether it should be increased by less than the rate of inflation, since any discussion should be on whether it should be increased by more than the rate of inflation?

Mr. Fowler

As my hon. Friend realises and understands, the decisions on child benefit are made at each uprating. We have made that position absolutely clear. I am glad that my hon. Friend shares my satisfaction that child benefit has been increased in this way.

Mr. Tim Yeo (Suffolk, South)

I join in the congratulations being heaped on my right hon. Friend for preserving the real value of child benefit. May I suggest that, to avoid the type of debate that has taken place over recent upratings, he could persuade the Treasury to accept an index-linking of the child benefit in the same way as we now index-link the tax thresholds?

Mr. Fowler

I cannot do anything other than refer my hon. Friend to the reply I have just given to my hon. Friend the Member for Hornchurch (Mr. Squire).

Mr. Allen McKay (Barnsley, West and Penistone)

While looking at housing benefits, will the Secretary of State consider withdrawing the rules of guidance that have been sent out recently to Department of Health and Social Security offices which have resulted in many of my pensioners who receive concessionary cash in lieu of fuel having their rent increased by between £3 and £4 per week? Given that the concessionary allowance is awarded by reason of disability, infirmity and inability to handle fuel, that is a very cruel cut.

Mr. Fowler

I shall consider the hon. Gentleman's comment.

Mr. Patrick Nicholls (Teignbridge)

Does my right hon. Friend recall that he was berated for not giving pensioners any more than he was legally obliged to give them? Since the last Labour Government did not even do that, does not it amount to a shabby attempt to mislead the country for Opposition Members to refer to the amount that would be paid under Labour's formula when the Labour Government did not even acknowledge their own formula?

Mr. Fowler

That is right. The Labour Government were not only totally unsuccessful in controlling inflation, but they perpetrated a number of frauds on the pensioners, the greatest being in 1976. They also ended the Christmas bonus. The public will remember that. I certainly do not believe that the public are remotely likely to accept or believe any of the promises made by the hon. Member for Oldham, West (Mr. Meacher).

Mr. D. N. Campbell-Savours (Workington)

Now that the Government have admitted in their submission on regional development to the European Community that their assumptions are based on unemployment in excess of 3 million by 1990 and, indeed, well into the 1990s, should not the Government now be reconsidering the position of people who have to live on benefits, because neither Government nor industry is capable of providing jobs?

Mr. Fowler

The changes that we are introducing in April 1988 as a result of the Social Security Act include provision for the unemployed in the income support arrangements. We should be seeking to bring unemployment down. That is what this Government want to do. One of the ways in which that can be done is to provide a context of low inflation. That is certainly what this Government are doing.

Mr. Peter Pike (Burnley)

Does the Secretary of State accept that the benefit increase, even if one regards it in the most favourable light. will mean that deprived people will at the best maintain a standstill position? Will the Secretary of State be able to ease his conscience next year in the Cabinet when it votes for a tax reduction to be introduced at the same time as it votes for the benefit increases? Will the Secretary of State bear in mind that a 1 p reduction in the standard rate of income tax is worth £1 billion more than the package that he announced today?

Mr. Fowler

Since 1978–79 social security spending has increased by 35 per cent. in real terms, so it is not immediately obvious how it has financed tax cuts. The point about tax cuts is that they take people on low incomes out of tax. I should have thought that that was what the hon. Gentleman would want.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Severe weather payments are very important to many pensioners in Scotland. That was demonstrated clearly early this year when thousands of payments were made following February's severe weather. Does the Secretary of State agree that any regulations relating to heating additions or severe weather payments must pay close regard to regional variations in weather conditions?

Mr. Fowler

We are awaiting the report from the Social Security Advisory Committee. We shall consider that and bear in mind what the hon. Gentleman says about it, although I do not want to raise his hopes that we shall do as he wishes.

Mr. Robert C. Brown (Newcastle upon Tyne, North)

Does the Secretary of State accept that, although the pensioners of Eastbourne fret themselves to sleep worrying about inflation, the majority of pensioners in Newcastle will fret themselves to sleep worrying that two days from pension day they do not have a penny in their purse? Does he further accept that the grotesquely unfair increase that he announced today will be further nails in the coffin for many pensioners with hypothermia at the tail end of this winter? Is he aware that the only good thing that comes out of the statement is that it will result in further nails in this Government's coffin?

Mr. Fowler

That is a pretty pathetic comment. The hon. Gentleman does not even understand that the statement is being made for next April, at any event. Whether in Newcastle or in Eastbourne, the people will remember that the Government of which the hon. Gentleman was a member presided over an inflation of 110 per cent. That was a disgrace.

Mr. Meacher

The Secretary of State has repeatedly referred to inflation and its effect on pensioners. In view of his constant references to 1976, will he acknowledge that what matters to pensioners is the real increase in pensions over a five-year period after taking account of inflation? Does the right hon. Gentleman acknowledge that the real post-inflation increase in the pension under Labour's last five years was 20 per cent., while in the last seven years of this Government it has increased in real terms by only 3 or 4 per cent.? That is the real difference between the parties and their treatment of pensioners. They did five times better under Labour.

Mr. Fowler

The hon. Gentleman totally ignores that inflation at the levels over which his Government presided devastated the savings of millions of pensioners throughout the country. The hon. Gentleman should be ashamed of that record when lie was a Minister and should certainly not boast about it.

Following are the details:

Schedule of .main proposed changes in Social Security Benefit rales from the pay-day in week commencing 6 April 1987 (weekly rales unless otherwise shown)
Old rates 1986 New rates 1987
Attendance Allowance
higher rate 30.95 31.60
lower rate 20.65 21.10
Child Benefit—each child 7.10 7.25
Child's Special Allowance 8.05 8.05
Dependency Additions
Adult dependency additions For spouse or person looking after children, with:
retirement pension on own insurance, invalidity pension, unemployability supplement and. if beneficiary over pension age, unemployment benefit 23.25 23.75

Old rales 1986 New rates 1987
non-contributory retirement pension, invalid care and severe disablement allowance 13.90 14.20
sickness benefit if beneficiary over pension age 22.25 22.70
unemployment benefit:
standard rate 19.00 19.40
three-quarter rate 14.25 14.55
half rate 9.50 9.70
maternity allowance/sickness benefit standard rate 18.20 18.60
three-quarter rate 13.65 13.95
half rate 9.10 9.30
Note:Half and three-quarter rates for existing cases only.
Child dependency additions
For each child with:
retirement pension, widows benefit, invalidity benefit, invalid care and severe disablement allowance, higher rate industrial death benefit, unemployability supplement and sickness or unemployment benefit if beneficiary over pension age 8.05 8.05
Earnings Rules
Retirement pension 75.00 75.00
Invalid care allowance 12.00 12.00
Unemployment benefit subsidiary occupation (daily rate) 2.00 2.00
Therapeutic earnings limit 25.50 26.00
Industrial injuries unemployability supplement permitted earnings level (annual amount) 1,326.00 1,352.00
War pensioners' unemployability supplement permitted earnings level 25.50 26.00
Adult dependant's benefit with:
Sickness benefit if claimant is under pension age 18.20 18.60
over pension age 22.25 22.70
Maternity allowance 18.20 18.60
Unemployment benefit if claimant is under pension age 19.00 19.40
over pension age 23.25 23.75
Retirement pension, invalidity pension,
severe disablement allowance,
unemployability supplement where dependent is:
living with the claimant 30.80 31.45
living with the claimant and still qualifies for the tapered earnings rule 45.09 45.09
Retirement pension, invalidity pension and unemployability supplement where dependant not living with claimant 23.25 23.75
Severe disablement allowance where dependant not living with claimant 13.90 14.20
Invalid care allowance (wife or female housekeeper) 13.90 14.20
Child dependency additions level at which child additions payable with long-term benefits are affected by earnings of claimant's spouse or partner first child 85.00 85.00
each subsequent child 10.00 10.00
Family Income Supplement
Prescribed amount for one-child family, where child is aged under 11 98.60 100.70
11–15 99.60 101.75
16 and over 100.60 102.80
Increase for each additional child
Old rates 1986 New rates 1987
under 11 11.65 11.90
11–15 12.65 12.95
16 and over 13.65 14.00
Maximum amount for one.child family where child is aged
under 11 25.30 25.85
11–15 25.80 26.40
16 and over 26.30 26.90
Increase for each additional child
under 11 2.55 2.60
11–15 3.05 3.15
16 and over 3.55 3.65
Guardian's Allowance each child 8.05 8.05
Hospital Downrating
20 per cent, rate 7.75 7.90
40 per cent, rate 15.50 15.80
60 per cent, rate 23.25 23.70
Reduction where wife has pension on her own insurance (category A) 23.20 23.65
Resettlement benefit 62.00 64.00
Housing Benefit
Needs allowances
single person 48.10 48.90
couple/single parent 70.85 72.15
single handicapped person 53.65 54.50
couple (one handicapped) or handicapped single parent 76.40 77.75
couple (both handicapped) 79.00 80.45
pensioner addition .85 .85
dependent child addition 14.60 14.75
Non.dependant deductions
Rate rebates
aged 18 to pension age, and not on supplementary benefit or youth training scheme nor qualifying for modified deduction after 56 days 2.60 2.70
of pension age, or over 25 and on supplementary benefit or qualifying for modified deduction after 56 days 1.10 1.15
age 16–17 and not on supplementary benefit, youth training scheme or severe disablement allowance, or 16–24 and qualifying for modified deduction after 56 days 1.10 1.15
Rent rebates and allowances aged 18 to pension age and not on supplementary benefit or youth training scheme nor qualifying for modified deduction after 56 days 7.80 8.05
of pension age, or over 25 and on supplementary benefit or qualifying for modified deduction after 56 days 2.80 2.90
aged 16–17 and not on supplementary benefit, youth training scheme or 16–24 and qualifying for modified deduction after 56 days 2.80 2.90
Disregards for:
claimant's earnings 17.30 17.30
partner's earnings 5.00 5.00
various pensions etc. 4.00 4.00
maintenance of non grant.aided students (maximum) 23.85 24.35
Deductions for amenities
all fuel 8.80 8.80
heating 6.70 6.70
hot water 0.80 0.80
lighting 0.50 0.50
cooking 0.80 0.80
Expenses allowed for sub.tenants
furnished letting 3.00 3.00
Old rates 1986 New rates 1987
unfurnished letting 1.50 1.50
garage or outbuilding 0.40 0.40
Industrial Death Benefit
Widow's pension
first 26 weeks 54.20 55.35
higher permanent rate 39.25 40.05
lower permanent rate 11.61 11.85
Child dependency addition 8.05 8.05
Industrial Disablement Pension
18 and over, or under 18 with dependants
100 per cent. 63.20 64.50
90 per cent. 56.88 58.05
80 per cent. 50.56 51.60
70 per cent. 44.24 45.15
60 per cent. 37.50 38.70
50 per cent. 31.60 32.25
40 per cent. 25.28 25.80
30 per cent. 18.96 19.35
20 per cent. 12.64 12.90
under 18
100 per cent. 38.70 39.50
90 per cent. 34.83 35.55
80 per cent. 30.96 31.60
70 per cent. 27.09 27.65
60 per cent. 23.22 23.70
50 per cent. 19.35 19.75
40 per cent. 15.48 15.80
30 per cent. 11.61 11.85
20 per cent. 7.74 7.90
Maximum life gratuity (lump sum) 4,200.00 4,290.00
Unemployability supplement 38.70 39.50
plus where appropriate an increase for early incapacity
higher rate 8.15 8.30
middle rate 5.20 5.30
lower rate 2.60 2.65
Adult dependency addition 23.25 23.75
Child dependency addition 8.05 8.05
Maximum special hardship allowance 25.28 25.80
Constant attendance allowance normal maximum 25.30 25.80
part.time rate 12.65 12.90
intermediate rate 37.95 38.70
exceptional rate 50.60 51.60
Exceptionally severe disablement allowance 25.30 25.80
Invalid Care Allowance 23.25 23.75
Adult dependency addition 13.90 14.20
Invalidity Benefit
Invalidity pension 38.70 39.50
Invalidity allowance
higher rate 8.15 8.30
middle rate 5.20 5.30
lower rate 2.60 2.65
Maternity Benefit
Maternity allowance full rate 29.45 30.05
adult dependency addition 18.20 18.60
three.quarter rate 22.09 22.54
adult dependency addition 13.65 13.95
half rate 14.73 15.03
adult dependency addition 9.10 9.30
Note:Half and three-quarter rates for existing cases only.
Mobility Allowance 21.65 22.10
One Parent Benefit 4.60 4.70
Old rates 1986 New rates 1987
Pneumoconiosis, Byssinosis, Workmen's Compensation and Other Schemes
Major incapacity allowance (maximum) and allowance for total disablement 63.20 64.50
partial disablement allowance 23.25 23.75
Unemployability supplement plus where appropriate increases for early incapacity 38.70 39.50
higher rate 8.15 8.30
middle rate 5.20 5.30
lower rate 2.60 2.65
Constant attendance allowance
normal maximum rate 25.30 25.80
part.time rate 12.65 12.90
intermediate rate 37.95 38.70
exceptional rate 50.60 51.60
Exceptionably severe disablement allowance 25.30 25.80
Lesser incapacity allowance (maximum) 23.25 23.75
—based on loss of earnings of over 30.95 31.60
Retirement Pension
on own insurance—category A or B 38.70 39.50
on spouse's insurance—category B (lower) 23.25 23.75
category C or D 23.25 23.75
category C (lower) 13.90 14.20
additional pension, guaranteed minimum pension and graduated retirement increased by
benefit 2.1 per cent.
graduated retirement benefit (unit) 5.06p 5.17p
increments to basic and additional pension, guaranteed minimum pension, increased by
and graduated retirement benefit 2.1 per cent.
maximum amount of additional pension (also paid with widows' and invalidity benefits) 24.03 24.53
addition for over 80's 0.25 0.25
Severe Disablement Allowance 23.25 23.75
adult dependency addition 13.90 14.20
Sickness Benefit
over pension age
single rate 37.05 37.85
adult dependency addition 22.25 22.70
under pension age
full rate 29.45 30.05
adult dependency addition 18.20 18.60
three quarters rate 22.09 22.54
adult dependency addition 13.65 13.95
half rate 14.73 15.03
adult dependency addition 9.10 9.30
Note:Half and three.quarters rates for existing cases only.
Supplementary Benefit
Scale rates
ordinary rates
single householder 29.80 30.40
couple 48.40 49.35
non.householder 18 or over 23.85 24.35
non-householder 16–17 18.40 18.75
long.term rates
single person living alone 37.90 38.65
couple 60.65 61.85
non-householder 18 or over 30.35 30.95
non-householder 16.17 23.25 23.70
dependent children
over 18 23.85 24.35
16–17 18.40 18.75
11–15 15.30 15.60
under 11 10.20 10.40
Board and lodging personal expenses: short term single 9.80 10.00
Old rates 1986 New rates 1987
couple 19.60 20.00
personal expenses:long.term
single 10.95 11.15
couple 21.90 22.30
personal expenses: dependants
18 and over 9.80 10.00
16–17 5.90 6.00
11–15 5.05 5.15
under 11 3.30 3.35
Allowances for personal expenses for claimants in
private and voluntary residential and nursing homes 9.05 9.25
re-establishment centres 9.95 10.15
resettlement units 7.60 7.75
hospital and local authority accommodation 7.75 7.90
the Polish Home Ilford Park 10.95 11.15
Additional requirements
Heating additions (including age.related heating additions)
higher rate 5.55 5.55
lower rate 2.20 2.20
Central heating
higher rate 4.40 4.40
lower rate 2.20 2.20
Estate rate heating
higher rate 8.80 8.80
lower rate 4.40 4.40
Special dietary additions
lower rate 1.60 1.65
higher rate 3.70 3.80
haemodialysis rate 10.65 10.85
Blind person 1.25 1.25
Over age 80 0.25 0.25
Laundry costs 0.55 0.55
Extra bath 0.30 0.30
Housing costs
Reduction for non.dependants aged 18 to pension age, and not on supplementary benefit, a youth training scheme nor qualifying for modified deduction after 56 days 7.80 8.05
of pension age or over 25 and on supplementary benefit or qualifying for modified deduction after 56 days 2.80 2.90
age 16–17 and not on supplementary benefit, a youth training scheme or severe disablement allowance, or 16–24 and qualifying for modified deduction after 56 days 2.80 2.90
non-householder rent addition 3.90 4.05
maintenance and insurance allowance 1.85 1.95
Capital limits for receipt of supplementary benefit 3,000.00 3,000.00
single payments and related items 500.00 500.00
interest on loans for major repairs and improvements 500.00 500.00
lower rate voluntary unemployment deductions 100.00 100.00
Other limits for expenses on starting work 35.00 35.00
religious requirements—funerals 75.00 75.00
single payment for repairs and maintemance 325.00 325.00
Deductions for direct payment fuel bills
Old rates 1986 New rates 1987
5 per cent, rate 1.50 1.55
10 per cent, rate 3.00 3.05
housing costs 1.50 1.55
Earnings disregard—£4 and in the case of single parents half the difference between £4 and £20 4.00 4.00
Unemployment Benefit
Over pension age
single rate 38.70 39.50
adult dependency addition 23.25 23.75
Under pension age
full rate 30.80 31.45
adult dependency addition 19.00 19.40
three-quarters rate 23.10 23.59
adult dependency addition 14.25 14.55
half rate 15.40 15.73
adult dependency addition 9.50 9.70
occupational pension abatement 35.00 35.00
Note:Half and three-quarter rates for existing cases only
War Pensions
Disablement pension (100 per cent, rates)
private or equivalent 63.20 64.50
officer (£ per annum) 3,295.00 3,363.00
Age allowances
40 per cent, to 50 per cent. 4.40 4.50
over 50 per cent, but not over 70 per cent. 6.85 7.00
over 70 per cent, but not over 90 per cent. 9.85 10.05
over 90 per cent 13.70 14.00
Disablement gratuity (£ per annum)
specified minor injury 4,200.00 4,290.00
unspecified minor injury 2,310.00 2,359.50
Unemployability allowance
personal allowance 41.10 41.95
adult dependency addition 23.25 23.75
addition for each child 8.05 8.05
Invalidity allowance
higher rate 8.15 8.30
middle rate 5.20 5.30
lower rate 2.60 2.65
Constant attendance allowance
normal maximum rate 25.30 25.80
part-time rate 12.65 12.90
intermediate rate 37.95 38.70
exceptional rate 50.60 51.60
Comforts allowance
Old rates 1986 New rates 1987
higher rate 10.90 11.10
lower rate 5.45 5.55
Mobility supplement 24.05 24.55
Allowance for lowered standard of occupation (maximum) 25.28 25.80
Exceptionally severe disablement allowance 25.30 25.80
Severe disablement occupational allowance 12.65 12.90
Clothing allowance (per annum)
higher rate 86.00 88.00
lower rate 55.00 56.00
Education allowance (per annum) 120.00 120.00
War widows' pension (private) widow 50.30 51.35
childless widow under age 40 11.61 11.85
age allowance
age 65 to 69 5.40 5.50
age 70 to 79 10.80 11.00
age 80 and over 13.55 13.85
child addition 11.55 11.60
addition for motherless or fatherless child 12.60 12.70
Unmarried dependant living as wife 48.25 49.30
Rent allowance (maximum) 19.15 19.55
Adult orphan's pension 38.70 39.50
Widower's pension (maximum) 50.30 51.35
Widow's Benefit
Widows' allowance 54.20 55.35
Widowed mothers' allowance 38.70 39.50
Widows' pension—standard rate 38.70 39.50
Age-related widows' pension
age 49 35.99 36.74
age 48 33.28 33.97
age 47 30.57 31.21
age 46 27.86 28.44
age 45 25.16 25.68
age 44 22.45 22.91
age 43 19.74 20.15
age 42 17.03 17.38
age 41 14.32 14.62
age 40 11.61 11.85
Non-contributory widow's pension (category C) standard rate 23.25 23.75
age 49 21.62 2209
age 48 20.00 20.43
age 47 18.37 18.76
age 46 16.74 17.10
age 45 15.11 15.44
age 44 13.49 13.78
age 43 11.86 12.11
age 42 10.23 10.45
age 41 8.60 8.79
age 40 6.98 7.13