§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo)
I beg to move,That the draft Pensioners' Lump Sum Payments Order 1987, which was laid before this House on 7 July, be approved.I understand that it will be for the convenience of the House if we discuss at the same time the following motion:That the draft Supplementary Benefits (Requirements and Resources) Amendment Regulations 1987, which were laid before this House on 9 July 1987, be approved.In passing, I wish to congratulate the hon. Member for Derby, South (Mrs. Beckett) on retaining her portfolio and to wish her well in her renewed stint as her party's social security spokesman.
The order provides for the payment of the £10 Christmas bonus. The regulations put into effect the amendments to the supplementary benefit regulations dealing with the payment of benefit to people in residential care and nursing homes which were announced on 7 July in a reply to my hon. Friend the Member for Crawley (Mr. Soames). They also uprate for the purpose of assessing the amount of benefit payable the element in the student grant that can be disregarded because it is intended for books and equipment.
I shall deal first with the changes to the supplementary benefit regulations relating to the payment of benefit to people in small residential care homes. As the House will know, people living in private or voluntary residential care homes registered with a local authority under the Registered Homes Act 1984 can get supplementary benefit to help with the fees that they have to pay. The amounts payable are subject to national limits ranging from £130 to £190 depending on the category of care provided by the home. Small homes with three or fewer residents cannot register with a local authority. Nevertheless, people living in these homes can get supplementary benefit up to the same limits as registered homes.
The intention was that this should happen only where the care given was clearly equivalent to that given in a registered home. However, there is doubt whether the current regulations actually achieve this aim. Recent legal advice is that if any amount of personal care is provided, help with the fees can be given up to the registered home limit even if the home has inadequate facilities and provides a low level of care. That would clearly be unsatisfactory. There has also been widespread concern that the present benefit provisions positively encourage the setting up of small homes, regardless of the services provided.
The amendments provide a tighter definition of a small residential care home in line with the previous policy intention. As the House will know, there are different ranges of limits for various types of board-and-lodging accommodation: ordinary board and lodging and hostels where the limits range from £45 to £70, residential care homes with limits from £130 to £190, and nursing homes with limits from £175 to £230. Our intention was that the residential care home limits would apply for residents of small homes only where the level of provision and thus the cost of the home would justify those benefit levels. The new definition at regulation 2(b) takes the provision of staff of reasonable calibre as the proxy for additional costs. The residential care limit will apply where the home 392 provides personal care and there are at least two people with relevant experience employed in providing that care. At least one of those people must be available throughout the working day and one must be on call throughout the night to care for residents. Residents must have full access to the home at all times.
The new definition will ensure that rates of benefit bear a defensible relationship with costs. The present arrangements require adjudication officers to make a judgment on whether the standard of care given in a small home is equivalent to that in registered homes before allowing the residential care home limit. The new definition specifies the requirements for the higher limit and should thus be easier to administer and will provide a system which is clearer for adjudication officers, claimants and those providing care.
The House will be concerned about the transitional arrangements. A few claimants in small homes may already be receiving higher rates of benefit, although the level of care would not justify the higher rates under the new provisions. In order to protect the position of those residents, regulation 3 provides that where an adjudication officer has already decided under the current rules that a residential care home limit is appropriate, claimants who continue to live at the same address will continue to qualify for the higher benefit limits.
Before leaving the subject of residential care, I should mention that the amendment regulations also include, at regulation 2(a), a new definition of a "nursing home". This is a technical amendment to make it clear that references to nursing homes in the supplementary benefit requirements regulations are to registered homes, so as to ensure that no payment is made in respect of homes which are not registered, unless the home is specifically exempted from the need to register.
The amendment regulations also deal with a wholly different aspect of supplementary benefit. Regulation 4 reflects the increased rates of student grants for the academic year 1987–88. Within the new rates of grant there is an increased allocation for books and equipment. The supplementary benefit regulations provide a specific disregard for this element of the student grant, and the purpose of this regulation is to uprate that disregard to the new level.
I should explain that this applies to a small category of students. Most students cannot claim benefit during the grant-aided period, since they are on their course and not available for work. However, lone parents and disabled people who are not required to be available for work can claim benefit while studying and their grant is taken into account as a resource against their benefit requirements. The grant is high enough to take most of these students out of benefit, but a few have needs sufficient to qualify them for benefit to top up the grant.
If a claimant has a partner who is a student, the couple's total needs are calculated, any grant is taken into account, and benefit will be payable during the grant-aided period. For these students, and for lone parents and disabled students, it is important that we do not treat their grant for books as a resource, and the disregard ensures that we do not take account of it. Only a small number of students are affected, but for them the uprating of the disregard is wholly advantageous.
The draft order provides for the payment of a non-taxable Christmas bonus of £10 in the week commencing 393 7 December to retirement pensioners and to recipients of the other qualifying benefits specified in the Pensioners' Payments and Social Security Act 1979.
It may seem curious to the House that, in mid summer, we have to debate the Christmas bonus, some six months in advance. I am pleased to be able to remind the House that this is the last time that such a debate will be necessary. From next year payment of the bonus will be made automatically as one of the very welcome administrative simplifications resulting from the Social Security Act 1986.
§ Mr. Paul Marland (Gloucestershire, West)
As this is the last time that we shall debate the Christmas bonus, may I tell my hon. Friend that there is a pensioners' organisation in my constituency which would much rather have an increase in the basic pension than a number of what they see as fringe benefits added to the pension? Does my hon. Friend have a view on that?
§ Mr. Portillo
I am grateful to my hon. Friend for his comments. I have heard that opinion expressed before and I understand what brings it about. Those fringe benefits, as he describes them, are of substantial help to the poorest groups in our society. If we took the route that my hon. Friend and his constituents are proposing, the money would be spread thinly across the total number of pensioners, of whom there are almost 10 million today. I appreciate the point made by my hon. Friend, and I hope that he understands my point.
The order and the purpose of the bonus need little introduction. The annual bonus, payable at first on a discretionary basis, was introduced in 1972, and was made a statutory entitlement by the Conservative Government in 1979. Unlike the last Labour Administration, which failed to pay the bonus at all in two years, we believe that pensioners budgeting for Christmas need the assurance of that contribution to their expenses which this payment provides. This year the bonus will be paid to a record number of pensioners and beneficiaries, at an estimated cost of about £114 million.
§ Mr. Robert McCrindle (Brentwood and Ongar)
My hon. Friend said that this was the last occasion on which we would have to discuss this matter because of the reference to it in the Social Security Act 1986. What opportunities will there be for hon. Members to suggest that the level at which the bonus is paid — its permanence is welcome—may continue to be a suitable subject to which they may turn their attention?
§ Mr. Portillo
As a relative newcomer to the House compared to my hon. Friend, I hesitate to advise him on when he should raise that issue. I am sure that he will use his ingenuity and raise it on numerous occasions. We certainly look forward to that.
It might be helpful if I set the Christmas bonus in context by considering its relative importance within the whole system of financial help for elderly people. It may also serve as an answer to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). With total benefit expenditure running at over £46 billion in this financial year, it is essential that we channel resources in the most effective way to those in need. Spending on benefits for elderly people accounts for about £22 billion, 394 almost half of that total, and the overwhelming majority of that expenditure goes, of course, on the day-to-day support which pensioners need throughout the year, not just at Christmas. I feel sure that there is widespread agreement that we should concentrate our resources on regularly paid benefits.
Indeed, I noted with interest from the election manifesto of the Labour party that that is the course that it would have followed had it been elected to office. There is no mention there of an increase in the Christmas bonus. We recognise that, however welcome one-off payments such as the Christmas bonus may be to pensioners and to others who receive them, they are essentially only a minor part of the total structure of help for elderly people. Our record shows that we have been meeting the challenge and putting our efforts into providing what pensioners need and want, a decent standard of living for 365 days of the year. We have maintained benefit levels, despite paying pensions to a million new pensioners since 1978, and indeed we have increased spending on benefits for the elderly by 29 per cent. in real terms since 1978–79. More than that, by controlling inflation we have protected that part of pensioners' incomes that does not come from the state.
Pensioners' incomes grew on average by 2.7 per cent. a year in real terms between 1979 and 1985, a rate of increase that was more than twice that for the population as a whole. That compares with an average increase in pensioners' incomes in real terms between 1974 and 1979 of only 0.6 per cent. a year. Income from state pensions and means-tested benefits increased at much the same rate between 1974 and 1979 and between 1979 and 1985. Those benefits account for about 60 per cent. of pensioners' incomes on average, but lower inflation between 1979 and 1985, and the steady development of occupational pensions, had a dramatic impact in the second period on total income.
Income from savings, which is received by 70 per cent. of all pensioners and 83 per cent. of recent pensioners, decreased in real terms by 3.4 per cent. a year between 1974 and 1979, whereas from 1979 it has increased by 7.3 per cent. a year.
Occupational pensions are now received by over half of all pensioners, compared with only 40 per cent. in 1979, and about 70 per cent. of recently retired couples have them. For those with occupational pensions, the value is on average roughly the same as the state basic pension. Over 5 million people now receive occupational pensions.
If total income is taken into account, pensioners' incomes, on average, are 60 per cent. of those of people in work. Far fewer pensioners are now on very low incomes. The number of those in the lowest fifth of the national income distribution fell from 38 per cent. in 1979 to 25 per cent. in 1985. Even after account is taken of housing costs, which have risen in real terms, there has still been a rise in average real net incomes for the elderly. Net of housing costs, they rose by nearly 2.5 per cent. a year between 1979 and 1985, compared with only 0.4 per cent. a year between 1974 and 1979.
Against that background, the Christmas bonus is necessarily only a very small part of the financial picture for pensioners. None the less, the bonus is something to which the majority of the elderly look forward very much, and I therefore have no hesitation in commending the order to the House.
§ 5.7 pm
§ Mrs. Margaret Beckett (Derby, South)
It is my pleasant task not only to welcome the Under-Secretary of State to his new responsibilities—which I do with particular pleasure, because he follows a path that I, too, was fortunate enough to follow, from the Government Whips' Office to departmental Front Bench—but to welcome you, Madam Deputy Speaker, to our social security debates. I know your excellent reputation as Chair of many Committees, and I am sure that we shall be very happy to have you presiding over our debates. Whether you will always be equally happy with the exciting nature of those debates is another matter.
I shall attempt to follow the pattern of the Under-Secretary's contribution, and deal briefly, first, with the issue of disregard for students in the requirement regulations. Like the hon. Gentleman, we believe that it is a necessary change, and we welcome the increase that the Government are making. As this is the first occasion on which the hon. Gentleman has presided over a social security debate in his present capacity, and we are being charitable to him, I shall mention only in passing that I seem to recall that the National Union of Students' evidence to the Select Commitee on Education, Science and Arts suggested that the element being dealt with in this disregard has gone up in cost by 65 per cent. since 1968, while the increase offered is about 12 per cent. However, I am sure that it will be more than welcome, and we do not propose to contest it on those grounds.
We can also see the reason for the tightening of regulations for the very small homes, which is the burden of the main part of the requirements regulations, although the root of the problem appears to us to be the combination of insufficient and inadequate public-sector accommodation with a degree of unthinking encouragement of diversification to the private sector, which took place a few years ago under the present Government. Unfortunately, we are all reaping the rewards of that, and elderly people in those homes are among those who sometimes have cause to be concerned about it.
The Minister said that there was doubt in the Department whether the regulations dealt adequately with the position of these very small homes. That may be so, but we doubt whether these regulations are any better in meeting the aim that he suggests they seek to meet. Were it not for the fact that they include the provision for students, which is urgent, I should have suggested to the Minister that he ought to consider withdrawing the regulations and re-submitting them in the autumn when they have been examined more carefully.
Regulation 2(2)(f)(ii) stems from a problem that has arisen more than once: whether a home that purports to provide care for a particular type of resident with a particular kind of need has residents who are in a different category. The phraseology refers tothe category of personal care for which the establishment providessuch care. It does not seem to us that that necessarily makes any difference, or makes it more enforceable. That may be a tighter definition of the category of care that is provided by the establishment, but whether the individuals living in the home come into that category and need that level of care, and therefore that level of public support, may not be met by the phraseology of this regulation. It is not clear to us that the wording resolves the problem that the Minister has identified.
396 The Minister also said that the regulations refer to a responsible person being available throughout the day. was pleased to hear him say that they mean that a responsible person, although not necessarily the same responsible person, has to be on duty throughout the day. That is what we hoped and presumed he meant, but that is not what the regulations say.
We are also a little concerned that the regulation suggests that the person who is on duty or on call should at all times be the person who is predominantly employed to provide personal care. Again, I recognise that the Government are seeking to ensure that those who provide personal care are qualified to do so. Even in a quite small home, those who are qualified to provide personal care may be employed on administration for much of their time. It is acceptable to all concerned that from time to time they should be employed on care duties, but that is not their primary task. It is not, therefore, a question of the regulations being wrong, but of the drafting of the regulations being less helpful than it might be.
Regulation 2(2)(f)(i) refers to "personal care" beingprovided by at least two employed or self-employed persons".Is the Minister confident that a home that is run by members of a religious order will always satisfy that condition? If there is any question about it, perhaps the Minister will be good enough to look into it. We are accustomed to the Department having to introduce amending regulations to correct regulations that have already been introduced. We should seek to be relatively charitable about that, if amending regulations were found to be necessary.
The Minister referred to the fact that decisions will be in the hands of adjudication officers and to the specific requirements that have been set out for their guidance. Their task is to ensure that the conditions are complied with and that they continue to be complied with, but it is not clear to us how they are expected to do that. The definition in the regulations may still leave them open to abuse. I am wondering what checks the adjudication officers are expected to carry out. For example, how will they check that staff have had at least one year's relevant experience? Will they take the proprietor's word for it, or will they employ checks of their own?
Thus far we have been concerned simply with clarity. We assume that the Government's intentions are those that we have identified. However, there are a few aspects of the regulations that cause us concern. The Minister referred to the fact that the intention is to provide transitional protection for those who are now in receipt of benefit but who, through no fault of their own, may not in future be entitled to benefit in exactly the same circumstances.
As we read the regulations, this protection will apply only if benefits have been awarded under the residential care provisions of schedule 1 before 27 July 1987. It will not apply if the claim is made before 27 July but no decision has been reached. Even during the short time that he has been in the Department I am sure that the Minister will have realised that there is great concern throughout the country at the burden that is placed on local DHSS offices and the speed with which they are able to deal with claims. It seems to us to be completely wrong and wholly unjustified that people might lose protection because, although they made their claim in time, delay in dealing with the claim resulted in no decision having been made.
397 Similarly, an adjudication officer may reach a decision on such a claim before 27 July, but the claimant may decide to appeal. The appeal tribunal may overturn the decision of the adjudication officer. However, as we read the regulations, even if the tribunal's decision were made before 27 July, it would still be ruled to be incorrect, because the determination ought to have been made by the adjudication officer. Therefore, the transitional protection will still be lost. We do not believe that is the intention, but that seems to be the effect of the regulations. We believe that the date of the original decision on the claim should matter and that it should be possible to overturn it, once the matter goes to appeal, by the decision of the tribunal.
The Minister also referred to the way in which transitional protection will apply. He said that a person will not lose entitlement if he is temporarily absent from the home in question; but when we are talking about homes and individuals who need a fairly high level of care it concerns me—and I am sure that it will concern the House—that people are most likely to he absent from a home for a short period of time through illness. According to the wording of the regulations, that is precisely the circumstance in which they will lose their transitional protection.
I draw to the Minister's attention a case that was brought to me fairly recently. It does not relate to a residential home, but the principle is the same. A 72-yearold lady on supplementary pension was also receiving a central heating addition. The Government abolished the central heating addition last summer but provided transitional protection. At the end of April she went into hospital for 12 days. She has now lost her central heating addition. As she was in hospital, she lost her right to supplementary benefit for those 12 days. Although the Government say that that is not the intention, it appears that somebody who goes into hospital may lose their transitional protection. Furthermore, those who are resident in a small home that is not receiving the full payment for them may find that their right to a place in the home is placed in jeopardy. We hope that that is not the Government's intention, but we fear that that is the effect of the regulations.
As for the Christmas bonus regulations, I congratulate the hon. Member for Brentwood and Ongar (Mr. McCrindle) on spotting what I suspect was a Freudian slip by the Minister, or by whoever drafted his speech. He said that this was the last time that this debate would be necessary, because the only time that such a debate might be necessary in future would be if the Government decided to increase the Christmas bonus. Between 1974 and 1979, when the Conservatives were in Opposition, they said that the Christmas bonus was inadequate. However, they were unable to increase it in the 1979 to 1983 Parliament. They were also unable to increase it in the last Parliament.
§ Mrs. Beckett
No, not for the moment.
It looks as though the Government have decided, despite their wonderful economic successes——
§ Mrs. Beckett
The hon. Gentleman says that we took it away. The Opposition have never disputed that during the lifetime of the last Labour Government, who did not enjoy the benefits of North sea oil, there was the odd economic problem. The Conservative party has just fought an election campaign in which it said that this country has not been so well off for years and that we are rolling in economic success. However, the Minister tells us that the Government cannot afford to increase the £10 Christmas bonus throughout the lifetime of this Parliament and that we shall not need to debate it again. Had it been indexed, the real value of the Christmas bonus should now be £44, not £10. It will undoubtedly become a very minor part of a pensioner's income.
During the election campaign, the Opposition said that the main basic pension, rather than the Christmas bonus, should be the source of remuneration. Even if it were £44, it would still be a minor part of a pensioner's income. We suggested a basic pension increase of £5 for a single pensioner and £8 for a married couple. If that is compared with the 80p that the Government have given in recent years, that is quite generous.
I plead with the Minister not to use the statistics that the Department is delighted to have discovered. They suggest that pensioners' incomes are increasing twice as fast as those of everyone else and that they are increasing much faster than between 1974 and 1979. Pensioners' incomes have gone up so much during the past few years because of the earnings-related pension scheme, and the underpinning that it provided for good occupational pension schemes, which was introduced by the Labour Government in 1975. It is precisely the scheme that the Government spent so many hours last year destroying. State earnings-related scheme benefits have been halved, and the Government have undermined even the basis of good occupational pension schemes which now have to meet much lower standards.
It is a little dodgy for the Government to take credit for something that they have just destroyed. We will treat the Minister gently on this occasion, but it is only fair to warn him that we will not be so kind in future.
§ Mr. Michael Stern (Bristol, North-West)
As the hon. Lady said that the Government are in the process of destroying good occupational pension schemes, could she explain why the providers of pension schemes are not only providing the schemes at a rate as never before, but are looking forward to unprecedented expansion in their industry?
§ Mrs. Beckett
I have no difficulty in accepting the hon. Gentleman's case. They would be very unwise if they did not take that attitude. They are in the business of providing pensions and making money out of it. They see an excellent opportunity for expanding what are known as personal pensions.
It is within the recollection of the hon. Gentleman—though not of all of his colleagues—that the pension industry was very alarmed and expressed great concern about the way in which the standard and occupational pension schemes are being undermined. It believes that the provisions for personal pensions will cause terrific problems in the future.
Now that the Government are being so unwise as to go ahead, flying in the face of their advice, people in the industry will try to sell as many pension schemes as they 399 can and try to make as much money as possible. They would be crazy not to do so. But that does not mean that they believed then, or that they believe now, that the Government were wise to do so.
The lump sum regulations are the product of the Government's habitual penny-pinching. That is bad enough, but it is a little dangerous if that becomes more force of habit and the Government assume parliamentary decisions. That, unfortunately, is what has happened here.
The regulation was not in practice what the Government told us it would be in their notes on clauses on the Social Security Act 1986. The notes suggested that the bonus would be paid in the first week of December and referred to the date on which it is currently paid. It means that this year, and I think next year, the bonus will be paid a week later. That is only a minor inconvenience to pensioners, but it is still an inconvenience, and no doubt the Government will make an equally minor saving at the expense of pensioners by way of interest payments on the sums involved. I cannot envisage any other advantage.
Although this is a comparatively minor issue, issuing leaflets which announce the new (late without indicating that it is subject to confirmation by Parliament suggests that the Department is getting into the habit of assuming that everything will go through and be OK. Even though the Under-Secretary was in the Government Whips' office, he may have noticed that the Department has occasionally landed itself with the odd problem through just that kind of assumption. That sort of attitude could lead to problems, given the enormous amount of material which should go into primary legislation but which will be put into regulations between now and next April. On this occasion we do not blame the Under-Secretary or the Minister for Social Security and the Disabled because they were not in their present posts when the decisions were taken. However, by the autumn they will have been in the Department long enough to realise that they will have to take the consequences of their actions.
The issues dealt with in the regulations are not major issues of principle but they cause concern and inconvenience, and perhaps point to the Department's attitude. The Department is faced with a mass of legislation and it is worrying to note that these provisions have not been properly drafted, that Ministers' intentions are not properly conveyed, and that parliamentary approval has been taken for granted. Let us hope that after the summer recess, when everybody has had a rest, this kind of thing will not happen again.
§ Dame Jill Knight (Birmingham, Edgbaston)
As this is the first time that I have spoken since you have been in the Chair, Madam Deputy Speaker, perhaps I may add my name to those who have congratulated you. Perhaps the ladies among us are more pleased to see you there than the gentlemen. [HON. MEMBERS: "No."] I am so pleased that hon. Members came back on that; I hoped they would. I would never make the mistake of calling you a piece of furniture, Madam Deputy Speaker. You are not a chair; you are the Deputy Speaker.
I also congratulate my hon. Friend the Under-Secretary of State on his first appearance at the Dispatch Box and I welcome his remarks warmly.
I do not want to delay the House, but there are one or two points about which I feel rather strongly. The hon. Member for Derby, South (Mrs. Beckett) accused us of 400 being penny-pinching in our expenditure on social security. The amount that we spend is now £46.000 million per annum. If that is penny-pinching, God help us if we ever have a profligate Government. It is important to recognise that we must pay our elderly people what we can afford and ensure that, as the country becomes more prosperous, its elderly people get their share. I believe that that is happening. The Christmas bonus can hardly be described as penny-pinching, as even taken alone it costs £114 million.
§ Mr. Thurnham
Would my hon. Friend agree that the penny-pinching took place in 1975–76 when the Christmas bonus was not paid and that that was a dreadful thing to do? Would she agree that we should welcome the regulations, which make the payment automatic?
§ Dame Jill Knight
I agree absolutely. I warmly support the Government's proposals and I am amazed that the Opposition should have the bare-faced cheek to talk to us in such terms about the Christmas bonus.
However, I am always a little concerned when money is spent on all pensioners. I should prefer public money to be directed to those in real need. Some elderly people do not need the Christmas bonus. Some millionaires living in large homes get the Christmas bonus, although I suppose that we must derive some comfort from the fact that they pay tax on it.
I suggest to my hon. Friend the Under-Secretary of State that, now that he is embarking on his career in the Department, which I hope will be a long one, he should re-examine supplementary benefit limits and the way in which they work. I am sure that I am not alone in being troubled by the fact that many people who fall a copper or two over the point at which supplementary benefit is payable lose so much. Many other benefits flow from supplementary benefit and it is rather hard on someone who finds that, because he is not quite at the limit at which supplementary benefit is payable, he cannot get glasses, coal or other help.
I have always thought that it would be worth considering a system of graded help for those whose incomes are just a little above the level at which supplementary benefit becomes payable. Perhaps they should be afforded some of the benefits, with those whose incomes are a little higher receiving slightly fewer. We should not have a sharp cut-off point which means that one gets all or nothing.
In considering help for elderly people, we rightly examine the residential care angle and the fact that it is nearly always better to keep people in their own homes if possible. Home helps, meals on wheels, and so on are important to achieve that, as the Government have acknowledged. Will the Government look at the meals on wheels system in particular? It was organised solely by the Women's Royal Voluntary Service and costs hardly anything because volunteers took the meals around There are still some volunteers, but recent figures show that the service could be extended if there were more voluntary helpers. This may be too far-reaching an idea, but, in making help available to those who need it, it is crucial to recognise that there are people—thank God for them—who are prepared to work voluntarily taking meals to elderly people, doing their shopping, and so on. If we looked more towards bodies such as the WRVS, we might be able to make the service available more widely because of the savings which would be made.
401 Old people are very conscious of the problems of law and order. They talk and write about them a lot. They worry about the dangers they face when going out. It is not just a matter of increasing the number of police and neighbourhood watches, although that scheme is important and has helped many elderly people. I should like to tell the House about one of my constituents, an 84-year-old lady who was going into her flat when a young man came up to her, said that he did not have his security key and asked whether she would let him in. To a certain extent, people would say that she was to blame, but the young man looked reasonable and trustworthy, so she let him in. He took her into the lift up to the top and raped her. Theat is a terrible thing to happen to any woman, and one can only imagine what it was like for a frail elderly person. I plead with the Government to recognise that old people are at risk in tower blocks and to introduce a system that might help.
I am proud to be part of a Government who consistently try to ensure that pensioners are never in need. The days when they were have gone, thank God. I despair at some of the publicity launched against us — for instance, comments that pensioners in this country do worse than in any part of Europe. That story came out recently in the Daily Mirror and was proved false because the article did not compare like with like. It did not mention the extra pensions—for example, from the state earnings-related pension scheme — received by our elderly people. The article added those benefits or similar ones to European benefits to try to prove that European pensions were better, but did not compare like with like. When that type of story gets out, many people are aggrieved and feel that they are not fairly treated. That is not true. One of the major jobs of my hon. Friend the Under-Secretary of State in his new task will be to make more widely known and understood exactly what is available and how it compares with countries on the continent.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I listened with interest to the hon. Member for Birmingham, Edgbaston (Dame J. Knight). I understand what she means when she says that making all benefits universal is a policy which is too expensive. There are admittedly problems in meeting the cost of universal benefits but, if I followed the hon. Lady correctly, she went on to argue that the selective system of giving help to those on supplementary benefit was unfair as it affected those whose incomes were only slightly above the level at which it was payable. May I gently suggest that she is trying to have it both ways. With a universal system, one gets around the second problem. With a means-tested benefit, one does not have the first problem.
§ Dame Jill Knight
I do not think that the hon. Gentleman's remarks follow from what I said. I was trying to say that when benefits are automatically universal many well-off people get the scarce Government help. Surely the hon. Gentleman can see the difference between that and not having such a sharp cut-off point. I am talking, not about millionaires receiving supplementary benefit, but about the poor people who earn just a penny or two over the level at which it becomes payable. There is a difference.
§ Mr. Kirkwood
I do not think that I misunderstood the hon. Lady. My interpretation of her remarks stands, but I do not want to make an issue of the apparent contradiction.
A new Treasury Bench team is looking after social security. I join in the welcome given to the new Parliamentary Under-Secretary of State and the new Minister for Social Security and the Disabled. The Minister will have his work cut out to match the promotion enjoyed by previous incumbents of his office, one of whom is now Chief Secretary to the Treasury—a hard act to follow. I wish the hon. Gentleman well. I hope that the House can take some comfort and succour from the fact that a couple of fresh and active minds have been brought to consider the thorny problems of social security. Those intractable problems have taxed bright brains in the past. I, for one, hope that Ministers will take the opportunity to consider in depth some of the principles behind the social security system. They are very technical. Although there were some changes in the Social Security Act 1986, I hope that the Minister, who will be charged with the responsibility of implementing some of them, will consider some of the longer-term problems and underlying principles behind the issues. That would be to the benefit of everyone.
I understand that the notional element of the student grant is attributable to books and equipment and that disregard is awarded in calculating entitlement to supplementary benefit. That has been the system for some time. The figure is regularly revised and the draft regulations increase it from £187 to £210. In so far as it goes, we welcome the increase. I am told that the books element is not increased in accordance with the index of book prices, but that the Department of Education and Science carries out a technical exercise every so often to attribute this so-called notional element of the student grant to various items for social security and other purposes.
We have had the advantage of the 1968 Brown report. Given the evidence submitted by the National Union of Students and the Department of Education and Science to the Select Committee on Education, Science and Arts when it considered students awards, there is a case for looking at the possibility of indexing some of the disregard elements. As the hon. Member for Derby, South (Mrs. Beckett) said, the increase required to bring the books, equipment and materials disregard in the student award up to the level recommended by the Brown committee in 1968 would be 68.5 per cent., instead of the present 12.3 per cent. There is evidence that the system of periodic reviews and investigation of the indexation of those disregards should be put on a more regular basis, or inevitably the books, equipment and materials element of the student grant will fall below the disregard portion of supplementary benefit.
It is a long time since I was at university, but to try to cover books, equipment and materials for a course such as mine—an applied science course in pharmacy at Heriot-Watt university—with £187 is a figment of the imagination of the DES. I have just paid £12.95 for a copy of the book by the right hon. Member for Henley (Mr. Heseltine), which I do not consider to be of particularly good value, although it is an interesting book. However, if his book cost £12.95, what chance does one have of obtaining a decent scientific textbook for half that price? I hope that the Department will consider that point.
403 Will the Minister say what the cost of this change will be for forgone expenditure and social security? I do not think that it will cost very much, and I appreciate that it is not possible to calculate the amount this afternoon, but I should be grateful if somebody would drop me a note and explain the long-term cost of this change to the Exchequer.
The statements that were made by the Minister's predecessors about how the order would mitigate some of the other cuts in student grants rang slightly hollow. Student grants have been suffering severely and, although this increase is welcome in so far as it goes, those students who are diligently trying to do their work and equip themselves properly will still experience difficulties.
I shall now deal with regulations on residential homes. I noticed in an article in The Guardian last Saturday that there is a problem, of which the Department is well aware, with regard to the financing of residential care. I understand that to debate that matter would be to take the point wider than the regulations, but I hope that the Minister will consider the financing of residential care and the relationship between the private and public sectors and that between the DHSS and local authorities. We should take an early opportunity to debate at some length the longer-term policy implications of those issues.
I am worried, as is the hon. Member for Derby, South, about transitional protection. I hope that the number of people about whom we are talking with regard to transitional cover is not great. Does the Minister have any figures of how many people will be covered by the transitional protection? I should like an assurance from the Minister that they will be properly looked after.
I understand the necessity for introducing the regulations to clarify the legal position, and I welcome the amendment in so far as it is necessary. I am aware of some evidence of abuse of the system, which I think was localised. It is perfectly proper for us to guard jealously the public purse as much as possible. If the Department is making changes to prevent such abuses in the future, that is welcome.
With regard to what is happening in social work homes in south London, we must be careful that we do not accept that local authorities are the be-all and end-all of oversight. We are giving local authorities the power to oversee private residential accommodation, of which I approve, but there is evidence that some local authority homes—part III homes in England and Wales and part IV homes in Scotland—may require inspection. Who will police the provisions that are made by the local authority?
The Department of Health and Social Security should recognise that we are asking local authorities to undertake quite a lot of extra work to ensure that these new homes with four places or fewer are properly looked after. I hope that that will be taken into account with regard to the facilities that are made available to the local authority social work departments and social services departments. The Under-Secretary of State will be aware that regulations north of the border are governed by the Social Work (Scotland) Act 1968. Those regulations are quite different, because we have never had a restriction or deregulation of homes that have fewer than four places. The experience that has been gained in Scotland since 1968 is instructive and would bear examination. The Minister's Department would benefit from the lessons that we have learnt.
404 Let me now deal with the Christmas bonus. I am puzzled by the expenditure provision under the Christmas bonus head in the expenditure White Paper, Cmnd. 56-II, which was published in January 1987. I think I heard the Under-Secretary say that the total cost of the Christmas bonus this year was some £114 million. For 1987–88 the provision in the White Paper is £108 million, but it falls in 1988–89 from £108 million to £100 million, and it stays at that level for 1989–90. I cannot understand why the provision in the White Paper should fall, unless people are coming out of benefit and therefore there are fewer claimants. I hope that the Minister will explain that matter, because I cannot understandt why that should happen.
The Minister would be well advised to take the opportunity of coming fresh to his office to look back at the 1972 debates. The Government were pressed by high and spiralling inflation rates into a difficult position. I was reading the debates this morning, and I noted that some hon. Members were claiming that that position was due to the imminence of the Sutton and Cheam by-election. The Minister will know that area well because of the location of his constituency, and he will be aware that the Government lost that by-election. The position at that time was that the measure was an earnest of the Government's good intentions, that it would be a one-off payment and that it was designed to secure a prices and incomes policy with the TUC and the CBI. The 8 million people who qualified for the payment in 1972 cost the Government £80 million. It is instructive to note that in 1987 the cost is still £114 million, if that is the current figure. That speaks volumes about the way that the value of the Christmas bonus has been eroded. The figures that were supplied to me by the Library show that the value of the Christmas bonus, compared with 1972 prices, is £2.26. One cannot go very far on £2.26.
If that amount were valorised according to the retail prices index at today's prices, the Christmas bonus would amount to £44.29. That would be a significant sum of money to have and it would be welcomed by pensioners at Christmas. That is why at the last election we tried to persuade the Government to double the payment of the pension for Christmas. I realise that that would cost some £370 million in addition to the £114 million that the Government are spending, but if the payment is to be made it should be of an amount that is worth having and not the rather derisory figure of £2.26. If the Government do not take active steps to increase that amount it will simply wither on the vine and become valueless.
I remind the Under-Secretary that under the Pensioners' Payments and Social Security Act 1979, which makes the payment compulsory, the Government have the necessary power. Section 4(3) says:If it appears to the Secretary of State that, having regard to the economic situation in the United Kingdom, the standard of living in the United Kingdom and such other matters as he considers relevant, the sums…should be larger",he has the power to provide accordingly. There is an argument for saying that the economic situation and the standard of living in the United Kingdom call for that power to be used and for the increase to be made.
Although nobody in the House, least of all the Under-Secretary, is looking for debates on social security statutory instruments, we will lose the opportunity of rehearsing the arguments about the value of the Christmas 405 bonus after the provisions of the Social Security Act 1986 come into effect and the increase is made automatically. Therefore, we should consider doubling the pension in the first week of December, rather than merely giving the amount that is provided for by the order.
I agree with the hon. Member for Derbyshire, South——
§ Mr. Kirkwood
I apologise to the hon. Lady; that is a monstrous insult.
I agree with the hon. Member for Derby, South that, on the face of them, the order and the regulations do not contain heavy principles. However, I hope that I have been able to persuade the Minister that there are important underlying strands of principle that go to the heart of our social security system that require his continuous and continuing urgent attention so that we get the provisions for the under-privileged groups right in the future. I hope that he will study the remarks that have been made from both sides of the House during the debate, reflect on them and take appropriate action.
§ Mr. Peter Thurnham (Bolton, North-East)
I welcome the statement by my hon. Friend the Minister, not only for its content but for the opportunity it provides to debate all that the Government have done for the elderly, not only with pensions but with increased spending on the National Health Service and law and order. It also gives us an opportunity to contrast the Government's record with the poor record of the Labour party when it was in power, supported by the Liberal party. The Labour party indulged in the penny-pinching and did not pay the Christmas bonus at all in 1975 and 1976. The hon. Member for Derby, South (Mrs. Beckett) glossed over that by saying that the then Labour Government had had the odd economic problem. It was because the Labour party had those economic problems that the electorate came to the conclusion that it did in 1979, 1983 and again with such resounding success in June this year, when it returned the Conservative party with such a large majority.
The economic problems cannot be glossed over. Every section of the community is equally concerned about them and will not forgive the Liberal party for having supported the Labour party when it was in power and kept it going for a year longer than it need have done.
This is an important debate. There is a record number of pensioners in this country: 10 million in total. We have the second highest proportion of elderly in the population in Europe. The figures show that there are about 15,000 pensioners in my constituency.
I understand that the cost of this measure will be £114 million. The £10 bonus was introduced by the Conservative Government in 1972 and it is to be welcomed. The promises that were made by the Labour party are hollow. It promised £5 extra on the pension for a single person and £8 for a couple. That seems to he nothing but a cruel deceit because it did nothing to enhance the prospects for the poorest pensioners who are dependent on supplementary benefit and would not have benefited by an increase in the basic pension. It showed a failure to understand the importance of controlling public spending and targeting it on those who are most in need.
406 Surely this Government's provisions are right. The standard of living of pensioners should depend not on the basic pension alone but upon occupational pensions as well. I remind Opposition Members that over 50 per cent. of pensioners now have occupational pensions and in the future we can expect that figure to rise to 70 per cent. or more as it relates to the current position of pensioners who have just reached pensionable age. Surely it is better to target any other funds on those who are most in need by ensuring that they have sufficient supplementary benefit.
There has been an increase in the level of benefit and the real standard of living of the poorest in our population. The figures quoted by my hon. Friend the Minister show that pensioners are no longer the poorest in our society to the extent that they were. We can take great comfort from the fact that the Government are targeting resources so that we can see the increase in the standard of living spread throughout the community.
We know that pensioners have benefited more than any other section of the community in their standard of living. It was wrong of the Daily Mirror to print an article that seemed to suggest that this country's pensions were the lowest. In fact, our spending on the elderly is the third highest in Europe, after France and Denmark, and we should have a table printed, at least in The Sun if not in the Daily Mirror, which makes that clear to as many people as possible.
I should like to echo the remarks of my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) who referred to law and order. Spending on other areas is important to pensioners. The latest figures I have show that 13,000 people aged 60 or over were victims of attempted murder, wounding, assault, rape, robbery or theft from the person. It is important that the Government make adequate provision in that area. The size of the police force has been increased by 10,000 officers already and there are plans to recruit a further 3,000 officers over the next few years. I press the Government on the importance of implementing those plans and ensuring that we have 3,000 more bobbies on the beat.
Our record contrasts strongly with that of the Labour party which presided over a police force whose morale as well as its numbers was collapsing. The officers just sat in panda cars and did not go out on the beat.
§ Mr. Tony Lloyd (Stretford)
That is a remarkable diatribe from the hon. Gentleman. He has to face up to the fact, even if he wants to play party politics, that we have a serious crime wave in this country. Many of the victims are elderly people. If we take politics out of the issue and start talking seriously, the hon. Gentleman would do far better by urging his Front Bench to look at it as a real issue and not sit back complacently and pretend that something realistic is being done. Crime has doubled under this Government.
§ Mr. Thurnham
I am surprised at the hon. Gentleman making such an intervention. He should be addressing his remarks to the Manchester city police committee, which has done nothing but damn the neighbourhood watch schemes that have been introduced so successfully in other areas. I press him to see that more neighbourhood watch schemes are introduced in Manchester. It has been shown that they are of great benefit and comfort to people. They not only help with the reduction of crime and provide a greater feeling of security and safety; they also bring 407 people together and introduce neighbours to one another in a way that can be particularly helpful to senior members of the community.
I should like to draw attention to Government spending on the NHS. A total of 40 per cent. of the spending is for old age pensioners. There has been a considerable increase in the number of operations relating to elderly people. For instance, the number of cataract operations has risen from 38,000 in 1978 to 55,000 in 1984, with a target of 70,000 for 1990. I am pleased to see that in Bolton many of the operations are now being conducted in the private sector, paid for by the NHS, because they are done more cheaply in the private sector. Similarly, the number of hip replacement operations has increased from 28,000 in 1978 to 38,000 in 1984, with a declared target of 48,000 for 1990. That shows how much the Government are doing in making extra provision for the elderly.
§ Mr. Peter Pike (Burnley)
We seem to be moving away from the subject of the debate. How can the hon. Gentleman explain the situation in a health authority not that far from his constituency — Burnley, Pendle and Rossendale? It is closing hospitals and transferring work to the private sector, to a private hospital called Gisburne park hospital, which has made a loss—
§ Mr. Deputy Speaker (Miss Betty Boothroyd)
Order. We are straying far from the terms of the debate. I ask hon. Members to keep to the terms of the debate, of which they are perfectly aware.
§ Mr. Thurnham
Spending on the NHS is up by 26 per cent. in real terms since the Labour party was in power. That is evidence of the care that the Government provide for the elderly.
The provision of occupational pensions is a valuable feature of what is being done by the Government to ensure that the standard of living of pensioners is high. That is why we are not simply calling for pensions to be increased across the board. With 10 million pensioners, the cost of doing that would be absolutely prodigious.
I much prefer to see spending targeted at those who need it most, including the disabled for whom spending has been substantially increased, and an increase in the number of home helps. My figures show that the number of home helps has risen by over 14 per cent. since 1979. That is the way in which the elderly can be kept at home where they want to stay. They will not be made to leave home because of a lack of care, facilities and personal social services. Since 1979, spending on personal social services has risen in real terms by over 20 per cent. For those who are unable to live on their own, there are now over 220,000 places in residential homes, compared with only 180,000 in 1979.
The figures show that the Government are spending and caring more for the elderly. The people were right to elect the Government to care for the elderly and not pay attention to the Opposition's false promises.
§ 6 pm
§ Mr. Michael Stern (Bristol, North-West)
It is always a pleasure to follow my hon. Friend the Member for Bolton, North-East (Mr. Thurnham), given our knowledge of the work that he has done for the handicapped. It is equally pleasurable to follow the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). He reintroduced one of the dottier ideas that surfaced briefly 408 during the recent election campaign. No doubt he has said a fond farewell to it before it is buried in the graveyard that is specially reserved for Liberal policies that are tried out and shot down as quickly as they appear.
The idea that anyone on benefit should receive an extra week's payment instead of a fixed amount of Christmas bonus seems to be designed to appeal to nobody except the administrators, who would clap their hands in glee at the extra jobs that would be created for them. It should be clear that a fixed payment to a discrete group will be rather easier to administer than a variable payment of about 100 or so different rates that, in the case of some pensions, would start at 5p per week. I wonder what a pensioner will say when he is told that his £10 annual payment will be replaced by 5p. We will end up with a system that benefits virtually no one other than administrators but is designed to be seen to be doing something different.
The hon. Member for Derby, South (Mrs. Beckett) accused the Government of being penny-pinching. We frequently hear Opposition Members make that accusation. Just as the hon. Lady chided my hon. Friend the Minister—and all of us are delighted to welcome him to his new post—I briefly chide her. She should be wary of sounding too much like her senior colleague the hon. Member for Oldham, West (Mr. Meacher) in greeting every social security announcement that is made by the Government with a cry of woe and disaster, saying that it is the last straw that will destroy for ever the hopes of all pensioners.
The hon. Lady accused the Government of penny-pinching because they recognise the need for a calendar. If an annual payment is made on a particular day of the week, we shall allow it to slip back one day, or sometimes two days, per year. If we do not correct that, we shall end up with a Christmas bonus being paid in August. Alternatively, we must take the action that the Government have proposed, which is periodically to step in and correct the malfunction in the calendar.
It is unfair to accuse the Government of penny-pinching. That accusation has been made twice today. This morning I saw it in a newspaper, the name of which I shall not quote because I should not want my constituents to know that I read that newspaper. In ringing terms, it made the accusation that the sole purpose of adjusting the date of the Christmas bonus was for the Government to save money. That accusation needs to be looked at in more detail. The Christmas bonus, whether it be paid on 3 or 10 December, will either be saved or spent by pensioners. If it is spent, pensioners will lose nothing. Indeed, experience of previous Christmases shows that very often the later that money is spent, the better the the value that is received, as many shops attempt to cash in on Christmas trade by lowering prices just before or after Christmas.
Let us assume the worst case: that a pensioner decides to save his or her Christmas bonus. At that point, one may say, "The Government are penny-pinching because the Christmas bonus is being paid a week later." Where is the vast loss to pensioners? We are talking about a sum of £10 that is paid one week late. If we assume that that money will be invested at an average rate of 10 per cent, a year, by having that money a week later, the loss to each pensioner is 2p before tax.
§ Mr. Tim Boswell (Daventry)
Does my hon. Friend agree that the global calculation also shows that the maximum possible loss to the Government will be one 409 week's interest on the total £114 million that is paid out, which, in turn, on any realistic assumption, comes to well under £1 million?
§ Mr. Stern
My hon. Friend is entirely right. We are still dealing with an Opposition who would rather accuse the Government of crime upon crime — that is, saving money—than look instead at sensible administration of the social security budget at virtually no cost to anybody.
My hon. Friend the Minister is right—indeed, there is broad all-party agreement on the matter—to welcome the regulations relating to supplementary benefit for small residential care homes. I am sure that he will agree that it is a small step in a minefield that still needs a great deal of attention. The relationship between residential homes—it is irrelevant whether we talk about publicly-owned, privately-owned or voluntary residential homes — patients, and various aspects of the benefit system is complex and mistakes are frequently made.
In my constituency, an excellent voluntary home called Cherry Orchards is run by the Camphill Community. I have a great deal of admiration for it. Unlike many homes in the public and private sectors, it has a niche in the provision of care of patients who are so physically and mentally disabled that it is almost impossible to fit them into any other similar home. Such organisations are to be praised for taking on the most difficult task in that respect. That community home found itself in an impossible position in terms of benefits. For totally valid reasons—I do not wish to be seen in any way to be denigrating the highly professional work of the Department of Health and Social Security in the county of Avon—it could not pick up the benefits to which many of its patients were entitled because it was not able to work through the bureaucratic elements of gaining the necessary registration and, therefore, being eligible under the regulations for the payment of benefit.
I urge my hon. Friend, during the fruitful period that he will spend in the Department, to look again at many of the regulations that affect the relationship between all sectors of residential care and the benefit system to try to find ways to publicise the benefits that are available and the ease of access to them so that we can make sure that the will of Parliament is not frustrated by over-complex regulations that ensure that benefits are not available when they are needed.
I remind my hon. Friend of another case about which I am currently in correspondence with the Department and which makes the same point in a different way. In this case, which relates to attendance allowance, a respected pillar of the community is about to be sued by the Department as a result of an entirely understandable mistake in relation to the regulations. I appeal to my hon. Friend the Minister to stop the damage before it is too late.
With regard to the student grant disregard, there can be no greater praise for the Government's proposal than the fact, cited by the hon. Member for Derby, South, that the National Union of Students disapproves of the change. In welcoming the order, I remind my hon. Friend the Minister of the very much greater task that awaits him. It has been common policy throughout the House for a long time that in considering student support we should be moving away from dependence on benefit towards a knowledge of the income to which a student is entitled. I 410 hope that the order is but the first stage in the rationalisation of provision for students promised by the Government in the course of this Parliament — a promise that was universally attacked by the Opposition parties in the general election.
I hope that this will be one of the last orders to be considered in relation to benefit payments for students, not because students should not receive benefits but because the benefit system was never designed to deal with student support. The quicker we move away from the benefit system acting as part of student support, the easier it will be to achieve the much-needed rationalisation of student support and of the benefit system.
§ Mr. Tim Boswell (Daventry)
I begin by joining in the plaudits to my hon. Friend the Member for Enfield, Southgate (Mr. Portillo) on his maiden appearance at the Dispatch Box. I use the term "hon. Friend" advisedly, as he and I had the honour and privilege of serving the Government some years ago as special advisers. To mix metaphors a little, my hon. Friend may feel that he has leapt from the boiler room into the frying pan.
During my election campaign in a widely scattered and mixed community, I was surprised at the large number of small residential care homes and activities, in addition to those of which I knew already, which form an important part both of social provision in the area and of the economic life of the rural villages. Indeed, that type of activity may be a more appropriate use and creator of employment in small settlements than, for example, small industrial estates.
My second and substantial point in this regard is that tightening the regulations for supplementary benefit in homes below registration level may, by a side wind, achieve the improvement in standards that we all wish to see. In my view, therefore, it is a move forward.
I am pleased to refer to the Christmas bonus, for two reasons. First, Conservative Members can do so with a clear conscience because, ever since 1972, when we introduced the bonus, whenever we have been in power with the opportunity to pay the bonus we have done so. As is well known, the Labour Government failed to do so on two occasions, whatever excuses the Opposition may advance today. Secondly, I was a prospective parliamentary candidate in 1972. The House may consider that I have finally reached this place after a rather long resting period. I was foremost in pressing for the introduction of a Christmas bonus to meet a social need. In that regard, I merely comment that if one casts one's bread on the waters, it may return after many days.
With regard to the substance of the order, I hope that Ministers will not rest on their laurels, as there are important considerations to be taken forward for the future. Whatever the Christmas bonus was in 1972 or has been since, it is no longer the same in effect as it was when it was introduced, because life has marched on. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred to the powerful impact of inflation. I must agree that if in 1972 we had offered pensioners £2.28 they would not particularly have thanked us.
The value of the bonus is therefore not what is was. Moreover, the absolute and unchanging level of the bonus has been accompanied not only by increases in state retirement pension and other state benefits but by the explosion in occupational pension schemes, leading to a 411 higher general income level for pensioners. The proportionate cost, merit and benefit of the bonus has thus been reduced by that factor, too.
There is also the relentless march of administrative costs. Perhaps my hon. Friend the Minister will give details of the relative cost of paying out this fixed bonus. I believe that there is a strong advantage in its tax status and in the fact that it is a lump sum rather than a graduated amount subject to deductions. Nevertheless, the administrative cost must be rising proportionately year by year. In that context, it is appropriate to consider what might be done about the bonus in the future. The order locks it in for now, but I hope that it will not close our minds to what could be done later.
During the election campaign, the pensioners for whom I felt most strongly and who felt that they were in greatest difficulty were those just above supplementary benefit level. Those who had very small savings or occupational pensions, especially if they retired some years ago, did not wish to plunge into the full cover of supplementary pension, if indeed they were entitled to do so, but they felt that they were under pressure and to some extent excluded from recent developments. A large reason for this has been the Government's success in containing inflation. I suspect that, if the 40p per week had been paid as part of an enhanced Christmas bonus, we might have received more thanks from those quarters.
The costs of pension provision are now so huge that it is only honest for the Government to commit themselves to the realistic target of maintaining a link with prices. On my calculation, which may be shaky, the increase of a million pensioners since 1979 has contributed an increased annual cost to the Treasury of some £2 billion in retirement pensions alone. In other words, if the numbers had not increased, pensions might have been increased by between £4 and £5 per week. That must be a powerful consideration for anyone making sweeping proposals for a major increase in the weekly pension.
The Christmas bonus provides a useful opportunity for flexibility. If we are saying that pensioners get protection from prices through their retirement pensions, it may be appropriate in the future to consider giving, through the medium of the Christmas bonus, some kind of bonus or social dividend reflecting the increase in prosperity in the country in due course restoring it to a more appropriate level. Therefore, it becomes not a problem for us but, I hope, an opportunity.
In the light of the changes that have taken place since the benefit was introduced in 1972, I argue that the Government Front Bench should consider, in cricket parlance, either hitting out or getting out. In my experience, those who are prepared and go out and hit usually succeed in getting the ball to the boundary.
§ Mr. Portillo
We have had a most interesting debate and I would like to thank the hon. Member for Derby, South (Mrs. Beckett) for her kind remarks and for treating me with kid gloves on my first outing. I also thank other hon. Members from both sides of the House for their kind remarks. I would particularly like to welcome my hon. Friend the Member for Daventry (Mr. Boswell), who is new to the House, and thank him for his kind remarks. I have noticed that in five weeks he has already spoken 412 perhaps more than some Members speak in five years. We have certainly heard some of his eloquence today, and he will make an important contribution here.
I will try to deal with the points that have arisen under the three headings that we are debating—student grants, residential care and the Christmas bonus. I deal first of all with those points that were made about student grants. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) asked me about the method by which the disregard in respect of books and equipment is calculated, and why we chose to increase it from £187 to £210. At the risk of appearing to shuffle the question off to another Department, I am informed by my right hon. Friend the Secretary of State for Education and Science that the amount of the grant which it is reasonable for the Department of Health to regard as paid to help with the purchase of books and equipment and the precise level for that element of the grant are matters for the Department of Education and Science. I am sure that officers in his Department will be interested to read my hon. Friend's remarks.
My hon. Friend the Member for Bristol, North-West (Mr. Stern) was concerned about proceeding with the aim of removing students from benefit. I remind him that the review under my hon. Friend the Member for Wantage (Mr. Jackson) on that subject continues. Doubtless he will be interested to read the conclusions of that review. It is likely that there will be cases—for example, students who are married to supplementary benefit or income support claimants— where it may be necessary to have some disregard in respect of books and equipment such as we have been discussing today.
I turn now to the subject of residential care homes, which attracted the largest number of questions today. The hon. Member for Derby, South was concerned about the categories of client and whether the adjudication officer would be drawn into making judgments in those matters. The best I can say to her is that inevitably adjudication officers will be drawn into making judgments that will be difficult for them to make. However, what we are doing today improves the situation. It at least gives a clear basis on which the adjudication officer can begin to make some of those judgments. I hope that she will recognise that, although we are not moving into a perfect world, at least we are improving on where we are today.
I congratulate the hon. Lady on the diligent way that she researched those orders and regulations and found all sorts of points and queries to raise. She also wanted to know whether it was intended that the transitional protection would apply only where a decision had already been made by an adjudication officer and what would happen if it was under appeal. The whole intention is to protect people who are already receiving money and who would therefore suffer some loss from the application of the rules from a particular date.
Where the award has not yet been made or is under appeal, the money has not been awarded and there is no loss of income. We are concerned that people do not lose financially. We do not want people, as it were, turned out on the street. That is our prority in all this. I would also ask her to share the thought with me that, if we insist that care should be provided in residential homes with fewer than four residents, that in itself is a considerable step forward. It is not quite apparent to me that allowing people to slip under the net, as it were, would be of benefit to the residents.
413 The hon. Member for Roxburgh and Berwickshire was concerned that changes in respect of small homes would mean extra work for local authorities. That is not quite right, because what we are talking about is the work that is done by DHSS adjudication officers. They are the people who are concerned with making judgments as to whether payment should be made in respect of the care received in a small home. As I said in answer to the hon. Lady, we are making their work simpler, not more difficult.
I had a feeling that the hon. Member for Roxburgh and Berwickshire was raising a more general point—whether we should now bring small residential homes with fewer than four residents into a registered system. That is debatable. There is certainly an argument for that and I know that a number of hon. Members believe that quite strongly. If the hon. Member is concerned about the work load on local authorities, there would be grave implications in bringing small homes into a registered system. At any rate, it cannot be the intention or the effect of supplementary benefit regulations to bring about a registration system, by proxy, as it were. That is really what we are debating today. If standards are to be laid down for small residential homes, they should apply to all small homes and to all residents, not just to homes with residents who claim supplementary benefit—who are the only people that we can address through the regulations today.
A practical point is that adjudication officers do not have the necessary expertise to make judgments about proper standards of care, which is what would be involved if we tried, through the regulations, to impose a registered system. I explored that with the hon. Member for Derby, South. We shall have to await further developments. We are today laying in the Library the conclusions of the joint central and local government working party on supplementary benefit and residential care. That report, which may be of interest to my hon. Friend the Member for Bristol, North-West, recommends a simplified form of registration to be introduced for small homes. However, those recommendations need to be considered in turn by the community care review being undertaken by Sir Roy Griffiths, so we may need to hold our horses in that respect.
Another point made by the hon. Member for Roxburgh and Berwickshire was that the House should have an opportunity to discuss the long-term arrangements for the financing of residential care. My hon. Friend the Member for Bristol, North-West was very close on that point. I think that they will both find the report laid in the Library today of great interest.
§ Mr. Portillo
The hon. Gentleman will doubtless find an opportunity to bring that about, should he wish.
The hon. Member for Derby, South made a series of interesting points of detail. I shall try to respond to as many of them as I can. She asked whether, if people went into hospital, that would affect their benefit. It is intended that there should be no loss to them provided that the person's stay in hospital is only temporary. In addition, they may get a retaining fee while they are in hospital to enable their place in the home to be kept free. The 414 definition of "temporary" is normally up to one year, but again it would be up to an adjudication officer to judge the circumstances that apply in a particular case.
I fear that I am unable to help the hon. Member for Roxburgh and Berwickshire about how many people will be affected by the transitional arrangements. We intend to go back to the original policy. We think that most small homes which are currently regarded as equivalent to a registered home will meet the new requirements, which would tend to show a fairly small effect.
The hon. Member for Derby, South made an interesting point about religious orders. The answer seems to be that for these purposes we would regard those in religious orders as being employed or self-employed. I am grateful to the hon. Lady for raising that point. The adjudication officer would then wish to judge whether the person, whether in a religious order or not, had the relevant experience.
The hon. Member for Roxburgh and Berwickshire raised a point of great topicality when he asked who polices the local authority provision for the elderly. The local authorities have the statutory responsibility for monitoring and ensuring adequate standards in their homes. In limited circumstances the social services inspectorate has powers of entry. We are in discussion with representatives of local authorities about the social services inspectorate's programme of work designed to help authorities to improve the standard of care in homes.
§ Dame Jill Knight
Some local authorities are not particularly sympathetic to the point made by the hon. Member for Derby, South (Mrs. Beckett) about religious homes. They will tend to cut grants if the home takes, say, only Roman Catholics. If a person is in need of care——
§ Mr. Portillo
My hon. Friend makes an interesting point, none the less, Mr. Deputy Speaker, and my right hon. Friend the Secretary of State has heard it.
Let me offer a word of apology to the hon. Member for Derby, South. She has apparently uncovered a leaflet which refers to the date for the introduction of the £10 Christmas bonus. I have also discovered that leaflet, because I have, I hope, done my research as diligently as she has. It should have said that that was subject to parliamentary approval. I apologise to the hon. Lady and the House.
The hon. Lady has made much of the point in this morning's newspapers and during the debate that we are in some way penny-pinching by changing the date. I do not wish to embarrass her, but let me read out the record during the period when she was in office. She reminded us that she was first a Government Whip. In 1975 and 1976, nothing was paid. In 1977, payment was made in the week beginning 5 December and in 1978 payment was made in the week beginning 4 December. There cannot really be a great point of principle between paying it in the week beginning 5 December, as under the previous Government, and paying it in the week beginning 7 December, as is proposed today.
The hon. Member for Roxburgh and Berwickshire raised two points about the public expenditure White Paper on which I should like to help. The £108 million figure which he quoted covers paying the bonus to 415 retirement pensioners only; it does not include the additional sum for the other categories who receive it, including war widows, recipients of invalid care allowance and so on. The £100 million figure which he mentioned is because for future years the estimates are rounded to the nearest £100 million, so that is not a significant figure. We are expecting the number of beneficiaries to increase, so the sum of money will rise correspondingly. However, the figures for future years are calculated to the nearest £100 million.
My hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) treated the debate broadly and interestingly and set the £10 bonus in its context. For example, she mentioned the meals service. I am pleased to be able to tell her that the number of meals served has increased substantially since 1979, to nearly 43 million at a cost of £32 million.
I take it that the hon. Member for Derby, South accepted my figures showing the increase in pensioners' living standards, but she said that that was all due to the introduction of SERPS. I must dispute that strongly, because it does not seem to hold water. The hon. Lady will know from her constituency experience that the contribution of SERPS to pensioners' living standards is, for the moment, small. She was resting her case upon the effect of SERPS on the occupational pension sector. Even so, it is early days for such an effect, if there has been one, to come through. She must face the fact that the increase has been largely due to the increase in the value of pensioners' savings as a direct result of the lower rate of inflation, which has been the big contrast between the period when she held office and the period since 1987.
In a moment of tremendous candour, the hon. Lady said that the Christmas bonus had not been payable under Labour because the country was broke. She did not actually use that expression, but that was the general flavour of what she was saying. None the less, she seemed keen that we should have kept SERPS in a unreformed state, presumably to guarantee that by the year 2030 or 2050 the country would again be broke and unable to pay the bonuses.
§ Mrs. Beckett
I am glad that the Minister made that point. He is quite right that, with not only candour but accuracy, I acknowledged that there were substantial economic problems when we last held power. Unfortunately, the remedy of North sea oil was not available to help us to tackle those problems—a remedy which has existed for 95 per cent. of the Government's tenure of office. Given all that has been said during the recent election campaign about how successful the economy now is, why have the Government not only not increased the Christmas bonus since 1979 but said—in his words in this debate—that they have no intention of doing so in the lifetime of this Parliament?
§ Mr. Portillo
Britain's prosperity is based on much more than North sea oil. That is borne out by the fact that, since the value of North sea oil has fallen by half, Britain's prosperity has continued to grow. It is the increase in revenue from a variety of taxes, reflecting the better performance of the economy, that has enabled us to do so well and to increase the benefits paid to the elderly by 29 per cent. in real terms since we came to office. I was at some pains to explain in my opening remarks that the total condition of the elderly and their income and receipts is the 416 relevant factor, and we do not regard it as the best use of public money to increase the Christmas bonus. As far as I know, the hon. Lady is of the same opinion because the Labour party's manifesto contained no proposal to increase the Christmas bonus. I thought that we were in agreement on that, and I see some nodding of heads.
§ Mr. Ian Gow (Eastbourne)
A few moments ago my hon. Friend reminded the House of something that the Labour party did not do in December 1976—it did not pay a Christmas bonus. But does my hon. Friend recall something which the Labour party did do in December 1976? Was it not on 15 December 1976 that the famous letter was written by the then Chancellor to Dr. Johannes Witteveen promising a continuing and substantial reduction in public expenditure, a promise which was forced——
§ Mr. Portillo
I take it that my hon. Friend was simply speaking in support of the hon. Member for Derby, South in her point about the country being broke in 1976 and 1977.
My hon. Friend the Member for Edgbaston made an interesting point, which is frequently made, about those just above supplementary benefit level who find that the sudden cut-offs are a disadvantage. I do not believe that the situation is exactly as my hon. Friend described. People can receive help for prescription and dental charges and for their spectacles even if they are not on supplementary benefit. In the new proposals for income support we have tackled the question of the capital disregard and my hon. Friend the Member for Edgbaston would approve of that. That reduces the cliff-edge distinction between one level of income and another.
During the debate we have heard a certain amount about what the Labour party would have done if it had been in office. The most important contribution that the Government have made to helping pensioners has been our success in controlling inflation. It was therefore very sad and distressing, especially to elderly people, when last month the Labour party and the alliance went to the electorate offering nothing less than a return to the high inflation rates of the 1970s.
§ Mr. Portillo
The hon. Gentleman may protest, presumably because he remembers that the alliance was hard to pin down on that point. It Commissioned a report from Coopers and Lybrand on the effect of its economic policies, but that report conveniently ignored the effect on the rate of inflation. Fortunately, another respected City firm, Cazenove, informed the debate with its independent forecast of 12 per cent. inflation by 1990 as a result of alliance policies.
The Labour party proved itself indifferent to the level of inflation. The Leader of the Opposition said on "Panorama" that there would be a "temporary surge" in inflation taking the rate up to "say, 7 per cent."
§ Mr. Deputy Speaker
Order. This has nothing to do with the order before the House. I hope that the Minister will confine himself to the order.
§ Mr. Portillo
I was trying to put the £10 bonus in the context of the cost of living which pensioners must face.
417 I remind the House that more than 70 per cent. of pensioners have an income from savings, while more than half have occupational pensions. Since 1979, the average value of pensioners' incomes from those savings has increased by more than half. Nothing in decades has done as much harm to pensioners as the inflationary surge that occurred under the previous Labour Government. Nothing is more important to the financial welfare of retired people than what the present Government have done to bring down inflation to its lowest level for 20 years. Against that background, and in that context, I commend the order to the House.
§ Question put and agreed to.
That the draft Pensioners' Lump Sum Payments Order 1987, which was laid before this House on 7th July, be approved.