§ The Secretary of State for Social Security (Mr. Tony Newton)With permission, Mr. Speaker, I wish to make a statement about the uprating of social security benefits. The statutory instrument necessary to bring my proposals into effect will be laid before both Houses and debated. Uprating will take place for most benefits in the week beginning 9 April next year, the first full week in the tax year. The provisions will apply to both Great Britain and Northern Ireland.
Let me turn first to the main national insurance benefits. As the House knows, the increase in the retail prices index for the year to September 1989—which is the most up-to-date indicator available at the time when the uprating process has to start—is 7.6 per cent.
Our commitment to raise the basic pension in line with that figure will again be fully carried out. It will therefore rise by £3.30 a week for a single person—from £43.60 to £46.90—and by £5.30 a week for a couple—from £69.80 to £75.10. The same percentage increase will be applied to other national insurance benefits—including widows' pensions—to public service pensions, to industrial injuries benefits and to the war pensions scheme—although, in the last case, with some exceptions, in which I propose larger increases to which I will come later in my statement. Unemployment benefit will go up from £34.70 to £37.35 for a single person and from £56.10 to £60.40 for a couple, and sickness benefit from £33.20 to £35.70 for a single person and from £53.75 to £57.80 for a couple.
As for statutory sick pay paid through employers, the welcome growth in occupational sick pay schemes, which now cover more than nine people at work out of every 10, means that the rates that we set often bear little relation to what individuals actually receive in total sick pay. I intend a limited restructuring of the scheme to make it somewhat simpler to run—while concentrating additional resources more on the lowest-paid employees, who are generally less likely to be covered by occupational schemes—and at the same time make a saving of between £70 million and £80 million for the national insurance fund. The dividing line between the higher and lower rates, at present £84, will be set at the point where employers' contributions rise from 7 to 9 per cent., currently £115. The lower rate of SSP will be increased by rather more than the rate of inflation, by £3 to £39.25, and the higher rate by 40p to £52.50. As the standard rate of statutory maternity pay is the same as the lower statutory sick pay rate, that also has the advantage of bringing about a modest real increased entitlement for about 230,000 women.
Next, let me deal with the main long-term sickness and disability benefits. Invalidity benefit will, as usual, go up in line with retirement pension. The associated invalidity allowances will rise by 7.6 per cent., except for a marginally greater increase in the highest rate to take it to £10. Severe disablement allowance and invalid care allowance will both rise from £26.20 to £28.20; mobility allowance, now helping more than half a million people compared with only 100,000 10 years ago, from £24.40 to £26.25; and attendance allowance, now helping more than three quarters of a million compared with only about a quarter of million 10 years ago, from £23.30 to £25.05 at the lower rate and £34.90 to £37.55 at the higher rate.
846 I turn now to the income-related benefits—income support, housing benefit, community charge benefit and family credit. The index applied here is the retail prices index less housing costs: the use of that index simply reflects the fact that, for those in receipt of such benefits, housing costs are taken into account in their housing benefit itself, or through help with mortgage interest. The increase in that index in the year to September 1989 is 5.2 per cent. The main rates of income-related benefits will be uprated accordingly. The rate for a single person over 25 will go to £36.70, the rate for a single person aged 18 to 24 to £28.80, and the rate for a couple, where one or both are over 18, to twice that, at £57.60. That figure will also be the threshold for calculating family credit. Again, with some exceptions where I propose somewhat larger increases, the premiums will be increased, for example taking the extra payment for pensioners to £11.80 for over-60s, £14.40 for the over-75s, and £17.05 for the over-80s.
The general uprating I have so far described will add more than £2.5 billion to the Department's programme. Separately, we have already implemented two measures this month, to abolish the pensioners' earnings rule and to increase benefits for disabled and older pensioners on income support and housing benefit, which together will cost nearly £600 million next year. In the remainder of this statement, I will detail proposals which will increase expenditure on residential care and nursing homes costing about £100 million and additional measures amounting to around another £200 million in a full year. Those measures will help three groups whose priority is, I believe, recognised in all parts of the House—the less well-off pensioners; low-income families with children, including many lone parents; and the long-term sick and disabled, together with those who care so devotedly for them.
Before describing those measures—and there are some 20 of them—I should make it clear that, against the background of additional expenditure on that scale for the three priority groups, I am not able to propose an increase in child benefit as well. In coming to that conclusion, I have taken account of the fact that an increase in child benefit of itself does nothing for the least well-off—indeed it helps only those who do not receive income support and family credit. I have also taken account of the fact that the take-home pay for those on average male earnings has already increased in the past year by some £16 a week, and will have been further increased by up to £3 a week for the great majority of families as a result of this month's reduction in national insurance contributions—indeed, more where both partners are working. The introduction of independent taxation next April will bring further improvements for many. In these cirumstances, I think it right to concentrate extra help from social security on others.
In that context, I take first the less well-off families receiving family credit or income support. They will of course receive, through the uprating of income-related benefits, the same amount as they would have gained from any general child benefit increase, at a cost of around £100 million. In addition to that, and to some increases for disabled children and their families to which I shall come shortly, I am making five other improvements.
The family premium in income support will be increased from £6.50 to £7.35, which is 50p a week more than a straightforward uprating would have entailed. This will of course carry through into extra entitlement to housing benefit and community charge benefit also.
847 The adult credit in family credit will be increased from £33.60 to £36.35, which is £1 a week more than would otherwise have occurred, and the child credits will be increased so as to compensate fully for the decision not to uprate child benefit.
The lone parent premium in housing benefit and community charge benefit will be increased by 12.8 per cent. from £8.60 to £9.70. The amount that lone parents can earn without affecting their housing benefit entitlement will be increased from £15 a week to £25 a week. Those two changes will help 95,000 lone parents.
The maternity payment, which is given to those on income support or family credit who have a baby, will be increased by £15 to £100. The total cost of additional measures for the least well-off families is about £70 million in a full year. over and above the £100 million which gives them the full equivalent of a child benefit increase. They will help 1.5 million families, and will in particular give greater encouragement to lone parents who wish to work. They should also reinforce our efforts to increase the number of people who take advantage of family credit. In that regard, I am glad to be able to tell the House that family credit coverage rose by more than 40,000 to over 320,000 between March and July this year, which means that it is providing nearly twice as much help to over 50 per cent. more families than the old family income supplement. We plan a further campaign in the next few months to make it still more effective.
Next, I come to the less well-off pensioners, for whom I propose five beneficial changes. The most important relates to income support for those in residential care or nursing homes, about which much concern was expressed in the House during last week's debate on community care. I intend to increase payments for this purpose, at a cost of more than £100 million, to give increases in the income support limits of £10 a week for virtually every category of home, providing more help for 200,000 elderly and disabled people.
I shall also deal with an anomaly in the amount allowed for the personal expenses of those who are in hospital for a long time, which has the effect of leaving uncovered certain expenses that they continue to incur at home. To help them, the relevant allowance will be increased from 20 to 25 per cent. of the retirement pension—from £8.70 to £11.75 a week.
For elderly couples on income support, the capital rule that governs access to the social fund will be doubled from £500 to £1,000 to help to overcome the anxiety that many of them feel about money set aside for a funeral. For war widows, I shall increase the age allowances from £6.10 to £7 for those aged 65 to 69, from £12.20 to £13.50 for those aged 70 to 79 and from £15.30 to £20 for those who are 80 or over. In each case, that is substantially more than a straightforward uprating, and for the over-80s it is over £3.50 a week more. I shall also, as was indicated earlier this year, raise from £5 to £10 the amount of war pension or war widows pension that is disregarded in calculating entitlement to income-related benefits.
The full-year cost of those measures, of which the bulk is on residential and nursing care, is £115 million, and they will help 400,000 people. That is over and above the extra £200 million which this month's premium increases will next year be giving to 2.5 million elderly people.
Last, but not least, I come to the needs of long-term sick and disabled people and of those many relatives and others who do so much to help with their care. As a result of the 848 series of important surveys which we commissioned four years ago from the Office of Population Censuses and Surveys, we now know much more about disabled people and their circumstances. In the light of that, I intend to bring forward, within the next few months, and I hope before the turn of the year, proposals to improve the balance and structure of social security provision for them.
Such changes will necessarily take some time to develop and carry through. Meanwhile, however, there are pressing needs which should not wait, and I intend to make, at the next uprating, or as soon as practicable if the House agrees the necessary legislation, 10 immediate improvements which, for the convenience of the House, I will simply list.
First, the disability premium for adults in income-related benefits will be increased by £1.70 for a single person and £2.60 for a couple. That is £1 and £1.60 more respectively than a straightforward uprating, giving extra help to about 400,000 people.
Secondly, the disability premium for families on income-related benefits with disabled children will be aligned with the adult rate. That will more than double it from £6.50 to £15.40, giving extra help to 20,000 families.
Thirdly, a carers' premium will be introduced into income support for those receiving invalid care allowance, initially at a rate of £10 a week. That will help 30,000 carers.
Fourthly, as has already been announced, attendance allowance will be made available to the terminally ill without the normal six months waiting period. That is expected to help more than 50,000 people by up to £37.55 a week.
Fifthly, we shall now also scrap the rule that prevents payment of attendance allowance for children under two. That will give up to £37.55 a week extra to 3,000 families with severely disabled babies.
Sixthly, in consequence of these extensions of attendance allowance, invalid care allowance at £28.20 a week will also become available to many carers who would not otherwise qualify.
Seventhly, mobility allowance will be extended to the deaf-blind. That will give £26.25 a week more to about 3,000 people.
Eighthly, the amount that those receiving invalid care allowance can earn without affecting their ICA will be increased by 66 per cent., from £12 to £20 a week.
Ninthly, the amount that people on invalidity benefit or severe disablement allowance can earn without affecting those benefits, provided the work is medically certified as beneficial, will go up by 23 per cent. from £28.50 a week to £35 a week and they will be able to keep their benefit when they go on an employment rehabilitation course instead of the existing rehabilitation allowance which may be lower by £20 or more.
Tenthly, the independent living fund, which has proved so successful in assisting many exceptionally severely disabled people with their very special needs, for which the original provision for this year was £5 million, is being doubled immediately to over £10 million, and will be more than doubled again next year to more than £20 million.
The total full-year cost of these measures, over and above the normal uprating of disability benefits generally, will be about £100 million a year. They will improve the incomes of more than 500,000 seriously ill or disabled people and carers, in some cases by very substantial amounts. To give the House just one example, a family 849 with a very severely disabled baby, where one of the parents is staying at home as carer, will get more than £65 a week extra. A full schedule of the new benefit rates is in the Vote Office.
Next year, for the first time, social security spending will be over £1 billion each and every week. The new measures that I have described confirm the capacity of our reformed benefit system to focus more quickly and effectively on those with a special claim to our help. They will reinforce our policies for care in the community, and they underline our commitment to ensure that our country's greater prosperity is widely shared.
§ Following are the details:
| Schedule of main proposed Social Security benefit rates from April 1990 | ||
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| Attendance allowance | ||
| higher rate | 34.90 | 37.55 |
| lower rate | 23.30 | 25.05 |
| Child benefit—each child | 7.25 | 7.25 |
| Child's special allowance | 8.95 | 9.65 |
| Community charge benefit | ||
| Personal allowances | ||
| single | ||
| 18 to 24 | 27.40 | 28.80 |
| 20 or over | 34.90 | 36.70 |
| lone parent—18 or over | 34.90 | 36.70 |
| couple—one or both over 18 | 54.80 | 57.60 |
| dependent children | ||
| under 11 | 11.75 | 12.35 |
| 11 to 15 | 17.35 | 18.25 |
| 16 to 17 | 20.80 | 21.90 |
| 18 | 27.40 | 28.80 |
| Premiums | ||
| family | 6.50 | 7.35 |
| lone parent | 8.60 | 9.70 |
| pensioner | ||
| single | 11.20 | 11.80 |
| couple | 17.05 | 17.95 |
| pensioner (enhanced) | ||
| single | 13.70 | 14.40 |
| couple | 20.55 | 21.60 |
| pensioner (higher) | ||
| single | 16.20 | 17.05 |
| couple | 23.00 | 24.25 |
| disability | ||
| single | 13.70 | 15.40 |
| couple | 19.50 | 22.10 |
| severe disability | ||
| single | 26.20 | 28.20 |
| couple (one qualifies) | 26.20 | 28.20 |
| couple (both qualify) | 52.40 | 56.40 |
| disabled child | 6.50 | 15.40 |
| carers (from October 1990) | 10.00 | |
| Allowance for personal expenses for claimants in hospital | 8.70 | 11.75 |
| Capital | ||
| upper limit | 8,000.00 | 8,000.00 |
| amount disregarded | 3,000.00 | 3,000.00 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| child's limit | 3,000.00 | 3,000.00 |
| Tariff income | ||
| £1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit | ||
| Earnings disregards | ||
| where disability premium awarded | 15.00 | 15.00 |
| various specified employments | 15.00 | 15.00 |
| lone parent—in receipt of IS | 15.00 | 15.00 |
| lone parent—not in receipt of IS (from October 1990) | 15.00 | 25.00 |
| where the claimant has a partner | 10.00 | 10.00 |
| single claimant | 5.00 | 5.00 |
| Other income disregards | ||
| war disablement pension and war widows pension | 5.00 | 10.00 |
| voluntary and charitable payments | 5.00 | 5.00 |
| student's covenanted income | 5.00 | 5.00 |
| Expenses for subtenants | ||
| furnished or unfurnished | 4.00 | 4.00 |
| where heating is included, additional | 7.00 | 7.35 |
| Dependency increases | ||
| Adult Dependency increases 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 | 26.20 | 28.20 |
| non-contributory retirement pension, invalid care allowance and severe disablement allowance | 15.65 | 16.65 |
| sickness benefit if beneficiary over pension age | 25.10 | 27.00 |
| unemployment benefit | 21.40 | 23.05 |
| maternity allowance/sickness benefit | 20.55 | 22.10 |
| Child Dependency increases For each child with:— | ||
| retirement pension, widows benefit, invalidity benefit, invalid care allowance, severe disablement allowance, higher rate industrial death benefit, unemployability supplement and sickness/unemployment benefit if beneficiary over pension age | 8.95 | 9.65 |
| Earnings rules | ||
| Invalid care allowance | 12.00 | 20.00 |
| Unemployment benefit (daily rate) | 2.00 | 2.00 |
| Therapeutic earnings limit | 28.50 | 35.00 |
| Industrial injuries unemployability supplement permitted earnings level (annual amount) | 1,482.00 | 1,820.00 |
| War pensioners' unemployability supplement permitted earnings level (annual amount) | 1,482.00 | 1,820.00 |
| Adult dependency increases with sickness benefit where claimant is | ||
| (a) under pension age | 20.55 | 22.10 |
| (b) over pension age | 25.10 | 27.00 |
| maternity allowance | 20.55 | 22.10 |
| unemployment benefit where claimant is | ||
| (a) under pension age | 21.40 | 23.05 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| (b) over pension age | 26.20 | 28.20 |
| retirement pension, invalidity pension, severe disablement allowance, unemployability supplement where dependant | ||
| (a) is living with claimant | 34.70 | 37.35 |
| (b) still qualifies for the tapered earnings rule | 45.09 | 45.09 |
| retirement pension, invalidity pension and unemployability supplement where dependant not living with claimant | 26.20 | 28.20 |
| severe disablement allowance where dependant not living with claimant | 15.65 | 16.85 |
| invalid care allowance | 15.65 | 16.85 |
| Child dependency increases level at which CDIs payable with long.term benefits are affected by earnings of claimant's spouse or partner | ||
| for first child | 95.00 | 100.00 |
| for each subsequent child | 12.00 | 13.00 |
| Family credit | ||
| Adult credit | 33.60 | 36.5 |
| Child credit | ||
| under 11 | 7.30 | 8.25 |
| 11 to 15 | 12.90 | 14.15 |
| 16 to 17 | 16.35 | 17.80 |
| 18 | 23.30 | 25.10 |
| Applicable amount (ie taper threshold) | 54.80 | 57.60 |
| Capital | ||
| upper limit | 6,000.00 | 6,000.00 |
| amount disregarded | 3,000.00 | 3,000.00 |
| child's limit | 3,000.00 | 3,000.00 |
| Tariff income | ||
| £1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit | ||
| Disregards | ||
| war disablement pension and war widows pension | 5.00 | 10.00 |
| voluntary and charitable payments | 5.00 | 5.00 |
| student's covenanted income | 5.00 | 5.00 |
| Expenses for subtenants | ||
| furnished or unfurnished | 4.00 | 4.00 |
| where heating is included, additional | 7.00 | 7.35 |
| Guardian's allowance—each child | 8.95 | 9.65 |
| Hospital downrating | ||
| 20 per cent, rate | 8.70 | 9.40 |
| 40 per cent, rate | 17.40 | 18.80 |
| Housing benefit | ||
| Personal allowances | ||
| single | ||
| 16 to 24 | 27.40 | 28.80 |
| 25 or over | 34.90 | 36.70 |
| lone parent | ||
| under 18 | 27.40 | 28.80 |
| 18 or over | 34.90 | 36.70 |
| couple | ||
| both under 18 | 41.60 | 43.80 |
| one or both over 18 | 54.80 | 57.60 |
| dependent children | ||
| under 11 | 11.75 | 12.35 |
| 11 to 15 | 17.35 | 18.25 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| 16 to 17 | 20.80 | 21.90 |
| 18 | 27.40 | 28.80 |
| Premiums | ||
| family | 6.50 | 7.35 |
| lone parent | 6.60 | 9.70 |
| pensioner | ||
| single | 11.20 | 11.80 |
| couple | 17.05 | 17.95 |
| pensioner (enhanced) | ||
| single | 13.70 | 14.40 |
| couple | 20.55 | 21.60 |
| pensioner (higher) | ||
| single | 16.20 | 17.05 |
| couple | 23.00 | 24.25 |
| disability | ||
| single | 13.70 | 15.40 |
| couple | 19.50 | 22.10 |
| severe disability | ||
| single | 26.20 | 28.20 |
| couple (one qualifies) | 26.20 | 28.20 |
| couple (both qualify) | 52.40 | 56.40 |
| disabled child | 6.50 | 15.40 |
| carers (from October 1990) | 10.00 | |
| Allowance for personal expenses for claimants in hospital | 8.70 | 11.75 |
| Non-dependant deductions | ||
| rent rebates and allowances aged 18 or over and in remunerative work | 9.15 | 10.85 |
| others, aged 18 or over, or on Income Support and over 25 | 3.85 | 4.55 |
| low earnings threshold | 52.10 | 56.05 |
| Service charges for fuel | ||
| heating | 7.00 | 7.35 |
| hot water | 0.85 | 0.90 |
| lighting | 0.55 | 0.60 |
| cooking | 0.85 | 0.90 |
| all fuel | 9.25 | 9.75 |
| Amount ineligible for meals | ||
| three or more meals a day single claimant | 12.50 | 13.15 |
| each person in family aged 16 or over | 12.50 | 13.15 |
| each child under 16 | 6.25 | 6.60 |
| less than three meals a day | ||
| single claimant | 8.30 | 8.75 |
| each person in family aged 16 or over | 8.30 | 8.75 |
| each child under 16 | 4.15 | 4.35 |
| breakfast only—claimant and each member of family | 1.50 | 1.60 |
| Capital | ||
| upper limit | 8,000.00 | 8,000.00 |
| amount disregarded | 3,000.00 | 3,000.00 |
| child's limit | 3,000.00 | 3,000.00 |
| Tariff income | ||
| £1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit | ||
| Earnings disregards | ||
| where disability premium awarded | 15.00 | 15.00 |
| various specified employments | 15.00 | 15.00 |
| lone parent—in receipt of IS | 15.00 | 15.00 |
| lone parent—not in receipt of IS (from October 1990) | 15.00 | 25.00 |
| where the claimant has a partner | 10.00 | 10.00 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| single claimant | 5.00 | 5.00 |
| Other income disregards | ||
| war disablement pension and war widows pension | 5.00 | 10.00 |
| voluntary and charitable payments | 5.00 | 5.00 |
| student's covenanted income | 5.00 | 5.00 |
| Expenses for subtenants | ||
| furnished or unfurnished | 4.00 | 4.00 |
| where heating is included, additional | 7.00 | 7.35 |
| Income Support | ||
| Personal allowances | ||
| single | ||
| under 18—usual rate | 20.80 | 21.90 |
| under 18—higher rate payable in specific circumstances | 27.40 | 28.80 |
| 18 to 24 | 27.40 | 28.80 |
| 25 or over | 34.90 | 36.70 |
| lone parent | ||
| under 18—usual rate | 20.80 | 21.90 |
| under 18—higher rate payable in specific circumstances | 27.40 | 28.80 |
| 18 or over | 34.90 | 36.70 |
| couple | ||
| both under 18 | 41.60 | 43.80 |
| one or both over 18 | 54.80 | 57.60 |
| dependent children | ||
| under 11 | 11.75 | 12.35 |
| 11 to 15 | 17.35 | 18.25 |
| 16 to 17 | 20.80 | 21.90 |
| 18 | 27.40 | 28.80 |
| Premiums | ||
| family | 6.50 | 7.35 |
| lone parent | 3.90 | 4.10 |
| pensioner | ||
| single | 11.20 | 11.80 |
| couple | 17.05 | 17.95 |
| pensioner (enhanced) | ||
| single | 13.70 | 14.40 |
| couple | 20.55 | 21.60 |
| pensioner (higher) | ||
| single | 16.20 | 17.05 |
| couple | 23.00 | 24.25 |
| disability | ||
| single | 13.70 | 15.40 |
| couple | 19.50 | 22.10 |
| severe disability | ||
| single | 26.20 | 28.20 |
| couple (one qualifies) | 26.20 | 28.20 |
| couple (both qualify) | 52.40 | 56.40 |
| disabled child | 6.50 | 15.40 |
| carers (from October 1990) | 10.00 | |
| Maximum amounts for accommodation and meals in residential care homes | ||
| old age | 140.00 | 150.00 |
| very dependent elderly | 155.00 | 165.00 |
| mental disorder (not handicap) | 140.00 | 150.00 |
| drug/alcohol dependence | 140.00 | 150.00 |
| mental handicap | 165.00 | 175.00 |
| physical disablement | ||
| (a) (under pension age) | 200.00 | 210.00 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| (b) (over pension age) | 140.00 | 150.00 |
| others | 140.00 | 150.00 |
| maximum Greater London increase | 23.00 | 23.00 |
| nursing homes | ||
| mental disorder (not handicap) | 195.00 | 200.00 |
| drug/alcohol dependence | 190.00 | 200.00 |
| mental handicap | 205.00 | 215.00 |
| terminal illness | 235.00 | 245.00 |
| physical disablement | ||
| (a) (under pension age) | 235.00 | 245.00 |
| (b) (over pension age) | 190.00 | 200.00 |
| others (including elderly) | 190.00 | 200.00 |
| maximum Greater London increase | 23.00 | 23.00 |
| Amounts for meals where these cannot be purchased within the accommodation (daily rate) | ||
| breakfast | 1.10 | 1.10 |
| midday meal | 1.55 | 1.55 |
| evening meal | 1.55 | 1.55 |
| Allowances for personal expenses for claimants in private and voluntary residential care and nursing homes personal allowance | 10.05 | 10.55 |
| dependent children | ||
| (a) Under 11 | 5.10 | 4.30 |
| (b) 11 to 15 | 6.05 | 6.35 |
| (c) 16 to 17 | 7.00 | 7.35 |
| (d) age 18 | 10.05 | 10.55 |
| hospital | 8.70 | 11.75 |
| local authority (Pt III) accommodation | 8.70 | 9.40 |
| the Polish home Ilford Park | ||
| maximum amount for accommodation and meals | 140.00 | 150.00 |
| personal expenses for claimant | 13.25 | 13.95 |
| personal expenses for partner | 13.25 | 13.95 |
| personal expenses for dependent children | ||
| (a) Under 11 | 4.10 | 4.30 |
| (b) 11 to 15 | 6.05 | 6.35 |
| (c) 16 to 17 | 7.00 | 7.35 |
| (d) age 18 | 11.95 | 12.55 |
| Housing costs | ||
| deduction for non-dependants | ||
| aged 18 or over and in remunerative work | 9.15 | 10.85 |
| others, aged 18 or over, or on Income Support and over 25 | 3.85 | 4.55 |
| low earnings threshold | 52.10 | 56.05 |
| Deduction for direct payments | ||
| fuel debt 5 per cent, rate | 1.75 | 1.85 |
| fuel debt 10 per cent, rate | 3.50 | 3.70 |
| arrears of housing costs | 1.75 | 1.85 |
| arrears of water rates | 1.75 | 1.85 |
| Deductions for arrears of Community Charge | ||
| single debtor | 1.75 | 1.85 |
| couple debtors both with IS | 2.75 | 2.90 |
| Reduction in benefit for strikers | 18.50 | 19.50 |
| Capital | ||
| upper limit | 6,000.00 | 6,000.00 |
| amount disregarded | 3,000.00 | 3,000.00 |
| child's limit | 3,000.00 | 3.000.00 |
| Tariff income | ||
| £1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| Disregards | ||
| standard earnings | 5.00 | 5.00 |
| higher earnings | 15.00 | 15.00 |
| war disablement pension and war widows pension | 5.00 | 10.00 |
| voluntary and charitable payments | 5.00 | 5.00 |
| student's convenanted income | 5.00 | 5.00 |
| Expenses for subtenants | ||
| furnished or unfurnished | 4.00 | 4.00 |
| where heating is included, additional | 7.00 | 7.35 |
| Industrial death benefit | ||
| Widow's pension | ||
| higher rate | 43.60 | 46.90 |
| lower rate | 13.08 | 14.07 |
| Industrial disablement pension | ||
| 18 and over, or under 18 with dependants | ||
| 100 per cent. | 71.20 | 76.60 |
| 90 per cent. | 64.08 | 68.94 |
| 80 per cent. | 56.96 | 61.28 |
| 70 per cent. | 49.84 | 53.62 |
| 60 per cent. | 42.72 | 45.96 |
| 50 per cent. | 35.60 | 38.30 |
| 40 per cent. | 28.48 | 30.64 |
| 30 per cent. | 21.36 | 22.98 |
| 20 per cent. | 14.24 | 15.32 |
| Under 18 | ||
| 100 per cent. | 43.60 | 46.90 |
| 90 per cent. | 39.24 | 42.21 |
| 80 per cent. | 34.88 | 37.52 |
| 70 per cent. | 30.52 | 32.83 |
| 60 per cent. | 26.16 | 28.14 |
| 50 per cent. | 21.80 | 23.45 |
| 40 per cent. | 17.44 | 18.76 |
| 30 per cent. | 13.08 | 14.07 |
| 20 per cent. | 8.72 | 9.38 |
| Maximum life gratuity (lump sum) | 4,730.00 | 5,090.00 |
| Unemployability Supplement | 43.60 | 46.90 |
| plus where appropriate an increase for early incapacity | ||
| higher rate | 9.20 | 10.00 |
| middle rate | 5.80 | 6.20 |
| lower rate | 2.90 | 3.10 |
| Maximum special hardship allowance/ reduced earnings allowance | 28.48 | 30.64 |
| Maximum retirement allowance | 7.12 | 7.66 |
| Constant attendance allowance | ||
| exceptional rate | 57.00 | 61.40 |
| intermediate rate | 42.75 | 46.05 |
| normal maximum rate | 28.50 | 30.70 |
| part.time rate | 14.25 | 15.35 |
| Exceptionally severe disablement allowance | 28.50 | 30.70 |
| Invalid care allowance | 26.20 | 28.20 |
| Invalidity benefit | ||
| Invalidity pension | 43.60 | 46.90 |
| Invalidity allowance | ||
| higher rate | 9.20 | 10.00 |
| middle rate | 5.80 | 6.20 |
| lower rate | 2.90 | 31.0 |
| Maternity allowance | 33.20 | 35.70 |
| Maternity payment | 85.00 | 100.00 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| Mobility allowance | 24.40 | 26.25 |
| One.parent benefit | 5.20 | 5.60 |
| Pneumoconiosis, byssinosis, workmen's compensation (supplementation) and other schemes | ||
| Total disablement allowance and major incapacity allowance (maximum) | 71.20 | 76.60 |
| Partial disablement allowance | 26.20 | 28.20 |
| Unemployment supplement plus where appropriate increases for early incapacity | 43.60 | 46.90 |
| higher rate | 9.20 | 10.00 |
| middle rate | 5.80 | 6.20 |
| lower rate | 2.90 | 3.10 |
| Constant attendance allowance | ||
| exceptional rate | 57.00 | 61.40 |
| intermediate rate | 42.75 | 46.05 |
| normal maximum rate | 28.50 | 30.70 |
| part-time rate | 14.25 | 15.35 |
| Exceptionally severe disablement allowance | 28.50 | 30.70 |
| Lesser incapacity allowance | ||
| maximum rate of allowance | 26.20 | 28.20 |
| based on loss of earnings over | 34.90 | 37.55 |
| Retirement pension | ||
| Category A or B | 43.60 | 46.90 |
| Category B (lower)—husband's insurance | 26.20 | 28.20 |
| Category C or D—non.contributory | 26.20 | 28.20 |
| Category C (lower)—non.contributory | 15.65 | 16.85 |
| Additional pension | (increased by 7.6%) | |
| Increments to basic and additional pension, contracted out deductions (from pre April 1988 earnings) and graduated retirement benefit | (increased by 7.6%) | |
| Contrated out deductions and increments to contracted out decuctions (from post April 1988 earnings1) | (increased by 4.6%) | |
| Graduated retirement benefit (unit)(pence) | 5.71 | 6.14 |
| Addition at age 80 | .25 | .25 |
| Severe disablement allowance | 26.20 | 28.20 |
| Sickness benefit | ||
| Over pension age | 41.80 | 45.00 |
| Under pension age | 33.20 | 35.70 |
| Social fund | ||
| Capital limit—aged 60 and over | 500.00 | 1,000.00 |
| Statutory maternity pay | ||
| Earnings threshold | 43.00 | 46.00 |
| Lower rate | 36.25 | 39.25 |
| Statutory sick pay | ||
| Earnings threshold | 43.00 | 46.00 |
| Standard rate threshold | 84.00 | 125.00 |
| Lower rate | 36.25 | 39.25 |
| Standard rate | 52.10 | 52.50 |
| Unemployment benefit | ||
| Over pension age | 43.60 | 46.90 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| Under pension age | 34.70 | 37.35 |
| Occupational pension abatement | 35.00 | 35.00 |
| War pensions | ||
| Disablement pension (100 per cent, rates) | ||
| private or equivalent | 71.20 | 76.60 |
| officer (£ per annum) | 3,712.00 | 3,994.00 |
| Age allowances | ||
| 40 per cent.-50 per cent. | 5.00 | 5.40 |
| over 50 per cent, but not over 70 per cent. | 7.75 | 8.35 |
| over 70 per cent, but not over 90 per cent. | 11.10 | 11.95 |
| over 90 per cent. | 15.50 | 16.70 |
| Disablement gratuity (base figures for calculation purposes only) | ||
| specified minor injury | 4,730.00 | 5,090.00 |
| unspecified minor injury | 2,601.50 | 2,799.50 |
| Unemployability allowance | ||
| personal | 46.30 | 49.80 |
| adult dependency increase | 26.20 | 28.20 |
| increase for each child | 8.95 | 9.65 |
| Invalidity allowance | ||
| higher rate | 9.20 | 10.00 |
| middle rate | 5.80 | 6.20 |
| lower rate | 2.90 | 3.10 |
| Constant attendance allowance | ||
| exceptional rate | 57.00 | 61.40 |
| intermediate rate | 42.75 | 46.05 |
| normal maximum rate | 28.50 | 30.70 |
| part-time rate | 14.25 | 15.35 |
| Comforts allowance | ||
| higher rate | 12.30 | 13.20 |
| lower rate | 6.15 | 6.60 |
| Mobility supplement | 27.10 | 29.15 |
| Allowance for lowered standard of occupation (maximum) | 28.48 | 30.64 |
| Exceptionally severe disablement allowance | 28.50 | 30.70 |
| Severe disablement occupational allowance | 14.25 | 15.35 |
| Clothing allowance (£ per annum) | ||
| higher rate | 97.00 | 104.00 |
| lower rate | 61.00 | 66.00 |
| Education allowance (£ per annum) (maximum) | 120.00 | 120.00 |
| War widow's pension (private) | ||
| widow | 56.65 | 60.95 |
| childless widow under 40 age allowance | 13.08 | 14.07 |
| (a) age 65 to 69 | 6.10 | 7.00 |
| (b) age 70 to 79 | 12.20 | 13.50 |
| (c) age 80 and over | 15.30 | 20.00 |
| children's allowance | 12.60 | 13.40 |
| Orphan's pension | 13.80 | 14.70 |
| Unmarried dependant living as spouse (maximum) | 54.60 | 58.90 |
| Rent allowance (maximum) | 21.55 | 23.20 |
| Weekly rates unless otherwise shown | Old rates 1989 | New rates 1990 |
| Adult orphan's pension (maximum) | 43.60 | 46.90 |
| Widower's pension (maximum) | 56.65 | 60.95 |
| Widow's benefit | ||
| Widow's payment (lump sum) | 1,000.00 | 1,000.00 |
| Widowed mother's allowance | 43.60 | 46.90 |
| Widow's pension | ||
| standard rate | 43.60 | 46.90 |
| age related | ||
| age 54 (49) | 40.55 | 43.62 |
| 53 (48) | 37.50 | 40.33 |
| 52 (47) | 34.44 | 37.05 |
| 51 (46) | 31.39 | 33.77 |
| 50 (45) | 28.34 | 30.49 |
| 49 (44) | 25.29 | 27.20 |
| 48 (43) | 22.24 | 23.92 |
| 47 (42) | 19.18 | 20.64 |
| 46 (41) | 16.13 | 17.35 |
| 45 (40) | 13.08 | 14.07 |
| 1 Contracted out deductions and increments (post April 1988). Scheme is responsible for 3 per cent. Balance of 4.6 per cent, paid by State. |
§ Note:
§ For deaths occuring before 11 April 1988 refer to age-points shown in brackets.
§ Mr. Robin Cook (Livingston)May I begin with those parts of the statement to which the Opposition can give an unqualified welcome? First, we warmly welcome the introduction of a carers' premium on income support. As the Secretary of State will be aware, it remedies one of the worst injustices of the cuts of last April, when carers found themselves the sole group on long-term supplementary benefit who were denied any premium on the transfer to income support. We welcome the introduction of such a premium. We regret that, for the past two years, carers have been left without it.
We also welcome the changes to attendance allowance, particularly the extension of attendance allowance to the terminally ill and to children under two. The Secretary of State will have had it pointed out to him, I am sure, that during the course of the Social Security Act 1988 my hon. Friends the Members for Preston (Mrs. Wise) and for Coventry, South-East (Mr. Nellist) were particularly vigorous in pressing that point on the Government and, at the time, the Government were particularly vigorous in resisting both changes.
But the Secretary of State cannot pretend that the comparatively minor changes that he has just announced to disability benefits are the comprehensive review of disability benefits that we were promised after the study conducted by the Office of Population Censuses and Surveys. As the Secretary of State is aware, that survey identified 6.5 million disabled people in Britain——
§ The Minister for Social Security (Mr. Nicholas Scott)It was 6.25 million.
§ Mr. Cook—my figure includes the under 16-year-olds—whose needs cannot possibly be met by an additional £100 million. Neither can an extra £1 on the disability premium possibly meet the depths of poverty revealed by 859 the OPCS study. May I, therefore, press the Secretary of State to make it clear that he remains committed to that comprehensive review of disability benefits?
I also congratulate the Secretary of State on having recruited another 40,000 claimants to family credit. I congratulate him on the fact that that brings the numbers up to two thirds of the number that the Secretary of State originally predicted would be on family credit. In case any hon. Members consider that family credit is now an efficient benefit, will the Secretary of State confirm that the additional numbers that he has announced today have been purchased by advertising expenditure which works out at £120 for every additional claimant? The extraordinary advertising costs necessary to recruit that modest increase makes it all the more incomprehensible that the Secretary of State has chosen to freeze child benefit, which, without advertising, reaches 98 per cent. of mothers.
May I at least congratulate the Secretary of State on Monday's Lobby briefing, in that he attempted to persuade the Treasury to let him uprate child benefit. Upon which arguments did he place the greatest stress in his negotiations with the Treasury? Did he place greatest stress on the dishonour brought on the Conservative party by a freeze in child benefit for the third year running since the general election during which every Conservative Member stood on a manifesto that pledged them to continue child benefit? Or did the Secretary of State stress the dishonesty of pretending that he had carried out his annual duty to review the level of child benefit? Is he aware that over the past three years of the freeze, the level of child benefit has sunk by a fifth?
Which mother did the Secretary of State meet in the course of his review who told him that the cost of bringing up a child has gone down by a fifth over the same period? Or did the Secretary of State point out to the Treasury the sheer hypocrisy of a party that boasts of being the party of the family, which cannot find an extra 50p for the family budget? Does not the Secretary of State understand that so many young mothers with small children live in first-time buyers' homes where budgets have been wrecked by Conservative mortgage rates? Will the Secretary of State now at least find the courage to do the House the courtesy of informing the House and the nation that he is a member of a Cabinet which wants to be rid of child benefit and that Britain, as it limps towards 1992, is the only country with a Government who are not prepared to recognise anywhere in the benefit or tax system the extra cost of families with children?
The Secretary of State has again increased income support by the retail prices index less housing costs. Will he confirm that this year that reduces the increase by one third? In view of the large difference between the increase in income support and the increase in national insurance benefits, how many pensioners are likely to find themselves floated off entitlement to means-tested benefit?
I want to press the Secretary of State about two particularly desperate groups on income support. The Secretary of State referred to the thousands of old people who have been encouraged to go into private nursing homes on the assurance that the Department of Social Security will meet their costs. They now find that the benefit does not cover their bills. Is the Secretary of State aware that many of my hon. Friends have cases in their constituencies where the gap between the old person's benefit and the private home fee is £30, £40 or £50 a week? 860 An increase of £10 a week in the benefit will go nowhere towards plugging that gap. Will the Secretary of State admit that the £10 he has just announced is no more than the 5.2 per cent. increase to which they are entitled on a weekly payment of £190?
The fees of those homes will go up by more than £10 this year and that will leave old people with a further gap to meet if they are to keep a roof over their heads.
May I press the Secretary of State on a group whom he omitted from his statement and who are on income support? I refer to the stark desperation of the 200,000 claimants who are entitled to no increase because they are still on transitional protection and to whom today's statement is wholly irrelevant. Next April will be the third year running in which they have had no increase. They still need the extra heating and the special diet for which they used to get allowances, but which they now cannot afford. I plead with the Secretary of State for an amnesty for those cases on transitional protection so that they may get the full uprating.
The Secretary of State has again announced an increase in the basic state pension, but it is not a penny over the minimum necessary to match price increases. Will he confirm that if the link with earnings had been preserved under his Government, the figures he has announced today for the state pension would have meant an increase in the single person's pension of £12.65 over the present level and, on the married person's pension, of £20 a week over the present level? Is he aware that, last April, the cumulative total in the national insurance fund was a record surplus of £9,900 million? Why will the Treasury not let him spend some of that surplus on the pensions for which working people have paid their contributions to that fund?
Is he aware that, this year, the cost to the national insurance fund of the 2 per cent. bribe in personal persons schemes is already £1.5 billion over budget? Will he confirm that that sum alone would have doubled the sum he announced today relating to the increase in the state pension? If he really believes in targeting, surely it would be better to target that expenditure to help pensioners in poverty than to subsidise the private pensions industry.
The Secretary of State will be aware that during the 11 years of this Government the basic pension has gone up by a beggarly 2 per cent. in real terms. In the five years of the previous Labour Government it went up by 20 per cent. in real terms. Those figures show up the different priorities we attach to the state pension.
Since the Secretary of State has said that his announcement is intended to ensure that the greater prosperity of the nation gets through to those on benefit, why does he not go back to the Treasury and remind the Chancellor of his many speeches on Britain's economic miracle? He should ask his right hon. Friend when that greater prosperity will get through to the millions of pensioners dependent on the basic state pension, who should not be abandoned in their old age to the stress and distress of a life in poverty.
§ Mr. NewtonI would have found the latter part of the hon. Gentleman's remarks somewhat more credible but for the fact that the previous Labour Government were unable even to sustain their own undertakings about the way in which they would uprate retirement pensions; and but for the fact that pensioners' average total net incomes have been rising far faster under this Government than 861 under the previous Labour Government. The latest figures show that, between 1979 and 1986, those incomes rose by 23 per cent. against only 0.6 per cent. a year, or 3 per cent. over the whole period when the hon. Gentleman and his friends were in office. The principal reason for that was, of course, the roaring inflation over which the Labour Government presided.
The second principal reason for the substantial increase in pensioners' average net incomes going far beyond what occurred under the previous Labour Government is the very growth of occupational and other pension schemes, which we have been sucessfully encouraging still further by the development of personal pensions.
The hon. Gentleman made several observations about family credit, child benefit and the review of benefits for disabled people. I shall refer to each of them. First, as I emphasised in my statement, the key point about family credit is that that benefit is now far more effective than the old family income supplement in taking substantial help to the less well-off families in work. The effectiveness of that benefit will be further increased by the steps that I have taken today. I make no apology for the scale and importance of the advertising campaign that we have mounted to ensure that that benefit is effective. We shall continue with the campaign.
As for disability benefits, I note with some pleasure the hon. Gentleman's welcome—albeit grudgingly—at least for the range of new improvements that I announced at the conclusion of my statement. If the hon. Gentleman had been listening to my statement with the care that I would have hoped for, he would have heard me say clearly that it is a package of immediate improvements and that within a few months—by the turn of the year, I hope—the Government will be coming forward with a fuller and more strategic response to the information that we have gained from the OPCS surveys. That is absolutely clear. There is no way in which I am suggesting that what I have announced today—important though it is—is the full and final answer to the greater information that we now have available.
Finally, I refer briefly to the hon. Gentleman's comments on child benefit. I shall tell the hon. Gentleman what I had in mind in considering the balance—it had to be a balance—between increasing child benefit and doing a variety of other things. It was against a background of rising real incomes for those in work and of further improvements in their position through the reduction in national insurance contributions that have already taken place and that are likely to occur in other ways as a result of changes in taxation, to which I also referred, that I came firmly to the conclusion that I would rather spend the sum of money that I outlined in my statement on the less well-off families, the poorer pensioners and on the sick and disabled and their carers. I believe that that sense of priorities will be widely shared.
§ Mr. SpeakerOrder. I draw the attention of the House to the fact that we have a heavy day ahead of us. The Secretary of State mentioned in his opening statement that there will be a statutory instrument and a debate so I ask for brief questions and answers today, please.
§ Mr. Nicholas Bennett (Pembroke)Will my right hon. Friend confirm that the Labour party, which is so concerned now about child benefit, voted against the reductions in income tax in the last two Budgets which will help the people who will not get an increase in child benefit this year? Does my right hon. Friend agree that the best way to help those on the lowest incomes is to target it, as he has done, on those who do not pay income tax?
§ Mr. NewtonI agree with my hon. Friend that whatever the rate of child benefit it is right to ensure that we have special measures to help less well-off families both in work and out of work. Again, I make no apology for having concentrated primarily on those groups in part of the proposals that I have outlined.
§ Mr. Frank Field (Birkenhead)As the Secretary of State is a known advocate of child benefit and he has now been defeated on this issue, what advice can he offer to his friends in the House? Does he agree that it would be gesture politics of the worst order now merely to call yet again for an increase in child benefit when it has been frozen for the third year running? Should not an alternative strategy be advanced? Does the Secretary of State accept that the best way forward would be a reintroduction of child tax allowances? Does he agree that such a move would benefit practically every working family with children? At a later stage, could not that money be put back into the child benefit scheme so that in next year's negotiations on this front, the right hon. Gentleman would have many more supporters among his hon. Friends who would be in favour of that move, including the Prime Minister?
§ Mr. NewtonI have noted with interest not only what the hon. Gentleman has just said, but the various press articles and other comments that he has made on similar lines. Our policy remains, as is required by law, to review the rate of child benefit annually in the light of all the relevant circumstances. That is what I have done and, in the light of all the relevant circumstances, I have come to the conclusions that I have outlined.
§ Sir Ian Gilmour (Chesham and Amersham)While I congratulate my right hon. Friend on his many welcome announcements this afternoon, does he agree that as this is the third year running that the Government have made the mean and wrong-headed decision to freeze child benefit that can only signify that it is the firm and considered—if unaccountable—view of the Government that at all levels of income couples with children have no greater expenses than couples without them or single people?
§ Mr. NewtonClearly, the existence of child benefit is at variance with that proposition. As I told the hon. Member for Birkenhead (Mr. Field) just now, we look each year at all the circumstances and in particular at the needs of those who will not be helped by child benefit. This year, as on earlier occasions, we have come to the conclusion that there are better ways of spending the money involved.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)But surely the Secretary of State recognises that there is no credibility left in the Government adhering to that view. For three years now Secretaries of State have told us that they are considering the circumstances each year individually and on their merits, but that is now a complete 863 fiction. Would it not be more honest to say that the Government have decided to let child benefit wither on the vine and to allow people to take appropiate steps accordingly?
Does the right hon. Gentleman agree that he has been guilty of sleight of hand this afternoon? Although many of the new changes involving increased expenditure are welcome, they are merely the recycled savings from the freezing of child benefit.
§ Mr. NewtonWe have decided not to uprate child benefit and to use that money and, taking account of the increase in pensioner premiums and the abolition of the earnings rule, provide significantly greater sums on improving the position of pensioners, especially that of less well-off pensioners and of less well-off families. Above all, in the light of the OPCS surveys, we have used the money to improve the position of the long-term sick and disabled and their carers.
§ Mr. Nicholas Winterton (Macclesfield)I associate myself with the views of the hon. Member for Birkenhead (Mr. Field), but may I also express my disappointment as a member of the Select Committee on Social Services that the Government have not decided to uprate child benefit? It is the most efficient way of getting money directly to families with children.
Nevertheless, I believe that my right hon. Friend has made an exciting announcement about the uprating of benefit, and I think that the whole House should look in detail at what he has said so that we may have a constructive debate when the regulations are laid.
§ Mr. NewtonI am grateful to my hon. Friend and I am well aware that he and many others—not only the hon. Member for Birkenhead (Mr. Field)—will be disappointed that there is to be no increase in child benefit. I can only tell him and others who may feel the same way that they would also have been extremely disappointed had I not been able to do some of the many things—some 20 in all—for the groups that I have mentioned. In the real world it is sometimes necessary to make choices.
§ Mr. Jack Ashley (Stoke-on-Trent)I welcome the premium for carers and the extension of the mobility allowance to deaf-blind people, although I regret the failure to extend it to mentally handicapped people. Is the Minister aware that these increases are miserly and lacking in all generosity? The fact that they are made at the expense of child benefit is disgraceful.
Does the right hon. Gentleman recognise that some disabled people need child benefit as well, so they are paying for the increase in the disability allowances by losing child benefit? Where is the justice in that?
§ Mr. NewtonIn view of the right hon. Gentleman's long track record of pressing the case for disabled people with such vigour and in such a well-informed way, I would have hoped for a slightly less grudging response to a number of changes for which he has pressed for a long time. What I have announced today adds up in a full year to about £100 million extra for many disabled families and their children and carers; to describe that as miserly is less generous than I would have hoped for from the right hon. Gentleman.
§ Sir George Young (Ealing, Acton)The whole House should welcome unequivocally the additional measures that my right hon. Friend has announced today over and 864 above the statutory uprating and bringing extra help to many groups who certainly need it. But was it not clear from my right hon. Friend's statement that these improvements are largely to be funded by freezing child benefit, provision for an increase in which was already in his Department's public expenditure programme? Where is the equity in funding these welcome improvements by placing an extra burden on families who happen to have children rather than funding them though taxpayers generally?
§ Mr. NewtonI fear that I have to repeat to my hon. Friend what I have said to a number of others already. When considering the overall position this year, I had to decide whether the right way to use a substantial sum of money was to increase child benefit and to give relatively modest amounts to a large number of people, many of whom have substantial incomes which have been rising rapidly, or whether to put it into the hands of groups who have not benefited in the same way and whose needs have been acknowledged by right hon. and hon. Members on both sides of the House. I decided to do the latter, and I shall not apologise to the House for that.
§ Rev. Martin Smyth (Belfast, South)I welcome the general statement, but will the Minister enlighten us about when the immediate grants will be paid? As I heard and read the statement, it seemed that the next uprating is likely to be six months to a year hence. Is it not possible for some of these payments to be made with greater speed? Secondly, in relation to child benefit, the Minister referred to the fact that male earnings have gone up, but will he recognise that citizens advice bureaux and others have said that what really matters are payments direct to the woman, not male earnings. As a male, I know that many men keep their wage packets and payments to their wives separate.
§ Mr. NewtonOf course, family credit is also normally payable to the mother for precisely those reasons, so I do not think that the hon. Gentleman's point takes us that far. It will be difficult—probably impossible—to bring any of these changes forward from the uprating date next April, except for the increase in the independent living fund, in regard to which I have made it clear that an immediate increase is being made. In one or two cases, changes may have to be later because of the need to pass legislation.
§ Dame Elaine Kellett-Bowman (Lancaster)I had intended to take my right hon. Friend to task because he is not indexing child benefit, because there is a large number of non-earning women whose husbands do not give them an allowance of any sort, shape or kind. However, in view of the immense generosity of his proposals for people in residential homes, for carers, on whom so many elderly people rely, and for disabled people in general, I shall refrain from criticising him at this time.
§ Mr. NewtonI suppose that I should be grateful to my hon. Friend, and I am.
§ Dr. David Owen (Plymouth, Devonport)Is it not a shabby way to help the disabled, who greatly need help, to take away allowances from children and from families with children? Is universal child benefit not a badge of citizenship in a country which professes to proclaim the 865 doctrine of one nation? Why does the Minister not tax the second earner in a family on child benefit and get some selectivity in that way?
§ Mr. NewtonI seem to be getting a number of suggestions which I shall obviously note. Choices have to be made when deciding how to use public money, and I think that we have made the right choice on this occasion.
§ Mr. David Nicholson (Taunton)My right hon. Friend and the Minister with responsibility for the disabled are to be congratulated on their skill in targeting this package at a time of financial stringency. Did my right hon. Friend hear the various murmurs of appreciation, not only from Conservative Members but from Opposition Members, as various long-standing injustices were remedied? Is he aware that the proposal on carers and on the independent living fund, both of which featured in the debate last week, are particularly welcome? Will he do everything that he can to increase uptake of family credit, which is an excellent benefit and can he say how much spending on family credit has increased in comparison to family income supplement?
§ Mr. NewtonVery roughly, the amount being spent on family credit is about twice as much as that on family income supplement. As I have said, as that goes to about 50 per cent. more families, it means that the average amounts being paid are substantially greater than under family income supplement. I noted and was grateful for the murmurs of approval from all parts of the House for what I announced, especially in relation to the disabled. We certainly hope in due course to build further on that.
§ Ms. Marjorie Mowlam (Redcar)The Secretary of State has returned to the position of two years ago for single parents of allowing them to earn up to £25 before it affects their benefit. Will he clarify whether he intends to return to the other piece of legislation of two years ago when the £25 was net of child care costs? Unless that is the case, his moves today will have no meaningful effect for single parents.
§ Mr. NewtonI have no plans for going back down the path of introducing specific arrangements in relation to specific costs. The increase in this earnings disregard in housing benefit for lone parents from £15 to £25 will help significantly with the problems of lone parents generally and especially those who wish to work.
§ Miss Emma Nicholson (Torridge and Devon, West)Is not my right hon. Friend aware that withering on the vine produces the most concentrated and sweetest wine? He has offered the House a most carefully constructed libation that will do more to help the really poor than the thin gruel spread so forcibly throughout the population by the Opposition. I also welcome the allowance to be paid to parents of severely disabled children under two where medical advances now mean that such children can be cared for at home. That is an example of sensitive thinking which I warmly welcome. Will he continue to look most carefully at the delivery system for family credit?
I welcome the fact that the advertising campaign has resulted in a greater take-up. I look forward to far greater 866 efforts being made in advertising and other campaigns aimed at the population so that this excellent benefit will receive the take-up that it deserves.
§ Mr. NewtonYes, I will continue to look very hard at ways of improving still further the effectiveness of family credit. This has been a fairly intractable problem under both family credit and family income supplement, but I am encouraged by the progress that we made in the early part of the year and which I outlined in my statement. I hope that we can build on that, especially in relation to lone parents. I obviously agree with the general drift of what my hon. Friend said about child benefit. Because of the medical advances about which she spoke and other matters, we have reviewed and changed the position about attendance allowance for the under-twos.
§ Mr. John Battle (Leeds, West)Although I welcome the overdue extension of mobility allowance to the deaf-blind, may I ask the Secretary of State to amplify his comments on pensions, because his answer on 17 October clearly demonstrates that every year since July 1986 the value of a pension as a proportion and percentage of average net earnings has been declining and is now lower than it was in 1978 and 1979? Further, what is his Department's estimate of the take-up level of family credit? Is it not the case that nearly 250,000 families who are entitled to family credit are not getting it because the take-up is low? What will happen is that some funds will be shifted from child benefit into family credit, but the Minister's Department will not even have budgeted for a full take-up of family credit.
§ Mr. NewtonWhat the hon. Gentleman suggests in the latter part of his question is manifestly incompatible with the strenuous efforts that we are making to improve the coverage of family credit. I have not given any figures for the percentage take-up of family credit because it is increasingly obvious from looking at the figures that we are not at all clear about the full size of the eligible population. Therefore take-up figures as such are not very meaningful. I have concentrated on what we have succeeded in doing in increasing the numbers of people in receipt of the benefit by comparison with the earlier period, because that is what seems to matter. As I said in my statement, the number went up by 40,000 to 320,000 in the middle part of this year.
On the earlier part of the hon. Gentleman's question, the apparent discrepancy between my earlier answer and what I said this afternoon is that pensioners' incomes from state social security benefits are only a small part—in some respects an increasingly small part—of pensioners' total incomes. Over the period to which I referred—from 1979 to 1986; the latest data available—income from social security benefits rose by 19 per cent. in real terms but income from occupational pensions rose by 56 per cent. in real terms and income from savings rose by nearly 64 per cent. in real terms. That explains the discrepancy. Whereas income from savings rose by 64 per cent. or 64 p in the pound under this Government in that period, under the previous Labour Government, the figure fell by 16 p in the pound.
§ Mr. John Maples (Lewisham, West)Many of us welcome my right hon. Friend's decision not to uprate child benefit as we regard it as wrong to pay universal flat rate benefits regardless of people's means. They are a 867 recipe for high taxation and it is no business of the state to have one of its agencies taking money out of the pockets of husbands so that another agency can put it back into the pockets of wives. Will my right hon. Friend use every opportunity to explain something to which he alluded in his statement but which is widely misunderstood, which is that an uprating of child benefit would have been of no benefit to children of the poorest 25 per cent. of families?
§ Mr. NewtonAs I know my hon. Friend understands, as child benefit is taken into account in setting the rates of income support and so on, an increase in child benefit reduces the amount of income support that would otherwise be paid. Conversely, if child benefit does not increase, as it is not increasing in my proposals for this year, the effect of that is fully offset for income support families by the increases that take place in their income support for their children and themselves.
§ Mrs. Margaret Ewing ( Moray)Will the Secretary of State accept that, despite his many and loud protestations today, his decision to freeze child benefit yet again will be regarded as a niggardly move by millions of women throughout the country as it is the one benefit that has an uptake rate of 98 per cent. and is paid directly to the mother? If it is his intention to kill the benefit through death by gradualism, has the right hon. Gentleman made an estimate of when family credit will have reached the same level of take-up? When he brings forward his proposals on mobility allowance and attendance allowance, will he also be looking at the procedures for dealing with such claims, because it seems as if the authorities believe that they should pay as few as possible of those allowances? Where an appeal is made people are subjected to long, difficult and sometimes humiliating procedures in order to obtain payment of the benefits.
§ Mr. NewtonThe answer to the hon. Lady's last question is yes. It is something that I am conscious of and if we could find ways of improving the medical adjudication procedures nobody would be more pleased than I. However, I do not want to pretend that that will be a simple or quick task. The hon. Lady may be right to think that some people—indeed there has been some evidence in the House today—will regard my decision not to uprate child benefit as niggardly. However, it will not be seen as niggardly by, among others, those women who are caring for disabled people, severely disabled babies and others, as they will be receiving substantial benefit increases.
§ Mr. Robin Squire (Hornchurch)My right hon. Friend is a humane and intelligent man and that is reflected in the range of welcome initiatives in his statement. However, he knows that as a result of his statement, several hundred thousand families in difficult circumstances, on either side of the level of salary qualifying for family credit, will receive nothing for the third year in a row. Knowing that, and hearing the suggestions from both sides of the House on the necessity for change, will he accept the need to change the system if we cannot uprate benefits?
§ Mr. NewtonAgain, I note what my hon. Friend has said and the comments he is reported to have made in the newspapers this morning. I am grateful that he has acknowledged the scale and importance of what I have been able to do as a result of the decision not to increase child benefit this year.
§ Mr. Andrew F. Bennett (Denton and Reddish)Does the Secretary of State agree that his early reputation in the House was built on the championing of child benefit as a universal benefit? Does he not now find it humiliating to have to trample over his principles?
§ Mr. NewtonNo, I do not. I have never made any secret of the importance that I attach to helping families with children, but it does not follow that that can be given, at any particular point in time, priority over a whole range of other needs that I have also advanced in the House over the years, including those of disabled people. My main feeling is one of pride at having been able to make so many improvements for that latter group.
§ Mrs. Elizabeth Peacock (Batley and Spen)While I welcome greatly what my right hon. Friend has told the House and appreciate all the extra money that he has announced—we all recognise and welcome that the sum is £143 million per day for benefit—I am greatly disappointed that he has not found it possible to uprate child benefit. I appreciate that it is a universal benefit, but it is paid directly to the mother, and that is an important aspect. During the next six months, will my right hon. Friend look carefully at the take-up of family credit, to see whether he can raise that figure to as near as that for child benefit as possible? I shall reserve my judgment about opposing him until I see how he gets on.
§ Mr. NewtonI take some comfort at least from the last part of what my hon. Friend said. I assure her, as I have assured the House several times, that everything possible will be done to increase the number of people who take up family credit. The improvements that I have announced this afternoon will assist in that process.
§ Ms. Dawn Primarolo (Bristol, South)Why has the Secretary of State ignored the report of the Social Security Advisory Committee, which said that if child benefit was not raised, the Government's efforts to encourage single mothers back into the paid labour market would not succeed, and that the freezing of the benefit at the 1987 level would increase women's dependency on means-tested benefits and continue to trap them within the poverty limit?
§ Mr. NewtonI have not ignored anything, on this or any other front, that the Social Security Advisory Committee has said. I simply take a different judgment, certainly at the moment, about the right way to achieve the objective to which it also attaches importance.
§ Mr. Robert G. Hughes (Harrow, West)Does my right hon. Friend accept that many Conservative Members find it offensive that people on the salaries of Members of Parliament and other similar salaries are still receiving child benefit, and that we would prefer to see that money used to help people who are less well off? People who are not sharing their income fully with their wives and children should be thoroughly ashamed of themselves. Most people will welcome my right hon. Friend's statement that the people most in need will be helped most.
§ Mr. NewtonMy hon. Friend has at least clearly shown that there is more than one view. I have sought to strike a balance that best suits the needs of those whom we most want to help at his time.
§ Mr. Harry Ewing (Falkirk, East)I should declare my position as one of the few hon. Members who gives all his earnings to his wife. What she does not get, my daughter gets.
Does the right hon. Gentleman appreciate that this is the third consecutive year that child benefit has not been increased? If, in 1991, in the run-in to a general election, he thinks that he can use child benefit for an election bribe, he will find that millions of mothers simply will not forgive the Government for the treatment that they have had over child benefit in the past three years.
On a completely different issue, as some of the changes that the Secretary of State has introduced arise from the introduction of the social security changes in April 1988, will he look at another anomaly introduced by those changes? The Government increased the age limit for qualification for a widow's pension from 40 to 45. Many widows who receive widowed mother's allowance will go off that allowance before they are aged 45. Therefore, they will go from the widowed mother's allowance one day to nothing the following day. Will the Secretary of State look at this vexed question?
§ Mr. NewtonThe hon. Gentleman will know that we have acted already to deal with one aspect of the changes in widows' pensions which was widely regarded as anomalous. I shall examine with care what he has said, but I cannot give him any undertaking. As for child benefit, I have no plans to do anything other than what I have faithfully done this year, which is to review the matter in the light of the circumstances and the other things that I wish to do. That is what I shall continue to do.
§ Mr. SpeakerOrder. I must have regard to subsequent business. I shall endeavour to call hon. Members who have been rising in their places, but I ask for brief questions and not repetition of questions which have already been asked and answered.
§ Mrs. Maureen Hicks (Wolverhampton, North-East)I welcome the generous benefits that have been outlined, but I have to say to my right hon. Friend that I think that there is an inconsistency and a principle at stake in excluding yet again an uprating of child benefit. I remained silent during the previous two occasions on which we discussed the subject, but I have reached the point where I am conscious of those who do not apply for family credit, despite our wonderful efforts to encourage take-up, and of constituents who are not eligible for family credit. I hope that all the comments that my right hon. Friend has heard this afternoon will demonstrate clearly to him that there is a need to say honestly and openly that there is a clear-sighted policy for the future. The Government have always been recognised as being clear sighted, but we are now in danger of having muddle. We have a universal benefit that has not been upgraded and at the same time we have family credit. All that we are saying is that we look to my right hon. Friend in future to offer a clear policy.
§ Mr. NewtonI respect what hon. Friend has said and the reasons why she said it. I merely say that I think that it would be accepted on both sides of the House that under a Government of any colour it would be virtually inconceivable that child benefit could be set at levels that would give family credit families the same amount that they get from family credit. Wherever the line is drawn, 870 there will be a need, in my judgment, for a benefit of that sort. I think that it is right to concentrate on making it as effective as we can.
§ Mr. Nigel Griffiths (Edinburgh, South)Does the Secretary of State not realise that for the 10th year running the Government have failed to link old-age pensions to rising levels of incomes? Next year the Government will save about £5,000 million from failing to uprate the old-age pension, and that is enough to cover the package that has been announced today, the top tax cuts for the rich and this month's trade deficit, all on the backs of Britain's pensioners.
§ Mr. NewtonOver the 10 years during which the Government have presided, the range of our policies as a whole have increased pensioners' average net incomes far faster than under the previous Government. In recent months—indeed, during this very month and in parts of the package that I have announced—we have given additional help on a substantial scale to those who have not yet benefited from occupational pension schemes, for example.
§ Mr. Barry Field (Isle of Wight)In view of the demographic slump, my right hon. Friend's announcement on helping lone parents back into work will be widely welcomed. Can he tell me when he will be able to announce a decision on a local increment for income support for families, with young children, that have a metered water supply?
§ Mr. NewtonI cannot give my hon. Friend an off-the-cuff answer on the second part of his question. I am grateful for his introductory comment.
§ Mr. Max Madden (Bradford, West)May I urge the Secretary of State to launch an urgent investigation into the difficulties of elderly people and their relatives who are finding great difficulty in paying the difference between DSS benefit and private home fees? Will he instruct his Department to collect information about elderly people who are being evicted from private homes because they cannot afford to pay the fees? In that context, will he persuade councils, such as Bradford council, not to close council homes, whose places will be needed desperately for elderly people who cannot afford the fees of private homes or are evicted from private homes because they cannot pay the fees?
§ Mr. NewtonThe hon. Gentleman will be aware that payments from social security in that respect have risen from only about £10 million in 1979 to more than £1 billion this year, and I have announced further increases today. The hon. Gentleman would acknowledge that payments have never been set at levels that cover all the costs in all the homes. However, they do cover the majority of homes, and I think that that cover will be improved by what I have announced today. That is certainly the position that I expect next year.
We all know that the system has not proved to be an entirely satisfactory way of providing help, which is why, following the report of Sir Roy Griffiths on community care, the Government have changed to a different way of dealing with those needs. Meanwhile, I repeat that what I announced this afternoon will give significant further help to many tens, indeed hundreds, of thousands of elderly people.
§ Mr. Peter Thurnham (Bolton, North-East)I congratulate my right hon. Friend on a welcome and thoughtful package. I am glad that he did not delay bringing in the planned £100 million package for the disabled. He has done a fair job in his dealings with the Treasury, but we shall be looking for further benefits for the disabled when he introduces his White Paper.
Will my right hon. Friend remind Opposition Members that universal child benefit accounts for about half of the total family package? Does he feel that he now has the balance right between targeted and universal benefits?
§ Mr. NewtonIn an area where I appreciate so many of the difficulties and the needs, I should always be reluctant to claim that we have everything absolutely right. However, as a result of what I have said this afternoon the balance of the social security system will be improved, and not least in relation to the disabled, in whom my hon. Friend rightly takes such an interest. I hope that we have paved the way for further improvements.
§ Mr. Jeremy Corbyn (Islington, North)Will the Secretary of State take this opportunity to congratulate my hon. Friends the Members for Preston (Mrs. Wise) and for Coventry, South-East (Mr. Nellist) and all those who campaigned for attendance allowance for the parents of disabled children under the age of two? Is he aware that his statement will be profoundly disagreeable to millions of pensioners and that he must therefore return to the 1980 link between the old-age pension and earnings? That would give pensioners an increase of at least £8 more per week than he has announced today. Does he realise that they bitterly resent the way in which they have been robbed by this Government during the past decade?
§ Mr. NewtonObviously, I reject the suggestion in the latter part of the hon. Gentleman's question. I beg leave to doubt whether pensioners generally would feel that way about proposals that steer additional help to so many of them, especially when taken alongside the increases this month in the pensioner premiums for the over-75s and for disabled pensioners.
§ Mr. Andrew MacKay (Berkshire, East)Is my right hon. Friend aware that as most people rightly believe that benefits should be targeted towards those most in need, they will widely welcome his statement today? Is he further aware that they will think him right not to increase child benefit further, but instead to use the money on more urgent priorities?
§ Mr. NewtonI am grateful to my hon. Friend for what he said.
§ Mr. John McAllion (Dundee, East)Last week, the Home Secretary boasted that police pay had increased by 50 per cent. above the rate of inflation since 1979. This afternoon, the Secretary of State has yet again shackled pensioners to increases of no more than the rate of inflation and he has frozen child benefit for the third year running. Is he saying that in the real world, when choices have to be made, the Government choose to boost police pay at the expense of pensioners and mothers with families?
§ Mr. NewtonThe hon. Gentleman might care to reflect on the fact that under this Government, the real value of total expenditure on the long-term sick and disabled has 872 risen not by 50 per cent., but has doubled. With the introduction of family credit alone, we have pretty well doubled the amount spent on low-income families in work.
§ Mr. Kevin Barron (Rother Valley)Will the Minister answer the question asked earlier by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) about the widening of the likely recipients of mobility allowance to include those with the disabilities of hearing and sight loss? Will he take that even further and bring in mental handicap, too? I am sure that he is aware that many people feel that the system is grossly unfair and that an extension that does not include mental handicap is only half a job.
§ Mr. NewtonI am aware of the arguments that took place both in this place and another place during the passage of the social security legislation earlier this year. When I considered the matters I concluded that there was a clear-cut and relatively straightforward way of helping the deaf-blind. The other problem to which the hon. Gentleman referred is somewhat more complicated, but we shall consider it in the course of the review to which I referred.
§ Mr. John Fraser (Norwood)Does the Secretary of State recognise that most single working parents are women, and therefore not in receipt of average male earnings, and that in inner-city areas many single working parents face massive poll tax payments next year, massive rises in housing costs and high child care costs? The effect of freezing child benefit is simply yet another disincentive to women to stay at work or return to it.
§ Mr. NewtonMany single lone parents such as those to which the hon. Gentleman referred receive income support or family credit. As I made clear in my statement, the measures announced this afternoon will be helpful to many lone parents. Part of the aim of the family credit further take-up campaign is to ensure that it becomes even more helpful to many lone parents.
§ Mr. Brian Wilson (Cunninghame, North)Does the Secretary of State accept that on top of the poll tax and the cruel removal of all benefit from 16 and 17-year-olds, freezing child benefit confirms the Tories' growing reputation as the anti-family party? At the other end of the age scale is a matter of particular concern in my constituency about which I seek general elucidation. The Secretary of State gave the impression of generosity when he announced a £10 increase in income support for elderly people in residential homes. Will he confirm that the increase will be only £10—less than the rate of inflation? Does he accept that that will increase pressure on the proprietors of such homes who at present maintain people at a rate that does not cover costs and will lead to people being removed from homes when they have nowhere else to go? Does he accept that the Government's parsimonious policies are simply building up problems for the future?
§ Mr. NewtonI have already made extensive comments on that matter in response to an earlier question. The percentage increase represented by the £10 increase varies because of the wide variation in the existing limits. In the case of residential care homes for the elderly, which have 873 given rise to special anxiety in recent months, it represents an increase from £140 to £150, which cannot be dismissed as the hon. Gentleman sought to do.
§ Mr. SpeakerMr. Tony Banks.
§ Mr. Tony Banks (Newham, North-West)Thank you, Mr. Speaker. You are a hard man, Sir.
It is perverse of the Secretary of State to claim as a virtue the additional money being laid out by his Department this year given that his Government's policies have forced so many people into poverty in the past 10 years. Is it true that unprocessed social fund applications at departmental offices are carried over into the next year's budget rather than being taken out of the budget for the year in which the application was made, even if it shows a surplus? If so, it is grotesquely unfair and the Secretary of State must do something about it.
§ Mr. NewtonThe mechanism of the social fund involves having regard to the priority of a particular range of claims. In the next few months I shall consider how best we can set the allocations and divisions between local offices and between different purposes of the social fund in the light of our continued monitoring.
§ Mr. Robin CookMay I press the Secretary of State to say something about the cases of income support and transitional protection about which I asked him? He will be aware that not only have those people had their benefit frozen for three years, but some face a further freeze of another three or four years. Some of the most harrowing letters that I receive—and, I suspect, that he must receive—are from those caught in that trap. Whatever one's view about freezing benefits—and vigorous views have been expressed by hon. Members on both sides—there cannot be a case for freezing a means-tested benefit which is supposed to reflect costs. Will the Secretary of State ascertain whether such people could qualify for an uprating of their benefit?
§ Mr. NewtonIt is important that we should all recognise that just under 90 per cent. of those on income support will receive an increase in this uprating. Of the remaining 10 or 12 per cent., about half will receive a partial uprating. The need for transitional protection arose from our wish to protect people during what we thought was, overall, a sensible change in the social security system. People were inescapably involved in moving from the old system to one that, as my statement has shown, is better able to target money quickly and effectively on those in need. The hon. Gentleman also knows that steps have been taken to uprate transitional protection in some of the most difficult cases—those who previously had large amounts of domestic assistance or payments in respect of respite care.