§ 2.38 p.m.
§ Order of the Day for the Second Reading read.
§ LORD BOWLES
My Lords, I beg to move that this Bill be now read a second time. We are to-day considering a Bill which marks the completion of one more stage in the Government's review of our social services. When we took office in October, 1964, we took immediate action to make substantial improvements in the levels of existing benefits: National Insurance, war pensions and National Assistance. These increases brought our present system of social security benefits up to new high levels. Since then my right honourable friends the Minister without Portfolio and the Minister of Pensions and National Insurance have been considering very carefully whether, and how far, that system itself needs bringing up to date. It was, after all, a product of the war years and the difficult years that followed the war. The thinking behind it was rooted in the problems of the 1930s, problems associated with depression and mass unemployment. It would be surprising indeed if changes were not called for; and hardly to our credit as a Government or as a nation if we could not find the ideas and the resources to make them.
We are making them. The first big step forward in our modernisation of social security was the introduction of the earnings-related benefits for unemployment, sickness and widowhood. These benefits are designed for the better protection of those in working life faced with a sudden loss of earnings. They will start in the autumn. Here we take our next step: a Bill for the better protection of those who are among the poorest members of our community: the chronic sick and the handicapped and disabled, those who have never been able to work, fatherless families and, the biggest group of all, those of our old people who need 455 more than their retirement pensions or who have no pensions at all.
The mainspring behind this Bill is the need to do more for our old people. Your Lordships will remember that the Conservative Administration started a survey of the economic circumstances of old people. It was to their credit that they did so, although I believe it was the representations of my right honourable and honourable friends in another place which pushed them into action. The results of that survey, as your Lordships may know, were published a fortnight ago. It brought out only too clearly how poor are many of our old people and, equally important, how far our existing service for helping those in need is failing to protect them. I commend the Report of the survey as a major social document of our times—a portrait of old age in Britain in the 1960s. It is far from reassuring.
I will not bore your Lordships with a mass of figures. But consider these few facts: There are now 6½ million pensioners in this country. About 1¼ million of them are now getting National Assistance. The survey tells us that another 700.000 pensioner households—that is 850,000 pensioners all told—could have National Assistance if they applied for it. Over 100,000 of these appeared to have no resources to live on other than the retirement pension. No Government could be content with that situation. This Government are certainly not content. My right honourable friends have grappled with the problem over many months and have embodied their ideas in the Bill before us, and in the White Paper presented when the Bill was introduced in another place. I mention the White Paper especially because some of the most important developments are in administration and, therefore, are not in the Bill at all. I will come back to these later.
The Bill itself has two main purposes. First, in Part I, it creates a new departmental framework for the administration of social security cash benefits, with one Ministry of Social Security taking the place of the Ministry of Pensions and National Insurance and the National Assistance Board. Secondly, in Part II, it creates a new non-contributory benefit 456 to supplement the existing contributory benefits of the National Insurance and Industrial Injuries schemes, and it gives the benefits as of right. Parts III and IV of the Bill are subordinate to these main features. Part III is concerned with the recovery of the cost of the new benefit awarded to wives and families where a husband or father has a duty to maintain them and has failed to do so. It also provides for recovery where over-payments have occurred because of misrepresentation or non-disclosure of material facts.
Part IV is concerned, first, with two important components of the new administration: advisory committees for the new Ministry, and appeal tribunals for the new benefit. Secondly, it prescribes offences, and penalties, in connection with the new benefit itself and with the new Ministry: for example, for fraud and for the personation of officers. Thirdly, it re-enacts the existing law providing for re-establishment and reception centres. Finally, it deals with the necessary mechanics of legislation in this field, including provisions for Northern Ireland, consequential amendments to other enactments and transitional provisions.
It will, I think, be most helpful to your Lordships if I concentrate on the provisions of Parts I and II of the Bill, dealing with the new administrative structure and the new benefit, and on the Schedule which sets out in some detail the rules governing the new benefit. Your Lordships will be aware that when the Bill was debated on Second Reading in another place, special circumstances made it necessary for my right honourable friend to curtail much of what she intended to say in explanation of the Bill. It may be helpful, therefore, if I bring out some of the points which had to be omitted on that occasion. I do not, of course, want to trespass on your Lordships' time, but this is an important Bill and it is only right that Parliament should give it full consideration.
First then, Part I of the Bill. It sets up the new Ministry of Social Security and abolishes the Ministry of Pensions and the National Assistance Board. It sets up within the new Ministry a Commission which will be responsible for determining the claims made for the new benefits and carrying out certain other 457 functions under this Bill and under other legislation in place of the National Assistance Board.
Now it is easy to be misled—and I think some of your Lordships have perhaps been misled—into thinking that this just amounts to a bit of name-changing. For instance, the noble Lord, Lord Drumalbyn, said, when these changes were announced in March:This is, in essence—let us recognise it—a revamping of National Assistance. The Board is being abolished and a Commission is being substituted."—[OFFICIAL REPORT, Vol. 273 (No. 47), col. 927; 7/3/66.]But there is a great deal more to it than that. It is a fact that when this Bill comes fully into operation there will no longer be two separate Government Departments as there are now—the Ministry of Pensions and National Insurance and the National Assistance Board. There will be one Department and, in the fullness of time, one network of local offices. As the White Paper put it:In the future there will no longer be the sharp distinction which now exists in the administration of contributory and means-tested benefit".The Commission will not have anything like the separate, totally independent role of the present National Assistance Board. But neither will it be just "an advisory body"—the noble Lord Lord Ilford, used those words on 7th March [col. 928]. I think he will since have seen from his reading of the Bill that while the Commission will undoubtedly have an advisory role, it will have a positive real job to do. I doubt whether it has yet been fully appreciated how novel this structure is. There will he only one Ministry, with one Minister responsible for all the social security cash benefits, including the non-contributory benefit. The main rules governing the award of that benefit are set out in the Bill itself, and the Minister will be directly responsible for all the Regulations concerning their administration. But the handling of individual claims and the general guidance of the new scheme will be under the direction of the Commission, who will be a group of independent people, detached from the Government of the day and experienced in social affairs. In this way, we hope to gain for the new benefit the best of both worlds: it will be awarded as of right 458 under clear qualifications, and paid by the same Minister who is responsible for the National Insurance benefits—indeed, for old people it will be paid on the same order-books eventually. But it will retain the humanity and flexibility in administration which have been universally admired features of the administration of the National Assistance Board.
In this connection, I wish to draw attention to the words used in Clause 3(1) about the Commission, which, like the National Assistance Board at present, will have the duty of promoting the welfare of the people with whom it deals. Those of us who are familiar with the needs and problems of old people particularly those living alone, will know how important it is that under our social services we should not only provide the financial and welfare services that are required but also ensure that the old people make the best use of them. This matter of "welfare detection" is of vital importance. It is already being done effectively among nearly 1½ million old people by the officers of the National Assistance Board and there is every intention, not only that that work should continue, but that it should cover even greater numbers under the new arrangements.
Before I turn from Part I of the Bill, let me make two general points about the idea of combining two substantial Departments—the Ministry of Pensions and National Insurance and the National Assistance Board—into one Ministry. There are, as noble Lords opposite will no doubt be pointing out during the course of our debate, differences of opinion about how far the process of amalgamation of the social service Departments should go. I believe that noble Lords opposite would wish to go further than this Bill does and bring the Ministry of Health into the one Ministry as well. The Government take a different view. They see a real case—a practical, hard-headed case—for bringing together the Departments concerned mainly with social security cash benefits. The two Departments concerned each have a clientele largely overlapping the other's; each is concerned with making each week hundreds of thousands of cash payments, mainly through the Post Office; each has a local office network dealing with people and their claims to 459 financial benefits of one kind or another. In short, there is much common ground between the two Departments.
This does not apply in anything like the some degree to the Ministry of Health, whose main preoccupation must naturally be the National Health Service. We think the two administrations of social security cash benefits, on the one hand, and the National Health Service and the health welfare services, on the other hand, are best kept separate. But this is not to say, of course, that there must not be the closest possible liaison at all levels between the Department providing mainly money and the Department providing, through doctors, hospitals and the local authorities, mainly services of various kinds. There already exist good working relationships in the field between the local officers of the Board and the health and welfare services, and it is our intention not only to maintain but to improve them. We do not have to legislate for this.
My second point concerns the staff of the two existing Departments. When they are brought together in one Department we shall have a new Ministry employing over 56,000 people. The staffs of the two existing Departments have earned high reputations both for efficiency and for that courtesy and consideration which make all the difference to the people we are concerned with. Care must and will be taken to ensure that in the new Ministry the high standards of the two former Departments are maintained and, where possible, made better still. There will be the challenge not only of a new Ministry and of the new developments in local administration to which I have referred but also of establishing a new scheme of benefits in place of National Assistance.
I turn now to the benefits themselves, dealt with in Part II of the Bill. The Bill provides two principal benefits—supplementary pensions for those of pensionable age and supplementary allowances for other people. This is an important distinction which is reflected at other points in the Bill.
The basic principle which is set out in Clause 4 is broadly that a person is entitled to benefit if he satisfies the qualification that his resources are less 460 than his requirements as determined under the provisions of the Bill. What this means in simple language is that if the claimant's income does not come up to the standards laid down in Schedule 2 he gets a supplementary pension or supplementary allowance to close the gap. This requires, of course, as noble Lords will appreciate, that the claimant must give full details of his commitments, for example, his dependants and his rent and of his resources, whether of income or capital. This is a means-related benefit. Noble Lords will be only too familiar with the way in which a means test became an unacceptable idea in years past. But times have changed and there is a growing awareness of the fact that without a benefit of this kind we cannot make proper provision for many of our old people. It is of interest to note in this connection that the Survey of Retirement Pensioners, to which I have already referred, showed that a really big factor that has kept so many old people from applying for National Assistance is not dislike of the Board but ignorance or misunderstanding, and it is in order to deal with ignorance and misunderstanding that the rules for the assessment of benefit have been completely recast.
Your Lordships will not, I think, want me to go into the details of Schedule 2, but I should like to make some general comments on it. The rates of income requirements are set out in Part II of that Schedule. These give the basic standard to which the claimant's income is brought. Leaving aside the rates for children and persons under 21, there are three main rates: for a married couple £6 13s., for a single householder £4 1s., and for other single persons £3 9s. per week. These are the basic rates for supplementary allowance claimants—that is, for people under pension age.
For people over pension age, and for those who have been two years in receipt of a supplementary allowance other than the unemployed, the figures I have mentioned are increased by what we call a long-term addition of 9s. a week. So, for a supplementary pensioner the income standard is to be: for a married couple £7 2s. a week; for a single householder £4 10s. a week; for other single people £3 18s. a week. Rent is added to these amounts. For the married couple and the single householder the amount added 461 will normally be the full net rent or, if the accommodation is shared with other adults, the proportionate share of it. For the non-householder, that is the person who is living as a member of someone else's household and is not, therefore, directly responsible for rent himself, the addition for rent will be a standard figure of 10s. A few examples may be of interest here. First, a retirement pensioner living alone and paying a rent of £1 10s. a week. His income standard will be £6 a week. Secondly, a married couple, where the husband has been sick for more than two years, or where he is over pension age, and the rent is £1 15s. per week. Their income standard will be £8 17s. a week; and thirdly, a separated wife with three children aged 3, 7 and 12, and paying a rent of £2 per week. Her income standard will be £10 7s. 6d. a week.
The main innovation in these income standards is the long-term addition of 9s. a week, and it may be helpful if I say a little more about it. I have already referred to the fact that one of the obstacles to acceptance of National Assistance was ignorance or misunderstanding. One of the reasons for this misunderstanding is that special needs, particularly of old people are met by a system of discretionary additions. These additions involve detailed enquiries into all kinds of quite small expenses and these in themselves may give rise to misunderstanding and apprehension; but, more important, the old person cannot know in advance whether he will get such an addition and, therefore, cannot know what he is due to get by way of a payment. The long-term addition makes a substantial contribution here. It will enable us to dispense with the detailed enquiries in every case which have to be made under National Assistance, and it will enable the old people especially to know more clearly where they stand. This means that, as was said in the White Paper:…an old person living alone as a single householder will have a guaranteed income after he has paid his net rent and rates of £4 10s. a week. For a married couple the figure is £7 2s. after payment of net rent and rates".My Lords, I can anticipate a question in your minds here, as to how the figure of 9s. was arrived at. The answer is that it is about the average of the discretionary additions now paid over the year 462 as a whole under the National Assistance scheme.
I want also to bring to your Lordships' notice that where there are special needs of more than 9s., the Commission will have no less power than the Board has to make further provision. And the Commission will have the same powers under Clauses 7, 13, 14 and 17 of the Bill as the Board has now to deal, under discretionary powers, with any exceptional situation; for example, where a lump-sum grant is needed for, say, bedding, or where benefit is better paid in kind or to a third party. There is, however, an important difference about the supplementary pension. The Commission may increase it to meet exceptional circumstances, but they may not reduce it. Taken together with what I was just saying about the effect of the long-term addition, this makes it a reality that for old people this Bill provides a form of guaranteed income to which they have a clear entitlement.
Take two of the cases I have just mentioned. There was the retirement pensioner, living alone and paying a rent of £1 10s. a week, whose income standard is £6 a week. If his retirement pension is £4 a week, and he has no other resources, he will have a clear entitlement under this Bill to a supplementary pension of £2 a week to give him his guaranteed income of £6. Similarly, in the case of the married couple I mentioned, paying a rent of £1 15s. a week, whose income standard is £8 17s. a week, if they have only their retirement pensions of £6 10s. a week and no other resources, they are entitled—I repeat, entitled—to a supplementary pension of £2 7s. a week, to give them their guaranteed income of £8 17s. Of course, if in the cases I have just mentioned, the claimant has some other kind of income or capital, he will be better off.
This brings me to the rules in Part III of Schedule 2 for the treatment of resources.
§ LORD DRUMALBYN
My Lords, before the noble Lord leaves that question (and no doubt he would like a little rest at this time, anyway), he has been talking about the old people, but Schedule 2 says that a supplementary allowance may be reduced below the allowance so calculated, or may be withheld. Is this 463 in relation only to the wage-stop, or does it apply more generally?
§ LORD BOWLES
As at present advised, I believe it applies to the wage stop only. But no doubt my noble friend Lord Sorensen, when he comes to reply, will be able to clear up that point for the noble Lord.
As I was saying, this brings me to the rules in Part III of Schedule 2 for the treatment of resources. The aim here has again been the dual one of clarifying entitlement, so that people can know where they stand, and of replacing the existing complex provisions by more standardised rules. Noble Lords may think that Part III of Schedule 2 is hardly a child's guide. It looks rather full of detail. This is necessary if we are to have clarity. But the broad effect of these rules can be quite simply summarised. First, the rules for capital. An owner-occupied dwelling is ignored. So is the first £300 of other capital. Thereafter, capital is converted into income, under a tariff of Is. a week for £25 up to £800, and 2s. 6d. a week per £25 thereafter. So £800 capital is treated as an income of £1 per week.
My Lords, before the noble Lord leaves that point, may I ask what is the basis of that particular calculation? I find it puzzling, because it assumes that the pensioner is getting 10 per cent., tax-free, on his money on sums between £300 and £800, and no less than 25 per cent. if he has over £800.
§ LORD BOWLES
My Lords, the £800 is capital, not income, so £800 capital is treated as being income of £1 per week.
Supposing that his £800 capital was completely idle and was earning nothing at all, he would have quite a large sum deducted from his entitlement in consequence, because it is assumed that sums between £300 and £800 are earning 25 per cent.
§ LORD BOWLES
I do not think the noble Lord has that right, but I will look into it; and if I am wrong, I will let him know.
Now, the rules for income. The main National Insurance benefits, family allowances and maintenance payments are taken fully into account. Everything else 464 is eligible for a disregard up to a limit. Earnings are disregarded up to £2 a week for each person, except where the claimant has to register for work: the disregard for him is 20s. Disability pensions of all kinds are disregarded up to 40s. a week. So are part of the children's allowances payable to widows and part of war widows' and Industrial Injuries widows' pensions. All other income, including tariff income from capital, is disregarded up to 20s. a week, subject to an overall limit of £2 on disregards of all kinds apart from earnings.
I should like to bring particularly to your Lordships' attention the facts that there are now no fixed limits to the amount of capital a person may have and qualify for benefit, and that by the device of converting capital over £300 into income, for this purpose, under the capital tariff, we will now allow a bigger disregard of capital altogether for people with no other resources. This is because the tariff income qualifies for the disregard of up to 20s. A person with no other income subject to disregard can have up to £800 wholly ignored. It will, I hope, be clear to your Lordships that the income standards I previously referred to are more accurately described as minimum income standards, for under these rules many people will have an income of up to £ 1 or £2 a week more, and may have substantial savings as well.
If I may return for a moment to the basic principle of assessment, which is to deduct resources from the income standards and pay the balance, if any, I draw attention to the rules in paragraph 2 of Schedule 2 which govern the amount actually payable after that calculation has been made. The first rule says that if the deficiency is less than 2s., benefit will not be paid, and the second rounds the sum payable to the nearest Is. The reasoning behind these rules, which are not new, is, I think, plain enough: it is better for all concerned not to be involved in trifling sums. There is, however, a technical point arising on this paragraph in relation to cases where noncontributory benefit is paid on the same instrument as a National Insurance benefit. The Parliamentary Secretary referred to this during proceedings in another place, and said that we might need to consider some Amendment during your Lordships' consideration of 465 the Bill. I think I should tell your Lordships that an Amendment will in fact be needed, and that we shall put it down as soon as possible.
Before leaving Part II of the Bill I ought to say to your Lordships that the provisions of Clauses 8, 9 and 10, dealing with exclusions and disqualifications, follow existing practice. I have not, therefore, thought it necessary to dwell on these, because they involve no new policy. As to the other clauses to which I have not yet referred, two of them are particularly of interest.
Clause 18 provides a right of appeal to a local tribunal against any decision of the Commission on a claim for benefit or on related questions concerning a claim—for example, whether the claimant should be required to register for work as a condition of receiving benefit. A right of appeal is important, the more so in a scheme of this kind which gives benefits as of right but also gives the authority determining the claim—that is the Commission—certain powers which it exercises at its discretion. The tribunal will have the same powers in dealing with an appeal as the Commission will have in dealing with an ordinary claim.
Clause 21 brings a chapter of social history to an end by terminating the last remnant of the old non-contributory old-age pension scheme, which dates from the very first measure of social security for old age put on to the Statute Book, the Old Age Pensions Act 1909. In referring to this I must draw your Lordships' attention to the fact that there are specific provisions in the Bill (paragraphs 4 and 7 of Schedule 7) which enable us to ensure that no one, either as a consequence of this clause or of the repeal of some other old features of the National Assistance Act, like the war savings provision, is any worse off than at present.
Now a brief word about Pants III and IV of the Bill. As to Part III, its five clauses are in most respects similar to those of the National Assistance Act. They are concerned first with the recovery of payments of benefit from husbands who have deserted their wives, and from the fathers of illegitimate children; and, secondly, with the recovery of over-payments which arise as the result of a claimant failing to give a true and accurate account of his cir- 466 cumstances. One regrets, of course, that such provisions are necessary, but it would be foolish to suppose that there will not be attempts to obtain money under the new scheme on the strength of false statements, or that certain husbands and fathers will not attempt to avoid meeting their responsibilities. The sums of money at issue in this latter group are substantial and may be of interest to your Lordships. In 1965 the National Assistance Board were paying at the rate of over £40 million a year to separated wives, mothers of illegitimate children and divorced women. The yearly value of payments received from the liable husbands and fathers was less than a quarter of this sum.
Part IV of the Bill contains mainly provisions which are naturally consequential to the provisions of Part I abolishing the Ministry of Pensions and National Insurance and the Board as separate Departments. I wish to comment briefly on three of these. Clause 27 provides for local advisory committees for the new Ministry. These new Ministry of Social Security committees will replace the existing separate local National Insurance and National Assistance advisory committees. There will thus be a unified network of local committees whose concern will be with the administration of both National Insurance and non-contributory benefits. I ought perhaps to emphasise the word "local" in this clause because, of course, the Minister will have quite separate central bodies to turn to for advice on matters of policy. In the field covered by this Bill there will be the Commission itself; and there are in the field of National Insurance the existing National Insurance Advisory Committee and the Industrial Injuries Advisory Council which, of course, continue. The separate War Pensions Committees are unaffected by the Bill.
Secondly, there are innovations in Clauses 31 and 32. When the Bill becomes law it will become an offence to personate an officer of the Ministry with intent to deceive (Clause 31), or for a person to take any order-book issued by the Ministry into his possession as a pledge for a debt (Clause 32). These provisions are needed to deal with two very real problems at the moment: inquiry agents who pose as officers of the 467 Ministry of Pensions and National Insurance in order to get information, for instance, from a man's employers; and unscrupulous salesmen who persuade women to pledge an order-book (for instance a family allowances order-book) as security for instalments of payments due on goods or for loans at a high rate of interest.
Finally, Clause 34 provides that the Commission shall take over from the Board the administration of re-establishment and reception centres, though they will be running them on behalf of the Minister of Social Security, and under his general directions. The clause otherwise simply re-enacts the provisions of the 1948 Act. But this is not to say that there will be no progress on the matter of dealing with the problem of the homeless. As your Lordships will know, a national survey has been undertaken to find out the size of the problem and its nature as a preliminary to the Government's considering whether further action is needed, and, if so, what form it should take.
I undertook, earlier on, to say something about the administrative changes which will be complementary to the Bill and which, I think your Lordships will agree, will make a valuable contribution to the solution of the problem the Bill sets out to deal with. These changes were referred to in paragraphs 23–25 of the White Paper. There are four particularly important ones. First, the procedure for claiming will be more flexible than under the present system, since an old person will, if he wishes, have the opportunity of making a written declaration of his circumstances instead of being visited at home. Frankly, taking the scheme to old people in their own homes will, I am sure, seem to most of us the sensible and most considerate way of administering it, and most old people seem to welcome the officers' visits. But the fact is that there are people who prefer it otherwise, and no one wishes to make a home visit an obstacle to a pensioner getting the non-contributory benefit he is entitled to. That is the reason for this innovation. In the nature of the case, there will have to be a confirmatory interview, but this can take place in the office if need be. This arrangement comes into force immediately the new scheme of benefits is introduced.
468 Secondly, there is the proposal to pay supplementary pensions on the same book as retirement pensions. So that whether a person has only a retirement pension, or a retirement pension and a supplementary pension, he will in due course be paid on the same kind of book, and there will be only one book. The attractions of this are, I am sure, obvious. The administrative difficulties of doing it are, I imagine, not so obvious to your Lordships, but they are very real and it is for this reason that the scheme of single books will start—as soon as possible—on a pilot basis.
Thirdly, the supplementary pension will be administered on the basis of annual renewals; that is, once a year the local officer will be asking the pensioner for a renewal declaration of his circumstances, on the basis of which his pension will be continued or adjusted to meet any changed circumstances as appropriate. This will be a welcome simplification and will put old people in the position of knowing that for a year ahead they have, unless their circumstances change materially, their guaranteed income.
Finally, there will be new arrangements introduced as soon as possible to follow up those who have just retired or have become widowed in retirement by reminding them of the supplementary pension scheme and inviting them to make a claim. If they fail either to claim or to say that they do not wish to, the Ministry will arrange for a personal contact. This kind of personal interest may perhaps be among the most effective ways of ensuring that in the future those who have a title to supplementary pension will claim it.
My Lords, this is a Bill which will, I think, command general support. It is humanitarian in its aims and will confer additional benefits on a large number of people. Given the approval of Parliament in time it will come into operation before the end of the year. In my submission the introduction of this Bill is evidence again of the determination of Her Majesty's Government, with the willing support of the people, to ensure that we do the very best we can for the fatherless families, the handicapped and disabled, the sick and the old. These are the people—some three million of 469 them—whom this Bill will help. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Bowles.)
§ 3.15 p.m.
§ LORD DRUMALBYN
My Lords, the noble Lord is quite right, I am sure, in thinking that what he has said to-day and this Bill will commend itself in general terms to your Lordships. I should like to thank him straight away for his very full explanation of the Bill. As he said, he has been able to fill in some of the gaps which it was not possible for the Minister in another place to speak about, owing to shortage of time and the circumstances there. Before I come to my comments on the Bill, I should also like to welcome to our debate to-day the noble Lord, Lord Taylor of Mansfield. He and I have exchanged ideas from different sides of the House many times in another place, and I have always appreciated his courtesy and humanity. I would also welcome to our own Front Bench my noble friend Lord Windlesham, who is to wind up the debate for this side tonight.
As I understand it, there are five main practical purposes to be achieved by this Bill to which the noble Lord has referred. The first is to raise the basic assistance scales for requirements. The second is to raise the amounts and types of income to be disregarded in calculating the amount needed to bring income up to the requirements level. The third is to revise the way in which capital resources are treated in assessing need. The fourth is to modify some of the procedures which are thought to deter people from applying; and the fifth is to take steps to encourage and help those who are eligible for assistance, but do not apply for it, to do so. These are the main practical purposes of the Bill, and with all those proposals we agree; indeed, if I may say so, we commend them.
I do not propose to examine these changes in detail at any rate, at this stage. What I should like to do is to try to focus attention on what seem to be the main underlying issues and then to ask the noble Lord several questions (though some of the questions I was proposing to ask he has already answered) about the way in which the proposed arrangements are intended to work. First, 470 I would refer to two general problems. For many years now National Assistance has not been expected, if it ever was, to provide by itself enough to live on. It is recognised that National Assistance benefits must invariably be supplemented by payments to cover rent and rates if an acceptable level of income is to be provided for those with little or no other resources than National Insurance benefits or pension. I venture to give one or two figures. At the end of 1964, some 23.3 per cent. of all retirement pensioners, including widows over 60, were receiving National Assistance allowances of one kind or another, 13.4 per cent. of those on sickness benefits, 15.3 per cent. on unemployment benefit, and 14.6 per cent. of widows under 60.
The first problem is how to ensure that everyone is aware that if he has little or no resources, apart from his National Insurance benefit or pension, he is entitled to a supplement to cover rent and rates, in addition to income from the National Insurance Fund. The results of the inquiry into the circumstances of retirement pensioners, to which the noble Lord referred, have just been published, and they reveal that, of National Insurance pensioners as a whole, a large majority have some income, in addition to their National Insurance pension: as one would have expected from the previous figures, eight out of nine married couples; three out of four single men, but only two out of three single women. The older the person is, however, the less likely he is to have any outside income. Of single women, only two out of five of those between 75 and 80 have any; and of those over 85 only one in two. It follows that there is a case for an addition to the requirements of the very old, say those over 75; that is, an extra payment over and above 9s. that is proposed to cover the usual extra requirements of all retirement pensioners. This is something about which we can argue in Committee, and I leave the matter there for the present.
This is a question affecting those who do apply for assistance, but what of those who do not? As the noble Lord said, it is calculated there are about 850,000 pensioners, or 700,000 households, who would receive assistance if they applied. Of those, there were about 250,000 households, or 300,000 pensioners, where either 471 there were no resources other than retirement pension or there was a gap of 5s. or more between resources and requirements only partly bridged by amenities or facilities in the households in which they were staying. The number with no resources at all was, perhaps, 85,000 households. I think the noble Lord said 100,000 pensioners, but we need not argue about that. At all events, it is as well to get the programme in focus.
There is no inherent difficulty in notifying people, as they become entitled to retirement pension, of their right to supplementary payments if they need them. Indeed, this has been done for some time. I am glad that the Government intend to go further and ensure that at that point every individual new pensioner is contacted personally—unless, presumably, they say that they do not want to be. But there is greater difficulty in discovering those already receiving pensions who are entitled to supplements but have never applied for them, whether because they prefer to manage on what they have, or because of pride, or because, as the noble Lord said, they simply do not understand that they are entitled to supplements. Proportionately, there are far more of such people in the oldest age groups. Incidentally, as the noble Lord also said, only a small proportion have said that they dislike going to the National Assistance Board. I hope that as soon as the new provisions are brought into effect the new Ministry will start by sending to every retirement pensioner not at present receiving supplements a letter explaining, simply and clearly, what they may be entitled to, and what steps to take if they think they are. But here again, writing is probably not enough, and individual visits will be needed.
The second point I want to make is this. There is a still greater difficulty in discovering those in need who are not receiving either National Insurance pension or National Assistance benefit, but who would be entitled to it if they applied. These are the people that my noble friend Lord Colville of Culross was concerned about and sought to help in the Bill which he introduced a year ago. That is the second great problem, as I see it—and the more difficult and more urgent, in the sense that these people are all getting on in years; they are all over 472 70. I cannot find any new proposals in this Bill or in the White Paper to identify these people. If I understood the noble Lord, Lord Bowles, correctly, he said that the work of seeking out would be intensified. But I doubt whether many will be induced, merely by changes in what the allowances are called, to identify themselves and to apply for them, unless and until they are forced by severe hardship to do so.
I recognise that the Government are anxious to reduce the resistance and misunderstanding which have deterred some old people—and, indeed, some younger ones—from applying for supplementary payments. It is the Government's intention that supplementary payments should be made in exactly the same way and through the same payments book as the National Insurance benefits. That is the intention. But first, as the noble Lord has said, and as mentioned in paragraph 24 of the White Paper, there is to be a test through a pilot scheme. Secondly, with the object of removing any taint or slur attaching to the acceptance of National Assistance, supplementary payments are to be described as "benefit", and the National Assistance Board is to disappear, its functions being absorbed into the Ministry of Social Security.
I want to make it clear that in seeking to remove reluctance on the part of those in need to apply for supplements the Government have, and will continue to have, our fullest support. At the same time, while accepting that these steps will have some beneficial effect, I suggest that we ought not to overrate it, and that we should consider any limitations and disadvantages in the steps proposed. In my view, the real resistance to accepting National Assistance has not arisen from the name "National Assistance", or from confusion with Public Assistance, or from dislike of the National Assistance Board, or from the fact that supplementary allowances are payable on a book separate from a National Insurance book, though latterly quite similar in appearance to it. In my view, the resistance is due mainly to the necessity to prove need and to the test of means applied in assessing it.
The Labour Party in Opposition made much political play with the test of means. They tried to get round it in their scheme in New Frontiers for Social Security, which envisaged an "income guarantee", 473 the object of which, to quote from pages 18 and 19 of that document, wasto remove, within a short period, all pensioners from National Assistance except those with very high rents or other special needs.It continues:In the first year, the Guarantee will be fixed at a figure well in excess of the present level of retirement pension. It will then be increased by annual increments, so that at the end of the transition period it will be high enough to remove the great majority of pensioners from National Assistance.There is nothing in the Bill about that last sentence.
Broadly, what the Bill does is to raise income requirements to approximately the same level as National Insurance, just slightly more, and then to add 9s. to those requirements, for any person over retirement age or anyone who has been out of work for two years and whose needs fall below the National Insurance level. As the noble Lord has said, such people will receive a minimum of £4 10s. if single and £7 2s. if married. The Bill also enables the Minister to increase the requirements in Part II of Schedule 2 by regulations, subject to approval by each House—a point which I do not think the noble Lord mentioned.
I must ask the noble Lord who is to reply to this question: Is it the intention of the Government to use this power to increase the minimum in the Bill by annual increments, not merely to keep pace with the cost of living, but to raise the level in real terms to the point where the great majority of pensioners will no longer need allowances? Whatever may be the Government's intentions for the future, it seems they have come to realise that there is no way of dispensing with a means test if we are to meet real need without spending public money where there is no real need. I am not saying that in no case should public money be disbursed without proof of need. Family allowances are an example. And my noble friend Lord Colville of Culross's Bill provided for payments to be made as of right, without test of means, to the very old, as being the only way of reaching those in need who are old, and as a measure of compensation for the losses which inflation has inflicted upon so many of them.
It would be churlish to suggest that in this Bill the Government have not tried to encourage those old folk who are 474 receiving neither pension nor assistance to apply for supplementary payments, although, as I have said, there seem to be no new means in the Bill of seeking them out. I am sure we are all in favour of saving those in need trouble and embarrassment. For my part, I shall be glad if payments can be made in one book, so that those who see the payments being drawn in the post office will not know whether they are contributory or noncontributory. I also welcome the steps proposed to avoid, so far as possible, investigation into the old person's special needs, provided of course that they do not mean he may be deprived of payments he requires. What I am a little concerned about is the average which the noble Lord mentioned. I know that he mentioned this only as a reason for taking 9s. as the figure; but it is just possible that people, having got the 9s., may be a little more reluctant to apply should they need more than 9s. I mention that in passing.
What I am not so sure about is the wisdom of trying to blur the real distinction between contributory and noncontributory benefits. Anyway, in nine cases out of ten, the man behind the counter in the post office will know. The way in which the Bill seeks to blur the distinction is by using, for the first time, the word "benefit" to cover both contributory and non-contributory payments. So far the distinction has been maintained. For what it is worth, "benefit" is defined in the latest edition of the Oxford Concise English Dictionary asallowance, pension, attendance to which pension is entitled under National Insurance Act or as member of benefit society, etc.In other words, "benefit" is something obtained in return for contributions made either by oneself or on one's behalf. Of course, words are constantly changing their meaning, and the Minister could no doubt reply, with Humpty Dumpty, "When I use a word, it means just what I choose it to mean." Unfortunately, as your Lordships will recall, a few minutes later Humpty Dumpty fell off the wall with a "heavy crash which shook the forest from end to end." There is really much more in this than the proper use of language.
§ LORD BOWLES
My Lords, I was going to say something about this, but if I had it would have made my speech 475 somewhat longer than I intended. If the noble Lord, or any noble Lord, suggests another word, or name or title, we shall be happy to consider it.
§ LORD DRUMALBYN
I am grateful to the noble Lord, because I think there is more in this than simply the proper use of language. The blurring of the distinction between contributory and noncontributory payments could have a significant effect on the attitudes, efforts and morality of our people. I recognise that there is a real dilemma of policy here. On the one hand, an object of national policy should be to ensure that nobody is in need. The trouble is that need is relative. Even in so far as the concept of need can be generalised, it is constantly changing. On the other hand, an object of national policy should be to encourage everyone to make sufficient provision for himself, including contributory pensions. Here the important thing is to make it worth while for people to save, and to do everything possible to ensure that their savings retain their real value. The dilemma is that the more generously the State provides for people's needs through non-contributory payments, and the easier the State makes it to obtain such help, the greater is the temptation for people to rely on that provision rather than to provide sufficiently for themselves.
This is a dilemma and, as with all dilemmas, you have to jump through the horns somehow or other. For this reason I must express my doubts whether it is right that payments to meet need should be described by the same word as benefit provided in return for contribution; and I shall certainly respond to the noble Lord's invitation and do some hard thinking to see whether we can find a more appropriate word. If people are to get unearned allowances without any distinction at all from earned benefits, will they not come to believe that their contributions and benefits are in no way related; that they owe their benefits to the party and the State and not to the contributions that they and their employers have made?
The Bill abolishes the non-contributory Old Age Pensions Act; yet it seems to be taking a step backwards—it may have been inadvertent—to the beginning of the 476 century. We may not be deluding ourselves about this, but we ought to ensure that others are not deluded. In my view, there is a distinction between what one has a right to by one's own efforts and by the contributions of oneself and one's employer, and what one has a right to because at some point in time Parliament says so—a distinction which is no less real if it is not explicit in the artificialities of law. It is for this reason that Iregard with very considerable misgiving the misuse of the word "benefit"—or, if you will, the extension of its meaning. I doubt very much whether it will have much effect in persuading non-pensioners who resent the means test to submit themselves to it. Moreover, this is essentially a transitional problem which ought to be dealt with by transitional provisions. I fear that it will have adverse long-term effects on the national outlook. Those that I can for-see seem to me undesirable. Nobody can foresee all the long-term effects, but I doubt whether many are compatible with the social security policy which the Government are pursuing.
This leads me to the merging of the Ministry of Pensions and National Insurance and the National Assistance Board.
§ LORD MITCHISON
My Lords, would the noble Lord allow me to put a short point to him? He talked about earned benefits and about money that was won by the man's or woman's own efforts. Is he not forgetting that National Insurance benefits derive not only from the man's contributions, but from those of the employer and those of the State?
§ LORD DRUMALBYN
My Lords, I did mention the contributions of the employer. As to the contributions of the State, it is a fact that the State contributions were really designed to make up for the fact that many people were going to get benefits they had not earned by their actual contributions on an actuarial basis, even though they were entitled to them.
I now turn to the merger. How far will this have any real impact on the public? The Minister in another place gave three reasons for this: first of all, the co-ordination of policy for all social security benefits; secondly, ensuring that 477 those receiving contributory benefits would also get non-contributory benefits to which they are entitled; and, thirdly, the development of a new comprehensive service for the public so that inquiries across the whole range of social security benefits can be dealt with at one point of contact. There really is nothing in the first point. The Minister has always coordinated policy. It is the Minister who is responsible to Parliament for regulations under the National Assistance Act, and in general for the policy of the National Assistance Board. Where the National Assistance Board is independent is in the exercise of its discretionary functions; and the Commission which is to take over those functions is apparently to have the same degree of independence in exercising them, and rightly so.
The truth is that, in my experience, which is a short one, the physical separation of the Ministry and the National Assistance Board has involved certain obvious handicaps, at least for the Ministry. It is much more important, in my experience, that they should be together in the same building than that they should be merged. The question is not whether the Minister will co-ordinate policy—he has to do that in any case—but whether the Minister and the Chairman of the Commission and their respective civil servants will work together as a team. Marriage without cohabitation is apt to be incomplete and unproductive. I therefore ask the noble Lord whether the Commission will be housed under the same roof as the new Ministry. The noble Lord mentioned that it was the intention in the long run that there should be one single network of offices throughout the country covering both the old National Assistance activities and the National Insurance activities, but will the Commission be housed under the same roof as the new Ministry?
The second reason given for amalgamation is to ensure that those receiving contributory benefits will also get noncontributory benefits if they are entitled to them. But that does not need amalgamation at all. Provided that those administering the supplementary payments are told who is getting contributory benefits and what they are getting, they can ensure that perfectly well for themselves. The third reason is the development of a comprehensive service 478 to the public through one point of contact for each person. What is that point of contact to be, even once one has got the two branches together? Will the noble Lord confirm that it is bound to be the local representative of the Commission? Is it to be the same point of contact for widows and retirement pensioners and for those drawing sickness benefits? What is the point of contact to be for those drawing unemployment benefit, who will at present go elsewhere? And what about the war pensioners? Is there to be one point of contact for them as well? I ask these questions because the administrative problem here seems to be much greater than is usually involved when Departments are amalgamated, and indeed bears much more closely on the public. I wonder how long the Minister estimates it will be before the merger is completed throughout the country? I am not talking merely of getting together in a single premises, but of how long it is going to be before the new set-up is being fully operated.
Before I finish, I will say two more things about the merger. There are two ways in which it could have been done. One way is that set out in the Bill. The other is to set up a National Insurance and National Industrial Insurance Commission as well as a Supplementary Benefits Commission, or perhaps three separate Commissions; war pensions would remain under the Minister. When I was considering the problem I inclined to that solution, although, needless to say, I received little encouragement for that idea from the Ministry itself. The point is that National Insurance is not so much an executive as a planning and supervisory function. It is not the Minister who decides the benefits to which contributors are entitled. It is the local insurance officer, who enjoys a virtually independent status. Appeal from his decisions lies not to the Minister but to an appeal tribunal and thence to the Commissioner. So the sort of questions the Minister decides, or those decided on his behalf, are much more limited. It seems to me, therefore, that the administrative functions of the National Insurance scheme could easily be put in the hands of a Commission, leaving the Minister to co-ordinate policy, carry out surveys, and so on.
That leads me to the second point to which the noble Lord referred. Ought 479 not one Minister to be responsible for co-ordinating the policy on health, welfare and social security as a whole? Ought there not to be one point of contact at which guidance on all the needs of the citizen could be given? At the last Election the Conservative Party advocated:combining the Ministry of Health, Ministry of Pensions and National Insurance and National Assistance Board into a single department, with local officers who would have a positive duty to seek out those needing help whether in cash or care. The new department would have a research organisation to pin-point changing needs.The Government have come some way towards that policy and have discarded some of the impractical fallacies which they advocated when in Opposition. But there is a need for continuing and coordinated research covering all branches of welfare and social security.
I think I have said enough to make it quite clear that the Opposition are in general sympathy with the proposals in the Bill, and to indicate the particular doubts and misgivings which I feel. I should have liked to see more done for the chronic sick: I still believe that the Government missed an excellent opportunity to do something for them in the Act which we passed in March, providing for earnings-related benefit for the temporary sick and unemployed. I still think that benefits for those struck down by lasting disease in the prime of life should be related to their past earnings. As the Bill stands, it is only when a person has been laid aside for two years that he will get even the additional 9s. without test of special need. No special provision seems to be contained in the Bill for the disabled and the chronic sick, apart from the blind. This, also, is a matter which we shall want to look into further.
I do not propose to talk about the wage-stop, because I do not myself believe that it could have been dealt with in this Bill: but I believe that it should be dealt with in conjunction with it. It is clear that the increases provided for in this Bill will widen still further the gap between what the low-wage earner with a large family is receiving and what he would have received but for the wage-stop; and it will increase the numbers affected by it, 480 which emphasises the need for action to be taken. To me, the most disappointing feature of the Bill is the absence of any special provision for those who were excluded from National Assistance and have seen the real value of their capital and income dwindling away as the cost of living rises and the value of Government securities falls. These old people will be the most difficult of all to persuade to apply for assistance, call it what you will.
Finally, I should like to pay my sincere tribute to the National Assistance Board, which has done a splendid job over the years in helping the needy, in rehabilitating those who had lost confidence and self-respect, and in distinguishing between the genuine and the not so genuine cases. I could not praise too highly the work of my noble friend Lord Ilford, Chairman of the Board for ten years. He has a wise head and a soft heart and his knowledge and experience are unrivalled. I hope that the merger will not mean that this admirable organisation of skilled and devoted people is to be broken up, but that the Commission will carry on where the Board leaves off. I feel that your Lordships would wish me to express our thanks to the noble Lord, Lord Runcorn, and the Board and to wish its successor well.