HL Deb 21 July 1967 vol 285 cc576-86

2.40 p.m.

LORD SORENSEN moved, that the Draft Supplementary Benefit (Determination of Requirements) Regulations 1967, laid before the House on June 28, 1967, be approved. The noble Lord said: My Lords, it is now some eight months since the new scheme of Supplementary Benefits was introduced in place of National Assistance. The object of the new scheme was to provide a noncontributory benefit to which there was a clear, statutory entitlement, with straightforward rules so that older people, in particular, should the more easily understand, and so be encouraged to claim, what was their right. Judging from the response so far, the new scheme has enjoyed a very real measure of success. There are now some 430,000 more people over pension age receiving a supplementary pension than were receiving assistance before the new scheme, and altogether over 2,600,000 weekly benefits are currently in payment. These are arresting figures because they indicate that large numbers of people either could have secured assistance and were igncrant of the fact, despite the publicity, or, for various strange reasons, did not apply for it. We are gratified to know that these people are now benefiting.

One of the improvements made when the new scheme was introduced last November was an increase in the basic rates for requirements which, together with an addition for rent, and the standard addition of 9s. for special expenses in long-term cases, represent the levels to which other income is brought up. Your Lordships now have before you draft Regulations providing for further increases in these basic rates. The main changes are increases of 5s. in the rate for a single householder, which will go up from £4 1s. to £4 [...] and of 8s. in the rate for a married couple, which will go up from £6 13s. to £7 1s. These rates, as I have mentioned, are exclusive of the long-term addition of 9s. which was introduced last November for those over pension age, and others (apart from the unemployed) who have received a noncontributory benefit for two years or more. Thus the net income level guaranteed to those over pension age, and for other long-term cases, will be £4 15s., plus rent, for a single householder, and £7 10s., plus rent, for a married couple. The new rates represent increases of about 6 per cent., which compares with an increase of about 1½ per cent. in the prices index since the current rates were introduced. It is proposed that the new rates should take effect from October 30; that is, at the same time as the increases proposed for National Insurance pensions and benefits.

My Lords, the Ministry of Social Security Act requires that any National Insurance pension or benefit shall be taken fully into account to arrive at the Supplementary Benefit payable. The increases to be made in these payments will therefore reduce the amount required to bring a person's income up to the appropriate Supplementary Benefit level. But since these levels are being raised at the same time the effect will in general be that people with Supplementary Benefit will have their total income increased by the amount of the Supplementary Benefit increase.

Your Lordships may ask why the increases in National Insurance and Supplementary Benefit rates are not the same, so that, for example, the supplementary pensioner can receive the full benefit of the increase proposed in the retirement pension. The answer is that this is the second increase in the Supplementary Benefit rates since National Insurance rates last went up, in March, 1965, the first being, as I have mentioned, when the new scheme was introduced last November. Taken together, the two main increases in Supplementary Benefit rates—10s. for a single householder and 15s. 6d. for a married couple—are virtually the same as the increases now proposed in the main National Insurance rates of 10s. single and 16s. married. I should mention that subsidiary Regulations, which are subject to the Negative Resolution procedure, will ensure that the exact Supplementary Benefit increase can be paid where this could be otherwise prevented or delayed by the provisions of existing Regulations.

I now come finally to the question of cost. The draft Regulations by themselves would lead to an increase in expenditure of about £40 million in a complete year; but because of the concurrent improvements in other social security benefits there will be a net saving of about £23 million a year. This, however, has to be considered against the background of the improvements made last November which cost over £50 million for those already receiving noncontributory benefit, apart from the cost for the new beneficiaries. I beg to move that these draft Regulations be approved.

Moved, That the Draft Supplementary Benefit (Determination of Requirements) Regulations 1967, laid before the House on June 28, 1967, be approved.—(Lord Sorensen.)

2.46 p.m.

LORD DRUMALBYN

My Lords, I am grateful to the noble Lord for having explained the draft Regulations. These Regulations are always brought in whenever there is up-rating legislation for National Insurance benefits, and the question that the Ministry always have to consider is by how much they are going to increase the Supplementary Benefits—or National Assistance, as it used to be called. At the time of last year's legislation, when the Supplementary Benefits were raised to a level slightly higher than the National Insurance rates, I remember asking whether this was done deliberately as a matter of policy, and whether it was intended to keep the Supplementary Benefits slightly above the National Insurance rates. I remember also that I did not get a clear answer. Now, of course, we have the answer: that that was not intended to be done. So that, in effect, on this occasion we have increases of about half the amount of the increases in the National Insurance.

As the noble Lord rightly said, if we take the present increases, together with the increases made last time, they are pretty well equivalent to the increases in National Insurance levels. It would be strange, of course, if we on this side of the House were to complain about this, because it is what has happened in the past. So far as Supplementary Benefits are concerned, we are always up against the problem that it has been considered right in the past never to allow Supplementary Benefits or National Assistance rates (or whatever we like to call them) to fall too far behind the cost of living as the cost of living increased, so that Supplementary Benefits have often been increased. In fact, it has been the general rule to increase Supplementary Benefits once during the period within which National Insurance arates have remained stable. This, of course, has always had an awkward effect, but this has had to be accepted.

It has been a matter of great criticism in the past—and I am sure it will be on this occasion, too—that people who receive National Insurance benefits and who, because Supplementary Benefits are added, receive a total amount in excess of National Insurance benefits, will not in this case get the full increase of the National Insurance benefit and will accordingly feel disappointed. Those of us who have had to do with the Ministry of Pensions have tried very hard to find a way round this difficulty but one has to accept the lesser of two evils, and I think it is certainly the lesser of two evils to give increases in Supplementary Benefits as frequently as possible and not to wait every time until National Insurance benefits are increased.

At the same time, I am not certain in my own mind that it is right now, and I am even less certain that it will always be right in the future, that National Assistance benefits should be below National Insurance benefits. They were just about level before. I think it was £4 1s. 0d. Supplementary Benefit last year for a single man, as against £4 under National Insurance benefit. It was just a little higher, but it was so close that I was somewhat deluded into thinking that this was a deliberate act of policy. It now appears that it was not; it was just that the amount was considered at the time to be the amount that it was desirable to add to the Supplementary Benefit. This being a decision of the Government, I do not think there is any reason to dispute it, because it is in line with precedents, and, as the Select Committee have said, the Regulations do not depart in any way from precedent. Therefore I think your Lordships can safely pass them, and indeed welcome them.

2.52 p.m.

LORD ILFORD

My Lords, I shall not detain your Lordships for many moments this afternoon, but there are one or two points I should like to put to the Minister, and one or two matters to which I wish to refer. I listened with a good deal of interest to the figures the noble Lord gave. We have certainly not succeeded in abolishing poverty. We may have succeeded in relieving it, but certainly not in abolishing it as the Party opposite so often claimed that they would. I do not blame them. I restrict my criticism to saying that certainly this matter was pursued and pursued very vigorously when they were in Opposition, and it is interesting to see, after two years of Labour rule, that the numbers on benefit have substantially increased.

The noble Lord told us that the crease in the benefit rates was 6 per cent. as against an increase of 1½ per cent. in the cost of living index figure. That is a wide margin. But I think it is wise to have a margin when one is estimating the rates that would be required, because before you have time to introduce another set of rates the cost of living index figure may have moved again. When I was at the National Assistance Board I had a good deal of experience of this, but I think we succeeded in maintaining the rates, as apparently the Supplementary Benefits Commission is going to do, with a comfortable margin for any increase in the cost of living index. But it does not seem to me to indicate any very great confidence in the Government in their ability to stabilise the index figure in the months to come.

May I turn for a moment to another matter. The noble Lord referred to the fact that it was known that there were a number of persons who appeared to be entitled to supplementary benefit but who had not claimed it. That is true, and I think we always knew that there were a large number of persons who for different reasons, reasons, perhaps, of pride—and I must say that I rather respected the independence of these old people—and recollections of past days and so on, did not apply for assistance. We know now the dimensions of that problem. I always believed that there was not really a very large number of persons in those circumstances as against the very large number of persons who came to the Assistance Board. We have the figures now in the Report on The Financial and Other Circumstances of Retirement Pensioners, which was published by the Ministry of National Insurance with the co-operation of the National Assistance Board last year.

The figures are, I think, instructive. It was found that there were 700,000 pensioner households who could have received assistance if they had applied for it. But a large number of those people appeared either to have income of one kind or another which would be disregarded for national assistance purposes, or to be living in households where there were other adults who made amenities available. When one deducted that class of person it reduced the total number to 300,000. Of these 300,000 households over two-thirds had some other resources in cash or were in households in which there were other people. Only about 85,000 appeared to have no resources other than the national assistance. Of course, 85,000 is a very large number. But compared with 850,000 it is not so many, and it has, I think, been described as manageable. But the figures which were used when this controversy began have proved to be completely exaggerated, and indeed when the Election was at its height I believe the figure bid up to over one million. At any rate, we know now how far this problem has gone, and I am very glad to hear the Minister say that the experience of the Supplementary Benefits Commission has been that the new methods have overcome these difficulties, and these people are now applying for the assistance to which they are entitled.

I was always told that the reason why persons would not apply for assistance was because of the name of the National Assistance Board. I never myself believed there was very much in this question of the name. I am old enough to remember seeing the name changed more than once. Outdoor relief became public asssistance in 1929. Public assistance became national assistance in 1948, and national assistance became supplementary benefit in 1966. I do not believe that the name has had very much to do with this. What has really deterred persons from applying has been the means test.

The National Assistance Board and the Supplementary Benefits Commission, succeeding them, have been at some pains to build up a staff which is devoted to the work they have to do, dedicated to the relief of poverty and who understand the manner in which the Commission desire that this work should be administered. That has gradually over the years eliminated persons who associated the means test with the old tests that were carried out by the Guardians or in the early days of national assistance. I believe we are now in a position to say that a means test is not the deterrent which it used to be considered to be. But I would say this. I think it calls for a conscious effort on the part of a great many people to ensure that the old stigma is eliminated.

I think that at any rate the national newspapers could have helped us a great deal to get rid of the old background of the Poor Law and of the early days of assistance. We did not get much assistance from them. Too many papers reported their police court cases as though the receipt of assistance was in itself some sort of offence. Persons who claimed national assistance were represented as belonging to the class of "corner boys", layabouts and idlers whom the papers desired to expose. I hope, that in the years that are coming we shall get a better aproach to this question.

I do not believe that we can have an adequate system of social security without the use of the means test. We rely on many different agencies to help us to get it accepted. I believe it is to-day nearly accepted but not quite.

Payment of benefits paid on a means test, or as I prefer to call it, a test of needs and means, is a means test of particular importance at the present time. One of the major difficulties which I think the Board encounters is the case of the man whose earnings are so low that he is actually receiving less than he would receive if he were unemployed and applied for supplementary benefit. It goes hard to say to a man, "Your earnings are actually less than you would get if you were on supplementary benefit." I think the Supplementary Benefit Board has no alternative but to scale down this man to the sum which he would take home if he had been in full employment at his normal trade.

When I was at the Board I was often approached on this subject. Members of another place would sometimes write to me rather indignantly asking me why this man was paid less than the standard rate. But they always, I think, accepted the explanation. It is exceedingly difficult to say that a man ought to be paid more when he is unemployed than when he is working full-time at his own trade. There it is. That, I think, is one of the major difficulties of our social security system to-day. I think the Government recognise that, and I understand that there are proposals under consideration for dealing with this particular matter. Whether it will be dealt with by permitting the Supplementary Benefits Commission to supplement the earnings of those men, or whether it will be dealt with by some change in the system of family allowances, we shall know when the Government's proposals are published.

I do not think that it makes much difference which way it is done. The question is, will it be done on a means and needs test basis? That the Government will have to consider for themselves and make up their mind about. If relief is given in that way, we shall be supplementing from public funds the earnings of a man in full-time employment. It was one of the most firmly held principles of administration of the old Poor Law and of the Assistance Board and, indeed, of the Supplementary Benefits Commission, that you ought not to do that. It had been an inflexible canon of the old Poor Law. Poor Law reformers from Sir Samuel Romilly to Lord Beveridge all held firmly to that principle.

Ought we to hold firmly to it to-day? That is the question that I think the Government must ask themselves. It may well be that the time will come when by other means we can avoid the demoralisation which it has always been feared will be created by supplementing a man's wages from public funds. I do not know which course the Government are going to adopt. I do not think it matters much, because the problem that they have to ask themselves is whether one ought to adopt a method of supplementing wages which has been condemned for so long.

There is one other thing that I should like to say. I have seen it suggested that the cost of improving family allowances, not, I think, supplementary benefit, might be made by withdrawing the allowances for children which are now made in the assessment to income tax. I hope that the Government will not adopt that course. I can think of nothing more unfair than that proposal. I have never been frightened of spending public money on the Social Services, and I am not now. But I think it would be most unjust that a new Social Service should be paid for by one section of the community and not by all. If we are to make payments to relieve the position of the man in the lower earnings group, then the community as a whole should contribute to those payments, and they should not be fastened round the necks of one class of the community alone. I profoundly hope that the Government will not adopt that solution of the financial problem which the low wage earner presents. I am most grateful to the noble Lord for the statistics which he gave us at the beginning of his speech, and I shall listen with great interest to what he has to say in answer to the few points that I have ventured to raise.

3.8 p.m.

LORD SORENSEN

My Lords, we are all most appreciative of any comments and remarks addressed, and scrutinies made, by the noble Lord, Lord Ilford, in view of his great experience in this matter. But I am equally certain that the House as a whole would appreciate it if I did not explore the same ground to any extent this afternoon. My own assessment of the feeling of the House is that it is better for us to get on as quickly as we can with the business; and as what the noble Lord has said does not bear directly on the immediate proposals, he will forgive me if I say no more than that I shall myself reflect, as I am sure all members of the Government in this Department will reflect, on the observations that the noble Lord has made.

I will, however, say just a brief word by way of explanation. All retirement pensioners receiving Supplementary Benefit will have a leaflet sent to them explaining why Supplementary Benefit rates are on this occasion being increased by less than the National Insurance benefits. In comparing the two rates, it must be remembered that for Supplementary Benefit recipient's rent is added to the scale rates. There is also for the old and other long-term cases, the new nine shillings addition.

I agree with what the noble Lord has said with regard to the name. It is not the name that is so important, as what the name signifies and its associations. One hopes that the names we are now employing and the general nomenclature have a much warmer and more human association than some of the names covering this field in the past. "Poor Law Relief" has a very grim association. It takes us back to the days when poverty was looked upon as a crime and those who were poor, in addition to being subjected to their poverty, were punished, just for being poor. I believe there was a time when those who were enfranchised could have their franchise taken from them if they sought Poor Law Relief. Many Members of this House at that time no doubt supported that as being a moral principle. We have now moved far beyond that in this House, in the other place, and in the country as a whole. Our moral conscience has grown considerably. That is why it is a good thing that we should discard entirely the terminology of Poor Relief. Now, with the better term "Supplementary Benefit", we have surely reached the stage where we recognise that we are all bound together, we are members one of another, and therefore the assistance which we are rendering is the assistance of the nation to members of the nation who desire it.

There is much more I could say by way of reflection on this very important subject, but I want to say to the noble Lord opposite and to the noble Lord, Lord Ilford, that if there are any particular points on which they would like further information I will see that the information is given to them. I appreciate that all have concerned themselves with this matter in a spirit of real humanity, and once more I pay tribute to the noble Lord, Lord Ilford, for drawing on the resources of his own experience to contribute to our greater knowledge to-day.

On Question, Motion agreed to.