§ 2.41 p.m.
VISCOUNT GOSCHENMy Lords, my right honourable friend the Secretary of State for Social Services is making a Statement to-day in another place on the uprating of social security benefits. This is a long and very detailed Statement, and after discussions through the usual channels my noble friend the Leader of the House has decided that it would be for the convenience of the House if the Statement were not repeated here but were circulated in the OFFICIAL REPORT which, with the leave of the House, I shall arrange to do. Copies of the Statement will also be available in the Printed Paper Office.
§ LORD SHEPHERDMy Lords, I am most grateful for what the noble Viscount has said, and I fully endorse the view that has been expressed: that because the Statement is very detailed and of length it would perhaps be best to deal with it in that way. I do not want to be too difficult, but I am not quite certain that the words in the noble Viscount's Statement were wisely chosen. I think he said that the Leader of the House had decided that the Statement 1316 should be treated in this way. Clearly, it is for the House to decide how a Statement is to be dealt with. I raise that point only so that there shall be no question of a precedent.
§ LORD BYERSMy Lords, may I ask the Government not to allow this very useful precedent in any way to be weakened by the splitting of hairs?
§ LORD BLYTONMy Lords, can the noble Viscount say whether this is a new procedure which is before the House, and whether we shall have a debate on the contents of the Statement?
§ THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)My Lords, it is always open to your Lordships to put a Question or arrange a debate through the normal channels. Of course this Statement will involve legislation, and there will be an opportunity for debate when the Bill is presented for Second Reading.
§ Following is the Statement:
§ With permission, Mr. Speaker, I would like to make a statement about the up-rating of social security benefits. My right honourable friend the Chancellor of the Exchequer has already announced the main increases in benefit and contribution rates to take effect in the week beginning September 20. Associated benefits will go up in proportion to the main increases. I shall be presenting a White Paper to the House with a Bill and the Government Actuary's Report shortly after the Easter Adjournment, and laying instruments for the war pensions and supplementary benefits improvements.
§ I am circulating fuller details of the new rates of benefit and contributions in the OFFICIAL REPORT. It may, however, be convenient to state now that for the £18 a week earner there will be no increase in contributions; for the £20 a week earner the increase will be 3 new pence a week; the £30 a week earner will pay an extra 15 new pence a week; and a person earning £42 a week or more will pay an extra 65 new pence a week.
§ There are certain new selective improvements which I now wish to explain to the House. I am making copies of my Statement available in the Vote Office.
1317§ THE EARNINGS RULE AND INCREMENTS FOR DEFERRED RETIREMENT:
§ First, the earnings rule. We propose that earnings up to £9.50 instead of £7.50 will have no effect on retirement pensions; on higher earnings the present tapering arrangements will apply. The increments payable for deferred retirement will rise from 5p to 6p for 9 contributions paid.
§ MEASURES FOR THE ELDERLY:
§ The old person's pension provided under the National Insurance Act 1970 for people who could not become insured in 1948 will rise from £3 for a single person and £1.85 for a wife to £3.60 and £2.20, respectively. Similar pensions, at the new rate, will be paid subject to a residence test to all persons over SO, who failed to qualify for a pension or who qualify for one at a lower rate, and to those who subsequently attain that age.
§ We are much concerned about the very old. We propose to increase the uprated pensions of all persons over 80, including the recipients of old person's pensions, by an addition of 25p. Thus with full standard pension a single pensioner will get £6.25, and a married couple will get £9.95 if one is over 80 and £10.20 if both are over 80. There are some 1.2 million people over 80, of whom about two-thirds will receive the increase. The remainder are supplementary pensioners, and there will be an increase of 25p in the long term addition where the pensioner or his dependant is over 80.
§ MAIN WAR PENSIONS AND INDUSTRIAL INJURIES BENEFITS:
§ The war and industrial disablement pension for 100 per cent. assessment goes up from £8.40 to £10.00, and pro rata with lower assessments; the normal maximum of constant attendance allowance goes up from £3.30 to £4. Standard war widow's pension will be increased from £6.50 to £7.80 and industrial injuries widow's pensions from £5.55 to £6.55.
§ A pension will be paid regardless of the cause of death to the widows of all war and industrial pensioners who were receiving the normal maximum or higher 1318 constant attendance allowance. This will help about 1,500 women who have devotedly nursed their gravely disabled husbands.
§ WAR PENSIONS PREFERENTIAL ALLOWANCES:
§ Certain war pensions preferential allowances which have not been increased since 1967 will be raised by a third—namely comforts allowance, clothing allowance, and age allowance. Severe disablement occupational allowance, unchanged since its introduction in 1961 will be doubled to £2 and we shall institute an age allowance at 50p a week for elderly war widows between the age of 65 and 70.
§ SUPPLEMENTARY BENEFITS:
§ The scale rates for supplementary benefits are to be increased from £8.50 to £9.45 for a married couple and from £5.20 to £5.80 for a person living alone. Children's rates will go up pro rata and, with the agreement of the Supplementary Benefits Commission, there wilt be selective additional increases for those aged from 13 to 20.
§ RESTRICTIONS ON UNEMPLOYMENT BENEFIT FOR OCCUPATIONAL PENSIONERS AND OPTIONAL CONTRIBUTIONS FOR NON-EMPLOYED PERSONS OVER 60:
§ There has been concern that some retired people with substantial occupational pensions claim unemployment benefit and contribution credits although they really have left the active employment field. But I know that the pensioners themselves have strong feelings about their liability to pay contributions when unemployed and not entitled to credits.
§ I propose three measures for occupational pensioners over 60. First those with pensions of £30 a week or more will not get unemployment benefit or credits unless they first satisfy a test of further work. Second, benefit will be reduced on a sliding scale if the pension is more than £18 a week. Third, everyone over 60 will be able to decide voluntarily whether or not to continue to contribute towards obtaining the full standard retirement pension. Some 5–6,000 people will be affected by the restrictions, but the contribution concession will go wider.
1319§ MEASURES FOR THE CHRONIC SICK:
§ We propose a substantial package of improvements for a neglected group, the chronic sick, to lift them above the basic benefits of the short-term sick when their earnings related supplement ceases after six months of incapacity. At this point they will become invalidity pensioners, entitled to an invaldity allowance if incapacity began more than 5 years before pensionable age as well as the full standard rate of benefit. We shall start at a modest level with three rates: £1 if incapacity began before the age of 35; 60p if it began before 45; 30p if it began before 55 for women and 60 for men. We are deliberately favouring those who fall chronically sick young, because they will not have had the same opportunities to build up personal savings or pension rights that an older man had.
§ The allowance will be paid to the existing chronic sick who are under pension age at the appropriate rate. Well over three-quarters of the existing 400,000 chronic sick are expected to qualify.
§ In these cases of prolonged incapacity the wife may become the main breadwinner. We therefore propose to apply to her earnings the tapered retirement pensions earnings rule, eased as I have already described to £9.50, instead of the all or nothing rule which at present extinguishes the increase paid for her if her earnings exceed £3.10.
§ The chronic sickness of the father imposes particular difficulties where there 1320 are dependant children. We propose to pay the higher rate of children's allowances at present payable only for the children of widows, £2.95 including family allowance after the uprating, for the children of invalidity pensioners instead of £1.55 now.
§ At retirement age, invalidity allowances will be carried over to retirement pensions as lifelong benefits, and they will be payable to unemployable pensioners under the war pensions and industrial injuries scheme. All these categories of pensioners will also qualify for the family benefits which go with invalidity pension.
§ The House may be interested in an example of the changes. The national insurance benefit income of a man who fell chronically sick at 30 with 2 children and a wife who is not working is to-day £11.20 including family allowances and would become £13.40 after the uprating. Under the new arrangements it will be £16.60, an increase of nearly 50 per cent.
§ Finally, we propose to increase the rate of attendance allowance due to start on December 6 for the very severely disabled from £4 to £4.80.
§ All these proposals, including the main pension increases, will cost about £560 million in a full year. There are gaps that need to be filled. We have nut the chronic sick and the very old as our priorities this time. I am sure that when the House has had the chance to study our proposals in detail they will be seen as a healthy combination of the universal and the selective.
§ Following are the tables giving details of charges:
1321| MAIN INCREASED NATIONAL INSURANCE BENEFIT RATES | ||
| Proposed Weekly Rate £ | Existing Rate £ | |
| Standard rate of unemployment and sickness benefits, maternity and widowed mother's allowances and invalidity, widows and retirement pensions | ||
| Single person | 6.00 | 5.00 |
| Wife or other adult dependant | 3.70 | 3.10 |
| Unemployment or sickness benefit | ||
| Married woman (normal rate) | 4.20 | 3.50 |
| Persons under 18 | 3.30 | 2.75 |
| Widow's allowance (first 26 weeks of widowhood) | 8.40 | 7.00 |
| Widow's basic pension | 1.80 | 1.50 |
| Invalidity allowance payable with invalidity pension, when incapacity began before age: | ||
| 35 | 1.00 | |
| 45 | 0.60 | New Benefit |
| 60 for men or 55 for women | 0.30 | |
| Attendance allowance | 4.80 | 4.00 |
| Old persons' pensions | ||
| Wife | 2.20 | 1.85 |
| Any other person | 3.60 | 3.00 |
| Age addition to retirement pension | 0.25 | New Benefit |
| Guardian's allowance | 2.95 | 2.45 |
| Child's special allowance and increases for children of widows, invalidity and retirement pensioners* | ||
| First child | 2.95 | 2.45 |
| Second child† | 2.05 | 1.55 |
| Any other child† | 1.95 | 1.45 |
| Increases for children of all other beneficiaries | ||
| First child | 1.85 | 1.55 |
| Second child† | 0.95 | 0.65 |
| Any other child† | 0.85 | 0.55 |
| *At present the chronic sick, who will become invalidity pensioners, and retirement pensioners receive the lower rates of increase for their children. | ||
| † Family allowances are payable for second and subsequent children. |
| MAIN INCREASED INDUSTRIAL INJURIES BENEFIT RATES | ||
| Proposed Weekly Rate £ | Existing Present Rate £ | |
| Injury benefit | 8.75* | 7.75 |
| Disablement benefit (100 per cent, assessment) | 10.00* | 8.40 |
| Unemployability supplement | 6.00† | 5.00 |
| Special hardship allowance (maximum) | 4.00 | 3.35 |
| Constant attendance allowance (normal maximum) | 4.00 | 3.30 |
| Exceptionally severe disablement allowance | 4.00 | 3.00 |
| Industrial death benefit: | ||
| Widow's pension during first 26 weeks of widowhood | 8.40 | 7.00 |
| Widow's pension now payable at £5.55 rate | 6.55 | 5.55 |
| Widow's pension now payable at £1.50 rate | 1.80 | 1.50 |
| Rates for dependant wives and children are the same as for comparable National Insurance benefit. | ||
| * Increases will also be made in the juvenile rates. | ||
| † Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table. |
| MAIN INCREASED WAR PENSIONS RATES | ||
| All ranks receive the same increases, officers rates being expressed in pounds per annum. | ||
| PART I—DISABLEMENT BENEFITS | ||
| Proposed Weekly Rate £ | Existing Rate £ | |
| Disablement pension for private at 100 per cent. rate | 10.00 | 8.40 |
| Unemployability allowances* | ||
| Personal allowance | 6.55 | 5.45 |
| Increase or further increase for wife | 3.20 | 2.60 |
| Increase for adult dependant | 3.70 | 3.10 |
| Comforts allowance | ||
| Higher rate | 1.70 | 1.25 |
| Lower rate | 0.85 | 0.63 |
| Allowance for lowered standard of occupation (maximum) | 4.00 | 3.35 |
| Constant attendance allowance | ||
| Special maximum | 8.00 | 6.60 |
| Special intermediate | 6.00 | 4.95 |
| Normal maximum | 4.00 | 3.30 |
| Three.quarter day | 3.00 | 2.50 |
| Half and quarter day | 2.00 | 1.65 |
| Clothing allowance (annual rate) | ||
| Highest rate | 19.00 | 14.00 |
| Intermediate rate | 12.00 | 9.00 |
| Lowest rate | 7.00 | 5.25 |
| Age allowance with assessments of | ||
| 40 and 50 per cent. | 0.50 | 0.38 |
| 60 and 70 per cent. | 0.70 | 0.50 |
| 80 and 90 per cent. | 1.00 | 0.75 |
| 100 per cent. | 1.40 | 1.00 |
| Exceptionally severe disablement allowance | 4.00 | 3.00 |
| Severe disablement occupational allowance | 2.00 | 1.00 |
| * Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table. |
| MAIN INCREASED SUPPLEMENTARY BENEFIT RATES | ||
| Proposed Weekly Rate £ | Present Rate £ | |
| Ordinary scale | ||
| Husband and wife | 9.45 | 8.50 |
| Person living alone | 5.80 | 5.20 |
| Any other person aged Not less than 21 | 4.60 | 4.15 |
| Less than 21 but not less than 18 | 4.05 | 3.50 |
| Less than 18 but not less than 16 | 3.60 | 3.05 |
| Less than 16 but not less than 13 | 3.00 | 2.40 |
| Less than 13 but not less than 11 | 2.45 | 2.20 |
| Less than 11 but not less than 5 | 2.00 | 1.80 |
| Less than 5 | 1.70 | 1.50 |
| Non-householder rent allowance | 0.65 | 0.60 |
| Attendance requirements | 4.80 | 4.00 |
| Employer | ||||||
| Present Rate | Increase* | New Rate | ||||
| Total | Graduated | Total | Flat Rate | Graduated | Total | |
| £ | £ | £ | £ | £ | £ | |
| Employed man not contracted out: | ||||||
| Earnings: | ||||||
| £10 | 0.947 | Nil | Nil | 0.887 | 0.06 | 0.947 |
| £20 | 1.397 | 0.03 | 0.03 | 0.887 | 0.54 | 1.427 |
| £30 | 1.707 | 0.15 | 0.15 | 0.887 | 0.97 | 1.857 |
| £42 | 1.707 | 0.65 | 0.65 | 0.887 | 1.47 | 2.357 |
| Contracted out: | ||||||
| Earnings: | ||||||
| £20 | 1.137 | 0.02 | 0.02 | 1.007 | 0.15 | 1.157 |
| £42 | 1.437 | 0.65 | 0.65 | 1.007 | 1.08 | 2.087 |
| Employed woman (including married woman not opted out) not contracted out: | ||||||
| Earnings: | ||||||
| £10 | 0.831 | Nil | Nil | 0.771 | 0.06 | 0.831 |
| £20 | 1.281 | 0.03 | 0.03 | 0.771 | 0.54 | 1.311 |
| £30 | 1.591 | 0.15 | 0.15 | 0.771 | 0.97 | 1.741 |
| £42 | 1.591 | 0.65 | 0.65 | 0.771 | 1.47 | 2.241 |
| Contracted out: | ||||||
| Earnings: | ||||||
| £20 | 0.981 | 0.02 | 0.02 | 0.851 | 0.15 | 1.001 |
| £42 | 1.281 | 0.65 | 0.65 | 0.851 | 1.08 | 1.931 |
| * No increase in flat rate contributions. |
| CLASS 2—SELF-EMPLOYED PERSONS* | |||
| Present Rate | Increase | New Rate | |
| £ | £ | £ | |
| Men over 18 | 1.24 | 0.26 | 1.50 |
| Women over 18 | 1.03 | 0.22 | 1.25 |
| CLASS 3—NON-EMPLOYED PERSONS* | |||
| Present Rate | Increase | New Rate | |
| £ | £ | £ | |
| Men over 18 | 0.99 | 0.21 | 1.20 |
| Women over 18 | 0.78 | 0.16 | 0.94 |
| * The limit for exemption from liability to contribute on grounds of small income goes up from £6 to £9. |