HL Deb 28 July 1972 vol 333 cc1714-24

1.50 p.m.

LORD ABERDARE

My Lords, I beg to move that this Bill be now read a second time. The Bill contains provisions for increases in National Insurance benefits, together with the higher contributions that are required to pay for them. It also contains provisions for the extension of the scope of the attendance allowance, which the Government have envisaged since the allowance was first introduced.

To start with the main uprating, Clause 1 with Schedule 1 provides for the increases in National Insurance benefits. The main standard rate for a single person goes up by 12½ per cent. from £6 to £6.75, and that for a married couple from £9.70 to £10.90. The old person's pension goes up from £3.60 to £4.05 for a single person, and from £5.80 to £6.55 for a married couple. Allowances for children, inclusive of family allowances, go up from £2.95 to £3.30 for the children of invalidity and retirement pensioners and widows. For the children of other beneficiaries, the dependency benefit goes up from £1.85 to £2.10. Guardian's allowance and child's special allowance are raised from £2.95 to £3.30.

Clause 1(5) changes the upper limit of the earnings band on which earnings-related supplement is paid at 15 per cent. from £42 to £48, in line with the changes in the graduated contributions structure. The rate of earnings-related supplement is related to earnings in the previous income tax year. The new limit will take effect in the calculation of supplements based on earnings in the 1973–74 income tax year—the first full year in which contributions will have been paid up to the new earnings limit of £48.

Clause 4 with Schedule 3 provides for increases in industrial injuries benefits. Injury benefit goes up from £8.75 to £9.50, disablement benefit for 100 per cent. assessment from £10 to £11.20, and widow's pension from £6.55 to £7.30. Increases for wives and children go up in line with those in the National Insurance scheme.

Changes in the National Insurance and industrial injuries contributions are provided for in Clause 3, with Schedule 2, and Clause 4(5). As last year, there is to be no increase in flat-rate contributions paid by employed persons and no increase in graduated contributions payable on earnings up to £18 a week. This continues our policy of avoiding increasing the burden on low wage earners.

On earnings between £18 and £42 contributions paid both by the worker and his employer will be increased from 4.35 per cent. to 4.75 per cent., and contributions of 4.75 per cent. will be levied on a new band of earnings from £42 to £48. The upper limit has again been fixed broadly at one and half times average earnings.

Flat-rate contributions paid by employers will be increased by 10p a week for a man, 9p for a woman, and 8p for those under age 18. This is proposed as a general move towards the contribution structure envisaged for the scheme outlined in Strategy for Pensions under which a greater part of the cost will be met by employers' contributions—and it is not practicable under the present scheme for employers and employees to pay different rates of graduated contributions.

The weekly rate of the contributions paid by the self-employed and non-employed (who pay only flat-rate contributions) is also to be increased to meet their share of the increasing cost of benefits. Self-employed men will pay an extra 18p a week, and women an extra 15p. For the non-employed, the increase for a man will be 13p a week, and for a woman 10p.

Flat-rate contributions automatically attract an Exchequer supplement, but graduated contributions do not. To maintain the Exchequer support at about 18 per cent. of contribution income provision is made in Clause 3(3) for additional lump sum Exchequer supplement.

Clause 2 with Schedule 4 is concerned with widening the scope of the attendance allowance. At present the allowance—which first became payable last December—is available only to those who are, broadly speaking, in need of attention and supervision both by day and by night and for these people the present allowance of £4.80 is increased to £5.40. Clause 2 widens the scope of the allowance to bring in broadly those whose need for attention or supervision arises either by day or by night. For them, the allowance will be £3.60 a week, which is two-thirds of the day and night rate. Because of the very large numbers involved in this extension—as many as half a million may claim, and a quarter of a million may qualify—it is inevitable that it must be phased. After seeking the advice of the Attendance Allowance Board, the Government propose to take first those of working age, then children, and then, in two groups, the elderly. The first group can claim from December this year, and payment will start from June 4, 1973.

Our present intention is to take claims from the other groups and put their allowances into payment, in three successive stages between June, 1973, and December, 1974. This is the best timetable we can plan at present for this extremely heavy administrative task but if we can do any better we shall of course do so.

Clause 5 relates to the finality of decisions made by the independent statutory authorities which decide claims and questions under the National Insurance and Industrial Injuries Acts, and arises out of recent judgments of the House of Lords sitting judicially. The judgment dealt with the effect of the provisions in the legislation that decisions of adjudicating authorities "shall be final" subject to specified rights of appeal and review, and their Lordships decided by a narrow majority that medical boards and tribunals dealing with questions arising on a disablement benefit claim must accept the specific medical conditions which can be inferred as the basis of an insurance officer's decision in connection with the preceding industrial injury benefit claim.

It would he most unsatisfactory to bind the medical practitioners and consultants who comprise the boards and tribunals to accept findings contrary to their medical judgment, and which could lead to long-term awards, sometimes for life, based on original diagnoses which subsequently proved to be wrong. The House of Lords judgments also seemed to have more general implications for adjudication under the National Insurance, industrial injuries and family allowances legislation and the law needed urgent clarification.

Clause 5 therefore restores the position to what it was originally believed to be, leaving it to the adjudication authorities deciding title to the various benefits under the Industrial Injuries Act—injury benefit, disablement benefit and death benefit—free to exercise their own judgment and expertise and not be bound to perpetuate error whether to the claimant's advantage or not. There is to be one exception to this doctrine. The lay statutory authorities deciding a death benefit claim must accept as having been due to the relevant accident a condition for which the deceased is entitled to disablement benefit at the time of his death. It will still, of course, be necessary for the lay statutory authorities to be satisfied that death was due to that condition—that is the fundamental requirement for industrial death benefit.

Schedule 4 confers power to vary certain rules about the amounts people are allowed to earn in certain circumstances while receiving benefit. The rules concerned are the unemployment benefit subsidiary occupation rule, and the so called "therapeutic" earnings rule for sickness, invalidity and injury benefits and the corresponding limit for unemployability supplement. It is proposed to raise the level of earnings allowed from a subsidiary occupation before losing entitlement to unemployment benefit to 75p a day, and the weekly and annual limits that apply in the case of sickness benefit and unemployability supplement by corresponding amounts (to £4.50 a week and £234 a year respectively). The present limit is 33p a day (£2 a week or £104 a year). The increase is a very substantial one because these limits are only changed infrequently.

Clause 1(3) provides that where a married woman paying full National Insurance contributions is residing with her husband, and he is in receipt of either invalidity benefit or retirement pension, or an industrial injuries or war pension unemployability supplement or allowance, she will if she is sick or unemployed receive the full (rather than the lower married woman's) rate of benefit.

The Northern Ireland National Insurance Scheme is virtually identical with the scheme in this country and upratings there usually follow closely what is done in this country. As the Northern Ireland Parliament is at present prorogued, however, the Secretary of State for Northern Ireland has asked that parallel provisions for that country be made in this Bill.

In conclusion, may I say that this is the first of the Government's annual reviews announced last December. The Government are confident that the purchasing power of retirement pensions and related benefits will be at the highest ever level when the increases take effect from October 2. And there will follow a further review in November, 1973, and every November thereafter.

2.1 p.m.

BARONESS PHILLIPS

My Lords, I should like to thank the Minister for explaining the Bill so clearly. I am sorry that not as many of your Lordships are as interested in the vital question of pensions as were interested in gas. May I again convey my appreciation to the Government for agreeing to the annual review and thank the Minister for repeating that this is in being. It is generally recognised that elderly people include the poorest and most vulnerable members of our society. With entry into Europe this will he the group, like anyone who is on a static income, who will feel the first impact of the price increases in food which must follow. Apart from rent and heating this is probably the only kind of expenditure in which someone in this group can indulge. Eventually the Government will have to accept the principle of a retirement pension being related to increasing national earnings. If we are to enjoy prosperity the pensioner must have a proportionate share.

There is still considerable evidence of poverty among single women and widows. This is aggravated by their earlier retirement and, in the case of the single woman, by the imposition of the earnings rule which hits her very hard if she works between the ages of 60 and 65. There is then the added burden of having to pay prescription charges, as the age for exemption was fixed by the previous Government, I am sorry to say, at 65. I remember a song about the teenager which was popular: I am just an in-between, Too old for toys, too young for boys Just as we do not seem to be able to decide at what age adolescence ends so we seem equally unable to decide the official retirement age. I noticed yesterday that jurors are going to continue to the age of 65 and magistrates to the age of 70 ; so far as I can discover, judges seem to be able to continue until they literally die on the job. One thing which this Bill gives for the first time is a definition of old age. The increase in old persons' retirement pensions refers to the over-eighties.

On the actual issue of the pension I have received representations from committees and individuals about sub-post offices being closed and the elderly having to travel many miles to get their pensions. I am wondering whether in the course of this Bill the Minister could see if there is some other way in which the pension could be paid as well as through the Post Office. Could it not be by a negotiable instrument like a cheque? I appreciate that this would have some elements of risk but the whole process of payment seems expensive and laborious. The form to be completed if a pensioner wishes someone else to collect his pension is written in such small print that one gets the feeling that with age the eyesight must improve rather than deteriorate.

On the widow's pension the Minister might clear up a small point. If a widow receives the lower pension because she is under the age of 50 does she remain on this rate until she is 60, or does she receive the full pension at 50 or at 60? This is not dealt with in the explanatory leaflet issued by the Department. If she is left on the lower level of pension there is an element of discrimination.

I was delighted to hear that there is to be an extension of the attendance allowance. I appreciate that the magnitude of this operation will mean that there will have to be classification. I should like to raise a point in relation to those who have made previous applications and who have been rejected. I have had experience of at least three cases. One woman seems to be almost completely paralysed and to fit the description of the people referred to in the Bill, but she was turned down. May I know whether she can now re-apply? This can hardly be described as retrospective as this is a condition which will hardly get better but is almost certain to deteriorate. The noble Lord has told us of the take-up of this allowance which is expected ; therefore I appreciate the nature of the size of the operation. I must warn the Minister that I may return in Committee to Clause 5 which deals with finality of decisions. I shall probably put down an exploratory Amendment to air the subject further. If I am not happy with the answer on the attendance allowance I may want to return to that also, but I can assure the noble Lord that I shall not in any way delay the passage of the Bill.

In regard to unemployment benefit, I notice that the self-employed are going to pay an increase in their contribution. I wonder if the Government can again look at the question of whether the self-employed might receive unemployment benefit. I have had many cases of hardship brought to my notice relating to small shopkeepers and such people who have great difficulty in the event of losing their livelihood where they are unable to collect unemployment benefit. There still remains a curious anomaly and this might be the moment to put it right. A widow who is unemployed but who is paying the full stamp is still unable to collect unemployment benefit because of the theory that a person can receive only one payment from the State. If she is a widow she is no less an unemployed person and if she is unemployed she is no less a widow. Perhaps the Minister can tell me something about that.

On the cost of the Bill, I have done some sums. I am open to correction, but if my calculations are right the improvements in benefits are of the order of £412 million. Changes in contributions will bring in £106 million, the graduated contributions £226 million and payments from employers on industrial injuries £6 million. All this adds up to £338 million. Therefore it seems that the Government are going to pay £74 million and the employer and the worker—namely, us—£338 million. I am not complaining I am only getting the record straight. No one, and certainly not I, would want to impede the passage of this Bill. The elderly who have waited since Christmas for their 75p may well find that it purchases even less now than it did then. Certainly it will not buy any beef.

I had a conference last weekend of my women's organisation. We had 16 resolutions, and four of them referred to pensions. This is one of the issues in which the ordinary person is extremely interested—far more, I would suggest, than in some of the other issues which occupy a great deal of time in this House. This is an important Bill which will bestow benefits on many people, and I wish it a speedy passage.

2.9 p.m.

LORD REIGATE

My Lords, I had not intended to take part in this debate but for one remark made by the noble Baroness, Lady Phillips. I think it is only right that after the storms of the Gas Bill one voice from the Back Benches should wish well to this admirable Bill which the Government are bringing forward. I have, however, a few criticisms to make. My noble friend dealt admirably with the complexities that are embodied in this Bill. I think we have to face the fact that National Insurance, so-called, is now becoming a more and more complex subject, and I believe that even experts are beginning to have to specialise in their knowledge of the various parts of our complicated social security system.

My noble friend said that this Bill was the beginning of a series of annual Bills. I welcome this fact, although I realise that it will be even more exacting in its call on Government and Government time, and the time of Parliament. But I think this is right. All I want to say to my noble friend in that connection is that I hope that, before the next Bill is drafted, he will have time to re-read the admirable debate in your Lordships' House on the White Paper on the Government's pensions policy. Many fruitful thoughts were then put forward, from both sides of the House, though they have not yet, of course, been embodied in legislation. I myself put forward one or two suggestions, and I have received a letter from my noble friend, but I think he will forgive me if I say that I considered his reply to be rather unsatisfactory. Although I shall take no action on it this year, I shall expect to see some action by next year on some of the points, or I might even prove to be a little rebellious on the next Committee stage.

One detailed point about which I should like to ask him is why no consideration has yet been given to increments for those who remain at work. The noble Baroness, Lady Phillips, stressed how hardly the earnings rule bears on the spinster who retires at sixty. But, with respect, I would point out that if the spinster stays on at work she is still in full employment and is therefore earning extra increments. So I think her case should really be put the other way: if she has to retire from work is the pension adequate? But the other question that I should like to ask is whether the increments are enough to induce women of sixty, and men of sixty-five, to stay on a little longer at work and earn those extra increments which really make the pension well worth while. Apart from that detailed point, I give the Bill my full blessing and wish it well.

2.12 p.m.

LORD ABERDARE

My Lords, I am grateful to the noble Baroness, Lady Phillips, and to my noble friend Lord Reigate for their reception of this Bill and for their welcome of the fact, once again, that we have now decided that there shall be an annual review. The noble Baroness, in her very short speech, raised a great many points, and I do not know whether I shall be able to satisfy her on all of them now ; but I will certainly write to her and ensure that she receives the answers. Like her, of course, we hope that eventually pensions will rise more in concert with earnings. This particular up-rating will give a fairly good margin over prices since the last increase, but I appreciate what the noble Baroness has said about the ultimate objective. To some extent the new pensions policy envisaged in Strategy for Pensions, and the greater reliance on pensions earned in work, will mean that this will be so.

I take note that both the noble Baroness and my noble friend are in close league on the question of the earnings rule, and I am sorry that my noble friend found my letter unsatisfactory. I am sure that others found some of the letters that he wrote when he was in my position equally unsatisfactory. But I appreciate the way in which he has fought for the relaxation of the earnings rule.

There were one or two points raised by the noble Baroness that I should like to try to answer at once. The payment of pensions other than at a Post Office presents a difficult problem. It is true, as she knows, that the pensioner can appoint someone to collect, but this is stated in rather small print. The difficulty is that negotiable instruments sometimes get into the wrong hands. However, I will look into that matter and see whether there is anything I can do to help.

As for the attendance allowance, a person who has not been accepted for the present attendance allowance, who has not met the full requirements of the day and night allowance and who has been turned down even though he or she may have gone through the appeal procedures, could apply for the new attendance allowance, for which the requirements are not quite so strict. In other words, one could need attendance either by day or by night. However, the noble Baroness will appreciate the tremendous administrative problem that this will present and which will fall on the Chairman of the Attendance Allowance Board, to whom we are grateful for the amount of work he has accomplished in this matter.

I will write to the noble Baroness in reply to her question about widows' pensions. I am not certain of the answer and I look forward to discussing the question of finality of decision with her in Committee. As for increments for deferred retirement, my noble friend Lord Reigate will know that the White Paper promised that in the new scheme these would be dynamised. I cannot give him any further information on this point at the moment but I will correspond with him about it.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

House adjourned at sixteen minutes past two o'clock.