HL Deb 22 March 1972 vol 329 cc699-713

3.34 p.m.


My Lords, I regret to interrupt such an interesting debate, and one with such a long list of speakers, but with your Lordships' permission I should like now to repeat a Statement which my right honourable friend the Secretary of State for Social Services is making in another place.

The Statement is as follows:

"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 October 2. After the Easter Adjournment I shall be presenting a White Paper to the House together with a Bill and the Government Actuary's report, and I shall be laying instruments for the war pensions and supplementary benefit improvements.

"I am circulating details of the new rates of benefits and contributions and of three minor changes in the OFFICIAL REPORT. These, with the copies of my Statement, are available in the Vote Office, and copies are also available in the Printed Paper Office.

"The Main Increases:

"The increase of 75p in the standard single rate of retirement pension one year after the last increase represents a bigger annual rate of increase than the £1 extra given last September after a two-year interval. The married couple's rate will go up by £1.20. Other associated benefits will go up broadly in proportion to the main increases, although, as I shall explain, nearly 2 million pensioners, that is those with supplementary pensions, will on this occasion receive an extra 10p, making their increases 85p single and £1.30 married.

"War Pensions and Industrial Injuries Benefits:

"The war and industrial disablement pension for 100 per cent. assessment goes up from £10 to £11.20; the normal maximum of constant attendance allowance goes up from £4 to £4.50. The exceptionally severe disablement allowance will also be increased from £4 to £4–50. Standard war widow's pension will be increased from £7.80 to £8.80, and the industrial injuries widow's pension from £6.55 to £7.30.

"Unemployment and Sickness Benefit:

"We will raise from 33½p a day to 75p the level of earnings a person is allowed from a subsidiary occupation before title to unemployment benefit is affected and make corresponding changes in the similar earnings limits for sickness and invalidity benefits and for the unemployability supplements. None of these limits has been changed for over ten years.


"As the Chancellor mentioned yesterday, we intend, as a move towards the contribution structure proposed in our White Paper, Strategy for Pensions, that the uprating should be financed mainly from graduated contributions, with some addition to the employer's flat rate contribution, because it is not practicable under the present scheme for employers and employees to pay different rates of graduated contributions. But there will be no increase in the employee's flat rate contributions. The effect is that the highest increases in contributions will fall on those earning £48 a week or more, who will pay an extra 39p; the £40 a week earner will pay an extra 9p a week; the £30 a week earner an extra 5p a week; for the £20 a week earner the increase will be only 1p a week. The man or woman earning £18 a week or less will pay no extra contributions. The employers will, of course, have to match these increased graduated contributions as well as pay the extra flat rate contribution for each employee—this will be 10p for each man, 9p for each woman and 8p for each young person under 18.

"Supplementary Benefits:

"The increase in the main scale rates for supplementary benefits will be the same as, and will operate from the same time as, the increases to the main national insurance benefits. Thus, the scale rate for a married couple will go up by £l.20 to £10.65, and that for a person living alone by 75p to £6–55. We will not, therefore, have the old 'ups and downs' problem of the retirement pension going up but the supplementary pension coming down.

"With the agreement of the Supplementary Benefits Commission, we propose two additional changes for older adolescents. Those aged 18 to 20 who are not householders will be assimilated to the corresponding adult rate, which will be £5.20, and those aged 16 to 17 will, for the first time, receive the non-householder rent allowance, which is being raised to 70p.

"The Supplementary Benefits Commission also intend to increase certain special additions which are paid at fixed rates. Those for extra heating will go up by 20 per cent., and there will also be increases in those for special diets.

"The long-term addition will be increased by 10p—the amount needed to restore its purchasing power—and the amount of the increase will not be taken into account in deciding the amount of any special addition. The increase in long-term addition, allowing for this change, will cost about £12 million a year and will mean that, while the general increases for pensioners will be 75p single and £1.20 married, for those on supplementary pensions the increases will be 85p single and £1.30 married.

"Attendance Allowance:

"The new attendance allowance for the very severely disabled, which first became payable in December, 1971, will be increased from £4.80 to £5.40. This allowance is paid, broadly speaking, to those who need a great deal of attention both by day and by night. We have always made it clear that the restriction of the allowance to those who satisfy that very stringent condition was only the first stage. The Government now propose to extend the scope of the allowance to bring in broadly those whose need for attention arises either by day or by night. For them the allowance will be at two-thirds of the day and night rate—that is, £3.60 a week. The allowance is, of course, tax-free.

"Supplementary benefit claimarts who qualify for the new allowance will get the full benefit of it except in a tiny minority of cases where they are already getting a special addition for the cost of personal attendance.

"Very large numbers will be involved in this extension—as many as 250,000 may qualify and as many as half a million may claim. This will be a formidable task.

"Furthermore, although we started the process of take-on for the present allowance as long ago as last June, claims are continuing to come in and there is a heavy load of outstanding review applications. Both have to be dealt with at the same time as we start work on the preparations for the extension. It is therefore inevitable that we must phase the extension, and the only practical way is by age groups. The whole process of extension from this winter when we are ready to receive claims will take two years because of the heavy medical and administrative task involved in assessing perhaps half a million claims.

"We propose to take those of working age first; then children; then, in two stages, the elderly. I will circulate details in the OFFICIAL REPORT.

"The total cost of the extension is likely to be about £11 million in the financial year 1973–74, rising to £45 million in a full year when all the new groups have been taken on.

"This is the first of our Annual Reviews. The total cost of our proposals will be about £480 million in 1973–74, of which about £395 million will fall on the Insurance Funds. The main increases—in general 75p on the single rate and £1.20 for a married couple, but 85p and £1.30 respectively for the poorest on supplementary pensions—will not only restore the value of pensions and related benefits but also give

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 6.75 6.00
Wife or other adult dependant 4.15 3.70
Unemployment or sickness benefit:
Married woman (normal rate)* 4.75 4.20
Persons under 18 3.70 3.30
Widow's allowance (first 26 weeks of widowhood) 9.45 8.40
Widow's basic pension 2.03 1.80
Invalidity allowance payable with invalidity pension, when incapacity began before age:
35 1.15 1.00
45 0.70 0.60
60 for men or 55 for women 0.35 0.30
Attendance allowance: Higher rate 5.40 4.80
Lower rate (see later note on phased introduction) 3.60 New Benefit
Old persons' pension:
Wife 2.50 2.20
Any other person 4.05 3.60
*A change is proposed in the rate of unemployment and sickness benefit for some contributing married women. Those who are wives of invalidity and retirement pensioners or of unemployability supplement beneficiaries will be paid benefit at the standard rate instead of the lower married women's rate.
Proposed Weekly Rate £ Existing Rate £
Guardian's allowance 3.30 2.95
Child's special allowance and increases for children of widows, invalidity and retirement pensioners:
First child 3.30 2.95
Second child* 2.40 2.05
Any other child* 2.30 1.95
Increases for children of all other beneficiaries:
First child 2.10 1.85
Second child* 1.20 0.95
Any other child* 1.10 0.85
*Family allowances are payable for second and subsequent children.
The first group to be taken on will be those who are broadly speaking the working age group—those born between 1st January 1908 and 31st December 1956 inclusive. It is proposed to take claims from this group from the beginning of December this year and to start making payments to them from from 4th June 1973. Thereafter the next group will be children—defined as those born on or after 1st January 1957. Then the elderly in two groups—first those born between 1st January 1898 and 31st December 1907 and then the older group, those born on or before 31st December 1897. Claims from these three groups will be taken and their allowances put in payment in three successive stages in the eighteen months between June 1973 and December 1974.

a real improvement, more substantial than we were able to achieve last year. When the extension of the attendance allowance is complete we shall be spending about £70 million a year on this special tax-free benefit for those needing care because of severe handicap. We shall have made, during the first half of the 1970's a substantial advance towards the proper treatment of the civilian disabled."

Following are the details referred to in the Statement:

Proposed Weekly Rate £ Existing Rate £
Injury benefit 9.50* 8.75
Disablement benefit (100 per cent. assessment) 11.20* 10.00
Unemployability supplement 6.75† 6.00
Special hardship allowance (maximum) 4.48 4.00
Constant attendance allowance (normal maximum) 4.50 4.00
Exceptionally severe disablement allowance 4.50 4.00
Industrial death benefit:
Widow's pension during first 26 weeks of widowhood 9.45 8.40
Widow's pension now payable at £6.55 rate 7.30 6.55
Widow's pension now payable at £1.80 rate 2.03 1.80
Rates for dependant wives and children are the same as for comparable
National Insurance benefits.
*Increases will also be made in the juvenile rates.
† Invalidity allowances and the higher rate of childrens allowances will be paid as to invalidity pensioners—see National Insurance Table.
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 11.20 10.00
Unemployability allowances*:
Personal allowance 7.35 6.55
Increase or further increase for wife 3.65 3.20
Increase for adult dependant 4.15 3.70
Allowance for lowered standard of occupation (maximum) 4.48 4.00
Constant attendance allowance:
Special maximum 9.00 8.00
Special intermediate 6.75 6.00
Normal maximum 4.50 4.00
Three-quarter day 3.40 3.00
Half and quarter day 2.25 2.00
Age allowance with assessments of:
40 and 50 per cent. 0.55 0.50
60 and 70 per cent. 0.80 0.70
80 and 90 per cent. 1.15 1.00
100 per cent. 1.60 1.40
Exceptionally severe disablement allowance 4.50 4.00
*Invalidity allowances and the higher rate of childrens allowances will be paid as to invalidity pensioners—see National Insurance Table.
Proposed Weekly Rate £ Existing Rate £
Widows' pension—private's widow:
Standard rate 8.80 7.80
Childless widow under 40 2.03 1.80
Rent allowance 3.40 3.00
Widowers' pensions 8.80 7.80
Widows' children:
Eldest child 3.50 3.15
Other children with family allowance 3.00 2.65
Other children without family allowances 3.35 3.00
Motherless and fatherless children aged:
Under 15 Eldest child or other children with no family allowances 3.50 3.15
Over 15 5.00 4.65
Under 15 Other children with family allowances 3.00 2.65
Over 15 4.50 4.15
Adult orphans 6.75 6.00
Two minor changes which will benefit some war widows are also proposed. The first will abolish the 30p qualifying rent for the widow's rent allowance. The second will amend the warrant so that widows whose husbands had no disablement pension and who die more than 7 years after service have the same appeal rights as other widows.
Proposed Weekly Rate £ Existing Rate£
Ordinary scale:
Husband and wife 10.65 9.45
Person living alone 6.55 5.80
Any other person aged:
Not less than 21 5.20 4.60
Less than 21 but not less than 18 (to be assimilated to rate for person not less than 21 years) 5.20 4.05
Less than 18 but not less than 16 4.05 3.60
Less than 16 but not less than 13 3.40 3.00
Less than 13 but not less than 11 2.75 2.45
Less than 11 but not less than 5 2.25 2.00
Less than 5 1.90 1.70
Blind scale:
Husband and wife:
If one of them is blind 11.90 10.70
If both of them are blind 12.70 11.50
Any other blind person aged:
Not less than 21 7.80 7.05
Less than 21 but not less than 18 (to be assimilated to rate for person not less than 21 years) 7.80 5.05
Less than 18 but not less than 16 4.95 4.40
Less than 16 but not less than 13 3.40 3.00
Less than 13 but not less than 11 2.75 2.45
Less than 11 but not less than 5 2.25 2.00
Less than 5 1.90 1.70
Non-householder rent allowance 0.70 0.65
Attendance requirements Higher rate 5.40 4.80
Lower rate 3.60 New Benefit
Long-Term Addition:
Aged 80 or over 0.85 0.75
Aged under 80 0.60 0.50
(including National Health Service contribution but excluding Redundancy Fund contribution and Selective Employment Tax)
Insured Person
Present Rate Increase* New Rate
Total £ Graduated £ Flat Rate £ Graduated£ Total £
Employed Man Contracted-out Earnings
£15 1.04 Nil 1.00 0.04 1.04
£20 1.15 0.01 1.00 0.16 1.16
£30 1.59 0.05 1.00 0.64 1.64
£40 2.02 0.09 1.00 1.11 2.11
£48 2.08 0.39 1.00 1.47 2.47
Not-Contracted-out Earnings
£15 1.18 Nil 0.88 0.30 1.18
£20 1.42 0.01 0.88 0.55 1.43
£30 1.85 0.05 0.88 1.02 1.90
£40 2.29 0.09 0.88 1.50 2.38
£48 2.35 0.38 0.88 1.85 2.73
Insured Person
Present Rate Increase* New Rate
Total £ Graduated £ Flat Rate £ Graduated£ Total £
Employed Man Contracted-out
£15 0.87 Nil 0.83 0.04 0.87
£20 0.98 0.01 0.83 0.16 0.99
£30 1.42 0.05 0.83 0.64 1.47
£40 1.85 0.09 0.83 1.11 1.94
£48 1.91 0.39 0.83 1.47 2.30
£15 1.05 Nil 0.75 0.30 1.05
£20 1.29 0.01 0.75 0.55 1.30
£30 1.72 0.05 0.75 1.02 1.77
£40 2.16 0.09 0.75 1.50 2.25
£48 2.22 0.38 0.75 1.85 2.60
Present Rate Increase New Rate
Total £ Flat Rate† £ Graduated £ Flat Rate† £ Graduated £ Total £
Employed Man Contracted-Out
£15 1.047 0.10 Nil 1.107 0.04 1.147
£20 1.157 0.10 0.01 1.107 0.16 1.267
£30 1.597 0.10 0.05 1.107 0.64 1.747
£40 2.027 0.10 0.09 1.107 1.11 2.217
£48 2.087 0.10 0.39 1.107 1.47 2.577
£15 1.187 0.10 Nil 0.987 0.30 1.287
£20 1.427 0.10 0.01 0.987 0.55 1.537
£30 1.857 0.10 0.05 0.987 1.02 2.007
£40 2.297 0.10 0.09 0.987 1.50 2.487
£48 2.357 0.10 0.38 0.987 1.85 2.837
Employed Woman Contracted-Out
£15 0.891 0.09 Nil 0.941 0.04 0.981
£20 1.001 0.09 0.01 0.941 0.16 1.101
£30 1.441 0.09 0.05 0.941 0.64 1.581
£40 1.871 0.09 0.09 0.941 1.11 2.051
£48 1.931 0.09 0.39 0.941 1.47 2.411
£15 1.071 0.09 Nil 0.861 0.30 1.161
£20 1.311 0.09 0.01 0.861 0.55 1.411
£30 1.741 0.09 0.05 0.861 1.02 1.881
£40 2.181 0.09 0.09 0.861 1.50 2.361
£48 2.241 0.09 0.38 0.861 1.85 2.711
*No increase in flat rate contributions.
† Man's rate includes 1p for industrial injuries.
Present rate £ Increase £ New rate £
Men over 18 1.50 0.18 1.68
Women over 18 1.25 0.15 1.40
Present rate £ Increase £ New rate£
Men over 18 1.20 0.13 1.33
Women over 18 0.94 0.10 1.04

3.43 p.m.


I should like to thank the Minister for repeating that very lengthy Statement. He will not expect—nor indeed will he hope for a debate on the particular sections at this stage. I should like, of course, to congratulate the Government on certain sections in this Statement. I am delighted to see the extension of the attendance allowance, and I hope that we shall not have a repetition of the kind of occasion which I had recently when a paralysed woman was told that she could not have the attendance allowance. Surely, this extension, this type of case will certainly come within the purview of this allowance.

Before Christmas we had the announcement of the annual review of pensions when we on this side of the House were delighted to know of this and of the upgrading of the present rates of pension. I said then, and I repeat now, that what we read in the Press this morning—that everyone is going to benefit now—is completely erroneous. The pensioners will not benefit for at least another seven months; and, indeed, some of the people who come into this age group may well not be in a position to benefit as the Divine Reaper has a habit of taking a hand in events when people are over the age of 75. The pensioners need this extra money now. This 75p is a very small amount, and I would again ask the Minister whether he will represent to his right honourable friend the necessity for urgency in this field. The explanations that have been given have always been that it is necessary to change the pension books, and that this is a very large administrative operation. So far as I can discover, the contributions in the graduated pension scheme will go up. We are not told when, but I assume that they will be going up (the Minister can perhaps confirm this) in April or May. If it is possible to change the stamps so quickly when people are paying in, I am at a loss to know why it is so necessary to be slow in making the change when it comes to paying out. This is something that I feel needs some investigation.

I see that we are to have a White Paper presented to the House after the Easter Adjournment but I should like to remind the Minister that we have had no debate, at any rate in this House, on the White Paper, Strategy for Pensions, so I hope that the new White Paper to be presented will still be in the nature of a document for consultation and not a firm presentation of changes. I am glad that the Government have recognised the inequalities of the "up and down" system when the supplementary benefits went up at one stage and the pension went up at another so that it was possible for somebody to lose something from the one contribution if he was in fact already receiving the others. In a "give-away" Budget—as this present Budget has been described—I feel that those who are in the greatest need are still very much at the end of the queue. And while I applaud certain parts of the Statement, I am still very unhappy that the retirement pensioners, those people who represent a generation that has given a great deal, are to receive only 75p—and that after seven months of waiting.

3.47 p.m.


My Lords, from these Benches we, too, would like to thank the Government for these new grants and allowances, and to welcome them. Echoing the noble Baroness who has just sat down, I would only add that it is a pity that payment to pensioners could not be made sooner. To wait until October is to wait a long time. It is also a pity that pensioners drawing supplementary benefit are to get only an additional 85p. Undoubtedly, these are almost the most seriously poverty-stricken section of our community, and if something rather larger than the extra 10p on to the 75p for all old-age pensioners could have been given to those on supplementary allowances it would have been very welcome indeed.


My Lords, I am grateful to both noble Baronesses who have spoken for the qualified welcome at any rate to some of these proposals. I think the whole House will welcome the extension of the attendance allowance, even though it is to be phased over a period of two years because of the huge administrative task. I should like to take this opportunity of expresing our great gratitude to the Attendance Allowance Board and the chairman, the noble Lord, Lord Amulree, who has been so very helpful in everything to do with this new allowance.

May I say to both noble Baronesses that we really have gone further than any other Government ever has before in agreeing to an annual review, and I think it is being a little "dog in the manger" to say that we should go even faster. As a result of the increase of £l at the last uprating only a few months ago—last September—we are still showing a small increase over the cost of living. This new amount which is l2. per cent. in one year and which would represent 25 per cent. over the normal two-year period, is, I think, generous.

My Lords, there is no question of contributions going up before October. They go up at the same time as the new pensions and allowances. The White Paper will certainly put all these matters in greater detail. So far as the Strategy for Pensions is concerned, if the noble Baroness, Lady Phillips, is anxious to have a debate on that matter, I am sure that it could be arranged through the usual channels.