SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS

HL Deb 07 March 1973 vol 339 cc1145-7

LORD DENHAM

My Lords, my right honourable friend the Secretary of State for Social Services is making a Statement in another place this afternoon on social security benefits and contributions. It has been agreed through the usual channels that this Statement need not be repeated here, but with the leave of the House I will arrange for it to be circulated in the OFFICIAL REPORT.

Following is the Statement referred to:

"With permission, Mr. Speaker, I should like to make a statement about increases in social security benefits and contributions. My right honourable friend the Chancellor of the Exchequer has already announced the main increases, to take effect in the week beginning October 1—that is, exactly 12 months after those of last year. In due course 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 the associated statutory instruments.

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

"As my right honourable friend said yesterday, unemployment and sickness benefits, injury benefit and maternity allowance will go up by £1 married and 60p single. The Government feel that it is right to do more for the pensioner. There will therefore be increases of £1.60 in the married and £1 in the single rate of pensions and other long-term benefits, including invalidity pensions and widows' pensions, bringing them up to £12.50 and £7.75 respectively. These increases reflect the Government's determination to concentrate resources on the long-term benefits as a continuing measure.

"Attendance allowance at the day and night rate will go up from £5.40 to £6.20 and at the day or night rate from £3.60 to £4.15 a week.

"The increases in the main scale rates of supplementary benefit will be the same as, and will operate from the same dates as, the increases in the related National Insurance benefits. The increases of £1.60 for a married couple, and £1 for a single person, proposed for retirement pensioners will also go to supplementary pensioners and other supplementary beneficiaries who have qualified for the long-term addition; that is, to people under pension age who have received supplementary benefit for two years or more, with the exception of those required to register for work.

"For these categories we also propose, since it has given rise to some confusion, to incorporate the long-term addition, of 60p for those under the age of 80 and 85p for those over 80, into new long-term scale rates. But, as at present, 50p of these new long-term rates, or 75p for those over the age of 80, will be regarded as covering any extra expenses, other than heating to which I shall refer later.

"Thus a single supplementary pensioner living alone who is now entitled to £7.15 a week plus rent and rates—because of course no one has been required to live on the National Insurance pension alone—will become entitled from October to £8.15 a week plus rent and rates, or £8.40 a week plus rent and rates if he or she is over 80.

"A supplementary pensioner couple now entitled to £11.25 per week plus rent and rates will become entitled to £12.85 a week plus rent and rates or £13.10 plus rent and rates if one of them is over 80. Extra benefits can be paid where there are special needs.

"Other supplementary benefit scale rates will go up by £1 for a married couple and 60p for a person living alone, to match the increases in the short-term National Insurance benefits. All children's scale rates will be increased proportionately to these latter figures.

"The war and industrial injuries disablement pensions for 100 per cent. assessment will go up from £11.20 to £12.80. The standard war widow's pension will be increased from £8.80 to £10.10 and the industrial injuries widow's pension from £7.30 to £8.30.

"We also propose certain selective improvements. The invalidity allowance which we introduced in 1971 and which goes with invalidity pension for the chronic sick, at one of three rates dependent upon the age at which incapacity started, will be raised by 40 per cent. in each case, from 35p to 50p, from 70p to £1 and from £1.15 to £1.60 a week respectively. This is a much more than proportionate improvement—in addition to the increase in the basic invalidity pension itself—and will go to the chronic sick and also to unemployable pensioners under the war pensions and industrial injuries schemes. The net cost will be £3 million in a full year.

"I turn now to special heating needs for old people and others on supplementary benefit. As from October 1 extra heating allowances will be paid on top of the new rates of supplementary benefit, instead of being off-set against the long-term addition. Thus, for the first time, supplementary benefit recipients will be entitled to the full amount of any additional heating allowance awarded because of their individual circumstances.

"The Supplementary Benefits Commission intend to apply this provision to all cases where a need for extra heating has been identified but off-set in the past. This will be done as they come up for normal review. It is estimated that over 400,000 supplementary benefit recipients may benefit, at a cost in a full year of about £6 million.

"Upratings of prescribed earnings levels for the Family Income Supplement will in future be made in the general autumn uprating programme, instead of in April. We shall therefore include in the October uprating a small increase in the prescribed levels of income on top of those coming into force next month. Income levels will be raised by 50p a week for families with up to four children, and there will be higher increases, in steps of 50p, for families with five or more children. Further, the maximum weekly benefit will be increased from £5 to £6 for families with three or more children.

"Mr. Speaker, these increases in benefits mean that an extra £570 million in a full year will go to the pensioners, the sick, the disabled, the unemployed and other special groups. About £500 million will fall on the National Insurance Funds.

"I now turn to contributions. As my right honourable friend said yesterday, the weekly earnings limit up to which graduated contributions are paid will be raised from £48 to £54. The full rate of graduated contributions for employers and employees will be increased from 4¾ per cent. to 5 per cent. The flat-rate contribution for employed men will be reduced by 4p. In the result, the man earning £54 a week will pay an extra 36p a week; the man on average earnings of £36 will pay 2p a week more than now; and the man earning £18 will pay 2p less than he does at present. The employer's share of the flat-rate contribution will be increased by 14p for men and 12p for women.

"In this way more of the contribution increases will fall on employers. These changes will bring us rather closer to the contribution arrangements under the Social Security Bill, which is due to come into force, if Parliament agrees, in 1975.

"The Treasury contribution will continue at about 18 per cent. of the other income from contributions.

"When it becomes operative, this uprating means that, since the last uprating of the Labour Government in November, 1969, pension will have increased by no less than 55 per cent. in money terms. Between November, 1969, and January, 1973, the Index of Retail Prices had gone up by 28.3 per cent.

"This is an uprating which redeems our promise of price protection for all the 11½ million people who will benefit from it, and, I would emphasise to the House, in conclusion, much more than redeems it for the elderly, the widows and the chronic sick among them.