HL Deb 27 March 1974 vol 350 cc590-9

3.8 p.m.

LORD SHEPHERD

My Lords, my right honourable friend the Secretary of State for Social Services is making a Statement in another place on the up-rating of national insurance benefits. It has been agreed through the usual channels that, in view of the complex nature of this Statement, it should not be repeated here, but with the leave of the House I will arrange for it to be circulated in the OFFICIAL REPORT.

The Statement was as follows:

"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 yesterday announced the main proposals. The increases in benefits will take effect in the week beginning July 22. This means 17 weeks from now—and in the last three years the shortest timetable achieved has been 25 weeks. The 17-week timetable can only be met at a risk that some beneficiaries may not receive their increase until shortly after the operative date. We will do our best to avoid this happening but, given our overriding objective of introducing the increases at the earliest possible date, I am sure the House will agree that it is a risk we should be prepared to take.

"The standard rate of pensions, that is of retirement pensions, invalidity pensions and widow's pensions, will go up by £2.25 for single persons. Married couples will get an increase of £3.50. Thus our pledge to increase pensions to the levels of £10 for single persons and £16 for married couples will be honoured. Old persons' pensions will go up from £2.85 to £3.70 for wives and from £4.65 to £6 for other people.

"Short-term benefits, namely, unemployment benefit and sickness benefit, will be increased by £1.25 for a single person and £2 for a married couple, making the single person's rate £8.60 and the married couple's £13.90 a week. Maternity allowance and injury benefit will go up by the same amounts.

"We are thus giving the highest priority to the long-term beneficiaries—the pensioners, the chronic sick and the widows. Nevertheless, the increase in the short-term benefits will be more than sufficient to maintain their purchasing power, and I should remind the House that short-term beneficiaries can receive an earnings-related supplement Which can itself bring their benefits up to levels in excess of £10 or £16.

"Attendance allowance where attendance is required both by day and by night will go up from £6.20 to £8; and where attendance is required by day or by night the rate will go from £4.15 to £5.35.

"The 100 per cent. war and industrial injuries disablement pension will go up from £12.80 to £16.40. The standard war widow's pension will be increased from £10.10 to £13 and the industrial injuries widow's pension from £8.30 to £10.55.

"For the older war disabled and war widows we propose a further improvement, in addition to the increases in the basic pensions themselves. The age allowances, which a war widow receives at the rates of 65p at the age of 65 and £1.30 at the age of 70, and which a disabled man with an assessment of 40 per cent. or more receives at the age of 65 at rates varying from 60p to £1.80, will all be doubled. Thus war widows will receive an age allowance of £1.30 at the age of 65 and £2.60 at the age of 70; and a disabled man with an assessment of 100 per cent. will get an allowance of £3.60 at the age of 65. Over 40,000 disablement pensioners and over 50,000 war widows will benefit from this special help. The net cost will be £4.5 million in a full year.

"The earnings rule will be relaxed as part of the uprating so as to increase the amount at which the rule starts to operate from the present £9.50 to £13 a week.

"I turn now to supplementary benefit. The increases in the main scale rates will be the same as, and will come into force at the same time as, the increases in the related national insurance benefits. The increase of £3.50 for a married couple—proposed for retirement pensioners—will also go to supplementary pensioners and other supplementary beneficiaries who qualify for the long-term rates. The increase of £2.25 proposed for single retirement pensioners will also go to supplementary pensioners and other supplementary beneficiaries who qualify for the long-term scale rates, where they live alone. Thus a supplementary pensioner living alone will become entitled to at least £10.40 a week plus rent and rates—£10.65 plus rent and rates if he is over 80. A supplementary pensioner couple will become entitled to at least £16.35 plus rents and rates, or £16.60 plus rent and rates if one of them is over 80.

"The supplementary benefit ordinary rates—for persons who are neither of pension age nor qualify for the long-term rates—will go up by £2 for a married couple and £1.25 for a person living alone, to match the increases in the short-term national insurance benefits.

"The prescribed amounts which govern title to family income supplement will also be increased.

"The cost of all these increases in social security benefits will be over £1,250 million in 1975–76. Over £1,100 million of this cost will fall on the National Insurance Funds.

"Next I come to national insurance contributions. My right honourable friend explained to the House yesterday how we are proposing to allocate the extra contribution burden so as to put most of it on the employer and, in particular, to help the lower paid. The net effect of our proposals is that men earning £20 a week will pay 3p less than they do now and that, in general, no man earning less than £27 a week will have to pay more than he does at present, while the highest increases in contributions will fall on those earning £62 a week or more. These men will pay an extra 57p a week; and men earning £40 a week will pay an extra 7p a week. Women's contributions will be changed correspondingly. All the contribution changes are proposed to come into effect on August 5. The Treasury contribution will continue at about 18 per cent. of the income from contributions.

"For the convenience of the House 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. I should add that I shall shortly be presenting the necessary Bill, which will be accompanied by the Government's Actuary's Report.

"Before I end I should say a word about financing after the end of the 1974–75 financial year. The proposed contribution rates, together with the associated Treasury supplement, will provide sufficient income to cover the cost of benefits at the new levels whilst the present national insurance scheme lasts. However, if the new structure and level of contributions provided by the Social Security Act 1973 were to come into force in April, 1975, the income of the National Insurance Fund would not be sufficient to finance an uprating of the basic pension on the generous scale we propose. We have not yet decided precisely how we are going to deal with all the interim problems raised by the Social Security Act, but I can say now that we intend to introduce legislation later in the year to secure income to the National Insurance Fund which will still be adequate to the new levels of benefit after April, 1975.

"I conclude by reminding the House that we are pledged to work for a greater measure of social justice. The proposals I am putting before the House will take us along that road. The increases in pensions will be the largest ever within the national insurance scheme, both in money and in real terms. The Government intend to build on this founlation by ensuring that in future pensions will be increased annually in proportion to increases in average national earnings. This is a pledge never before given to the most vulnerable members of our society. It is a pledge long overdue."

Following are the details of the new rates of benefits and contributions referred to in the Statement:

MAIN INCREASED NATIONAL INSURANCE BENEFIT RATES:
Proposed Weekly Rate £ Existing Rate £
Standard rate of invalidity, widows' and retirement pensions and widowed mothers' allowances:
Single person 10.00 7.75
Wife or other adult dependant 6.00 4.75
Standard rate of unemployment and sickness benefits:
Single person 8.60 7.35
Wife or other adult dependant 5.30 4.55
Married woman (normal rate) 6.05 5.15
Persons under 18 4.75 4.05
Widow's allowance (first 26 weeks of widowhood) 14.00 10.85
Widow's basic pension 3.00 2.33
Maternity allowance 8.60 7.35
Invalidity allowance payable with invalidity pension, when incapacity began before age:
35 2.05 1.60
45 1.30 1.00
60 for men or 55 for women 0.65 0.50
Attendance allowance:
Higher rate 8.00 6.20
Lower rate 5.35 4.15
Old persons' pensions:
Wife 3.70 2.85
Any other person 6.00 4.65
Guardian's allowance 4.90 3.80
Child's special allowance and increases for children of widows,invalidity and retirement pensioners:
First child 4.90 3.80
Second child* 4.00 2.90
Any other child* 3.90 2.80
Increases for children of all other beneficiaries:
First child 2.70 2.30
Second child* 1.80 1.40
Any other child* 1.70 1.30
* Family allowances are payable for second and subsequent children.
Injury benefit*† 11.35 10.10
Disablement benefit (100 per cent assessment)* 16.40 12.80
Unemployability supplement‡ 10.00 7.75
Special hardship allowance (maximum) 6.56 5.12
Constant attendance allowance (normal maximum) 6.60 5.15
Exceptionally severe disablement allowance 6.60 5.15
Industrial death benefit:
Widow's pension during first first 26 weeks of widowhood 14.00 10.85
Widow's pension now payable at £8.30 rate 10.55 8.30
Widow's pension now payable at £2.33 rate 3.00 2.33
* Increases will also be made in the juvenile rates.
†Increases for adult dependants and children will be the same as those for unemployment and sickness benefit—see National Insurance table.
‡Invalidity allowances and increases for adult dependants and children will be the same as those for invalidity pensions—see National Insurance table.
MAIN INCREASED WAR PENSION 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 … … … 16.40 12.80
Unemployability allowances*:
Personal allowance … … … 10.75 8.40
Increase for wife or adult dependant … … … 6.00 4.75
Comforts allowance:
Higher rate … … … 2.80 2.20
Lower rate … … … 1.40 1.10
Allowance for lower standard of occupation (maximum) … … … 6.56 5.12
Constant attendance allowance:
Special maximum … … … 13.20 10.30
Special intermediate … … … 9.90 7.75
Normal maximum … … … 6.60 5.15
Half and Quarter day … … … 3.30 2.60
Age allowance with assessments of:
40 and 50 per cent … … … 1.20 0.60
60 and 70 per cent … … … 1.80 0.90
80 and 90 per cent … … … 2.60 1.30
100 per cent … … … 3.60 1.80
Exceptionally severe disablement allowance … … … 6.60 5.15
Severe disablement occupational allowance … … … 3.30 2.60
MAIN INCREASED SUPPLEMENTARY BENEFIT RATES:
Proposed Ordinary Weekly Rate £ Proposed Long-Term Weekly Rate* £ Existing Ordinary Rate £ Existing Long-Term Rate* £
Ordinary scale:
Husband and wife 13.65 16.35 11.65 12.85
Persons living alone 8.40 10.40 7.15 8.15
Any other person aged:
Not less than 18 6.70 8.40 5.70 6.60
Less than 18 but not less than 16 5.15 — 4.40 —
Less than 16 but not less than 13 4.35 — 3.70 —
Less than 13 but not less than 11 3.55 — 3.00 —
Less than 11 but not less than 5 2.90 — 2.45 —
Less than 5 2.40 — 2.05 —
Blind scale:
Husband and wife:
If one of them is blind 14.90 17.60 12.90 14.10
If both of them are blind 15.70 18.40 13.70 14.90
Any other blind person aged:
Not less than 18 9.65 11.65 8.40 9.40
Less than 18 but not less than 16 6.05 — 5.30 —
Less than 16 but not less than 13 4.35 — 3.70 —
Less than 13 but not less than 11 3.55 — 3.00 —
Less than 11 but not less than 5 2.90 — 2.45 —
Less than 5 2.40 — 2.05 —
Class 1—EMPLOYED PERSONS—INSURED PERSON (including N.H.S. contribution):
Earnings Present Rate Total £ Decrease Flat Rate £ Increase Graduated £ Flat Rate £ New Rate Graduated £ Total £
Employed Man:
Contracted-Out £15 1.02 0.09 0.02 0.87 0.08 0.95
£20 1.15 0.09 0.06 0.87 0.25 1.12
£30 1.65 0.09 0.11 0.87 0.80 1.67
£40 2.15 0.09 0.16 0.87 1.35 2.22
£50 2.65 0.09 0.21 0.87 1.90 2.77
£60 2.83 0.09 0.58 0.87 2.45 3.32
£62 2.83 0.09 0.66 0.87 2.53 3.40
Not Contracted-Out £15 1.15 0.09 0.03 0.75 0.34 1.09
£20 1.41 0.09 0.06 0.75 0.63 1.38
£30 1.91 0.09 0.11 0.75 1.18 1.93
£40 2.41 0.09 0.16 0.75 1.73 2.48
£50 2.91 0.09 0.21 0.75 2.28 3.03
£60 3.09 0.09 0.58 0.75 2.83 3.58
£62 3.09 0.09 0.66 0.75 2.91 3.66
Employed Woman:
Contracted-Out £15 0.85 0.09 0.02 0.70 0.08 0.78
£20 0.98 0.09 0.06 0.70 0.25 0.95
£30 1.48 0.09 0.11 0.70 0.80 1.50
£40 1.98 0.09 0.16 0.70 1.35 2.05
£50 2.48 0.09 0.21 0.70 1.90 2.60
£60 2.66 0.09 0.58 0.70 2.45 3.15
£62 2.66 0.09 0.66 0.70 2.53 3.23
Not Contracted-Out £15 1.02 0.09 0.03 0.62 0.34 0.96
£20 1.28 0.09 0.06 0.62 0.63 1.25
£30 1.78 0.09 0.11 0.62 1.18 1.80
£40 2.28 0.09 0.16 0.62 1.73 2.35
£50 2.78 0.09 0.21 0.62 2.28 2.90
£60 2.96 0.09 0.58 0.62 2.83 3.45
£62 2.96 0.09 0.66 0.62 2.91 3.53