§ 7.42 p.m.
§ Lord BANKS rose to ask Her Majesty's Government what plans they have to increase the National Insurance Death Grant in view of the fact that it has not been raised since 1967. The noble Lord said: My Lords, I look forward with interest to the Answer to my Question, which is to be given by the noble Lord, Lord Wells-Pestell, a little later. This is the first opportunity I have had to congratulate the noble Lord publicly upon his recent appointment as Parliamentary Under-Secretary of State, and I am quite sure that the whole House will feel that the appointment was well deserved. I wish to thank the noble Lord, Lord Sandys, the noble Baroness, Lady Macleod of Borve, and the right reverend Prelate the Bishop of Rochester, who have indicated their intention to speak in this short debate. I greatly appreciate their interest. If I single out the right reverend Prelate for particular mention, it is because he and I were at school together. He was the captain of monitors when I was a most insignificant member of the student body. I think that he would agree that he had perhaps a little more hair then than he has now, but he still has the same commanding presence, and I cannot help feeling that I must watch my step if I am not to incur a monitor's detention.
I live near Harrow Hill, and if I walk to the top of the hill, I can see there written on the side of a building the following words:
Near this spot Anthony Ashley Cooper, afterwards seventh Earl of Shaftesbury, KG, while yet a boy at Harrow School, saw with shame and indignation the pauper's funeral which
helped to awaken his lifelong devotion to the service of the poor and the oppressed.
§ That was over 150 years ago, and when our present National Insurance scheme was introduced, following the Beveridge Report, in 1948, it was intended to put that kind of scene right behind us. In 1949 a death grant was introduced which would pay at least a substantial part of funeral expenses. Old people would no longer have to worry about a decent burial when they died. Their death would not be a financial burden on their relatives. In 1949 the death grant was £20, which was about 60 per cent. of the average cost of a funeral. It has been raised only twice since 1949. It was raised to £25 in 1958, and to £30 in 1967, where it still is, and it costs the country about £16 million a year.
§ Those two increases have not been nearly enough to keep pace with inflation. In real terms the death grant is now worth less than a quarter of what it was worth in 1949. It would need to be put at £123 to have the same purchasing power as in 1949. The average cost of a funeral is now over £200. The grant no longer provides 60 per cent. of the cost, as it did in 1949; it provides about 13 per cent. of the cost.
§ There are three additional points to bear in mind. The full grant is provided only for those who fulfil the contribution conditions. Secondly, no grant is payable for men born before 5th July 1883, or women born before 5th July 1888; that is, men over 95 and women over 90. There are 150,000 of these in the country, but they were over retirement when the scheme started and have not paid any contributions. Only a half-rate grant is payable for men and women up to ten years younger who were paying contributions for ten years—men over 85 and women over 80. The numbers of these peopleare obviously reducing rapidly. It would cost £3 million to include them all at the present rate of grant.
§ The first question I have to ask is: have the Government any plans to include them—and to include them at the full rate? The second question is: how can the present level of the grant possibly be justified? The cost of funerals has more than doubled since the last increase in 1967. To raise the grant from £30 to £123 would cost approximately £50 107 million to £55 million per year. The Government say, "If we had £50 million to spend, is this the best way to spend it? What about pensions, what about the handicapped?" In my view, it is not right and it is not fair to allow particular benefits to be eroded by inflation over the years, and then to pose that question. After all, it is pensioners and the handicapped who are concerned about this matter. It is a matter of pride to ensure that sufficient is set aside for an adequate funeral. Money which should be used to meet the rising cost of living is set aside to meet the rising cost of dying. Unless it is agreed by Parliament that a benefit is no longer required, or is no longer required at the original level, its value should be automatically maintained; it should be indexed.
§ In this connection in another place the Social Security Bill, now before Parliament, has been amended to refer to the maternity grant and the death grant in such terms as to ensure that the Secretary of State shall each year review these grants to see whether they have retained their value in relation to the general level of earnings or prices in this country. We shall have the opportunity of considering that clause in due course in this House. I am sure that we shall welcome it as far as it goes; but it deals only with the future. In any event there is no obligation on the Secretary of State to do anything about it once he has reviewed it, and it would appear from what Government spokesmen have said in another place, that it is not the Government's intention that they should automatically increase the benefits according to the results of this review.
Fifty-five million pounds seems to be a formidable sum, but it perhaps seems to be not quite so formidable when it is compared with the £10,000 million to be paid out of the National Insurance Fund in the year 1978/79. The most recent forecast of the Government Actuary is that there will be a surplus of £247 million in the National Insurance Fund for the year 1978/79. If it is not considered prudent to use that surplus for this purpose, the money might be raised by raising the top limit for National Insurance contributions. The Prime Minister said in the House of Commons on 7th Decem-
ber last, as reported at column 1619 of the Official Report,
the value of the death grant has substantially fallen behind".
He went on to say,
there is obviously a substantial discrepancy here ".
§ But he would not promise any increase at that time. But since there is, on the authority of the Prime Minister, "a substantial discrepancy", I am sure that we are right to press this matter, and I hope that in his Answer to my Question the noble Lord will be able to give us some encouragement this evening.
§ 7.50 p.m.
§ Lord SANDYS
My Lords, it is some seven months since this important subject was last discussed in your Lordships' House, and I think we must be grateful to the noble Lord, Lord Banks, for returning to it once more. Before I open my remarks, I should like to join him in congratulating the noble Lord, Lord Wells-Pestell, on his appointment as Parliamentary Under-Secretary of State. We believe that this appointment has come all too late in the life of the Government. We can recollect the prominent part that the noble Lord has played in the life of the Front Bench over the past several years. However, although it may be late in the day, we most warmly congratulate him on what has duly taken place.
I am further in the noble Lord's debt because today he has thought fit to reply with most detailed figures to a Question for Written Answer submitted by my noble friend Lord Newall. I very much appreciate receiving a copy of this reply, which will appear in today's Official Report, because it refers quite specifically to the death grant and gives most valuable information concerning the last five years. From this Answer we can now see much more precisely the numbers of people who have benefited in the five years since 1974, with the exception of the current year. My Lords, in those years no less than 2,237,000 people are recorded as having received the death grant. I believe this is a very significant figure; and, although the figure projected for this year is not available, we can assume that it is very similar to that of years past; that is, that approximately half a million people will receive this sum.
109 We looked with interest at the provisions in the Social Security Bill—in Clause 12, to which reference has already been made—as to the review by the Secretary of State of the maternity and death grant; and, further, at the Amendments being made in another place. I think it would be inappropriate to comment further at this stage, because we shall certainly be making reference to it when the Bill reaches your Lordships' House. Nevertheless, we note what has taken place on this subject, and mark it as a step forward.
I would refer to the Question for Written Answer in another place on 11th April last year, which was on this same subject. In that Written Answer, Mr. Orme gave a detailed table concerning the raising of the death grant by certain figures and the amount of expenditure which would have to come out of the public purse. I do not propose to quote those figures again because I believe that, with the lapse of time since April last year, there may be certain alterations which need to be made. Nevertheless, this short table pointed out most clearly what a very significant increase in public expenditure would take place were the death grant to be raised by an appreciable amount.
Here, my Lords, I must come to the view which my Party takes as to the priorities in public spending in this field, and I would refer your Lordships to the document, The Right Approach—A Statement of Conservative Aims, in which it says—and here I quote the phrase:Priority should continue to be given, when resources permit, to improving services to the disabled and the chronically sick".I think there is a very grave dilemma here which was perhaps indicated when the noble Lord, Lord Banks, said that the cost of funerals, naturally, has risen most sharply. But, as one must emphasise particularly, so has the cost of hospitals, and so has the cost of all the other benefits which public expenditure must continue to meet. So, my Lords, it must be a matter of priorities. Further, I think that we must consider this in the light of other increased expenditure.
That is not to say that we are unsympathetic to all those who find that the increasing cost of a burial is insupportable; but I think it is significant that the noble Lord, Lord Banks, referred to the fact that the grant, when it was 110 established in 1949, was able to pay for about 60 per cent. of the cost of a funeral. To coin a phrase, it broke the wave. It did not pay for the whole funeral, but it met a significant part of the cost. I believe that there is a repair to be made to the value of the death grant if at all possible. I would join the noble Lord, Lord Banks, in asking the Government to use their best endeavours to see what can be done, and would ask whether the surplus in the National Insurance Fund can perhaps be given a little more scrutiny.
§ 7.56 p.m.
The Lord Bishop of ROCHESTER
My Lords, at the November session of the General Synod of the Church of England a motion was passed, with only one dissentient, requesting Her Majesty's Government realistically to increase the present death grant and to keep it under regular review. As this motion was moved on behalf of my diocese, where the initiative had been taken by the nine parishes of the deanery of Gillingham after careful consultation with undertakers and others, I should naturally like to support the noble Lord, Lord Banks, in the Question he is asking tonight. I am only sorry that, as we began rather later than expected, I shall not be able to stay for the Minister's reply. For that I apologise; and, at the same time, I should like to add my congratulations to the others that he has received on his new appointment. We on these Benches are always extremely grateful to him for his sympathy and help to us.
I should like to speak on behalf of the clergy and ministers of all denominations who are frequently dealing with death, bereavement and funerals in their day-to-day pastoral ministry. Reference has already been made to the special difficulties which arise in connection with the very old, and these instances are sometimes heartbreaking. But, my Lords, they are nothing compared with the shock and bewilderment of the totally unexpected death of a child. Many clergy will tell you that nothing strains them more than the pastoral care of a family which has had a cot death or which, by the sudden death of an older child, has lost someone particularly dear to them. I can remember as though it was yesterday the first child's funeral that I conducted as a 111 very "green" curate, and the utter dejection of the young, unemployed and very poor parents.
We have to accept that, sometimes, funerals are far more elaborate than is necessary. Perhaps this comes about because this is the only way in which the relatives can express their deep emotion and sense of loss. Joyce Carey, in his book Accept the Lord, wrote that he had never known a man less inclined to ostentation than his father, but the sum he spent, largely on credit, on his mother's funeral was, he said, not only his father's statement before the world that she was worthy of honour but also, in the mysterious domain of our spiritual life, an act of gratitude and worship towards the dead. We must accept, I think, that many funeral directors know perfectly well that sometimes, especially with funerals of children, they will never be paid. Very often the family commit themselves in a way which leaves them permanently in debt; and indeed in some cases where they are quite incapable of paying, a funeral director has to write off the debt, so that inevitably this becomes a charge on the funeral industry and, therefore, puts up the cost of funerals.
At the General Synod debate we were told of funeral directors who reduce their charges for the very poor and of clergy who forgo their fees. But neither should be necessary if a funeral is modest and dignified, rather than extravagant and showy, and if the grant available is sufficient to go some real way towards the expenditure involved. If, as I hope, the Government decide eventually to make the long overdue updating—and if it was done in the 50s and the 60s, why should it not happen also in the 70s?—I hope that they will also take the opportunity to simplify the administration, to make it clear that the amount payable will be affected by unpaid contributions over the years and that the intention of the grant is not to encourage ostentation by relatives or elaboration by undertakers, but to ensure for every citizen a simple, dignified burial of their body or their ashes.
§ 8.1 p.m.
§ Baroness MACLEOD of BORVE
My Lords, I realise that the time is getting 112 on and that your Lordships would not want me to speak for longer than is necessary. I am deeply indebted to the noble Lord, Lord Banks, for bringing this matter to the notice not only of the House but of the Government. Speaking of the Government, I, too, should like to add my congratulations to the Minister. I have always addressed him as such because I have always thought of him as the Minister for the DHSS. I, too, have always met with the greatest of kindness and courtesy in everything that he has done.
I am national president of the National Association of Widows and it is really in that capacity that I thought I ought to say a few words; but it is abundantly apparent to everybody that it is the next of kin, whoever they are, or the executors who bear the full brunt of paying for a funeral. I have got some statistics here about the death grants given in Europe. For instance, in Germany they give 3 months' salary; in France, also 3 months' salary; in the United Kingdom, £30, which is taxed; in Ireland £50 and in Holland, 3 months' salary which is tax-free. I think your Lordships will agree that our country, which is still paying £30, is more than somewhat parsimonious. I should like to try to press that everybody who is next of kin, however old the deceased is, should have the same grant—and the noble Lord, Lord Banks, drew our attention to this—because it is a fact that if you are 86 you get only £15 instead of £30.
The costs that I can give your Lordships are perhaps even more up to date than those the noble Lord was able to give. For instance, in 1972 the minimum funeral charge was: cremation, £63; burial, also £63. In 1976, cremation had gone up to £165—this is the minimum—and burial to £180. But last week a friend of mine who is a widow and an old-age pensioner had to bury her very elderly mother, who was 86, and therefore the grant was only £15. She had a cremation and she told me on the telephone that it was with no trimmings—however much she loved her mother, it was with no trimmings—and no funeral car. There was a hearse but nothing else—and she told me that it cost last week £230.
I understand that in the good old days before roaring inflation, a lot of people 113 saved for their own funerals. Everybody would realise that today it is very difficult to save to live, let alone to save to die; and I doubt very much whether anybody has put anything by. When costs are discussed in this Chamber or in another place, we are often told by the Government to shop around; but when you are faced with a disaster in your own home you cannot shop around and, in any case, there is probably only one funeral parlour in the vicinity, so that one is left with having to cope with very large bills indeed. I am not, if I may use a rather vulgar phrase, "knocking" the funeral people. I am certain that it is not their fault. As other noble Lords have done, I am asking the Government to update the £30 to something more realistic; but, even more important, to reconsider the situation of those who have to bury people over 86 and who have received only £15. I wonder who thought that one up. It does not seem to me that somebody over 86 is any cheaper to bury than somebody younger. Certainly, those who are next of kin are likely to be old-age pensioners. If you are over 86 your children are probably over 60 or 65 and, therefore, they are not earning.
My friend who lives in the Midlands, and who buried her mother, has to earn, as so many of we widows have to earn, and I hope she will be able to find the £230. I am indebted to the noble Lord, Lord Banks. I think there is quite a lot here that the Government could take away and consider, and I hope that they will give us good answers to some of our questions this evening.
§ 8.8 p.m.
§ Lord WELLS-PESTELL
My Lords, first, I hope that your Lordships will allow me to begin by thanking each noble Lord who has spoken—and that obviously includes the noble Baroness—for the kind remarks and observations relating to my own promotion in the ministerial ranks. I am grateful to them because I know all four extremely well and I know that none of them would have said what they said if they did not mean it. That is always a great comfort and it is worth a lot to people who attach importance to what others say.
Let me first acknowledge the concern which exists among my colleagues at the 114 Ministry, a concern which is no less great than that expressed by noble Lords who have been speaking this evening. There has been pressure on us from various quarters for a long period to increase the grant; and my right honourable friend the Secretary of State for Social Services has made it clear that he appreciates the genuine concern which is felt about it. Perhaps we should all reveal an interest in this matter because it is an interest which, on the face of it, would seem reasonable and it is a cost which we do not have to meet ourselves; but there comes a time when we all die and somebody has got to face up to this if we have not made adequate provision before we leave this earth.
My Lords, the death grant was introduced in 1949 as a new benefit under the National Insurance scheme which came into force in 1948. Since it was a new benefit, it was decided that only people who contributed under the scheme should be eligible for it. That is the first answer that I would give to the noble Baroness: benefits under our National Insurance scheme—whichever Government have been in power—have been related to what people have been able to contribute themselves by way of National Insurance. It may be that it is unfortunate that we live in a society, a society that is to be found all over the world, where people who pay for something expect a little more than those who do not. This benefit was geared to the contributions under the scheme of people who participated in it. Hence, those who were over the age in July 1948 were ineligible and those who were within 10 years of pension age were eligible for only half the standard rate.
It has been said, quite correctly, that in 1949 the grant was £20 with reduced rates for people under 18. It was increased to £25 in 1958 and to £30, its present rate, in 1967. That £30 in 1967 covered about 35 per cent. of the average cost of a funeral. The noble Lord, Lord Sandys, and, I am sure, the noble Baroness, Lady Macleod of Borve, will understand when I say that their Party did nothing about this in 1970, 1971, 1972 and 1973, when the cost of a funeral must have been considerably higher than it was in 1967. Yet the amount remained, I accept, at £30. I begin to wonder, why all this interest in this particular matter?
§ Lord SANDYS
My Lords, I think that the noble Lord will appreciate that the purchasing power of the pound has depreciated by a figure of no less than 55 to 60 per cent. since 1974.
§ Lord WELLS-PESTELL
Yes, "hear, hear!" Is the noble Lord saying that between 1970 and 1974 the purchasing power of money rose so much that the £30 paid for more than 35 per cent? Of course he is not! Nothing was done about it then. My Lords, I accept that the average cost of a funeral has gone up to about £200 and that the grant covers only about 15 per cent. of the cost. To restore the 1967 value, the grant would need to be increased to about £97. I think that is about right. This would cost an extra £36 million a year on top of the present £16 million. To increase the grant to £200, which, as I have said, is at present about the average cost of a funeral, it would amount to something like an extra £92 million a year. To increase it to £100, a figure often mentioned, would cost an extra £38 million a year. In each of these cases, the cost would be increased substantially if the increased grant were extended to those elderly people who at present get only a half-rate grant or no grant at all.
These are, let us face it, my Lords, very large sums of money. We have never made any pretence of the fact. We have never sought to hide the fact that one of the things that are in short supply today in this country is money. Everyone of us knows—and on this side we have not tried to conceal it—there is so much that still needs to be done for many millions of people in the community who are not getting an adequate amount of money to give them—shall I say?—the standard of living that everybody in your Lordships' House would like to see them have.
I do not think that I need remind your Lordships that resources for additional public expenditure—whichever Government happen to be on this side of your Lordships' Chamber—are going to be limited. There is never going to be enough money, as I see it, to do all that requires to be done. The Government are under constant pressure to do more in the social security field: to increase the 116 level of pensions; to reduce pension age for men; to increase the level of supplementary benefit for the long-term unemployed; to do more for the disabled and their families, particularly the low paid and those of single parents.
All these I believe have a very real measure of urgency. The sums that I have referred to could not be spent on the death grant without denying other claims in the social security field which some people will feel are even more deserving. To say that is not to indicate that one lacks sympathy or understanding, or even does not wish that the ability were there to do it. This is the crux of the matter. As my right honourable friends the Secretary of State and the Minister for Social Security have said on many occasions—and we come back to something I am almost tired of saying and your Lordships are almost tired of hearing—it comes back to a matter of priorities. Indeed, as my right honourable friend the Minister for Social Security said in another place a few months ago, it has become a question of priorities among priorities.
§ Lord BANKS
My Lords, I am grateful to the noble Lord for giving way. He was saying just now that the grant now meets 15 per cent. of the cost of a funeral. Is he now telling us that it is the Government's intention to allow that percentage to drop further?
§ Lord WELLS-PESTELL
My Lords, the position that the Government are in at the moment is that they cannot see their way clear to do anything in this matter in the foreseeable future. So I suppose that, regretfully, the answer is, "Yes."
No one would claim that recent times have been easy for the less privileged sections of the community. That is why the Government have thought it right to concentrate all available resources on such groups as pensioners, families with children, and disabled people. It is sometimes argued that if we are concerned about pensioners we should increase the death grant, since it is often said that it is the elderly people who worry most about funeral costs. But, where pensioners are concerned, the Government consider that the most important thing to do is to protect the value of the weekly pension.
117 As evidence of our success in this respect, we can point to the fact that, after taking account of prices rises, we have increased the real value of pensions by about 20 per cent. in the past five years.
No one would accuse this Government of not having the interests of pensioners at heart. But, as I have said already, we cannot look at particular groups in isolation, however deserving they may be. In a department like the Department of Health and Social Security we see on all sides particular needs which we would love to be able to cater for if only the resources were available. This, I am afriad, is where I come back—as I so often do; I admit it—to the question of priorities.
While there is no doubt that some old people worry about their funeral costs, I must make the point—though noble Lords may feel that it is not a very valid one—that the cost of their funeral does not fall on them. It falls on their families, their next of kin or whoever is responsible for the funeral arrangements. The death grant is not the only source of funds for many of them. For example, the majority of people are still covered by life insurance. In fact, in 1975, my Department, the Department of Health and Social Security, carried out a survey on funeral expenses interviewing people who had recently been responsible for meeting funeral expenses. The people who undertook the survey were selected people with no responsibility to the Department. It was not a prejudiced review in any way. They found that very few had experienced any hardship. I cannot remember offhand the number of people who were interviewed, but I am sure your Lordships will take my word that it was a real cross-section of the community and the number of people who were seen ran into several hundreds, certainly four figures. Ninety-three per cent. said they had experienced no difficulties, and there were few strong feelings about the level of the death grant. The report concluded that funeral expenses no longer posed a difficulty for the great majority of families and that they had ceased to be a major social problem. Of course, the cost of funerals has risen since the survey was carried out, but when we are thinking about priorities we have to bear in mind the evidence such as the survey produced.
The Parliamentary Under-Secretary of State for Health and Social Security, 118 speaking in another place just over a month ago, referred to the dilemma which faced Ministers in the Department as to where money goes first when there are limited resources. He explained that, although the Government were well aware of the feelings about the level of the death grant, the first priority for Ministers in the Department was to get the long-term supplementary benefit rate paid to the long-term unemployed. And if there is anybody in your Lordships' House who would agree with that, I think it would be the noble Lord, Lord Banks, because this is a very real problem for the long-term unemployed.
As the Parliamentary Under-Secretary said on that occasion, if we had more resources we could look at what we could do about a number of problems, including that of the death grant. At the moment we do not have those resources and it would be wrong for me to pretend that the death grant is top of our list of priorities. But I want to say in all sincerity that this does not mean the Government have not thought about this problem. Indeed, the level of the death grant is one of the issues we have constantly in mind. I have been in the Department for nearly five years and I know that this has been considered because I have been in the team which has considered it time and time again. As I say, we shall continue to bear it constantly in mind and shall certainly see what can be done, if anything, in the future.
The noble Lord, Lord Banks, referred to that section who, because they were men of 65 and women of 60 at the time the National Health Service was introduced in 1948, were not given any provision at all; and others referred to those who had been paying contributions for less than 10 years prior to 1948. They asked why we could not do something for them. I think the noble Lord said it would cost only £3 million a year. That is perfectly true, but the answer is that Governments and Departments are always apprehensive about selecting a special group, however little it may cost, and doing something for that special group—because immediately you do it you are subject to a great deal of pressure—"You have done it for them. Why don't you do it for us?" Heaven knows!, 119 my Lords, this is part of the state of affairs we are suffering from at the moment, because one group which has managed to get "so much" per cent. for itself finds that it is being imitated by others, and many others are trying to improve upon what has been given.
I do not want to keep your Lordships any longer. I think it is desirable that we have taken time to air this. If I may say so, it could not have been done by four better people. There was nobody from the Cross Benches, but the fact remains that we have had a short and very clear debate on this. I know that my replies are not going to give rise to any satisfaction. I merely ask your Lordships to accept the fact that it is not out of callousness that the Government are not doing anything in this matter at the present time. It is due solely to one thing which has bedevilled us for some considerable time in the Health Service; that is, the limit of financial resources. We have got to look at the overriding priorities and, rightly or wrongly, this is not one of them at the moment.