Social Security Benefits Up-rating Order 1981 (Hansard, 31 July 1981)

HL Deb 31 July 1981 vol 423 cc913-26 913

§ Child Benefit (Up-rating) Regulations 1981

§ Family Income Supplements (Computation) Regulations 1981

§ Supplementary Benefit Up-rating Regulations 1981

§ Pensioners' Lump Sum Payments Order 1981

§ Supplementary Benefit (Requirements and Conditions of Entitlement) Amendment Regulations

§ 1.16 p.m.

§ Lord Cullen of Ashbourne rose to move that the draft order laid before the House on 3rd July be approved; and

§ That the draft order laid before the House on 6th July be approved; and

914

§ That the draft regulations laid before the House on 20th July be approved.

§ Lord Cullen
of Ashbourne said: My Lords, I beg to move the Motions standing in my name on the Order Paper.

Lord Wallace of Coslany
My Lords, I hesitate to interrupt, but am I right in thinking that we are also discussing the Supplementary Benefit (Requirements and Conditions of Entitlement) Amendment Regulations?

§ Lord Cullen of Ashbourne
Yes, my Lords. These instruments are being debated in another place today. First, I should like to make the point that very large sums of money are involved in social security. This year expenditure is running at over £27,000 million a year. These up-rating instruments between them raise expenditure on social security benefits by over £2,000 million in a full year. Half of this goes on increased retirement pension which goes up for a single person from £27.15 to £29.60; and for a married couple from £43.45 to £47.35.
I know that many of your Lordships are particularly interested in benefits for the disabled and I should like to mention particularly that benefits specifically provided for sickness or disability are increased by over £250 million a year. For example, the higher rate of attendance allowance goes up from £21.65 to £23.65. Mobility allowance is being increased from £14.50 to £16.50 a week—an increase of nearly 14 per cent. It is particularly appropriate in this International Year of Disabled People that we can give this extra help to people with severe mobility problems. This means that a severely disabled person who gets maximum invalidity benefit, including invalidity allowance which we are restoring to the full normal level, plus higher rate attendance allowance and mobility allowance gets £80.56 a week. Ten years ago he would have got only sickness benefit. Thus the main thrust of extra expenditure covered by these orders and regulations is in the direction of elderly people and those who are sick or disabled. But substantial sums of extra money are also being found for families with children, widows, and unemployed people.
Your Lordships may recall that, under Section 1 of the Social Security Act 1981, the up-rating order must increase the rates of benefit to the sums which the Secretary of State announced in his up-rating statement at the time of the Budget. As your Lordships will recall, the main increases are based on the Chancellor's forecast of a 10 per cent. increase in prices between November 1980 and November 1981. There have been suggestions in some quarters that in view of the movement of prices between November and now the 10 per cent. forecast may turn out to be an underestimate.
While readily acknowledging that economic forecasting is an inexact science I should like to make two main points. First, as experience last year showed very clearly the rate of inflation in the early part of a year is not necessarily a reliable guide to what will happen later in the year. This time last year the doubting Thomases were predicting a 20 per cent. inflation rate against our earlier forecast of 16½ per cent. In the event prices moved only 15½ per cent. over 915 the year. Secondly, if in the event the forecast should prove to be too low, the Government will take appropriate action to honour the pledge which my right honourable friend the Prime Minister has made clear on several occasions, to price protect pensions and other long-term benefits over the life of this Parliament. This means making good any shortfall for these beneficiaries at the next up-rating.
This brings me to another aspect of this year's up-rating which has been the subject of some controversy. Although the main increases are based on the 10 per cent. forecast, the actual increases are rather less than that because of the adjustment we have made to take account of last year's over-estimate. Your Lordships will be aware that provision for this adjustment was made in the Social Security Act 1981, which was recently approved by your Lordships' House.
This provision has been fully discussed already during the passage of the Act and I do not propose to go over the same ground again now. However, there has been considerable misunderstanding about what we are doing, so I want to make it quite clear that pensioners and others are still getting price protection over the two-year period. The increases they received last year were higher than was necessary to keep their benefits in line with inflation. All we are doing now is going back to what last year's benefit rates should have been before adding on this year's increases. We wish it was not necessary to do this, but the 25p difference for the individual pensioner means for social security expenditure as a whole some £200 million. We wish we could allow pensioners to keep the extra beyond what is necessary to price-protect their benefit, but the economic situation makes this impossible. I repeat that, over the two years taken together, pensions will be protected against price rises. This is in full accord with our pledge to price-protect pensions over the lifetime of this Parliament and is the most the country can afford at present.
The Supplementary Benefit (Up-rating) Regulations 1981 provide for the supplementary benefit scale rates to be increased on the same basis as that applying to the contributory benefits. For example, the supplementary allowance for a single person living alone is going up from £21.30 to £23.25 a week. The long-term scale rates are, of course, aligned with the main retirement pension rates. Subsidiary additions to supplementary benefit will be increased by appropriate amounts, generally in line with the movement of relevant components of the Retail Price Index. Heating additions will rise by between 18 and 19 per cent. in line with the likely movement of the RPI fuel component over the 12 months to next November. This should protect the substantial advance made last year when we boosted these additions by considerably more than the rise in fuel prices. These particular regulations add £230 million a year to public expenditure.
Your Lordships' House will have taken note of the 28th Report from the Joint Committee on Statutory Instruments, which drew special attention to this instrument on the grounds that elucidation is required of the basis used to determine the up-rating of the various amounts specified in the regulations. The detailed elucidation is provided in a memorandum by the department which is printed as Appendix II to the Joint Committee's Report, copies of which are available 916 in the Printed Paper Office. Also before your Lordships today are draft regulations to extend entitlement to the higher long-term rate of supplementary benefit to unemployed people aged 60 and over who have been on supplementary benefit for a year or more, and choose not to register for work. The change will take effect from 23rd November 1981.
It has long been recognised on both sides of the House that there is a case for extending entitlement to the long-term rate of supplementary benefit to the long-term unemployed in general, but the cost of doing so would be greater than we can afford at present. These proposals are, however, a step in the right direction. They offer older claimants who qualify for the long-term rate the opportunity to withdraw from the job market and, in effect, to retire early. There are many men aged between 60 and 65 who would welcome this. Moreover, it is men in this age group in particular who find it especially difficult to get a new job and the step we have taken will spare them this disheartening task.
The proposals permit those who wish to register for work to do so, but they will continue to receive the ordinary rate of supplementary benefit. Claimants will be able to count periods in receipt of supplementary benefit since their 59th birthday towards entitlement to the long-term rate, subject to the normal linking provisions. I hope, therefore that the House will endorse these measures, which will mean up to £9.60 per week more for a married couple, and up to £6.35 more for a single person.
I should now like to draw your Lordships' attention briefly to the Child Benefit (Up-rating) Regulations. Again, the increases are as my right honourable friend announced at the time of the Budget. Child benefit will go up by 50p from £4.75 to £5.25 per child per week and one-parent benefit by 30p from £3.00 to £3.30 per family per week. These increases cost £280 million net in a full year and bring the annual total expenditure on child benefit to nearly £3,500 million. They fully protect the November 1980 value of the benefits and fulfil the commitment given by my right honourable friend last year that, subject to economic and other circumstances, the Government would maintain the real value of child benefit. One-parent benefit has in fact increased by 65 per cent. since we came to office—well ahead of inflation.
At this point, I should also mention the Family Income Supplements (Computation) Regulations. Their terms are, I believe, quite straightforward and their effect is to raise the prescribed levels of income for FIS by £7.00 to £74.00 weekly for one-child families and to raise the additional amount for each further child to £8.00 a week. The maximum amount for one-child families will go up to £18.50 weekly, and this will be increased by £1.50 for each further child. Following the increases in real value last year, these levels will maintain the crucial role of FIS as a benefit designed specifically to support low-income families in work. I should perhaps emphasise that for these families the increases in FIS will be on top of the increases in child benefit and one-parent benefit, because, as your Lordships will know, these benefits are not taken into account in assessing income for FIS purposes.
917 Finally, I come to the order which provides for the payment of this year's Christmas bonus to pensioners and others. As in previous years, the bonus will be £10—not as much as we might wish, perhaps, but nevertheless an addition to the regular benefits which, as recent research by OPCS has shown, is much appreciated by those who receive it.
Naturally there is a wish to do more to help the less fortunate members of our society, but these instruments provide evidence of the Government's determination to protect the interests of those most in need at a very difficult time. Within the limits of available resources, this is the most we can do. I am confident that your Lordships will accept the instruments now before you. My Lords, I beg to move.

§ Moved, That the draft order laid before the House on 3rd July be approved; and

§ That the draft order laid before the House on 6th July be approved; and

§ That the draft regulations laid before the House on 20th July be approved.—(Lord Cullen of Ashbourne.)

Lord Wallace of Coslany
My Lords, from listening to the noble Lord, Lord Cullen of Ashbourne, I had the impression of some benevolent gentleman throwing pound notes away by the million. In point of fact, the story is entirely different. I entirely agree, of course, that these orders should be the subject of one debate. With possibly one exception, they are the administrative instruments of social security legislation which has passed through both Houses of Parliament in spite of severe criticism and the now familiar pattern of the Government's rigid attitude in not accepting amendments.
It is true that at times we have had some sympathetic noises from Government Ministers. We have also heard ad nauseam the phrase, "when economic circumstances permit". Sympathetic noises and vague promises are no consolation to the unemployed, the sick, the disabled and the deprived, who are the real sufferers under the Government's monetary policy.
In the main it is not my intention to deal with each order specifically. They are uprating orders based on a Treasury forecast, as the noble Lord has said, of 10 per cent. inflation, although forecasts that have emerged since June indicate a possible rate of inflation of 10.5 per cent to 12 per cent., with the Daily Telegraph forecast of inflation edging upwards in the last three months of the year to 12 per cent. or even 13 per cent.
Of course, in point of fact the up-rating orders are not 10 per cent., they are reduced to 9 per cent. because of the clawback of 1 per cent. imposed due to miscalculation last year. So in fact it is a reduced up-rating. We have argued considerably about this ad infinitum, without result. Social security beneficiaries just have to pay for Government miscalculation. What concerns many people now is what is going to 918 happen if inflation in fact exceeds 10 per cent. later this year If that is the case there will be a shortfall in benefits. Will the Government make good such shortfalls with the same speed and decision as they decided on the 1 per cent. clawback?
The Secretary of State for Social Services in a letter to my right honourable friend Mr. David Ennals quoted in The Times of 20th June, stated: If, and I underline if, the uprating proves to be too low because inflation has continued at a higher rate than had been anticipated, then the promise of price protection carries with it the promise that the resulting shortfall will be made good next time round". That on the surface sounds all right, but in fact the promise of price protection refers only to "long-term" social security benefits. It does not cover child benefits, unemployment, sickness, injury and maternity benefit, or indeed the ordinary rate of supplementary benefit. The noble Baroness, Lady Young, in your Lordships' House gave a similar undertaking to that given by the Secretary of State, but she said—and I quote from Hansard of 16th June at col. 543: As regards short-term benefits the Government's view is that if the situation arose the position could be properly considered only in the light of the amount of the shortfall and"— and here it comes again— of the economic circumstances of the time". The repetition of "the economic circumstances of the time" is becoming a monotonous stock phrase for Government Ministers. Will the Government come clean and give a clear undertaking that if the shortfall arises in both long- and short-term benefits then it will be made good? The noble Lord, Lord Cullen, made some indication of benefits being made good, and I understand from reading the tape that in another place Mr. Rossi, the Minister, made yet another pledge, but does this apply to all benefits, long and short term?
So far as the Christmas bonus of £10 is concerned, I suppose one should be grateful for small mercies, but we must not overlook the fact that it has remained at £10 a long time and its purchasing power has dropped considerably since first instituted. Nevertheless—and here I declare an interest from the point of view of a little spending money for Christmas for a poverty stricken Lord—I give the order a muted welcome. So far as supplementary benefits are concerned, there is a considerable variation in the range of increases varying from 6 per cent. to 19 per cent. It would be interesting to learn the Government's reasons for this extremely wide variation.
With reference to the limit of £2,000 capital for supplementary benefit purposes, although we have debated this the question still remains why, with the continuing fall in the purchasing power of money, have the Government failed to make an obvious and necessary adjustment? In spite of what the noble Lord said, child support is generally negligible. Total child support for each child in a family on unemployment, sickness, injury or maternity benefit, will rise by only 5p in November. For a child whose parent is on invalidity or widow's benefit it will rise by 70p. Whatever the Government will say the real value of child benefit will still be 40p less than when the Government took office. Do the Government really believe 919 that the present level of child benefit is adequate? I cannot believe that they do. Will they give now a commitment to improve it even if they have to use that well-worn stock phrase, "if economic circumstances permit"?
With reference to unemployment benefit and the 5 per cent. abatement, or cut, what hopes are there for the real value of unemployment benefit being restored once it is brought into tax next year, for remember that in November next the abatement effect is a cut of £1 for a single person and £1.65 for a couple based on real value? There exists a bitter resentment over invalidity benefit. For some 400,000 it is their only source of income, and the tax issue does not affect them, and yet they still suffer a cut of 5 per cent. There is real injustice here that cries out to be remedied. We have debated this, but I wonder whether the Government will take earlier action on reflection.
So far as the order extending the long-term supplementary benefit rate to unemployed men aged 60 or over, this is of course welcome. I welcome that unreservedly so far as the men over 60 are concerned. But it is a pity that the Government did not take the opportunity of extending their order to cover all unemployed claimants in receipt of supplementary benefit for over a year. The Government accept the case in principle—I concede that; that is admitted—but as expected state "this is not yet the time". Financially it is possible to do it now from savings on the anti-fraud drive and the increased revenue from taxation on benefits for the unemployed. Can the Minister say whether contribution credit rights will be preserved for those who cease to register availability or incapacity to work as a result of claiming benefit under this order? Contribution credits are vital so far as pension rights are concerned. I am not at all clear on the position, despite the statements that have been issued. Could the Government make a statement on this matter today?
My Lords—and here I approach a conclusion—we are on the very brink of a Summer Recess, and this is rather obvious in this Chamber. I am sure that noble Lords are sick and weary of the effects of the last minute spasms of legislative indigestion that we have had to endure. Even so, when we return some weeks earlier than another place, the long weary process will resume for a while. But, who knows, the Government may change their policy and restore to the unemployed, the sick and the disabled, that which they have taken away. After all, as we all know, even Scrooge changed his mind. Will the Government do so? On reflection, I suppose that that is supreme optimism. Like Oliver Twist I ask for more, but somehow or other, knowing this Government as I do, I do not expect to get it. On the other hand, as another place has passed the orders, in the tradition of this House we shall offer no opposition to them, and I offer the Minister my good wishes for a happy Recess.

§ 1.40 p.m.

§ Lord Banks
My Lords, I thank the noble Lord, Lord Cullen, for his explanation of the contents of these orders. This is the seventh consecutive year that I have had the pleasure of commenting to the House on the Social Security Benefits Up-rating Order, and, 920 as the proposed increases are announced, as Lord Cullen said, the day before the Budget, we have always had a long time to consider them and comment on them before the order appeared. This year has been no exception and in addition we have dealt with the whole question of up-rating when discussing the Social Security Bill.
In the debate on the Social Security Bill, my noble friend Lord Kilmarnock and I were concerned with the possibility that there might be a shortfall, a possibility to which the noble Lord, Lord Wallace, referred—that the Government's estimate of inflation this year might not be correct. We felt that the Government's estimate of 10 per cent. might not be enough and that their clawback from that, of 1 per cent., to recoup the over-estimate the year before might be not only undesirable in itself hut premature. My noble friend has asked me to say that he would have liked to have been present to press the point again today had he not had an engagement which prevents him from doing so.
What he and I sought to do when we were discussing the Social Security Bill was to ensure that, if there were a shortfall, it would be made good not only for long-term benefits but for short-term benefits as well. But in that we were unsuccessful and, since the fall in the value of the pound, economic commentators have cast some doubts, as the noble Lord, Lord Wallace, said, on the target of 10 per cent. being met and, as he said, there have been suggestions of anything from 10½ per cent. to 12 per cent. as a possible rate.
They may he very pessimistic and that may not happen. But, if the rate of inflation were to be 12 per cent., the loss to a single person on unemployment and sickness benefit would be 40p per week and to a married couple 65p per week, plus 5p for each child. I am underlining the question asked by the noble Lord, Lord Wallace, when I ask whether the Government in such circumstances intend that that loss should be sustained permanently by those on short-term benefits, with the cumulative consequences which would follow in future years. As Lord Wallace pointed out, we have already had a drop in the real value of these benefits through the 5 per cent. abatement last year, and I reinforce his question to the Government in asking the Minister whether the Government will restore the abatement for all benefits affected when they are brought into tax.
Looking at the Government Actuary's Report on the Social Security Benefits Up-rating Order, we see that the new estimate for 1981–82 shows a deficit of £619 million, compared with an estimate last November of a surplus of £39 million. That is almost entirely accounted for by the increasing numbers of unemployed and by a more realistic assumption in the calculations with regard to them. The present rates of contribution are clearly enough at the moment to meet the cost of pensions, which are far and away the largest single item—in fact, the estimate for pension expenditure has been revised downwards very slightly—but the cost of unemployment benefit is now one-sixth of the cost of pensions. The estimated deficit to which I have referred is very small compared with the reserve in the National Insurance Fund. If a reduction in unemployment could confidently be predicted in the next year or two, the deficit for 1981–82 could, in 921 my view, be disregarded, but, if unemployment is to remain at about its present level into the foreseeable future, then some further small increase upwards in contributions will no doubt be necessary eventually.
In the Social Security (Contributions) Act last winter, the Government increased personal national insurance contributions, but only part of that increase was to meet unemployment; part went to the health service and part to allow the Government to reduce the Treasury supplement. Had the Government not reduced the Treasury supplement, the fund would have been better placed today to meet the cost of unemployment without further increase in contributions, because it should be borne in mind that unemployment reduces the revenue as well as increasing the cost of benefits.
Coming to the Child Benefit (Up-Rating) Regulations, much has been said about the fact that the increase proposed, though it aims to match inflation over the past year, does not make good the decline in the value of child benefit since the present Government took office there is still a shortfall there, and we on these Benches endorse that criticism.
As for the Pensioners' Lump Sum Payments Order, we note that this benefit is to be paid again at the rate of £10. No allowance is made each year for inflation; the value of this benefit therefore becomes less and less. Is it the Government's intention to phase it out altogether? We on these Benches take the view that if a particular benefit is worth including in the range of benefits which the Government provide, its value should be maintained unless and until Parliament decides that the value should be reduced or the benefit abolished.
We welcome the increase in family income supplement, although we look forward to the day when FIS, in view of its implications for the poverty trap, will be replaced by a tax credit system such as I have commended to your Lordships on many previous occasions. The object of that, in addition to the basic family income supplement, would be to take large numbers off supplementary benefit. While the cost of national insurance benefits to the unemployed is increasing, as we have seen, the recent report of the Social Services Committee in another place nevertheless underlines the fact that, while supplementary benefits accounted for 46 per cent. of benefit expenditure on the unemployed in 1975–76, that figure had increased to 53 per cent. by 1979–80 and is expected to reach 63 per cent. by 1983–84. In other words, 63 per cent. of' the benefits paid to the unemployed will be paid by means of supplementary benefit. Supplementary benefit was never designed for such a task, and a complete overhaul of the social security system is clearly needed. In the meantime, however, from these Benches we shall offer no opposition to the orders which have been presented today.

§ 1.49 p.m.

§ Lord Houghton of Sowerby
My Lords, I was a little alarmed when my noble friend Lord Wallace said we were on the brink of the Summer Recess, which rather suggested that we were on the edge of a volcano or something similar. We are in fact on the eve of the Summer Recess, and I hope it will be a tolerable one. I told the Minister yesterday, when he asked me whether 922 I intended to take part in the debate, that I did not intend to do so, but as on many occasions when noble Lords come into the Chamber to listen, there is a temptation to speak. This is a curious occasion, in that we are approving regulations that are made under legislation previously discussed at length, and passed, so that this is really, so to speak, the routine end of the process. Nevertheless, when we take the regulations en bloc, as we have done this afternoon, we have one of those rare occasions when we can look broadly at the whole perspective of social security, and in these circumstances I think that one looks at it in a new light. This is not the time to go into some of the broad problems of philosophy, and of the structure and financing of our social security system, but I have been connected with it in Opposition and in Government, and in Parliament generally, for so long that I cannot but form opinions about it as time goes by.
My first contact with social security was in broadcasting on the Beveridge Report—and indeed before that. I should imagine that if Beveridge were alive today, he would think that our social security system is far and away more generous than ever he thought it would be. He laid down principles which were the product of pre-war thinking about bare subsistence levels and the relief of poverty, and even on that basis, low enough as it was, we could not wait to get the benefits which the scheme contemplated. So we rushed into it and laid the foundations of our present social security scheme, without the possibility of realising what a vast charge upon the nation's resources it would become. In more recent years I have questioned whether the working population could bear the increasing weight of the dependency factor in society; and this is another thought which troubles me as time goes by.
Something else which I cannot get rid of is the feeling I have long had, especially on the Labour side of politics, that we are really in search of an acceptable means test, and we have been all along. I do not think that we have one even now, more acceptable though it is than that of earlier days. When I look at the Social Security Benefits Up-rating Regulations and turn, for example, to the clothing allowances, I see how much is allotted for a blouse for a woman, a cap for a man, trousers, and all the other clothing, including underclothing. It is given in detail: jumpers, nightdresses, pantie-girdles, petticoats, pyjamas, raincoats, shoes, and so on and so forth. One really wonders whether this is the way to do it.
But of course it replaces much of the discretionary element that there used to be in supplementary benefit in earlier days. I well remember that in another place we used to say that the discretionary benefits under the supplementary benefits scheme occupied far too large a proportion of the total allowances granted for them to be satisfactory. That was because the benefits were at the discretion of officials. Then there was a desire to get hold of the book of instructions given to the officials, to see what were their directions. Since they had to exercise discretion, we wondered what advice they received on how to do it. So it went on. And then it was thought that it was better to bring it out in the open and have catalogues, classifications, prices and so forth.
923 These are random thoughts which came to mind as I sat listening to the debate on the regulations. What a mistake the Christmas bonus was, for instance. I was in the Government at the time, and I remember how the Christmas bonus arose from internal pressures in the Labour Party. It had nothing whatever to do with public demand at that particular moment. Our difficulty was that we were pledged to a very substantial up-rating of the social security benefits, and we encountered administrative difficulties in having the new benefits in payment before Christmas. The Parliamentary Labour Party thought that administrative difficulties must be overcome, that nothing should be impossible, and in 1964–65 every effort was made to try to find a computer that might do the job more quickly.
Well, we could not find one. So we decided to introduce the Christmas bonus, but it was highly discriminatory when we did. It was to be for those people who were really deserving, those on supplementary benefit, and the chronic sick. Well! I recall the sacks of mail that arrived at the Department of Social Security from outraged pensioners who were not on social security, or supplementary benefit, as we then called it. In many cases what they thought of those who were on supplementary benefit was far from complimentary, and we realised that we had made a serious mistake in discriminating between one section of recipients and another.
Then there was the question of removing that discrimination. Rather than have a debate on the matter every year, we said, "Let's make it permanent". But when it was made permanent and each year regulations were introduced to deal with it, the amount remained the same. So, naturally, there is pressure over the question of how much longer should the Christmas bonus go on being eroded before there is some kind of explosion that calls for a catching-up process, which would prboably lead to it being doubled or trebled at some time. After all, Christmas is Christmas. One must keep up. But one wonders whether this is a justifiable feature of a social security and national insurance system.
Another thought occurred to me while the Minister was speaking. In his concluding remarks he referred to the regulations as providing additional benefits to the less fortunate members of our society. Of course, that is not a true description of all the people who fall within the regulations. The national insurance scheme is not all the time necessarily dealing with the less fortunate members of our society. I declare my own interest: I am myself a retirement pensioner. I do not count myself among the less fortunate members of our society, and there are a great many other people to whom the national insurance pension is a form of occupational pension and has nothing to do with how fortunate they may be in society. An increasing number of people are on two pensions. We must not overlook that. There are vocational pensions and the national insurance pension.
The less fortunate members of society are those without jobs, the sick, the disabled, and those whose resources are so small that they must have supplementary benefits. It is that fact that makes for some difficulty in presenting the whole of the social security system as if it were comprehensively dealing with 924 people who are less fortunate than others. That is not wholly true, and it seems to me that the time has come when we must look in a different way at the various sections of the community.
I greatly regretted that the negative income tax system never came to anything. We worked very hard on it in a Select Committee in another place. One of the main reasons why the scheme failed was that the evidence we received in the Select Committee represented a vote of censure on the fathers of Britain. Mothers were not prepared to have child allowances channelled to them through the taxation system which applied to their husbands. So long before the Select Committee had really started on its task, Ministers had to hurry in order to assure the mothers of England that they would have the prescriptive right to whatever benefits were applicable to the children.
The other thing was that the scheme was presented as being costly in terms of revenue foregone and benefits paid, with an undue proportion of the benefits in the scheme going to the better off because they were getting the benefit of it through the tax system. I think the presentation was largely responsible for that misunderstanding, coupled with a certain amount of political bias against it. There are times when the Opposition do not like to see the Government succeed. I leave it at that. So we did not get that provision but I think that one day we will come around to getting something of that kind. That is enough said at this time of day and at this juncture in the Session, but I will probably return to some of these ideas on another occasion.
I should like to conclude by saying that I believe the time is coming when we have to do some new and unorthodox things about social security. I believe we have got into a groove over social security, but with changes in society and in economic conditions, a new look at much of what we are doing to fortify the resources of those who lack having all they need will become imperative. With those few remarks I can only sign off by saying that, since we are on the brink of the Recess, I will not now trouble your Lordships further.

§ 2.2 p.m.

Lord de Clifford
My Lords, before the Minister replies I should like to ask him one or two questions. I listened with great care to all the facts and figures which the Minister rolled out so beautifully. While I partially understood them, it is very difficult for someone like me who lives in a rural area to explain to people in a slightly aged population how these benefits are made up. It would be of great help to everyone if the Minister's department could produce in an understandable form the points which he has made. It is very difficult to explain them to people.
Secondly, people are very worried about the speed with which a pension can be adjusted under certain circumstances—especially people in rural areas. These people feel the rising costs very quickly. One instance is the rise in the price of petrol, which has nothing to do with Government policy but is purely due to the oil companies. That increase affects the man who has no bus service for collecting his pension and has to use his car; the cost of his doing so rises instantly. And when he travels to the shops, or when a mobile 925 shop calls in his area, that increase is passed on instantly in the form of higher prices. It is difficult to explain to people what they can do about this. The speed at which these up-ratings are considered is an essential factor.
I now return to the question of the Christmas bonus. We should ask the Government whether they consider it is worth going on with this or whether they consider it should be continued but upgraded in value. This bonus started off as a nice dish of roast beef but has ended up as something like a cat's dinner. It is difficult to explain why the Government go on year after year keeping the bonus at the same level when there has been such a decrease in the value of money. I wonder if my noble friend will ask his department to consider bringing this bonus up to date or doing away with it.

§ 2.5 p.m.

§ Lord Cullen of Ashbourne
My Lords, I am grateful to all the noble Lords who have spoken in this short debate for the information which I have extracted from their speeches. I always find that I learn a good deal when debating this subject. I always learn a lot from the noble Lord, Lord Banks, and today I have learnt also from the noble Lord, Lord Houghton of Sowerby. I must start by saying to the noble Lord, Lord Wallace of Coslany, who not surprisingly complained about the frequent references to our lack of resources, that we cannot live in isolation in this world. There is a world recession. It would be nice to do all sorts of things which the noble Lord would regard as being more generous. It would certainly be very much easier for me to stand here and to be able to announce all sorts of delightful increases in benefits rather than simply up-rating them on the basis of inflation.
I have been asked quite a number of questions to which I will try to reply. If I do not reply to them all perhaps I might be permitted to write to noble Lords accordingly. The question that was asked of me by many noble Lords concerned the shortfall, particularly as it applies to short-term benefits. Your Lordships' House is well aware that my right honourable friend the Prime Minister has pledged that long-term benefits will be price protected. I should like, particularly on the eve of the Recess, to be able to send the noble Lords, Lord Banks and Lord Wallace of Coslany, away with a joyful heart by saying that we could make the same pledge on short-term benefits, but I am afraid we cannot do that. It will have to be looked at in the light of the amount of the shortfall and the circumstances at the time. Hopefully, one day we will have more resources and be able to take a different view of these matters.
The noble Lord, Lord Wallace, asked about the variation in supplementary benefit rates. The main supplementary benefit rates are being increased on the same basis as the main national insurance benefit rates. Subsidiary increases for various special expenses have, broadly speaking, been increased in line with relevant components of the retail price index. For example, dietary additions have been increased in line with the movement of the food component of the index—an increase of 8 to 9 per cent. Heating additions have been increased in line with the forecast rise in the fuel component of the index over the 12 months to 926 next November—l9 per cent. Those are two examples.
The noble Lord asked me an important question about the entitlement to national insurance credits. In reply, I would say that it is not the intention that this change in the supplementary benefit rules should have any effect on a person's entitlement to any national insurance benefit. For most people the benefit at issue is retirement pension, and credits will continue to be available for this purpose. This may require an amendment to regulations to ensure that receipt of supplementary benefit at the long-term rate in these circumstances can be counted for credit purposes.
Both the noble Lord, Lord Wallace, and the noble Lord, Lord Banks, asked about the abatement being made good in benefits when they come into tax. As far as unemployment benefit is concerned, this will be considered in the context of the annual review of public expenditure decisions in the normal way, and the same applies to sickness benefits. As to invalidity benefit, on the other hand, we are pledged to restore the value when it comes into tax, and this is an unqualified pledge. It will not now be possible to bring invalidity benefit into tax in 1982, as we had hoped. However, because we are anxious to make a start towards the restoration of the value of this benefit we are proposing to restore from next November the value of the invalidity allowances paid on top of the invalidity pension.
Regarding entitlement to the long-term rate of supplementary benefit for all the unemployed, the Government are well aware of the case for this change but, like our predecessors, we have not been able to go the whole way. The cost of making this available to all unemployed would have been well over £100 million. Incidentally, had we reduced the figure from 60 to 55 that would have cost £40 million. The noble Lord, Lord Banks, referred to the national insurance fund deficit, and suggested that it might be necessary to raise contributions in the future. That indeed is possible, my Lords, but I think it is much too early to speculate on this.
I was grateful to the noble Lord, Lord Houghton, for many of the things that he said, and I will certainly pass on to my right honourable friend his suggestion that the whole social security system should be reviewed. I feel that I shall be telling him something which he knows well already; and I think it is very difficult to make any major changes at a time when (with apologies to the noble Lord, Lord Wallace) resources are very short. It is very much easier to carry out those changes when there is a little more in the kitty. I fully understood what my noble friend Lord de Clifford said about rural areas; and I also agree with him that the situation about the Christmas bonus, to which all noble Lords referred, of going on and on year after year at £10, is not satisfactory, but at the moment I am afraid the Government see no possibility of increasing it.

§ On Question, Motions agreed to.