§ 6 p.m.
§ Lord Glenarthur
My Lords, I beg to move that the Social Security Benefits Up-rating Order 1983 be approved. The order is accompanied by a report by the 1591 Government Actuary (Cmnd. 8969), and there is a separate statement, HC32, which covers the up-rating of mobility allowance. It will, I hope, be for the convenience of your Lordships if, at the same time, I speak to the other Motions—a total of seven Motions—standing in my name on the Order Paper. I shall then move the first five Motions en bloc, if that is agreed to, and the Pensioners' Lump Sum Payments Order and the Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations individually. I hope that that is acceptable.
The Social Security Benefits Up-rating Order is the principal means by which national insurance, industrial injuries and certain other social security benefits will be increased from November this year. Your Lordships will recall that earlier this year this House approved the Social Security and Housing Benefits Act 1983, which changed the basis of up-rating these benefits from the "forecast" method to the "historic" method. The provisions of that Act were fully debated, and I shall not take up your Lordships' time either by repeating the reasons for the change or by detailing the increases which will be effected by the order.
It will, I hope, be sufficient for me to say that the increases proposed in the order, and the basis on which they are calculated were fully explained in the Statement made on 23rd June in another place by my right honourable friend the Secretary of State for Social Services and repeated by me to your Lordships that same day. Apart from the increases in weekly benefits for which it provides, it also increases the retirement pension earnings limit from £57 to £65 a week.
The second instrument before us is the Supplementary Benefit (Up-rating) Regulations, which are solely concerned with increases in supplementary benefit.
It is, perhaps, worth mentioning that whereas the increases in other social security benefits reflect, generally, the current inflation rate of 3.7 per cent., the increases in the main supplementary benefit scale rates reflect the movement of the RPI, excluding housing costs. This leads to an increase of 4.3 per cent. in the weekly scale rates, in addition to which housing costs are met usually in full. The supplementary benefit heating additions for those with a need for extra heating are being increased in line with the rise in fuel prices in the past year and go up by 8.6 per cent.
The regulations also provide new levels of single payments for clothing, footwear and bedding, and increase the amount of capital which a person may hold without affecting his entitlement to weekly benefit or to single payments under the supplementary benefit scheme.
The Family Income Supplement (Computation) Regulations increase the prescribed amounts which form the basis of calculating the amount of family income supplement payable to a working family bringing up children on low income. The regulations also increase the maximum payments under the scheme. The increases are in line with the 3.7 per cent. movement of the RPI in the past year.
1592 The Child Benefit (Uprating) Regulations will increase the amount of child benefit and one parent benefit by 11 per cent., bringing each of these to its highest ever level in real terms.
The last of the instruments which are concerned with increases in benefits is the Housing Benefits (Increase of Needs Allowances) Regulations. These regulations increase the needs allowances by about 4 per cent.
The sixth instrument, the Pensioners' Lump Sum Payments Order, differs from those which I have so far mentioned in that it does not provide for an increase in benefit but is the means by which the payment of the Christmas bonus to people receiving retirement pensions and other specified benefits is authorised.
The orders and regulations to which I have referred so far form a package of draft statutory instruments which traditionally your Lordships' House considers collectively at about this time each year. However, this year there are before your Lordships the draft Supplementary Benefit (Requirements, Resources and Single Payments) Regulations which do not form part of that package and which perhaps call for rather more detailed comment. These have been considered by the Social Security Advisory Committee, and their reports are to be found in Cmnd. Paper 8978. A number of changes were made to the draft regulations in the light of representations made to the committee and as a result of the committee's own observations. The Government are grateful to the committee for the consideration they have given to these proposals.
The regulations contain a wide range of changes to the supplementary benefit scheme, the majority of which are minor or technical. The two particular changes which have attracted some publicity concern the rules whereby a deduction is made from a claimant's benefit if he is voluntarily unemployed; and the rules for meeting board and lodging charges. However, before I deal in some detail with these I should first like to mention briefly some of the other important changes.
The change which will help the largest number of people concerns the removal of the so-called "invalidity trap". At present most people who receive invalidity benefit and other long-term incapacity benefits are paid at a rate which makes them unable to qualify for supplementary benefit because their benefit income is higher than the ordinary rate of supplementary benefit and they are therefore unable to progress to the higher long-term rate. They are thus trapped between the two rates. We are amending the regulations so that periods in receipt of long-term incapacity benefits will count towards the qualifying period for the long-term rate of supplementary benefit, so as to benefit 30,00 sick and disabled people at a cost of about £9 million a year.
Another change concerns the rule for linking separate periods on supplementary benefit for the purposes of the 52-week qualifying period for the long-term rate. At present gaps of 13 weeks or less between periods on benefit count towards the qualifying period. We are reducing the linking period from 13 weeks or less to 8 weeks or less to bring it into line with the linking rules for most other social security benefits.
1593 We are making a significant improvement in the rate of benefit payable to single people without accommodation. At present they receive £2.95 a day to cover all their expenses. This is less than a hostel dweller receives to cover the cost of meals alone. We are therefore increasing the amount of benefit payable to single homeless people to the equivalent of the rate for meals allowances—that is to say, £3.90 a day from November. The regulations introduce an easement in the assessment of capital resources. The first £1,500 of the surrender value of life insurance will be disregarded. We are increasing from £225 to £325 the limit on the cost of repairs and redecoration which can be met by a single payment of supplementary benefit.
I turn now to the changes in the rules for meeting board and lodging charges. When boarders claim supplementary benefit a fixed amount is allowed for personal expenses, but the main element in the assessment is the charge made for accommodation. If this is within the amount that the benefit officer considers to be reasonable for the area—what is known as the "local limit"—it is included in full. If it covers only part board, fixed amounts are added for the other meals. If the charge exceeds the local limit the benefit officer has to consider whether it is reasonable for the claimant to move to other accommodation, taking account of the availability of accommodation and the level of charges in the area and the personal circumstances of the claimant. This latter provision in particular has given rise to difficulties and caused us to bring forward the changes before your Lordships this afternoon. The provision for a single local limit is unsatisfactory, covering as it does a wide range of accommodation from bed and breakfast establishments for fit persons to nursing homes; and the current discretionary power places a heavy burden on supplementary benefit officers in deciding whether or not a person should move.
We propose, therefore, a three-tier system of limits based on reasonable weekly charges in the area for respectively nursing homes, residential care homes, and ordinary board and lodging accommodation, plus a single extension of £15.35 a week. We believe that this represents a considerable improvement in our provisions for boarders. However, we share the view of the Social Security Advisory Committee that the system will work as we intend only if the limits are properly set. We are working closely with the Chief Supplementary Benefit Officer to this end. We are also making arrangements to monitor what effect the new limits have on claimants and the accommodation provided for them. The local limits under each heading will be set by reference to the level of charges made for that type of accommodation in that area. Charges quite out of keeping with the local level for comparable accommodation will not be met. We are also setting up a survey to identify claimants whose charges are no longer met under the new provisions.
Finally, I come to the changes in voluntary unemployment deductions. Where a person is disqualified from unemployment benefit because he leaves, or refuses the offer of, a job without good cause, a deduction of 40 per cent, of the appropriate single person's scale rate is made from his supplementary benefit for up to six weeks. The regulations define certain types of case where a lower rate of deduction 1594 (20 per cent.) is to be applied to avoid potential hardship. The criteria in the regulations for the lower rate deduction follow closely the guidelines laid down by the Supplementary Benefits Commission prior to November 1980, but at that time staff were required to modify the deduction only if, in their opinion, the full rate would cause hardship. The effect of putting the criteria into regulations was that the deduction had to be modified automatically when they applied. But this was not intended to change the way the criteria were being applied in practice. However, before the new regulations came into effect in November 1980 fewer than 2 per cent, of deductions were at the lower rate. By November 1981 this had risen to 34 per cent. Clearly, the intended policy was not being achieved.
The Social Security Policy Inspectorate were therefore asked to look into the way the new regulations were working. Their report, which we have published, found that there was no justification on hardship grounds for the lower rate of deduction in the majority of cases where it was being applied, though there was in a minority; for example, where there was serious illness in the family. The Government therefore propose to limit the circumstances where the lower rate of deduction applies only to those cases where there is pregnancy or serious illness in the family. Proposals to this effect were put to the Social Security Advisory Committee, who advised against proceeding with them in their present form. The committee were not persuaded by the evidence from the inspectorate inquiry, and considered that the definition of hardship used by the inspectorate—a risk of the claimant or his family going without food or essential services"—was too severe.
The Government respect and share the concern of the committee that unemployed people and their families should not suffer serious hardship. We have therefore carefully reconsidered the proposed amendment in the light of the committee's report. However, we remain convinced, for the reasons which caused us to bring forward the change, that such a change is justified. The deduction is intended to have a penal effect on those people who give up their jobs without good cause, and the definition of hardship used by the inspectorate, though more stringent than would apply normally for supplementary benefit purposes, is in our view appropriate in the context of voluntary unemployment.
It must be borne in mind, too, that the deduction applies only to the personal scale rate of the claimant: benefit for a wife and children is not affected, nor are payments to meet housing costs or additional requirements. The effect of applying the higher rate deduction instead of the lower is to reduce benefit by, at most, a further £5.15 a week at the current rates for an average of about four weeks and a maximum of six weeks. The lower rate of deduction was intended to apply to the small proportion of cases where there was a real risk of hardship. In practice, it is being applied where there is none.
The inspectorate inquiry also identified some defects in the administration of the present rules which result in some claimants not receiving refunds of voluntary unemployment deductions where a decision is subsequently made that they were not after all to be 1595 regarded as voluntarily unemployed. This is quite unacceptable to the Government, and we have taken urgent action to correct and improve their effectiveness. As regards past cases where the department may have failed to refund deductions, we are taking steps to identify these and to refund any benefit due.
All current claims will be examined in the course of the up-rating exercise, which is just starting and will be completed by November, and any benefit which it is established has been wrongfully withheld on grounds of voluntary unemployment will be paid in full. Subject to the availability of the relevant records, anybody else who believes that benefit has been wrongfully withheld on these grounds in respect of a previous claim may apply to have his case reviewed. Publicity will be arranged and leaflets prepared inviting such applications. Instructions have been issued to social security local offices and to unemployment benefit offices requiring procedures to be strictly applied for the future.
My Lords, each passing day makes clearer to me that very little, if anything, is simple in the field of social security, but I have tried to explain the main purposes of the instruments now before your Lordships not as briefly, I am afraid, as I should have liked on what I suppose is the last day of term; but I have tried to do it as simply as possible in view of the more detailed explanatory material which has previously been made available for those who require it. I therefore commend the proposals for your Lordships' approval. I beg to move.
§ Moved, That the draft order laid before the House on 5th July be approved.
§ That the draft regulations laid before the House on 7th July be approved.
§ That the draft regulations laid before the House on 7th July be approved.
§ That the draft regulations laid before the House on 7th July be approved.
§ That the draft regulations laid before the House on 7th July be approved.—(Lord Glenarthur.)
§ 6.15 p.m.
§ Baroness Jeger
My Lords, I appreciate that the noble Minister has had a difficult job today in presenting to us, on the last day of term, such a complicated number of proposals. I must say, in no criticism of him but of those who manage Government business, that I much regret that these detailed matters have been put before us at such a time and in such a comparatively difficult situation, when they affect thousands and thousands of the poorest people in our country. It is a great pity that the Government business managers did not feel that these matters should have been organised in a different way so that we might have had a fuller debate and not have to rush these through at this time.
Of course, the proposals before your Lordships arise out of previous legislation. Like the noble Minister, I do not propose to go over the arguments that we had, particularly during the passage of the Social Security and Housing Benefits Bill, but I must ask the noble Lord one or two questions. As he says, there is a 1596 package before us, but there are one or two matters which come outside the package.
I am not sure whether the noble Minister is aware of the anxiety of the Association of Metropolitan Authorities about some of these points, particularly regarding the last matter before us, the Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations, and so on. There seems to be some difficulty, and the noble Minister was quite fair in explaining that the Government have not always agreed with their own Social Security Advisory Committee on some of these points. I am particularly concerned with the introduction of the three-tier system instead of allowing the local supplementary benefits officers to have some discretion in amounts that are being awarded for board and lodgings.
One complication which I hope the noble Lord may be able to explain—and I hope he will not think I am going into too much detail—concerns some anxiety about the question of people in hostels where they have special needs. I think of people who might be on treatment for alcoholism or for drug abuse, and where obviously it is going to be much more expensive to maintain them. I hope that the rates will not be so rigid that they will not take into account these special concerns.
I want to ask the Minister whether he has been fully sympathetic to the question of what we call adult fostering, and the payments to be made in this connection. We hear a lot of talk from the Government—and this side of the House supports it fully—about the idea of getting more mentally handicapped and physically handicapped people out of big hospitals and into the community and into small hostels. People who are to be helped to get out of the big hospitals, I submit, are expensive people.
It is wrong to think that by cutting the cost to the National Health Service of maintaining large hospitals we are going to save money in the long run. The greater part of the expenditure saved by this welcome policy will have to be transferred to social services and to supplementary benefits.
I am concerned that where cuts are made in the payments for hostel accommodation more and more of those people will look increasingly to the social services departments of local authorities. This is at a time when the Government are trying to tell every local authority that it is not to spend so much money. I know from friends in local government that there is anxiety about these matters. I hope that nothing the Minister has said tonight is intended to suggest that being more strict about hostel and adult fostering charges will have the effect of increasing liabilities for the social services departments of local councils.
We welcome the removal of the invalidity trap and the slight improvement in the single homeless daily allowance, but today is not the occasion to go into detail. We are looking forward very much to some real policy decisions from the Government about dealing with the single homeless. If they think they are dealing with the single homeless by giving them £3.90 per day to go away and keep quiet that is not the answer to a terrible social problem. I am not aware of any signs that that problem is being tackled at its roots.
1597 I said that I would not go into a great deal of detail. My last point is on the question of voluntary unemployment. I am sure we all recognise the difficulties, but I hope that the Government are clear what they mean about voluntary unemployment. Is it that the chap just cannot stand his boss any more and sacks himself because he finds everything getting on his nerves? Is it someone who is wilfully lazy? Perhaps the Minister would remind the House what the appeal procedures are for someone who suffers this reduction in benefit, because he is deemed voluntarily to have created his own unemployment, when, in fact, he has some very good reason for walking out and slamming the door on a job which he may find he is not well enough to do or which is not suited to him.
The Minister suggested that the new rules would not cause hardship. On the other hand, he said—I wrote it down—that these changes were meant to have a penal effect on the man concerned, or I suppose it might be a woman. He emphasised that the wife and children would continue to receive full rates of benefit. But the effect of reducing unemployment benefit to the head of the household means that the family income is inevitably smaller and this is likely to rebound on the standard of living of the whole family. Therefore, I hope this will be used with the greatest care and sensitivity because it is no use trying to get a definition of "hardship" which excludes the fact that a reduction in income must increase the possibility of hardship, even if the wife and children maintain their own benefits.
These are the main points that are causing us concern. I will not go beyond the terms of reference before the House to raise more fundamental questions of the Government's whole attitude to the problem of social security. I shall leave out the philosophy and any more mathematics and hope that the Government will see that these orders are carried out with the fullest understanding, sympathy and compassion for those who have to seek help in this way.
§ 6.24 p.m.
§ Lord Banks
My Lords, I should like to thank the noble Lord, Lord Glenarthur, for his clear exposition of the content of these orders. As I understand it, we are speaking now to seven different items. That is quite a lot and I will endeavour to do so briefly, but it is a lot to cover in a short time.
Dealing first with the up-rating orders, we are always in difficulty over these because the increases are usually announced at the time of the Budget and the news has become a little stale by the end of July, usually on the last day, when we get these orders embodying the changes. However, as has been pointed out, this year it has been slightly different because of the return to the historic as opposed to the forecast method of determining inflation. That means that most of the figures could not be given in March and we had to wait until comparatively recently to learn what the inflation rate was for the 12 months to May. However, we had the discussion on the legislation governing the change and a few weeks ago we learned that the figure for the increases was 3.7 per cent.
On the change to the historic method, the Government's expectation of inflation in November, as announced by the Chancellor of the Exchequer in 1598 his Budget speech, was 6 per cent. The increase is to be 3.7 per cent., so that on those figures the beneficiary is losing as a result of the change.
Government spokesmen have repeatedly said that if the inflation rate to November exceeded 3.7 per cent. and consequently there is a loss, it will automatically be made up in the following year. But that is not so and on 9th May in this House I set out my reasons for saying that. I argued that the November 1984 up-rating would not necessarily make good any loss occasioned by a change in method in November 1983. Whether it did so would depend on the difference between the rise in prices in the period May to November 1982 and the period May to November 1984.
Immediately before the general election the noble Lord, Lord Trefgarne, wrote to me in these terms:I write to confirm that, as you said, the difference between the two review periods will depend on the difference between the rise in prices in the period May to November 1982, which we know to be 1.3 per cent., and the corresponding movement between May and November 1984".That last increase is certainly likely to be more than 1.3 per cent., which means that the loss will not be made good in the second year. However, let me make it clear, as I have before, that I think it is right in principle to go back to the historic method, but I think the change was made at the wrong time because it is bound to be adverse from the beneficiary's point of view; which is exactly the same thing as the Labour Government did when they moved in the opposite direction, also at a time when the move was not advantageous to the beneficiary.
Moving to more general remarks, Ministers often say of the annual up-rating, "We are increasing benefits by such and such—an enormous sum". The implication is, "How can you accuse us of cutting back when we are going to spend all that amount extra?" In the main, they are merely repairing the ravages of inflation. This year the increase of benefits in a full year from the National Insurance Fund will cost £772 million. Two years ago—we are thinking of the National Insurance Fund which is only a part of the up-ratings we are considering today—the corresponding figure was £1,446 million; almost twice as much. Were the Government twice as generous two years ago? Of course not. Inflation was higher at that time and the argument about whether the fall in inflation has been obtained at too high a cost lies outside the scope of this debate.
My point is that it is clearly no use trying to judge the merit of up-rating by the total figures involved. What is important is whether the real value of benefit has been maintained, whether the level of benefit is higher or lower as a consequence of Government policy. There are some increases which I, like the noble Baroness, would welcome. I welcome the increase of 65p in child benefit, but for that increase to match the increase in personal taxation allowances an 80p increase would have been necessary and not a 65p increase. We always have to remember the relationship between personal income tax allowances and child benefit; because child benefit has replaced income tax allowances for children. We on these Benches have argued frequently for increases in child benefit. We believe that that is very important and, 1599 while welcoming the present increase, we shall continue to urge a higher increase yet; because we believe that families with children have fallen behind.
I welcome the rise of 8.6 per cent. in the supplementary benefit heating additions. This has been done because of the rise in fuel prices of some 60 per cent. in three years. Whether it is adequate to meet that, I do not know, but at least it is a step in that direction. But it reminds me again of the need to have a pensioners' index which really reflects what pensioners spend and to which the pension could be related. The restoration of the 5 per cent. rebate on unemployment benefit is welcome, of course, but it does not excuse its introduction in the first place. Like the noble Baroness, I welcome the end of the invalidity trap; but, against that, I should have to set the fact that pensions, because of the break with earnings, are lower as a result of Government policy than they otherwise would have been.
The inadequacy of the pension for today's pensioners, to which I referred during the debate on the Address, has not been tackled. The 5 per cent. rebate is not yet restored for invalidity pensions and I should very much like to know when that will be achieved. Invalids' chair allowance is still not extended to married women; and the household duties test for the housewife's non-contributory invalidity pension has not yet been abolished. The real value of the pensioner's Christmas bonus is being allowed to wither away.
I must say, as I have said before in this House, that I think that if benefits are provided by Parliament for people in particular categories, they should be maintained at a constant value unless Parliament deliberately and positively decide to the contrary. The earnings rule, although the limit is raised, still remains, although the Conservatives were so keen to remove it in early 1979 when in Opposition that they divided this House on the issue. The long-term rate of supplementary benefit is still not available to unemployed men under 60. It is appeciated that, whatever progress has been made with certain benefits—and I agree that with certain benefits, mobility allowance, for example, progress has been made—the level of many benefits remains inadequate and some benefits are lower than they would otherwise have been but for Government policies.
The rumours of a possible further cut in the social security field become increasingly alarming. I hope that the noble Lord will be able to dispel these rumours when he comes to reply and to say specifically and categorially that there is no intention, the 5 per cent. rebate having been restored, to cut unemployment benefit again, as has been suggested in the Press.
My Lords, before I close, I should like to say a word about the Supplementary Benefit (Requirements, Resources and Single Payment) Amendment Regulations, 1983. There are two comments there. One is on the amendment to Regulation 8.3 and one on amendment to Regulation 9. The amendment to Regulation 8.3, as the noble Lord explained, deals with supplementary benefit payable to a claimant who, through his own fault, is no longer in employment. While in certain conditions he can nevertheless 1600 be entitled to full benefit although he has voluntarily left his job, normally there is a reduction of 40 per cent., but in cases of hardship there is a reduction of only 20 per cent. But, as the noble Lord explained, the number of cases when that lesser deduction will apply in order to prevent hardship, is being restricted to one only—where there is a member of the family pregnant or seriously ill. For example, to have a child under 5 in the family will no longer be a reason for a lower deduction under the order. I believe that this may cause hardship, in spite of what the noble Lord has said.
The cut in the claimant's entitlement affects the amount of financial support available to children, and the supplementary scale rate for children is already inadequate. The noble Lord referred to the inspectorate survey of August and November 1982, and said that, according to the inspectorate, there had been no hardship. But the definitions which he himself gave to the inspectorate to use were very severe; and the inspectorate seemed to assume that all housing costs would be met by housing benefit, although that is not necessarily so. I still have grave doubts as to the humanity or necessity of this proposal.
Finally, on the amendment to Regulation 9, I am concerned about the proposal to abolish the ultimate discretion to meet a person's board and lodging charge in full where it is above the DHSS limit but it is unreasonable to expect the person to move. I understand that it is the view of the Department of Health and Social Security that this has been abused by certain organisations concerned with the rehabilitation of alcoholics and drug addicts. But is the only way of dealing with such abuse to penalise the innocent as well as the guilty; and to discriminate against boarders as opposed to tenants and owner-occupiers? The Government obviously do not want to give an unscrupulous landlord a blank cheque, but the limit must be reasonable. I wonder whether the ultimate solution is perhaps to have all boarding establishments licensed by the local authority, with premises regularly inspected, to ensure that health and safety standards are maintained and fixed maximum charges set. I should be interested to hear the views of the noble Lord on the points that I have raised.
§ Lord Kilmarnock
My Lords, I should like to thank the noble Lord for having steered us so expertly through the reefs of these regulations. There are some things here that we can welcome. The increase in child benefit is one of them. However, I still have severe doubts about the adequacy of the 3.7 per cent. up-rating for pensioners. Lord Banks referred to the need of a pensioners' index. I am sure that that is the case, particularly in view of Paragraph 13 of the report for the last Session of the Social Services Committee of another place, in which they say that there are good grounds for believing that the welcome fall in the rate of inflation over the past 12 months has not been fully reflected in the expenditure patterns of pensioners and other groups of social security beneficiaries. I hope very much that the Government will keep a close eye on that.
I also wonder whether the retention of the £65 earnings limit for pensioners was really necessary. Having gone up to £65, it seems to me that it would 1601 have been sensible to have removed it altogether. And then, as Lord Banks has said, we still have the bonus for pensioners at only £10 and the death grant still at £30. We pledged ourselves in our general election manifesto to the abolition for pensioners of standing charges for gas, electricity and telephone. This would have been of great benefit to that group.
I want to turn briefly to the Family Income Supplements (Computation) Regulations 1983.I wish to take the opportunity here of thanking the noble Lord for his letter to me of 8th July, in response to my question on 23rd June on family income supplement take-up.
I note from his letter that there are 200,000 families now claiming the supplement as against 73,500 in 1979, and he attributes this largely to an increase in take-up. But one has to point out that there has also been a serious increase in poverty and we now have a total of 7 million people who are dependent on supplementary benefits, which the noble Lord will recall was seen by Beveridge as the last refuge of the destitute.
The noble Lord in his letter goes on in relation to family income supplement—and I quote:In the absence of detailed statistical analysis we cannot put a precise figure on the improvement that has taken place".I want to ask the noble Lord whether his department will try to improve the statistical analysis of this particular benefit so that we may know what is happening to it.
On the Supplementary Benefit Up-rating Regulations, I came across a rather curious little fact; perhaps it was even a slip. In the schedules under "men's clothing and footwear", on pages 8 and 9, I found that the standard amount for men's vests, woollen, had soared from £6.20 to £8.50, while women's vests, woollen, remained pegged at £4.70. As they are both made of wool, presumably with the same price movement in the material, surely what is sauce for the goose is sauce for the gander. I wonder whether the Government are not in danger possibly of running into accusations of sex discrimination. Would they please look into it?
I share the concern expressed by the noble Baroness, Lady Jeger, on the Supplementary Benefit Requirements, Resources and Single Payments Regulations, particularly in relation to the passage which the noble Lord read out. This seems to be the only case in which the Government have gone directly against the recommendation of the Social Security Advisory Committee in relation to the deduction for so-called voluntary unemployment. In fact, the noble Lord read out this very clear passage to the effect that the deduction applies only in cases of voluntary unemployment and is intended to have a penal effect.
Obviously one is thinking here mainly of the interests of children in families who are so affected. I also wonder whether the old discretionary system was perhaps not better than the rigid rules which have now been introduced. However, I should like to associate myself with the remarks of the noble Baroness, Lady Jeger, in hoping that the Government will attempt to apply these new rules with humanity and with proper attention to the merits of individual cases.
Finally, as this is the last chance we have of jogging the Government's arm about anything before October, and in order to give them a little homework 1602 for the holidays—I have also informed the noble Lord's office of this point—I wanted to raise the question of the extension of the long-term supplementary benefit rate to unemployed families with children. I think the noble Lord, Lord Banks, also touched on that. That was a top priority recommendation of the Social Services Committee of another place in their report for the Session 1982–83, in paragraph 28. I quote:The Social Security Advisory Committee, both in their first annual report and in their letter to the Secretary of State, put the extension of the long-term rate of supplementary benefit to unemployed people with children at the top of their list. This would also be our priority".So it is not only the priority of the Social Services Advisory Committee, but also of the Social Services Committee of another place. They go on to say:We recommend that the extension of the long-term supplementary benefit rate to unemployed families with children should be the first priority use of the funds available".I want to leave that thought in the Government's mind and ask if they will give very serious consideration to that recommendation of both the Social Security Advisory Committee and the Social Services Committee of another place before we return from the Recess.
§ 6.45 p.m.
§ Lord Glenarthur
My Lords, I am grateful for the comments which your Lordships have made on the various orders I have described. There are a number of points to answer and I will do my best to answer them, although not necessarily in the order that they came to me. I hope I shall be able to answer as many points as possible. The noble Baroness, Lady Jeger, asked about the three tiers for board and lodging and about the rates payable to those in hostels for alcohol and drug misusers. In fact, charges made in such hostels cover both board and rehabilitation costs. The latter element is a matter for local authorities, although residents in such hostels will qualify for the extension of £15.35 a week which is available to certain categories of patients. I hope that information meets that particular point. I am advised that the question of adult hospitals is outside the scope of the regulations I have described. If I am advised incorrectly I will write to the noble Baroness, but I understand that the regulations do not cover the particular point which she mentioned.
§ Baroness Jeger
My Lords, did the noble Lord mishear me? I was talking about hostels and not hospitals.
§ Lord Glenarthur
My Lords, if I have got it wrong then of course I apologise, and I will write to the noble Baroness. But, as I understood the point she made, this is not in fact covered by the regulations. The noble Baroness asked about hardship and the question of voluntary unemployment. There were really three areas that were touched on in connection with voluntary unemployment. When someone has family responsibilities, the deduction is considerably less than 40 per cent. of total benefit income. The deduction is applied only to the claimant's scale rate, leaving the amounts paid for wife or children intact; and housing benefit is also unaffected by the deduction.
Also on the question of voluntary unemployment, the noble Baroness asked: why abolish the concession 1603 for those with children under five? Since these families were included in the pre-1980 Act guidelines their benefit provision improved considerably. Children under five now have the same considerably higher scale rate as 5 to 10-year olds, and families with children under five receive a special heating addition. Also, because the deduction is 40 per cent. of the single person's rate, the benefit for wife and children is unaffected. This means that the standard deduction for a married man with children is actually 20 to 25 per cent. of his benefit income. The question of appeal rights was also mentioned. There is a right of appeal to the National Insurance Tribunal, which has much experience in such cases, against the insurance officer's decision that a claimant is voluntarily unemployed. I hope that covers most of the points raised by the noble Baroness, but if there are others I will pick them up and write to her.
The noble Lord, Lord Banks, made certain points about the change back from the "forecast" to the "historic" method of up-rating. The noble Lord said that the difference between the two review periods will depend on the difference between the rise in prices in the period May to November 1982 (which we know to be 1.3 per cent.) and the corresponding movement between May and November 1984. What is less clear is what adjustments might have been necessary under the old "forecast" method and whether such adjustments would in any way have affected the comparison. Under the "historic" method, no such deductions would fall to be made, although I take the point that under either method it is possible that the November up-rating might reflect more or less than the actual movement of prices between up-rating dates. Whatever his view about the change, the fact remains that the Government have more than fully honoured our pledge to maintain the level of pensions and related benefits.
If I may give the noble Lord some figures—even if he assumes that there is an inflation rate of 6 per cent. in November next year; it may be even less than that—since November, 1978, prices have gone up by 70.7 per cent. and pensions have gone up by 74.6 per cent. I think that that demonstrates that the pledge to pensioners has been more than maintained.
The noble Lord asked about the Christmas bonus. It was an indication of our concern for pensioners that we legislated early to make the Christmas bonus a permanent feature of the social security scheme, but an increase in the amount of the bonus from £10 cannot be justified at present. The bonus is paid to nearly 10½ million people at a cost of £104 million. The noble Lord will be aware that there are constraints, and this I am afraid is to some extent the result of those constraints. Much as we should like to put it up, I am afraid that there is not the money to do so.
The noble Lord also asked about restoring the 5 per cent. abatement of invalidity benefit. We have undertaken that the abatement of the invalidity benefit will be made good when the invalidity benefit is brought into tax, but a date for taxation has not yet been fixed so I cannot go any further on that point. The noble Lord asked whether it is the Government's intention to cut unemployment benefit again. The 1604 rates of all benefits payable from November 1983, have already been determined and set out in the uprating instruments which we have discussed today. I really cannot anticipate what the rates might be in future years.
On the question of board and lodging, the meat of the question that he asked me was: is not the solution to the regulation of board and lodging charges to licence all boarding establishments with local authorities, who would be responsible for fixing maximum charges and for inspection to ensure that health and safety standards were met? We think that that is too draconian. Market forces will properly control charges and standards of ordinary board and lodging. There is already legislation in respect of health and safety standards.
The noble Lord, Lord Kilmarnock, asked me a variety of questions and I am grateful to him for giving me notice that he was going to ask at least some of them. As for woollen garments, I am afraid that I do not have an answer for the noble Lord. In the heat of the summer, those are the last things to cross my mind. But I will inquire and if there has been a mistake I shall have it corrected. He raised a point about the long-term rate of supplementary benefit to families with children, when the head of the family is unemployed. He said that he would provide that as a little background work for us in the holidays. This is something that we shall look into; but I must tell him that the Government are aware of the arguments for extending the long-term rate to the unemployed more generally. But there are problems of cost and broader economic issues, of which he will be aware, such as possible repercussions on work incentives, and because of these problems no commitment can be given at present. As I understand it, what he suggests should cost up to £190 million a year extra.
The noble Lord talked about the letter that I wrote to him on 8th July about family income supplement take-up. I do not think that I can usefully add to the letter that I sent to him on that date. We cannot put a precise figure on take-up, but it is increasing greatly and people are now far more aware of family income supplement. I am afraid that I do not have any more information to give him on that point, but I hope that I have been able to cover the main points that he raised—and, very probably, there will be others.
The noble Lord mentioned the pensioners' price index and perhaps I might refer to that before I finish. Pensions have risen significantly faster than the pensioner price indices since November 1978. For example, in the four-year period to the last up-rating, retirement pensions rose by 68.5 per cent. compared to a rise of 61 per cent. in the RPI and only 57.4 per cent. in the two-person pensioner price index and 58.1 per cent. in the one-person pensioner price index. Over the same period, supplementary pension scale rates, before the addition of housing costs, went up by 65.3 per cent. Over the last year, the PPI has risen by 3.7 per cent. for a two-person household and 3.8 per cent. for a one-person household, compared to the RPI movement of 3.7 per cent. Having I hope not baffled the noble Lord with figures, I trust that that has covered most of the points and that I may take up any other points that I have not been able to cover this afternoon. If your Lordships are content, I shall now 1605 beg to move the first five Motions standing in my name en bloc.
§ On Question, Motions agreed to.