§ 3.15 p.m.
§ Lord Denham
My Lords, it has been agreed through the usual channels that a Statement which is to be made in another place on the social security benefits uprating should, by leave of the House, be printed in the Official Report.
Following is the Statement referred to:
"The improvements we are making, which have been allowed for within the Government's public expenditure plans, will increase the Government's 139 social security budget by over £2,000 million in a full year.
"As the House will know, the retail price index published last Friday showed a rise of 7 per cent. between May 1984 and May 1985. The Government are pledged to increase pensions and other linked long-term benefits in line with this rise in prices. Accordingly, the retirement pension for a single person will rise from £35.80 to £38.30, an increase of £2.50 a week, while, the pension for a married couple will rise from £57.30 to £61.30, an increase of £4.00 a week.
"This will mean that between November 1978 and November 1985 pensions will have gone up by over 96 per cent., some 10 percentage points more than the expected rise in prices over the same period. Thus we have more than fulfilled our pledge to protect the retirement pension against rising prices.
"Public service pensions will similarly be increased by 7 per cent. We shall also further ease the earnings rule; that is, the amount which a pensioner can earn without a reduction of his pension. This will be increased from £70 to £75 a week.
"The basic rate of unemployment benefit will be increased by 7 per cent. from £28.45 to £30.45 for a single person and from £46 to £49.25 for a couple.
"Supplementary benefit is increased in line with the retail price index excluding housing costs. This is because people on supplementary benefit have their housing costs met separately through housing benefit. All the main supplementary benefit rates will therefore be increased by 5.1 per cent. The longterm scale rate for a couple will go up by £2.90 to £60 a week. The ordinary scale rate for a couple will go up by £2.30 to £47.85 a week. The scale rates for children will go up to £18.20 for a child aged 16 to 17, £15.10 for a child of 11 to 15 and £10.10 for a child under 11.
"The extra weekly payments to cover items such as heating and special diets will be increased in the usual way. Heating additions will be increased by 4.4 per cent. in line with the rise in fuel prices, while the additions for special diets will go up by 3 per cent. in line with the rise in food prices.
"I also intend to make a change to the additions which are given to supplementary benefit households with central heating sytems. These special additional payments were introduced in the early 1960s because at the time central heating was more expensive. That is no longer generally true. In the meantime there has been an extensive development of additional help with heating costs for those such as pensioners and the disabled. Claimants already receiving central heating additions will continue to receive them while they remain on benefit. However, I propose that no further awards of such additions should be made to people claiming on or after 5th August. But the range of automatic heating additions for the special needs of particular groups will be extended so that from November the lower standard rate of heating addition, which will then be £2.20 a week, will be 140 paid automatically to sick and disabled householders on the long-term rate of supplementary benefit.
"Turning to housing benefit, the needs allowances, which are increased according to a formula which takes account of increases in average local authority rents and rates as well as the supplementary benefit rates, will be increased by the full 5.8 per cent. to £47.70 for a single person and £70.20 for a married couple.
"The uprating of the housing benefit needs allowances will further increase spending on a benefit which is already paid to well over 7 million households. Expenditure will increase to £4½ billion in a full year. The Government believe it is right to restrain further growth in housing benefit expenditure. We therefore propose to increase the rates taper above the needs allowance from its current level of 9 per cent. to 13 per cent.
"No one on supplementary benefit or with income within £10 of the scale rates will be affected by the change. Indeed, a pensioner couple would need to have an income nearly £13 a week above the retirement pension level before their overall benefit increase was reduced by even 10p a week as a result of this change.
"Mr. Speaker, the Government believe it right to maintain child benefit for all children, irrespective of the income of their parents. Nevertheless, we have to consider its level both in relation to overall priorities within social security and, in particular, with the aim to do more for families with children on low income.
"The Government have concluded that child benefit should be increased in November to £7 a week. However, one-parent benefit will be increased by the full 7 per cent. from £4.25 to £4.55 per week; and families on supplementary benefit will not be affected and will benefit from the increases in the scale rates for children. At the same time, we propose to take two important steps to give additional help to less-well-off families with children.
"First, the prescribed amounts in family income supplement will be increased by more than 7 per cent. to give all FIS families extra help. In addition, we shall introduce new higher prescribed amounts for families with older children. This will mean, for example, that the prescribed amount for a child aged 11 to 15 will be increased by an extra £2 and for a child aged 16 and over by an extra £3 a week ahead of prices.
"Secondly, we shall increase the child's needs allowance in housing benefit to £14.50 per week—£1 a week more than the normal uprating would have required.
"Taken together with the reduction in national insurance contributions for lower-paid workers announced in the Budget, these two measures are further steps towards reducing the unemployment trap and directing help more effectively to the families most in need.
"Benefits for disabled people, war pensioners and war widows will all be increased by 7 per cent. This will mean that the pension for a war widow will go 141 up to £49.80, the higher rate of attendance allowance will increase to £30.60 a week and mobility allowance will go up to £21.40.
"For invalidity benefit, the Government propose to make a total increase of 12 per cent. This will restore the 5 per cent. abatement as well as giving the full 7 per cent. uprating. It will mean that invalidity benefit will increase from £34.25 to £38.30 for a single person and from £54.80 to £61.30 for a married couple. This will bring it in line with retirement pension once more and give an increase of £4.05 a week for a single person and £6.50 for a married couple.
"I should also take this opportunity to tell the House that it is our intention to take powers to increase the £10,000 vaccine damage payment which has remained at that level since 1979 to £20,000.
"Mr. Speaker, the measures announced in this statement will add over £2 billion to the social security budget. The result is that the budget will now stand at over £42 billion a year, almost a third of all Government spending. I shall he laying a schedule giving the increases in the main benefit rates before the House.
"As I have already told the House, this will be the last time that benefits are uprated in November. Next year an uprating will take place in July before the new annual cycle based on April begins in 1987. The Government will be introducing an amendment to the Social Security Bill in another place to enable this change.
"Mr. Speaker, had we continued with the unreliable forecast method of uprating introduced by the last Labour Government, the uprating of benefits that I am announcing today would be substantially less. As it is, this uprating will protect those people in greatest need, give extra help to many disabled people and fulfil our pledges to the pensioners of this country".