HL Deb 26 February 1987 vol 485 cc376-87

7 p.m.

Baroness Trumpington

My Lords, I beg to move that this Bill be now read a second time.

The purpose of the Bill is to put right a technical defect which has recently emerged in the 1986 Social Security Act. The Bill is short, but it is essential if we are to carry out our policy of directing effective help with maternity and funeral costs where it is needed most. I should like briefly to remind your Lordships what that policy is and why such a change is needed. I shall then explain what the defect is in the 1986 Act, and shall set out the effect of the new Bill.

It is widely acknowledged that the present arrangements are unsatisfactory. In the Green and White Papers on reform of social security which we published in 1985, we proposed to concentrate effective help with maternity and funeral costs on people on low incomes, in or out of work. The payments would be made out of the social fund. As noble Lords may recall, this is a new fund to be set up to replace not only the maternity and death grants but all lump-sum payments of supplementary benefit for special needs.

On maternity we are proposing a flat-rate amount as a reasonable contribution to the cost of providing for a baby. We announced shortly before Christmas that that amount would be £80—over three times as much as the current maternity grant. People on supplementary benefit or family income supplement will be eligible unless they have any capital over £500, in which case the excess will be taken into account. From April 1988 recipients of income support or family credit will be eligible in the same way. This will avoid the need for a separate income test. People will be able to get maternity payments from 11 weeks before the expected birth to three months afterwards—like maternity grant but more generous than the supplementary benefit limits. On the other hand, people will get maternity payments for adopted babies—unlike maternity grant but like supplementary benefit.

There are three further points which I should stress. First, maternity payments will be grants and not loans. Secondly, they will not be constrained by the budget of the social fund. If someone meets the criteria she will get help. Thirdly, there will be help for mothers under the age of 16 if their families are receiving supplementary benefit or family income supplement. In such cases the family will get the same rate of maternity payment as a mother aged over 16 on a low income would get.

Our proposals for help with funeral costs will allow all people on low incomes to pay for a funeral if they cannot afford to do so. We shall pay the full cost of a reasonable funeral. The amount paid will vary according to actual expenses, but will be based on a list of items of reasonable expenditure. Similar arrangements apply now for people on supplementary benefit, but we are extending such help to people on family income supplement or housing benefit as well. From April 1988 those receiving income support, family credit or housing benefit will be eligible. This means a very substantial increase in the number of people who will have effective cover for the cost of a reasonable funeral if they cannot afford to pay for it themselves.

Again, I should point out that funeral payments will be made to those who meet the criteria, without regard to any budget. And they will not be recovered from the claimant's own income. But in order to concentrate effective help where it is most needed we shall, first of all, take account when making funeral payments of any insurance policies relating to the deceased person which can be put towards the cost of the funeral, and any savings which the claimant has over £500. That is in line with our current arrangements. But the lump-sum payment of £1,000 proposed for widows from April 1988 will be disregarded in full. Secondly, if the estate of the deceased when it is settled turns out to have money in it to pay for the funeral then the payment will be recovered from it at that stage.

The new arrangements will be handled sensitively and with a minimum of detailed questioning. By using income-related benefits as "passports" we shall avoid a separate income test. We are cutting out some of the detailed supplementary benefit rules. People will be able to apply for help quite easily by post, although they will also be able to see a member of staff in person if they prefer.

Perhaps I should just say a brief word here about funerals for war pensioners who die of their war disablement. These will continue to be handled separately from the general system of help with funeral costs. But we are also improving that scheme. At present a war pensioner's family can only get help if it asks the war pensions welfare service to arrange the funeral. From April, the family will be able to arrange the funeral privately and be reimbursed. I think I can safely say that this has been greatly welcomed by war pensioner associations.

Those are our proposals. I shall now briefly say why the present Bill is needed. The 1986 Social Security Act provided among other things for payments to be made out of the social fund to meet maternity and funeral expenses. Detailed rules on those payments were set out in regulations which were laid in December. But the Joint Committee on Statutory Instruments then questioned whether the power in the Act to make regulations included—as we had believed it did—the power to define how much those payments should be. We accepted that its doubts were well founded.

With hindsight, it is clear that a few words were simply left out of the 1986 Act. I should stress that there was never any suggestion during the course of the 1986 Bill—either by us or by the Opposition—that we were giving up the policy we had previously announced of specifying the level of help available. In other words, it is basically a technical defect in the Act. Naturally I regret that, but I hope that noble Lords will accept that we should not be deflected from our policy by such an accident.

That brings me to the present Bill. It has only two clauses. The first clause seeks to amend the 1986 Act to remedy the defect which I have just described. It simply enables regulations to be made, not only to prescribe who should get help with maternity and funeral costs but how much that help should be—whether in relation to particular items of expenditure or otherwise.

The second clause contains the Short Title—the Social Fund (Maternity and Funeral Expenses) Act 1987. It also contains a standard provision—similar to that in the 1986 Act—relating to Northern Ireland. This would enable an order to be made in council, subject to the negative resolution procedure, for purposes corresponding to this Act.

We have also said that we shall revoke the regulations which have already been laid. Subject to Parliament's agreement, we intend to lay a fresh set of regulations along similar lines in due course under the powers which the Bill is designed to provide. That should enable the much-needed reform of help with maternity and funeral costs to go ahead as intended from April this year. We do not believe that it would be right to abandon that reform simply because of a technical error, unfortunate though that error is. The proposals I have outlined again today mean that we shall direct effective help to those who really need it. The Bill will enable us to achieve that, and I commend it to your Lordships. I beg to move.

Moved, That the Bill be now read a second time.—(Baroness Trumpington.)

7.10 p.m.

Baroness Jeger

My Lords, I thank the noble Minister for explaining this short Bill so clearly to us. I thought there had been a record number of amendments to the Social Security Bill which we passed last year and which is now the Social Security Act, and it does not reflect credit on anyone concerned that we now have to have another short amending Bill. I accept, as the noble Minister said, that it is just a technical Bill, but the time of Parliament ought not to be taken up with these technical defects which should have been dealt with last year.

I want to ask one or two questions this evening. At Committee stage we may want to raise other points. I am glad that the Minister has made it clear that the maternity grant and the funeral expenses will not be subject to cash benefit limitations. I understood that from the other place. But, if there is no cash limit for funerals and maternity, will that decrease the total in the Social Fund? Will that mean that there will be less money available for other grants for single payments, for instance?

I want to ask one or two specific questions. I was glad that the Minister said that war pensioners were to be in a different scheme for funeral grant. Does that apply to soldiers who might be killed in Northern Ireland or while they are part of a United Nations force in some other country, or does it only refer to war pensioners from the last world war?

As regards the maternity grant of £80 it has been emphasised in the other place that this is a question of a grant and not a loan, but I understand that these payments will not be constrained by the budget of the Social Fund. Therefore may I ask the noble Minister to confirm that, so far as concerns the maternity grant of £80 to people who are entitled to it, there will be no question of the Social Fund running out of money and then not being able to pay what is needed?

The present position is that there is £25 available under the maternity grant scheme, and everyone understands that that is really not sufficient, but the more important question is: what about the future of single payments, which I understand are to be abolished under the present legislation so that the maternity fund of £80 will be a one-off and will not be supplemented by single payments for people who might be in special need?

As regards the funeral grant, the system with widows getting a grant of £1,000 will not be effective until 1988, as I understand it. Therefore, meanwhile, if a husband dies after April 1987 there will be no £30 and no £1,000. I should like to have an answer to that question. I should also like to know how many people will lose on this death grant change, and also how many people will lose out on the maternity grant?

If we take the question of the under-16s, to which the noble Minister referred, I agree with her that ideally one would want the under-16 pregnant girl to be looked after by her family, and the Minister said that her family should look after her and the money should go to the family. But, sadly, there are many broken families, many problems, many teenagers leaving home and single parent family children and other young girls who are not in a family situation. If the Minister is saying that maternity grant for the under-16s can only go to the family of that girl and she has no family, then we have to ask how is she to be helped? Does she go on to supplementary benefit, or is there any other way in which she can be helped through social security?

Those are just a few points. I know that we shall have another opportunity to go through this Bill, but for this evening those are the main questions. I hope that the Minister or her noble friend will be able to give answers to some of those points.

7.16 p.m.

Lord Kilmarnock

My Lords, the technical reasons for the introduction of this Bill have been explained by the noble Baroness, and they were also set out in the notes that her department was kind enough to circulate. It all sounds simple, but it raises a number of quite important questions. First, there is the matter of how the error that this Bill corrects came about. It stems from an all-party amendment successfully moved and carried by my noble friend Lord Wigoder which, if preserved in the Bill, would have introduced an independent right of appeal and made the Social Fund subject to regulation rather than the Secretary of State's directions and guidance.

Panicking at the prospect of what a truly independent appeal system might do to their fund, the Government responded with a much weaker alternative to Lord Wigoder's proposal. So anxious were they to get the Bill and this weaker appeal system through before the Summer Recess that they rushed the redrafting, with the result that they now need this little Bill to make the maternity and funeral mechanism workable.

That is a technicality which we can accept, but we now want to know more about the power of the Social Fund Commissioner who is to be appointed by the Secretary of State in lieu of the independent tribunal proposed by my noble friend. We know from Section 35 that he has power to appoint the Social Fund inspectors to whom dissatisfied claimants will presumably be able to apply. With a cash limited and largely discretionary fund, however, it is obviously much more than merely a matter of technical concern to know how this system will be applied. That is still not clear.

In particular it is vital to know whether claimants will have the right to be present or to be represented at hearings on their own cases. Official figures on appeals against single payments decisions under the old system show the significance of the appellant either being present or being represented when his or her case is being considered. In those cases where such representation took place the percentage of heard appeals decided in the claimants' favour was 35.7 per cent. as opposed to only 8.1 per cent. when neither the claimant nor a representative attended.

I hope that the Minister will be able to tell us that claimants under this fund will have a right to an oral hearing. It is not sufficient to say that it is up to the commissioner to decide, because surely this is something that should be made clear in Parliament. I know that it is not in the Act and cannot be put into the Act by amending this amending Bill. Nonetheless, a statement by the noble Lord appearing on the record will go a long way to alleviating concerns on this score.

A good deal of attention has centred both in the other place and outside Parliament on the amount of £80 proposed for the maternity grant. The Government have chosen supposedly to target on the needy, and the Under-Secretary of State, Mr. Lyell, said in the other place on 9th February, at col. 113, that it was of the essence of the Bill, that an increased number of people in the targeted groups will get more than they would have received previously.". But that unfortunately would not appear to be the case if the maternity grant is set at £80, because the average payments made under the current, shortly to be abandoned, system, taking the grant element and the single-payment elements together, were higher than that figure in 1983. Therefore the Government's proposal is lower in cash terms and in real terms than the average which was available to mothers on supplementary benefit in 1983, when payments in the range of £170 to £190 to young mothers in real poverty were not uncommon. In future the Social Fund will presumably be prohibited from making such payments to meet real needs.

I gather, furthermore, that the department's own list of basic maternity items adds up to £187-45 and many would say that that is very much at the lower end of the range. Another selection which covers nappies, a push-chair, bottles, a basic layette and so on, which has been sent to me today, brings us up to over £200. Of course one has to remember that the nappies are not just a one-off cost, but a continuing cost. If the Government are serious about targeting, they are certainly missing the mark by a very wide margin.

If this is intended to discourage childbirth among people who cannot afford children that is also wide of the mark, because it is not the child's fault that it has been born in such circumstances. It is the child's welfare that we are concerned with. Those born to poor families or to single parent families have enough disadvantages without being discriminated against from day one.

On the question asked by the noble Baroness, Lady Jeger—whether this exiguous payment should be available to young mothers under 16—the number is not high. It was 1,390 in 1985, and the cost would therefore be low. On the question of principle, Mr. Major said in another place that there was a genuine dilemma which is moral as well as administrative. Were the Government to extend the principle to those under 16 years of age, they would overturn a longstanding principle of supplementary benefit which they believed to be correct; the principle that a child under the age of 16, even if she has given birth to a child, remains the dependant of her parents or guardians. This, however, seems to conflict with an equal and opposite principle that under family law all mothers have full responsibility to care and provide for their children. Under Section 17(1) of the Supplementary Benefit Act 1976 a mother of any age is liable to maintain her child.

In recognition of this conflict Mr. Major said that he was not categorically ruling out taking some action, but that it was a matter for regulation rather than primary legislation. Later he said that if the young girl and her family were living in poverty they should be given the assistance they needed and that in those circumstances the maternity grant would be paid, though he seemed to be in some doubt whether such payment should be to the young mother or to her parents. The Minister also seemed to imply that it is the poverty of the parents of the young mother that should be the test. But this would take no account of cases in which the girl had left home—which I venture to suggest in such cases might happen quite frequently—and it seems to me that it is the person responsible for caring for the child who should have the payment. It should be the mother's circumstances, rather than her parent's circumstances, which should act as a trigger. The matter ought to be cleared up while the Bill is in this House. I hope the Minister will be able to give assurances that these girls will be eligible in their own right.

On the question of funeral expenses, it is obvious that the deliberate and long erosion of the death grant has made it virtually meaningless. It is now barely enough to buy a good wreath. But the Government's targeting policy is not well designed, as was pointed out when the Social Security Bill was in the House.

Means testing is particularly repulsive at a moment of maximum stress. What happens if death occurs over a long weekend with a bank holiday tacked on? Does the next of kin have to wait until the following Tuesday, say, to know whether he or she qualifies before getting in touch with an undertaker? What evidence will be required? Surely it would be much better if everyone knew they could get a grant for funeral expenses on a simple application, particularly as the Government have written into the Act under Section 32(4) that Social Fund payments to meet funeral expenses may, in all cases, be recovered out of the estate of the deceased. Bureaucracy at the time of bereavement would then become minimal and the grant would in effect become a loan if the size of the estate so warranted. What could be simpler or fairer than that? Also can the noble Lord say what level of expenses will be considered "reasonable"? A simple funeral nowhere costs less than £350 and it might be £550 in some areas.

Turning briefly to the balance of loans and grants to be made from the fund, it appears from the debates so far on the subject that only maternity and funeral expenses will be the subject of grants and that all other needs will be by way of loans. There have also been mysterious references to "community care". It is quite unclear what aspects of this very wide ranging concept are to be catered for under the Social Fund. I know it is intended that phase 1 of the fund, coming into effect in April this year, will deal only with maternity and funeral grants. But I do not know on what occasion we shall have the opportunity of discussing the operation of the fund when it is fully functional. It would be much appreciated if the noble Lord could enlighten us on the meaning of "community care" in this context.

There is also the still completely mysterious question of how a cash limited fund—the noble Baroness, Lady Jeger, touched on this—will function when demand is, by its very nature, unpredictable. Will there be an actual fund with real money in it? Will that be topped up from time to time? If the money, whether notionally or actually available, starts to run out, will all claims be scaled down or will there simply be a cut-off point when there is nothing left in the kitty? It was always difficult to see how this would operate, especially with loans going to people who, by definition, would find it extremely difficult to pay them back. If loan repayment income is seen as an important ingredient in the fund then its prospects of being maintained at realistic levels are, frankly, bleak.

It is not surprising that this little Bill should reopen debates we had when the parent Bill, now the Social Security Act 1986, was in this House, because the serious flaws in that Bill are now with us on the statute book. As implementation draws nearer it is natural that anxieties should increase. We hope that the noble Lord, Lord Hesketh, will be able to allay some of those anxieties this evening.

7.27 p.m.

Baroness Seear

My Lords, I shall be extremely brief because most of the points that I wished to make have already been made either by the noble Baroness, Lady Jeger, or by my noble friend Lord Kilmarnock. 1 should, however, like again to underline the question of the mother aged under 16 who at present will not receive the grant, the grant going to her parents if, and only if, the parents are on supplementary benefit. I can see the administrative neatness of this arrangement and I can see the argument that it is desirable that such a girl, herself little more than a child will be looked after by her parents. But the reality is that it will not be like that for a considerable number. As we know, a number of these girls break away from home and they are on their own. There are not a very large number. As my noble friend Lord Kilmarnock pointed out, whether they are under 16 or not, they have full responsibility for the well-being of that child.

In these circumstances, is it too much to ask the Government to think again and to find some way in which it will be possible to give the grant to the mother under 16 and not to her parents if it can be established, through workers in the social services department, by the local authorities or by some other means, that in reality the girl is not living with her parents, is not being supported by her parents and has somehow or other to maintain both herself and her baby? It will not be a huge charge but it could avoid some very disagreeable, painful cases, which will otherwise most certainly arise.

The other point I briefly want to make is of a quite different order. But it is not, I think, totally out of place as this is, after all, a Second Reading. It was only this week in the Synod that a debate took place under the title, "The Welfare State is not only for the Poor". This new Act, with the amendments that we are discussing tonight, underlines the Government's attitude which is that the welfare state is only for the poor.

I know the Government's argument is that they concentrate resources where they are most needed. But there are a very large number of people who are not on social security benefit, but who are only a very little above that level. I am thinking, in particular, of the funeral grant and the case of a couple of old age pensioners with a very small amount of money of their own, and a very small income above that, who are not social security benefit recipients. For people of that sort, paying the funeral costs for whichever of the partners goes first is a very heavy drain indeed.

Do we really have to say that these benefits must be limited to people who have not been on social security benefit? So many of the people we are talking about—and we all know them—would not go anywhere near a social security office. They are people who, by being very careful, very frugal and denying themselves a great deal, have been able to pay their own way. But to have to produce £300 or more to bury a husband or a wife would be very hard indeed. The same applies to the benefits to be paid for mothers, although in some ways that is a less serious matter than the question of the funeral grants, which I can see bearing very harshly on people just above social security benefit level.

Can there really be no flexibility? Are the Government so wedded to the idea that the welfare state is only for the poor? I know that is not how they put it. They say that the welfare money is focused on those most in need. But can they, at least, look again at what they mean by "need" if they cannot take a wider view of what the welfare society should be all about?

7.32 p.m.

Lord Hesketh

My Lords, my noble friend has once again explained how we propose to go about the reform of the maternity and funeral costs and why we need to correct a technical defect in the 1986 Act to carry that programme through. I shall not go over all that ground again, but I should like to respond briefly to some of the points that have been made this afternoon.

First, some noble Lords have commented on the technical defect in the 1986 Act which has given rise to this Bill. They have focused on the fact that a mistake has been made. Frankly, I do not think that there is all that much more we can say on that matter. A mistake has been made and we regret that. But now that the error has come to light, the sensible course is to put it right. That is what we are doing.

Today's comments have concentrated on the area of policy rather than on the technical points of this very small Bill. So far as concerns maternity and funerals, those who followed the progress of the 1986 Act will recognise much of that as familiar territory. We initiated a general debate on our reform proposals with the publication of the Green Paper in 1985. That was followed by the White Paper, the 1986 Act and extensive discussions here and in another place. Ultimately, Parliament approved the substance of our proposals.

A number of speeches today have simply sought to reopen the old debates yet again. Arguably the place for some of the more detailed queries we have heard is in any debate on the eventual regulations for maternity and funeral payments, rather than in a discussion of the principle of a technical measure to correct a defect in the Act. For example, it is the regulations and not this Bill which will set the level of maternity payments.

The noble Baroness, Lady Jeger, made a number of points and I shall attempt to answer some of them. One that she mentioned was what would happen to serving soldiers in Northern Ireland. If they are killed there, they will not be pensioners and will not be covered by this Bill. Moving on to single payments, they will be replaced by the social fund and so hopefully will not become the problem which I think she felt they would be.

A number of noble Lords spoke about the under 16 year-old mothers who have left home. They should be the responsibility of the social services and dealt with on that basis. More than likely they will be in the care of the local authority. When a child or young person is in the care of the local authority, either voluntarily or because its parents have requested it, or if for some reason it has been committed to care, the local authority is responsible for the welfare of that child.

As regards a child under 16 who is at home, the Government considered this matter carefully during the passage of the Social Security Act last year and still remain unconvinced about the arguments for extending provision to mothers under 16 years of age. To do so would overturn a long-standing principle of supplementary benefit which we believe to be correct; namely, that a child under 16—even if she has given birth to a child herself—remains the dependant of her parent or guardian. Where a young mother under 16 is in a low income family receiving one of the passported benefits (supplementary benefit, or in future income support or FIS, or in future family credit) the family will be eligible for a maternity payment. Additionally, where the family is on income support a young person under 16 will continue to receive free milk tokens during pregnancy, and she will be able to pick up free vitamin pills from health clinics.

The noble Lord, Lord Kilmarnock, drew my attention to a matter which is not really covered by the Bill, but I shall attempt to answer. The noble Lord asked about the social fund commissioner, who is outside the terms of this modest Bill. However, there will be two opportunities for a case to be reviewed. The first will be by a senior officer in the local office, and the second will be by an independent social fund inspector appointed by the social fund commissioner. The applicant will certainly have a chance to put his case in person in the local office, though not necessarily to the officer who takes the decision. Beyond that, this is a matter to be discussed with the social fund commissioner, who is not yet appointed.

The noble Lord, Lord Kilmarnock, also mentioned the maternity grant of some £80. Most people can and do provide for the cost of having a baby. It would cost £80 million to restore the maternity grant to its 1969 value. The level of the flat-rate payment for maternity costs was debated during the course of the Bill's passage last year. In the Government's view, a flat-rate payment over three times as much as the current maternity grant, payable to low income families in or out of work, represents a reasonable contribution to the costs of having a baby. It will balance the position of those with low incomes in society, who at present receive no more than the £25 grant, with those on supplementary benefit who at present can receive help with a detailed list of items if—and I stress the word "if"—they have need of those items. I am informed that the average figure of take-up today is of the order of £68.

The noble Baroness, Lady Seear, made a point concerning those close to the borderline on the cost of funerals. That point really comes back, as in so many other aspects of the matter, to the £500 capital rule. The fact of the matter is that a line must be drawn somewhere. Under this Government, we lifted the capital rule in 1983 from £300 to £500. In real terms, that was a considerable improvement. There will always be a difficulty on the point because the line must be drawn somewhere and there will always he someone who is just above or just below that hypothetical line.

The noble Baroness also asked why we could not pay the grant to people who are not on social security. Most people cope with the expense of a funeral. Over 90 per cent. of funerals are paid for from private resources. It would cost £140 million to restore the death grant to its 1949 value and it would cost approximately £220 million to raise the grant to £350, which the department accepts is the minimum cost of a simple funeral. Obviously that is a considerable sum of money.

The noble Lord, Lord Kilmarnock, also wanted to know why people qualifying for help when a death occurs have to be means tested. First, the rules will be simple and clearly explained. The fund will meet reasonable funeral costs for people on low incomes who are responsible for a funeral and who need help to pay for it. People receiving income support, family credit, housing benefit, supplementary benefit or family income supplement in 1987-88 will be eligible without need. The noble Lord, Lord Kilmarnock, also asked whether or not it really makes sense to continue the grant for everyone. I answered that point a moment ago.

In conclusion, I should like to stress that the new arrrangements for help with maternity and funeral costs are much-needed reform. I believe that is widely recognised. They will direct effective help where it is needed most, to low-income groups in or out of work. I appreciate that some noble Lords may want to use the opportunity of this Bill to reopen the whole policy debate again. Maybe they would like to delay the reforms and carry on with the present unsatisfactory system. But there is a time for debate and a time for action. Now is the time for us to put our proposals into practice. This short Bill will enable us to do that. I trust that noble Lords will support it.

Baroness Jeger

My Lords, before the noble Lord sits down perhaps I may thank him for answering so many questions. There is one further point on which perhaps he can advise me. In regard to widows, if the husband dies after April 1987 the £30 death grant will not be available. The £1,000 widow's grant does not begin until 1988. I asked in my speech whether this was not a rather unkind gap and I wonder whether widows are to be left in a situation in which they will not receive £30 and they will not receive £1,000. If the noble Lord wishes to write to me, I shall of course accept that.

Lord Hesketh

My Lords, I should indeed like to write to the noble Baroness.

Lord Kilmarnock

My Lords, before the noble Lord sits down I should also like to put one question. Perhaps I may thank him for attempting to give us as full an answer as he possibly could to the questions that arise in a very tricky field in which even the old hands often get extremely confused. The point which I wish to put to him concerns the under-16 question.

In response to a Question from a Member of another place, the Minister said: If a young girl and her family are living in poverty, they should be given the assistance they need. In the circumstances that he envisages"— that is, the circumstances which the Member putting the Question had envisaged— the maternity grant will be paid". I wish to be clear on whether or not that is in fact the policy of the Government. Will the maternity grant be paid to child mothers under 16 where the mother is living in poverty with her family?

Lord Hesketh

My Lords, I thank the noble Lord, Lord Kilmarnock, for his question, and I shall write to him.

On Question, Bill read a second time, and committed to a Committee of the Whole House.