§ 3.42 p.m.
§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale)
My Lords, with the leave of the House, I shall now repeat a Statement on the up-rating of social security benefits currently being made in another place by my right honourable friend the Secretary of State for Social Security. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a Statement about the up-rating of social security benefits. The necessary statutory instrument, which will bring my proposals into effect, will be laid before both Houses and debated. Up-rating will take place for most benefits in the week beginning 10th April next year, the first full week in the tax year. The provisions will apply in both Great Britain and Northern Ireland.
"This year I have more increases than usual to announce. I am varying some of the increases to target them better on those who need them most. And I am pleased to announce additional help for claimants to ensure that we are more than correcting for the error discovered in the retail prices index last year.
"I propose to concentrate on the main features. I have set out the details in a full schedule which is now available in the Vote Office and which, with permission, Mr. Speaker, I shall publish in the Official Report.
"The social security budget is huge: nearly£50 billion a year, almost one-third of all public expenditure. The increases I am announcing today amount to more than £2 billion. It is thanks to the growth in the economy and to the success of our economic policies that we are able to afford to bring this substantial help to pensioners, disabled people, and to lower income families on benefit. It is right that we should continue to help in this way everyone who needs that help. But it is equally right that we should continue to target this massive expenditure, to ensure that it is concentrated to best effect, on those who need it most.
"I should like to make it clear that this is where my priorities lie, in carrying forward the policies 1713 which I began last year, of redirecting increases within these large sums to be most helpful to those in most need of help and to stimulate the proper responsibilities and personal efforts of those who do not need to rely on benefit.
"I start with the main rates of contributory benefits and benefits for war pensioners, disabled people and others. The retail prices index published on 14th October showed an increase in prices over the 12 months to September 1988 of 5.9 per cent. But the RPI was subject to a minor error which was corrected during this period. This increase of 5.9 per cent. corrects the error which was made earlier in the RPI; that is, 5.9 per cent. includes both the correction for the error and the rise in prices since then. But to make quite sure that benefits are up-rated by at least as much as they would have been if the error had not occurred, they will be up-rated either by the published figure of 5.9 per cent. or by the amount arrived at by recalculating the benefit from the last correct rate in July 1986 using the adjusted movement in prices since then, whichever figure is the higher.
"I should like to emphasise that we shall pay whichever is the higher figure from the two calculations which we have done for each benefit. If we had not done this, pensioner couples, for example, would, using recalculated figures for past up-ratings, have been 5 pence a week worse off. This approach more than fulfils the promise which my honourable friend the Minister of State gave to the House last December, when the error was discovered. On top of the special payments of over £100 million already made to pensioners and others earlier this year, I am now putting the benefit rates right for the future in the most favourable possible way. I am placing in the Library of the House full details of all the rates, and of all the calculations needed to carry out our intention to adopt a best of both worlds approach.
"The basic retirement pension for a single person will thus rise by £2.45 a week, from £41.15 to £43.60, and for a married couple by £3.90 a week, from £65.90 to £69.80. Pensioners' total incomes, including their occupational pensions and savings, have grown steadily since 1979—by over 23 per cent. on average in real terms compared with a miserable rate of 0.6 per cent. a year between 1974 and 1979. After allowing for inflation, pensioners' incomes have increased twice as fast as those of the population as a whole between 1979 and 1986. A range of government policies have played their part in this record, and it is one of which we as a government are proud. Public service pensions will be increased by 5.9 per cent. This fulfils the pledge given by the Paymaster General to correct the RPI error.
"I turn now to the income-related benefits. I restructured these benefits last April in a simpler scheme with new rates which is already proving much easier to understand and operate. I propose to up-rate these benefits in the normal way by the published movement of prices less housing costs. In addition, in recognition of the minor error in the RPI there will be further increases for pensioners, disabled people and families comparable to those 1714 for people on contributory benefits. Overall these measures to take account of the RPI error will cost some £10 million more than simply up-rating by the published indices.
"We are making a once and for all adjustment to income support levels to help meet the minimum 20 per cent. contribution which recipients will have to make to the community charge. This will also provide help for the rates liability which recipients in England and Wales will face next year. To this end we are including £1.15 a week for single people under 25 and £2.30 for couples. I am leaving the figure for single people over 25 at £1.30, the present level, since that is the assistance they are currently receiving towards their domestic rate liability. This significant group will thus be more than compensated over the longer term—a more than adequate settlement.
"Before I come to the other increases I wish to announce, honourable Members will expect me to say something about child benefit. I have never made any secret of my belief that this benefit is not the most effective use of social security resources. It is paid to virtually every family in the country, no matter how large their income, at a cost of over £½ billion this year, a tenth of all benefit expenditure on social security. Furthermore, if we were to up-rate it across the hoard, most of the money would go to better-off families, including the very wealthiest. The poorest—those on income support—would gain nothing at all from the child benefit increase. Neither would those claiming family credit. That would be perverse targeting in the extreme.
"I have decided therefore, as last year, to direct help where it is most needed, to the lower income families with children. I propose to put substantial additional resources into the benefits going to those families. I have already said that there will be a prices up-rating of the child allowances and premiums in income support, family credit and housing benefit. That up-rating will cost £135 million. But on top of that I am adding an extra 50 pence a week to all these child allowances. This will cost an additional £70 million. The result is that we shall be directing over £200 million to the greater benefit of some three million children in lower income families.The rates for some children—those under 11 will go up by as much as 9.3 per cent., well in excess of a normal up-rating. These families will clearly be better off than if we had simply up-rated child benefit which I propose to leave unchanged.
"I know that some of my honourable friends have expressed concern about the position of families on low incomes. Unlike other parts of the benefit system, such as income support, when it comes to helping working families with children there is no cut-off point at low income levels. Family credit goes well up the income scale, for example to those earning £9,300 a year with two children aged 12 and 14, and even higher in some cases. I firmly believe that it is better to target resources in this way than to improve child benefit for all including those on the highest incomes.
1715 "I have further increases to announce, for disabled people, the elderly and families with young children. This is the tenth anniversary of Motability, the scheme set up to help disabled people to obtain cars on favourable terms. The scheme has been extended and has a fine record of success. It is now helping 60,000 people. I am pleased that this anniversary has been marked by the grant in May this year of a Royal charter. I am very glad to announce today that the Government will be contributing £5 million to a special trust fund which is being set up to celebrate the anniversary. Motability is a joint venture between government and the private sector, and the clearing banks also will be contributing £5 million. These new funds will increase fivefold the money available for Motability to spend each year and in particular will in future provide extra help for the more severely disabled people who need a specially adapted vehicle.
"I shall also be bringing forward legislation to extend the upper age limit for mobility allowance from 75 to 80 as an interim measure pending our consideration of the series of reports on the OPCS survey of disabled people. All this is good news for disabled people.
"Finally, I propose useful and what I hope will be welcome improvements to the very good scheme we already have for giving help during periods of very cold weather to pensioners, disabled people and families with young children on income support. First, I am changing the rules for the period over which temperatures are measured. This will in future be any consecutive seven days, and not limited to seven days starting on a Monday. Secondly, I am raising from two to five the age below which a child can make a family eligible. That will extend the scope of the scheme to nearly half a million more families. I shall be amending the regulations recently laid before the House to include these improvements which, taken together, could double expenditure on this scheme. It will be extra money well spent.
"This is an uprating which directs massive resources to where they are most needed. My proposals amply fulfil our pledges to pensioners and others who receive long-term benefits. They provide substantial extra help to families on low incomes and to disabled people. And, with other measures which I shall be bringing forward, they encourage those who are able to do so to support themselves and their families. In all some 16 million pensioners and others will benefit at a total cost of over £2 billion. That is the full measure of the success of this Government."
§ My Lords, that concludes the Statement.
§ 3.55 p.m.
§ Baroness Jeger
My Lords, in courtesy I must thank the Minister for making that Statement even if I do not thank him for its contents. Before I comment in detail on the Statement I should like to say that I wish that we could do away with the procedural annual pantomime whereby Ministers spend months 1716 probably working on changes before bringing them to the House while the rest of us have about 10 minutes to go through very complicated documents. I am not making a party point; I feel sure that that view must be shared on all sides of the House. It does not illumine our exchanges if some of us are put at a severe disadvantage.
There is one aspect of the Statement which I am particularly glad about. That is the changes in the Motability scheme to which the Minister referred. I hope that he will be even more generous in the future.
I must bring several points to the Minister's attention and I am afraid that I shall have to ask a few questions. I shall do so as rapidly as possible but I am not sure that I can be as quick as the noble Lord. I am a slower reader and I have only just received all this "bumph".
We are told that the inflation rate is likely to rise to about 6 per cent. The Chancellor of the Exchequer has warned that it will go even higher. Therefore by next April I do not believe that many of the increases will be of real avail to people. They will have been more than swallowed up well before April by rising inflation.
The Minister said a great deal about pensioners. As a pensioner myself I am very glad to hear that I shall have a little more help. However, the Labour Party policy of linking increases in pensions to earnings has not been continued. I am told that as a result, in the nine years of Conservative government, the cumulative total which pensioners have lost is about £18 billion. Therefore. I do not think that the other side can be too proud of what they are doing for old age pensioners.
I must remind the Minister that pensioners received only a 4.2 per cent. increase last year. That was quickly swallowed up by inflation, particularly by higher prices on items which old people tend to need most and which are not always reflected in the RPI. I cannot understand why the Government are so anxious to use the term "targeting". It reminds me of people shooting bows and arrows at each other. It is a very dangerous social policy; it means that one sets aside groups of people and says, "You are the low paid, you are the poor, and we will target you." That is not healthy for the community.
I cannot find in the Statement what the Government plan to do for people who lost out last year and were given transitional benefits. What will happen to them next April? Will the Government increase national insurance contributions to offset some of the changes? I hope that the Minister will bear in mind the effects of mortgage interest rate increases on many families and that he will not forget that there may be some connection with the tax cuts included in the last Budget.
I am told that the average wage earner probably gained £12 a month in the Budget but that his mortgage repayments have now gone up by £30 a month—or even more in some cases. While £6 billion was given away—I say "given away" because it did not go into the Exchequer—we now hear that the Minister will not give an extra 45 pence a week to the children in this country. That is absolutely disgraceful.
1717 I do not have the up-to-date figures for the takeup of family credit and income support. The latest figure that I could obtain was 54 per cent. compared with nearly 100 per cent. for child benefit. In trying to switch to family credit and income support the Government are perhaps unwittingly deepening the poverty trap, because if those allowances are paid to people who are in especially poor circumstances they have absolutely no incentive for self-improvement. A person knows that if he does a little more work and obtains promotion which brings with it a few pounds a week more than the Government say he should earn, he loses all that benefit. On the other hand, child benefit, which is not wage-related, accompanies him up the income scale and that is something that I am sure we all want to see families trying to do.
This adds to what I think one Minister called the "dependency syndrome". If a man is better off staying at home and collecting some benefit, there is no incentive to go out to work. But if child benefit is preserved at its proper level in relation to inflation, there is a real benefit to the family. I said that "targeting is a word that is too often used but child benefit is targeted. It is targeted on all our children and I wish it would stay that way. It was not fully up-rated in 1985 and it was not up-rated at all either last year or this year. It is not good enough to say that it is frozen; in my view it is in the deep freeze.
I should not like to give the impression that we do not want more money to go to poor people. Of course we do. But why do the Government have to take that money from other people's children? We are told that the economy is fine and that the Exchequer is awash with money. If the Chancellor wants to up-rate income support and family credit, surely he has plenty of money which he can use to do that.
The Government say that some people believe —and I know that many of their supporters do. but not all of them—that there is something wrong about giving money to rich ladies who do not need it. But that is what they are doing. They are continuing to give £7.25 to all the rich mothers in the land. If the Government want to introduce a new policy for child support, that would be an honourable action and I am sure we should all carefully consider it. But if insistence on total availability and an across the-board, universal attitude is wrong, then why do the Government maintain it?
I am puzzled by the change in the Government's policy. Family support started with William Pitt when he first brought in income tax. He arranged that people with children should pay less than those who did not have children. That situation was maintained by successive governments until the 1975 Child Benefit Act which abolished income tax relief and family allowances and put them both together. The Conservatives did not oppose that Act. One of the good things that came out of it was that we all agreed that that was the right and proper thing to do.
Some of us, including the Minister, spent many weary hours in this House dealing with what are usually called the Fowler reforms. There were White Papers, Green Papers, a Bill—and amendments uncountable. The question of changing child benefit was not raised during the passage of that Bill which 1718 was supposed to reflect a root and branch, once-and for-all review which was the biggest since Beveridge. Now suddenly the Government seem to have turned against children in this extraordinary way. It is quite out of line with our friends in the EC who are much more generous. It is very difficult to understand.
I want to know whether the Government's real policy is to abolish child benefit, and by downgrading and devaluing it (as they did the death grant) they will soon be able to come along and say that it is not worth having. I think that that is a dishonest way to deal with the situation.
Another problem that the Government must face is that of the promise in their election address to the effect that child benefit would continue to be paid, as now, to the mother. "As now" must mean in the same framework of up-rating. One cannot say that one is paying child benefit in 1988 as in 1979 if it has been allowed to become devalued. Perhaps they are afraid that the Conservative Women's Associaton, which I understand strongly supports child benefit, would not be very pleased if the Government came out with a statement of that kind.
I should like to make just two more points. I am sorry, my Lords, but this is a long Statement and it is not my fault. I should like to refer briefly to a constitutional point. During the dreary passage of the Social Security Bill the noble Lord, Lord Banks, moved an amendment which stated that:The Secretary of State shall review the level of child benefit in April of each year, taking account of increases in the Retail Price Index and other relevant external factors".—[Official Report, 3/3/88; col. 311.]The Minister asked this Chamber to reject that amendment, but all sides of the House refused to do so. It was passed by 97 votes to 84. It was not returned by the other place and so far as I am aware it is the law of the land. I wonder what happened to the amendment which was passed by your Lordships' House at that time.
I want to ask one question about the poll tax. I know that there was much talk about it yesterday and today. In The Times of 10th September I read that there had been a ruling on community charge to the effect that while both a man and woman on unemployment benefit were living at the same address only one would be able to claim a social security rebate. I am not speaking of a common law husband and wife; it might be a mother and daughter or friends sharing a flat. I did not see in The Times any rebuttal to that point from the Minister's department. I think the matter should be cleared up because it will affect many people.
We shall have to return to all these problems but mostly we regret the attitude of the Government to those who may be just £1 or £2—
§ Lord Elton
My Lords, perhaps the noble Baroness will give way. We have a Standing Order which states that discussion on a Statement should not exceed 20 minutes. The noble Baroness has had half of it.
§ Baroness Jeger
Then I have another half to go my Lords! What we regret mostly is the attitude to those who may be just above what the Government decide is the poverty line. We do not applaud this Statement in any way.
§ Lord Banks
My Lords, I should like to thank the noble Lord, Lord Skelmersdale, for repeating the Statement made in another place by the Secretary of State. In the course of the Statement the Secretary of State referred to "pensioners' earnings", and naturally we shall all be gratified to learn that overall they are tending to increase on a satisfactory basis. However, the Government have to remember that some pensioners rely entirely on the basic pension. They tend to be the oldest among them. Those people have indeed lost, as the noble Baroness said, through the breaking of the link with earnings in the early days of this Government.
The Statement is mainly concerned with the annual up-rating to take account of inflation, and this year there is a higher rate of inflation. A higher rate of inflation leads to a higher cost. The Government seem to be congratulating themselves on meeting that higher cost instead of condemning themselves for causing it.
I am glad that the RPI error is taken care of. I welcome the changes that are made in the provisions for dealing with very cold weather. We shall wish to debate these matters very thoroughly when the orders come before the House, and in particular to examine the poll tax proposals to make sure that the Prime Minister's promise to protect the average liability of those receiving income supplement has been fulfilled.
I wish to join with the noble Baroness in deploring the fact that for the second year running the Government have failed to up-rate child benefit. I deplore it because this is a benefit with no poverty trap implications as it is not withdrawable. On the other hand, I believe that family credit has already increased by three-quarters the number of people facing marginal tax plus benefit withdrawal rates of 70 per cent. or more. Child benefit is a benefit that has a take-up rate of 100 per cent. Family credit is estimated not to have exceeded 50 per cent. in its operation since April. Therefore 50 per cent. of the poorest will suffer through the freeze. People with children generally are falling behind. We ought to remember that child benefit was instituted to assist that category of people. It replaced among other things the income tax allowances which existed previously.
We are told that it costs £4.5 billion to pay out child benefit, but the remaining personal allowances lose in revenue £25 billion. I imagine that it is not proposed to freeze them even though they give more to those on higher rates of tax, which child benefit does not.
Like the noble Baroness, I should like to refer to the amendment approved by this House on 3rd March 1988. Whatever the technical effect of that amendment, it was clearly taken as a statement of opinion by this House that it favoured the annual up-rating of child benefit. I very much regret that the Government decided to flout the recorded view of the House in this matter. They certainly cannot expect the House to receive the news of that with acclaim.
§ Lord Skelmersdale
My Lords, I am grateful to both the noble Baroness and the noble Lord for their instant reactions to this Statement. Kinder things 1720 were said by the noble Lord, Lord Banks, who was obviously listening to the Statement, than by the noble Baroness, Lady Jeger, who I know was reading through the Statement as I was reading it to your Lordships. It is absolutely amazing; I do not think she has the same Statement. Despite what she said, this is an up-rating for families. It is targeted—yes. It is meant to be targeted. Your Lordships' House is a targeting House. Your Lordships target your thoughts very firmly, for instance, on disabled people. We have a very strong representation of disabled people in this House. What is wrong with targeting?
We are making available an extra £70 million to the neediest families. We are doing that by increasing children's allowances in the income-related benefits by 50p more than required by the normal up-rating rules. That extra money goes to those very families who would not have gained from an increase in child benefit. Together with the normal increases in benefit that means that we are directing around £200 million more to 1½ million of the poorest families. To have up-rated child benefit would have meant spending resources on a larger number of families—of course that is true. But what is also true is that over 40 per cent. of those families earn more than the national average. However, the approach that we adopt channels extra money to the poorest 22 per cent. of the families. I do not see anything wrong with that.
Spending on the elderly in the United Kingdom— which was another point raised by the noble Baroness—is the third highest in the European Community as a share of gross domestic product. At 9.6 per cent. it is just behind Denmark and France, and higher than Germany, the Netherlands and so on. Figures for 1983—the latest available—bear that out. Partial figures for 1984 show spending in the United Kingdom up with spending in other states down. I do not think that we fail to stand by our pensioners.
I was asked about transitional protection. I point out that 89 per cent. of all income support claimants will receive some increase from this up-rating. Clearly it is most important to get people out of transitional protection as soon as possible. That is what this up-rating achieves: 97 per cent. of all pensioners will benefit; 68 per cent. of income support recipients will receive all their increase. I hope that the House is pleased with that.
Not surprisingly, child benefit figures largely in your Lordships' thoughts. We have reaffirmed our manifesto commitment to child benefit; and we have reviewed it. The fact that we have not up-rated it does not mean that we have not reviewed it. Clearly we have reviewed it. We have decided that resources can be better spent elsewhere. Child benefit will continue in the same form and structure as at present and will be paid directly to the mother. The rate of the benefit is considered annually when benefit rates generally are reviewed. Decisions about its level cannot be made in advance. They have to be made in the light of circumstances at the time.
Both the noble Baroness and the noble Lord referred to an amendment on the review of child benefit which was carried in this House—they are 1721 quite right—against the Government's wishes on the basis that it was tautological. That is why the Government have not brought a commencement order in respect of that amendment although I accept that it remains on the statute book in the Act.
On community charge, I am afraid that I must advise the noble Baroness that she is wrong. If two claimants are in receipt of income support they will both be entitled to the community charge rebate. In other words, they will be treated as separate units. If they are on income support they will both receive it.
The noble Lord, Lord Banks, in his much more moderate tone, talked about the financial incentives to work. We are building on a new structure of benefits which ends the absurd situation where a person on family income supplement whose pay went up could be left worse off than before. It is true that by practically eliminating marginal tax rates in the 95 per cent. to 100 per cent. bracket the effect has been to shunt them lower down. But this uprating, I am advised, makes no difference to that. Even before this uprating is introduced far fewer people are now better off when not working than even a few years ago.
I repeat what has been said in the Statement: family credit goes a long way up the income scale. The effect of the changes announced today is to broaden but not to deepen the trap about which the noble Lord is so concerned. No working families need now have combined deductions for taxes and benefits which exceed their extra earnings.
Lastly, both the noble Baroness and the noble Lord talked about Section 5 of the 1988 Act. That concerns a review of child benefits which I have already covered.
§ Lord Kilmarnock
My Lords, perhaps we could he allowed a minute or so after the 13 minutes taken up by the noble Baroness. There are just three points that I should like to make. We welcome some of the measures in this Statement, in particular those concerning cold weather and the Motability improvements.
There are three points which really must be made on child benefit. The first is ethical. I am not one who believes that party manifestoes should be holy writ, but the Government clearly do. To the average layman the phrase,Child benefit will continue to be paid as now, and direct to the mother",embodies two points, not one. The phrase "as now" would appear to any reasonable person to include the up-rating which had taken place regularly prior to 1987. I do not want to use unparliamentary language and I do not propose to do so, but many people will draw their own conclusions on that.
The second point concerns conflicting standards for charges on the Treasury. The Government want to freeze child benefit because it is untargeted and benefits some who do not need it. But what about the married man's tax allowance, which is also totally untargeted and also costs the Treasury in the region of £4½billion, roughly the same as child benefit? Will the Government freeze that too? Logic would so dictate, but I do not expect the noble Lord to answer me in the affirmative.
1722 Finally, a technical point was touched on by the noble Baroness. Even if the Government increase family credit by £200 million, we are faced with the serious drawback of this benefit that it still attracts only 50 per cent. take-up and it is withdrawn at a marginal rate of 70 per cent. or more, which means that it does not release people effectively from the poverty trap; while child benefit, on the other hand, has virtually 100 per cent. take-up and has no poverty trap side-effects. It is also a nonsense to say, as the Statement does, that most of the money would go to better-off families, including the wealthy. There are 720,000 families in this country earning £25,000 or above, but 6,700,000 with incomes below £15,000— by no means rich—and where the woman in the household could very well do with this money.
Pending the introduction of an integrated tax benefit system, which the Government show no signs of introducing, and because methods of taxing child benefit are extremely difficult to devise, we are strongly of the opinion that child benefit should be maintained and up-rated for the foreseeable future. For all those grounds we cannot welcome this part of the Statement.
§ Lord Skelmersdale
My Lords, I refer the noble Lord, Lord Kilmarnock, to some of the answers I gave to the noble Baroness and the noble Lord opposite just now. However, I would point out that child benefit is paid without a means test to all who have children, and that is totally consistent with the manifesto commitment.
§ Lord Boyd-Carpenter
My Lords, is my noble friend aware of the fact that many of us do not share the view of the noble Baroness in criticising this procedure and that, on the contrary, many of us feel that when a matter of this importance is brought forward it would be an outrage if a Statement of this kind were not made?
One appreciates the noble Baroness's problem, but perhaps she will allow me to say that it does not seem to have unduly restricted her capacity to comment. I want to ask my noble friend whether he is aware that the great body of thoughtful, responsible opinion on social security matters in this country is enormously glad to see the shift of expenditure which the Statement carries even further towards the least well off. It is appreciated that the enormous burden of social expenditure needs to be more and more concentrated on those who really need it. is my noble friend aware that it is because the Statement takes us quite a long way in that direction that it will be extremely well received in your Lordships' House and in the country?
§ Lord Skelmersdale
My Lords, the House would do well to note the points made by my noble friend Lord Boyd-Carpenter. He and I clearly belong to that great body of thoughtful opinion, as he calls it, who are unrepentent targeters.
§ Baroness Seear
My Lords, perhaps I may ask the noble Lord what he meant when he said that the Government's objection to the amendment of the noble Lord, Lord Banks, which was carried in the House, was tautological. What did he really mean?
§ Lord Skelmersdale
My Lords, I should he delighted to explain myself. It said the same thing twice.
§ Lord Skelmersdale
No, not the amendment, my Lords. The statute book now says the same thing twice but in slightly different forms. The original Act commits the Secretary of State to review the level of child benefit annually, which is done immediately before the up-rating Statement every year. The noble Lord's amendment required us to do that again in April. I regard that as tautological.
§ Lord Stallard
My Lords, I am conscious of the stricture that the noble Lord, Lord Elton, laid on us at the beginning of these exchanges, but I also remember that the noble Lord made a fairly lengthy statement himself earlier this week on another Statement. I should have thought that that was quite unfair.
I thought I heard the Minister say that this Statement would be debated. If he can confirm that, it would assist me. I could quite dramatically shorten my remarks and confine myself to one or two questions. I should first like him to say whether there will be a debate and whether it will be soon. Secondly, I should like to congratulate him on repeating the Statement. I do not want to be churlish about everything that is in it because there are some matters at which I should like to look, including some of the more positive issues that we shall want to accept.
I should like to remind the Minister of an outstanding manifesto pledge on the pensioners' earnings rule. There was many years ago a manifesto pledge to abolish the earnings rule. How much further forward have we reached with that manifesto pledge, which must be nearly 20 years old now? I note that on the earnings rule there is still no change.
Secondly, I imagine that we shall be embarking on a fairly long debate later this afternoon on housing benefit, so I do not need to say too much about that except to ask the Minister whether he can tell us what adjustments have been made to the tapers to which the housing benefits apply. As well as answering that, could he perhaps enlarge on the community charge once and for all payment? I was under the impression that the community charge would last for ever. What is this point about once and for all? I should be quite happy if he said it was to be on a once and for all basis. Can he enlarge on that?
§ Lord Skelmersdale
My Lords, there will be the normal annual up-rating order, and that as usual will be in the form of a debate. On housing benefit tapers there is no change.
While we regard it as important to encourage pensioners to maintain contact with the labour market after minimum pension age, we cannot accept abolition of the pensioners' earnings rule as a priority in the context of the many other competing demands on social security spending. We are talking as usual and as always of a retirement pension. Therefore there must be a test of retirement, and £75 a week is that test.
§ Lord Carter
My Lords, I should like to ask the Minister a question on the disability allowance, but will he clarify a matter regarding compensation for the poll tax as he passed over it rather quickly? Will compensation for income support for the poll tax be based on average liability for the population as a whole or, as the Prime Minister pledged, on the average liability of those on income support? The Minister will be aware that it has been calculated that the liability to poll tax of claimants on income support could be 7 per cent. to 8 per cent. higher than the figure which is based on the national average.
When the statutory instrument on disability is laid before the House, will there be an attempt to deal with the ludicrous anomaly that has arisen? The disabled were promised that the loss of the special benefit additions which were abolished in the Act, would not, because of transitional protection, result in any reduction in income. But this is not happening. Rises in interest rates automatically increase the income support housing allowance and then that goes towards paying the increase in the mortgage. It decreases under transitional protection. The extra payment has to go in mortgage payments and that will go up and down with increases in the rates, but the loss of the transitional addition is permanent. This rule results in the ludicrous situation that benefit entitlement goes down as the mortgage interest rate goes up.
§ Lord Skelmersdale
My Lords, I am not sure that after 35 minutes I should answer the detailed point of the noble Lord's last question. However, I shall try to explain the once-and-for-all amount of community charge. The point of incorporating that in the Statement is that it is a new charge and therefore there must be a new benefit. Following normal procedures, when it occurs it will be rolled into income support and in future up-rated by whatever income support is up-rated.
It may be helpful if I repeat the fact that the rates are £1.15 for single people under the age of 25 and therefore £2.30 for couples. For people over the age of 25 the rate is £1.30—the amount which they are now receiving in respect of rates.
§ The Lord Privy Seal (Lord Belstead)
My Lords, if the noble Lord will allow me to intervene I should like to point out that, by accepting the report of the Procedure Committee, the House has decided to confine questions on Statements to 20 minutes after the Statement has been made. We have now reached 36 minutes and we have a heavy day ahead of us. I suggest that the noble Lord, Lord Peston, puts his question and that we then move on to the next business.
§ Lord Peston
My Lords, I am grateful to the noble Lord. I have a simple factual question. Can the Minister tell the House how much it would have cost in total to have up-rated child benefit in line with the full indexing? How much was added to family income support? Am I right in saying that only a fraction was added?
§ Lord Skelmersdale
My Lords, I cannot find the figure at this moment. However, the answer that the noble Lord would expect is the true answer: it is considerably more.
§ Lord Belstead
My Lords, this is a matter for the House. I felt it right to remind the House that it agreed to accept the recommendation of the Procedure Committee to spend 20 minutes on questions following a Statement. The matter will arise again when the order is laid. I think that it is a question for the House now to decide whether, after 38 minutes, it has had enough.
§ Lord Stoddart of Swindon
My Lords, I appreciate the point that the noble Lord has made but I should like to say briefly—
§ Lord Belstead
My Lords, if the noble Lord will forgive me, I am putting the matter to the House. If the noble Lord continues and finds that the House does not want him to do so, then we are in difficulty. I beg the noble Lord to bear in mind the fact that we have a long day ahead of us.
§ Lord Stoddart of Swindon
My Lords, in deference to the noble Lord I shall not continue but I shall write to him.