§ Mr. Kenneth Clarke
I beg to move Amendment No. 10, in page 10, line 2, column 2, leave out '£0.25' and insert:'£0.25 (in respect of retirement pensions to which paragraph 11 of this table refers) £0.50 (in all other cases)'.This is an amendment which has some similarity to the previous amendment in that the Government find difficulty in contemplating any amendment that involves any increase in expenditure. It is therefore possible to deploy only amendments which would involve an absolutely trivial amount of expenditure. Since the Minister attacked me in the last debate for what he called inconsistency between what I said then and what I said on Second Reading and, indeed, what I am about to say, perhaps I should make my position clear.
My understanding of the Government's position is that the huge expenditure for which the Minister rightly claims credit was entered into before the election as an election commitment. Nice round figures were chosen. They were chosen without any consideration of the cost which would be involved and the effect that that cost would have on other priorities, particularly a national insurance scheme.
The figures for retirement pensions which were taken up by the Labour Party were first put forward a long time before the election by Mr. Jack Jones of the Transport and General Workers' Union. Had the election come even earlier, so that the actual value of that commitment had not been eroded so much by inflation, it is possible that the Labour Party would not have been able to put forward the figures that it was prepared to bandy about for so long.
Attempts to plug gaps to deal with minor matters in the national insurance scheme have had to be cast aside, the Labour Party having saddled itself with 588 its pension commitment. However welcome that commitment is to the beneficiaries, and however much it represents a real shift in resources, such a commitment has left the Government with no room in which to maneouvre. The Minister has not been in a position to give one brass farthing to the smallest claim which has been put forward. In the debate on the last amendment we were not doubting the Minister's good faith but bringing home to him his political position.
The Minister was so loaded up with the commitment which the Bill represents that he had to speak and vote against death grants for the over 80's because there was no room for such a trivial amount of expenditure, even though this was a proposition which he found it impossible to argue against as an urgent priority for people who are dying while they wait for this change to be made. This amendment refers to the age addition for retirement pensioners. How much would it cost to double the age addition for the comparatively small number of people over the age of 80? Will the Minister be able to accede to this request? I anticipate that he will not be able to do so. This illustrates how this particular orange has not a pip left to be squeezed out of it.
If the hon. Gentleman is not able to satisfy me and the expenditure proves to be impossible, given the difficulties he has put himself in, will he say a brief word about the Government's approach to the age addition and this choice of priorities in retirement pensions? The age addition was brought in a few years ago and in my opinion is a desirable choice of priorities, made by the previous Government. The Tory Government meant it to be a foundation on which to build when resources allowed.
When they first retire nowadays, pensioners are increasingly in good health. Those just over 65 will be allowed to carry on working if the earnings rule is eased. There will be some modest savings for them if the Government allow them to supplement the national insurance pension. It is when they reach the 589 age of 80 that more pressing financial difficulties arise. Such people are no longer able to remain in remunerative employment. Those who have been supplementing their pension by their savings find that they have exhausted those savings after 15 years in retirement. There are extremely sad cases of people living to a very great age and getting into more and more straitened circumstances in the last few years.
I should like the Minister to say that he accepts that this was a valid choice of priorities and that when he next brings forward a National Insurance Bill—after a calmer and more detached period of thought—he will not allow the fact that the age addition is frozen in this Bill to mean that the Government are going back on their choice of priorities. In view of the small number of cases I hope he will say that this group of over 80s can look forward to some age addition in the not-too-distant future.
§ Mr. Raison
My hon. Friend the Member for Rushcliffe (Mr. Clarke) has presented a persuasive and effective argument. I, too, look forward to hearing what the Minister has to say on this question of the age addition. It is a common practice of the Labour Party and of this Government to scoff at or disapprove of the discriminatory elements in our social policy. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) showed what a discriminatory or selective social policy could mean when he introduced this distinction between the genuinely old and those who merely happen to be over 60 or 65.
He brought in the notion that if a person was over 80 he had personal needs not applying to the general run of pensioners of 60 or 65. The age addition was a thoroughly good idea. If the Government had not been so profligate in their approach to such matters as food subsidies and free family planning services, which will cost a certain amount of money, there would be money to spare for worthwhile exercises such as that put forward by my hon. Friend. I shall await the Minister's reply with interest.
§ Mr. O'Malley
Both the hon. Member for Rushcliffe (Mr. Clarke) and the hon. Member for Aylesbury (Mr. Raison) have asked me to state the Government's atti- 590 tude towards the age addition. The hon. Member for Aylesbury suggested that members of the Labour Party, including members of the present administration, either scoffed at or disapproved of the age addition. If the hon. Gentleman looks back at the history of the matter, he will see the reception that we gave to the scheme in 1971. We welcomed the announcement when it was made, and we think that this is one of the aspects of the national insurance system that needs careful examination at upratings.
I think that I should point out that the Conservative Government did not increase the age addition automatically at each uprating. The system was introduced in September 1971, but the original sum of 25p was not increased at the uprating of 1972 or at that of 1973. The Committee may like to know what would be needed to restore the purchasing power of the original 25p. That would require not an extra 25p as is suggested in the amendment, but only another 6p if that was all that one wanted to do.
I have said that the Government will consider the age addition, together with other aspects, at future upratings, and there are two other things that I should tell the hon. Member for Rushcliffe. In the second part of his speech the hon. Gentleman put his proposition in a reasonable way, having made his party points at the beginning. I do not object to that; I do it myself, and that is what the House of Commons is about. This would be a dull place if that were not so.
It is not only a question of the global amount of £1,250 million that is being provided by the Bill. If we are to be able to introduce the uprating on 22nd July, features such as disregards have to be left out for that reason alone, but there is another reason that the Committee must consider.
The death grant that we discussed a moment ago is, I find, an emotive issue, and it is a matter on which I have strong feelings. The acceptance of that proposal would have cost £2 million in a full year, while the acceptance of this amendment would cost £15 million in that period. The difficulty is that if one begins to add on £2 million, £15 million, £3 million and £5 million, one ends up with a substantial extra bill.
Sir Harmar Nicholls (Peterborough)
It is no good argument for not doing any of these things to say that added together they would account for a lot of money. The hon. Gentleman should take one or two of the proposals that ought to be acceded to and accept them.
§ Mr. O'Malley
If the hon. Gentleman takes the matter on board, I think he will agree that we have dealt with the most important aspect of all. We have uprated long-term benefits by 29 per cent. That is the one that pensioners and long-term beneficiaries will value.
We do not disapprove of the age addition—rather the reverse. We accept it as a valuable part of the national insurance system, and it will be considered along with other aspects of the scheme at future upratings.
Next—this is a very important point—it would be impossible to introduce the uprating on 22nd July if we were to incorporate any increased benefits involving additional calculations in all individual cases. Therefore, I cannot accept the amendment.
§ Mr. Clarke
I am grateful to the Minister for the way in which he replied to the amendment. I am impressed by the way in which, at this time of night, problems of matching resources alongside desperately competing demands on Government can be so eloquently expressed by the Minister of State. This is becoming a more urgent matter. However, in view of the way in which the hon. Gentleman so fairly dealt with the case and accepted the obligation to deal with the age addition, and in view of the further point he made about the impossibility of applying the uprating on 22nd July, I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Question proposed, That this be the First Schedule to the Bill.
§ Sir B. Rhys Williams
I took the precaution of advising the Chair that I would wish to speak in the debate on whether this should be the First Schedule to the Bill. I have a point to make which 592 may take a little time. It is a matter which it would have been proper to raise on Second Reading if back benchers had not been brought under pressure not to speak on Second Reading for the convenience of the Government Front Bench. I will try to confine myself strictly to what is in the Schedule. I think that what I have to say is strictly in order at this point.
I have on a number of occasions drawn attention to the relationship in the national insurance system to the benefits which are given to single people and the benefits which are given to couples under various headings of entitlement. On this occasion I have examined the relationship between single persons' and married couples' benefits where the beneficiary is a pensioner. I have also looked at unemployment and sickness benefit and injury benefit; and at the supplementary benefit rates which have been brought in for pensioners to correspond with the new higher rate of pension.
There are significant anomalies which are important and which lead to conclusions as to what the Government might or should be doing. I should like to hear whether these are points which the Minister has taken note of, because they arise out of the Bill. Even though people may not be fully conscious of these anomalies, the Government at least should know what they are doing.
There is an element in the rate of benefit for a single person which is obviously not repeated in the benefit for a couple, because, if it were, the benefit for the couple would be exactly double that for the single person. However, this is not so. The Minister is looking surprised, but I think he has heard me make this point before. If it is suggested that it is not necessary to give double for two people the benefit for a single person, we must assume that the national insurance system thinks that for two people there is a certain element which does not need to be covered twice.
This is what I call the household element. Obviously heating, roof over the head, and certain other basic items of household expenditure do not need to be repeated where there is a couple. The nature of these household elements is worth examining to see what the Department's policy is. I calculate that for 593 pensioners the household element before the increase in allowance was £3 and it is now to be £4 a week, and the personal element was £4.75 and is now to be £6. As regards unemployed and sickness benefit, we find that less generous increases are proposed. For the unemployed or sick, the household element was £2.80 and is now £3.30—that is, an increase of 50p, whereas the increase in the case of pensioners is £1. The personal element was £4.55 and is now to be £5.30.
For injury benefit we find that the household element was much higher: it was £5.55 and is now to be £6.05. That is an increase once again of 50p, the same as for the unemployed and the sick, but only half the increase for the pensioners, while the personal element that was formerly £4.55 is now to be £5.80. The personal element for the unemployed and the sick and those benefiting from the injury scheme is to remain the same, in spite of the other increases.
It is the household elements that are of particular interest. The new supplementary benefit rates will have a personal element of £5.95 compared with a personal element in the pension of £6. I suppose that the difference of a shilling is to mark the inferior character of those in receipt of supplementary benefit by comparison with those drawing retirement pensions. But the household element for those receiving supplementary benefit is now to be £4.45, although it is only £4 for the pensioner. Moreover, the household element for those in receipt of supplementary benefit excludes the most important items which one would expect to be included, such as rent and heating and certain other items.
One deduces from that that the Government accept, consciously or unconsciously, that the household outgoings of the pensioner family are more than are provided for by the national insurance system, but they do not provide the extra cover for the national insurance beneficiary because it is deemed that if he needs the money, he will apply for supplementary benefit. Therefore, the pensioner who does not apply for supplementary benefit, who is somehow managing on his pension, is suffering discrimination in respect of his household expenditure.
594 This is something of which the Committee should take serious note, because if we allow the schedule to go through unamended, as no doubt we shall at this late hour, we shall be enacting a system that is particularly adverse for pensioners who own their own houses, because the ownership of the house is what is not taken into account in the national insurance benefit calculations. If a man owns his own house he and his wife are much nearer to being able to manage than those who have to pay rent for their accommodation. It is the payment of rent that obliges a pensioner to apply for supplementary benefit because he cannot manage if he is required to meet outgoings on rent.
Many of those in retirement on limited resources will be in subsidised accommodation, because they will still be entitled to remain in council house accommodation, or they may be living with relatives, which introduces an entirely different situation that once again the national insurance system does not take into account, although I think that it should. But others will be in furnished or unfurnished tenancies, in other words, almost certainly eligible for benefit under the Housing Finance Act.
But the Department also takes no note of the benefits available to pensioners under the Housing Finance Act. There is all too little collaboration, if any, to ensure that pensioners obtain the benefits of the Housing Finance Act that are available from local authorities. I agree that those who apply for supplementary benefit automatically have their rent allowances obtained for them, and I suppose that there is virtually a 100 per cent. take-up of the Housing Finance Act provisions in that respect; but the people who seem to be missed out are those who do not apply for supplementary benefit.
This is a matter to which the Minister should give urgent consideration. There should be a special campaign to encourage pensioners to apply for their rent allowances under the Housing Finance Act. Better still, I suggest that every taxpayer and every pensioner should be encouraged to report what rent he pays, or even obliged to report it as part of his tax return, giving his conditions of tenure. In that way the housing allowance could be calculated by the Inland Revenue— 595 not the local authority—and paid automatically. What in effect I am recommending is that a tax credit system which takes in a household allowance should be incorporated into the social security system.
I do not want to elaborate the scheme further, partly in view of the hour, but partly because I may be verging on going out of order. I think that I have said enough to make my point, and I shall be pleased to hear what the Minister says.
§ Mr. O'Malley
I think that the best thing for the Minister to say at this stage of the proceedings is that I have heard the hon. Member make some of his comments on two previous occasions on the relevant schedules to uprating Bills, and that as this is the first time I have heard the hon. Gentleman's comments when it falls to me to examine the detail of what he has said and how the elements he has described operate within the range of benefits laid down in the schedule, I shall be very pleased and willing to read what he has said and consider it fully. I will not only write to him about it but will see that his observations are properly considered and put before me in the Department.
§ Question put and agreed to.
§ Schedule 1 agreed to.
§ Schedules 2 to 4 agreed to.