§ 3.1 p.m.
§ BARONESS PHILLIPS rose to draw attention to the proposed introduction of cost-related prescription charges and to the increasing dependence of Her Majesty's Government on means-tested benefits as the basis of social services which segregate those in hardship from the rest of society and produce consequent problems of disincentive and inadequate "take-up"; and to move for Papers. The noble Baroness said: My Lords, I should first like to apologise for the fact that I am introducing this Motion on behalf of my noble friend, Lady Serota. Indeed, I feel that if I am going to make a speech every Wednesday I may need to make a further apology, but I at least have the reputation for being brief and I will see that that reputation is in no way damaged on this occasion. The noble Baroness, Lady Serota, is unfortunately ill.
My Lords, we are discussing this Motion on a day when there will be a Statement on another very important matter, and I selected from the Library one of the fact sheets on Britain and Europe which describes how Britain is similar to or unlike the countries of the Six. Under the reference to health we find this statement:
In Britain the National Health Service is largely paid for by taxes. The British Health Services are available to the whole population and the range of treatment is virtually unlimited.
That is a proud boast and one which we frequently make. When visiting other countries it is one we are only too proud to reiterate. But if your Lordships will look at the White Paper that was presented earlier in this Parliament, Policies of Public Spending, you will see that measures will be introduced as soon as possible to enable prescription charges to be related more closely than now to a proportion of the cost of individual prescriptions, and there will be a ceiling to the amount of the charge. Meanwhile, the existing flat-rate charge of 2s. 6d. per prescription item will be raised to 4s., the arrangements for exemption remaining unchanged. There will also be increased charges for plastic surgery and charges for certain appliances issued
by hospitals; and charges for dental services and spectacles will be increased. These charges will produce a gross saving of public expenditure which is estimated at £71 million in the year 1971–72.
§ Let us see how this will work. First of all, let us take the flat increase in prescription charges from 12½p to 20p. I know we shall be told by the Government that there are exemptions. Indeed, in the previous Government I was responsible for introducing one of the Bills which dealt with those exemptions. One, of course, relates to age, and I am going to put in a plea at once to the Minister to ask whether he can put right an anomaly which I failed to put right in trying to present this matter before the House, namely, that a woman who retires at 60 cannot claim exemption from the prescription charge until she is 65. At various stages in different debates we have raised the question of the magic figure. There is the magic figure at which one must retire, the magic amount at which one has a ceiling in relation to a particular charge, and even, within your Lordships' House, the magic hour at which one can turn on the lights in the Royal Gallery. These figures are plucked out of the air and often do not stand investigation. I am sure that it is so in this case. There is also the question of exemption of children, which ends at the age of 15. I would again ask that exemption should be extended at least to children who are still at school, because they will still be, as it were, a charge on their parents. There will be the exemption of the chronic sick, and we know here the limitation of the categories. There is the exclusion of those who have chronic bronchitis, asthma and heart diseases. All of those are diseases for which you may need constantly to have prescriptions filled and for which you constantly need attention. I know about the "season ticket" arrangement and the fact that this can be taken up. I should be interested to hear what proportion of those who are eligible do take up this privilege.
§ Now let us look a little more closely at the proposed charges proportional to costing. This scheme introduces a frightening new concept into medicine. There are many people living to-day who can remember when women, in particular, did not have the services of a doctor, not 979 because they were not ill but because they could not afford to call in a doctor to deal with their condition. If charges are related to any State services there is always a danger that they will be provided not for those who need them but for those who can afford them. Indeed, I understand that in America it is said that a doctor looks at a patient to see what is wrong with him and also to assess which drugs he can afford to make him better. We in this country have made remarkable strides in the treatment of certain diseases by drugs, and it seems to me nothing less than a tragedy if anything is allowed to interfere with the opportunity which is presented to a doctor to prescribe a new and possibly expensive treatment. My Lords, how can this scheme work, and what right have we to impose yet another duty upon a greatly overworked medical profession? I think this debate is particularly important now because the Government have not actually introduced this measure; and that is why my noble friend wanted the debate to-day. I implore the Government to think again. How much money will really be saved? Every time there is an introduction of cost-related benefits it means more people to operate the scheme.
§ I have some of the leaflets here which have been issued in connection with these cost-related prescriptions and with the family income supplement. One of them says very gaily—it is a splendid leaflet—"Which of these are yours as a right free?" There is a list given—welfare foods, prescriptions, school meals, and dental and optical treatment. Then one is advised to look at the incomes guide inside. There one is told what to do to get the benefits. If it is welfare milk and foods you must ask for leaflet W11 at your local post office or social security office. If you want National Health prescriptions you must get leaflet PC11 from your local post office or social security office, and for school meals you need to contact your local education office or the education welfare office. In connection with dental and optical charges you ask your dentist or optician for a claim form. You can also ask for a claim form in connection with Family Income supplement.
§ Now this is rather complicated, and I would say at once that I have been read 980 ing a Study on people with low incomes and low pay. Here we see very clearly that those who receive low pay, receive it for the obvious reason that, first, they are not very well educated, and secondly, they are not very healthy. These will be the people who will be asked to go through this complicated ritual in order to reclaim these benefits. In addition we are beginning to see how the Departments are already overloaded. There was a letter in one paper the other day making this point. The more we ask these already overworked people to do, the more we shall have either to slow up the whole operation, or introduce more staff and make it colossally expensive. Quite a number of people have asked the dentists and opticians, and they do not understand the arrangement. But why should they understand it? They are there to deal with your eyes and teeth, not the complicated arrangements which the State asks them to undertake.
We now come to the question of means-tested benefits, which is the second part of our Motion to-day, and to the apparently increasing dependence of the Government on them. The Minister will probably tell me that it was not the present Government which first introduced means-tested benefits. This is so. We see an increasing leaning towards these benefits and an increasing use of them. A very interesting question was put in the other place on May 25 last when the Minister was asked what investigations he was making to establish the disincentive registered by low-income families from the accumulation of means-tested benefits restricted to such families. This was his reply:
We are aware of consequences which the withdrawal of means-tested benefits can have for man's net income. This is a complex problem and we are considering how the more extreme effects can be mitigated."—[OFFICIAL REPORT, Commons, 25/5/71, col. 61.]
It is certainly a complex problem, and it is a human problem. These forms of means testing are divisive, wasteful and degrading.
§ I think we may also look at some of the other measures mentioned in Policies of Public Spending. Some of your Lordships will have read yesterday that there are nearly one million fewer children taking school dinners since the price of dinners was raised. The Minister in another place said that it should not be 981 assumed that the drop in take-up was attributable only to the recent increase in price. Perhaps we may hear what is the reason for the drop in take-up. When I was concerned with school meals it was always noticeable that any increase in price was immediately followed by a decrease in the number of children taking them up. We have some further figures from the Department. Comparing the numbers with previous years, those taking school dinners are certainly far fewer than previously. This may or may not be a seasonal drop, but there is another factor which I should like your Lordships to consider. We see from an article in a newspaper to-day that about 60,000 people in low income families have lost their right to school meals because of the increase in child allowances in the Budget. Here is a piece of nonsense; you give with one hand and take away with the other. This is always with the expense of having more and more administration. Every fresh means-testing benefit needs more people to carry it out. I cannot repeat this too often.
§ We are going to have quite soon a Bill called—rather euphemistically—the Education (Milk) Bill. I do not propose to go into that Bill now because we shall have an opportunity to debate it. We understand that the purpose of the Bill is partly to enable us to switch our priorities to fill some of the gaps in educational provision, and particularly to improve and replace old primary schools. The Minister cannot be serious in this. Is the choice really between building more schools and allowing little children to have milk? I cannot believe that this is a choice that confronts us.
§ Here again we come to the magic figure of seven. It is presumed that from the age of seven a child does not need milk. Recent statistics show that many of these children do not have breakfasts. I know from my experience in school that the bottle of milk was often the first substantial intake of food of the child that day. We see the divisive factor: some children will receive free milk. We cannot imagine that this is not going to be known; children can be very cruel. This is where you divide those who have and those who have not.
It is not my intention to labour any of these points. There are speakers who
will follow me who are very knowledgeable in all aspects of the Motion before your Lordships' House. I am making a genuine appeal to the Minister, whom I know to be a humane man, who likes and understands human beings and their problems. There is an old song, to the effect that:
The rich get rich and the poor get poorer ".
My Lords, indeed this seems to be the case in the year of Our Lord 1971. I beg to move for Papers.
§ 3.16 p.m.
§ LORD AMULREE
My Lords, when I first heard the words in the gracious Speech about the cost-related prescriptions I did not understand what this was going to be all about. I am not sure that I understand now because not a great deal has been published about it. I think that the amount of the prescription charge is going to be increased, or varied, according to the kind of drug which is prescribed. Quite apart from the drawbacks which the noble Baroness has referred to, there is this rather sinister drawback, that it looks as if the Minister, the Secretary of State, or whoever it may be, is trying to dictate to doctors what drugs they should prescribe for certain of their patients, in the sense that certain drugs that are expensive are going to carry a bigger prescription charge, and if a person has little money then he cannot afford to pay for the prescription. That seems a very peculiar and wrong point of view. This is something with which I do not think the National Health Service has tried to interfere before, except in the few cases where some doctors have been guilty of overprescribing; but that is not quite the same thing. If such a plan were put forward there would be a good deal of opposition to it.
I have never really liked prescription charges. There has been talk of quite a number of ways of modifying the National Health Service, lodging charges while in hospital and that sort of thing. They have all been dropped as being impracticable; but the prescription charge seems to have come to stay and it brings in about £30 million a year. I know that the National Health Service is a fairly expensive exercise. The disproportionate amount of money that is spent in this country upon the social services compared to the national income generally is 983 not really as big as all that. Quite a number of countries in Europe spend a great deal more than we do in this respect, such as France, Italy, West Germany and Sweden.
It is also said that the tax burden is heavy and must be reduced. But again, quite a number of countries in Europe seem to have far heavier tax systems than we have, and yet they do not get into terrible trouble. France and West Germany are examples; they are fairly prosperous and well developed countries. It is the tax structure which is wrong; it bears too strongly on those with marginal incomes. Supposing you are really poor; you can obtain supplementary benefits which help you. But supposing you are in a category which I might call "marginal", and which includes a large number of people, then you can obtain no relief at all. And it seems to me that if you are going to get your prescription charges varied in this kind of way, the lot of the people I have referred to is going to become worse than it was before.
It is said that the change will stop a good number of people from wasting the resources of the National Health Service; that they go to their doctors and hospitals when they have nothing visibly wrong with them. But, my Lords, they are people who need some kind of support. They may not have any gross pathological lesions visible (if I may use rather technical language) but they are people who feel unwell, and they want comfort. The Service was intended to take care of such people as these. When it is said that many people who are hypochondriacal—one might call them neurotic or all sorts of unkind things—are using the Health Service, my reply is that that is really what the Health Service is for: to take care of people like that who need some kind of support. If that is put forward as a reason for these charges, I do not think it is a good one.
I want to say one word about the means test. "Means test" is a wrong term now: it shows the dominance that the Poor Law still has in our lives. It is a good old Poor Law term and goes back to the evil days in the 'twenties and 'thirties, when people had everything taken from them before they received any relief at all. I would much rather use the word "selectivity", nasty and unattractive 984 word though that may be, because it seems to me to mean rather more than "means test" at the present time. The question of selectivity sounds rather attractive; but if one goes into the matter carefully, one sees that it is not as attractive as it appears at first sight. The numbers who would be protected by selectivity are not very large—I am talking now about elderly people. It has been worked out that about 83 per cent. of retirement pensioners have an income of under £15 a week, so they would not be in the wealthy class. It is more efficient administratively to pay everybody the same benefit and to recover it by income tax, because the percentage of the cost of administering the benefit from the Supplementary Benefits Commission is about twice that of running the benefits under the National Insurance Scheme. So I do not think there is a great deal to be said for selectivity, or the means test, or whatever it might be called. I have always been attracted by the system adopted in France. I am never sure whether we have gone into that system very much. Under it, the patient pays the full amount but can recover 85 per cent. or more from the Social Security Department. That seems a reasonable way of approaching matters and, on the whole, a fairer way of doing so.
My Lords, before I sit down I should like to join the noble Baroness in making a plea that women of 60 should be treated as retired, as men are at 65, and that there should not be a general age of 65 when they get some relief from prescription charges. If there is to be a difference in pensionable age, I cannot see why the principle cannot apply to all sorts of further benefits. I am very pleased to support the Motion moved by the noble Baroness.
§ 3.25 p.m.
§ THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)
My Lords, I am grateful to the noble Baroness, Lady Scrota, for having put this Motion on the Order Paper today because it gives us an opportunity to discuss one of the most important aspects of our social provision. May I say how sorry I am to hear that she is unwell. I hope it is nothing that will take her more than a few days to recover 985 from and be back in this House. And may I say that the noble Baroness, Lady Phillips, acted as her substitute in her usual eloquent, powerful and critical—rightly critical—way.
This is an immense subject and it is impossible to approach it without considering what our underlying objectives are, and I feel certain that our objectives are the same. In a comparatively rich country we wish to see that none of our citizens, of whatever age, is without the resources to lead a full life; that those who are sick receive the skilled care which they need to return to the community, and that those who are handicapped are provided with the facilities which will enable them to play their full part in the community. In other words, we are speaking about the transfer of resources from those who can afford it to those of our fellow citizens who require additional resources to enable them to attain such minimum standards. This transfer of resources can take place either by the provision of free benefits, or at least cheaper than cost benefits, or by the provision of cash which will enable the extra facilities to be bought. I am quite sure that these are objectives which we share on both sides of the House. But the Motion, and I think to some extent the noble Baroness's speech, seemed to imply that we on this side of the House had some special love for means-tested benefits, while her Party were opposed to them. This to my mind is an unfair comparison. When the facts are examined the picture of the Party opposite as one which regards means-testing with abhorrence is entirely unrecognisable.
As my right honourable friend the Prime Minister pointed out in another place a week ago, the system of means-tested benefits, found in many areas of social care to-day, is one which existed under the last Government. Not only did it exist under their Administration but, all credit to them, they significantly developed its scope. They introduced, as the noble Baroness opposite has told us, a system of relief from the payment of National Health Service charges, based on a means test. They instituted a scheme for means-tested rate rebates and recommended local authorities to grant means-tested rent rebates. Furthermore, they improved the old National Assistance scheme by substituting the supplementary 986 benefits scheme—an excellent scheme, but again dependent on a means test.
What we have done is to go further in two directions. In the first place, we have introduced a new and, I suggest to your Lordships, a very good family income supplement which is not means tested in the old sense. It takes no account of capital, of the income of children or of income in kind. But it brings direct help to people in work with low incomes and dependent children; and, as was noted when the Bill passed through this House, it includes one-child families for the first time, and provides specially favourable treatment to one-parent families. The second thing we have done is to raise the exemption limits to ensure that more of those in need receive these benefits, at a cost estimated to be some £7 million a year.
Our view was summed up by my right honourable friend the Secretary of State for Social Services when he said, on May 5, that:there will continue to be scope for a healthy combination of the universal, the selective by category and the selective by means in the development of our social policies ".The business of social security is to a great extent a question of helping those in misfortune, though this may not be its only sphere of activity. The Government believe that their social policies need to be a mix, as my right honourable friend's remarks made clear. From time to time the balance may change, both as regards the needs to be met and the resources available to meet them. We make no apology for regarding means testing (or selectivity, if the noble Lord prefers the word) as a valuable weapon in society's armoury, and we make no apology for doing our best to improve its efficiency.
We would, however, deprecate—and I am sure the noble Baroness would deprecate—anything that might suggest that there was any indignity involved in claiming the benefits available as of right. I would not deny for a moment that universal benefits have great advantages—they would avoid all need for discrimination, they are cheap to administer and easy to publicise. They are most useful when the object is to help everyone, or at least the majority, in a particular group—for example, retirement pen 987 sioners. But there is no real possibility, and there never has been, of putting our whole social security system on a universal basis. For that we should need to enter not the European Economic Community but Utopia. The sensible view on which all Governments have acted is that the universal principle is useful for some purposes, while for others some form of selectivity is inescapable.
The first essential, in our view, in order to guarantee social advance is an expanding economy. If taxation is too high, this will lead to a lack of incentive, a lack of investment and a stagnant economy. To reduce taxation, as we believe is essential, again demands strict priorities. So not for any dogmatic reason, but in the interests of what is practical, we are driven to the conclusion that greater social justice will result from concentrating our limited resources where they are most required. And this inevitably lead, to the necessity of some test of means in order to determine where the greatest need lies.
All of us are used to an annual means test—all of us have to submit our annual income to the income tax inspector for his determination of our liability. All of us accept this as fair and that is the reason why the various concepts which are known as negative income tax, by which one annual means test would result in some paying income tax and others receiving income allowances, are so attractive. This was reflected in our Election Manifesto, and techniques of this character are among the matters being taken into account in the Government's study of family poverty. They are but one aspect of a complex set of issues to which we are determined to give the most thorough consideration.
So to start with, I cannot possibly agree with the words of the Motion that we are becoming increasingly dependent on means tests. In fact, our strategy for improving the system is likely to make it easier for the claimant. The noble Baroness mentioned this leaflet, to which I shall refer again later. It is true that there are a great number of benefits and a number of different places at which they have to be collected, but again this is no different from what it was under the last Government. What we are aim 988 ing to do is to reduce the number of separate claims that have to be made by a person entitled to more than one benefit. We have arranged that the holder of a family income supplement book, like the holder of a supplementary benefit book, will be entitled to exemption or remission of charges for school meals, welfare milk, prescriptions, glasses and dental treatment. We have made it easier for people who supply information on one claim to obtain other benefits to which they are entitled, and we are continuing to examine such procedures so as to improve them where possible.
As a further step towards greater simplicity in making claims, we are exploring the possibilities of providing a single claim form for people applying for more than one benefit. My right honourable friend the Secretary of State for Social Services announced in reply to a Question on May 13 that an intensive study has been made in a preliminary way of a common form of inquiry for a wide range of means-tested benefits, administered both locally and centrally, and that the feasibility of such a procedure was being discussed with the local authority associations, whose co-operation would of course be essential, if the idea is to be taken further.
The Motion goes on to refer to the problems of disincentive and inadequate take-up. I would not for a moment deny that these are problems. But I would suggest that they are problems that have to be overcome, if we are to make the best use of our available resources. So far as incentives are concerned, not very much is known about the effect on the weekly wage-earner. It is true, however, that an increase in earnings in any given week is very unlikely to produce an immediate change in benefit entitlement, because assessment of benefits is based on income over a previous period of some length and different periods are used for different benefits. The problem is, of course, compounded by the income tax threshold, and in this respect at least we have improved on the situation which was left to us by the previous Government, by raising the tax threshold by means of increased child allowances.
On the question of take-up, we have made a real onslaught on this problem and we believe that we are succeeding. 989 We have launched the largest ever campaign across the whole field of social services to seek out those who, for lack of knowledge, reluctance or for other reasons are not claiming benefits or exemptions to which they are entitled. This has cost over £340,000. It began in April and May with a campaign for take-up of free milk and welfare foods, prescriptions and dental and optical treatment for people in full-time work. So far we have received over 380,000 claims, and while many still remain to be processed we have already made over 175,000 awards. It was followed by a second campaign that is still in progress for the take-up of family income supplement. We have not only advertised in newspapers, on television and by posters, but we have also approached all local authorities and voluntary social workers to ask for their assistance.
I entirely reject, therefore, the latter part of this Motion and I am left with the first sentence on cost-related prescription charges. Once again we are concerned with a matter of priorities. We are continuing the wide exemptions for those people on whom prescription charges might otherwise bear heavily. But is it really right that all those who can afford to pay more towards the cost of their prescription should not do so, while there are so many other unmet demands in the National Health Service? The alternative is an escalating burden of taxation, and we have decided that this is wrong. We feel that those who can afford to do so without hardship should pay a charge more closely related to the cost of their prescription, and thereby enable scarce resources to be devoted to those aspects of the National Health Service, such as the care of the mentally ill, mentally handicapped and the old, where they are most desperately needed. We have, as your Lordships are well aware, already increased some charges. Without these increases and the further proposals for savings we have announced, we should not have been able to make available an additional £110 million over the next four years to assist those services in greatest need. But even so, with the wide exemptions well over half of all prescriptions are free of charge. If all prescription charges at the current rate of 20p per item were abolished, we should have to 990 find some £40 million more in a full year.
There is an inevitable tendency for the drugs bill to rise and we must expect that with the development of modern medicines this will continue. The total gross cost of prescriptions in Great Britain in 1970 was of the order of £220 million, and the average cost of a National Health Service prescription is now about 75p, compared with a charge (where payable) of 20p. As the cost of the average prescription increases, the proportion of the drug bill which the charges save gradually falls and an increasing share has to be met from the limited resources available to the N.H.S. until the charges are next increased. In quite a number of other countries the share of the total pharmaceutical bill, contributed by patients, keeps pace quite smoothly with the total through a system of proportionate charges, which were mentioned by the noble Lord, Lord Amulree. We would not contemplate introducing proportionate charges without a ceiling to the charge, nor without the present very wide exemptions and the arrangements for season tickets which the last Government, if I may say so, so sensibly introduced. We have been in touch with the representatives of the professions concerned, and they have explained very fully the objections they see, including possible effects on treatment and the practical difficulties of operating such a scheme.
§ BARONESS SUMMERSKILL
My Lords, may I ask the noble Lord a question? He has, quite rightly, dwelt on the very important point that the doctors—when he talks about the professions concerned—oppose the scheme; the doctors who are going to be called upon to administer it are totally opposed to it. How can he therefore hope that this will be successful?
§ LORD ABERDARE
My Lords, the noble Baroness will be able to develop that point when she speaks. All I am saying is that we are well aware of the feelings of the medical profession; and we have been in touch with the pharmaceutical profession and we are well aware of their views, too. I was saying that we appreciate the genuine concern and 991 we shall pay full attention to the representations that have been made.
The noble Baroness, Lady Phillips, asked me one or two more detailed questions. In view of the fact that an important Statement is expected, I will, if I may, speak at the end and answer her then. What I should like to suggest in ending is that we are all in the same difficulty. We all recognise the weak points in our social services. We know where additional resources are required. We are all of us aware from our own experience of the shortage of available finance and we have all therefore been driven, whether we be supporters of the Labour Party or the Conservative Party or the Liberal Party, into the necessity of using scarce resources where they are most required. Those are the hard facts which would be, I am sure, amply demonstrated in any Papers for which the noble Baroness has moved.