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Column 845

Social Security Benefits (Uprating)

3.30 pm

The Secretary of State for Social Security (Mr. Tony Newton) : With permission, Mr. Speaker, I wish to make a statement about the uprating of social security benefits. The statutory instrument necessary to bring my proposals into effect will be laid before both Houses and debated. Uprating will take place for most benefits in the week beginning 9 April next year, the first full week in the tax year. The provisions will apply to both Great Britain and Northern Ireland.

Let me turn first to the main national insurance benefits. As the House knows, the increase in the retail prices index for the year to September 1989--which is the most up-to-date indicator available at the time when the uprating process has to start--is 7.6 per cent. Our commitment to raise the basic pension in line with that figure will again be fully carried out. It will therefore rise by £3.30 a week for a single person--from £43.60 to £46.90--and by £5.30 a week for a couple--from £69.80 to £75.10. The same percentage increase will be applied to other national insurance benefits--including widows' pensions--to public service pensions, to industrial injuries benefits and to the war pensions scheme--although, in the last case, with some exceptions, in which I propose larger increases to which I will come later in my statement. Unemployment benefit will go up from £34.70 to £37.35 for a single person and from £56.10 to £60.40 for a couple, and sickness benefit from £33.20 to £35.70 for a single person and from £53.75 to £57.80 for a couple.

As for statutory sick pay paid through employers, the welcome growth in occupational sick pay schemes, which now cover more than nine people at work out of every 10, means that the rates that we set often bear little relation to what individuals actually receive in total sick pay. I intend a limited restructuring of the scheme to make it somewhat simpler to run-- while concentrating additional resources more on the lowest-paid employees, who are generally less likely to be covered by occupational schemes--and at the same time make a saving of between £70 million and £80 million for the national insurance fund. The dividing line between the higher and lower rates, at present £84, will be set at the point where employers' contributions rise from 7 to 9 per cent., currently £115. The lower rate of SSP will be increased by rather more than the rate of inflation, by £3 to £39.25, and the higher rate by 40p to £52.50. As the standard rate of statutory maternity pay is the same as the lower statutory sick pay rate, that also has the advantage of bringing about a modest real increased entitlement for about 230,000 women. Next, let me deal with the main long-term sickness and disability benefits. Invalidity benefit will, as usual, go up in line with retirement pension. The associated invalidity allowances will rise by 7.6 per cent., except for a marginally greater increase in the highest rate to take it to £10. Severe disablement allowance and invalid care allowance will both rise from £26.20 to £28.20 ; mobility allowance, now helping more than half a million people compared with only 100,000 10 years ago, from £24.40 to £26.25 ; and attendance allowance, now helping more than three quarters of a million compared with only about a quarter of million 10 years ago, from £23.30 to £25.05 at the lower rate and £34.90 to £37.55 at the higher rate.


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I turn now to the income-related benefits-- income support, housing benefit, community charge benefit and family credit. The index applied here is the retail prices index less housing costs : the use of that index simply reflects the fact that, for those in receipt of such benefits, housing costs are taken into account in their housing benefit itself, or through help with mortgage interest. The increase in that index in the year to September 1989 is 5.2 per cent. The main rates of income-related benefits will be uprated accordingly. The rate for a single person over 25 will go to £36.70, the rate for a single person aged 18 to 24 to £28.80, and the rate for a couple, where one or both are over 18, to twice that, at £57.60. That figure will also be the threshold for calculating family credit. Again, with some exceptions where I propose somewhat larger increases, the premiums will be increased, for example taking the extra payment for pensioners to £11.80 for over -60s, £14.40 for the over-75s, and £17.05 for the over-80s.

The general uprating I have so far described will add more than £2.5 billion to the Department's programme. Separately, we have already implemented two measures this month, to abolish the pensioners' earnings rule and to increase benefits for disabled and older pensioners on income support and housing benefit, which together will cost nearly £600 million next year. In the remainder of this statement, I will detail proposals which will increase expenditure on residential care and nursing homes costing about £100 million and additional measures amounting to around another £200 million in a full year. Those measures will help three groups whose priority is, I believe, recognised in all parts of the House--the less well-off pensioners ; low-income families with children, including many lone parents ; and the long-term sick and disabled, together with those who care so devotedly for them.

Before describing those measures--and there are some 20 of them--I should make it clear that, against the background of additional expenditure on that scale for the three priority groups, I am not able to propose an increase in child benefit as well. In coming to that conclusion, I have taken account of the fact that an increase in child benefit of itself does nothing for the least well-off--indeed it helps only those who do not receive income support and family credit. I have also taken account of the fact that the take-home pay for those on average male earnings has already increased in the past year by some £16 a week, and will have been further increased by up to £3 a week for the great majority of families as a result of this month's reduction in national insurance contributions--indeed, more where both partners are working. The introduction of independent taxation next April will bring further improvements for many. In these cirumstances, I think it right to concentrate extra help from social security on others.

In that context, I take first the less well-off families receiving family credit or income support. They will of course receive, through the uprating of income-related benefits, the same amount as they would have gained from any general child benefit increase, at a cost of around £100 million. In addition to that, and to some increases for disabled children and their families to which I shall come shortly, I am making five other improvements.

The family premium in income support will be increased from £6.50 to £7.35, which is 50p a week more than a straightforward uprating would have entailed. This will of course carry through into extra entitlement to housing benefit and community charge benefit also.


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The adult credit in family credit will be increased from £33.60 to £36.35, which is £1 a week more than would otherwise have occurred, and the child credits will be increased so as to compensate fully for the decision not to uprate child benefit.

The lone parent premium in housing benefit and community charge benefit will be increased by 12.8 per cent. from £8.60 to £9.70. The amount that lone parents can earn without affecting their housing benefit entitlement will be increased from £15 a week to £25 a week. Those two changes will help 95,000 lone parents.

The maternity payment, which is given to those on income support or family credit who have a baby, will be increased by £15 to £100. The total cost of additional measures for the least well-off families is about £70 million in a full year, over and above the £100 million which gives them the full equivalent of a child benefit increase. They will help 1.5 million families, and will in particular give greater encouragement to lone parents who wish to work. They should also reinforce our efforts to increase the number of people who take advantage of family credit. In that regard, I am glad to be able to tell the House that family credit coverage rose by more than 40,000 to over 320,000 between March and July this year, which means that it is providing nearly twice as much help to over 50 per cent. more families than the old family income supplement. We plan a further campaign in the next few months to make it still more effective. Next, I come to the less well-off pensioners, for whom I propose five beneficial changes. The most important relates to income support for those in residential care or nursing homes, about which much concern was expressed in the House during last week's debate on community care. I intend to increase payments for this purpose, at a cost of more than £100 million, to give increases in the income support limits of £10 a week for virtually every category of home, providing more help for 200,000 elderly and disabled people. I shall also deal with an anomaly in the amount allowed for the personal expenses of those who are in hospital for a long time, which has the effect of leaving uncovered certain expenses that they continue to incur at home. To help them, the relevant allowance will be increased from 20 to 25 per cent. of the retirement pension--from £8.70 to £11.75 a week.

For elderly couples on income support, the capital rule that governs access to the social fund will be doubled from £500 to £1,000 to help to overcome the anxiety that many of them feel about money set aside for a funeral. For war widows, I shall increase the age allowances from £6.10 to £7 for those aged 65 to 69, from £12.20 to £13.50 for those aged 70 to 79 and from £15.30 to £20 for those who are 80 or over. In each case, that is substantially more than a straightforward uprating, and for the over-80s it is over £3.50 a week more. I shall also, as was indicated earlier this year, raise from £5 to £10 the amount of war pension or war widows pension that is disregarded in calculating entitlement to income-related benefits.

The full-year cost of those measures, of which the bulk is on residential and nursing care, is £115 million, and they will help 400,000 people. That is over and above the extra £200 million which this month's premium increases will next year be giving to 2.5 million elderly people.

Last, but not least, I come to the needs of long-term sick and disabled people and of those many relatives and others who do so much to help with their care. As a result of the


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series of important surveys which we commissioned four years ago from the Office of Population Censuses and Surveys, we now know much more about disabled people and their circumstances. In the light of that, I intend to bring forward, within the next few months, and I hope before the turn of the year, proposals to improve the balance and structure of social security provision for them.

Such changes will necessarily take some time to develop and carry through. Meanwhile, however, there are pressing needs which should not wait, and I intend to make, at the next uprating, or as soon as practicable if the House agrees the necessary legislation, 10 immediate improvements which, for the convenience of the House, I will simply list.

First, the disability premium for adults in income-related benefits will be increased by £1.70 for a single person and £2.60 for a couple. That is £1 and £1.60 more respectively than a straightforward uprating, giving extra help to about 400,000 people.

Secondly, the disability premium for families on income-related benefits with disabled children will be aligned with the adult rate. That will more than double it from £6.50 to £15.40, giving extra help to 20,000 families.

Thirdly, a carers' premium will be introduced into income support for those receiving invalid care allowance, initially at a rate of £10 a week. That will help 30,000 carers.

Fourthly, as has already been announced, attendance allowance will be made available to the terminally ill without the normal six months waiting period. That is expected to help more than 50,000 people by up to £37.55 a week.

Fifthly, we shall now also scrap the rule that prevents payment of attendance allowance for children under two. That will give up to £37.55 a week extra to 3,000 families with severely disabled babies. Sixthly, in consequence of these extensions of attendance allowance, invalid care allowance at £28.20 a week will also become available to many carers who would not otherwise qualify.

Seventhly, mobility allowance will be extended to the deaf-blind. That will give £26.25 a week more to about 3,000 people.

Eighthly, the amount that those receiving invalid care allowance can earn without affecting their ICA will be increased by 66 per cent., from £12 to £20 a week.

Ninthly, the amount that people on invalidity benefit or severe disablement allowance can earn without affecting those benefits, provided the work is medically certified as beneficial, will go up by 23 per cent. from £28.50 a week to £35 a week and they will be able to keep their benefit when they go on an employment rehabilitation course instead of the existing rehabilitation allowance which may be lower by £20 or more.

Tenthly, the independent living fund, which has proved so successful in assisting many exceptionally severely disabled people with their very special needs, for which the original provision for this year was £5 million, is being doubled immediately to over £10 million, and will be more than doubled again next year to more than £20 million.

The total full-year cost of these measures, over and above the normal uprating of disability benefits generally, will be about £100 million a year. They will improve the incomes of more than 500,000 seriously ill or disabled people and carers, in some cases by very substantial amounts. To give the House just one example, a family


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with a very severely disabled baby, where one of the parents is staying at home as carer, will get more than £65 a week extra. A full schedule of the new benefit rates is in the Vote Office.

Next year, for the first time, social security spending will be over £1 billion each and every week. The new measures that I have described confirm the capacity of our reformed benefit system to focus more quickly and effectively on those with a special claim to our help. They will reinforce our policies for care in the community, and they underline our commitment to ensure that our country's greater prosperity is widely shared.

Following are the details :


Schedule of main proposed Social Security benefit rates                                                                                                              

from April 1990                                                                                                                                                      

Weekly rates unless                                                                                      |Old rates 1989     |New rates 1990                         

otherwise shown                                                                                                                                                      

---------------------------------------------------------------------------------------------------------------------------------------------------------------------

Attendance allowance                                                                                                                                                 

  higher rate                                                                                            |34.90              |37.55                                  

  lower rate                                                                                             |23.30              |25.05                                  

                                                                                                                                                                     

Child benefit-each child                                                                                 |7.25               |7.25                                   

                                                                                                                                                                     

Child's special allowance                                                                                |8.95               |9.65                                   

                                                                                                                                                                     

Community charge benefit                                                                                                                                             

                                                                                                                                                                     

Personal allowances                                                                                                                                                  

  single                                                                                                                                                             

    18 to 24                                                                                             |27.40              |28.80                                  

    20 or over                                                                                           |34.90              |36.70                                  

                                                                                                                                                                     

  lone parent-18 or over                                                                                 |34.90              |36.70                                  

                                                                                                                                                                     

  couple-one or both over 18                                                                             |54.80              |57.60                                  

                                                                                                                                                                     

  dependent children                                                                                                                                                 

    under 11                                                                                             |11.75              |12.35                                  

    11 to 15                                                                                             |17.35              |18.25                                  

    16 to 17                                                                                             |20.80              |21.90                                  

    18                                                                                                   |27.40              |28.80                                  

                                                                                                                                                                     

Premiums                                                                                                                                                             

  family                                                                                                 |6.50               |7.35                                   

                                                                                                                                                                     

  lone parent                                                                                            |8.60               |9.70                                   

                                                                                                                                                                     

  pensioner                                                                                                                                                          

    single                                                                                               |11.20              |11.80                                  

    couple                                                                                               |17.05              |17.95                                  

                                                                                                                                                                     

  pensioner (enhanced)                                                                                                                                               

    single                                                                                               |13.70              |14.40                                  

    couple                                                                                               |20.55              |21.60                                  

                                                                                                                                                                     

  pensioner (higher)                                                                                                                                                 

    single                                                                                               |16.20              |17.05                                  

    couple                                                                                               |23.00              |24.25                                  

                                                                                                                                                                     

  disability                                                                                                                                                         

    single                                                                                               |13.70              |15.40                                  

    couple                                                                                               |19.50              |22.10                                  

                                                                                                                                                                     

  severe disability                                                                                                                                                  

    single                                                                                               |26.20              |28.20                                  

    couple (one qualifies)                                                                               |26.20              |28.20                                  

    couple (both qualify)                                                                                |52.40              |56.40                                  

                                                                                                                                                                     

  disabled child                                                                                         |6.50               |15.40                                  

                                                                                                                                                                     

  carers (from October 1990)                                                                                                 |10.00                                  

                                                                                                                                                                     

Allowance for personal expenses for                                                                                                                                  

claimants in hospital                                                                                    |8.70               |11.75                                  

                                                                                                                                                                     

Capital                                                                                                                                                              

  upper limit                                                                                            |8,000.00           |8,000.00                               

  amount disregarded                                                                                     |3,000.00           |3,000.00                               

  child's limit                                                                                          |3,000.00           |3,000.00                               

                                                                                                                                                                     

Tariff income                                                                                                                                                        

£1 for every complete £250 or part                                                                                                                                   

  thereof between amount of capital                                                                                                                                  

  disregarded and capital upper limit                                                                                                                                

                                                                                                                                                                     

Earnings disregards                                                                                                                                                  

  where disability premium awarded                                                                       |15.00              |15.00                                  

  various specified employments                                                                          |15.00              |15.00                                  

  lone parent-in receipt of IS                                                                           |15.00              |15.00                                  

lone parent-not in receipt of IS (from                                                                                                                               

  October 1990)                                                                                          |15.00              |25.00                                  

  where the claimant has a partner                                                                       |10.00              |10.00                                  

  single claimant                                                                                        |5.00               |5.00                                   

                                                                                                                                                                     

Other income disregards                                                                                                                                              

war disablement pension and war widows                                                                                                                               

  pension                                                                                                |5.00               |10.00                                  

  voluntary and charitable payments                                                                      |5.00               |5.00                                   

  student's covenanted income                                                                            |5.00               |5.00                                   

                                                                                                                                                                     

Expenses for subtenants                                                                                                                                              

  furnished or unfurnished                                                                               |4.00               |4.00                                   

  where heating is included, additional                                                                  |7.00               |7.35                                   

                                                                                                                                                                     

Dependency increases                                                                                                                                                 

Adult Dependency increases                                                                                                                                           

For spouse or person looking after                                                                                                                                   

  children, with:-                                                                                                                                                   

  retirement pension on own insurance                                                                                                                                

  invalidity pension, unemployability                                                                                                                                

  supplement and, if beneficiary over                                                                                                                                

  pension age, unemployment benefit                                                                      |26.20              |28.20                                  

non-contributory retirement pension,                                                                                                                                 

  invalid care allowance and severe                                                                                                                                  

  disablement allowance                                                                                  |15.65              |16.65                                  

sickness benefit if beneficiary over                                                                                                                                 

  pension age                                                                                            |25.10              |27.00                                  

    unemployment benefit                                                                                 |21.40              |23.05                                  

    maternity allowance/sickness benefit                                                                 |20.55              |22.10                                  

                                                                                                                                                                     

Child Dependency increases                                                                                                                                           

  For each child with:-                                                                                                                                              

    retirement pension, widows benefit,                                                                                                                              

    invalidity benefit, invalid care                                                                                                                                 

    allowance, severe disablement                                                                                                                                    

    allowance, higher rate industrial                                                                                                                                

    death benefit, unemployability                                                                                                                                   

    supplement and sickness/                                                                                                                                         

    unemployment benefit if beneficiary                                                                                                                              

    over pension age                                                                                     |8.95               |9.65                                   

                                                                                                                                                                     

Earnings rules                                                                                                                                                       

Invalid care allowance                                                                                   |12.00              |20.00                                  

                                                                                                                                                                     

Unemployment benefit (daily rate)                                                                        |2.00               |2.00                                   

                                                                                                                                                                     

Therapeutic earnings limit                                                                               |28.50              |35.00                                  

                                                                                                                                                                     

Industrial injuries unemployability                                                                                                                                  

  supplement permitted earnings level (annual                                                                                                                        

  amount)                                                                                                |1,482.00           |1,820.00                               

                                                                                                                                                                     

War pensioners' unemployability                                                                                                                                      

  supplement permitted earnings level (annual                                                                                                                        

  amount)                                                                                                |1,482.00           |1,820.00                               

                                                                                                                                                                     

Adult dependency increases with                                                                                                                                      

  sickness benefit where claimant is                                                                                                                                 

    (a) under pension age                                                                                |20.55              |22.10                                  

    (b) over pension age                                                                                 |25.10              |27.00                                  

                                                                                                                                                                     

  maternity allowance                                                                                    |20.55              |22.10                                  

                                                                                                                                                                     

  unemployment benefit where claimant is                                                                                                                             

    (a) under pension age                                                                                |21.40              |23.05                                  

    (b) over pension age                                                                                 |26.20              |28.20                                  

                                                                                                                                                                     

  retirement pension, invalidity pension,                                                                                                                            

    severe disablement allowance,                                                                                                                                    

    unemployability supplement where                                                                                                                                 

    dependant                                                                                                                                                        

    (a) is living with claimant                                                                          |34.70              |37.35                                  

    (b) still qualifies for the tapered                                                                                                                              

    earnings rule                                                                                        |45.09              |45.09                                  

                                                                                                                                                                     

  retirement pension, invalidity pension and                                                                                                                         

    unemployability supplement where                                                                                                                                 

    dependant not living with claimant                                                                   |26.20              |28.20                                  

                                                                                                                                                                     

  severe disablement allowance where                                                                                                                                 

    dependant not living with claimant                                                                   |15.65              |16.85                                  

                                                                                                                                                                     

  invalid care allowance                                                                                 |15.65              |16.85                                  

                                                                                                                                                                     

Child dependency increases                                                                                                                                           

  level at which CDIs payable with long-                                                                                                                             

    term benefits are affected by earnings                                                                                                                           

    of claimant's spouse or partner                                                                                                                                  

    for first child                                                                                      |95.00              |100.00                                 

    for each subsequent child                                                                            |12.00              |13.00                                  

                                                                                                                                                                     

Family credit                                                                                                                                                        

Adult credit                                                                                             |33.60              |36.5                                   

                                                                                                                                                                     

Child credit                                                                                                                                                         

  under 11                                                                                               |7.30               |8.25                                   

  11 to 15                                                                                               |12.90              |14.15                                  

  16 to 17                                                                                               |16.35              |17.80                                  

  18                                                                                                     |23.30              |25.10                                  

                                                                                                                                                                     

Applicable amount (ie taper threshold)                                                                   |54.80              |57.60                                  

                                                                                                                                                                     

Capital                                                                                                                                                              

  upper limit                                                                                            |6,000.00           |6,000.00                               

  amount disregarded                                                                                     |3,000.00           |3,000.00                               

  child's limit                                                                                          |3,000.00           |3,000.00                               

                                                                                                                                                                     

Tariff income                                                                                                                                                        

  £1 for every complete £250 or part                                                                                                                                 

    thereof between amount of capital                                                                                                                                

    disregarded and capital upper limit                                                                                                                              

                                                                                                                                                                     

Disregards                                                                                                                                                           

  war disablement pension and war widows                                                                                                                             

    pension                                                                                              |5.00               |10.00                                  

  voluntary and charitable payments                                                                      |5.00               |5.00                                   

  student's covenanted income                                                                            |5.00               |5.00                                   

                                                                                                                                                                     

Expenses for subtenants                                                                                                                                              

  furnished or unfurnished                                                                               |4.00               |4.00                                   

  where heating is included, additional                                                                  |7.00               |7.35                                   

                                                                                                                                                                     

Guardian's allowance-each child                                                                          |8.95               |9.65                                   

Hospital downrating                                                                                                                                                  

20 per cent. rate                                                                                        |8.70               |9.40                                   

40 per cent. rate                                                                                        |17.40              |18.80                                  

                                                                                                                                                                     

Housing benefit                                                                                                                                                      

Personal allowances                                                                                                                                                  

  single                                                                                                                                                             

  16 to 24                                                                                               |27.40              |28.80                                  

  25 or over                                                                                             |34.90              |36.70                                  

                                                                                                                                                                     

  lone parent                                                                                                                                                        

    under 18                                                                                             |27.40              |28.80                                  

    18 or over                                                                                           |34.90              |36.70                                  

                                                                                                                                                                     

  couple                                                                                                                                                             

    both under 18                                                                                        |41.60              |43.80                                  

    one or both over 18                                                                                  |54.80              |57.60                                  

                                                                                                                                                                     

  dependent children                                                                                                                                                 

    under 11                                                                                             |11.75              |12.35                                  

    11 to 15                                                                                             |17.35              |18.25                                  

    16 to 17                                                                                             |20.80              |21.90                                  

    18                                                                                                   |27.40              |28.80                                  

                                                                                                                                                                     

Premiums                                                                                                                                                             

  family                                                                                                 |6.50               |7.35                                   

                                                                                                                                                                     

  lone parent                                                                                            |6.60               |9.70                                   

                                                                                                                                                                     

  pensioner                                                                                                                                                          

    single                                                                                               |11.20              |11.80                                  

    couple                                                                                               |17.05              |17.95                                  

                                                                                                                                                                     

  pensioner (enhanced)                                                                                                                                               

    single                                                                                               |13.70              |14.40                                  

    couple                                                                                               |20.55              |21.60                                  

                                                                                                                                                                     

  pensioner (higher)                                                                                                                                                 

    single                                                                                               |16.20              |17.05                                  

    couple                                                                                               |23.00              |24.25                                  

                                                                                                                                                                     

  disability                                                                                                                                                         

    single                                                                                               |13.70              |15.40                                  

    couple                                                                                               |19.50              |22.10                                  

                                                                                                                                                                     

  severe disability                                                                                                                                                  

    single                                                                                               |26.20              |28.20                                  

    couple (one qualifies)                                                                               |26.20              |28.20                                  

    couple (both qualify)                                                                                |52.40              |56.40                                  

                                                                                                                                                                     

  disabled child                                                                                         |6.50               |15.40                                  

                                                                                                                                                                     

  carers (from October 1990)                                                                                                 |10.00                                  

                                                                                                                                                                     

Allowance for personal expenses for                                                                                                                                  

  claimants in hospital                                                                                  |8.70               |11.75                                  

                                                                                                                                                                     

Non-dependant deductions                                                                                                                                             

rent rebates and allowances aged 18 or over                                                                                                                          

  and in remunerative work                                                                               |9.15               |10.85                                  

                                                                                                                                                                     

  others, aged 18 or over, or on Income                                                                                                                              

  Support and over 25                                                                                    |3.85               |4.55                                   

                                                                                                                                                                     

  low earnings threshold                                                                                 |52.10              |56.05                                  

                                                                                                                                                                     

Service charges for fuel                                                                                                                                             

  heating                                                                                                |7.00               |7.35                                   

  hot water                                                                                              |0.85               |0.90                                   

  lighting                                                                                               |0.55               |0.60                                   

  cooking                                                                                                |0.85               |0.90                                   

  all fuel                                                                                               |9.25               |9.75                                   

                                                                                                                                                                     

Amount ineligible for meals                                                                                                                                          

  three or more meals a day                                                                                                                                          

    single claimant                                                                                      |12.50              |13.15                                  

    each person in family aged 16 or over                                                                |12.50              |13.15                                  

    each child under 16                                                                                  |6.25               |6.60                                   

                                                                                                                                                                     

  less than three meals a day                                                                                                                                        

    single claimant                                                                                      |8.30               |8.75                                   

    each person in family aged 16 or over                                                                |8.30               |8.75                                   

    each child under 16                                                                                  |4.15               |4.35                                   

                                                                                                                                                                     

breakfast only-claimant and each                                                                                                                                     

  member of family                                                                                       |1.50               |1.60                                   

                                                                                                                                                                     

Capital                                                                                                                                                              

  upper limit                                                                                            |8,000.00           |8,000.00                               

  amount disregarded                                                                                     |3,000.00           |3,000.00                               

  child's limit                                                                                          |3,000.00           |3,000.00                               

                                                                                                                                                                     

Tariff income                                                                                                                                                        

£1 for every complete £250 or part                                                                                                                                   

  thereof between amount of capital                                                                                                                                  

  disregarded and capital upper limit                                                                                                                                

                                                                                                                                                                     

Earnings disregards                                                                                                                                                  

  where disability premium awarded                                                                       |15.00              |15.00                                  

  various specified employments                                                                          |15.00              |15.00                                  

  lone parent-in receipt of IS                                                                           |15.00              |15.00                                  

  lone parent-not in receipt of IS (from                                                                                                                             

    October 1990)                                                                                        |15.00              |25.00                                  

  where the claimant has a partner                                                                       |10.00              |10.00                                  

  single claimant                                                                                        |5.00               |5.00                                   

                                                                                                                                                                     

Other income disregards                                                                                                                                              

  war disablement pension and war widows                                                                                                                             

    pension                                                                                              |5.00               |10.00                                  

  voluntary and charitable payments                                                                      |5.00               |5.00                                   

  student's covenanted income                                                                            |5.00               |5.00                                   

                                                                                                                                                                     

Expenses for subtenants                                                                                                                                              

  furnished or unfurnished                                                                               |4.00               |4.00                                   

  where heating is included, additional                                                                  |7.00               |7.35                                   

                                                                                                                                                                     

Income Support                                                                                                                                                       

Personal allowances                                                                                                                                                  

  single                                                                                                                                                             

    under 18-usual rate                                                                                  |20.80              |21.90                                  

  under 18-higher rate payable in                                                                                                                                    

    specific circumstances                                                                               |27.40              |28.80                                  

  18 to 24                                                                                               |27.40              |28.80                                  

  25 or over                                                                                             |34.90              |36.70                                  

                                                                                                                                                                     

  lone parent                                                                                                                                                        

    under 18-usual rate                                                                                  |20.80              |21.90                                  

    under 18-higher rate payable in                                                                                                                                  

      specific circumstances                                                                             |27.40              |28.80                                  

    18 or over                                                                                           |34.90              |36.70                                  

                                                                                                                                                                     

  couple                                                                                                                                                             

    both under 18                                                                                        |41.60              |43.80                                  

    one or both over 18                                                                                  |54.80              |57.60                                  

                                                                                                                                                                     

dependent children                                                                                                                                                   

    under 11                                                                                             |11.75              |12.35                                  

    11 to 15                                                                                             |17.35              |18.25                                  

    16 to 17                                                                                             |20.80              |21.90                                  

    18                                                                                                   |27.40              |28.80                                  

                                                                                                                                                                     

Premiums                                                                                                                                                             

  family                                                                                                 |6.50               |7.35                                   

                                                                                                                                                                     

  lone parent                                                                                            |3.90               |4.10                                   

                                                                                                                                                                     

  pensioner                                                                                                                                                          

    single                                                                                               |11.20              |11.80                                  

    couple                                                                                               |17.05              |17.95                                  

                                                                                                                                                                     

  pensioner (enhanced)                                                                                                                                               

    single                                                                                               |13.70              |14.40                                  

    couple                                                                                               |20.55              |21.60                                  

                                                                                                                                                                     

  pensioner (higher)                                                                                                                                                 

    single                                                                                               |16.20              |17.05                                  

    couple                                                                                               |23.00              |24.25                                  

                                                                                                                                                                     

  disability                                                                                                                                                         

    single                                                                                               |13.70              |15.40                                  

    couple                                                                                               |19.50              |22.10                                  

                                                                                                                                                                     

  severe disability                                                                                                                                                  

    single                                                                                               |26.20              |28.20                                  

    couple (one qualifies)                                                                               |26.20              |28.20                                  

    couple (both qualify)                                                                                |52.40              |56.40                                  

                                                                                                                                                                     

  disabled child                                                                                         |6.50               |15.40                                  

                                                                                                                                                                     

  carers (from October 1990)                                                                                                 |10.00                                  

                                                                                                                                                                     

Maximum amounts for accommodation and                                                                                                                                

  meals in                                                                                                                                                           

  residential care homes                                                                                                                                             

    old age                                                                                              |140.00             |150.00                                 

    very dependent elderly                                                                               |155.00             |165.00                                 

    mental disorder (not handicap)                                                                       |140.00             |150.00                                 

    drug/alcohol dependence                                                                              |140.00             |150.00                                 

    mental handicap                                                                                      |165.00             |175.00                                 

    physical disablement                                                                                                                                             

      (a) (under pension age)                                                                            |200.00             |210.00                                 

      (b) (over pension age)                                                                             |140.00             |150.00                                 

    others                                                                                               |140.00             |150.00                                 

    maximum Greater London increase                                                                      |23.00              |23.00                                  

                                                                                                                                                                     

  nursing homes                                                                                                                                                      

    mental disorder (not handicap)                                                                       |195.00             |200.00                                 

    drug/alcohol dependence                                                                              |190.00             |200.00                                 

    mental handicap                                                                                      |205.00             |215.00                                 

    terminal illness                                                                                     |235.00             |245.00                                 

    physical disablement                                                                                                                                             

      (a) (under pension age)                                                                            |235.00             |245.00                                 

      (b) (over pension age)                                                                             |190.00             |200.00                                 

    others (including elderly)                                                                           |190.00             |200.00                                 

    maximum Greater London increase                                                                      |23.00              |23.00                                  

                                                                                                                                                                     

Amounts for meals where these cannot be                                                                                                                              

  purchased within the accommodation                                                                                                                                 

  (daily rate)                                                                                                                                                       

  breakfast                                                                                              |1.10               |1.10                                   

  midday meal                                                                                            |1.55               |1.55                                   

  evening meal                                                                                           |1.55               |1.55                                   

                                                                                                                                                                     

Allowances for personal expenses for                                                                                                                                 

  claimants in                                                                                                                                                       

  private and voluntary residential care and                                                                                                                         

    nursing homes personal allowance                                                                     |10.05              |10.55                                  

                                                                                                                                                                     

  dependent children                                                                                                                                                 

    (a) Under 11                                                                                         |5.10               |4.30                                   

    (b) 11 to 15                                                                                         |6.05               |6.35                                   

    (c) 16 to 17                                                                                         |7.00               |7.35                                   

    (d) age 18                                                                                           |10.05              |10.55                                  

                                                                                                                                                                     

  hospital                                                                                               |8.70               |11.75                                  

                                                                                                                                                                     

  local authority (Pt III) accommodation                                                                 |8.70               |9.40                                   

                                                                                                                                                                     

the Polish home Ilford Park                                                                                                                                          

  maximum amount for accommodation                                                                                                                                   

    and meals                                                                                            |140.00             |150.00                                 

  personal expenses for claimant                                                                         |13.25              |13.95                                  

  personal expenses for partner                                                                          |13.25              |13.95                                  

  personal expenses for dependent                                                                                                                                    

    children                                                                                                                                                         

      (a) Under 11                                                                                       |4.10               |4.30                                   

      (b) 11 to 15                                                                                       |6.05               |6.35                                   

      (c) 16 to 17                                                                                       |7.00               |7.35                                   

      (d) age 18                                                                                         |11.95              |12.55                                  

                                                                                                                                                                     

Housing costs                                                                                                                                                        

  deduction for non-dependants                                                                                                                                       

  aged 18 or over and in remunerative                                                                                                                                

    work                                                                                                 |9.15               |10.85                                  

others, aged 18 or over, or on Income                                                                                                                                

  Support and over 25                                                                                    |3.85               |4.55                                   

  low earnings threshold                                                                                 |52.10              |56.05                                  

                                                                                                                                                                     

Deduction for direct payments                                                                                                                                        

  fuel debt 5 per cent. rate                                                                             |1.75               |1.85                                   

  fuel debt 10 per cent. rate                                                                            |3.50               |3.70                                   

  arrears of housing costs                                                                               |1.75               |1.85                                   

  arrears of water rates                                                                                 |1.75               |1.85                                   

                                                                                                                                                                     

Deductions for arrears of Community                                                                                                                                  

  Charge                                                                                                                                                             

  single debtor                                                                                          |1.75               |1.85                                   

  couple debtors both with IS                                                                            |2.75               |2.90                                   

                                                                                                                                                                     

Reduction in benefit for strikers                                                                        |18.50              |19.50                                  

                                                                                                                                                                     

Capital                                                                                                                                                              

  upper limit                                                                                            |6,000.00           |6,000.00                               

  amount disregarded                                                                                     |3,000.00           |3,000.00                               

  child's limit                                                                                          |3,000.00           |3.000.00                               

                                                                                                                                                                     

Tariff income                                                                                                                                                        

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit                                                             

                                                                                                                                                                     

Disregards                                                                                                                                                           

  standard earnings                                                                                      |5.00               |5.00                                   

  higher earnings                                                                                        |15.00              |15.00                                  

  war disablement pension and war widows                                                                                                                             

    pension                                                                                              |5.00               |10.00                                  

  voluntary and charitable payments                                                                      |5.00               |5.00                                   

  student's convenanted income                                                                           |5.00               |5.00                                   

                                                                                                                                                                     

Expenses for subtenants                                                                                                                                              

  furnished or unfurnished                                                                               |4.00               |4.00                                   

  where heating is included, additional                                                                  |7.00               |7.35                                   

                                                                                                                                                                     

Industrial death benefit                                                                                                                                             

Widow's pension                                                                                                                                                      

  higher rate                                                                                            |43.60              |46.90                                  

                                                                                                                                                                     

  lower rate                                                                                             |13.08              |14.07                                  

                                                                                                                                                                     

Industrial disablement pension                                                                                                                                       

  18 and over, or under 18 with dependants                                                                                                                           

    100 per cent.                                                                                        |71.20              |76.60                                  

    90 per cent.                                                                                         |64.08              |68.94                                  

    80 per cent.                                                                                         |56.96              |61.28                                  

    70 per cent.                                                                                         |49.84              |53.62                                  

    60 per cent.                                                                                         |42.72              |45.96                                  

    50 per cent.                                                                                         |35.60              |38.30                                  

    40 per cent.                                                                                         |28.48              |30.64                                  

    30 per cent.                                                                                         |21.36              |22.98                                  

    20 per cent.                                                                                         |14.24              |15.32                                  

                                                                                                                                                                     

  Under 18                                                                                                                                                           

    100 per cent.                                                                                        |43.60              |46.90                                  

    90 per cent.                                                                                         |39.24              |42.21                                  

    80 per cent.                                                                                         |34.88              |37.52                                  

    70 per cent.                                                                                         |30.52              |32.83                                  

    60 per cent.                                                                                         |26.16              |28.14                                  

    50 per cent.                                                                                         |21.80              |23.45                                  

    40 per cent.                                                                                         |17.44              |18.76                                  

    30 per cent.                                                                                         |13.08              |14.07                                  

    20 per cent.                                                                                         |8.72               |9.38                                   

                                                                                                                                                                     

Maximum life gratuity (lump sum)                                                                         |4,730.00           |5,090.00                               

                                                                                                                                                                     

Unemployability Supplement                                                                               |43.60              |46.90                                  

  plus where appropriate an increase for                                                                                                                             

    early incapacity                                                                                                                                                 

  higher rate                                                                                            |9.20               |10.00                                  

  middle rate                                                                                            |5.80               |6.20                                   

  lower rate                                                                                             |2.90               |3.10                                   

                                                                                                                                                                     

                                                                                                                                                                     

reduced earnings allowance                                                                               |28.48              |30.64                                  

                                                                                                                                                                     

Maximum retirement allowance                                                                             |7.12               |7.66                                   

                                                                                                                                                                     

Constant attendance allowance                                                                                                                                        

  exceptional rate                                                                                       |57.00              |61.40                                  

  intermediate rate                                                                                      |42.75              |46.05                                  

  normal maximum rate                                                                                    |28.50              |30.70                                  

  part-time rate                                                                                         |14.25              |15.35                                  

                                                                                                                                                                     

Exceptionally severe disablement allowance                                                               |28.50              |30.70                                  

                                                                                                                                                                     

Invalid care allowance                                                                                   |26.20              |28.20                                  

Invalidity benefit                                                                                                                                                   

Invalidity pension                                                                                       |43.60              |46.90                                  

                                                                                                                                                                     

Invalidity allowance                                                                                                                                                 

  higher rate                                                                                            |9.20               |10.00                                  

  middle rate                                                                                            |5.80               |6.20                                   

  lower rate                                                                                             |2.90               |3.10                                   

                                                                                                                                                                     

Maternity allowance                                                                                      |33.20              |35.70                                  

                                                                                                                                                                     

Maternity payment                                                                                        |85.00              |100.00                                 

                                                                                                                                                                     

Mobility allowance                                                                                       |24.40              |26.25                                  

                                                                                                                                                                     

One-parent benefit                                                                                       |5.20               |5.60                                   

                                                                                                                                                                     

Pneumoconiosis, byssinosis, workmen's                                                                                                                                

  compensation (supplementation) and other                                                                                                                           

  schemes                                                                                                                                                            

Total disablement allowance and major                                                                                                                                

  incapacity allowance (maximum)                                                                         |71.20              |76.60                                  

                                                                                                                                                                     

Partial disablement allowance                                                                            |26.20              |28.20                                  

                                                                                                                                                                     

Unemployment supplement plus where                                                                                                                                   

  appropriate increases for early incapacity                                                             |43.60              |46.90                                  

  higher rate                                                                                            |9.20               |10.00                                  

  middle rate                                                                                            |5.80               |6.20                                   

  lower rate                                                                                             |2.90               |3.10                                   

                                                                                                                                                                     

Constant attendance allowance                                                                                                                                        

  exceptional rate                                                                                       |57.00              |61.40                                  

  intermediate rate                                                                                      |42.75              |46.05                                  

  normal maximum rate                                                                                    |28.50              |30.70                                  

  part-time rate                                                                                         |14.25              |15.35                                  

                                                                                                                                                                     

Exceptionally severe disablement allowance                                                               |28.50              |30.70                                  

                                                                                                                                                                     

Lesser incapacity allowance                                                                                                                                          

  maximum rate of allowance                                                                              |26.20              |28.20                                  

  based on loss of earnings over                                                                         |34.90              |37.55                                  

                                                                                                                                                                     

Retirement pension                                                                                                                                                   

Category A or B                                                                                          |43.60              |46.90                                  

                                                                                                                                                                     

Category B (lower)-husband's insurance                                                                   |26.20              |28.20                                  

                                                                                                                                                                     

Category C or D-non-contributory                                                                         |26.20              |28.20                                  

                                                                                                                                                                     

Category C (lower)-non-contributory                                                                      |15.65              |16.85                                  

                                                                                                                                                                     

Additional pension                                                                                        (increased by 7.6)                                         

                                                                                                                                                                     

Increments to basic and additional pension,                                                                                                                          

  contracted out deductions (from pre                                                                                                                                

  April 1988 earnings) and graduated                                                                                                                                 

  retirement benefit                                                                                      (increased by 7.6)                                         

                                                                                                                                                                     

Contrated out deductions and increments to                                                                                                                           

  contracted out decuctions (from post                                                                                                                               

  April 1988 earnings<1>)                                                                                 (increased by 4.6)                                         

                                                                                                                                                                     

Graduated retirement benefit (unit)(pence)                                                               |5.71               |6.14                                   

                                                                                                                                                                     

Addition at age 80                                                                                       |.25                |.25                                    

                                                                                                                                                                     

Severe disablement allowance                                                                             |26.20              |28.20                                  

                                                                                                                                                                     

Sickness benefit                                                                                                                                                     

Over pension age                                                                                         |41.80              |45.00                                  

Under pension age                                                                                        |33.20              |35.70                                  

                                                                                                                                                                     

Social fund                                                                                                                                                          

Capital limit-aged 60 and over                                                                           |500.00             |1,000.00                               

                                                                                                                                                                     

Statutory maternity pay                                                                                                                                              

Earnings threshold                                                                                       |43.00              |46.00                                  

Lower rate                                                                                               |36.25              |39.25                                  

                                                                                                                                                                     

Statutory sick pay                                                                                                                                                   

Earnings threshold                                                                                       |43.00              |46.00                                  

Standard rate threshold                                                                                  |84.00              |125.00                                 

Lower rate                                                                                               |36.25              |39.25                                  

Standard rate                                                                                            |52.10              |52.50                                  

                                                                                                                                                                     

Unemployment benefit                                                                                                                                                 

Over pension age                                                                                         |43.60              |46.90                                  

Under pension age                                                                                        |34.70              |37.35                                  

Occupational pension abatement                                                                           |35.00              |35.00                                  

                                                                                                                                                                     

War pensions                                                                                                                                                         

Disablement pension (100 per cent. rates)                                                                                                                            

  private or equivalent                                                                                  |71.20              |76.60                                  

  officer (£ per annum)                                                                                  |3,712.00           |3,994.00                               

                                                                                                                                                                     

Age allowances                                                                                                                                                       

  40 per cent.-50 per cent.                                                                              |5.00               |5.40                                   

  over 50 per cent. but not over 70 per                                                                                                                              

    cent.                                                                                                |7.75               |8.35                                   

  over 70 per cent. but not over 90 per                                                                                                                              

    cent.                                                                                                |11.10              |11.95                                  

  over 90 per cent.                                                                                      |15.50              |16.70                                  

                                                                                                                                                                     

Disablement gratuity                                                                                                                                                 

  (base figures for calculation purposes                                                                                                                             

    only)                                                                                                                                                            

    specified minor injury                                                                               |4,730.00           |5,090.00                               

    unspecified minor injury                                                                             |2,601.50           |2,799.50                               

                                                                                                                                                                     

Unemployability allowance                                                                                                                                            

  personal                                                                                               |46.30              |49.80                                  

  adult dependency increase                                                                              |26.20              |28.20                                  

  increase for each child                                                                                |8.95               |9.65                                   

                                                                                                                                                                     

Invalidity allowance                                                                                                                                                 

  higher rate                                                                                            |9.20               |10.00                                  

  middle rate                                                                                            |5.80               |6.20                                   

  lower rate                                                                                             |2.90               |3.10                                   

                                                                                                                                                                     

Constant attendance allowance                                                                                                                                        

  exceptional rate                                                                                       |57.00              |61.40                                  

  intermediate rate                                                                                      |42.75              |46.05                                  

  normal maximum rate                                                                                    |28.50              |30.70                                  

  part-time rate                                                                                         |14.25              |15.35                                  

                                                                                                                                                                     

Comforts allowance                                                                                                                                                   

  higher rate                                                                                            |12.30              |13.20                                  

  lower rate                                                                                             |6.15               |6.60                                   

                                                                                                                                                                     

Mobility supplement                                                                                      |27.10              |29.15                                  

                                                                                                                                                                     

Allowance for lowered standard of                                                                                                                                    

  occupation (maximum)                                                                                   |28.48              |30.64                                  

                                                                                                                                                                     

Exceptionally severe disablement allowance                                                               |28.50              |30.70                                  

                                                                                                                                                                     

Severe disablement occupational allowance                                                                |14.25              |15.35                                  

                                                                                                                                                                     

Clothing allowance (£ per annum)                                                                                                                                     

  higher rate                                                                                            |97.00              |104.00                                 

  lower rate                                                                                             |61.00              |66.00                                  

                                                                                                                                                                     

Education allowance (£ per annum) (maximum)                                                              |120.00             |120.00                                 

                                                                                                                                                                     

War widow's pension (private)                                                                                                                                        

  widow                                                                                                  |56.65              |60.95                                  

  childless widow under 40                                                                               |13.08              |14.07                                  

  age allowance                                                                                                                                                      

    (a) age 65 to 69                                                                                     |6.10               |7.00                                   

    (b) age 70 to 79                                                                                     |12.20              |13.50                                  

    (c) age 80 and over                                                                                  |15.30              |20.00                                  

  children's allowance                                                                                   |12.60              |13.40                                  

                                                                                                                                                                     

Orphan's pension                                                                                         |13.80              |14.70                                  

                                                                                                                                                                     

Unmarried dependant living as spouse                                                                                                                                 

  (maximum)                                                                                              |54.60              |58.90                                  

                                                                                                                                                                     

Rent allowance (maximum)                                                                                 |21.55              |23.20                                  

                                                                                                                                                                     

Adult orphan's pension (maximum)                                                                         |43.60              |46.90                                  

                                                                                                                                                                     

Widower's pension (maximum)                                                                              |56.65              |60.95                                  

                                                                                                                                                                     

Widow's benefit                                                                                                                                                      

Widow's payment (lump sum)                                                                               |1,000.00           |1,000.00                               

                                                                                                                                                                     

Widowed mother's allowance                                                                               |43.60              |46.90                                  

                                                                                                                                                                     

Widow's pension                                                                                                                                                      

  standard rate                                                                                          |43.60              |46.90                                  

  age related                                                                                                                                                        

   age 54  (49)                                                                                          |40.55              |43.62                                  

       53  (48)                                                                                          |37.50              |40.33                                  

       52  (47)                                                                                          |34.44              |37.05                                  

       51  (46)                                                                                          |31.39              |33.77                                  

       50  (45)                                                                                          |28.34              |30.49                                  

       49  (44)                                                                                          |25.29              |27.20                                  

       48  (43)                                                                                          |22.24              |23.92                                  

       47  (42)                                                                                          |19.18              |20.64                                  

       46  (41)                                                                                          |16.13              |17.35                                  

       45  (40)                                                                                          |13.08              |14.07                                  

<1> Contracted out deductions and increments (post April 1988). Scheme is responsible for 3 per cent. Balance of 4.6 per cent. paid by State.                        

Note:                                                                                                                                                                

For deaths occuring before 11 April 1988 refer to age-points shown in brackets.                                                                                      

Table file CD891025.001 not available
Table file CD891025.002 not available
Table file CD891025.003 not available
Table file CD891025.004 not available
Table file CD891025.005 not available
Table file CD891025.006 not available
Table file CD891025.007 not available
Table file CD891025.008 not available
Table file CD891025.009 not available

Mr. Robin Cook (Livingston) : May I begin with those parts of the statement to which the Opposition can give an unqualified welcome? First, we warmly welcome the introduction of a carers' premium on income support. As the Secretary of State will be aware, it remedies one of the worst injustices of the cuts of last April, when carers found themselves the sole group on long-term supplementary benefit who were denied any premium on the transfer to income support. We welcome the introduction of such a premium. We regret that, for the past two years, carers have been left without it.

We also welcome the changes to attendance allowance, particularly the extension of attendance allowance to the terminally ill and to children under two. The Secretary of State will have had it pointed out to him, I am sure, that during the course of the Social Security Act 1988 my hon. Friends the Members for Preston (Mrs. Wise) and for Coventry, South-East (Mr. Nellist) were particularly vigorous in pressing that point on the Government and, at the time, the Government were particularly vigorous in resisting both changes. But the Secretary of State cannot pretend that the comparatively minor changes that he has just announced to disability benefits are the comprehensive review of disability benefits that we were promised after the study conducted by the Office of Population Censuses and Surveys. As the Secretary of State is aware, that survey identified 6.5 million disabled people in Britain--

The Minister for Social Security (Mr. Nicholas Scott) : It was 6.25 million.

Mr. Cook : --my figure includes the under 16-year-olds--whose needs cannot possibly be met by an additional £100 million. Neither can an extra £1 on the disability premium possibly meet the depths of poverty revealed by


Column 859

the OPCS study. May I, therefore, press the Secretary of State to make it clear that he remains committed to that comprehensive review of disability benefits?

I also congratulate the Secretary of State on having recruited another 40,000 claimants to family credit. I congratulate him on the fact that that brings the numbers up to two thirds of the number that the Secretary of State originally predicted would be on family credit. In case any hon. Members consider that family credit is now an efficient benefit, will the Secretary of State confirm that the additional numbers that he has announced today have been purchased by advertising expenditure which works out at £120 for every additional claimant? The extraordinary advertising costs necessary to recruit that modest increase makes it all the more incomprehensible that the Secretary of State has chosen to freeze child benefit, which, without advertising, reaches 98 per cent. of mothers.

May I at least congratulate the Secretary of State on Monday's Lobby briefing, in that he attempted to persuade the Treasury to let him uprate child benefit. Upon which arguments did he place the greatest stress in his negotiations with the Treasury? Did he place greatest stress on the dishonour brought on the Conservative party by a freeze in child benefit for the third year running since the general election during which every Conservative Member stood on a manifesto that pledged them to continue child benefit? Or did the Secretary of State stress the dishonesty of pretending that he had carried out his annual duty to review the level of child benefit? Is he aware that over the past three years of the freeze, the level of child benefit has sunk by a fifth?

Which mother did the Secretary of State meet in the course of his review who told him that the cost of bringing up a child has gone down by a fifth over the same period? Or did the Secretary of State point out to the Treasury the sheer hypocrisy of a party that boasts of being the party of the family, which cannot find an extra 50p for the family budget? Does not the Secretary of State understand that so many young mothers with small children live in first-time buyers' homes where budgets have been wrecked by Conservative mortgage rates? Will the Secretary of State now at least find the courage to do the House the courtesy of informing the House and the nation that he is a member of a Cabinet which wants to be rid of child benefit and that Britain, as it limps towards 1992, is the only country with a Government who are not prepared to recognise anywhere in the benefit or tax system the extra cost of families with children?

The Secretary of State has again increased income support by the retail prices index less housing costs. Will he confirm that this year that reduces the increase by one third? In view of the large difference between the increase in income support and the increase in national insurance benefits, how many pensioners are likely to find themselves floated off entitlement to means-tested benefit? I want to press the Secretary of State about two particularly desperate groups on income support. The Secretary of State referred to the thousands of old people who have been encouraged to go into private nursing homes on the assurance that the Department of Social Security will meet their costs. They now find that the benefit does not cover their bills. Is the Secretary of State aware that many of my hon. Friends have cases in their constituencies where the gap between the old person's benefit and the private home fee is £30, £40 or £50 a week?


Column 860

An increase of £10 a week in the benefit will go nowhere towards plugging that gap. Will the Secretary of State admit that the £10 he has just announced is no more than the 5.2 per cent. increase to which they are entitled on a weekly payment of £190?

The fees of those homes will go up by more than £10 this year and that will leave old people with a further gap to meet if they are to keep a roof over their heads.

May I press the Secretary of State on a group whom he omitted from his statement and who are on income support? I refer to the stark desperation of the 200,000 claimants who are entitled to no increase because they are still on transitional protection and to whom today's statement is wholly irrelevant. Next April will be the third year running in which they have had no increase. They still need the extra heating and the special diet for which they used to get allowances, but which they now cannot afford. I plead with the Secretary of State for an amnesty for those cases on transitional protection so that they may get the full uprating.

The Secretary of State has again announced an increase in the basic state pension, but it is not a penny over the minimum necessary to match price increases. Will he confirm that if the link with earnings had been preserved under his Government, the figures he has announced today for the state pension would have meant an increase in the single person's pension of £12.65 over the present level and, on the married person's pension, of £20 a week over the present level? Is he aware that, last April, the cumulative total in the national insurance fund was a record surplus of £9,900 million? Why will the Treasury not let him spend some of that surplus on the pensions for which working people have paid their contributions to that fund? Is he aware that, this year, the cost to the national insurance fund of the 2 per cent. bribe in personal persons schemes is already £1.5 billion over budget? Will he confirm that that sum alone would have doubled the sum he announced today relating to the increase in the state pension? If he really believes in targeting, surely it would be better to target that expenditure to help pensioners in poverty than to subsidise the private pensions industry.

The Secretary of State will be aware that during the 11 years of this Government the basic pension has gone up by a beggarly 2 per cent. in real terms. In the five years of the previous Labour Government it went up by 20 per cent. in real terms. Those figures show up the different priorities we attach to the state pension. Since the Secretary of State has said that his announcement is intended to ensure that the greater prosperity of the nation gets through to those on benefit, why does he not go back to the Treasury and remind the Chancellor of his many speeches on Britain's economic miracle? He should ask his right hon. Friend when that greater prosperity will get through to the millions of pensioners dependent on the basic state pension, who should not be abandoned in their old age to the stress and distress of a life in poverty.

Mr. Newton : I would have found the latter part of the hon. Gentleman's remarks somewhat more credible but for the fact that the previous Labour Government were unable even to sustain their own undertakings about the way in which they would uprate retirement pensions ; and but for the fact that pensioners' average total net incomes have been rising far faster under this Government than


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under the previous Labour Government. The latest figures show that, between 1979 and 1986, those incomes rose by 23 per cent. against only 0.6 per cent. a year, or 3 per cent. over the whole period when the hon. Gentleman and his friends were in office. The principal reason for that was, of course, the roaring inflation over which the Labour Government presided.

The second principal reason for the substantial increase in pensioners' average net incomes going far beyond what occurred under the previous Labour Government is the very growth of occupational and other pension schemes, which we have been sucessfully encouraging still further by the development of personal pensions.

The hon. Gentleman made several observations about family credit, child benefit and the review of benefits for disabled people. I shall refer to each of them. First, as I emphasised in my statement, the key point about family credit is that that benefit is now far more effective than the old family income supplement in taking substantial help to the less well-off families in work. The effectiveness of that benefit will be further increased by the steps that I have taken today. I make no apology for the scale and importance of the advertising campaign that we have mounted to ensure that that benefit is effective. We shall continue with the campaign.

As for disability benefits, I note with some pleasure the hon. Gentleman's welcome--albeit grudgingly--at least for the range of new improvements that I announced at the conclusion of my statement. If the hon. Gentleman had been listening to my statement with the care that I would have hoped for, he would have heard me say clearly that it is a package of immediate improvements and that within a few months--by the turn of the year, I hope- -the Government will be coming forward with a fuller and more strategic response to the information that we have gained from the OPCS surveys. That is absolutely clear. There is no way in which I am suggesting that what I have announced today--important though it is--is the full and final answer to the greater information that we now have available.

Finally, I refer briefly to the hon. Gentleman's comments on child benefit. I shall tell the hon. Gentleman what I had in mind in considering the balance--it had to be a balance--between increasing child benefit and doing a variety of other things. It was against a background of rising real incomes for those in work and of further improvements in their position through the reduction in national insurance contributions that have already taken place and that are likely to occur in other ways as a result of changes in taxation, to which I also referred, that I came firmly to the conclusion that I would rather spend the sum of money that I outlined in my statement on the less well-off families, the poorer pensioners and on the sick and disabled and their carers. I believe that that sense of priorities will be widely shared.

Several Hon. Members rose --

Mr. Speaker : Order. I draw the attention of the House to the fact that we have a heavy day ahead of us. The Secretary of State mentioned in his opening statement that there will be a statutory instrument and a debate so I ask for brief questions and answers today, please.


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Mr. Nicholas Bennett (Pembroke) : Will my right hon. Friend confirm that the Labour party, which is so concerned now about child benefit, voted against the reductions in income tax in the last two Budgets which will help the people who will not get an increase in child benefit this year? Does my right hon. Friend agree that the best way to help those on the lowest incomes is to target it, as he has done, on those who do not pay income tax?

Mr. Newton : I agree with my hon. Friend that whatever the rate of child benefit it is right to ensure that we have special measures to help less well-off families both in work and out of work. Again, I make no apology for having concentrated primarily on those groups in part of the proposals that I have outlined.

Mr. Frank Field (Birkenhead) : As the Secretary of State is a known advocate of child benefit and he has now been defeated on this issue, what advice can he offer to his friends in the House? Does he agree that it would be gesture politics of the worst order now merely to call yet again for an increase in child benefit when it has been frozen for the third year running? Should not an alternative strategy be advanced? Does the Secretary of State accept that the best way forward would be a reintroduction of child tax allowances? Does he agree that such a move would benefit practically every working family with children? At a later stage, could not that money be put back into the child benefit scheme so that in next year's negotiations on this front, the right hon. Gentleman would have many more supporters among his hon. Friends who would be in favour of that move, including the Prime Minister?

Mr. Newton : I have noted with interest not only what the hon. Gentleman has just said, but the various press articles and other comments that he has made on similar lines. Our policy remains, as is required by law, to review the rate of child benefit annually in the light of all the relevant circumstances. That is what I have done and, in the light of all the relevant circumstances, I have come to the conclusions that I have outlined.

Sir Ian Gilmour (Chesham and Amersham) : While I congratulate my right hon. Friend on his many welcome announcements this afternoon, does he agree that as this is the third year running that the Government have made the mean and wrong-headed decision to freeze child benefit that can only signify that it is the firm and considered--if unaccountable--view of the Government that at all levels of income couples with children have no greater expenses than couples without them or single people?

Mr. Newton : Clearly, the existence of child benefit is at variance with that proposition. As I told the hon. Member for Birkenhead (Mr. Field) just now, we look each year at all the circumstances and in particular at the needs of those who will not be helped by child benefit. This year, as on earlier occasions, we have come to the conclusion that there are better ways of spending the money involved.

Mr. Archy Kirkwood (Roxburgh and Berwickshire) : But surely the Secretary of State recognises that there is no credibility left in the Government adhering to that view. For three years now Secretaries of State have told us that they are considering the circumstances each year individually and on their merits, but that is now a complete


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fiction. Would it not be more honest to say that the Government have decided to let child benefit wither on the vine and to allow people to take appropiate steps accordingly?

Does the right hon. Gentleman agree that he has been guilty of sleight of hand this afternoon? Although many of the new changes involving increased expenditure are welcome, they are merely the recycled savings from the freezing of child benefit.

Mr. Newton : We have decided not to uprate child benefit and to use that money and, taking account of the increase in pensioner premiums and the abolition of the earnings rule, provide significantly greater sums on improving the position of pensioners, especially that of less well-off pensioners and of less well-off families. Above all, in the light of the OPCS surveys, we have used the money to improve the position of the long- term sick and disabled and their carers.

Mr. Nicholas Winterton (Macclesfield) : I associate myself with the views of the hon. Member for Birkenhead (Mr. Field), but may I also express my disappointment as a member of the Select Committee on Social Services that the Government have not decided to uprate child benefit? It is the most efficient way of getting money directly to families with children.

Nevertheless, I believe that my right hon. Friend has made an exciting announcement about the uprating of benefit, and I think that the whole House should look in detail at what he has said so that we may have a constructive debate when the regulations are laid.

Mr. Newton : I am grateful to my hon. Friend and I am well aware that he and many others--not only the hon. Member for Birkenhead (Mr. Field)--will be disappointed that there is to be no increase in child benefit. I can only tell him and others who may feel the same way that they would also have been extremely disappointed had I not been able to do some of the many things--some 20 in all--for the groups that I have mentioned. In the real world it is sometimes necessary to make choices.

Mr. Jack Ashley (Stoke-on-Trent) : I welcome the premium for carers and the extension of the mobility allowance to deaf-blind people, although I regret the failure to extend it to mentally handicapped people. Is the Minister aware that these increases are miserly and lacking in all generosity? The fact that they are made at the expense of child benefit is disgraceful.

Does the right hon. Gentleman recognise that some disabled people need child benefit as well, so they are paying for the increase in the disability allowances by losing child benefit? Where is the justice in that?

Mr. Newton : In view of the right hon. Gentleman's long track record of pressing the case for disabled people with such vigour and in such a well-informed way, I would have hoped for a slightly less grudging response to a number of changes for which he has pressed for a long time. What I have announced today adds up in a full year to about £100 million extra for many disabled families and their children and carers ; to describe that as miserly is less generous than I would have hoped for from the right hon. Gentleman.

Sir George Young (Ealing, Acton) : The whole House should welcome unequivocally the additional measures that my right hon. Friend has announced today over and


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above the statutory uprating and bringing extra help to many groups who certainly need it. But was it not clear from my right hon. Friend's statement that these improvements are largely to be funded by freezing child benefit, provision for an increase in which was already in his Department's public expenditure programme? Where is the equity in funding these welcome improvements by placing an extra burden on families who happen to have children rather than funding them though taxpayers generally?

Mr. Newton : I fear that I have to repeat to my hon. Friend what I have said to a number of others already. When considering the overall position this year, I had to decide whether the right way to use a substantial sum of money was to increase child benefit and to give relatively modest amounts to a large number of people, many of whom have substantial incomes which have been rising rapidly, or whether to put it into the hands of groups who have not benefited in the same way and whose needs have been acknowledged by right hon. and hon. Members on both sides of the House. I decided to do the latter, and I shall not apologise to the House for that.

Rev. Martin Smyth (Belfast, South) : I welcome the general statement, but will the Minister enlighten us about when the immediate grants will be paid? As I heard and read the statement, it seemed that the next uprating is likely to be six months to a year hence. Is it not possible for some of these payments to be made with greater speed? Secondly, in relation to child benefit, the Minister referred to the fact that male earnings have gone up, but will he recognise that citizens advice bureaux and others have said that what really matters are payments direct to the woman, not male earnings. As a male, I know that many men keep their wage packets and payments to their wives separate.

Mr. Newton : Of course, family credit is also normally payable to the mother for precisely those reasons, so I do not think that the hon. Gentleman's point takes us that far. It will be

difficult--probably impossible--to bring any of these changes forward from the uprating date next April, except for the increase in the independent living fund, in regard to which I have made it clear that an immediate increase is being made. In one or two cases, changes may have to be later because of the need to pass legislation.

Dame Elaine Kellett-Bowman (Lancaster) : I had intended to take my right hon. Friend to task because he is not indexing child benefit, because there is a large number of non-earning women whose husbands do not give them an allowance of any sort, shape or kind. However, in view of the immense generosity of his proposals for people in residential homes, for carers, on whom so many elderly people rely, and for disabled people in general, I shall refrain from criticising him at this time.

Mr. Newton : I suppose that I should be grateful to my hon. Friend, and I am.

Dr. David Owen (Plymouth, Devonport) : Is it not a shabby way to help the disabled, who greatly need help, to take away allowances from children and from families with children? Is universal child benefit not a badge of citizenship in a country which professes to proclaim the


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doctrine of one nation? Why does the Minister not tax the second earner in a family on child benefit and get some selectivity in that way?

Mr. Newton : I seem to be getting a number of suggestions which I shall obviously note. Choices have to be made when deciding how to use public money, and I think that we have made the right choice on this occasion.

Mr. David Nicholson (Taunton) : My right hon. Friend and the Minister with responsibility for the disabled are to be congratulated on their skill in targeting this package at a time of financial stringency. Did my right hon. Friend hear the various murmurs of appreciation, not only from Conservative Members but from Opposition Members, as various long- standing injustices were remedied? Is he aware that the proposal on carers and on the independent living fund, both of which featured in the debate last week, are particularly welcome? Will he do everything that he can to increase uptake of family credit, which is an excellent benefit and can he say how much spending on family credit has increased in comparison to family income supplement?

Mr. Newton : Very roughly, the amount being spent on family credit is about twice as much as that on family income supplement. As I have said, as that goes to about 50 per cent. more families, it means that the average amounts being paid are substantially greater than under family income supplement. I noted and was grateful for the murmurs of approval from all parts of the House for what I announced, especially in relation to the disabled. We certainly hope in due course to build further on that.

Ms. Marjorie Mowlam (Redcar) : The Secretary of State has returned to the position of two years ago for single parents of allowing them to earn up to £25 before it affects their benefit. Will he clarify whether he intends to return to the other piece of legislation of two years ago when the £25 was net of child care costs? Unless that is the case, his moves today will have no meaningful effect for single parents.

Mr. Newton : I have no plans for going back down the path of introducing specific arrangements in relation to specific costs. The increase in this earnings disregard in housing benefit for lone parents from £15 to £25 will help significantly with the problems of lone parents generally and especially those who wish to work.

Miss Emma Nicholson (Torridge and Devon, West) : Is not my right hon. Friend aware that withering on the vine produces the most concentrated and sweetest wine? He has offered the House a most carefully constructed libation that will do more to help the really poor than the thin gruel spread so forcibly throughout the population by the Opposition. I also welcome the allowance to be paid to parents of severely disabled children under two where medical advances now mean that such children can be cared for at home. That is an example of sensitive thinking which I warmly welcome. Will he continue to look most carefully at the delivery system for family credit? I welcome the fact that the advertising campaign has resulted in a greater take-up. I look forward to far greater


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efforts being made in advertising and other campaigns aimed at the population so that this excellent benefit will receive the take-up that it deserves.

Mr. Newton : Yes, I will continue to look very hard at ways of improving still further the effectiveness of family credit. This has been a fairly intractable problem under both family credit and family income supplement, but I am encouraged by the progress that we made in the early part of the year and which I outlined in my statement. I hope that we can build on that, especially in relation to lone parents. I obviously agree with the general drift of what my hon. Friend said about child benefit. Because of the medical advances about which she spoke and other matters, we have reviewed and changed the position about attendance allowance for the under-twos.

Mr. John Battle (Leeds, West) : Although I welcome the overdue extension of mobility allowance to the deaf-blind, may I ask the Secretary of State to amplify his comments on pensions, because his answer on 17 October clearly demonstrates that every year since July 1986 the value of a pension as a proportion and percentage of average net earnings has been declining and is now lower than it was in 1978 and 1979? Further, what is his Department's estimate of the take-up level of family credit? Is it not the case that nearly 250,000 families who are entitled to family credit are not getting it because the take-up is low? What will happen is that some funds will be shifted from child benefit into family credit, but the Minister's Department will not even have budgeted for a full take-up of family credit.

Mr. Newton : What the hon. Gentleman suggests in the latter part of his question is manifestly incompatible with the strenuous efforts that we are making to improve the coverage of family credit. I have not given any figures for the percentage take-up of family credit because it is increasingly obvious from looking at the figures that we are not at all clear about the full size of the eligible population. Therefore take-up figures as such are not very meaningful. I have concentrated on what we have succeeded in doing in increasing the numbers of people in receipt of the benefit by comparison with the earlier period, because that is what seems to matter. As I said in my statement, the number went up by 40,000 to 320,000 in the middle part of this year.

On the earlier part of the hon. Gentleman's question, the apparent discrepancy between my earlier answer and what I said this afternoon is that pensioners' incomes from state social security benefits are only a small part--in some respects an increasingly small part--of pensioners' total incomes. Over the period to which I referred--from 1979 to 1986 ; the latest data available--income from social security benefits rose by 19 per cent. in real terms but income from occupational pensions rose by 56 per cent. in real terms and income from savings rose by nearly 64 per cent. in real terms. That explains the discrepancy. Whereas income from savings rose by 64 per cent. or 64 p in the pound under this Government in that period, under the previous Labour Government, the figure fell by 16 p in the pound.

Mr. John Maples (Lewisham, West) : Many of us welcome my right hon. Friend's decision not to uprate child benefit as we regard it as wrong to pay universal flat rate benefits regardless of people's means. They are a


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recipe for high taxation and it is no business of the state to have one of its agencies taking money out of the pockets of husbands so that another agency can put it back into the pockets of wives. Will my right hon. Friend use every opportunity to explain something to which he alluded in his statement but which is widely misunderstood, which is that an uprating of child benefit would have been of no benefit to children of the poorest 25 per cent. of families?

Mr. Newton : As I know my hon. Friend understands, as child benefit is taken into account in setting the rates of income support and so on, an increase in child benefit reduces the amount of income support that would otherwise be paid. Conversely, if child benefit does not increase, as it is not increasing in my proposals for this year, the effect of that is fully offset for income support families by the increases that take place in their income support for their children and themselves.

Mrs. Margaret Ewing (Moray) : Will the Secretary of State accept that, despite his many and loud protestations today, his decision to freeze child benefit yet again will be regarded as a niggardly move by millions of women throughout the country as it is the one benefit that has an uptake rate of 98 per cent. and is paid directly to the mother? If it is his intention to kill the benefit through death by gradualism, has the right hon. Gentleman made an estimate of when family credit will have reached the same level of take-up? When he brings forward his proposals on mobility allowance and attendance allowance, will he also be looking at the procedures for dealing with such claims, because it seems as if the authorities believe that they should pay as few as possible of those allowances? Where an appeal is made people are subjected to long, difficult and sometimes humiliating procedures in order to obtain payment of the benefits.

Mr. Newton : The answer to the hon. Lady's last question is yes. It is something that I am conscious of and if we could find ways of improving the medical adjudication procedures nobody would be more pleased than I. However, I do not want to pretend that that will be a simple or quick task. The hon. Lady may be right to think that some people--indeed there has been some evidence in the House today--will regard my decision not to uprate child benefit as niggardly. However, it will not be seen as niggardly by, among others, those women who are caring for disabled people, severely disabled babies and others, as they will be receiving substantial benefit increases.

Mr. Robin Squire (Hornchurch) : My right hon. Friend is a humane and intelligent man and that is reflected in the range of welcome initiatives in his statement. However, he knows that as a result of his statement, several hundred thousand families in difficult circumstances, on either side of the level of salary qualifying for family credit, will receive nothing for the third year in a row. Knowing that, and hearing the suggestions from both sides of the House on the necessity for change, will he accept the need to change the system if we cannot uprate benefits?

Mr. Newton : Again, I note what my hon. Friend has said and the comments he is reported to have made in the newspapers this morning. I am grateful that he has acknowledged the scale and importance of what I have been able to do as a result of the decision not to increase child benefit this year.


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Mr. Andrew F. Bennett (Denton and Reddish) : Does the Secretary of State agree that his early reputation in the House was built on the championing of child benefit as a universal benefit? Does he not now find it humiliating to have to trample over his principles?

Mr. Newton : No, I do not. I have never made any secret of the importance that I attach to helping families with children, but it does not follow that that can be given, at any particular point in time, priority over a whole range of other needs that I have also advanced in the House over the years, including those of disabled people. My main feeling is one of pride at having been able to make so many improvements for that latter group.


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