Mr. Tam Dalyell (Linlithgow) : On a point of order, Mr. Speaker. It will be known to you that a Select Committee of this House--the Select Committee on Defence--has decided, as is its right, to look at the affair of Colin Wallace. First, how, if at all, does this affect your decision when you took avizandum--if that is the right expression--on the whole question of Colin Wallace and privilege? Secondly, may I have an assurance that it will in no way inhibit what is said, hopefully to the Attorney- General, in the Adjournment debate on Monday? Thirdly, in relation to what may be Table Office difficulties relating to the rules of advice to Ministers, will we be able to probe the Minister's statement to my right hon. Friend the Member for Chesterfield (Mr. Benn) in the Adjournment debate last night that no clearance--the word used was "clearance"--had been given? Is clearance advice to Ministers, or can we probe a good deal further as to what exactly what was meant by the statement that no clearance had been given for Clockwork Orange?
Mr. Speaker : As to the hon. Gentleman's last question, I shall have to see the questions that were asked yesterday before giving him a reply. So that is hypothetical. In reply to the hon. Gentleman's first question, I can say that the investigation by the Defence Select Committee will not affect any decision I may take. Secondly, the hon. Gentleman may certainly proceed with his debate without any concern.
Sir Jim Spicer (Dorset, West) : On a point of order, Mr. Speaker. It may be that the combination of television coverage and Foreign Office questions is inevitably a good mix, but have you, Sir, noticed that during the course of Foreign Office questions we tended to move from questions to speeches? Would it be possible for you, particularly in relation to Foreign Office questions, to remind all hon. Members that it is Question Time and that we are not taking part in debate?
Mr. Speaker : That point of order is helpful from the point of view of the Chair. I know that we in this House take no account of television, but the truth is that it is very difficult to proceed down the Order Paper if we have long questions and long replies.
Mr. Anthony Nelson (Chichester) : On a point of order, Mr. Speaker. In respect of Question Time, may I put to you a point that I think affects the rights of all Back Benchers? I know that you try to achieve the impossible--being fair to all of us--and that no Member has a right to complain even though he may be disappointed at not having been called. However, a real problem arises when a major issue is being dealt with--and, arguably, South Africa is that issue today. Sixty per cent.--six out of ten --of questions come from the Opposition. The practice that you, Sir, adopt- -for reasons that one understands--is to call Government and Opposition Members alternately. If the next question on the Order Paper happens to arise on the alternate call you will move on. That results occasionally in commentary on a major issue being out of balance, as was the case today when Members on the Government side were called in a quite small proportion to comment on South Africa.
Mr. Speaker : Order. If the hon. Gentleman looks carefully at Hansard tomorrow, he will see that that is not true. The Procedure Committee has asked me to speed up Question Time. My predecessor, Dr. Horace King--
Mr. Speaker : I have started, so I shall finish. Mr. Speaker King used to get through 40 questions in an hour, whereas we got through only 14 today. The House may well agree that it would be fairer if we were to get more quickly through questions, but that inevitably means fewer supplementaries.
Mr. John Butterfill (Bournemouth, West) : On a point of order, Mr. Speaker. It was not possible today, because of the way that the questions were selected, to ask any questions on the European Economic Community. On a day when my right hon. Friend the Foreign Secretary returned from important meetings in Germany, that was unfortunate. Is there any possibility of you making arrangements with my right hon. and learned Friend the Leader of the House-- [Hon. Members :-- "No."]--to ensure that such an imbalance can be redressed?
Mr. Speaker : That matter has already been studied carefully by the Procedure Committee. There used to be a 15-minute slot in Foreign Office Question Time specifically for European questions. If the hon. Gentleman feels that we should go back to that, he should make his representations there. I judge from the comments that I hear that it might not be particularly popular.
Mr. Dennis Canavan (Falkirk, West) : On a point of order, Mr. Speaker. I rise to support you this time, although I have had occasion to complain about the lack of balance and the lack of fairness towards the Opposition during Scottish Question Time. It is worth pointing out to the hon. Member for Chichester (Mr. Nelson) that, if we take into account the contributions from the Treasury Benches, the Tories get the lion's share of any Question Time--about three quarters of it--so they cannot complain about lack of balance. On top of that, the Minister--
Mr. Tony Banks (Newham, North-West) : On a point of order, Mr. Speaker. I am an assiduous attender at Question Time. There is a great deal of pressure on you to call hon. Members, and I am deeply grateful that you called me this afternoon. I think that you are wonderful.
Mr. Tony Marlow (Northampton, North) : On a point of order, Mr. Speaker. I venture to suggest that this may be of more interest to the majority of hon. Members than the antics of Mr. Colin Wallace, that dubious Walter Mitty who was active mainly during the depressing and dismal interlude represented by the last Labour Government. We gave certain powers to the Select Committee dealing with the experiment of televising the House. Who decides how far and wide those powers go? Is it you, the Select Committee or the House?
Column 889Mr. Speaker : The Select Committee, which will bring its recommendations to the House.
Mr. Marlow : Further to that point of order, Mr. Speaker. Last week, in answer to a parliamentary question, the Select Committee made suggestions about changes in the experiment, but those suggestions were not brought before the House--they were merely introduced. I am not saying that it is outside the broadcasters' terms of reference, but should they come forward with a suggestion for something outside their terms of reference, who is to judge that situation? Is it you, the House or the Select Committee untrammelled on its own?
Mr. Speaker : This is a matter for the Select Committee. I hope that the House and the hon. Gentleman will accept that we are engaged in an experiment, and without changes we cannot experiment. We need to see whether the changes, which may themselves be varied from time to time, are beneficial, or not.
Mr. Brian Wilson (Cunninghame, North) : On a point of order, Mr. Speaker. I raise a matter which I imagine will not attract the attention of many hon. Members. Yesterday, in a written answer in the House of Lords, the centrepiece of legislation which went through both Houses at inordinate length and which has been lying about for four years suddenly disappeared. I refer to the Salmon Act 1986 and, with it, the salmon dealer licensing scheme.
Is it in order, Mr. Speaker, that the central core of a measure which has gone through both Houses of Parliament should be withdrawn by press release and written answer? Many uncertainties were created by that legislation, many people were waiting for its implementation and much advice was offered against the spirit of what was contained in that legislation. Is it right that, as it were, with a snap of the fingers, the whole thing should have disappeared as the result of a written answer?
Mr. Speaker : I thought that the hon. Gentleman proposed to ask me if I had received a request for a statement on the matter. Although he has not asked that question, I will give him the answer to it, which is that I have not. He must take up with the Government Department concerned the matter that he has raised with me.
Mr. Jack Straw, supported by Mr. Barry Jones, Mr. Derek Fatchett, Ms. Hilary Armstrong, Mr. Andrew Smith, Mr. Win Griffiths, Mr. George Howarth and Mr. Tom Cox, presented a Bill to amend the law relating to appointments by local authorities to school governing bodies : And the same was read the First time ; and ordered to be read a Second time on Friday 9 March and to be printed. [Bill 69.]
That the draft Social Security (Contributions)(Re-rating) Order 1990, which was laid before this House on 18th January, be approved. I understand, Mr. Speaker, that it will be convenient also to consider the following motions :
That the draft Social Security Benefits Up-rating Order 1990, which was laid before this House on 18th January, be approved. That the draft Statutory Sick Pay (Rate of Payment) Regulations 1990, which were laid before this House on 18th January, be approved.
That the draft Guaranteed Minimum Pensions Increase Order 1990, which was laid before this House on 18th January, be approved. I imagine that the main interest of the House, and therefore the main focus of the debate, is likely to be on what is in the uprating order, and in at least one respect what is not in it. But first I should outline the purpose and content of the other three instruments.
I take first the contributions re-rating order, conscious, in the wake of having been mildly rebuked by a distinguished observer of our proceedings for a certain want of jollity during Question Time earlier this week, that the scope for bringing jollity to the discussion of national insurance contributions is limited indeed. The order is concerned with the national insurance contributions which determine people's entitlement to pensions and other important contributory benefits, and which are the source of finance for over half of what is spent in this country each year on social security. It is rather odd that the House devotes so much less time to discussing those contributions than to matters of taxation, given that there are many people for whom national insurance contributions are larger than any tax liability they may have and that the total paid in such contributions amounts to about two thirds of the total collected in income tax.
The most notable feature of the re-rating order is that, for the seventh year in succession, it makes no increase in the main rates, the class 1 rates paid by employed people and their employers. As the House will be aware, however, there are boundaries for contribution liability, known in the jargon of the trade as the lower earnings limit--LEL--and the upper earnings limit--UEL--and those will change as usual. The LEL applies to both the employer's and employee's share of contributions ; the UEL to the employee's share only. The order itself does not set those two earnings limits ; that is done by a set of regulations to be laid after the benefits uprating order has been approved. But I should remind the House that the LEL, which is linked by law to the nearest pound below the retirement pension rate, will be £46 a week and that the UEL, for which there is somewhat greater flexibility, will be £350 a week.
The House will recall that in 1985 we reduced the contribution rates paid by lower paid workers and their employers to help those workers and to reduce employment costs. The reduced contribution rates will significantly cut the impact of contributions on people with lower earnings without affecting their benefit entitlement in any way. From 5 October 1989, we built on that process by further restructuring the employee's
Column 891element of class 1 contributions, again without affecting benefit entitlement. People who earn less than the lower earnings limit will still pay no contributions but will pay an initial entry fee, as it might be called, of 2 per cent., charged on earnings at the lower earnings limit. The standard 9 per cent. is charged on that part of any earnings that exceed the lower but not the upper earnings limit. The effect of the 1985 and October 1989 changes taken together was to reduce contributions of every contributor by just over £3 per week, which clearly was of particular help to the lower-paid. I very much welcome that, as I am sure do all right hon. and hon. Members. Although the order makes no further change to the rates, the effect of the increase in the lower earnings limit will be to reduce most employees' contributions by 21p per week, or by 15p per week if they are in contracted-out employment.
The effect of raising the upper earnings limit is that those having earnings of £350 per week or more will pay an extra £2.04 per week, or £1.60 per week if they are contracted out.
Employers' contributions, which have a somewhat different structure, were not affected by last October's changes. However, as on previous occasions, the re-rating order provides that the earnings limit below which they pay lower contribution rates will be increased roughly in line with inflation, rounded to the nearest £5. From April, employers' contributions will be at 5 per cent. in respect of employees earning between the lower earnings limit and £79.99 per week ; 7 per cent. for those earning between £80 and £124.99 ; 9 per cent. between £125 and £174.99 per week ; and 10.45 per cent. for those earning more than £175 per week.
Mr. Tony Banks (Newham, North-West) : I am trying to follow the Secretary of State, but he is reading his brief very closely and I should not be surprised if the people at the receiving end of all that information could not understand it. I cannot pretend that I do. I shall put to the right hon. Gentleman a point made to me by those representing welfare rights in Newham, who say that, although a person earning £84 per week in 1989-90 would receive £52 per week statutory sick pay, that same person claiming after April will receive only £39.25, unless he or she receives a pay rise of 49 per cent., taking their income to £125. If that is so, the new arrangement represents a real cut for people at lower income levels.
Mr. Newton : Having considerable experience of the subject myself, I sympathise with the hon. Gentleman's difficulty in understanding the complexities of national insurance contributions. However, they have relatively little to do with the point that he makes. I shall deal shortly with the Statutory Sick Pay (Rate of Payment) Regulations 1990, which are in the batch before the House this afternoon, when the answer to the hon. Gentleman's question will become clear. Meanwhile, I have little alternative but to plough on through the complexities of the Social Security (Contributions) (Re-rating) Order 1990 as briefly as I can.
In 1990-91, class 1 contributions, which are the ordinary contributions that most people make, are expected to yield £32 billion. As is the case with contributions made in all classes, that revenue will be apportioned between the national insurance fund and the
Column 892National Health Service. Self-employed people pay national insurance contributions in two portions--the flat-rate class 2 contribution and the profits-related class 4 contribution. We do not propose any change to the class 4 rate, which will remain at 6.3 per cent. in the coming year. The profits limit for class 4 contributions, which determine the level of profits on which contributions are payable, will increase in the normal way and broadly in line with the earnings limit for class 1 contributions, to £5,450 and £18,200 respectively.
The upper profits limit is exactly 52 times the class 1 upper earnings limit. We propose also to increase the class 2 contribution by 30p to £4.55 per week from next April. The class 2 rate is broadly linked to the class 1 lower earnings limit, and its increase reflects the proposed rise in that limit.
In somewhat different terms, the result of all this is that self-employed people with profits at or below the present lower limit of £16,900 will pay about £25 less in class 4 contributions per year. Those with profits above the proposed upper limit of £18,200 will pay about £57 more. Self-employed people are expected to contribute about £1,200 million overall in contributions in 1990-91.
Finally, certain categories of people--for example, those who are not gainfully employed or receiving contributions credits, such as people who retired before the age of 60--can pay class 3 contributions if they wish ; they are voluntary contributions. We propose to increase class 3 contributions by 30p, making them £4.45 a week. Before leaving this tangled question of national insurance, I should note that, as usual, the Government Actuary's report on the effect of our proposals on the national insurance fund has been laid with the re-rating and uprating orders. Having referred to the report at some length in my speech on Second Reading of the Social Security Bill on 22 January, I shall merely remind the House now of what I consider to be its essential points.
The expected balance of the fund in the present year, at 34 per cent., is more than twice the Government Actuary's recommended minimum. Although, in 1990-91, expenditure is likely to exceed income, the balance is expected to remain at 25 per cent., which is well above the minimum. While a problem could have been foreseen had that trend continued in subsequent years, it should be overcome by the proposals in the Social Security Bill to transfer from the national insurance fund to the Consolidated Fund payment of industrial injuries benefits, statutory sick pay and statutory maternity pay. Since none of those is a national insurance benefit in the ordinary sense, as they do not depend on a contribution record, in my view, as the House knows, that is a sensible move in any case.
I now turn to the draft Statutory Sick Pay (Rate of Payment) Regulations. Those regulations were referred to the Social Security Advisory Committee, and its report, together with my response, is also before the House. There are three main elements in the regulations. The first is to increase the lower rate of statutory sick pay by £3 a week, to £39.25, an increase of rather more than simply matching inflation would have required. That will improve the position of low-paid workers who experience short- term sickness. That has been widely welcomed, as has the knock-on effect of a modest real increase in the entitlement of more than 200,000 women receiving statutory maternity pay, since the SMP rate is the same as the lower SSP rate.
As is the way of the world, comment has tended to ignore that aspect of the proposal and to concentrate on
Column 893the other two elements of the regulations, which are the more limited increase of 40p, bringing the higher SSP rate to £52.50, and the increase from £84 to £125--that directly relates to the point that the hon. Member for Newham, North-West (Mr. Banks) raised--in the weekly earnings limit, above which the higher rate is payable. The concerns that have been expressed, and which he reflected, on the latter proposal are fairly reflected in the Social Security Advisory Committee's report, but for the reasons set out in my formal response the Government do not believe that those concerns are justified and they therefore do not intend to depart from the proposals, which have been conceived as a whole. Therefore, it would have been necessary to reconsider also the position on the real increase in the lower rate of SSP and SMP, which has been generally welcomed.
In commending this order to the House and, at the same time, commenting on the point that the hon. Gentleman raised, I shall simply ask hon. Members to bear in mind three matters. First, since 91 per cent. of employees are now covered by occupational sick pay schemes, and 83 per cent. of those schemes in the private sector now top up SSP to full pay and most of the rest to at least half pay, very few employees are likely to be affected in practice in the way that the hon. Gentleman's constituents have suggested. There will be a change in the balance of what they receive--between what the State provides through SSP and what the employer provides through an occupational sick pay scheme--without affecting the individual. We expect that in practice very few employees will be affected.
Mr. Tony Banks : I am grateful to the Secretary of State for his patience in taking me through this highly complicated point, which I now understand better. Although he says that very few employees will be affected, has he any estimates? This matter has been raised with me by people in Newham, and I should not like anybody in Newham to lose under the provisions which have just been announced. Has the Secretary of State any estimate of the numbers involved, and what will he do if examples are brought to his attention of people who are manifestly losing out?
Mr. Newton : I shall make three points in response to the hon. Gentleman. First, if he investigates the circumstances of everyone in Newham, as I am sure he does assiduously as a Member of Parliament, he will certainly find a fair number who are likely to gain. They will be either quite low-paid workers who will be helped by the increase in the lower rate of SSP, or women having babies who will be helped by the small real increase in the rate of SMP.
Secondly, I cannot give the hon. Gentleman a detailed figure of the sort he requires. Many of the theoretical effects will happen only if someone is sick. We think that about 290,000 spells of sickness might theoretically be effected. However, to know who is going to be sick and relate that statistic to the occupational sick pay scheme which they may or may not be in is a task that would be beyond even my Department's excellent statisticians.
Thirdly, even at the present rate, somebody with substantial numbers of dependants would be likely to need--as they would be entirely entitled to if they were on only SSP--some topping up from income support or housing benefit. That remains open under the new arrangements in precisely the same way as it does at present.
Column 894The £125 dividing line, apart from the slight administrative advantage for employers of alignment with the dividing line which also exists in relation to contribution payments--the point that the hon. Member for Newham, North-West (Mr. Banks) noticed earlier--does no more than restore the balance of numbers between those receiving the standard rate of SSP and the lower SSP rates to where it was when the SSP scheme started in 1983.
While the proposal undoubtedly means that employers will bear a slightly greater proportion of the costs of short-term sickness, the actual amount involved--about £80 million--is small in relation to total labour costs in the economy of more than £250,000 million. Overall, I have no doubt that this relatively modest restructuring is a sensible and reasonable one, taking account of the many pressures for social security expenditure in sectors for which only the state can provide.
You, Mr. Deputy Speaker, will be glad to hear that I need address the third instrument only briefly--
Mr. Tim Smith (Beaconsfield) : What information has my right hon. Friend the Secretary of State about the 9 per cent. who are not covered by occupational sick pay schemes? Does not common sense suggest that they are more likely to be part-time, and therefore low-paid, people, who will benefit, not lose, from this change in the arrangements?
Mr. Newton : Common sense suggests that, as I implied when I originally announced this in my original uprating statement. That is one reason why I would expect many people to be helped by what I have done with the lower rate of SSP, which is likely to be
disproportionately helpful to those lower-paid and part-time workers who may not be in occupational sick pay schemes.
If only to take the opportunity to encourage more employers to do this, I must say that one encouraging factor is that employers generally are tending to extend their occupational schemes to part-time as well as full- time employees. Not least because of its effect on so many married women, that is something that I welcome and would wish to encourage.
As for the Guaranteed Minimum Pensions Increase Order 1990, in line with my statutory duty under the Social Security Act 1986, the order obliges occupational pension schemes that are contracted out of the state earnings- related pension scheme to provide post-award increases in guaranteed minimum pensions, earned in the tax year 1988-89, of 3 per cent. from 6 April this year.
The main uprating order follows the announcement that I made to the House in October about the generality of social security benefits rates that will be payable from 9 April 1990. It provides for an increase in retirement pensions, and in virtually all other benefits that are not income related, of 7.6 per cent. That is the increase in retail prices that took place between September 1988 and September 1989. As for income-related benefits, the order provides for a general increase of 5.2 per cent., which is the increase in retail prices, other than housing costs, over the same period. That difference, as is now well understood, reflects the fact that for people on income support there is generally direct assistance with housing costs, either through the payment of their mortgage interest, or some part of it, or through housing benefit.
Rather than rehearse all the many benefit rates to which those general increases give rise, which are set out in the
Column 895order, it will be more helpful to concentrate on the ways in which its provisions depart from the general pattern that I have just outlined. They are quite numerous. On the one hand, the rate of child benefit remains unchanged. On the other hand, there is an extensive range of specific improvements that go well beyond the basic uprating percentages. They are closely associated with a number of important extensions of benefit coverage that we are making in other ways, especially for disabled people and their carers.
The House will recall what I said about child benefit in my uprating statement. The requirement is to review the level of child benefit each year, taking account of all relevant considerations. Having done so, I came to the conclusion that other claims should, on this occasion, be given priority over those of a general increase in that benefit, particularly since such an increase of itself does nothing to improve the relative position of those who are least well off--the families on income support or family credit.
I do not intend to repeat everything that I said on that occasion, but I shall make one observation which I hope hon. Members will bear in mind. Targeting--or whatever word we want to use--is not simply a matter of increasing benefits that pay regard to people's exact financial circumstances--the income-related benefits--rather than those which do not. It also involves making judgments about the needs of different groups at a particular time and the relative weight of their claims to any additional resources that can be made available. The incomes of people in work, which include the great majority of families with children, have been rising fast. Over the past year alone, the take-home pay of a married man on average earnings, including the effect of the £3-a-week reduction in national insurance contributions, has risen by about £20 a week. In the numerous cases where both partners are working, the overall increase in family income will have been even more.
Against that background, I do not think that it was unreasonable to judge that the prior claims at this time lie in other quarters : families with children who are out of work or in low-paid jobs, the less well-off pensioners and--very much not least--disabled people, their carers and families with disabled children. It is on those groups that we focused additional help, both in the measures that we implemented last October and, in this order and in what we are doing in other ways.
Mr. John Battle (Leeds, West) : I am sure that the Secretary of State accepts that one of the primary causes of the classic poverty trap is those on low pay who are not earning the average wage of £258 a week, according to the Department's latest figures. Does not child benefit cut through the poverty trap because it is not means-tested? It reaches, therefore, precisely those families who cannot claim other benefits but whose take-home pay is too low to qualify either for tax concessions or for other benefits. Does not the Secretary of State accept that it breaks helpfully and progressively through the poverty trap?
Mr. Newton : I do not accept the full implication of that. As the House knows from what I have said on numerous occasions, the more effective way of tackling that problem is the one that we adopted with the move from family
Column 896income supplement to family credit, a significantly more generous benefit than its predecessor. I refer also to the efforts that we are making to channel amounts averaging £27 a week in family credit to low-paid working families with children.
At the same time, we made changes that constituted an important aspect of the reforms introduced in 1988. Although they did not eliminate--I would not pretend that they did--the problem of high marginal rates of withdrawal associated with income-related benefits, they certainly mitigated those effects and, above all, virtually reduced to nil the number of people who could make themselves worse off by increasing their incomes. The hon. Gentleman is student enough in this area to know that we are discussing intractable problems. I do not want to over-simplify ; I am sure that he does not want to, either. I do not entirely agree with his point, and I emphasise what we have sought to do by means of family credit.
Mr. Michael Meacher (Oldham, West) : If the argument is about better targeting for the low-paid, why are the Government making cuts that amount, in the case of child benefit over the past three years, to £250 million, of which only £70 million--about 28 per cent.--will go to families in respect of family credit? Is not the right hon. Gentleman being a little dishonest by trying to pretend that the argument is not really about cuts?
Mr. Newton : I am not being dishonest. It has just become apparent that the hon. Gentleman must have switched off during the past few minutes when I was talking about what I understood by targeting. Targeting is not merely a matter of picking out some money that has been going in one universal direction and deciding to add an income-related direction as well. We look more broadly at the various groups in the population and consider where it is necessary to direct extra help
Mr. Newton : I do not think so. I have made it clear that one aspect that has been in the Government's mind is the extent to which there has been a rapid and considerable increase in the standard of living, real incomes and cash incomes of the great majority of those in work, who include the great majority of families with children. Against this background, we thought that priority should be given not only to low-income families with children, including those out of work, but to people in other parts of society, not least to many pensioners and disabled people who do not share directly and immediately in the growth in employment incomes either. That is a much broader point and I should be surprised if, at the end of the day, the hon. Gentleman disagreed with it.
I want now to cover as briefly as I can the many improvements contained in the uprating order. In income support we are increasing the premium for families with dependent children from £6.50 to £7.35, which is 50p more than inflation. We are increasing the adult disability premium from £13.70 to £15.40, which is a pound more than inflation. We are increasing the child disability premium from £6.50 to £15.40, which more than doubles it. We are adding more than £100 million to the income support limits for people in residential care and nursing homes, virtually all of which will rise by £10 a week as a result. At the same time, we are increasing the personal
Column 897expenses allowance for long-term hospital patients by more than £3, to £11.75 a week. These improvements all come into effect in April. Then, in October--it is October rather than April only for practical reasons--we shall introduce a new carers' premium into income support, for those receiving invalid care allowance, at a rate of £10 a week. In housing benefit and community charge benefit, all these increases in the income support premiums carry through into the starting points for calculating benefit, thus giving additional help to yet more families with children, disabled people and carers.
In addition, we are making a number of other improvements aimed particularly at assisting those lone parents who are working or who wish to do so. The lone parent premium in those benefits is being increased by nearly 13 per cent. from £8.60 to £9.70 a week, and the amount that lone parents can earn without affecting their entitlement to them is being increased by two thirds from £15 to £25 a week. In family credit, the adult credit is being increased by £1 a week beyond what inflation would have required to £36.35, which we hope and expect will reinforce our efforts to maximise the effectiveness of that benefit in helping low-income families in work.
In the social fund, we are increasing the maternity payment from £85 to £100, and doubling from £500 to £1,000 the amount of capital that people over 60 may have without affecting their entitlement. Apart from those improvements in income-related benefits, the order also provides for a number of beneficial changes in other aspects of the benefit system. For those receiving invalid care allowance, it increases the amount that they can earn without affecting their entitlement from £12 to £20 a week. For those receiving invalidity benefit or severe disablement allowance, it increases what they can earn under what is called the therapeutic earnings limit from £28.50 to £35, to improve encouragement for rehabilitation into employment. Not least--this will be particularly welcomed on the Conservative Benches--the order provides for a significant increase in the help given to the older war widows through the war pensions scheme, with a real increase in age allowances to all over 65, and a particularly large increase, from £15.30 to £20, for those over 80. It also doubles, from £5 to £10, the amount of war widows and other war pensions which is disregarded for the purposes of income-related benefits.
Those increases in the DSS war pension scheme are separate from what my right hon. Friend the Secretary of State for Defence announced on 11 December when he said that he would be making a special £40 a week payment to the pre-1973 war widows. Those extra payments will also come into effect in April and they will be entirely disregarded in calculating income-related benefits. While concentrating on the changes contained in the order, it is right that I should also remind the House briefly of a number of other changes which are being, or will be, brought about by other mechanisms but which are very much part of the context in which the order is brought before the House.
Last October we abolished the pensioners' earnings rule and made substantial increases in the income support and housing benefit premiums for disabled pensioners and those over 75. We are preparing, and will shortly lay,
Column 898regulations to extend attendance allowance to disabled babies under two and to extend mobility allowance to those who are deaf and blind.
Mr. Archy Kirkwood (Roxburgh and Berwickshire) : I hear on the grapevine that there may be some difficulties in the implementation date for the welcome extension of the mobility allowance to the deaf and blind. Is there any suggestion that the improvement will not be made in April as expected?
Mr. Newton : The hon. Gentleman will have seen me hastily consulting my right hon. Friend the Minister for Social Security, but all I can say is that the grapevine on which he heard that does not appear to have extended to Ministers in the DSS. Should it turn out that he is ahead of us in learning of those difficulties, I shall do my best to ensure that they are overcome, but I have not yet had any such difficulties brought to my attention.
Mr. Newton : I had better seek further advice to establish the merits or otherwise of the point that has been made before commenting further. I shall go no further than to say that my instinct is that if there proved to be some hiccup in the implementation of a proposal that is among those that are dearest to my heart in all these, I would look carefully at the possibility that my hon. Friend suggests.
Ms. Dawn Primarolo (Bristol, South) : While the Minister is investigating that hiccup, may I mention another possible hiccup with regard to war widows? A constituent of mine aged 81 in a nursing home will, I am told, have all of the £40 announced by the Secretary of State for Defence clawed back in her nursing home costs. Therefore, it will not be disregarded but will be taken into account in her income support when calculating her contribution to the nursing home costs.
I have made it clear that our intention is to regulate to make sure that total payments are disregarded for the purpose of all income-related benefits. I wish to see the details of the case to which the hon. Lady referred, because it is not unknown, when a home learns that the income of a resident has increased, for it to increase its charge to that person. Clearly that would not be susceptible to action through the social security regulations. It might be susceptible to some form of intervention by my right hon. Friend the Secretary of State for Health or by the local authority. I hope that the hon. Lady and the hon. Member for Newport, West (Mr. Flynn) understand that I need to consider that case. I cannot give an off-the-cuff answer.
Mr. Timothy Raison (Aylesbury) : We read in the newspapers this morning that Wrens in the Royal Navy are to starting flying combat aircraft. Does the provision cover war widowers as well as war widows?
Column 899Mr. Newton : That was a very helpful question, not least because it is primarily one for my right hon. Friend the Secretary of State for Defence. I shall ensure that his attention is drawn to it. I was referring to the mobility allowance for those who are both deaf and blind when I was subject to something of a barrage of queries and interventions. I was about to say that the Social Security Bill, which is now in Committee, in the able hands of my right hon. Friend the Minister for Social Security and my hon. Friend the Under-Secretary of State, extends attendance allowance to the terminally ill without the six-month waiting period and provides for the addition of invalidity allowance to severe disablement allowances later this year. We are preparing later legislation to introduce the proposed new disability allowance and the disability employment credit.
Last week we referred to the Social Security Advisory Committee draft regulations, all of which we hope to make by April, which make further beneficial changes, many of them fairly small and technical, to income- related benefits. I shall mention just one of them. As announced by my hon. Friend the Under-Secretary of State in a parliamentary answer last week, we intend to double to £10 a week the current disregard for charitable and voluntary payments made to people receiving an income-related benefit, and to disregard completely any regular charitable or voluntary payment intended and used for an item other than certain accommodation costs met by benefit, food, ordinary clothing or footwear and household fuel. We have been pressed hard by many voluntary and charitable bodies to make that change. It will allow charities, voluntary bodies and relatives to give more help to people, where they wish, without affecting their entitlement to income-related benefits.
It is conventional to end the opening speech in a debate such as this with some reference to money. The money involved is vast. The increase in social security expenditure between 1989-90 and 1990-91, most of it arising from this order, is £3 billion. It takes the total social security expenditure next year to well over £55 billion. As I said in my uprating statement, that is over £1 billion each week. No less important than the amounts involved is what we are doing with it, and the people whom we seek to help.
Taken together, the changes to which I have referred mean that in a comparatively short time we shall have brought about a real improvement in the position of nearly 3 million of the least well-off pensioners, 850,000 disabled people and carers, 1.5 million low-income families with children, including nearly 100,000 lone parents, and about 50,000 war widows. All those people have a particular claim to our concern as a community. We are pleased as a Government to be able to respond to that concern with this wide range of new steps to help, and I have no doubt that the House will be pleased to endorse those that are contained in this order. 4.19 pm
Mr. Michael Meacher (Oldham, West) : Although the Secretary of State treated us to an array of minor changes across a whole range of marginal benefits, this debate on the uprating orders is, in effect, a debate about the overall adequacy or otherwise of the income of the poorest quarter of the population. Although market capitalism is
Column 900dominated by the driving forces of money and wealth, the House never debates how that money is distributed throughout the nation. I have often thought that many of the most important events or processes in our society are never debated when they happen, which is when it really matters, whether they relate to internment in Northern Ireland, competition and credit control in the City, the internationalisation of the capital markets or the accountability of the security services. In the same way, the House never debates the distribution of income and wealth, although it is at the heart of our economic system. I suppose that today's debate is the nearest proxy that we shall get to that, and I intend to treat it in that vein. My first point, therefore--
Mr. Tim Smith rose --