The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mrs. Margaret Thatcher)
I came to the House expecting to reply to a debate on National Assistance Regulations. I think that I am expected to answer not only for the National Assistance Board, but also for the Treasury, the Ministry of Health, the Ministry of Labour, the Ministry of Agriculture, Fisheries and Food, and one or two more. My right hon. Friends in charge of those Departments must find this prospect as alarming as I do.
There have been various comments in the debate about the use of statistics. Some hon. Members have condemned them all outright and some have used them. What usually happens is that we use those statistics which support our particular argument and we condemn all the rest. Some hon. Members have condemned us for looking back on the past and have said that we should only look forward to the future. Some have dealt with the whole matrix in which the National Assistance Board is embedded and some with the detail of the scheme. As far as my voice continues, which is an even more important factor at the moment than the time between now and four o'clock, I will try to answer as many points as I can.
I should like to deal, first, with the Government's general approach to social security. This takes up the point made by the hon. Member for Ebbw Vale (Mr. M. Foot) who, whatever else he is, is always a master of the twist. This is a feat which he demonstrates regularly in the House. Government expenditure on the social services has gone up not only in absolute terms, but in far more significant terms. It has gone up as a proportion of the gross national product, which is a much better yardstick of judgment than the absolute terms.
We define the social services altogether as education, child care, school meals, [column 1767]welfare food, the National Health Service, National Insurance, war pensions, National Assistance, family allowances and housing. Taking all these things together, which are all part of the social services and part of the Welfare State, I have to go back, I regret to say, to the year 1946, but for the very good reason that statistics before that year were taken on a different basis. That is the only significance of the starting point.
In 1946, the expenditure on these services amounted to 12 per cent. of the gross national product. In 1951, it amounted to 15.9 per cent. and in 1961 to 17.6 per cent. of the gross national product. I trust, therefore, that we shall have no more of the argument that we are trying to reduce the social services even as a proportion of the gross national product.
Mr. J. Griffiths
I am intrigued to understand why the hon. Lady thinks that she should begin in 1946 and has omitted, curiously enough, what she generally does not omit, 1948. Why take 1946, which was before any action or legislation had been put into effect?
Mrs. Thatcher
For the very simple reason that for the moment I have not got the figures for 1948 with me. I would assume—I should have thought it was a good arithmetical assumption—that the figure for 1948—between 1946 and 1951—was somewhere between 12 per cent. and 15.9 per cent. I would not need to be an academic genius to make that reasonable deduction.
Government expenditure as a whole over the last three years has been taking an increasing proportion of the gross national product. Hon. Members on this side of the House will not take too happily to that. We have not even been reducing Government expenditure since 1957 as a proportion of the gross national product. It is not as if we were trying to take more away from the sections of the community who need it or from those social services which we have been discussing today.
We have gone on from the general social security background to a discussion of National Insurance and the functions of National Assistance. National Insurance is a contributory scheme, as the right hon. Member for Llanelly (Mr. J. Griffiths) is very well aware, and [column 1768]National Assistance depends on a test of means. They are quite different systems and they are operated on quite different bases.
When discussing any new legislation people must always think how best to draft legislation. There are two broad methods. One is to draft it carefully and minutely, trying to account for every sort of circumstance in the actual legislation itself. Where we are dealing with a matter like National Insurance this is the course usually taken. One tries to legislate either by legislation in this House or by regulation for many minutely different circumstances, and then one finds as a question of fact whether individual cases fit those particular circumstances.
This method is not really suited at all to the work of National Assistance because it is far too rigid. Where we come to deal with National Assistance it would seem to me that it is very appropriate that we should have a very wide measure of discretion in order that we may fit in the actual grants with the needs in widely different circumstances. I find it most discouraging when we have Questions on National Insurance and Members ask J. Boyd-Carpentermy right hon. Friend to exercise a discretion which he has not got, and then, when we have a wide measure of discretion, as in National Assistance, people do not like that either.
We have had various strictures about the level of benefit of the National Insurance scheme and various suggestions that it would have been better to have put up the standard rate considerably. This, again, must be considered against the background of the general economic situation and competing claims of other Government Departments. When hon. Members suggest that particular Departmental expenditure should go up, then, with the exception of the hon. Member for Ebbw Vale, they rarely suggest that other Departments should take a cut in their expenditure. If we were to put up the National Insurance benefit rates we should have to consider increasing all the other rates. I am sure that the right hon. Gentleman will agree that we cannot just move National Insurance rates in isolation; we have to move industrial injuries and war pensions proportionately as well.
If we were to put up pensions to £4 a week for a single person and £6 8s. 6d. [column 1769]for a married couple the total cost would be an extra £490 million, of which National Insurance would take £425 million, industrial injuries £25 million, and war pensions nearly £40 million. The cost to the Exchequer out of that sum would be £130 million. That is equivalent to an increase of 4d. in the standard rate of Income Tax. The cost in contributions, taking it over all those who are members of the National Insurance Scheme, would be an extra 7s. a week on the stamp for a man and an extra 6s. a week on the stamp for a woman.
Having given those figures I trust that the House will agree with the hon. Member for Coventry, East (Mr. Crossman) that it would be quite impossible at the moment to increase the pensions and National Insurance rates by that amount. Even if we did, many people who have no title at all to National Insurance benefits would receive no help from any such increase. People say quite glibly that 70 per cent. of the payments made by the National Assistance Board go to supplementing National Insurance benefits——
Mr. Ross
Why “glibly” ? That is what is said in the Report—71 per cent.
Mrs. Thatcher
May I finish the sentence? Perhaps “glibly” is not the word to use. People say that——
Mr. Ross
It is said that——
Mrs. Thatcher
It is true that 70 per cent. of the grants made by the Assistance Board go to supplementing National Insurance benefits. The point I was making is that that leaves 30 per cent. of the people—in fact, the accurate figure is 29 per cent., quite a large number—without any basic provision upon which to fall back. Any increase in the National Insurance benefits coupled with an increase in the others would not touch these people at all.
Who are these other people? There are at the moment about 530,000 on National Assistance with no title to National Insurance benefits. Of these some are old. A large number of them, both men and women, are under retirement pension age. There are over 90,000 non-contributory old age pensioners. There are 122,000 people over retirement age receiving neither retirement pension [column 1770]nor an old age pension. Of women under 60 and men under 65, there are 131,000 sick and disabled not eligible for National Insurance benefit. There are 79,000 women with children to care for. In this group are the deserted wives to whom the hon. Member for Sowerby (Mr. Houghton) referred, the sufferers from the way in which modern men treat their women. An uncivilised way, I think the hon. Gentleman said, and I entirely agree.
There are 13,000 who cannot go out to work because they are needed at home to care for sick or old relatives. There are 3,000 not classified, and there are 92,000 registered at employment exchanges because they are considered fit for work but who, nevertheless, in many cases are handicapped in one way or another. It is to these people that the work of the Assistance Board—and this increase—is mainly directed. In any event, improvements in the pension scales at the moment would have no effect whatever upon those who are on National Assistance and receiving fairly high grants because the one would merely offset the other.
Hon. Members have raised a large number of points about the detail of the Board's work, and I shall try to answer as many as I can. It was a great pleasure to have the right hon. Member for Llanelly taking part in this debate; he has not taken part in any debate on these matters since I have been in my present office. I know that the hon. Member for Kilmarnock (Mr. Ross) is trying to push me out of my office by suggesting that I should “leak” about the Index of Retail Prices, but I shall do my best to confound his efforts. The right hon. Gentleman asked me a question of fact about industrial injuries benefits. He will find a footnote on page 9 of the Board's Report for 1961 pointing out that supplements to those in receipt of industrial injury benefit form only a small part of the supplements given—rather less than 2,000 in each year.
Mr. J. Griffiths
Perhaps I did not make myself clear. I saw that footnote. To have 2,000 people on industrial injury benefit is a very serious matter. Do I gather that these people are in receipt of industrial injury benefit and not disablement benefit?
[column 1771]Mrs. Thatcher
A number of them will be receiving disablement benefit. I am sure that my right hon. Friend has taken to heart, or, at any rate, to head, the right hon. Gentleman's remarks. [Hon. Members: “Head?” ] Both are necessary, and I suggest that the head is, at any rate, as important as the other part of the anatomy.
The hon. Member for Sowerby asked about discretionary grants. There is a note in the Explanatory Memorandum to the White Paper, paragraph 4, saying that
“The other provisions of the present Regulations are left unchanged. The discretionary powers which form an important part of the Regulations will continue to be exercised in any case where special circumstances so require.”
My hon. Friends the Members for Torrington (Mr. P. Browne) and Torquay (Mr. F. M. Bennett) spoke about disregards. It is true that we are not altering the legislation on disregards this time. It would not assist those in the very worst positions merely to increase the disregards. The last time that we dealt with disregards was in 1959. We accept that this time we are having a holding operation to make good the erosion which has occurred since the date of the last increase.
The hon. Member for Fife, West (Mr. W. Hamilton) made a most interesting point, and I was grateful to him for making it. He pointed out indirectly how unwise it can be to make comparison with average earnings. Quite a number of us have been making that comparison today. When making a comparison with average earnings, it is easy to forget that one is comparing a net amount received from the National Assistance Board—a net income—with a gross income, which must have deducted from it payments made for tax and for National Insurance contributions and payments such as fares to and from work, trade union dues, and the like. Basically, therefore, the comparison is not a good one.
Some people in the hon. Member's constituency appear to be at that part of the scale of National Assistance which compares quite well with the earnings that some of them receive. In the work of the Board, we have to apply the wage stop clause in a number of cases when otherwise we would pay more than [column 1772]the average amount that a person would receive if he were at work.
The hon. Member for Sowerby, who is figuring a great deal in my comments today, suggested that we should raise the National Assistance scale rates to 68s. for a single person and to 107s. for a married couple. This would cost an extra £50 million over and above the extra £20½ million for which we are attempting to provide today. This would be a very large figure indeed.
The hon. Member for Feltham (Mr. Hunter) asked for an assurance concerning rent. He will find it on page 18 of the Annual Report, which states that rent is paid in full in 99 per cent. of cases. That leaves 1 per cent. The hon. Member will, however, appreciate that rent cannot be paid irrespective of how high it may be or of whether the accommodation is suitable or alternative accommodation could be obtained for those in need.
The hon. Member for Coventry, East suggested—I admit, in the context in which he spoke—that we should have done everything together, that is to say, National Assistance rates and pension rates moving together. There is an obvious reason why this should not be done which will not have escaped the hon. Member, but may have escaped others. National Assistance is going to those in need and we must try to make good any erosion at rather more frequent intervals than in the case of the National Insurance benefits. The hon. Member will be familiar with the quotation from the Phillips Report, which is not very fashionable in the House, these days, when it pointed out, in paragraph 215, that
“On the whole, the conclusion we have reached is that there cannot be any stereotyped formula for fixing the level of benefit and changes should not be made except at infrequent intervals and unless there are compelling reasons …”
Mr. Crossman
The Phillips Report is not my favourite document, nor do I always have to agree with it. I am not clear why the hon. Lady has read that passage and suggested that erosion—which means denying to people what they have been promised—should be made good only in respect of National Assistance.
If I am an old-age pensioner and the State has promised me a certain standard [column 1773]of living, it seems to me that the State has an obligation to maintain that standard of living to an old-age pensioner, whether on National Assistance or not. Therefore, I should like to know why it is felt that the erosion should be made good at more frequent intervals in the case of National Assistance than in the case of the old-age pension.
Mrs. Thatcher
The hon. Member knows full well that, taking our overall record, we have more than made good the erosion in the standard of living. The point I was making is that a change in National Insurance is a massive administrative operation and one which does not usually occur more often than at two- or three-yearly intervals.
Mr. Crossman
That is what I was complaining of.
Mrs. Thatcher
The trouble is that the hon. Member and I have different favourite documents and doctrines and there is no good in arguing the toss about them. I might just as well go on. If we were to take the advice of eminent economists, coupled with the advice of Michael Footthe hon. Member for Ebbw Vale, we should have a riot and we would have no Army to quell it; and by the time we had finished we should have to call in the Army of British Guiana.
The hon. Member for East Ham, North (Mr. Prentice) referred to the reluctance of people to apply for assistance. As the hon. Member knows, we do our very best to overcome this reluctance, which is due to two quite different reasons. It may be due to ignorance or to pride. We do not think that a great deal of it is due to ignorance; most people are aware of the existence of the Board.
The other reason, which is much more difficult to tackle, is the innate pride which people feel and their unwillingness, quite naturally, to admit that they have come to the last resort. That is, of necessity, something which they must admit if they come to ask for an extra grant based on need. There will always be people in need who have suffered misfortune or who have suffered misfortune or who have been deserted and there will always, therefore, need to be machinery to try to deal with these people. [column 1774]
We do everything that is possible. We make it clear on our posters that people do not even have to go to the office. If we could get that across to people, if they would read what is there to be read, it would be a great help. They have in their mind's eye the idea that they have to go before the old type of Board, which they do not have to do in any way whatever.
Before I finish, may I make a point which the Board consider to be very important? We do not only assess people's needs and give them allowances. The Board does far more constructive and more positive work than that. It tries to visit the people once every six months, if they have extra needs it tries to cater for them and sometimes suggests special allowances to meet them.
I am delighted to be able to tell my hon. Friend the Member for Hertford (Lord Balniel) that it makes a point of putting these people into contact with those who supply other social services, such as those responsible for meals on wheels and the wide variety of other social services which are available to them. The Board also undertakes the positive job of trying to give them back their pride and independence, and to get back into jobs, and even to become taxpayers, those people who are under pension age and who have fallen by the wayside. We have re-establishment centres run by those who deal with the long-term unemployed and who can look after them and find jobs for them.
I trust that the House will not think that the work of the Board lies merely in trying to assess need and paying out allowances. The Board's officers are genuine friends and helpers to those who are in need, and genuinely try to give back their pride and independence to those who have temporarily lost them and try to secure jobs for them. I should like, on behalf of the Board, to thank those hon. Members who have been complimentary about its work, and to ignore the comments of those who have not been so complimentary.
I commend the Regulations to the House happy in the knowledge that every penny will go to those who really need this extra money and that it will [column 1775]be of some help to them in the coming months.
Question put and agreed to.
Resolved,
That the National Assistance (Determination of Need) Amendment Regulations 1962, dated 30th June 1962, a draft of which was laid before this House on 3rd July, be approved.