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1964 Nov 20 Fr
Margaret Thatcher

HC S Statement [Pensions and Benefits (Improvements)]

Document type: speeches
Document kind: House of Commons Speech
Venue: House of Commons
Source: Hansard HC [702/769-76]
Journalist: -
Editorial comments: MT spoke at cc772-73, c1115. For better understanding the whole statement has been included. A table of the pension and benefit changes can be found at cc775-76 (not included here).
Importance ranking: Minor
Word count: 2295
Themes: Family, Social security & welfare



The Minister of Pensions and National Insurance (Miss Margaret Herbison)

I should like, with permission, to make a statement about improvements in National Insurance and industrial injuries benefits, National Assistance and war pensions.

I have already presented the Bill to increase benefits and contributions under the National Insurance and Industrial Injuries Schemes which my right hon. Friend the Chancellor of the Exchequer foreshadowed in his Budget statement. Today, an explanatory White Paper and a Report by the Government Actuary are being published and will be available in the Vote Office. The Government Actuary's review of the operation of the National Insurance Scheme over the last quinquennium, which he is required to make under Section 39 of the National Insurance Act 1946, has also been laid before the House. Under the same Act I am required to make a parallel review of rates of benefit, and my Report is included in the White Paper on the Bill.

As my right hon. Friend told the House, it is proposed to increase the standard rate of National Insurance benefits by 12s. 6d. for a single person to £4 a week and by £1 1s. for a married couple to £6 10s. a week. Allowances for children under the National Insurance scheme will go up by 2s. 6d. a week. Taken together, these increases mean that the weekly rate of benefit for a man and wife with two children, including family allowances, will [column 770]be £8 15s. It is proposed in the Bill to abolish the earnings rule for widow beneficiaries under the scheme. Widowed mothers' allowance and widows' pension will also be raised to £4 a week and the allowance for widows' children will be increased to £2 a week, including family allowances, for each child. The benefit payable to a widow with three children, including the increases for these children and her family allowances, will now be £10 a week.

Parallel improvements will be made in the remaining National Insurance benefits. The Bill also proposes to merge the home confinement grant with the maternity grant usually paid to all mothers and to set the combined grant, payable for each birth to all mothers, at £22. The increase in the 10s. widow's pension which we are making is not included in the Bill, but will be achieved through regulations.

The industrial injuries provisions in the Bill will include the increase of £1 in the 100 per cent. rate of disablement benefit, of which my right hon. Friend has told the House. A married man receiving injury benefit will get £9 5s. a week under the Bill, instead of the present £7 16s. 6d. and the widow's pension rate of £3 15s. will be raised to £4 10s. Improvements in line with these will be made in the allowances for disablement resulting from employment before July, 1948, payable to workmen's compensation and other “old cases” .

The higher insurance benefits will, of course, entail a corresponding rise in contributions. The Class 1 insurance stamp for a man will go up by 5s. 3d. a week, of which the employee will pay 2s. and his employer 3s. 3d. This increase will apply both to men who are liable for contributions to the graduated scheme and to those who have been contracted out. There will be no change in the graduated contributions themselves. The contributions for employed women will go up by 1s. 9d. for the employee and 2s. 10d. for the employer. Corresponding changes will be made in the juvenile and other contribution rates; a self-employed man, for example, will pay an extra 2s. 6d. a week and a self-employed woman 2s. 2d.

The cost of the improved National Insurance and industrial injuries benefits will be £271 million and £14 million respectively in the first full year. [column 771]

Now, about National Assistance. I have received the Board's proposals for further increases in the rates of National Assistance and I shall shortly be making draft regulations, which will then require the approval of both Houses of Parliament by affirmative Resolution. The Board's main proposals, as already announced, are for an increase of 12s. 6d. a week in the rate for a single householder and of £1 1s. a week for a married couple, bringing the householder rates to £3 16s. and £5s. 6d. An allowance for rent is, of course, added to these amounts.

I now come to war pensions, which are a matter for the Royal Warrant for the Army and corresponding instruments for the Royal Navy and the Royal Air Force. War pensioners generally—and there are about 650,000 of them—will, of course, share in the improved benefits under the National Insurance schemes. But they can qualify for further benefits, on well-established and generally accepted principles, because they are disabled or bereaved by service. The basic rate of pension for 100 per cent. disablement will be increased from £5 15s. to £6 15s.

The standard rate of war widow's pension will be increased from £4 10s. to £5 5s. and there will be an increase in the maximum rent allowance payable to war widows with children and in the allowances for the children themselves and for war orphans. There will also be increases in the allowances for constant attendance, for unemployability and for lowered standard of occupation. I will, with permission, circulate a list of the principal changes in the Official Report. The additional cost for war pensions is of the order of £15 million a year.

Finally, I come to the timetable. As the House well knows, this is a tremendous and complex task, involving changes in many millions of payments. We have examined urgently and exhaustively all the possibilities of speeding up the administrative arrangements, and we have come to the conclusion that with the existing machinery it is humanly impossible to bring the new rates of pensions and other main benefits into payment before the week beginning 29th March. Only with unemployment, sick[column 772]ness, maternity and injury benefits is any greater speed possible, and if the Bill is passed into law before the House rises for the Christmas Recess the new rates of these benefits will come into force in the week beginning 25th January. Associated war pension benefits such as the unemployability supplement, would also be increased at the earlier date.

I also propose to abolish the earnings rule for widows' benefits as soon as possible after Royal Assent.

Mrs. Thatcher

This is a very long statement which we shall need to examine with considerable care. I should like to ask the right hon. Lady one or two questions. We are all pleased that she has managed to bring forward the increases in the short-term benefits to 25th January, but I should like to ask her a question about the allowances for children.

When we increased the pensions by 10s. for a single person and 16s. 6d. for a married couple, the allowance for children was then increased by 2s. 6d. and the allowance to children of widows by 5s. We therefore expected that when the single rate of the retirement pension was increased there would be a bigger increase than 2s. 6d. in respect of children.

Is the right hon. Lady aware that the present proposals tip the scale against the family man in favour of the single person and the retired married couple and that we are somewhat disappointed that the allowance for the children of widowed mothers—mothers who have never been able to go out to work—is not increased by more than 2s. 6d.

As for the maternity benefits, will the right hon. Lady confirm that the mother who is confined at home will now receive exactly the same under her proposals, that is, £22, as she would have received under the old proposals, made up of £16 maternity grant and £6 home confinement grant? Has the right hon. Lady received an assurance from K. Robinsonthe Minister of Health that the new arrangements will not lead to increased pressure on maternity beds?

We shall need to examine the right hon. Lady's provisions for war pensions with considerable care to see that the preferential rates are maintained. Has the right hon. Lady received recommendations yet from the Committee on the Assessment of Disablement set up by my right hon. Friend the Member [column 773]for Bridlington (Mr. Wood) on 22nd June last year? If so, will these recommendations be incorporated in the changes?

Finally, if we succeed in obtaining the Royal Assent before Christmas, through the co-operation of both sides of the House, does the right hon. Lady expect that the widow's earnings rule will be abolished by Christmas?

Miss Herbison

I take first the point about the increase of 2s. 6d. for children. In view of the other increases and the special arrangements which were made only this year for the widowed mother by the hon. Lady's own Government, we felt that, taking all the increases together, no injustice was being done to anyone by our proposals.

The hon. Lady is quite correct about the confinement grant. The mother who has her child at home receives at present £22, but the hon. Lady will be aware of the very strong pressure from many hon. Members, and particularly from my right hon. Friend now the Minister of Overseas Development, to ensure that those women who were in hospital for perhaps only 48 hours and had to go home and had all the expenses of a mother at home did not lose the £6. It seemed to us that the just thing to do was to give all these mothers the £22. I have been in touch with my right hon. Friends the Minister of Health and the Secretary of State for Scotland and they agree, looking at the matter from all points of view and not only the point made by the hon. Lady, that this is the correct thing to do.

We have not yet received the recommendations from the Committee set up to go into assessments, but immediately the report is brought to us we shall certainly be ready to take action on it. As for the abolition of the widow's earnings rule, if we get the Bill through before the Christmas Recess we hope that by Christmas the rule would be abolished.

Mr. A. E. Hunter

May I congratulate my right hon. Friend on bringing the date forward to 25th January? Is she aware that this will bring great satisfaction not only to hon. Members but to many people outside the House?

Sir K. Joseph

Will the right hon. Lady recognise that while she has brought forward the short-term benefits which my [column 774]hon. Friend the Member for Finchley (Mrs. Thatcher) urged her to do, she has not succeeded, because of the recognised administrative difficulties, in bringing forward the long-term retirement increased benefits? Will she recognise that it would be possible for her, in co-operation with the National Assistance Board, to increase Assistance scales in a matter of a few weeks? We succeeded in doing it in eight weeks in 1955–56.

Will the right hon. Lady accept that if, on the excuse of administrative difficulties which apply to pensions but do not apply to National Assistance scales, she persists in delaying the increase in Assistance scales until 29th March, instead of making it effective from the end of January, she will be depriving the most needy of all pensioners of eight weekly increases which will far more than offset in the case of married couples the Christmas bonus which she has announced?

Miss Herbison

I confirm that 25th January is the date for short-term benefits and that for pensioners the date is still 29th March. The right hon. Gentleman will have noted that I shall very soon be laying regulations on behalf of the National Assistance Board. The £4 lumpsum payment, which he spoke of as being given to the neediest pensioners, covers the vast majority of, if not all, old people receiving Assistance, and it covers quite a number of weeks of the increase. Because we were so anxious to get something to old people in time for Christmas, we have put a heavy load on the National Assistance Board at a very busy time. The other matters we are now examining urgently, and I ask the right hon. Gentleman to await publication of the draft regulations.

Mr. Orme

My right hon. Friend has stated that 29th March is the earliest possible date for paying the retirement pension increases. Is she still considering other suggestions which have been made in the House to meet this situation, taking into account retrospection, and so forth?

Miss Herbison

I assure my hon. Friend that, ever since I found that, because of administrative difficulties, it was impossible to pay the pension increases before 29th March, I have been giving the most serious consideration to other [column 775]ways of trying to mitigate the hardship, particularly for old people. I am still very busy with this consideration.

Sir Knox Cunningham

Is there any provision made for a higher rate of payment of old-age pension to those over 75? Will the Minister use all the pressure she can to see that, by whatever means is possible—certain ways have been suggested by my right hon. Friend—payments are made to old-age pensioners before March of next year?

Miss Herbison

As regards special payments for those over 75 years of age, I know that it was said in the Tory election manifesto that something special should be done for these older people. We are making no provision in the Bill for that contingency. A former Minister made [column 776]quite clear, from his point of view, that it would not be a good thing to do.

People over 70 or over 75 do not form a homogenous class. There may be those over 75 who are very strong and healthy, while, on the other hand, there may be those under 75 who are weak and ill. It seemed to us that the much better course was to give the biggest pension increase ever since the last one given by a Labour Government to ensure that over-75s and under-75s shared in the rising national prosperity.

Several Hon. Members


Mr. Deputy-Speaker (Dr. Horace King)

Order. We cannot debate this now. Opportunities will be afforded for debating all the issues which arise out of the statement.