Amendments of Supplementary Benefits Act 1976

Part of Orders of the Day — Social Security Bill – in the House of Commons at 6:45 pm on 19 March 1980.

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Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry 6:45, 19 March 1980

The right hon. Member for Salford, West (Mr. Orme) correctly said that we debated all the issues covered by these amendments in Committee. Nevertheless, they are important. Although I do not want to detain the House too long, an explanation is due on each of the three main subjects covered in the right hon. Gentleman's speech.

I will, first of all, speak to amendments Nos. 37 and 53 which deal with what has been described as the "NCIP trap"—NCIP being the non-contributory invalidity pension. Perhaps the group for whom the problem is most acute is the 16-yearolds who receive this pension. It presents a worrying problem for parents who are trying to decide what is best for their children. Because the rate of the NCIP is higher than the ordinary rate of supplementary benefit for young people of that age, they cannot qualify for supplementary benefit unless they suffer a loss of income. If they accept that loss of income and claim supplementary benefit, in order to qualify for higher, long-term rates, they have to accept the lower income level for two years. Under the revised scheme the waiting period for the long-term rates will be reduced from two years to one year, but this does not remove the anomaly.

In Committee I explained that we had been studying this problem, and I am pleased to tell the House that, from the introduction of the new supplementary benefits scheme in November of this year, it will be possible for young sick and disabled people aged 16 to 17 years to qualify for supplementary benefit at the long-term rate after one year of being in receipt of a NCIP. No amendment is needed for this purpose. The change will be provided for in the regulations to be made under the Bill.

Naturally, I recognise that that does not remove the anomaly altogether. But it is the only practical change I am able to announce within existing constraints and I hope that it will remove at least part of the worrying aspect of this problem. The cost of the change will be about £500,000 in a full year. It is a modest amount, which we can cover within the overall nil-cost supplementary benefit package.

I turn to the group of amendments dealing with the long-term unemployed. A great deal of support has been expressed outside the House, and on both sides of the House, for extending to the unemployed the long-term rates of supplementary benefit. But I must repeat the reply that I have given, and make the obvious point that government is about priorities.

The cost of providing what the Opposition have asked for would be about £65 million in a year. Even if we were to make it available after 15 months, which is suggested in amendments Nos. 35 and 36, it would still cost £50 million in a year. To pay unemployment benefit at the higher long-term rate to those who had been continuously unemployed for a year or more could cost substantially more.

Our priorities are different. I think that the House recognises that. Labour hon. Members have been prepared to accept our priorities, at least to the extent that they deliberately shift more of the payments of supplementary benefit towards larger families. I have had to state the obvious several times—that the Opposition cannot make a priority of everything at the same time. For precisely the same reason, the Labour Government, too, did not extend the higher rate to the long-term unemployed. The right hon. Member for Salford, West said just now that they did not get around to it. I do not think that they would have got around to it by now if they had been in office.

The right hon. Gentleman said that it was refreshing to hear a Conservative hon. Member say last night that this reform should be made. I think that we all agree that we should like to see it made, but I repeat what I said in Committee. I do not argue against the amendment in principle; I argue against it simply because of what it would cost. It is not compatible with the nil-cost package that is the basis of the scheme.