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Benefits

Volume 984: debated on Tuesday 6 May 1980

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asked the Secretary of State for Social Services (1) what legislation since 1945, or any earlier date for which information is available, has resulted in a cut in the value of national insurance benefits;(2) what legislation since 1945, or any earlier date for which information is available, has resulted in a cut in the value of cash benefits for disabled people.

The right hon. Gentleman no doubt has in mind in particular clause 1 of the Social Security (No. 2) Bill which allows certain non-taxable benefits to be uprated by less than the amount necessary to restore their real value at the next uprating—as an interim measure pending their being made taxable. There are no precise precedents. Benefit upratings have fallen short of the amount required to restore the full value of some or all of the main benefits in a number of years. On some occasions, particular benefits were not increased at all.

asked the Secretary of State for Social Services (1) what is his estimate of the gross increase in unemployment pay and any consequent reduction in supplementary benefit in 1981–82 as a result of clause 3 of the Social Security (No. 2) Bill;(2) what is his estimate of the gross savings in sickness, invalidity and equivalent incapacity benefits and the consequent increase in supplementary benefit payable in 1981–82 as a result of clause 3 of the Social Security (No. 2) Bill.

This is a difficult area in which to estimate the effect of changes and further statistical analyses are in progress. The current estimate of the effects on the national insurance fund in 1981–82 is that expenditure on sickness and invalidity benefits will be reduced by up to £60 million, and expenditure on unemployment benefit will be increased by up to £40 million. The saving in supplementary benefit may be of the order of £20 million. It is estimated that there will be an increase in expenditure on supplementary benefit for incapacity, but a somewhat larger decrease in expenditure on supplementary benefit to the unemployed.