15 D O C U M E N T 13 T H E P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S
C . ( 6 5 ) 1 7 6
9th D e c e m b e r ,
GOVERNMENT)
C O P Y NO.
66
1965
CABINET
P R O P O S A L S F O R R E S H A P I N G NATIONAL, A S S I S T A N C E
M e m o r a n d u m b y t h e M i n i s t e r of P e n s i o n s and. N a t i o n a l I n s u r a n c e
A t t h e i r m e e t i n g on 29th J u l y ( C . C . ( 6 5 ) 4 3 r d C o n c l u s i o n s ,
M i n u t e 3) t h e C a b i n e t a g r e e d t h a t , f o l l o w i n g t h e d e f e r m e n t of I n c o m e
G u a r a n t e e , I should p r e p a r e f o r c o n s i d e r a t i o n by the S o c i a l S e r v i c e s
C o m m i t t e e a s c h e m e f o r r e m o d e l l i n g National A s s i s t a n c e so a s to
i n c o r p o r a t e i n i t a s m a n y f e a t u r e s a s p o s s i b l e of t h e G u a r a n t e e .
2.
It i s a b u n d a n t l y c l e a r f r o m t h e a l l o c a t i o n m a d e t o m y D e p a r t m e n t
that-for the next few y e a r s we shall be p r e c l u d e d f r o m making any l a r g e
s c a l e a d v a n c e s in s o c i a l s e c u r i t y g e n e r a l l y .
T h i s s t r e n g t h e n s rny c o n­
v i c t i o n t h a t if w e a r e c o n c e r n e d a b o u t s o c i a l p r i o r i t i e s w e m u s t d e v i s e
s o m e m e a n s w i t h i n t h e s t r i n g e n c y of f u n d s a l l o c a t e d t o i m p r o v e t h e l o t
of t h e m o s t d e p r i v e d of o u r p e o p l e - t h o s e i n r e c e i p t of N a t i o n a l
A s s i s t a n c e and t h o s e w h o c o u l d h a v e i t b u t f o r o n e r e a s o n o r a n o t h e r
will not apply for it.
I h a v e now w o r k e d out p r o p o s a l s which I b e l i e v e
will go a long w a y to m a k e s u p p l e m e n t a r y p a y m e n t s m o r e a t t r a c t i v e
and m o r e a c c e p t a b l e .
T h e y h a v e t h e g r e a t m e r i t of e n a b l i n g u s t o
c u r t a i l the detailed e n q u i r i e s which a r e so w i d e l y r e s e n t e d by people
i n n e e d a n d t h e y r e m o v e m a n y of t h e o t h e r l e s s d e s i r a b l e f e a t u r e s of
N a t i o n a l A s s i s t a n c e w h i c h l e d u s t o t h i n k of a n I n c o m e G u a r a n t e e i n t h e
first place.
I n d e e d t h e s c h e m e c o n t a i n s m o s t of t h e f e a t u r e s of o u r
e a r l i e r p r o p o s a l s f o r an Income G u a r a n t e e .
Subject to bringing the
p r o p o s a l s within the public e x p e n d i t u r e a l l o c a t e d to m e , they h a v e b e e n
a p p r o v e d in p r i n c i p l e by the Social S e r v i c e s C o m m i t t e e who c o n s i d e r e d
m y m e m o r a n d u m S. S . ( 6 5 ) 31 on 1 7 t h N o v e m b e r ( S . 3 . ( 6 5 ) 1 7 t h M e e t i n g ,
Minute 2) which e x p l a i n e d m y p r o p o s a l s in d e t a i l .
3,
T h e m a i n f e a t u r e s of m y s c h e m e a r e a s f o l l o w s : ­
(a)
t h e r e - n a r n i n g of n a t i o n a l a s s i s t a n c e ;
( b )
the t r a n s f e r to the M i n i s t e r f r o m the ( r e n a m e d ) National
A s s i s t a n c e B o a r d of t h e p o w e r t o i n i t i a t e c h a n g e s i n t h e
National A s s i s t a n c e regulations.
I a m pursuing separately
m o r e f u n d a m e n t a l c h a n g e s i n t h e o r g a n i s a t i o n of t h e M i n i s t r y
of P e n s i o n s a n d N a t i o n a l I n s u r a n c e a n d t h e N a t i o n a l
A s s i s t a n c e B o a r d v/ithin a M i n i s t r y of S o c i a l S e c u r i t y ;
( c )
the p r o v i s i o n f o r p e o p l e o v e r p e n s i o n a g e and o t h e r l o n g - t e r m
c a s e s , of a s t a n d a r d a l l o w a n c e of 7 s . 6 d . a w e e k in p a r t i a l
substitution for small d i s c r e t i o n a r y additions;
-1­
fj
(d)
.J
t h e r e p l a c e m e n t of t h e e x i s t i n g v a r i a b l e r e n t a l l o w a n c e f o r n o n ­
h o u s e h o l d e r s b y a s t a n d a r d r e n t a l l o w a n c e of 1 0 s . a w e e k ;
(e)
t h e r a t i o n a l i s a t i o n a n d m o d e r n i s a t i o n of d i s r e g a r d s ;
(f)
c o m b i n e d o r d e r b o o k s f o r r e t i r e m e n t p e n s i o n s and n o n ­
contributory benefits as soon a s p r a c t i c a b l e ; (g)
an option f o r c l a i m a n t s o v e r p e n s i o n age to be i n t e r v i e w e d at
h o m e o r t o s u b m i t a w r i t t e n s t a t e m e n t , t o be f o l l o w e d b y a n
i n t e r v i e w which could be at a d e p a r t m e n t a l office;
(h)
t h e r e n e w a l of c l a i m s f o r e l d e r l y a n d o t h e r l o n g - t e r m c a s e s
c o v e r e d b y (b) t o b e p u t on a n a n n u a l b a s i s , w i t h s m a l l i n t e r i m
c h a n g e s of c i r c u m s t a n c e s i g n o r e d ;
(i)
new a r r a n g e m e n t s f o r f o l l o w i n g - u p p e n s i o n e r s who do not c l a i m
n o n - c o n t r i b u t o r y b e n e f i t and do not i n d i c a t e t h e y do n o t w a n t
it.
F o r r e a s o n s mentioned l a t e r , I a m convinced that these p r o p o s a l s
should be brought into effect a s soon a s p o s s i b l e , which would b e , f o r
t h e m o s t p a r t , i n t h e a u t u m n of 1 9 6 6 , w h e n I e x p e c t t h a t a n o r m a l
i n c r e a s e in National A s s i s t a n c e scale r a t e s will be n e c e s s a r y .
A Bill
w o u l d be n e c e s s a r y t o g i v e e f f e c t t o t h e p r o p o s a l s a t ( a ) , ( b ) , ( c ) a n d (f)
above.
A p l a c e h a s b e e n r e s e r v e d in the l e g i s l a t i v e p r o g r a m m e f o r a
M i n i s t r y of S o c i a l S e c u r i t y B i l l .
4.
There a r e also particular reasons why a decision is urgent.
In
t h e e a r l y m o n t h s of t h e N e w Y e a r w e m u s t p u b l i s h t h e r e s u l t s of t h e
r e c e n t s u r v e y of r e t i r e m e n t p e n s i o n e r s , w h i c h c o n f i r m s t h a t t h e r e a r e
m a n y p e n s i o n e r s eligible f o r A s s i s t a n c e but not r e c e i v i n g it.
We must
ad s o f a c e a f r e s h P r i v a t e M e m b e r ' s B i l l d e s i g n e d t o p r o v i d e r e t i r e m e n t
pensions for people at p r e s e n t ineligible for them.
In o r d e r t o s e t t l e
how t h e s e i s s u e s should be handled in P a r l i a m e n t , we m u s t know within
the n e x t few w e e k s w h a t m o r e w e a r e p r e p a r e d to do to m a k e National
A s s i s t a n c e m o r e a c c e p t a b l e t o t h e m i n o r i t y of o l d p e o p l e w h o , t h o u g h
eligible, do not c l a i m it.
M y colleagues will r e m e m b e r how h e a v i l y
v/e r e l i e d on w h a t v/e t h o u g h t a t t h e t i m e t o b e t h e e a r l y p r o s p e c t of
Income G u a r a n t e e in dealing with M r . A i r e y N e a v e ' s Bill l a s t S e s s i o n .
5.
In m y b a s i c p r o g r a m m e s o m e p r o v i s i o n h a s a l r e a d y b e e n m a d e
f o r a m e a s u r e of s u c c e s s i n t h e c u r r e n t p u b l i c i t y c a m p a i g n t o c o m b a t
r e l u c t a n c e to apply f o r National A s s i s t a n c e .
After allowing for this
p r o v i s i o n , t h e a d d i t i o n a l c o s t of m y p r e s e n t p r o p o s a l s i3 u n l i k e l y t o
e x c e e d £32 m i l l i o n in the f i r s t full y e a r o r to r e a c h £40 m i l l i o n
thereafter.
G n t h e b a s i s of d e c i s i o n s s o f a r t a k e n , I s t i l l h a v e £18
m i l l i o n i n h a n d f r o m m y a l l o c a t i o n of p u b l i c e x p e n d i t u r e f o r 1 9 6 9 - 7 0 .
T h e e x t r a c o s t of m y p r e s e n t p r o p o s a l s i n t h a t y e a r i s e s t i m a t e d a t
£38 m i l l i o n .
I a m t h u s l e f t w i t h t h e p r o b l e m of f i n d i n g s a v i n g s i n m y
b a s i c p r o g r a m m e t o t h e t u n e of s o m e £ 2 0 m i l l i o n i n 1 9 6 9 - 7 0 .
I under­
s t a n d t h a t t h e C h a n c e l l o r of t h e E x c h e q u e r a c c e p t s t h a t , w i t h s u c h
s a v i n g s , the e x t r a c o s t could be a c c o m m o d a t e d w i t h i n m y public
e x p e n d i t u r e l i m i t s f o r the i n t e r v e n i n g y e a r s a s w e l l .
6,
I r e g a r d the need to m o d e r n i s e and i m p r o v e National A s s i s t a n c e
a s s o u r g e n t and so i m p o r t a n t that I w o u l d be p r e p a r e d t o a c h i e v e such
a saving.
A s a m a t t e r of s o c i a l p r i o r i t i e s , I t h i n k i t w o u l d b e
-2CONFIDENTIAL
"V, M tCI T\V2 K I T I A. I
j u s t i f i a b l e t o a c h i e v e i t b y i n c r e a s i n g b e n e f i t s g e n e r a l l y on t h e n e x t
o c c a s i o n - i n 1 9 6 7 - b y s o m e w h a t l e s s t h a n w o u l d b e s t r i c t l y c o r r e c t if w e
w e r e fully reflecting the r i s e in e a r n i n g s since the l a s t g e n e r a l
increase.
( S i n c e t h e e x t r a c o s t of m y A s s i s t a n c e p r o p o s a l s w o u l d b e
a p e r m a n e n t a d d i t i o n , t h e a m o u n t w i t h h e l d i n 1 9 6 7 c o u l d n o t be r e s t o r e d
later.)
It i s , of c o u r s e , i m p o s s i b l e t o p r e d i c t w i t h c o m p l e t e a c c u r a c y
w h a t t h a t r i s e w o u l d t u r n out t o b e a n d h e n c e t h e i n c r e a s e in r a t e s w h i c h
v/e c o u l d a f f o r d t o g i v e a n d s t i l l s 3.V6 SOITIG ic 2 0 m i l l i o n i n 1 9 6 9 - 7 0 .
I
can, h o w e v e r , give m y colleagues a broad indication.
7.
The b e s t g u e s s w e can m a k e s u g g e s t s that by m i d - 1 9 6 7 a s t r i c t
a n d c o m p l e t e r e f l e c t i o n of t h e r i s e i n e a r n i n g s , i n m o n e y t e r m s , w o u l d
j u s t i f y a n i n c r e a s e of s o m e 1 2 c . a w e e k i n t h e s t a n d a r d r a t e of n a t i o n a l
i n s u r a n c e p e n s i o n f o r a single p e r s o n , with c o r r e s p o n d i n g i n c r e a s e s in
other rates.
If i n s t e a d of g i v i n g t h e f u l l i n c r e a s e v/e g a v e I s . l e s s ( o r
the equivalent) a l l r o u n d , including A s s i s t a n c e and W a r P e n s i o n s , t h i s
would s a v e about £25 m i l l i o n in 1 9 6 9 - 7 0 .
S i n c e the i n c r e a s e s in the
m a i n r a t e s of b e n e f i t w o u l d h a v e t o b e r o u n d e d off a t l e a s t t o t h e n e a r e s t
6 d . , t h e a d j u s t m e n t i s i n p r a c t i c e u n l i k e l y t o t u r n out e x a c t l y a t I s . a
w e e k and m i g h t n e e d t o be a l i t t l e h i g h e r in o r d e r t o e n s u r e a s u f f i c i e n t l y
l a r g e total saving.
8.
I a s k the Cabinet ­
(l)
to e n d o r s e m y p r o p o s a l s for remodelling A s s i s t a n c e with effect,
g e n e r a l l y s p e a k i n g , f r o m n e x t a u t u m n ; and
( 2 )
to a g r e e that, to the extent n e c e s s a r y to a c c o m m o d a t e t h e i r
c o s t w i t h i n m y p r o g r a m m e l i m i t f o r 1 9 6 9 - 7 0 , t h e a m o u n t of
the g e n e r a l b e n e f i t i n c r e a s e in 1 9 6 7 should be s o m e w h a t l e s s
t h a n w o u l d b e j u s t i f i e d b y a n e x a c t a n d c o m p l e t e r e f l e c t i o n of
the r i s e in e a r n i n g s since the l a s t g e n e r a l i n c r e a s e .
M.H.
M i n i s t r y of P e n s i o n s a n d N a t i o n a l I n s u r a n c e , W . C . 2 .
9th D e c e m b e r ,
1965
r; w; .!::;-.;-;'..AJ..