Benefit reform

Use of means-tested assistance

There was increasing pressure within the Conservative Party to move further towards a selective approach to the allocation of payments and the use of means-tested assistance. In 1962, the new Minister of Pensions and National Insurance, Niall MacPherson, warned of the possible political consequences of shifting to social security through means-tested benefit, or even introducing a differential system to meet the needs of the poorest. The arguments were revisited shortly before the Conservatives lost the election in 1964. The Cabinet was unwilling to move radically in favour of means-tested assistance. It did agree, however, to increased National Assistance payments for the over-75s and long-term claimants, particularly the chronically ill.

Labour reform and supplementary benefits

Following its election in 1964, Harold Wilson's Labour government introduced wage-related unemployment and sickness benefit. However, the government did acknowledge that it would be years before improved pensions would cancel out the need for National Assistance. The immediate objective was to de-stigmatise National Assistance and to make the process automatic, leaving only difficult cases for detailed assessment by the National Assistance Board.

Wilson's Labour Party promised subsistence 'income guarantee' for pensioners. This was to be a flat amount, which would not be means tested. This soon turned out to be impractical and increasingly unaffordable in the worsening economic conditions of the mid-1960s. Labour's response was the Supplementary Benefits Scheme, which created the Supplementary Benefits Commission from the National Assistance Board. This was merged with the Ministry of Pensions and National Assistance to form the new Ministry of Social Security. The topping-up of pensions and other benefits with national assistance now became a right. These measures were incorporated into the Ministry of Social Security Act of 1966.