I move: "That the Bill be now read a Second Time."
In the four years since this Government came into office, Ireland has changed dramatically for the better. Unemployment has been cut to one of the lowest levels in Europe, taxes have been slashed so that our people keep much more of their hard earned money and we have put in place a framework for a lasting peace in Northern Ireland.
We have turned around our social welfare system from one that simply compensates people for economic failure to one that helps people to help themselves. The Government has massively increased spending on social welfare from £4.5 billion in 1997 to more than £6 billion in 2001 – an increase of more than one third in just four years.
Pension rates for our older people have been increased dramatically over the period. When we took up office in 1997, the old age (contributory) pension stood at £78 per week. We promised to raise it to £100 by 2002. We have more than delivered on that target as the Bill before the House provides for a pension rate of £106 today. We also promised to raise all social welfare pensions for older people to £100 per week by 2002. We are well on the way to delivering that target with the old age (non-contributory) pension rate of £95.50 provided for in this Bill.
Under the previous Government, pension rates were allowed to fall back compared to average earnings. We put at end to that. When we came into office, the old age (contributory) pension stood at only 27.5% of average industrial earnings. We have increased that in each year to 31% in 2001, which is in line to reach the National Pensions Policy Initiative target of 34%.
The level of child benefit will be more than doubled from only £30 per month in 1997, for the first two children, to £67.50 as set out in the Bill for 2001. We have promised that we will increase it further next year to more than £20 per week, which represents a threefold increase in the rate of payment over our term in office.
The number of carers in receipt of a carers' allowance or benefit has almost doubled from 9,000 in 1997 to 17, 000 today. We have extended maternity and adoptive leave so that a mother can now take up to 26 weeks leave on the birth of a child, including 18 weeks paid leave. The Bill provides for the social welfare aspects of this important move. This improvement will come into force for women going on maternity leave on or after the 8 March next, which is International Women's Day.
Because of our success in creating more than 300,000 new jobs and of getting people back to work, the live register has fallen more rapidly than anyone could have expected, with a reduction of more than 110,000 people. We now have one of the lowest unemployment rates in Europe. There is more good news to come today from the quarterly national household survey.
In 1997, we spent almost one pound in every four of total social welfare expenditure on employment and unemployment supports. Today, that is down to one pound in every seven. Whereas in 1997 most of that money was spent paying people to do nothing, more than 30% of current employment and unemployment spending goes to help people back to work and back to education.
Not alone has unemployment fallen rapidly, but the overall number of people of working age who are dependent on welfare has also declined as a result of our policies. In 1997, one in every four people of working age was dependent on welfare. Today, despite the rapid growth in our economy and our population, that figure is down to less than one in every five.
Because we have increased real spending and allowed many people of working age to be more independent of the welfare system, we have been able to increase spending significantly in key areas such as old age and retirement pensions, child support, carers and people with disabilities.
This Bill gives effect to the biggest ever increases in social welfare rates of payment and to a wide range of other improvements announced in Budget 2001. It addresses commitments set out in the Government's An Action Programme for the Millennium aimed at building an inclusive society, improves the living standards of people on social welfare and fulfils our commitments under the Programme for Prosperity and Fairness.
The £850 million package provided by the Government in Budget 2001 for social welfare improvements is more than twice the size of last year's social welfare package and four times more than that delivered by the previous Government in its last budget in 1997. With increases ranging from 10% to 18%, people dependent on social welfare will see significant real increases in their incomes this year. The historic increases in child benefit represent the most concerted effort in the history of the State to tackle child poverty.
I now wish to outline the provisions of the Bill and I will refer to a number of its key provisions. The Government's commitment to addressing the needs of the elderly both now and in the longer term is beyond question. It recognises the tremendous contribution the present generation of pensioners has made to the social and economic development of the State. In so doing they had to endure great hardship and make great sacrifices for which we owe them a great deal of gratitude. The increases provided for in sections 4 and 5 more than deliver on our commitments. In our period in government we have given pensioners increases of £5, £6, £7 and £10 per week compared to the insulting increases of between £1.50 and £3 given by the Rainbow Coalition.
The Bill provides for a special increase in the rate of widow's and widower's contributory pen sion and deserted wife's benefit for those aged over 66 years. This increase of £12.90 per week will bring the new rate to £102 per week and is a first step in bringing the rate into line with old age contributory pension. The Bill also introduces a special allowance of £10 per week for pensioners who reside on islands off the coast.
The Government is committed to substantial increases in other social welfare payments. The Programme for Prosperity and Fairness provides that "substantial progress will be made over the period of this Programme towards a target of £100 per week for the lowest rates of social welfare". The personal rates of social welfare payments, other than those for older people, are being increased by £8 per week. This represents an increase of almost 10% and means that we are in line not only to make substantial progress, but to fully reach the £100 target. We are fully meeting our commitments under the PPF. I am delighted to say that the increases in the weekly payments will be paid from the first week in April and coincide with the implementation of the income tax changes.
In recent years we have introduced a range of measures to make it easier for those, particularly women, who have taken time out for family reasons to qualify for old age pension. Work is continuing towards introducing a greater degree of flexibility in the qualifying conditions to improve the position of women. I am introducing special improvements to assist women at pension age and who may not benefit from these improvements. The Government has decided that the allowance for qualified adults over the age of 66 years should be increased in this and future budgets to the full old age non-contributory pension rate.
As a first step towards this goal, I am providing in the Bill for special increases of £15 per week in the allowances payable to qualified adults over the age of 66 years whose spouses-partners are receiving a contributory pension with proportionate increases for those on reduced rates. In other words, a couple, each of whom is over the age of 66 years, in receipt of old age contributory pension and qualified adult allowance will get an extra £25 per week from this April.
Increases ranging between £7 and £9 per week are also being provided in the rate of qualified adult allowances payable to those under the age of 66 years as a further step in increasing these allowances to 70% of the main rate. The increase in qualified adult allowance payable with old age non-contributory pension is £9 per week with proportionate increases for those on reduced rates.
Child benefit is a universal payment made directly to families. As such it is the most efficient and effective way in which the Government can channel help to children. Before we took office expenditure on child benefit was £397 million annually. The increases announced in budget 2001, provided for in section 6 of the Bill, bring investment in 2001 to £761 million, almost double the 1997 figure. The monthly rate for the first two children is being increased by £25 per month and the monthly rate for the third and subsequent child by £30 per month. These increases are greater than the sum of all increases provided in the past six budgets. The increases of £25 and £30 compare starkly with the £1 and £5 increase given by Deputy Quinn when Minister for Finance in the last Rainbow Coalition budget in 1997.