Column 1T H E
P A R L I A M E N T A R Y D E B A T E S
IN THE FIRST SESSION OF THE FIFTY-FIRST PARLIAMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
[WHICH OPENED 27 APRIL 1992]
FORTY-SECOND YEAR OF THE REIGN OF
HER MAJESTY QUEEN ELIZABETH II
SIXTH SERIES VOLUME 228
TWENTY-SECOND VOLUME OF SESSION 1992-93
House of Commons
The Secretary of State for Social Security (Mr. Peter Lilley) : Invalidity benefit is being reviewed in the context of the fundamental review of social security expenditure. Many representations have been received. No decisions have been made, but when they are I will make a full statement to the House.
Mrs. Jackson : Is the Secretary of State aware that, in Sheffield, the number of medical assessments for people on invalidity benefit has increased in every month since February, so that it is now 70 per cent. higher than it was in February? Is he also aware that, to use the words of a constituent who went for a medical assessment, it was undertaken in a way that made her feel "a criminal and a
Column 2scrounger"? Will the Secretary of State, therefore, assure all the many people who are already sick and depressed from being out of work that they will not suffer continual harassment and worry that their income will be removed?
Mr. Lilley : I am grateful to the hon. Lady for writing to me about that case. I assure her that I have asked a senior medical officer in the area to look into her constituent's interview and report the details to me. Obviously, I would not like anyone to feel harassed in the way that she describes.
The number of people applying for invalidity benefit has remained pretty constant in recent months throughout the country, whatever may have happened in particular regions, but, over the longer term--since 1979--the number of people receiving invalidity benefit has increased from 600,000 to 1.5 million, at a time when the nation's health has improved. It is only natural, therefore, that we should examine the benefit and see whether the arrangements for it can be improved.
Mr. Bruce : Will the Secretary of State acknowledge that the sooner he can make a decision on that the better, and that many people who receive invalidity benefit are deeply concerned and angry that the Government may be targeting them--the poorest and most vulnerable members of the community --when wealthy donors to the Conservative party appear to be trying to persuade the Government to ensure that their incomes are protected? Can that be just and fair?
Mr. Lilley : The second half of the hon. Member's question makes it clear that he is not seriously concerned about those on invalidity benefit. He is just trying to make cheap jibes at their expense. Nothing that has been said by the Government, or in any of the documents allegedly coming from us, would give rise to the fears that he mentions. Only the scaremongering of Opposition Members suggests that there is any targeting of people on invalidity benefit. Our objective is to ensure that those who are genuinely sick and disabled receive help and that it is not diverted to those who would be better off either working or on benefits that would help them back to work.
Column 3That seems to me a logical and positive approach, which those who have a genuine incapacity to work fully and whole -heartedly support.
Mrs. Roe : Does my right hon. Friend share my view that his proposals to consult fully on a test of ability to work will be welcomed widely by the medical profession? Is he able to tell the House whether his Department has received any representations from doctors on the tightening up of procedures and current rules?
Mr. Lilley : I agree with my hon. Friend that most people think that it is sensible to consider an objective medical test. We are considering it and we shall see whether it is possible to develop one. If so, we will consult fully about it. Since we began the tightening up of procedures under the existing legal powers in February this year, we have received about 300 letters from doctors, all but three or four supporting the changes that we are making and saying that it is sensible to tighten up, and that the previous arrangements were unsatisfactory for them as well as for their patients.
Mr. Ward : Does my right hon. Friend agree that, while we all want applicants for state help to be sympathetically and courteously dealt with, he should not be deterred from carrying out a full review of all aspects of social security spending by all the smears and innuendo put about by the Labour party? Does he further agree that such a review is the only way to make sure that the money goes to those in need and not to those who would just like a little bit extra?
Mr. Lilley : My hon. Friend is absolutely right. We have to carry out a deep and far-reaching review. The objective of that review is to end up with a better system, in the sense that it guarantees the position of the most vulnerable and needy in society and does not outstrip the nation's ability to pay. If we allowed the system to outstrip that ability, it woud collapse under its own weight and put at risk the very people who depend on it. Opposition Members who believe that nothing need be done are putting at risk those who depend on the system.
Mr. Bradley : Is not it quite incredible that the Secretary of State accuses the Opposition of scaremongering and fails to deny that he will cut benefits to the sick and disabled who will have to pay the price for your economic impompetence? [Hon. Members :-- "Order."] Does not he realise that the average invalidity benefit payment is £79 a week, which is well below the national average? Those people will suffer hardship if you tax it, thus reducing the amount of benefit to which they are entitled. If you add to that the heartless decision to stop payments to the independent living fund for the terminally ill because the Government refuse to resource the fund sufficiently--this is not scaremongering--that is a tax on the sick and disabled because the Government are trying to cut public expenditure. Will the right hon. Gentleman today stop the attacks on the sick and disabled and make sure that they have the amounts to which they are entitled, so that they may live and die in dignity and independence?
Mr. Lilley : I am grateful to you, Madam Speaker, for sharing some of the unwarranted blame that we have to face on this issue. Whenever we have reformed and changed benefits, we have always protected the position of existing claimants. Everybody knows that and people have our track record to go on. Equally, we have made it clear
Column 4for many years, since the Chancellor of the Exchequer announced that it was our long-term intention to tax all income replacement benefits, that that has been our intention in the case of invalidity benefit, as elsewhere. Because of practical difficulties, we found it impossible to do that. However, most people would agree that it is sensible that a benefit that replaces income should, where possible, be treated like income and taxed for people who have other income to accumulate with it. The hon. Gentleman seems to think that money grows on trees and that it is just a matter of the Government pouring endless, additional sums into the benefit system. We have increased expenditure by two thirds in total, but growth must be contained within the nation's ability to pay.
Mr. Fishburn : Do not these figures show that, unless something is done about it, the growth in social security will overwhelm us all? Is not the main intellectual and political question for the Conservative party to seek to constrain that giant in the years ahead? Does my right hon. Friend agree that there is no better place to start than to set a date for the equalisation of the age at which men and women may retire?
Mr. Lilley : My hon. Friend is right ; we have to start thinking now about these problems if we are to ensure that they are tackled sensibly and that we or a future Government are not forced into arbitrary cuts later. Every Government in the world face such a problem. Some, who perhaps have shown less foresight than us, have been forced into difficult and arbitrary decisions. Last week, the German Government had to announce nearly £10 billion of cuts, including real cuts of 3 per cent. in many benefits.
We are committed to introducing an equal pension age for men and women and we shall make an announcement on that in due course. It would not be sensible to make an announcement before we have heard the Coloroll decision from the European Court of Justice, which should clarify the position on the equalisation of private pensions. We are proceeding in an orderly and speedy fashion to that end.
Mr. Frank Field : Does the Secretary of State accept that he is panicking over his review of social security expenditure? Has he taken note of the Prime Minister's statement that 70 per cent. of the public sector borrowing requirement is due to cyclical--that is, unemployment--effects on the Government's budget? If that is so and the Secretary of State takes the Prime Minister's words to heart, should not he relax over the whole process?
Mr. Lilley : The hon. Gentleman forgets that we have set a new control total for public expenditure that deliberately excludes the cyclical rise in spending on the unemployed because we believed that it was right, morally and economically, to finance that rise as the economy went into recession. As we come out of recession, it is equally
Column 5right and proper to keep to the same total and ignore, therefore, the cyclical beneficial effects on unemployment. Otherwise, there would be a permanent ratchet effect--every time there was a down turn, the level of expenditure would be raised and it would never be allowed to recover. Even if one excludes unemployment, the underlying rate of growth of spending on social security spending has been 3 per cent. a year in real terms during the 1980s and is set to be 3.3 per cent. up to the end of the century. That is something which must be taken into account in any long-term review.
Mr. Forman : Is not the most disturbing consequence of the seemingly inexorable increase in social security over this long period the way in which it produces disincentives for people to take low-paid jobs? Is my right hon. Friend aware that one of my constituents, who saw me at my surgery on Friday, said that he has the possibility of taking a new job, largely on commission, selling insurance for £30 a week, plus any commission, whereas his existing income on income support is £300 a week? He complained that, when there is a disparity of that kind, where is the advantage of getting back into regular work?
Mr. Lilley : My hon. Friend points to a difficult problem that arises especially acutely in the case of those on income support who get help with their mortgage payments. I do not think that it is possible to resolve that problem simply by extending that help to people in work, except at the potential expense of several billion pounds, which clearly is not affordable in any foreseeable circumstances. Therefore, we have to look at other ways in which we can try to improve incentives in the system and, of course, we are doing so.
Mr. Dewar : Does the Secretary of State accept that many people are worried about the treatment of lone parents in future social security budgets following the speeches made by Ministers this weekend, some of which seemed to give the impression that lone parents were a feckless group of social outcasts? Is not it the case that 70 per cent. of lone parents are divorced, separated or widowed and that teenage unmarried mothers, so often represented as typical, are only a small minority of the total? Ministers preach family values, but does the Minister accept that their policies constantly undermine family stability?
Did the right hon. Gentleman notice-- [Interruption.] Did the Secretary of State notice that statistics produced by his own Department in the past week showed that, in 1979, 19 per cent. of lone parents had a family income of less than half the national average? By 1991-92, that figure had grown to 60 per cent. Rather than simply criticising lone parents publicly, would not it be right for Ministers to concentrate on helping the vast majority who want to earn their keep, by improving affordable child care facilities, training opportunities and job opportunities?
Mr. Lilley : The hon. Gentleman is wrong on most points. The largest, fastest-growing group of lone parents--they cover a variety of different categories--is the "never married" category. The important thing is that we are not against any category of people and we are certainly not against lone parents. We are in favour of parents--both parents--accepting responsibility for their children and offering them love, affection and support. The state can and must sometimes step in with monetary help if
Column 6marriages break down and the parents are unable to support their children. However, we can never substitute for that love and commitment.
Everyone notices that Opposition spokesmen, with one or two notable exceptions, never say anything good about the family and they always seem to support alternatives to it. That is, I imagine, why one anonymous leading Labour figure is quoted in The Independent today as saying that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should stop trying to defend the indefensible. I agree with his colleague the hon. Member for Sheffield, Brightside (Mr. Blunkett) who, in a "carefully worded statement" according to The Independent, made it clear that Ministers were right to tackle the issue of single parents. He said
"We need real action to reinforce personal responsibilities. That means acceptance by fathers of their obligation towards their children and housing policies which do not encourage the belief that the only way to a home is having a baby."
I agree with the hon. Gentleman.
The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt) : Family credit expenditure for 1992-93 was £864 million. This is 13 times more in real terms than the £24 million spent on family income supplement in 1978-79. Since its introduction in April 1988, more than 3,750,000 family credit awards have been made.
Sir Anthony Durant : In spite of earlier criticisms of the scheme, does my hon. Friend agree that the average payment is now £42 a week and that more than 80 per cent. receive at least £20 a week, which is an incentive to getting back to work? Is it not a better scheme than the earlier one?
Mr. Burt : My hon. Friend is quite right. The average award now compares favourably with the average award of family income supplement, which, at current prices, would be about £17.40 a week, compared with the present average of £44 a week. The average for the self-employed is £55 a week. The numbers currently in receipt of family credit are at a record of 457,000. The scheme is fulfilling its aim of directing resources to where there is most need.
Mr. Amess : Will my hon. Friend confirm that a family credit helpline was introduced in March this year, thus fulfilling another election manifesto commitment? Will he also confirm that our right hon. Friend the Secretary of State is conducting an advertising campaign to help unemployed families better to understand the benefits to which they would be entitled when in work?
Mr. Burt : My hon. Friend speaks for some 1,300 family credit recipients in Basildon. I am pleased to tell him and them that our helpline, which now caters for potential as well as existing claimants, has received 250,000 calls so far. My hon. Friend is also right to say that the latest take-up
Column 7advertising campaign is aimed at the unemployed and informs them of their potential to receive family credit, which can act as a real incentive to getting back to work.
Mr. Pike : Is not one of the reasons for the large increase in amounts paid out in family credit the large increase in the number of people on low pay as a result of Government policy? Will the Minister tell us how many people on low pay and living in poverty are entitled to family credit, but, unfortunately, not getting it?
Mr. Burt : The hon. Gentleman fails to distinguish the fact that the most important determinant in family credit is not the size of the wage, but the number and the age of the children. Part of his anger comes from the fact that family credit is a better system than any supported by the previous Labour Government.
Mr. Rooney : In view of the Minister's comments about the spectacular increase in the numbers receiving family credit and about the amount of the awards, when can we expect the Government to undertake a responsible review of how the money is distributed? How much impact has there been from the change in working hours from 24 to 16? Why does the Minister not look again at the clawback of 94 per cent. for anyone receiving an increase in wages?
Mr. Burt : About 60,000 extra families have received family credit as a result of the change of hours from 24 to 16 as the entry to family credit. We keep the scheme constantly under review. I am sure that the hon. Gentleman shares my pleasure in the fact that take-up is increasing both for expenditure and for case load. Take-up by case load is 14 per cent. higher than it was five years ago and expenditure is 6 per cent. higher. I am sure that the hon. Gentleman welcomes those figures.
Mr. Harry Greenway : Does my hon. Friend agree that family stability comes best from children being born of a loving relationship between a man and a woman? The strong movement towards girls and very young women to have babies to get flats and houses is damaging to them and to the children, because those children do not have the proper background that they should have. Will my hon. Friend consider that point and do all that he can to encourage proper family stability, because it is the bedrock of the nation?
Mr. Burt : Behind some of the newspaper rhetoric over the weekend have been sensible comments from hon. Members of all parties and from a variety of commentators on the issues raised by single parenthood. Family structure is important. It is the responsibility of social security to protect the most vulnerable and it is too often forgotten that the most vulnerable element in a single-parent family is the child. We ought to hear more about the child's situation than about the rights and responsibilities of everyone else.
Mrs. Golding : Given the big increase in the need for families to have family credit, does not the Minister think that, instead of proposing the withdrawal of all benefits from mothers with children who have been recently abandoned by their fathers, the Government would do better to concentrate their efforts on eliminating poverty wages and the threat of unemployment, as that would do more to stabilise family life? Or does the Minister agree with his right hon. Friend the Secretary of State for Wales who believes that penalising children is the right answer?
Mr. Burt : There is no question of withdrawing benefit in the manner suggested by the hon. Lady. It is important that the social security system acts to protect the most vulnerable. The hon. Lady will also understand that the most important thing that any Government can do for the poorest is to improve the jobs situation. The Government are determined to improve that situation by keeping inflation and interests rates low. It should be noted that the prospects for growth in this country are significantly better than in the majority of countries abroad. I would have hoped that the hon. Lady would welcome that development.
Mrs. Lait : Will my hon. Friend confirm that the income of pensioner couples, excluding housing costs, has risen by almost a half since 1979, allowing for inflation? Will he further confirm that the proportion of pensioner couples in the lowest income groups has fallen from 19 per cent. in 1979 to 11 per cent. now? Does he agree that those figures show that pensioners are better off under a Conservative Government?
Mr. Hague : My hon. Friend is absolutely right. She rightly draws attention to the figures published last week showing that the total incomes of pensioner couples have risen by 48 per cent., excluding housing costs, since 1979. That is largely because of the growth in occupational pensions and in income from savings. But the Government have always recognised that not all pensioners have shared in that increased prosperity. That is why extra resources have been concentrated on helping the oldest and poorest pensioners.
Mr. Winnick : Is the Minister aware that, last week, a strong deputation of pensioners from all over the country came to the House and that they were deeply anxious that their standard of living will be further eroded as a result of the introduction of VAT on domestic fuel? Does the Minister recognise that, in this country, there remain literally millions of pensioners who are living on the very smallest of incomes? That have not benefited in any way from occupational pensions and now find themselves living day by day, virtually on the breadline. Are not the Government largely responsible because they have refused to increase the pension in line with earnings? Should not they be thoroughly ashamed of themselves?
Mr. Hague : My right hon. Friend the Secretary of State and other members of the Government have always made it clear that extra help will be given before the increase in VAT takes effect next year. That help will be additional to the automatic increase in pensions and other beneftis that will reflect the impact of any increase in fuel bills. But the hon. Gentleman should remember that, in the past 14 years, total expenditure on benefits for the elderly has
Column 9increased by 40 per cent. in real terms, to a level never dreamt of by any previous Labour Government. The Opposition should remember that on all occasions.
Mr. Arnold : Would not the reverse be true if equalisation were to take place at a higher level? Would not there be considerable savings-- amounting to billions of pounds--in the social security budget, which could be redirected to those most in need? Is not that why Germany and the United States are well on the way to equalising at a higher level and why Denmark has already done so?
Mr. Hague : My hon. Friend is right to point to the action taken by other countries in equalising, and in some cases increasing, their state pension age. Obviously, large savings stand to be made in those countries' expenditure. The Government are still considering all the options. No decision has yet been taken, but one will be announced in due course.
Mr. Bennett : Is the Minister aware that the Government's continual dithering over this matter is causing a lot of hardship to people who have to make logical decisions about their retirement? Does he accept that what would help most people would be to offer a flexible retirement age between 60 and 65 to suit individuals and their savings?
Mr. Hague : Accusations of indecision or dithering come strangely from a party whose policy on this matter is shrouded in the deepest mystery and is likely to remain so for some time. The Government have received 4,000 responses to their consultation document about the state pension age. It is fair and proper to give full consideration to all those responses and to await the European Court judgment, which was mentioned by my right hon. Friend the Secretary of State, before reaching a decision on any of the options, including a flexible retirement age.
The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : Since the discretionary social fund was introduced in 1988,more than 7.2 million grants and loans, worth more than £1.2 billion, have been awarded.
Lady Olga Maitland : I thank my right hon. Friend for that most encouraging news. Will he confirm that, since the introduction of the social fund, more than £300 million has been given to community care projects and more than £800 million in interest-free loans? Is not that another good example of the Government targeting those most in need?
Column 10respond flexibly to need at the margins of the overall social security system and to control expenditure--something which its predecessor manifestly failed to do.
Mr. Skinner : Why do not the Government admit the facts--that during their period in office, they have allocated £26.2 billion in tax cuts to the richest 1 per cent. of people in Britain, yet they have the cheek to tell people who are living below the poverty line that they cannot get money from the social fund? This Government stink to high heaven.
Mr. Scott : I am tempted to respond to the gross discourtesy shown by the hon. Gentleman earlier in our proceedings by ignoring his question. Instead of doing that, I shall say that the social fund has responded to need and that Governments of all political colours have always found that, at the margins of any social security system, there is a need for a flexible response to special need. The social fund has provided such a response. The single payments scheme was doubling in cost every two years and had simply become unaffordable. I believe that we were right to bring that expenditure under control while meeting special needs.
Mr. Coombs : Does my right hon. Friend agree that it is essential that the Government, like other Governments, should live within their means when it comes to the social security budget? Is not it significant that the French Government have just announced that there will be no pension uprating in July this year and that they propose to claw back £3.8 million in health charges? Has my right hon. Friend also noted that the German Government propose a 3 per cent. cut in benefit across the board? Is there an example to be followed in all that, and will he follow it?
Mr. Lilley : My hon. Friend puts his point extremely clearly. He will recall that, before the announcement of last year's public expenditure round, we heard scaremongering throughout the summer to the effect that we would have to make such a draconian cut. None of the scares that were run by the hon. Member for Glasgow, Garscadden (Mr. Dewar) turned out to be true. We fulfilled the uprating that was then necessary. We believe that it is sensible to carry out sensie decision of the Secretary of State to accept the judgment of the European Court of Justice--case number C328/CF91 --will he ensure that all the women concerned, who will benefit directly from that judgment and his belated acceptance of it, will not only receive the benefits to which they are entitled under European Community law but will be paid all arrears dating back to this April? Will he give an assurance that he
Column 11will not now proceed with his appeal at the Court of Appeal against Commissioner Skinner's decision, CS27/91?
As I do not keep in mind a catalogue of all European Court cases by number, I shall write to the hon. Gentleman when I have traced that case number. We have no option but to accept the rulings of the European Court of Justice since it overrides the authority of the House.
10. Mr. Riddick : To ask the Secretary of State for Social Security how much was provided by his Department in benefits to single mothers in 1975, 1980 and the last year for which figures are available.
Mr. Burt : Although changes in the benefits system mean that figures for 1975 and 1980 are not available, expenditure on benefits for all lone parents has increased from £2.4 billion in 1981-82 to £6 billion in 1991-92 at constant prices.
Mr. Riddick : Those are pretty incredible figures. Does my hon. Friend agree that, when the welfare system encourages young women to have babies out of wedlock so that they can qualify for council houses and benefits, perhaps the system has gone too far? Will he confirm that the Government will take action to extend and encourage parental responsibility, particularly paternal responsibility?
Mr. Burt : There are many reasons why there has been a greater number of single parents in the past 20 years or so, including a greater tendency to divorce and separate, as well as a rising number of single, never-married young mothers. The responsibility of social security is that, whatever the relationship between parents may have become, a child has a right to be financially protected : in the first instance, by its natural parents, and the Child Support Agency will reinforce that ; secondly, by providing what incentives we can for mothers to go back to work, where appropriate, because all the evidence that we have shows that the majority of single mothers want to get back to work ; and, thirdly, where children are left vulnerable, they must be protected by the rest of society.
Ms Glenda Jackson : Will the Minister take this opportunity to condemn unreservedly not only the question put by the hon. Member for Colne Valley (Mr. Riddick) but the speech made by the Secretary of State for Wales over the weekend, which quite outrageously alleged that young women deliberately make themselves pregnant to benefit from housing and social security benefits, when the Minister knows, as do Conservative Members, that there is absolutely no evidence whatever to support those scurrilous allegations? Will he further assure the House and the country that no woman and her children will be denied benefit because she will not name, or the Government cannot find, the father?
Column 12both sides of the House. My right hon. Friend the Secretary of State mentioned the quote from the hon. Member for Sheffield, Brightside (Mr. Blunkett).
In addition, my right hon. Friend the Secretary of State for the Environment said that Britain had moved on, quite rightly, from the unacceptable situation where single mothers were ostracised but "as a society we have to think seriously about how we try to help single mothers and I am not at all sure that putting them on their own with their children is the best way."
The hon. Member for Croydon North-West (Mr. Wicks) wrote an interesting article on single-parent policy, which appeared in The Guardian today. The issues have now been raised and, provided they are discussed sensibly and in a straightforward way, some of the problems that affect single parents, and therefore society, can now be sensibly considered.
Mr. Burt : Since April 1991, there have been four increases in child benefit rates--in April and October 1991 and April 1992 and April 1993. These have increased the pre-1991 rate of £7.25 a week for each child to the current rate of £10 a week for the eldest eligible child and £8.10 a week for all other children.
Mr. Congdon : Will my hon. Friend confirm that the Government have pledged to retain child benefit as the cornerstone of their policy for helping all families with children? Will he further confirm that the annual uprating of child benefit, in line with the increase in prices, fulfils that pledge? Does he agree that the greatest threat to universal benefits is the threat to means-test them, which emanated from members of the Labour party?