§ Mr. Bob Cryer (Bradford, South)
On a point of order, Mr. Speaker. You will notice that in relation to the Opposition prayers, the three instruments concerned have not yet been considered by the Joint Committee on Statutory Instruments. When it was announced that the orders were to be considered this week, the instruments were not in the hands of our clerk and our counsel. If our Committee can consider an instrument and make a report—as we are obliged to under Standing Orders—in time for a debate, we use our best endeavours.
It is a matter of deep regret that the Department of Social Security failed to provide copies of the instruments in time for the Joint Committee on Statutory Instruments to consider them and report to the House. The House has not had the opportunity to consider the instruments in detail or subject them to detailed technical examination. Your Counsel, with his expert advice, has not been able to run a fine-toothed comb over them. My Committee has an important job to do.
§ Mr. Speaker
The hon. Gentleman has made an important point. The House should be grateful to him and for what his Committee does in examining statutory instruments.
§ The Secretary of State for Social Security (Mr. Tony Newton)
I beg to move,That the draft Social Security Benefits Up-rating (No. 2) Order 1991, which was laid before this House on 4 December, be approved.I understand that it will be for the convenience of the House if we also discuss the following Government motions:That the draft Social Security (Contributions) (Re-rating) (No. 2) Order 1991, which was laid before this House on 4th December, be approved.That the draft Guaranteed Minimum Pensions Increase (No. 2) Order 1991, which was laid before this House on 4th December, be approved.That the draft Statutory Sick Pay (Rate of Payment) (No. 2) Order 1991, which was laid before this House on 4th December, he approved.That the draft Social Security (Introduction of Disability Living Allowance) Regulations 1991, which were laid before this House on 26th November, be approved.That this draft Disability Working Allowance (General) Regulations 1991, which were laid before this House on 26th November, be approved.That the draft Social Security (Disability Living Allowance) Regulations 1991, which were laid before this House on 26th November, be approved.That the draft Social Security (Adjudication) Amendment (No. 3) Regulations 1991, which were laid before this House on 26th November, be approved.Perhaps we can also consider the three Opposition prayers:That an humble Address be presented to Her Majesty, praying that the Social Security (Attendance Allowance) Regulations 1991 (S.I., 1991, No. 2740), dated 5th December 1991, a copy of which was laid before this House on 5th December, be annulled.That an humble Address be presented to Her Majesty, praying that the Social Security (Claims and Payments) Amendment Regulations 1991 (S.I., 1991, No. 2741), dated 5th December 1991, a copy of which was laid before this House on 5th December, be annulled.882That an humble Address be presented to Her Majesty, praying that the Disability Living Allowance and Disability Working Allowance (Consequential Provisions) Regulations 1991 (S.I., 1991, No. 2742), dated 5th December 1991, a copy of which was laid before this House on 5th December, be annulled.In view of the plethora of material for debate and the fact that the debate is starting rather late for reasons that the House understands, I think that it will be sensible if I curtail my remarks to some degree. I will not therefore take the time of the House with the conventional lengthy explanation of the detail of what are in fact relatively routine pieces of annual business, such as the guaranteed minimum pensions order and the draft contributions rerating order, which are very much in line with their predecessors over a number of years. The detail of the proposals on contributions was, of course, fully set out in the very full statement that I made to the House by way of a written answer at the same time as my right hon. Friend the Chancellor's autumn statement on 6 November.
Similarly, I will refer only briefly to the statutory sick pay order, which gives effect to the SSP proposals announced in my uprating statement to the House on 21 October. The order increases the lower rate of SSP by the full retail prices index increase of 4.1 per cent., from £43.50 to £45.30 a week, while leaving the higher rate unchanged at £52.50. At the same time, the earnings threshold which forms the boundary between the two rates, which is now aligned with the earnings threshold for payment of full-rate employers' class I contributions, will go up from £185 per week to £190 per week. In no other respect does the order make changes in arrangements put in place last year which were extensively debated at the time and which, as I said to the House in October, appear to be working well.
My speech is therefore directed principally to what will no doubt be the two main areas of interest to the House: that is to say, the benefits uprating generally and the voluminous regulations that provide or pave the way for the introduction of disability living allowance and disability working allowance in April 1992, to the advantage of tens of thousands of disabled people.
First, I deal with the general uprating order. As the House knows, for those benefits which are not income-related, the basis for the uprating is the full increase in the RPI for the 12 months from September 1990 to September 1991, which was 4.1 per cent. With the exception of the higher rate of SSP to which I have already referred, this has been applied to all the relevant main benefits rates—notably retirement pensions, war pensions, widows' pensions, invalidity benefit, severe disablement allowance, the disability living allowance rates equivalent to the present mobility and attendance allowances, invalid care allowance, industrial injuries benefits, and the national insurance benefits for unemployment, sickness and maternity. It has also been applied to the special Ministry of Defence payment to the pre-1973 war widows.
In particular, we have thus once again honoured in full our commitment to increase in line with prices the basic retirement pension, which will thus rise from £52 to £54.15 a week for a single person and from £83.25 to £86.70 for a couple, entailing additional expenditure of about £1 billion.
Just over a year ago, I told the House that child benefit is, and will remain, a strong element in our policies for family support. It is fair to claim that those words have been amply borne out in the intervening period and are 883 confirmed again in this order. Following the increase for the eldest eligible child last April, we have made a further increase for all children in October, with corresponding increases in income-related benefit rates to make sure that the less well-off families also gained to the same extent.
This order now provides for the full year's 4.1 per cent increase to be applied from April to the October rates, even though they will have been in place for only six months. Thus the rate for the eldest eligible child will rise in April by 40p to £9.65 a week and the rate for other children by 30p to £7.80.
If I may anticipate a point which, I know from experience, the hon. Member for Oldham, West (Mr. Meacher) may in due course seek to make, those increases mean that, when looked at alongside the extra help that we have made available in the past four years through income-related benefits for the less well-off families with children, which will amount to some £600 million next year, total expenditure on help to families next year will be higher than if we had simply increased child benefit each year since 1987.88.
Turning now to the income-related benefits, as the House knows, the uprating is, in this respect, based not on the full retail prices index, but on what is known as the Rossi index, which, in essence, is the RPI less housing costs but which we have this year brought more exactly into line with what the benefits are intended to cover by including in the calculation 20 per cent. of community charge, certain miscellaneous housing costs previously excluded and—perhaps most importantly—water and sewerage charges.
That more exact calculation has, I think, met with general approval and as I said in my statement about our proposal for council tax benefit in a written answer on 28 November, we intend to maintain that closer alignment in the wake of the changes in local taxation that are intended to take effect in April 1993. That is to say, the Rossi index would then need to reflect that there will be no minimum contribution to the new council tax, but water rates and the other miscellaneous items that I have mentioned would, of course, continue to be taken into account.
The House will also recall—I know that hon. Members of all parties will welcome this—that I have also made it clear that there will be no downward adjustment in 1993 in income-related benefit rates to correspond to the nearly £700 million which, in terms of 1992.93 benefit rates, is included in them in respect of the 20 per cent. contribution to the community charge.
The Rossi calculation on the basis that I have described produces this year an uprating index of 7 per cent. Thus, those on income-related benefits, who are the least well-off, will have their benefits uprated next April. under this order, by nearly 3 per cent. more than the rise in prices generally over the relevant period. Again, with one exception to which I will come in a moment, all the main rates of income support and the related applicable amounts for housing benefit and community charge benefit, together with the credits in family credit, will rise by the full 7 per cent.—producing, for example, an increase in income support for a couple with two children aged 10 and 12 from £104.55 to £111.85, and for a pensioner couple aged under 75 from £83.15 to £88.95.
884 The exception, of course, is those less well-off pensioners who are disabled or over 80, where the order provides for additional increases of £1 a week for a single pensioner and £1.50 for a couple, over and above the 7 per cent. Thus, the benefit for a pensioner couple over 80 will rise from £88.45 a week to £96.15 a week—an increase of 8.7 per cent., which is more than double the increase in the retail prices index.
I remind the House that this is the third year running in which, using the new pensioner premium structure introduced by the 1988 reforms, we have directed real extra support to those over pension age who are least well-off. Overall, by next April—when nearly 1 million people will gain from this year's real increase, either directly through income support or through increased entitlement to housing or community charge benefit—we shall in three years have steered an extra one third of a billion pounds in real extra benefit to less well-off pensioners, in a way which I believe the whole House will welcome and support.
Before leaving the uprating order, there are three other points on the income-related benefits on which I should touch. The first, which is, of course, also a point of particular although not exclusive concern to large numbers of less well-off people over pension age, is the further large increase in the special income support limits for those in residential care and nursing homes. Following the very important increase last year, which focused especially on the needs of those in nursing homes in the light of the survey information that we had received, the increase next April will give an additional £15 a week across virtually all the main categories and with an even larger increase, of £20 a week for two residential care categories—the very dependent elderly and the mentally handicapped—which together account for nearly two fifths of all residential care cases on income support.
The only increase smaller than the £15 is in what is known as the terminal illness category for nursing homes, for reasons that I explained to the House in my uprating statement, where we have instead thought it more appropriate to make, through the Department of Health, an additional grant of £1 million specifically directed to the funding of hospices. I am, of course, aware that these increases have not removed all controversy from this area of the benefit system. Indeed, if I had thought that, I would no doubt have been disabused of it by last night's debate, to which my hon. Friend the Under-Secretary of State, the hon. Member for Maidstone (Miss Widdecombe) so ably replied.
I think it can fairly be claimed that the increases are widely regarded as having appropriately addressed a number of important concerns. Certainly, at a cost of nearly £200 million, they are a further reflection of the Government's continuing commitment to disabled and elderly people in need of residential care.
Secondly, I should refer to one aspect of the uprating order which does not reflect the proposals in my uprating statement, which is in respect of the non-dependant deductions made from housing benefit, or income support for housing costs, in cases where the claimant's home contains another adult who could reasonably be expected to contribute to those costs. The present order contains the current structure and rates of those deductions, simply because the amendments that I outlined in the uprating statement require a separate set of amending regulations, 885 following statutory consultation with the local authority associations and referral to the Social Security Advisory Committee.
I expect to lay those regulations shortly, to provide, as I indicated in the uprating statement, for four rates of deduction, ranging from £4 to £18, to replace the present two, which are at £5.70 and £13.50. The effect would be to reduce the contribution expected from the least well-off non-dependants by over a quarter, while expecting somewhat more than at present from those with incomes of £130 a week or more. This has been generally thought to be fairer and more sensible than the present arrangements and, indeed, the Social Security Advisory Committee decided not to undertake a formal consultation.
Lastly on the income-related benefits, although for the most part not arising directly from the uprating order itself, I should remind the House of two other important changes that are taking place in April 1992, when we are introducing a new maintenance disregard of £15 a week into family credit, housing benefit, community charge benefit and the new disability working allowance, and at the same time reducing from 24 hours to 16 the number of hours of work required for someone to be able to qualify for family credit. Those changes will be of particular benefit to lone parents who wish to work, and I am glad to be able to announce today a further measure which I believe will contribute to making those changes even more effective.
I am providing a grant of £1 million to the National Council for One Parent Families to enable it to run courses for lone parents who are thinking of returning to work. The council has an impressive track record in this area and I am very pleased that the Government are joining it in this venture. Its work will he complementary to the services already provided by my right hon. and learned Friend the Secretary of State for Employment. I believe that that adds to what is a package of solid and practical help from which many lone parents and their children will stand to derive real benefit.
§ Mr. Graham Allen (Nottingham, North)
Before the Secretary of State leaves the issue of income support and income-related benefits, could he tell us what further progress has been made towards ensuring that those pensioners who are now eligible for income support take it up? I know that the right hon. Gentleman chased up this issue with the local authorities and that he has issued a circular on it.
§ Mr. Newton
The hon. Gentleman has asked a fair question, but I cannot give him a report on the outcome of that effort—our biggest single effort—to encourage local authorities to use what the jargon terms their "housing benefit computers" to notify people aged over 80 who might be expected to gain. It is expected that those notices will go out early next year. We are well on the way towards achieving that notification, but obviously I cannot tell the hon. Gentleman what result has been achieved.
Nevertheless, I assure him and anybody else who is interested in such matters that I am not in the business of putting up benefit rates, as we have done, with a view to minimising the number of people who are helped by them. We shall do everything that we can, in that way or through more normal publicity in magazines and the specialist 886 press, to ensure that people who are entitled to additional payments as a result of the increases actually get those additonal payments.
The other major area covered by the regulations before the House is the introduction next April of disability living allowance, which will embrace the existing mobility and attendance allowances for those of working age and at the same time extend help with mobility or care costs to some 300,000 disabled people who at present get no such help at all, and of disability working allowance, a completely new benefit to help those disabled people who wish to work to some extent but who feel inhibited from doing so by the present benefit system.
The number and bulk of the regulations perhaps indicates just what a major undertaking the new disability benefits represent, involving as they do not only the payment of benefit to substantial numbers of new beneficiaries but a comprehensive improvement of the way in which we assess and adjudicate benefits.
Taking the latter aspect first—it is certainly not the least important—the amendments to the adjudication regula-tions and claims and payments regulations indicate radical changes in the way in which we assess disability benefits. I highlight particularly the proposed self-assessment process, which is the key to both disability living allowance and disability working allowance and to the new regime for attendance allowance, which continues for the over-65s.
The new system changes the basis on which the benefits will be assessed to give disabled people themselves more say and an opportunity for the first time to tell us about their everyday needs, with the help and support of their carers and those professionals, including their GPs, who know most about their needs. That means that we will be able to minimise the requirement—a feature of the benefit arrangements often criticised—for claimants to be subjected to medical examinations. That objective will be widely supported.
In devising the new self-assessment procedures for the three benefits, we have consulted widely with disabled people and their organisations. My right hon. Friend the Minister for Social Security and Disabled People deserves great credit for that. We have tested the leaflets and claim forms with disabled people and taken their advice on ways of improving the process. We are also consulting disabled people on the best ways of publicising the new benefits, using every possible means at our disposal.
In that regard, I echo the words that I uttered a few moments ago in reply to the hon. Member for Nottingham, North (Mr. Allen). The process of involving disabled people and their organisations in a wholly different way from what happened before, perhaps under either Administration, has been widely welcomed. It has brought a helpful response from disabled people and their organisations.
§ Mr. Allen
I will try not to bother the Secretary of State again. He has probably seen early-day motion 356, tabled in the names of my hon. Friend the Member for Manchester, Withington (Mr. Bradley) and myself, about the distribution of claim forms. The claim forms will be the property of the individuals. There is great anxiety that groups or welfare rights people who may assist individuals to fill in those forms will not be able to get hold of the forms. If they could get them, they could short-circuit the 887 process and assist the Department. Will the Secretary of State undertake to look at the early-day motion and comment on it constructively?
§ Mr. Newton
The hon. Gentleman has asked a reasonable question in an extremely reasonable way; I do not mean to express the surprise that might be detected, but I am always anxious to give credit where it is due. He will no doubt have noticed my right hon. Friend the Minister for Social Security Disabled People muttering in my ear as he spoke. My right hon. Friend assures me that there is no question of seeking to deny forms to those who feel that it would be helpful to have them to perform the role mentioned by the hon. Gentleman. My right hon. Friend will say more about it when he replies to the debate.
I assure the hon. Gentleman again, in line with what I have said twice in a sense, that we are in the business of doing everything that we reasonably can to help disabled people, elderly people or whomever we are seeking to help. If disability organisations, Age Concern, citizens advice bureaux or other organisations can be assisted by being provided with forms, I would not want to put any impediment in the way. That is the spirit in which we shall approach it.
As I was about to say before I was so politely interrupted, the other point for particular mention is the right of appeal to a new form of independent tribunal. All the new disability appeal tribunals—for appeals on disability matters on all three benefits—will include not only a legal chairman and a doctor but, most importantly, someone with practical experience in the needs of disabled people. Indeed, we intend that as many tribunals as possible will include a member who is himself or herself a disabled person.
The complexity of the next set of regulations, on disability living allowance, arises from our decision to introduce the new benefit in a single step, unlike the many years of phasing which occurred when mobility allowance was started in 1976. I do not want to go over the difficulties or the sense of unfairness that the phasing caused, but I am sure that our decision to introduce the new regulations in one go is right.
The first and most important function of the regulations is therefore to provide for a smooth transition from the old benefits to the new disability living allowance. More than 600,000 people getting mobility allowance and about 300,000 people under 65 getting attendance allowance will all be automatically transferred to the appropriate rate of disability living allowance. If I emphasise that it is because I hope that it will help to allay finally any misplaced concerns about the position of existing claimants. There is no question of the transfer being used as an opportunity to review and remove or downrate anyone's existing benefit entitlement.
The other "technical" regulations, the consequential provisions regulations, cover the consequences throughout the social security system of the introduction of DLA and DWA. I draw the House's particular attention to the fact that people on income support, who from April qualify for one of the new rates of DLA, will automatically get title to the disability premium in their income support. That means that someone who may currently be getting £39.65 in income support at this year's benefit rates could from 888 April 1992 get £71.80 in income support and disability living allowance, an increase of around £30 a week for several thousand of the least well-off disabled people.
What might be called the "main" sets of regulations in that area are the disability living allowance, disability working allowance and attendance allowance benefit regulations. Taking disability working allowance first, the regulations are a voluminous bundle from which I draw particular attention to the radical new functional disability test which underpins DWA. I hope that hon. Members who, understandably, in debates during the passage of the Act expressed concerns about how the Department might be planning to adjudicate the definition ofdisadvantaged in getting a jobwill gain reassurance from what the regulations provide.
The functional test will be set out in a simple-to-answer claim form in which all that the claimant has to do is tick the boxes which apply to him. Most claimants, particularly people making the transition from incapacity back to work, will not have to fill in even that simple form. All that we will ask for is a straightforward declaration that the claimant has a disability which puts him at a disadvantage in getting a job; we think that in such cases the supporting evidence from the disability benefit or recent incapacity benefit is sufficient confirmation of the person's disadvantage.
Disability working allowance is a totally new depature in social security. It provides a benefit not only for those who can work but whose disability prevents them from achieving their full earnings potential, but for those on the road to recovery from long-term illness who need some short-term help to re-enter the labour market. The majority of people who will claim disability working allowance could not afford to take a job at present, to put the matter very clearly. The aim of DWA is to change that.
I acknowledge that it will inevitably take some time for that large change to work through: it will take some time for disabled people to start taking DWA into account when deciding whether to seek a job; and, because it provides a new opportunity for disabled people, it is bound to take time to build up the case load.
I assure the House that we shall monitor progress closely to see what we can do to ensure that disabled people are aware of the new opportunities for independence that the new benefit will offer—my right hon. Friend the Minister for Social Security and Disabled People may want to say a word more on that. If matters come to light which we can tackle and which will help to make the benefit even more effective, we shall consider them.
Disability living allowance regulations and the accompanying attendance allowance regulations are, happily, much less lengthy. That is largely because the conditions of entitlement for disability living allowance are clearly set out in the primary legislation.
The regulations, however, also give effect to important improvements beyond those contained in the Bill that we published last autumn, including changes for children who are in hospital for up to 12 weeks, and the higher rate of benefit for severely mentally handicapped people with severe behaviour disorder—10,000 of whom can now look forward to £73.65 a week from DLA—or rather more than £90 per week in recognition of their disability needs if they are on income support.
I have necessarily taken a good deal of the time of the House in describing the content and purpose of the orders. 889 Let me conclude by saying simply this. The orders themselves are inevitably often complex and technical—sometimes wearisomely so, even to those of us who are enthusiasts in such matters—but underneath the technicalities lie some very straightforward points.
We are honouring our commitment to 10 million retirement pensioners. We are directing real extra help, over and above that, to nearly 1 million pensioners who are among the least well off.
We are making the third increase in a year in help to all families with children; we are reinforcing the growing success of family credit for low-income families in work, and not least for lone parents; and we are carrying forward a programme of improvement and reform of disability benefits, from which hundreds of thousands of disabled people will gain.
In agreeing these orders, the House will have done a good day's work.
§ Mr. Michael Meacher (Oldham, West)
We have just listened to a speech by the Secretary of State which was, as he said, quite detailed and technical, but was also quite effusive, especially in his peroration, when he set out how the Government had carried out all their commitments, how much expenditure had increased and how generous the Government have been to this, that or the other group with regard to the minutiae of social security provisions.
It was the sort of speech which is listened to with respectful deference, if, I suspect, with a measure of blind incomprehension on the Government Benches, and it will no doubt earn congratulations or plaudits later in the debate from Conservative Members, who will say how well he has done for the various groups, with minute improvements eulogised out of all proportion.
I sometimes wonder whether I am the only person who finds these debates predictably sentimental and not a little hypocritical. The truth is that the Secretary of State, having commended the measures to us as not only decent but even generous, would be horror-stricken if he, or any members of his immediate family or any of his hon. Friends who will be supporting him, had to live on the benefit standard of living that he enthuses about. I do not suppose that most of them know, or have any understanding of, what that standard of living is.
I suspect that the truth is that most Conservative Members would rather be dead than seen claiming benefit in a social security office. It is that lack of identification with the victims of our society which I regret seems to give these debates such an unreal air of ministerial mutual congratulation. That is a pity, because the standard of living of about 17 million people in our society depends, technically at least, on the result of this debate.
§ Mr. David Winnick (Walsall, North)
Does my hon. Friend remember a former Conservative Member of Parliament who was challenged to live on the same amount of money that one would receive in income support? He lost his seat—I am not suggesting that that was a result of the experiment, which was shown on television. He found that it was impossible to manage on that sum of money, which ran out before seven days were up. Are any Conservative Members willing to try to live on the state pension plus income support? If they are— 890 perhaps the Ministers or one of their Back-Bench supporters would like to try—I should certainly like to know.
§ Mr. Meacher
I should like to know, too. My hon. Friend raises a significant matter. We know that Mr. Matthew Parris tried to live for one week—I give him credit for trying—on such a sum. At the end of the week, he had a far better understanding of the appalling standard of living to which we in the House condemn about one in seven of our fellow citizens for months or for years on end.
If hon. Members had to live for a week or two on income support, I do not think that it would remain at the present level. No one can keep themselves together, eat healthily, get the basic clothing that they need, or participate as an active citizen in society, on £42 a week.
I would be the first to admit that the numbers that I quoted—17 million—are so enormous that any substantial or significant improvement in their living standards could not be brought about overnight or by any realistic adjustment of one year's uprating orders.
§ Mr. Tim Smith (Beaconsfield)
Let us suppose that the hon. Gentleman is right, for the sake of argument. Is it not the case that he has no proposals to do anything substantial about it, because his proposals relate only to child benefit and pensions, and not to any other social security benefit? Can we have that on the record, please?
§ Mr. Meacher
One thing that we would have done differently, and that we shall do differently, is that we shall not allow the poorest in our society not to share in I he rising living standards of the rest of the Community. That applies to 10 million pensioners and to people on income support, which is not merely extremely low, but has fallen steadily as a proportion of average earnings in the past few years. That is unforgivable. I would be the first to admit that, under the last Labour Government, supplementary benefit was not a prince's ransom. However, it is unforgivable to allow it to fall further, and not to use the vast extra resources available to the Government through North sea oil, privatisation assets—and the money that they gave away in taxation to the richest instead—to give more to the poorest.
§ Mr. Newton
I shall try to approach my intervention in the same way as the hon. Member for Nottingham, North (Mr. Allen), and simply try to establish a fact.
An important development seems to follow from what the hon. Member for Oldham, West (Mr. Meacher) has said. I previously understood that his reference to uprating by the increase in earnings or prices was confined only to the pension area of the benefit system. The implication of what he has just said is that uprating factors of earnings or prices—whichever is the larger—would be applied throughout the benefit system, including to income-related benefits. Can he confirm that?
§ Mr. Meacher
It is, indeed, confined to pensions, but if the Secretary of State looked at the experience of what happened to supplementary benefit under the last Labour Government, he would see that it did not fall. It is in the discretion of the Government. The Labour Government used their discretion to ensure that the poorest at least maintained their living standards. We intend to do that again, although it is not a commitment like the one that we 891 made on pensions. We intend to reduce the number of people on income support—we certainly do not intend to let income support levels fall further behind.
§ Mr. Frank Haynes (Ashfield)
I wanted to intervene before the Secretary of State did so, with regard to what the hon. Member for Beaconsfield (Mr. Smith) said. He was the candidate in Ashfield in 1979. The blue posters that he placed in windows at that time talked about cutting public expenditure, particularly on social security. He stood on doorsteps saying that the Labour Government were pouring money into people's pockets.
§ Mr. Meacher
My hon. Friend exposes the hypocrisy of some Conservative Members' interventions.
Our case against the Government is not that a £2 a week increase in pensions is a penny-pinching and niggardly exercise—although it is—but that in the past 12 years the Government have consistently and deliberately pursued a policy of pushing down the poor even further and penalising them for their poverty. It is not that the Government have tried but failed to redress the cancer of poverty in our midst, nor even that they did not try, but that they actively made the problem worse, either by indifference or by design.
They made it worse by indifference in 1986, when 8.25 million people were on income support and the right hon. Member for Chingford (Mr. Tebbit) declared—I have never forgotten his words:Poverty is just not an issue".They made it worse by indifference in 1987, when the Secretary of State, the right hon. Member for Croydon, Central (Mr. Moore) declared that poverty had ceased to exist, despite the fact that 8.25 million people were still on income support.
The Government made matters worse by design in 1988, when 7.5 million people were on income support and the so-called reforms of the right hon. Member for Sutton Coldfield (Sir N. Fowler) cut benefits by more than £1 billion a year. They are making matters worse by design in 1991 when, once again, 8.25 million people are on income support and the Government say that their first priority is to cut income tax by a further 1p in the pound.
Our charge is that, under this Government the poor are "the disappeared ones"—tolerated so long as they are invisible and resented if they obtrusively sleep in shop fronts or badger pedestrians for money in subways, or if their poverty and unemployment prove a cause of inner-city disorder or riots, as the chief constable of the West Midlands police claimed a month ago.
Our charge is that, after all the small print and technicalities of the orders that we are debating are set in place, Christmas will still be typical. On current trends, 50 or 60 pensioners will probably die of hypothermia in the next month, nearly 1,000 more people a day will join the income support queues, and a further 100 or more 16 to 17-year-olds a day will probably find themselves not only without further education, jobs or training but without benefit and often starving. It is hoped that, so long as they all do it quietly, no one will notice.
Our charge against the Government is that none of that need be so. Let us consider each of the groups that will be affected by the orders. Had Labour's link with earnings not been broken by the Government in 1980, single 892 pensioners would celebrate a pension next April not of £54 a week but of nearly £70 a week, and married pensioners would receive not £86 a week but £111 a week.
§ Mr. Meacher
That is exactly the point that I am coming to. Every time we suggest the slightest improvement, Tory Members ask where the money will come from because, deep down, they do not really want to make improvements. They claim that improvements cannot be afforded. May I call in aid an important witness who has stated unequivocally that they could be afforded? Speaking about the financing of the state pensions framework which the Government inherited from Labour—that is, the earnings-related increase in the basic state pension plus SERPS—he said——
§ Mr. Meacher
I shall come to that. He said:There is no immediate cause for alarm. The main growth in pensions expenditure has come from improved benefits, not more claimants. Over the next 20 to 25 years, there is expected to be virtually no growth in the number of claimants, because of the low birth rate in the 1920s and 1930s. Indeed, the number of people over pension age is actually expected to fall as a proportion of the whole population, from about 17.5 per cent. now to 16.7 per cent. at the end of this century. Even as a proportion of the working population, which is what really matters, the numbers over pension age will be fairly stable until 2010 AD. So, unless decisions are taken to improve pensions further in real terms during the next 25 years, there is no major problem of finance.I think that that person will carry great weight with the Secretary of State, because it was Sir Michael Partridge, his permanent secretary.
A Labour Government would have ensured that pensioners enjoyed their fair share of rising community living standards, whereas the Government deliberately decided to deprive them of it. According to a parliamentary answer that I received just a couple of weeks ago, this year alone pensioners have lost £5.7 billion as a result of that link being broken. One must conclude that the Government have cruelly neglected pensioners. Even on today's issue—the protection of occupational pension rights arising from the Mirror Group Newspapers scandal—there has been a deafening silence from the Secretary of State, who is rapidly becoming the Government's "invisible man".
The right hon. Gentleman is still dithering on the regulations on self-investment and on disclosure. Millions of pensioners whom the Government have cheated of a decent state pension are now deeply worried about the security of their occupational pensions, yet the right hon. Gentleman has been as silent as the grave.
What does the right hon. Gentleman propose for the unemployed? I do not think that he even mentioned them in his speech—if he did so, I did not catch it—yet, according to documents that were leaked about a week ago, the Government expect unemployment figures to rise to 2.9 million next year—that is, if they have not already reached that figure on a proper count, as many of us suspect. Our charge against the Government is not just the indifference to the unemployed shown by the right hon. Gentleman today, but the vendetta that the Government have waged against the unemployed in the past 12 years.
A few months ago, I tabled a parliamentary question asking the right hon. Gentleman to list the cuts in benefit to the unemployed in the past dozen years and the annual 893 savings to the Government as a result of each cut. I can now tell the House that 11 separate cuts were made in unemployment benefit, and the total annual saving to the Government from all those cuts is now £1.5 billion a year. If Labour's benefits framework had been preserved, the unemployed would receive £1.5 billion more than they receive at present.
It is bad enough running an economic policy that makes the unemployed bear the price of the Government's crass mismanagement of the economy, but it is unforgivable gratuitously to force them down into poverty by repeatedly cutting the benefits for which they have paid through their own national insurance contributions.
As we know, the Prime Minister last night rejected the social chapter of the EMU treaty on the ground that it would be uncompetitive for British industry. He confirmed that again today. What he meant was that the Government are now placing the burden of competing squarely on the shoulders of British workers. Why is it that, under this Government, we can compete only if we make the terms and conditions of British workers—and those out of work—worse than they are even for Spanish, Portuguese and Greek workers?
§ Mr. Meacher
The unemployment rate in those countries, with the exception of Spain, is below that of this country, where it is still rising rapidly. Why is it that the employers in every other Community state can turn a profit while ensuring proper social rights and benefits for their employees, whereas in Britain we must have poverty wages, topped up by social security through family credit, before employers can make a profit? That is the worst way to compete. It is not competition based on efficiency, productivity or product innovation, but lower wages for those in work and lower benefits for those out of work.
No wonder the Prime Minister rejected the social dimension when unemployment benefit today in Italy is about £60 a week, in Germany it is £125 per week, in France it is £147 a week, in the Netherlands it is £211 a week, and in Denmark it is £271 a week.
Perhaps the hon. Member for Beaconsfield (Mr. Smith), who likes to intervene, can give the House the level of unemployment benefit that he and his hon. Friends intend to impose on the 2.5 million to 3 million unemployed people in this country. Does he know what the level of unemployment benefit is in this country? Would he like to tell the House? Would the Secretary of State or indeed any Conservative Member like to tell us the level of unemployment benefit? Perhaps they need a note from those who can provide the information. It is significant that not a single Tory Member——
§ Mr. Newton
The hon. Gentleman has used the figure on a number of occasions and knows perfectly well that if we are talking about the most relevant rate—probably the income support rate—it is £39.65 per week at present. One fact to which he has not adverted is that many of the countries he mentioned have far more restrictive rules on the relation of such benefit to contribution payments. Many people who receive help here would not receive anything like the rates that the hon. Gentleman gave.
§ Mr. Meacher
That is an interesting point. Without looking into the full details—which I certainly intend to do—I should be very surprised if the right hon. Gentleman 894 were right. After he and his right hon. Friends have imposed the actively-seeking-work rule, the restart procedure and the extension to two years for the contribution requirement, and after they have knocked out benefit for university and polytechnic students. I should be extremely surprised if what he said was correct. I was referring not to income support levels, but to unemployment benefit, which is a national insurance benefit for which people have paid and to which, under insurance principles, they have a right. It is perfectly clear that not a single Tory in the Chamber today knows the figure.
§ Mr. Newton
If the hon. Gentleman wants to proceed with this discussion, I can tell him that the rate for a single person is currently £41.40.
§ Mr. Meacher
I am pleased that the Secretary of State has finally tumbled to the figure: he is right in saying that it is £41.40. It was clear than none of his hon. Friends, certainly none of those behind him—those who are to impose that level on the people of this country—know what the figure was. The rate is indeed £41, when the average wage today is about £300. That is not just slightly lower than every other EC country, but five or six times lower than that of some of our competitors.
§ Mr. Bob Cryer (Bradford, South)
My hon. Friend was right to say that unemployment benefit is paid for from national insurance contributions. Under the Government's rotten legislation, a person whose employer claims that he or she left work without reason—for example, a woman working at night who feared an attack and who left work without an excuse that the employer found valid—could have his or her unemployment benefit reduced for up to 26 weeks. In practice, unemployment benefit offices cut the benefit for the total 26 weeks.
§ Mr. Meacher
My hon. Friend makes an important point. I imagine that the Secretary of State was deeply embarrassed when, as a Minister, he introduced that legislation in Committee. I credit him with being embarrassed because it was iniquitous to increase from six weeks, initially to 13 and then to 26 weeks, the period when such people are not entitled to unemployment benefit and to reduce income support by 40 per cent. below the extremely low levels that I have already mentioned.
Such a policy does not just provide a disincentive, but places an intolerable penalty on some of the most helpless victims in society. That policy is dependent not on "industrial gross misconduct"—the imposing, solemn words used—but on the say-so of the employer. If, for any reason, the employer has a grudge against the employee, the employer's word will be taken by the DSS, not the employee's. My hon. Friend was entirely right to raise that issue.
We often hear about the Prime Minister having suffered dole hell when he was 19. What a pity that, when he became a Social Security Minister, along with the present Secretary of State for Social Security, he imposed the rule that created a much worse dole hell for those who came after him. When the Prime Minister left work in order to look after his father and cared for him for a time—a creditable thing to do—he sought to claim, and received, unemployment benefit. For the sort of reasons outlined by my hon. Friend the Member for Bradford, South (Mr. 895 Cryer), I doubt whether the Prime Minister would receive unemployment benefit today. If he did, he would probably be disqualified from receiving it for 26 weeks.
No one is suggesting that differences of the order of magnitude to which I have referred can be made good in a single uprating order. I am not saying that sufficient changes to make our system comparable with those in the EC can come overnight. Our charge against the Government is that, instead of seeking to close the gap, during the past 12 years they have deliberately widened it by a massive degree. That is what we oppose.
We have one of the lowest levels of child benefit in the EC. Despite what the Secretary of State said as he tried to make excuses by talking about alternative ways of providing help to families, the orders do nothing to remedy the losses to families and children that resulted from three years of Tory freeze. For the second and subsequent children, those losses amount to more than £2 a week. Despite the rhetoric about choice, the Secretary of State and his hon. Friends have done nothing to provide mothers with increased opportunities to work and paths to independence, which is what they want.
It is not enough to increase child benefit; mothers want the opportunity to be independent and stand on their own two feet. The Government have made no attempt to secure nationwide child care provision for working mothers. In addition, the Secretary of State has made no attempt to remove the poverty trap whereby if a mother stays home on income support, the mortgage interest on her home is paid, but if she works and receives family credit, the interest is not paid. As a result, many mothers are often forced back into unemployment and dependence.
The uprating orders are equally disappointing for disabled people. I listened carefully to what the Secretary of State said and I do not disagree with a good deal of it. However, I disagree with the fact that, after 12 years, the Government have not implemented a strategy of steadily working towards a comprehensive disability income benefit. That is what we should have had, but instead we have had 10 years of procrastination because the Government did absolutely nothing until 1990. I cannot blame the right hon. Gentleman personally for that. Reshuffled minutiae is not an unfair description of disability living allowance and disability working allowance.
The legislation was amended on Report to allow the affirmative procedure, and it is absurd that we have not been given proper time to debate these long and quite complex technical documents. As my hon. Friend the Member for Bradford, South said, the Government were determined to have them debated today, and documents have been pushed into the debate before the instruments have been examined by a statutory instruments Committee. That is an abuse of the House, and it is impossible in an hour or two of open debate such as this to go into the detail of the orders in the way that is required.
Before I run out of time, I should like to raise some of the key issues to which we expect full answers from the Minister. Will provision be made for visiting officers to help claimants who ask for assistance to complete the self-assessment forms? Will the disability working allowance claim packs clearly alert claimants to the fact 896 that if they delay they may lose benefit? Why have several commonly occurring disabilities been excluded in devising the DWA tests? The Minister looks puzzled. Urinary incontinence is one and respiratory disorders are another. Will there be at least one specialist benefit adviser in each local office to deal with the likely huge influx of inquiries about DLA? Will the Government introduce rules to prevent disabled people from losing benefit if they serve, as I hope they will, on disability appeal tribunals?
The debate should be about a major further step towards comprehensive disability income. Every time that we debate disability benefit, which is a huge gap in our system, that is what we should discuss. Nothing more starkly reveals the parsimony of the Government than the fact that we are debating a £1.50 a week increase in the pathetically inadequate £10 lower care component of the DLA.
The last and biggest group of those covered by the orders are those on income support, and here, more than anywhere, the Government and especially the right hon. Gentleman should be ashamed. The Minister looks terribly tired. No doubt he finds tedious my repetition of these facts. I repeat them, because they get worse all the time.
In 1979, there were 4,400,000 people on supplementary benefit. I agree that that figure was too high. There are now 8,300,000 people on income support. When unemployment rises, as the Government expect and forecast, to 2.9 million next year, the total number on income support will rise to about 8,800,000. That will be the highest number for 50 years of those forced to live on the poverty line. That is the Government's memorial after 11 years of rampant Thatcherism and one year of the classless society. In that year alone, the number of people on income support has risen by more than 1 million.
The Prime Minister speaks about the power to choose. Where is the power to choose on £42.50 a week? One can scarcely survive on that, let alone have the power to choose healthy food or essential clothing. It is time for the House to ask on what basis it is right for one seventh of our population to be paid £42 a week when they cannot work, while the average worker receives £300 a week, MPs £600 a week, Ministers £1,200 a week and many directors more than £5,000 a week.
What makes the situation far worse is that the Government have pushed a record number of people to below the poverty line, a line which is worth less as a proportion of average earnings than ever before. The right hon. Gentleman and the Prime Minister, who as I have said was a Social Security Minister in 1986, have produced a new category of poverty. They have pushed more than 1 million people below the poverty line, below £42 a week.
A parliamentary answer to me of 21 October showed that, as a direct result of the right hon. Gentleman's policies, more than 1 million people have been forced below the poverty line because of deductions of income support due to the poll tax, the social fund, and rent and fuel arrears. In addition, again as a direct result of the Act that the right hon. Gentleman and the Prime Minister together placed on the statute book, it is estimated that there are now about 115,000 16 to 17-year-olds with no education, no training, no jobs and no benefit entitlement. Many of them have not eaten for several days.
By contrast to these miserable orders, the next Labour Government will immediately raise the pension by £5 and £8 a week and the recipients, without deduction, will 897 include those on income support. We shall restore the link with earnings so that pensioners will get their proper share of rising living standards, and we shall consolidate Labour's SERPS which already grants an entitlement of more than £40 a week for someone retiring on average earnings this year.
We shall restore to child benefit what was lost during the three years of Tory freeze, and it will also be paid without deduction to those on income support. We shall provide pathways to independence for lone mothers, restore benefit entitlement to 16 and 17-year-olds, introduce a minimum wage of £130 a week and implement the social charter. For the 17 million who are the subject of these orders, that day cannot come too soon.
§ Miss Emma Nicholson (Torridge and Devon, West)
I went to Moscow for the weekend. In that city where the Soviet Union was slowly disintegrating I saw much poverty. Many people were queuing for food and I saw people with insufficient clothing for a temperature of minus 15 deg C. I also saw much unhappiness. As is the way with disintegrating socialist and communist economies, the guidebook took a rather different view. It was only two years old, but it painted a glowing picture of all the benefits that the communist and socialist system offered its people. It said much about the happiness of people. It showed happy faces and splendid statues and clean streets without queues. It gave not promises but statements, which it claimed to be accurate, about plenty of food and consumer goods.
When I listened to the overlong and turgid speech by the hon. Member for Oldham, West (Mr. Meacher) I was reminded of that guidebook. He paints a picture that bears no semblance of realism to the United Kingdom today. Perhaps the hon. Gentleman's feelings and inadequacies were encapsulated most beautifully in his question about where the money would come from and by his claim that that was some sort of Tory threat. The great weakness of the socialist system is that it has no money at all. All the hon. Gentleman's grand statements about what the next Labour Government will do—they will not, because a Labour Government will not be elected—will come to naught because there will be insufficient funding to do what the hon. Gentleman anticipates and would dearly love to do.
The hon. Gentleman's statement also displayed his great lack of understanding of the statistics—either that, or I have to conclude that he was putting before the House statements that were not absolutely valid because they were so selective that they did not give a proper picture. Perhaps the hon. Gentleman does not know that statistics have to be soundly based before one can use them. For example, he spoke about unemployment in Greece, but how does he feel about the 1 million mythical olive trees that the common agricultural policy so sweetly supports because Greece has reported to Brussels that they are in need of being set aside and nurtured?
Statistics are only as good as the base from which they are taken. That is why I suggest that, when the hon. Member for Oldham, West claimed that we had the lowest level of child benefit in the European Community, although he was not exactly misleading the House, he 898 should perhaps also have said that we have a significant scheme of family credit that is not shared by any other member of the European Community.
When the hon. Gentleman spoke about high unemployment payments and the levels of funding supplied by the state to the unemployed by other European countries, why did not he also add that in those member states there is no wife's pension, so that unemployment payments have to go towards providing a larger pension than the state provides? He spoke about the social charter, although he did not use the word "harmonisation", but why does not he admit that in Denmark, for example, men and women alike have a mandatory retirement age of 67? Why is it that he selects statistics that support only his own most abnormality inaccurate statements?
It is difficult for the hon. Gentleman, because he is trying to pursue an untenable case. I saw my right hon. and hon. Friends on the Front Bench look surprised when the hon. Gentleman spoke about the young being without a job or anything else, because he overlooked the largest youth training programme in the European Community.
The hon. Gentleman said about the elderly—this was his largest misunderstanding and cannot have been by accident—that people have paid and therefore have a right to have back in equal kind. I must correct that large and crucial misunderstanding. I know that my right hon. Friend the Secretary of State will have better statistics on this than I do, but surely to goodness the hon. Member for Oldham, West understands that, as we are a rapidly aging population, the people over 65 or 60 now, whom we deem to be elderly and who are of pensionable age, are taking more back from the state than they ever put in. I do not deride them for that—it is merely a question of understanding that there is no equal balance in our society between the amount that one puts in and the amount that one gets back. That rapidly aging population is placing an ever larger burden on the younger people who are earning. [Interruption.]
I see that this accurate statement wholly eludes Opposition Front-Bench Members, who are merely laughing and jeering at it. It is a pity that they are doing so, because with a rapidly aging population what we need above all is intelligent and careful planning of social security benefits rather than the mediocre statements that we get from them.
§ Miss Nicholson
The Opposition Front-Bench spokesman has had his say, but I will give way to him because I know that he will merely trot out more nonsense for me to knock down.
§ Mr. Meacher
The hon. Lady is so anxious to lay about her, claiming misapprehensions, that she seems rather to have overlooked the obvious point that it is an insurance system, that there is such a thing as a contributory principle, and that the problem with the national insurance system is not the increasing number of elderly people taking more out of it. The Government increased national insurance contributions from 6.5 to 9 per cent.—that is, by 38 per cent. If there is a problem with the national insurance system, it is that the Government have spent billions bribing people to take up personal pensions and at the same time have ended the Exchequer supplement, which was 18 per cent. of the total income in 1979. Perhaps 899 the hon. Lady needs a bit of a lesson about the nature of the national insurance system before she makes accusations against others.
§ Miss Nicholson
It was unparliamentary to claim that the Government have bribed the electorate, and it was not accurate either. It should not have been said. The hon. Member for Oldham, West has again picked selective statistics to support his untenable premise. He wholly overlooks the enormous investment in the national health service and other benefits and the way in which the elderly press heavily on the younger people who are putting the money into the system. My statements are accurate, and I should be happy to take the hon. Gentleman out to coffee afterwards to explain the matter to him. Exactly the same phenomenon occurred, a little ahead of us, in the United States.
The hon. Gentleman spoke about the social charter, or, more accurately, the social chapter that was taken out of last night's treaty, but he overlooked entirely the fact that the social chapter delineates gaps in the social service provisions of member states which do not exist here. For example, other member states do not have a national health service. There are many more benefits that our people have but that the hon. Gentleman would not dream of bringing to the attention of the House.
As the hon. Gentleman rightly said I would, I warmly welcome the statement by my right hon. Friend the Secretary of State. It is good, for example, that income support is going up to 7 per cent. and I am particularly pleased, having served on the Committee considering the Local Government Finance Bill, which sets up the council tax, that those on income support will keep the payments given for the 20 per cent. poll tax, or community charge, payment and will not, on top of that, pay anything towards the council tax. That is an excellent thing, and I am delighted that it should be so.
The hon. Member for Oldham, West spoke disparagingly about the disabled benefits that my right hon. Friend announced today. With characteristic quietness, my right hon. Friend made a statement towards the end of his speech that highlights the purpose of these benefits. He said that they gave new opportunities for independence and that has been the key to both the disability working allowance and the disabled living allowance.
The disability working allowance is an important move forward. I should like to see it matched by something else—disability rights in employment. In a report, the Select Committee on Employment, whose meeting I am missing so that I can contribute to this important debate, asked the Secretary of State for Employment to look into such a concept. The disability working allowance will empower disabled people who wish to work to go to work and, one hopes, to reach their full potential. I am glad that it applies also to those with long-term illnesses.
We have a long way to go when personnel managers still do not allow someone an interview if he mentions on his application form some disability. Even something as minor as a small fit of epilepsy may disqualify somebody for interview. From the social security point of view, the disability working allowance, far from being something small and modest, is an important marker. I hope and believe that it will give the disabled new opportunities for independence, as my right hon. Friend suggested.
900 I do not consider a comprehensive disability allowance to be a desirable goal, because it would reflect a paternalistic attitude. It would not empower disabled people but rather depress and marginalise them, telling them that they are different and so must have a comprehensive disability allowance. Far more important is to give people the ability to follow the path that they wish. In this instance, I particularly welcome the disability working allowance.
I am glad to learn that there will be a self-assessment programme which will again help disabled people, who may feel different from the rest of society, to take charge of their own fate. That is a crucial part of the proposal that we are debating. I am also glad to hear that those on mobility allowance, for example, will be able to transfer automatically to the disabled living allowance.
I cannot help but remind my right hon. Friend the Minister for Social Security and Disabled People of the excellence of the independent living fund. Only yesterday I sent him a letter congratulating him on introducing that excellent measure which will not yet have reached him. Some of my friends who are active in various areas of disability are still concerned about the independent living fund's short life, and I again ask him to consider that once more. It is an extraordinarily positive measure, which is immensely important.
I congratulate my right hon. Friend the Secretary of State on the grant for the National Council for One Parent Families. It is difficult for one-parent families to learn skills which will enable them to bring up their children in the way that I am sure they would wish and the grant is excellent.
The hon. Member for Oldham, West accused Conservative Members of being hypocritical and sentimental. That is surprising from a man who was a Minister in a Labour Government when the Christmas bonus was denied for two years to some of those in greatest need.
The hon. Gentleman talks about the victims of society. Conservative Members do not see their fellow citizens as victims; we see them as citizens of the United Kingdom and people whom we wish to assist to achieve their potential. Throughout the hon. Gentleman's too lengthy speech, I detected not just the outdated guidebook to a defunct socialist philosophy, but a hefty dollop of hypocrisy and unacceptable sentimentality. I would not have confidence in his ability to bring home the British bacon were I a member of British society who needed help.
Finally, I do not want to let the Minister off too lightly, so when he replies will he be kind enough to tell me how he will treat the transitional payments on housing benefit from next April onwards?
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
It is always a pleasure to follow the hon. Member for Torridge and Devon, West (Miss Nicholson). I was interested in what she said, particularly towards the end of her remarks. I agree that some of the recent changes in the area of disability have been commendable. The Government have moved quite a distance in a short space of time. The introduction of the new living allowance and disability working allowance scheme is another welcome improvement.
901 However, I profoundly disagree with the hon. Lady when she says that a comprehensive disability benefit would not be sensible in principle. I am sure that she is wrong about that. Those who study such matters have certainly persuaded me that it is the only sensible and fair way in which to deal with disability in the long term. I do not doubt that it would be more expensive, but we must move towards the situation where people can be fully compensated financially for the physical and learning effects of their disability.
Individuals need the help and support that is tailored to their needs and is right for them, so that they can play a full and proper part in the community in which they live. I am sure that that is a principle on which we should make progress. It may take time to achieve, but I should be much happier with that general approach. The hon. Lady seemed to be saying that she did not want to move in that direction, which I think is a mistake on her part. However, I agree with much of what she said towards the end of her speech.
I certainly agree that the grant that has been announced for the National Council for One Parent Families is extremely welcome. A retraining grant will be of considerable assistance to many single-parent families. However, there are between 300,000 and 400,000 single-parent families in Britain and £1 million, welcome though it is, will not go too far towards dealing with the sort of difficulties that single parents have in trying to fight their way back into the employment market.
I endorse the criticism made by the hon. Member for Oldham, West with regard to the disability living allowance and disability working allowance regulations. It is regrettable that the Joint Committee on Statutory Instruments has not had a chance to consider them. The draft regulations amount to 80 or 90 pages and are fiendishly complicated. I have never been a Minister, but the Minister must be able to tell the business managers that he will not go before the House without at least the protection of such regulations having been considered by the Joint Committee on Statutory Instruments. If he has not, he should quickly arrogate that power to himself. Without such consideration, it is difficult for us to be sure that the regulations are intra vires. These are important and complicated regulations.
§ The Minister for Social Security and Disabled People(Mr. Nicholas Scott)
The hon. Member for Bradford, South (Mr. Cryer) raised that matter, and it seems to be a slightly running issue. Three sets of the regulations referred to by the hon. Gentleman are subject to the negative procedure. There is no requirement to send them to the Joint Committee on Statutory Instruments, but it is always open to the Opposition to pray against them. That they have done, so the proper procedure has been followed.
§ Mr. Kirkwood
I entirely take the Minister's point. I was confusing those regulations with some others, because I happened to be dealing with the lack of adequate time for the disability working regulations. As the hon. Member for Oldham, West (Mr. Meacher) said, dangers and difficulties arise as a result of the shortage of time that is available to consider the regulations. The Minister is right. Scrutiny by the Joint Committee on Statutory Instruments applies to other affirmative regulations.
§ Mr. Allen
I hope that the hon. Gentleman will not accept the Minister's explanation too readily. In Committee, an Under-Secretary of State agreed to a debate on the Floor of the House under the affirmative procedure. It was not the Committee's understanding, nor, I am sure, was it in the Under-Secretary of State's heart, that those crucial regulations would be bodged together with the uprating statement so that there would be insufficient time to discuss them.
§ Mr. Kirkwood
That is helpful. I do not want to make a meal of this, but the point has obviously been well made. If Ministers were tempted to give undertakings to the Committee, on which unfortunately I could not serve because I was dealing with other orders such as the Scottish seed potato order at the time, what has happened is a bit below the belt. I hope that the Minister will reassure us that the fact that some of these orders have not been considered by the Joint Committee on Statutory Instruments will not happen again.
§ Mr. Kirkwood
The Minister may be surprised to learn that I am not responsible for what is said by Her Majesty's official Opposition. However, if hon. Members had been given more time to study these complicated regulations, more of them might have realised how adversely they affect some of their constituents and would have made it their business to be here. This complex system of social security is beginning to get out of hand.
§ Mr. Allen
Conservative Members say that this is a stupid procedural diversion. The Disability Alliance, Mencap and other disability groups are outraged at the way in which these four affirmative orders have been spatchcocked on to the normal debate. Although Conservative Members have had a lot to say on the subject, in Standing Committee E the hon. Member for Maidstone (Miss Widdecombe) said:The effect of the amendments"—in other words, an amendment to the Bill in order to make these affirmative orders—would be that all regulations under the Bill would be subject to the affirmative procedure."—[Official Report, Standing Committee E, 24 January 1991; c. 268.]Opposition Members and all the organisations which were present at the proceedings were under the clear impression that all affirmative orders would be the subject of a separate debate so that these very important matters could be gone through line by line, if necessary. That is not the case when they are added on to the normal uprating statement, as has happened today.
§ Mr. Kirkwood
I am grateful for that helpful clarification. I had not originally intended to make a great issue of the fact, but it is true to say that the pressure groups that study these matters in great detail are incensed at the way in which the orders have been introduced. In his comprehensive speech, the hon. Member for Oldham, 903 West was able to touch on only some of the detailed and complicated matters that may receive scant attention tonight.
§ Mr. Haynes
I am a bit surprised at the Minister. Social Security Ministers are ducking about all over the place. They are not accepting their responsibilities. My hon. Friend the Member for Bradford, South (Mr. Cryer) has being doing a first-class job on the Committee. When I have been in the Chamber, he has raised the matter regularly with Mr. Speaker. He is appalled at what is going on; the orders have not been considered by the Committee. My hon. Friend does not raise the matter just for the fun of it; he raises it because of its serious nature. Ministers make excuses in their own interests, but they are responsible for these matters and they should do their job properly. Incidentally, the Minister of State knows that he has got a real pressure group round his neck when it comes to disability and the disabled. He knows what I am talking about.
§ Mr. Kirkwood
These are difficult interventions to deal with. I am not responsible for what is said by Her Majesty's official Opposition. Even less am I responsible for what is said by the Minister of State. Nevertheless, I subscribe entirely to the hon. Gentleman's helpful intervention.
Self-assessment may lead to difficulties. To the extent that it avoids medical bureaucracy and so on, it is an improvement, but self-assessment is a radical change. The pressure groups want a clear assurance that they will be able to ask, as of right, for a visit from the visiting officer—at least in the initial stages so that the new self-assessment procedure can be carried through correctly. By 3 February 1992, we know that all fresh claims for attendance allowance and mobility allowance will be treated as claims for disability living allowance. One can imagine, in such a relatively short period, the delay and uncertainty that will be caused if the transitional arrangements are not properly set out.
Even with the help of highly motivated and expert Benefits Agency staff, I cannot see how, with the best will in the world, that can be achieved in an ordered way. Correct information must be made available to people who claim the new allowances. If it is not provided, it may prejudice some of the other benefits to which they are now entitled. I am told that the Under-Secretary of State gave an undertaking in the House of Commons that steps would be taken to warn claimants about the possible loss of benefits. Failure to do so now would be a breach of promise. I hope, therefore, that appropriate information packs will be made available so that benefits are not inadvertently lost.
A number of the regulations have given rise to concern. They omit some of the qualifying disabilities. The pressure groups consider the omissions to be flagrant discrimination. The hon. Member for Oldham, West referred to respiratory problems and incontinence. The Minister of State must reassure the pressure groups. He would go some way to doing so if he told the House tonight that he intends to monitor carefully what is happening and to initiate independent research into the strengths and weaknesses of the new system in its initial stages.
904 I am the secretary/treasurer of the all-party pension group. I have followed the pension changes and difficulties that have been experienced by my constituents and the work that has been undertaken by the all-party pension group. The 1992 pension increases are welcome, as far as they go. The Government's pledge on price protection has also been honoured, so far as it goes. Nobody, however, would deny that there is a growing gap between those who rely for the majority of their income on state benefits and the average working population.
That disparity causes me great concern. The increases of £2.15 or £3.45 that have been announced for next April are not enough in terms of the basic state pension, which supplies most of the income for the majority of our pensioners. Those who sit on the Treasury Bench make claims about average net income increases. I do not doubt the figures and I welcome the fact that, on average, there has been a 33 per cent. increase in income over the period 1979 to 1988. To a certain extent that was inevitable as a result of the changes that have occurred over the past three or four Governments and I am certain that it will continue to improve.
I hope that I shall not be retiring too soon, but if I see out the rest of my working life as a Member of the House, I shall retire with a pension that should look after me comfortably. I am concerned about the people who are retired and over 70 between now and then. The Government can say that increased amounts have been devoted to pensions and that their pledges have been kept. However, Age Concern has done some research and found that the percentage increase in the average income of the lowest quintile of pensioners over the period 1978 to 1988 is 15 per cent. and for the second lowest quintile it is 19 per cent. I see the hon. Member for Beaconsfield (Mr. Smith) looking puzzled. If those figures are right—they bear out the experience of some of my casework—there is a group of pensioners in deep financial trouble.
I understand that the Government's policy is to target pensioners and, as I said, the increase in premiums is welcome as far as it goes. I hope that, in his discussions with the Treasury, the Minister will not just look at the statistics that he quotes with monotonous regularity, and I guess with some justification, about average incomes, but that he will say that some people below that average have real problems.
The only way in which that can be addressed sensibly is by putting extra money into the basic state pension. Current average adult earnings are about £263 per week. The disparity between that and even the increased pension rates of £54 and £86 for a single person and married couple is enormous and it is getting worse every year. It is unacceptable. The Minister should tell the House that he is prepared to go to the Treasury and argue not just for increases that provide price protection, but that he will start to look at the experience of those in the bottom two fifths of the pensioner population and make arrangements to do something significantly better for them.
The Minister could use all sorts of devices to achieve improvements. He could make substantial increases in the severe weather payments scheme. I know that there have been improvements, but as I represent part of the country where the climate is meteorologically colder, I know that there is a great deal of scope of increases in the support that we provide for heating allowances for our elderly population. Also, the 20 per cent. community charge payment should have been abolished completely this year. 905 I welcome the Secretary of State's announcement that the poll tax compensation of £700 million will not be clawed back. However, the Government should have done something this year to mitigate the costs of that 20 per cent. contribution. That, taken together with water charges, is driving pensioners into real poverty and will wipe out any increase that the uprating orders will bring in April.
I receive more complaints from retired people about standing charges than anything else. The reason for that is obvious. The recent announcements of salaries and profits being made by the new privatised energy companies whether gas or electricity, are galling in the extreme. The same is true of British Telecom and the BBC television licence increase that has been announced recently. Older people are incensed that those companies are making huge profits and that their chief executives are receiving huge increases in their salaries to bring them up to the so-called market rate, while they are paying high standing charges. It is indefensible.
The Christmas bonus has also been neglected for too long. The Minister should make a statement of intent about that. It should have been substantially increased, as it is a useful contribution to the income of retired households at this time of year. The Government should index it or come clean and abolish it. It is unforgivable to leave it to wither on the vine.
Increases in the costs of transport, housing and health charges and other costs for food, heating and clothing, are becoming unbearable for retired people in my part of the world. I have given the Minister credit for what has been achieved, and I am disappointed that he has not been able to go further.
There is now an overwhelming case for the Government to undertake an urgent investigation into simplifying the structure of the benefits system. Their public excuse was that they attempted to do so in the Social Security Act 1986, but it has clearly been a failure. We have been discussing the DLA scheme, which is good in principle. However, when the regulations are published, even good schemes become a nightmare of complexity for those of us who are supposed to make sensible policy and for those to whom the schemes are supposed to apply.
I make a plea for the Government to consider a matter of urgency, either through independent research or their own officers, finding a long-term method of achieving a much more comprehensible system that is easy to use and that can be understood by ordinary people.
§ Mr. Tim Smith (Beaconsfield)
Like the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), I was concerned when I first saw the complexity of the disability regulations. I do not like complex subordinate legislation. As far as possible, it should be included in primary legislation; otherwise it makes it difficult for the House to consider the issues. However, if we choose, we can continue the debate for nearly an hour and a half. I am struck by the paucity of hon. Members in the Chamber. I do not think that it will be difficult for all those present to make a contribution to the debate. That is why I described what happened earlier as a stupid procedural diversion. It is better if we consider the merits of the orders before us.
I do not want to be predictable, because the hon. Member for Oldham, West (Mr. Meacher) does not like 906 people to be predictable. He was fairly predictable except in one important respect. I congratulate the hon. Gentleman on his speech—I am sure that he would not have predicted that—because he attempted to deal with the question of who would pay for increased benefits by quoting a statement apparently made by the permanent secretary to the Department of Social Security, Sir Michael Partridge. I listened to that with great interest. There is something in what he said about a prospective demographic change over the next 10 or 20 years.
However, I do not think that one could increase pensions in line with earnings each year if one did not address oneself, not to the rate at which contributions are made, but to the income on which contributions are assessed. Under the present arrangements, the minimum and maximum limits are increased each year in line with prices. If we were to move to an earnings-linked set-up, we should have to make changes accordingly. Working people, especially those at the top of the range, would have to understand that they would be paying more. Of course, under a Labour Government they would be paying more anyway, because the Labour party proposes to undermine the contributory principle further by extending the 9 per cent. contribution rate with no maximum limit.
The point is rather academic for the Labour party. It is all very well for the Labour party to say that it will increase pensions in line with earnings, but that presupposes that earnings will rise faster than prices. Of course, that has been the case over the past 12 years—the record is remarkable. Over the past 12 years, the take-home pay of a married man with two children has increased by more than 30 per cent. Take-home pay hardly increased under the Labour Government of 1974–79. Indeed, in some years, prices increased faster than earnings and people's standard of living fell. Therefore, the fact that pensions were to be increased by earnings rather than prices was academic; it meant nothing to pensioners.
The previous Labour Government not only robbed pensioners of the Christmas bonus but, in one year, failed to uprate pensions for eight months—there was a gap when no improvement was made. Unlike some young people, pensioners can remember exactly what happened under the previous Labour Government. They will want to place the promises that Labour is now making to them in that historical context.
§ Mr. Meacher
Perhaps the hon. Gentleman will confirm, if he is aware, that under the previous Labour Government the pension increased by 20 per cent. in real terms, whereas in the past 12 years the 2 million pensioners who are dependent entirely on the basic pension or on income support have had a zilch increase in their standard of living.
§ Mr. Smith
The hon. Gentleman may be right—I am not in a position to argue with him—and I am prepared to concede the point for those 2 million pensioners; but millions of other pensioners have benefited enormously under this Government, not only from increases in the standard pension but from rising income from the state earnings-related pension scheme, rising occupational pensions and increased income from savings. That fact must be put in the wider context.
If I may be predictable for a moment, I should like to welcome the benefit increases. The Government have a fine record on increasing benefits in line with prices every year, 907 but I have a particular point to raise with my right hon. Friend, although it is principally a matter for the Treasury. Pensions are increased each year in line with the retail prices index. Some pensioner constituents have written to me to say that they think that their cost of living is rising by more than 4.1 per cent. I think that they are right. I have had to try to explain a rather sophisticated argument: last year their pensions were increased by more than 10 per cent., when the increase in the cost of living was lower.
The RPI is a broad-brush measure of inflation, especially for pensioners. Housing costs account for a large proportion of the RPI, and mortgage interest rates play a significant part in housing costs. That is relevant to people who are in work, as those of us who have mortgages know, but, generally speaking, it is not very relevant to pensioners, who, if they had a mortgage, have usually paid it off.
What has happened is a swings-and-roundabouts operation, whereby last year pensioners received more than the cost of living that they had incurred, whereas this year they will receive less. It is rather difficult to explain that. A different index, the Rossi index, omits housing costs. It was not surprising to learn that that was rather higher—7 per cent.—as it takes into account the point that I have just made.
There is no simple solution to the problem, which was examined recently by the Public Accounts Committee. Therefore, although the RPI is a widely followed and widely understood index, it is not entirely satisfactory for the indexation of pensions.
My next point is on a relatively minor announcement that was made on the same day that my right hon. Friend the Secretary of State announced the changes in benefits and contributions. It dealt with something about which I had been writing to Social Security Ministers for about six months—abuse of the benefit-in-kind regulations, whereby highly paid people were paying themselves in gilt unit trusts. The loss of revenue amounted to about £1 million a week. I was concerned about that and very much welcomed the change that was made. It is wrong that people should be able to abuse the social security contribution system, and I hope that Ministers will keep a close eye on the matter because the smart people who offer advice may be looking for further ways of getting around the regulations.
Quite rightly, social security contributions are applied to benefits in kind, but it creates an extra burden for employers if the system of assessing the benefit that will be subject to contributions is out of line with income tax. I hope that my right hon. Friend the Secretary of State will keep closely in touch with the Chancellor of the Exchequer so that the system for taxing benefits in kind runs parallel with the system that he operates in his Department. Most people do not think of the Department of Social Security as a great taxing Department, but it raises enormous sums that go into the national insurance fund to pay benefits. That is welcome, but I should like that element of the contributions to be kept in line with income tax to minimise compliance costs for employers.
§ Mr. Paul Flynn (Newport, West)
In the spirit of affability, may I congratulate the Government on one of the changes that they made some time ago, in which they followed fairly accurately the views expressed in early-day motion 488, which noted that whenthe Social Fund cold weather payments scheme trigger mechanism was put to a serious test it collapsed three times under the weight of its own absurdity…the scheme is inadequate, inefficiently targeted and wasteful as the cost of advertising and administration are unjustifiably high; and urges a new saving limit of £3,000 that would create a fully automatic scheme".The Government followed that early-day motion, except in the principal respect of the claim about the inadequacy of a payment. I say that to show that the payments are ludicrously inadequate—£6 last year, £6 this year and presumably the same next year.
The other matter with which I wish to deal is the false feeling among Conservative Members that the Government have acted correctly on child benefit. That was said by the Secretary of State and by the Prime Minister, who said that the Governmentattach particular significance to support for families through the provision of increased child benefit".—[Official Report, 29 November 1991; Vol. 199, c. 667.]It is worth noting what has happened. The Prime Minister could not have said that between 1987 and April 1991—the four years when child benefit was frozen. Nor could he have said it in 1985, when the uprating was 35p per child below inflation. Can he honestly say it now? After next year's uprating, child benefit will still be worth substantially less than in 1984, the last year before the process of erosion began. Even for the first child in a family, despite the fact that this year's uprating mainly benefited first children, there is still a shortfall of 75p a week. For other children, the losses are much higher—£2.60p a week for every child from the second onwards.
For instance, if child benefit had been uprated fully in line with prices since 1984, a three-child family would receive £31.20 a week from next April, whereas they will receive only £25.25p—£5.95p a week less than in 1984, or a loss per child of £100 a year. That is little for the Government to congratulate themselves on.
The logical basis for uprating child benefit is not prices but average earnings, as the main purpose of the benefit is to reduce inequalities in living standards due to family size. A similar comparison of 1984 and 1992 child benefit rates, taking into account the increase in earnings, shows that the benefit from next April should be £12.55p per child; instead it will be £9.65p for the first child and only £7.80p for each subsequent child. For a three-child family, child benefit has fallen below earnings by £12.40 a week or £645 a year. The value of child benefit for a three-child family relative to average earnings has fallen by 33 per cent. over a mere eight years. Yet the Secretary of State says that child benefit is one of the main elements in support for the family, and the Prime Minister says that he attaches "particular significance" to it.
I shall continue to pursue another matter on which I touched in an Adjournment debate, although it is difficult to arouse great interest in it among Conservative Members or among anyone else. It is a matter of great importance, on which the Government are at it again. As there were signs of some useful action by the Government on cold weather payments, I believe that the struggle may avail something, so it may be worth pursuing the point.
909 The Government's commitment to child benefit has been shown to be only lukewarm, and they regard the benefit as a politically necessary extravagance. We have heard the argument time and again because the benefit is paid to all families, whether rich or poor. However, dependency additions are paid to people who have suffered greater losses and who are the most deserving, whom the Government claim to target. The additions are paid to people such as widowed mothers, retirement pensioners with children—surprisingly, there are many—invalidity pensioners, guardians and other carers who receive invalidity care allowance. There are 200,000 such families, and more than half of them include a sick or disabled parent.
Those families have lost in two ways. First, like other families, the value of their child benefit has fallen since 1984. Secondly, there has been a dramatic erosion in the value of the children's allowance which they receive as part of their national insurance benefit—the child dependency addition. Since 1979, with one exception, every increase in child benefit has been deducted from the additions. If the increase in child benefit had been a real increase, there might have been some logic in that. However, child benefit has fallen in real value, so there was no justification for reducing the dependency additions. The Government have offered the excuse that that happened under a Labour Government in 1977, as if it was right to continue to do something that was done once before for a short time. There is no justification for the policy to continue.
The cumulative effect has been dramatic. When the Government took office in 1979, child benefit was £4 per child and the child dependency addition was £5.35—a total of £9.35 per child. The 1992 equivalent, simply adjusting for inflation, would be £25.50 per child. Instead, the combined amount payable from next April will be £19.40 for the first child and £18.65 for the second onwards. Those most deserving families have lost more than £6 a week for each child. For a widow or for a chronically sick parent with three children, the total loss is almost £20 or £1,030 per annum.
The one occasion on which the Government did not cheat on the payments was earlier this year and we hoped that it had something to do with the Adjournment debate. Under attack from hon. Members of all parties, the Government decided that the increase in child benefit in October would not be deducted from other benefits. The conversion was short-lived. I understand that next April's increase will be deducted from the national insurance dependency addition, just as all previous increases have been.
The Secretary of State has argued today that at least part of the money saved has been spent on other benefits and he has implied that on balance, people are no worse off—a familiar argument. The fact is that the people who have lost out from the erosion of children's allowances have also lost in other ways. Widows and the long-term sick, for example, have suffered big losses in the breaking of the link between benefits and earnings from 1980 onwards. Widows have suffered an additional loss from the freezing of the £1,000 widow's payment, a matter on which the Government are curiously shy.
I hope that I can catch the attention of the Secretary of State. The widow's payment was introduced at the level of £1,000 in 1988. Like so many other worthwhile benefits, it 910 seems destined to wither away year by year, even though the benefit that it replaced, the widow's allowance, would have been uprated annually if it had continued.
Cold weather payments, child benefit and the dependency allowances are important matters on which the Government have cheated in the uprating statement. They affect the poorest and most vulnerable families in the land. When will the Government start to do the proper thing and uprate the benefits as they should?
§ Mr. David Winnick (Walsall, North)
There is certainly no room for complacency when we debate pensions and the other provisions in the orders. There are far too many pensioner households in which the total income is very small. The obvious reason for that is that the state pension is low.
I listened carefully to what the Secretary of State said about the reasons for the 1980 decision whereby the pension was no longer increased in line with earnings. Whatever the Government say, there can be no doubt from the answers given to parliamentary questions that, if the pension had been increased in line with earnings, a married couple would now receive more than £20 a week extra. That extra sum is very much needed by people who rely on the state pension or on income support and by those who rely on the state pension and a small occupational pension which disqualifies them from receiving income support.
Many people live in poverty through no fault of their own. Some pensioner constituents who come to see me ask why they are penalised and punished. The hon. Member for Derby, North (Mr. Knight) seems to consider it a matter of amusement. I do not know whether he, although a Whip, wants to intervene. If he does, I shall give way. Do those of his constituents who have to live on the margin, as many of mine do, consider the subject to be a matter of amusement? The hon. Gentleman continues to be amused. He is a Whip who receives about £35,000 a year or more and he does not have to worry about the daily necessities of life. He should consider pensioners who have to rely simply on the state pension and income support or a small occupational pension.
We all know how bitterly cold it is now outside; it is not very cold here, of course. How many of our constituents cannot keep their homes adequately heated? They simply have not got the money, and they are frightened to put the heating on and to keep their homes warm because of the bills which they know they will not be able to pay. We should be concerned about that.
The main reason why pensioners are in this plight is the Tory Government's decision in 1980. Another reason is the drastic reduction in housing benefit in 1988. Local authorities no longer have the discretion to decide on rebates, and the rebates are very limited. What shocks me and should shock every hon. Member is that those whose total income is so small have to pay out of that income far too much in rent and poll tax. I hope that a Labour Government will change that system.
We debate the orders against the scene that my hon. Friends and I have described. Literally millions of elderly people live in poverty or in near-poverty through no fault of their own. It is understandable when pensioners who come to see me ask, "Who won the war? What crime have 911 we committed that we should have to live in this way?" They have to struggle desperately every day to make ends meet.
I welcome the changes affecting cold weather payments. I understand that the payments will be triggered automatically so that people on income support will not have to apply for them. Anything along those lines is welcome, however modest, but let us understand clearly that those payments are triggered only when the temperature reaches zero or below for seven consecutive days. It is bitterly cold outside today, but probably not cold enough to trigger the payments.
Help should be given to pensioners—certainly to those on income support, and if possible to those whose income is just above that level. In winter, they face many difficulties in trying to keep their accommodation warm. How shocking that must be. When we go home, we put the heating on. We may worry a little about how much it will cost, but we know that, by and large, we shall be able to meet the bill. That is not true of the people about whom I am talking. I see that the Under-Secretary is nodding in agreement. I wish that she would use whatever influence she, as a junior Minister, may have to bring about a more generous cold weather payments scheme.
I began by describing the position as Labour Members see it. While my hon. Friend the Member for Oldham, West (Mr. Meacher) was speaking, I said that I challenged any Conservative Member of Parliament to spend just one week—I do not ask for longer—living on the money that so many of our constituents who are pensioners have to rely on—the state pension and income support. Conservative Members should try that for a week.
When Matthew Parris and another Tory MP who has since lost his seat tried to live on income support for a week, they both found it virtually impossible. By the fifth or sixth day—certainly by the end of the week—their money was exhausted. Would any Conservative Member here tonight accept my challenge to try to live on the state pension and income support? They know the answer. They know that it would be almost impossible for them, even though it would be for only a week, after which they could return to their comfortable lives.
Much has been said about what a Labour Government could and could not do, but I am certain that a Labour Government would set out with the best of intentions to improve the situation. Between 1974 and 1979, we kept the pension in line with the increase in earnings or prices, whichever was the greater. As my hon. Friend the Member for Oldham, West has already said, during those years the pension increased by 20 per cent. in real terms. That is far better than anything achieved for pensioners during the past 11 years.
I welcome the fact that, when we are returned to government at the next election, pensions will go up by £8 and £5; those are steps in the right direction. If we can do more—if we can do what I have described—so be it. The basic difference between us and the Conservatives is that Conservative Members do not want that to happen. They believe that the miserly increases being made now are enough for pensioners.
We take a different attitude. We believe that retired people who have worked all their lives are entitled to a decent standard of living. There is no reason why they 912 should have to live in poverty and near-poverty. We want that to end as quickly as possible, and an effective way to achieve that would be the election of a Labour Government.
§ 7.4 pm
§ Mr. Graham Allen (Nottingham, North)
This is the last uprating debate before the general election. We are thankful that we have also had the last uprating statement that will be issued in the name of the Conservative party for many years to come. This is a suitable time to examine the record of this Administration, of the Secretary of State and of the Prime Minister.
It is also a suitable time to look forward to a new Government which will use the Department of Social Security to defend the interests of pensioners, the disabled and others in need, rather than the interests of the Treasury, the wealthy and the political constituencies of the Conservative party.
Sadly, this uprating, like all the others announced by the Secretary of State, is a civil servants' uprating—a shuffling of the pack. It is an uprating after the Treasury officials have filleted it. It is the first draft—one which the officials probably expected Ministers to beef up and argue about. Instead, the civil servants have had a walkover. This is not so much "Yes, Minister" as "Yes, Permanent Secretary".
The uprating, like its predecessors, betrays a Department on autopilot—a Department and a Secretary of State both suffering from advanced anaemia. They can do whatever they like provided that it is what the Treasury has already agreed. Those terms of reference seem to suit the Secretary of State down to the ground. If a pre-election bribe is needed, the Government can knock a penny in the pound off income tax, and social security will probably deliver the cost. I can tell our friends in the Box that after next May that will not happen any longer. They might now begin to turn their minds to the new opportunities that will arise for them, as well as for the people whom we shall seek to represent.
The uprating deals with the expenditure of the largest Government Department—it spent some £60 billion this year. When the history is written, for what positive things will the Secretary of State's tenure be remembered? I shall be glad to give way to any Conservative Member who can think of any. Sadly, there do not appear to be any takers.
Unfortunately, many people will have cause to remember the Secretary of State and the Government—for all the wrong reasons. The pensioner couple, who even after the uprating will still be £25 a week worse off, will remember him. As my hon. Friend the Member for Walsall, North (Mr. Winnick) said, that is not this week or next week but every week. Pensioners will be worse off every week because the Government broke the link with earnings. Single pensioners, too, will be worse off by £16 every week.
What an indictment it is that people wholly dependent on the state pension, with no other source of income, are now almost automatically eligible for income support. The compression of the state pension down to income support levels has gone so far that it has superseded the income support level, so that every pensioner, as of right, should be on income support. What a pass we have come to when state pensions have been screwed down so far.
913 Other people who may remember the Secretary of State and write his epitaph are the mothers whose child benefit is still worth £2.15 a week less than it was worth in 1987 for second and subsequent children. There is a whole litany of people. There are the unemployed who, as my hon. Friend the Member for Oldham, West (Mr. Meacher) told the hon. Member for Torridge and Devon, West (Miss Nicholson), have suffered 11 separate cuts in benefit. A total of £1.5 billion a year has been taken away from the unemployed. That is a record of shame.
Those cuts apply not only to the group of people whom the Conservatives would like to have us believe are claimants—the little group of scroungers whom Labour Members wish to prosecute at least as much as Conservative Members do, because of the vast number of people in need who are tarred with the "scroungers" brush that the Government choose to use.
In fact, the biggest section of people involved in the social security system are ordinary working people—the 20 million or so people who contribute every week to the national insurance fund, those mugs who pay in every week in the mistaken belief that at the end of their working days, or if a crisis should arise, they will have benefits to fall back on when times get tough.
There is a long catalogue of people who will queue up to write the Secretary of State's epitaph. Sadly, his tenure has been characterised, too, by an affront to the House and to our democracy. Even during my brief tenure at the Dispatch Box, the Secretary of State has been party to several actions to which parliamentarians and democrats should not be party. First, the Government made law when Parliament was not even sitting. In the summer, the statutory instruments arrangements were abused when certain backdated benefits were effectively eliminated in instruments moved after Parliament had risen. That law came into being when we were not even here.
Secondly, the Government have evaded parliamentary questions by placing the Benefits Agency and other agencies beyond our reach: we could not find out the answers without going through ever more tortuous procedures.
Today, despite assurances given by the Under-Secretary of State for Social Security in Committee, crucial regulations on disability have been botched together with the uprating measures so that they cannot be effectively and properly considered by Parliament. [HON. MEMBERS: "Not true."] Disability organisations and their members may dispute Conservative Members' sedentary interventions. They know very well from their reading of Hansard, and because they were present during the Committee stage, the assurances given and the spirit in which they were made. They are aware of the fraud, and my hon. Friends and I will make them even more aware of it. Like everyone else, they will be able to pass judgment by means of the ballot box.
The very principle of social insurance lies not merely threatened but broken by 12 years of abuse by the Government. Its restoration will be one of our first and continuing tasks at the Department. The violation of the state pension fund by the Secretary of State and his predecessors makes Robert Maxwell's activities look like those of a dabbling amateur. They have ripped off £6.7 billion from our state pension fund—a process that started when the current Prime Minister was a Minister at the then Department of Health and Social Security.
914 As my hon. Friend the Member for Oldham, West said, by the end of the decade, they will unilaterally have slashed £12 billion from the value of SERPS, transferring funds paid in by all of us for the future into private funds run solely for the benefit of the few. Even those few are now being bled dry by charges and commissions just when they thought that they had entered the land of milk and honey.
The Government have given themselves a permanent contributions holiday by no longer making an Exchequer contribution to the national insurance fund. As was said earlier, before 1979 18 per cent. of that fund was paid in by the Government, but now the Government have taken a holiday. It is little wonder that the private sector mimics the Government in its disrespect for pensions. It is not so much a case of Captain Bob as of Major John and Petty Officer Newton. I hope that you, Mr. Deputy Speaker, will impound the Secretary of State's passport because it may well be needed when the full inquiry gets under way.
§ Mr. Flynn
My hon. Friend caused some agitation on the Government Front Bench when he quite fairly referred to the Government's policy of denying information by diverting answers through the agencies. He will be aware that only the most diligent of hon. Members and outside organisations used to go to the Table Office or the Library to get those replies.
Perhaps my hon. Friend does not know that the Government have just announced that they intend to nationalise the private enterprise operation that I am running, which entails my sending those replies to all Opposition Members—as I have been doing for the past three months—and, this month, to Conservative Members, following an offer made to their Whips some time ago. My hon. Friend will be glad to know that the denial of information will shortly come to an end.
§ Mr. Allen
I am grateful to my hon. Friend for his intervention—although anything that the Government nationalise they may flog off at a profit at a later date, so I ask him to keep an eye on the situation. As a member of the Procedure Committee, I was one of those who urged—not least at my hon. Friend's insistence—that the House should once again be able to see the answers to parliamentary questions on social security matters. I can promise him and you, Mr. Deputy Speaker, that we shall examine the new arrangements. I can say fairly confidently that those arrangements are inadequate and will be reviewed by my hon. Friend and his team when we come into office next May.
The Conservatives' strategy of holding back the state pension on the ground that the deficit could be made good by additional private sector pensions has been blown out of the water, not least by the vulnerability of occupational pensions which we have witnessed recently and by the under-performance and the milking of private pension schemes themselves.
Labour will put that right. We will legislate to ensure that the Maxwells, Hansons and Lucases cannot raid our occupational pension funds. We will also need to restore an honest state pension fund that can be kept at arm's length from the rip-offs of future Conservative Governments if necessary. No doubt, as the election approaches, the Conservatives will seek to blame everything on the right hon. Member for Finchley (Mrs. Thatcher)—a close friend of the Chancellor, whom I am glad to see in the Chamber. How very convenient to have 915 the right hon. Lady to blame. One is reminded of how those huddled in the dock at Nuremberg pointed towards the bunker. We shall see ever more frantic gesticulating in the direction of Finchley, Dulwich or the American lecture circuit as the election approaches.
We must remember, however, that today's uprating comes more than a year after the Conservative leadership coup and that there can be no excuse for the provisions. In the intervening year, nothing has been done to right the wrongs of the decade, so what profit has been gleaned in the first year of the new leadership of the Conservative party? What has been the harvest?
More than 300,000 more families are on income support as a result of the economic mismanagement and incompetence for which the Government and the Chancellor are responsible. Thanks to the Prime Minister's ban on benefit for unemployed 16 and 17-year-olds, another 21,000 youngsters have been sucked into a black hole where there is no job, no school, no training and no benefit.
This year, 25,000 pensioners, sick and disabled and others have received no increase whatever in their weekly benefit, which was frozen in 1987 when the Prime Minister was pushing through the Fowler cuts. The right hon. Gentleman was the grinning accomplice of those who reduced benefits for people injured at work. He was the accomplice of those who pushed for the 20 per cent. poll tax contribution required from the poorest. His fingerprints are also to be found on the introduction of the hated social fund. He was at the Department when it abolished the maternity grant. He was Minister at the Department when the Government halved help with mortgage interest repayments for the newly unemployed.
That is the Prime Minister's social charter for Britain. That is the way in which he devised his social charter when he had the ability to make policy at the Department. That is the right hon. Gentleman's pedigree. Little wonder, then, that the Tory party is laughed at even by its continental sister parties for being so backward and Victorian.
The present uprating puts none of that right. The Conservative Government are content with their decade of work on the jobless, the disabled, mothers, pensioners and others who deserve better. I am sorry to say that there is no joy here, only despair. The only cause for celebration tonight is that is that this uprating will be the Secretary of State's and the Government's last.
§ The Minister for Social Security and Disabled People (Mr. Nicholas Scott)
Whatever that was, it was not a winding-up speech. It is said of some speeches that they smell of the lamp. The speech of the hon. Member for Nottingham, North (Mr. Allen) smelt of a weekend with the thesaurus and a few reference books, and was made without reference to what had preceded it.
I am not one to accuse the hon. Gentleman of misrepresenting the position; I know and like him too much for that. Nevertheless, he betrayed a total and absolute misunderstanding of the public expenditure survey process and the part that my right hon. Friend the Secretary of State played in it. I am not one who crawls, but I feel bound to respond to such attacks on my right 916 hon. Friend. Anyone who has served with him at the Department—and I am talking not just about his present ministerial team—knows that he not only brings a greater degree of expertise to his job than anyone I can remember but does it with great inventiveness in terms of improving benefits and with an exceptional degree of compassion and, above all, integrity. I say that with absolute passion about a man who is my boss and my friend and with whom I am proud to serve in this Government.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) takes a close interest in these matters. He wanted to know whether we would monitor the introduction of the new disability benefits and their impact in policy terms and with regard to their administration. I give him that absolute assurance. All Ministers in the Department of Social Security are conscious of the fact that in social security very little is for ever. Society changes and the social security system must change to reflect those changes. We will monitor the matter very carefully.
I must apologise for returning somewhat dryly to the procedural point that has been raised during the debate. I am puzzled by the widespread misunderstanding and the suggestion in certain quarters that the Government have tried to do something underhand. Nothing could be further from the truth.
We are debating seven sets of disability orders. Four sets, which come under the affirmative procedure, have been considered by the Joint Committee on Statutory Instruments and have all been declared intra vires. The three sets which have not been to the Joint Committee come under the negative procedure and are consequential upon the main affirmative orders. We would not have considered the orders today if the Opposition had not prayed against them and agreed that they should be debated with the main affirmative orders. Had the Opposition wished to debate the issues, they should have delayed their prayers until after today's debate and that debate could have been arranged through the usual channels. The Government have done nothing underhand. For the convenience of the House, we are discussing the motions together, and I understand that that has the agreement of the Opposition.
The hon. Member for Roxburgh and Berwickshire made a plea for a comprehensive disability scheme. My hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) responded to that. I share many of the reservations expressed by my hon. Friend about the wisdom of that course of action—certainly in the short term. However, the practice of incremental change under this Government has led to a much more comprehensive coverage of meeting the needs of disabled people.
When we came to office, 300,000 people received help with the costs of their disabilities. The figure will now be 2 million. In that regard, the hon. Member for Roxburgh and Berwickshire will be aware that since we took office in 1979 the expenditure has risen from £4.5 billion to more than £12 billion. We are moving to more comprehensive coverage. However, as we are using incremental change instead of wiping the slate clean and trying to move to a new system, we are avoiding huge extra costs at one fell swoop and also avoiding creating a system in which there would be many losers as well as gainers at the point of change.
§ Mr. Kirkwood
The Minister will acknowledge that I paid credit to the Government's work in respect of 917 disability. However, does the Minister of State accept the principle that a comprehensive disability benefit is the goal, or is he going to operate on a piecemeal basis in the short term?
§ Mr. Scott
I can simply call in aid the Government's record so far. We have steadily improved the coverage and generosity of the benefits system. I cannot commit myself or anyone else to what may happen in future. That will depend on the available resources and the needs that become evident. However, we have a first-class record of incremental change. Indeed, we have a much better record than that of any Labour Government. We can build on that in future.
The hon. Member for Roxburgh and Berwickshire also referred to cold weather payments. I wonder whether the news has reached him that the system has been triggered in one station in Scotland today. We will for the first time be able to see the new system work. It will be automatic and payable in advance. People will not need to make a claim. As we have made the choice of stations more sensitive, particularly in Scotland, the system itself will be more sensitive.
§ Mr. Alex Salmond (Banff and Buchan)
How many people will benefit from what the Minister has just announced?
§ Mr. Scott
That depends on the weather. It is impossible to say how many until we know what the winter will be like. If we have the same amount of cold weather this winter as we had last winter, we will more or less double the coverage of the benefit as a result of the changes that I announced earlier this year.
§ Mr. Winnick
What would the Minister say to the pensioners outside that one area in Scotland who are suffering as a result of the bitterly cold weather and who cannot receive payment if they are on income support? Why should it be zero or below before they receive the small amount of assistance of £6 a week?
§ Mr. Scott
If the hon. Gentleman followed that matter with any care, he would know that over the past four or five years we have steadily improved and made more generous the cold weather payments. Indeed, we have very substantially improved them this year. My statement was widely welcomed by hon. Members on both sides of the House.
We will have to wait to see how the new system works. We increased the amount and introduced the automaticity principle—the lack of need to make a claim—and the ability to forecast cold weather in advance and the ability to pay in advance.
My hon. Friend the Member for Torridge and Devon, West asked about the housing benefit transitional payments. She will recall that last year we eroded those transitional payments by £3. We have decided that in April 1992 there will be a flat rate reduction of £2 rather than the £3 of last year. As a result, the majority of transitional payments recipients will gain overall in cash terms from next April's uprating.
My hon. Friend the Member for Beaconsfield (Mr. Smith) vividly illustrated the performance of the Labour Government in respect of provision for pensioners. He referred to the retail prices index, the so-called pensioner index and the Rossi index. I am sure that we are right to stick to uprating the retirement pension in relation to RPI 918 over the years as that has proved to be the most generous index available to us. The so-called pensioner index has risen more slowly than the RPI: Rossi exceptionally this year is ahead of RPI, but is normally significantly below it.
My hon. Friend the Member for Beaconsfield also said that the tax and contribution systems should stay as much in line as possible, particularly with regard to payments in kind. I understand his point. Because the tax and contribution systems serve different purposes, they may never be totally in alignment. However, I recognise my hon. Friend's point.
The hon. Member for Oldham, West (Mr. Meacher) revealed his traditional obsession, not with the overall income of retirement pensioners, but with the level of the state pension. That is not what matters to pensioners in our society. What matters is the money in their pockets. The Opposition and the hon. Member for Roxburgh and Berwickshire recognise that pensioners' average total net income grew by 34 per cent. between 1979 and 1988—an average of 3.3 per cent. each year compared with 3 per cent. overall between 1974 and 1979. That is to say, for each year of this Government, the increase in total pensioner incomes has been as much as was achieved over the whole period of the Labour Government. That is what matters in terms of the standard of living of pensioners.
§ Mr. Meacher
Those figures are continually bandied about, but they are absolute nonsense, for three reasons. First, the Minister was not comparing like with like. The majority of those who were pensioners in 1979 are unlikely still to have been alive in 1988—[Interruption.] We are talking about a completely different group of pensioners. If we are referring to the bottom 10 per cent., that 10 per cent. will not comprise the same people now as then. Secondly, in so far as there has been an increase, it is overwhelmingly because of SERPS, which was introduced by a Labour Government. Thirdly, the figures are available only until 1988. It will he interesting to have the figures for 1991. I suspect that they will show a very different picture.
§ Mr. Scott
Not only do I doubt that, but the hon. Gentleman's earlier point was totally ludicrous.
I had been about to say that, of course, the Government recognise that not all pensioners have benefited to that extent. We all know that some pensioners—perhaps those whose careers were interrupted by the war or whose savings were decimated by the inflation of the 1970s—are not in the position of the average pensioner these days. That is why, over the past three years, we have found an extra £330 million to help the poorer pensioners. My right hon. Friend the Secretary of State has been particularly inventive at finding ways of making resources available to help those pensioners.—[Interruption.] I hope that the House will have the grace to acknowledge that we have recognised the problem of the poorer pensioners and have addressed it to the extent of providing an extra £330 million in the past three years.
Two hon. Members referred briefly to pensions and pension funds as a result of matters that have recently been in the news. Obviously, there is a limit to what I can say about that today, but we acknowledge that trustees have a clear duty to act at all times in the interests of the beneficiaries of the scheme. They are required by law to disclose certain facts to their pensioners, the trade unions and the members of their funds. The actuarial valuation of 919 the funds is an important part of that. When we have considered the outcome of the Maxwell situation, we shall consider whether any further changes to the law are needed. I am not prejudging that issue when I say that, if somebody deliberately sets out to commit fraud on a massive scale, there is precious little that the law or regulatory agencies can do to prevent it entirely.
I turn now to the issue of disability benefits which, as the House knows, are particularly close to my heart and which I want to see being introduced as effectively and as smoothly as possible. As there appears to be some misunderstanding, I advise the House that all those under 65 years of age who are currently receiving mobility and attendance allowances will be transferred automatically and will receive the new disability living allowance. There may be some misunderstanding at the point of change, but we shall do our best through advertising campaigns, mailshots and providing information to the organisations of and for disabled people, the welfare rights organisations, the citizens' advice bureaux and our own offices, to minimise possible misunderstandings. We want to ensure that the provisions are implemented smoothly.
I should like to make one or two things clear about claiming the new allowance. First, the claimants' pack for the disability working allowance—the new allowance—will be widely available from all the places that were listed in early-day motion 356, plus the citizens' advice bureaux and from any other organisation that asks for supplies of the claim forms.
The disability living allowance form will not be distributed so widely, not least because it is not an entirely new benefit; it is subsuming the mobility and attendance allowances. However, it will be widely advertised in leaflets with coupons attached so that people can send in for a claim form. When they send in their claim, the claim form will be date-stamped with the date of its despatch, which will normally be within 24 hours of the arrival of the leaflet, and the claim will be deemed to have been made from that date as long as the claim form is returned within six weeks of that date.
That will allow people to carry out their own self-assessment procedure and to have that self-assessment endorsed and reinforced by a professional, carer or general practitioner, according to their choice. The claim will be dated from the date on which the coupon is sent in. That is a sensible, flexible and fair way of handling the matter.
§ Mr. Allen
I thank the Minister of State for his helpful reply about the disability living allowance. Are there any reasons why the form for the disability working allowance cannot be made available to the interest groups that wish to help disabled people so that they can in fact help them? Is there any reason in the Department why the form cannot be made available?
§ Mr. Scott
The hon. Gentleman may not have heard what I said. The form will be available not only to all those who were mentioned in the early-day motion, but to the citizens advice bureaux and anybody else who helps, including many of the organisations of and for disabled people. We consulted widely on the claim forms for both benefits with a substantial cross-section of the disability 920 organisations, and with an independent panel of disabled people. Both the consultation process and the final claim forms were widely welcomed.
§ Mr. Allen
I apologise if I misunderstood the Minister, but my understanding is that there are two separate forms, one for the DLA and one for the DWA, and that the Minister's remarks referred to the DLA forms. Is he now saying that the forms apply to both? If he is, many people who were extremely worried about the availability of the forms will feel reassured.
§ Mr. Scott
If the hon. Gentleman reads Hansard, he will see that I referred first to the DWA forms, which I said would be widely available, and that I then said that the DLA forms would not initially be distributed so widely but that they would be available to people who sent in the coupon from one of the leaflets. Those people will then receive a form that will be date-stamped.
I believe that we have met most of the concerns on that point. Of course, there will be visiting officers. In addition, help will be available from our district offices to enable people to fill in the forms. Inevitably, because we are moving towards self-assessment, the forms are now longer. We depend no longer on medical examinations but on self-assessment. That is why the forms are longer and may be daunting to some people. We will have a visiting facility and specialists in our district offices.
Above all, we will have a free benefits inquiry line that will be specially dedicated to those benefits and if people want, an operator in the centre will be able to complete a form on behalf of a claimant who is on the other end of the telephone. The form will then be sent to the claimant or the customer who will be asked to check the details and, if the details are correct, to sign it and send it in as a claim. We are doing everything in our power to ensure that the system is as friendly and helpful as possible to those who need the help of the disability benefits.
§ Mr. Kirkwood
The Minister is being helpful, and what he has said will be welcomed. However, I should like to ask him about the potential loss of additional benefits. It has been my experience in the past that, unless people specifically ask questions about their specific entitlement to other benefits, their claims for those other benefits are likely to be prejudiced. Will such questions be an integral part of the self-assessment procedure?
§ Mr. Scott
When the hon. Gentleman sees the forms and the advertising campaign, I am sure that he will be reassured on that matter. I have no doubt that the very fact that we are introducing a benefits line and running a greater awareness campaign will lead to a substantial number of new claims. We are geared up to cope with that.
I have been present on other occasions when the hon. Members for Oldham, West and for Nottingham, North have travelled around the country making commitments—sometimes "absolute commitments", sometimes just ordinary "commitments"; sometimes "absolute priorities", sometimes "high priorities", sometimes just plain "priorities" and sometimes "increasing priorities", which is a phrase that crept in earlier; and sometimes they have just plain "aims". But today we have had another nudge or wink or two from those hon. Gentlemen suggesting that various things might happen. When pressed, however, they were unable to make a firm commitment about exactly what they would do. I do not know whether the 921 hon. Member for Derby, South (Mrs. Beckett) has a laptop computer, a pocket calculator or an abacus, but she must spend a lot of her time trying to keep up with the nudges, winks, priorities and commitments of the shadow social security team.
During the past year or so, those hon. Gentlemen have promised the earth to every pressure group in the country. One of two things is happening: either a cruel deception is being practised upon those pressure groups or the Opposition intend, if and when they come into office, to spread the available resources so thinly that they will not make a significant difference to anyone.
§ Mr. Scott
I understand that it is a team. I thought that the hon. Gentleman, being a keen cricketer, was a great team player. I assumed, therefore, that he was part of the team.
I essence, Labour is promising the earth. What we have done in government is to deliver the goods—to pensioners, to families with children, and to disabled people and their carers. The two new benefits are a particular manifestation of that. We can continue to produce the goods for the people most in need in society, and we will continue to do so.
§ Question put and agreed to.
That the draft Social Security Benefits Up-rating (No. 2) Order 1991, which was laid before this House on 4th December, be approved.
That the draft Social Security (Contributions) (Re-rating) (No. 2) Order 1991, which was laid before this House on 4th December, be approved.—[Mr. Newton.]