Social Security (Reviews) (Hansard, 29 November 1984)

§ Mr. Gordon Brown (Dunfermline, East)

I wish to raise the important matter of the Government social security reviews into pensions, supplementary benefits, children's and young persons' benefits, housing benefits and the social services. Most of them were established by the Secretary of State for Social Services earlier this year to report to him by the end of the year to lead to recommendations by the beginning of next year and, presumably, to legislation in the next session.

Yet although the Secretary of State for Social Services, has said that the reviews were the most important and far-reaching reviews of the social security system since Beveridge, a number of important questions pointed out that about them remained unanswered, unexamined and undebated by the House.

When at least 7 million people depend on means-tested benefits, more than 16 million people are on low incomes, when we have poverty that no one dared imagine 20, 10 or even five years ago, poverty on a national scale that is a national disgrace, poverty that sends children to school ill clad and hungry, forces pensioners to choose between eating and heating, affects millions, yet has left British industry worse off than ever before, no one can doubt the need for wide-ranging improvements in our social security system to secure opportunity in youth, sufficiency in family life and dignity and comfort in old age.

The Secretary of State for Social Services has been prepared to call his reviews independent, objective, impartial and comprehensive. However, performance has not yet matched that ambitious claim. Although we cannot expect this evening to hear the final recommendations of the reviews, we can expect answers to some questions about the remits, the membership, the precise objectives and detailed activities of what we were told were open reviews.

The Minister who will reply must be aware of many of the widespread criticisms of the reviews. Although they were to be comprehensive, only 12 weeks were allowed for evidence to be submitted by interested parties and only the chosen few were asked to give oral evidence. Far from being independent, the entire membership of, for example, the children and young persons' review team consists of Mr. Rogers, who had to declare an interest when the Institute of Directors advocated the abolition of child benefit, and Mrs. Barbara Shenfield, whose chairmanship of the WRVS sounds promising but who just happens to be co-author of an Adam Smith Institute pamphlet, which advocates the abolition not merely of child benefit but of the welfare state. Other review members include building society managers, a biscuit manufacturer who happens to be a leading Conservative, a college lecturer who is also a former Conservative councillor and our statutory Lady Bountiful. To the public, the independent members of the independent reviews must seem as independent as the Prime Minister would like her Bishops and Archbishops to be.

While a study of the transcripts and evidence demonstrates a consensus on the need to protect and raise benefits among Labour party and trade union opinion, where they have submitted evidence, and voluntary and 1207 charitable organisations not normally associated with the Left-of-centre parties in the United Kingdom, it is a measure of the distance between the Committee, the review teams and the reality of life in Britain in 1984 that many witnesses appearing before the Committees are frequently asked by review team members whether there is a role for the welfare state in modern Britain.

We know that the reviews will report to the Minister by December, that a paper will probably be published in the new year, that there is a central review unit co-ordinating the work of the individual review teams, and that other Government Departments are contributing to the reviews.

I have a number of specific questions which I hope that the Minister can answer this evening. Will there be further consultations on the conclusions of the review team before any decisions are finally taken by his Department? Will there, therefore, be a Green Paper instead of a White Paper published by the Department of Health and Social Security? Will the full reports of the individual review teams be made public so that those who have submitted evidence and everyone else can see the conclusions?

When we talk about Government Departments, what is the role of the Treasury in the review? Is Mr. Peter Riddell of the Financial Times right when he states that the Treasury now have rights of representation on the review teams and that this is the price that the Secretary of State for Social Services has paid for agreement to the reviews in the first place?

The Chancellor of the Exchequer, who told us five years ago that the rich must get richer to ensure true prosperity for all, now believes that it is necessary that the poor must become poorer, whether they are in work or not, for his policies truly to succeed. Can the Secretary of State for Social Services really compare himself with Beveridge and yet accept direct control by a Chancellor who wishes to make his political reputation on destroying the legacy of Beveridge in the same way as he has destroyed the heritage of Keynes?

When a pensioner on supplementary pension has an income of little more than £5 a week, after paying his rent, and when members of a family whose breadwinner is unemployed have even less, it is regrettable that the terms of reference for the supplementary benefits review state clearly that one reason why so many people claim supplementary benefit is that the benefit levels are so generous. It is even more regrettable that the reviews have conducted no research into the adequacy of benefits, nor have they surveyed or studied public opinion among benefit claimants about the adequacy of the rates. What is more fundamentally wrong about the social security review, and about which the House deserves precise answers this evening, is what is called in Treasury jargon the "nil cost basis" of the reviews—the fact that no more public money will be available whatever the outcome of the review teams' investigations.

We are being told that, if pensioners are to benefit, the unemployed will be worse off; if single parents are to do better, the disabled will do worse; if families are to improve their position, teenagers will experience more hardship.

The Secretary of State for Social Services has gone further than that. In reply to a question he stated clearly that savings found from the benefits system could be used for reductions in taxation. That is not a nil cost basis but apparently a lower cost basis for the reviews.

1208 Only this week the Financial Times stated that, in return for a standstill budget in real terms this year, the Secretary of State had promised real cuts in his budget for next year.

The House deserves a fuller answer than we have been given by the Secretary of State until now, and 1 expect some detailed answers from the Minister to several detailed questions. Has the Secretary of State agreed to a public spending ceiling for the social security budget? Must the review teams, individually as well as collectively, recommend lower spending, or is it the case that the review teams, which have received excellent evidence from organisations such as the policy study units on the inadequacy of benefit rates, are not in a position to recommend the precise level of benefits that should be paid, and that that will be left to negotiations between the Treasury and the DHSS?

If a public spending ceiling has been agreed, if public spending cuts can be considered but public spending increases cannot—if the review is comprehensive, but the only way the budget can go is down—is it not a complete distortion for the Secretary of State to have compared his review with that of Beveridge?

Although the review teams can consider spending cuts, they cannot consider tax-related issues. One has the right to ask in those circumstances why, under the social security reviews, pensioners stand accused, having to justify their meagre heating additions, teenagers are under scrutiny, having to defend this pitiful supplementary benefits, and mothers and children are as though on trial, having been told that £6.85 for child benefit is too generous, when unexamined, uninvestigated and undebated are the tax concessions, the fringe benefits and the gilt-edged black economy of the very rich, who have benefited by £13 billion in taxation changes since 1979? Some of them now earn more in a day than most manual workers earn in a year, at a time when inequalities are increasing faster than ever before. The text that governs the Government's conduct is not, as the Prime Minister would have us believe, that God helps those who help themselves, but that God helps those whom he has already helped.

We are anxious about the review on child benefit, which is the right of 7 million mothers and which the Prime Minister called evidence of the Government's commitment to the family. The Foreign Secretary called it the most effective means of relieving family poverty. This benefit, which averts poverty for several million families and mitigates it for millions of others without the humiliation of a means test, is now at risk.

When the Secretary of State was asked whether he was now considering the means-testing of child benefit, his reply was: that the Government were considering all options in child benefit and supplementary benefit, and that that was what a review is all about. Last May, the Prime Minister assured the country: there are no plans to make any changes to the basis on which the benefit is paid or calculated. Last July, the Secretary of State gave us what he called: "a categorical guarantee" about child benefit. He said that the Government did not intend, and had never intended, to change the basis of that benefit, and that that was just another scare during the election. The House needs to know now whether, under cover of this review, the Government are secretly overturning promises made to the 1209 House and the country, and whether, without the consideration of the House, the assurances of 1983 are to become the betrayals of 1984.

The Minister must give me a precise answer to these questions. Are the detailed plans for changing the present structure of child benefit part of the work of these review teams? Are the Government now considering means-testing the child benefit—a measure that would achieve substantial savings less by eliminating the claims of the rich than by deterring the claims of the poor? As The Times suggested last week, are the Government considering a two-tier system of child benefit, with a flat rate as low as £3 a week, with the remainder means-tested?

The House cannot expect to know this evening what the precise recommendations of the review are likely to be, but the Minister has a duty to tell us whether the Conservative promises of the last election are to be honoured or are to be abandoned during the examination of these reviews. We are told that other changes are being discussed by the social security reviews.

There is also the problem of the long-term rate of supplementary benefit payments, the price protection of which was guaranteed by the Government in their election manifesto. There are fears that the means that the Government will choose to abandon price protection of the long-term rate of supplementary pension is to abandon the long-term rate altogether. That matter has apparently frequently been raised by members of the supplementary benefit review teams when interviewing witnesses. Again, we need a promise from the Government that they will hold to the pledge that they made to pensioners and others on long-term benefits when they faced the people last June.

Many people believe that that pledge also included the protection of the weekly additions and the single payments that pensioners and other groups receive. Some 2.5 million people—I suspect more after this week—receive heating additions, 75,000 people recieve clothing allowance and the latest figure is that 1.33 million exceptional needs payments are made every year.

My reading of the transcripts of evidence and of the questions put by the review teams is that it is likely that these allowances and additions will be severed. Thousands of people will be floated off supplementary benefit or pensions as a result. The Minister has a duty to tell us whether the pledge that has been made to long-term supplementary benefit claimants is to be abandoned because of the work of these review teams.

My final query is about our teenagers, who have suffered under this Government. Many have lost benefits in the first few months of their unemployment, many more are worse off because of the deduction of housing addition for those who are not householders. Statements made in the other place by Lord Young suggest that the intention is to remove the right of these teenagers to supplementary benefit altogether. The Government must know that the majority of teenagers on supplementary benefit already live in poor income households. When the Government treat youth unemployment as if it were a problem of youth, and not a problem of unemployment, what do the promises that have been made to the generation on which our future depends mean?

1210 We are entitled to specific answers as to whether the Government's promises at the last election are being taken away by the work of these reviews. In March, the Prime Minister told the House: We shall protect the poor and those in most need of help, honourng our pledges on benefits".— [Official Report, 8 March 1984; Vol. 55, c. 665.] Are these pledges to be honoured, or are they to be abandoned by the nature of the work of these reviews?

The Secretary of State for Social Services compared his work with that of Beveridge. I doubt whether Beveridge would have seen the similarities. The comparison is as fundamentally misplaced as the Prime Minister making common cause with Keynes and the 1944 employment White Paper. Beveridge talked of grand and magnanimous aims removing the giant evils caused by poverty and unemployment and achieving security against want without a means test. The Fowler reviews refers only to making the best use of available resources. In his time Beveridge represented a huge and altruistic attempt to relieve poverty and hardship in a comprehensive and unified manner. The Fowler review appears to be divisive, penny pinching and an attempt to apply the principles of the Victorian era to Britain as it approaches the 21st century. This is possible only because the Minister has forgotten and ignored the problems which Beveridge had to tackle.

This year is the 150th anniversary of the Victorian poor law commission. That commission suffered also from inadequate terms of reference, a loaded membership and political preconceptions that affected its conclusions. The Government have already shown by the activities of the review committee that their work is different from that of Beveridge in 1942. They have yet to prove that the methods, recommendations and outcome of the review will be different from those of 1834.

§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney)

I am grateful to the hon. Member for Dunfermline, East (Mr. Brown) for giving me the opportunity to discuss the important reviews of social security which have been initiated by my right hon. Friend the Secretary of State. I am disappointed that the hon. Gentleman, who has established a reputation for his interest in social security matters, should choose to use this opportunity to read out some phantasma of paranoia which are unrelated to the realities of today. In his final burst of fantasy, he took us back to 1834.

My opportunity is therefore even more welcome than it would otherwise be to reject the premises on which the hon. Member's speech was based, not least his references to poverty on a scale that no one dared imagine five or 10 years ago and to policies which have left industry worse off than ever before. As most hon. Members and most of those outside the House realise, the objective of the Government's policies is to take the burdens off industry. We wish to ensure that our economic policies strike a balance between relieving industry of its burdens and enabling it to create employment while fulfilling the obligations, which we sincerely accept, to those who are in need.

The hon. Member referred to the promises made by the Conservative party, and I am glad to explain to the House, 1211 especially to the hon. Gentleman, how those promises have already been honoured by the Government. I tell him that he should not be led astray by whatever he reads in the organs of the press, be they distinguished or not. He should not be misled either by, in his own words, his readings of the transcript of the evidence put before the social security reviews.

Given the hon. Gentleman's assault, I shall remind the House of some of the Government's achievements on social security. Only this week we have increased benefits yet again, covering all benefits fully against inflation. Retirement pensions are 84 per cent. higher than they were when we came to office. That increase is substantially greater than the 76 per cent. increase in prices over the same period.

Supplementary benefit rates are about 5 per cent. higher in real terms than when we came to office. Child benefit has just been increased to £6.85 per child and is now at its highest ever real value. Mobility allowance has been increased to £20 per week, double what it was when we came to office, and worth about 14 per cent. more in real terms.

Expenditure on social security has increased substantially. During the last year of the Labour Government in 1978–79, the social security budget was just over £16 billion. In 1984–85 it will be about £40 billion. That is an increase of 27 per cent. in real terms. Much of that increase is due to increased numbers of pensioners, of unemployed, of one-parent families, and of the long-term sick and disabled. Nevertheless, improvements in benefit rates have added about £2.75 billion to the total budget.

The same is true of the National Health Service, but I shall not go into the details now. The major point to set against the distortions to which the hon. Gentleman has treated the House is that we have continued to honour our determination to protect the weakest in our society and we have continued to find the resources to meet those commitments. Therefore, it is nonsense for the hon. Gentleman to suggest that there is any attack on the welfare state. and he knows that full well.

Four major reviews of social security are now under way, covering pensions, benefits for children and young people, supplementary benefit and housing benefit. Taken together, they cover some four fifths of the total expenditure on benefits, and represent the most substantial re-examination of the system since the Beveridge report was published some 40 years ago. It is important to realise that the system today is not the same as the one that Beveridge envisaged. The hon. Gentleman had a lot to say about Beveridge.

Beveridge proposed flat-rate contributions paid into a proper insurance fund to finance flat-rate benefits. We have earnings-related contributions, some earnings-related benefits, and a fund that is operated on the pay-as-you-go system. We have a wider range of non-contributory benefits than Beveridge envisaged. The scope of supplementary benefit is enormously greater than the residual role envisaged by Beveridge for national assistance. Furthermore, that is against the background that the real value of the main benefits has more than doubled between 1948 and now; and that spending is now five times what it was then in real terms.

We have therefore every reason to believe that we have a record of which we can be proud. We have now embarked upon a wide-ranging consideration of the whole 1212 social security system. It is of great importance, which is why we have sought to involve the public from the outset in an unprecedented manner.

I was sorry that the hon. Gentleman was not prepared to give the credit that is most certainly due to my right hon. Friend for the way that this has been achieved. People have been brought in from outside Government and the Civil Service to assist and advise Ministers. They were appointed for their personal qualities and for the different perspective that they could bring to bear. The individuals concerned have, between them, experience in business, local authority administration, housing and voluntary and advisory work. I am glad to take this opportunity to thank them for the substantial amount of time they have given to their task so far and for the contribution that they are making.

I am especially sorry that the hon. Gentleman sought yet again to raise any question mark about two members of one review team—Mrs. Shenfield of the WRVS and Mr. Parry Rogers. It was explained clearly to the hon. Gentleman, in a letter that he received from my right hon. Friend the Prime Minister dated 3 October, that his assertion that Mrs. Shenfield was the author of a pamphlet from the Adam Smith Institute was incorrect. She was one of those who offered advice and information. As a matter of courtesy, the authors acknowledged those who gave such information.

Mr. Parry Rogers has been a member of the Institute of Directors for many years, as he has of many other organisations associated with business and commerce. There is no question of anyone being obliged to declare an interest. That has been clear from the outset. He took no part in the discussion when the IOD gave oral evidence at a public session. The reasons were given openly at the public hearing.

The hon. Gentleman complains about only 12 weeks being allowed for giving evidence. Surely three months is a long time, considering the importance of the problem and considering that those invited to give evidence were specialists and had a day-by-day professional interest. I do not accept that three months was too short a time in which to present their evidence.

The hon. Gentleman was dissatisfied that only a chosen few were selected to give oral evidence. The list of those chosen was representative. I wish that the hon. Gentleman would give credit for the fact that the hearings were held in public, and not only in London, but in Scotland and Belfast. The public were invited to participate. The fullest consultation took place.

I do not have time to answer all the hon. Gentleman's specific questions, so I shall write to him. We are not yet in a position to give any idea about the conclusions of the reviews because the 4,500 pieces of evidence are being absorbed and studied by the review teams. The hon. Gentleman is clear about the timetable. When the time comes, a document will be issued and there will be a further chance for public comment.

There is participation by other Government Departments, organised by the DHSS, but final conclusions are for the Government as a whole. We are talking about an exercise which involves about 30 per cent. of public spending, which reaches——