HC Deb 16 July 1985 vol 83 cc163-5
13. Mr. Cohen

asked the Secretary of State for Social Services whether he estimates that the relative financial position of the unemployed will improve in the two years after the implementation of the social security review.

Mr. Newton

A firm estimate of the effects cannot be made until benefit rates are set within any new structure of social security benefits which may be settled following the current consultation on the Green Paper proposals.

Mr. Cohen

Is not the Minister's answer a cover-up of the truth? Will not the financial position of the unemployed drastically deteriorate after the implementation of the review, as a result of which the unemployed will be impoverished? Is not the Government's message to the unemployed and those who become unemployed that they will be made financially and socially insecure?

Mr. Newton

All that the hon. Gentleman has done is to convey the impression that he has not even read the Green Paper. One of the major causes of concern has been the position of families with children, whether unemployed or in low-paid work. It is clear from the Green Paper that that is a group to which the Government wish to give greater emphasis.

Mr. McCrindle

In any consideration of the effect on the unemployed of the proposals in the social security reviews, is it not wise to take into account the fact that encouraging people who may be discouraged at the moment from taking a job is a positive step in the interests of those who are unemployed?

Mr. Newton

That is correct, and the effect on both the poverty and unemployment traps, especially the latter, is one of the major advantages of our structural proposals, as is the improved earnings rule for those who have been out of work for a long time.

Mrs. Beckett

Is the Minister aware that those who lose service through unemployment will be most disadvantaged by the abolition of SERPS? Does he recall that when the Secretary of State announced that abolition he told the House that it was the result of unexpected and unforeseen developments and that those developments had come to light during the reviews? In the light of the statement in the last few days that these matters were not discussed, and in the light of the Government Actuary's statement that costs were not unforeseen and that what has changed is the Government's willingness to meet the costs, will the Minister now tell us whether his right hon. Friend intends to apologise to the House? [Interruption.] Further, will he tell us the real reason for the abolition?

Mr. Newton

I am in some difficulty about replying to the hon. Lady, because I heard only about half the question. I can say, however, that it is quite clear from the additional analysis, including work relating to the 1981 census carried out for the review, that the prospective cost of SERPS is significantly greater than was fully appreciated by those who made the decisions at the time.

Mr. Favell

Will my right hon. Friend bear in mind that many people take low-paid employment out of a sense of pride? They find it enormously difficult to make ends meet.

Mr. Newton

Yes. Not the least of the failures of our social security system is that we have put many people in low-paid work in the intolerable position of knowing they would be better off out of work. We intend to put a stop to that.

Mr. Meacher

Is the Minister aware that all the cuts, as opposed to the restructuring in the Green Paper, the abolition of SERPS, the requirement on the poorest families to pay at least 20 per cent. of their rates, the removal of mortgage interest payment relief from those on the dole for the first six months, were not recommended by the review committees and imposed only on the personal decision of the Secretary of State? What other decisions, what other cuts, did he impose which were not recommended by his own review committees? Will he now publish all the review committee reports so that we can judge how much he has deviated from his own advisory review committees to impose cuts?

Mr. Newton

It was made absolutely clear throughout that the Government would be taking decisions and putting forward proposals as Government decisions after taking account of the work of the various teams which were set up. What I would like to know from the hon. Gentleman is when we shall know whether his proposals about mortgage interest are the policies of the Leader of the Oppostion and the Labour Party.