Elderly Persons

HC Deb 06 June 1985 vol 80 cc448-93

4 32 pm

Mr.David Steel(Tweeddale, Ettrick and Lauderdale)

I beg to move,

That this House, while recognising the need for a review of the social security system, rejects those parts of the Green Paper which are designed to cut costs and will therefore add greatly to the problems of many elderly people on low incomes by reducing their entitlement to help with the high cost of rent and rates, will eventually remove the state earnings-related pension scheme without substantially increasing the basic pension, and will replace a parsimonious death grant scheme with one likely to cause maximum distress at the time of bereavement.

Mr. Speaker

I have selected the amendment in the name of the Prime Minister.

Mr. Steel

As this is the first occasion on which the amended Standing Order No. 6 has been brought into use, and the minority parties have a chance to introduce a debate out of slightly more generous time than in the past, it would be churlish to let this opportunity go by without thanking the Leader of the House for enabling this reiorm to be made Needless to say, we are not satisfied that we are being given a fair deal, but this is a notable step forward, with the existence of something other than the official Opposition at last being recognised in the Standing Orders.

I am pleased that my colleagues and I took the decision that our first use of this opportunity should be to have a debate on the problems of the elderly. We took that decision before the Whitsun recess knowing that the Green Paper on social security reform would be published before the debate Although the debate is not to be confined to that Green Paper, it provides the House with an early opportunity to probe the Government further on their intentions in that review.

Bevendge once observed that if one scratched a Tory one would find a pessimist, and if one scratched a Liberal one would find an optimist If one scratched the Green Paper one would find acute pessimism Where it is not pessimistic, it is mean-minded The pessimism is contained in the assumptions set out in paragraph 5.6 of volume 1, which looks at the costs of our pension provisions over the next 20 years. It does so on assumptions of 6.5 to 10 per cent. continuing unemployment, so that the greatest extent of the Government's optimism for the next 20 years is an unemployment level of 6.5 per cent. That is a great contrast with Bevendge's original concept of working out a social security scheme, based on assumptions of reasonably full employment.

The Government's basic assumption is dumbfounding Week in, week out, we hear of how economic recovery is about to arrive next week, next month or next year, and that the economic miracle has been achieved. Such ohrases trip off the tongues of Mimsters at weekend speeches, but, when it comes down to the hard facts, the basic assumption throughout the review is of an intolerable level of unemployment in the years to come.

We are entitled to ask on what growth assumptions in the economy the review is based. Again, pessimism seems to be the order of the day. The only figures that one can find in the review are the page and paragraph numbers.

The first question that I put to the Minister for Social Security is: what is it that you have to hide? Without the figures, as the Financial Times commented, it is rather like having an annual report without a profit and loss account. The figures should be given to the House soon, for three reasons. First, no Government or Parliament can contemplate recommending a series of changes to our basic welfare provisions without a pretty good idea of how they will affect those who rely on the welfare state. On Tuesday, the Prime Minister, in answer to questions, said that her refusal to give figures was because of her belief in sound finance. That must be an exotic statement, even by her standards.

The second reason why there have to be figures is that the Secretary of State said, back in April 1984, that the review was to be revenue neutral. How can we tell if that is so without costing? How can we tell if the reforms will save the £1 billion that the Chancellor wants to save without costings?

The third reason why the Government should give the House some figures is that in the housing benefit review section of the report, paragraph 3.19 refers to the illustrative costings for that section. However, they have not been given. They have been leaked in various places, but not here.

While we all welcome the review, the Government have been less than candid, and their failure to publish figures has spread unnecessary fear among claimants, especially pensioners, and this has been done because of media management. However, on the basis of what the report says, we can already identify three sectors in which pensioners will be hard hit—housing benefit, SERPS and the death grant.

Mr. Eric S. Heffer (Liverpool, Walton)

I endorse what the right hon. Gentleman says, but he spoke of unnecessary fears. Surely these are necessary fears.

Mr. Steel

That is a play on words, but I accept the hon. Gentleman's point. It is a fear that I fear will turn out to be necessary. However, if we are right in some of the calculations that I shall give, it would be better for the Government to give the figures now so that the population can thoroughly debate the Green Paper.

It has been calculated outside the House that on housing benefit over 6 million people will lose more than £1.40 per week. Is that calculation correct? The Government are in a position to tell us. Before we look at what is proposed on housing benefit, we should do well to remind ourselves of what has already happened to housing benefit in the lifetime of the Government.

In the 1983 Budget, housing benefit was introduced to unify the two existing schemes, but, because the reform was supposedly conducted without costs, many people lost out during the original introduction of the housing benefit scheme. It has had two further cuts, in April and November 1984. Thus we are arriving at the review against a background of at least three previous occasions in the lifetime of this Government when housing financial support for certain people has been cut The total cut may be about £500 million Again, the Government are the only people who can tell us whether that figure is right.

I move on to the detail of what is proposed on housing First, there is the question, on which we were quizzing the Prime Minister on Tuesday, of the 20 per cent rate demand as a minimum payment from everybody in the future I asked the Government about that, because it is not clear whether it is intended that people receiving the new income support help with these payments will be subject to the 20 per cent or not That is not clear from my reading of the report.

In principle, it is a good idea to cut the number of individual tapers and the rates at which benefit is withdrawn against them, but the Government's proposal for a single taper for rent and rates will hit pensioners particularly hard I can give a specific case as an example It concerns a pensioner couple who have paid off their mortgage and have an income of £75 a week, which is hardly living in the lap of luxury On realistic assumptions, they will lose out substantially, if my calculations are correct Let us assume a weekly rates bill of £9—a not excessive figure for London At present, the couple will receive £4.71 housing benefit Assuming an income support level of £61, which is the current supplementary benefit level, plus a few additions to which pensioners are entitled, their entitlement under the new, combined 70 per cent taper will be negatived—minus 80p They will lose all benefit entitlement, and there will be the imposition of the 20 per cent rates provision The basic point is that those who pay no rent, who are mainly pensioner owner-occupiers, will be very severely hit by the new proposals in the Green Paper I should like the Minister to confirm that

At present, people on supplementary benefit receive help to pay their water rates, but under these proposals, as I understand it, they will receive only about £1 per week That will prove inadequate, especially against the background of the Government telling water authorities to push up their charges The Green Paper proposal will hit pensioners severely Many elderly pople will see their basic weekly standard of living drop substantially as a result of the review.

In regard to the state earnings-related pension scheme, we on these Benches will not be able to support its abolition without a correspondingly large increase in the basic pension All the pensioner organisations that I have met in recent months — Age Concern, Pensioners' Voice, and so on—say that, while they welcome the individual provisions made for pensioners, they would really like a substantial increase in their basic standard of living We have always supported that During the passage of the legislation my noble Friend Lord Banks in another place and my hon Fnend the Member for Truro (Mr Penhaligon), who was our spokesman in this House at the time, made it clear that we reckoned that SERPS would turn out to be too expensive We said we would rather put the money on the basic rate and encourage the growth of occupational pension schemes The Government have never been generous to pensioners in the basic rate.

We must examine the Green Paper against the background of what has happened m recent years The breaking of the link between earnings and pensions in 1979 has cost a couple £4.85 and a single pensioner £3 per week It is also a way of saying that pensioners should not share automatically in any general growth in the nation's prosperity which, as I shall show in a moment, runs counter to some phrases in the Green Paper.

The effect that the proposals will have on the value of the basic pension is not clear. Paragraph 9.4 of volume 1 suggests that there is to be a reallocation of support towards families with children. The Minister also said that in his statement. It follows that, if the review is to be neutral overall, the people who will lose out will be not families with children, but again mainly pensioners.

Paragraph 7.19 of volume 1 refers to the abolition of SERPS enabling the Government,

if economic growth permits, to give all the pensioners of the time a share of increasing prosperity through the basic pension. If we were to put that in jargon terms, it means that the Government's policy is possible jam for the day after tomorrow. That is the only interpretation to put on it. In other words, pensioners will have to wait for a general uplift in the economy, which the Government's own assumption through the 20-year forecast denies will happen, before they can achieve a higher standard of living.

In volume 2, paragraph 1.69 says that the earnings rule, which the Government have been promising to end since 1979, will be ended

at the earliest opportunity when resources permit". That is the same message of possible jam the day after tomorrow. What is the Government's long-term intention about the basic pension? We should know before further debate on the Green Paper.

Of all the proposals in the copious volumes of the review, the proposal in regard to the death grant is the meanest. We would face the same problem if we were in government. I well understand that a flat rate grant of £30 that is long out of date cannot be increased suddenly to bring it in today's terms to the level at which it was introduced, because the public expenditure commitment would be enormous.

The Government's proposal is doubly vicious. The individual seeking help for a funeral will have to go to the DHSS to ask for a discretionary payment at a time of maximum grief and bereavement. Moreover, the decision will have to be made quickly, by definition, because of the funeral that is being booked to take place within a dew days. Those are the worst possible conditions in which to have a general discussion of a means-tested benefit.

On top of that I understand that help for funerals is to come out of the new social fund, on which there will be a limit. What will happen towards the end of a financial year if after the money has run out someone asks for help to pay for a funeral? There has been no explanation of how the social fund will operate in general on a fixed sum. In particular, how will it operate if people are inconvenient enough to die towards the end of a financial year? The Government should come clean on that.

I have a positive suggestion. The only reasonable course is to uprate the death grant to a substantial amount — probably £250 — and to say that it is available automatically for those who wish to claim it, but that the Government may claw it back from the estate in due course, after the funeral is over and the bereavement has passed. That would ensure that the money would not go to those who do not need it. I do not know why the Government have not come up with such a scheme.

I have said enough about the Green Paper. There are three other matters that I wish to raise under the heading of the elderly. Many hon. Members are concerned about the tax provisions that we make for those who devote their lives to caring for the elderly. This is surely one of the developing areas of support for the elderly. The network of informal community care throughout the country is massive, but it is often ignored and not greatly encouraged by public authorities.

It was estimated from the 1981 census that about 800,000 people are involved in caring for the handicapped elderly. If we add to that other categories of elderly, who need extensive care but receive it through the informal sector—families, neighbours, and so on—the reasonable figure for informal carers would be able about 1 million. If the work of these people has been done by the state and if, on a modest asssumption, we take three and a half hours a day at £2.90 per hour, the average cost of home helps in the financial year 1982–83 would have been a massive £3.5 billion. Therefore, as a community, we should recognise that these informal carers are extremely important because they do a good job at very low cost. Instead of taking them for granted, we need to formulate policies to support them and recognise the selfless contribution that they make.

The first thing to be done is to extend the improperly named invalid care allowance to married women. At the moment it is discriminatory in that it is paid only to men and women who are not dependent on a breadwinner. I understand that there is before the European Court a case that the Government are likely to lose. It would be more useful and sensible for the Government to give in gracefully and agree that the allowance should be extended to married women. Help should also be provided to enable the carers to have one or two weeks' holiday by bringing someone else in to look after the elderly relative. That would give these people a break from the work they have to do.

One consequence of the Government's cutback on spending by local authorities has been the reduction in the personal social services. The people who have suffered most have been the elderly, through the meals-on-wheels and home help schemes. Those are the things which directors of social services find relatively easy to cut from their budgets when they are hard pressed. I am told that between 1979 and 1984 two thirds of local authorities had increased spending by less than the Association of Directors of Social Services regarded as necessary to maintain, not to improve, these basic services. Rate-capping will make the problem even worse. Too often the Government have tried to shift the blame for the reduction in personal social services on to the local authorities. We should make it clear in the House that we regard the Government as directly responsible for these cutbacks.

The elderly who live in rural areas—although I am not speaking exclusively about rural areas — are dependent on the transport provisions that we make for access to post offices, and so on. I believe that the Transport Bill, which is at present going through another place, will damage the interests of elderly people by making it more difficult for local authorities to provide the schemes necessary for effective support of transport for elderly people. For example, I believe that the cross-subsidy will be down from about £60 million to £20 million a year, and in any case it is designed to be phased out within five years.

Mrs. Elaine Kellett-Bowman (Lancaster)

Does the right hon. Gentleman accept that in my part of the country the elderly, and particularly the disabled, will be substantially helped by the Bill? Although many of them receive concessionary fares, they cannot make use of them either because there are no buses or because they are too disabled to board them. Under the new Bill, they will be able to use their coupons for taxis, and that will help enormously.

Mr. Steel

The hon. Lady is half right; but to say that because there are no buses in some areas we should introduce legislation that will mean even fewer buses in the future is to express a most extraordinary view. I think that the hon. Lady will join common cause with me in this view. I find that the various concessionary fare schemes suffer through lack of a national scheme of support which would enable elderly people to travel across boundaries between rail and buses. Old-age pensioners in my constituency, which is hard hit by that, have complained to me that in other parts of the country, notably in the London Transport area, pensioners have benefited greatly in past years from imaginative local schemes that have no cross-geographical reference. We know from the experience of British Rail, which found it convenient to introduce off-peak travel schemes for old people, that it is possible for a national scheme to be introduced.

I referred earlier to post offices. In rural areas people have to travel further because of the cutbacks and closures that are taking place. The combined effect of post office closures and the lack of transport facilities will adversely affect elderly people in rural communities.

In conclusion, it is important that we turn our attention, in the wake of the publication of the Green Paper, to the plight of the elderly in our communities. We should insist that during the debate in the weeks ahead the Government are more forthcoming about what is actually going to happen, so that at least, in the words of the hon. Member for Liverpool, Walton (Mr. Heffer), people know the worst and are not left with the vague, unfigured, unstructured debate into which they have been plunged by the publication of the Green Paper.

4.52 pm

The Minister for Social Security (Mr. Tony Newton)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

recognises the Government's achievement in increasing the value of the retirement pension and welcomes the Government's continued commitment to protect its value; congratulates the Government on carrying out a thorough review of the social security system; and endorses the aim of ensuring a coherent and soundly based benefit structure to meet the needs of pensioners and others.", We welcome very much the opportunity for this debate, at an early stage, on the needs of elderly people and their relationship with the proposals that we have put forward in the social security review Green Paper. As a Government, we have shown by our actions that meeting the needs of elderly people is a major objective of our policies, whether in social security, social services, health, or the many other aspects of policy that affect people in retirement.

The Government's amendment begins by referring to what has been achieved. Especially against the background of what I took to be the rather grudging remarks of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr Steel), I want simply to remind the House of what has been achieved in the past five or six years First and foremost, we have firmly and clearly not only fulfilled but more than fulfilled our pledge to protect the value of retirement pensions They have risen by very nearly 84 per cent in a period in which prices have risen by 77 per cent —a clear real increase What is more, that has been achieved at a time when the number of retirement pensioners has increased by some 700,000, so that we have protected the position not only of those pensioners whom, as it were, we inherited, but of the significantly larger number of pensioners arising from demographic factors in the past few years Contrary to what many Opposition Members profess to believe, it is our achievement in providing for that additional number of pensioners and increasing the real value of benefits that accounts for the major part of the real increase in social security expenditure of over £8 billion that has taken place in the past five or six years

At the same time, we have changed the method of uprating pensions so that pensioners have the assurance of increases based on the actual measured increase in prices instead of the vagaries and uncertainties of the forecast method that we inherited from the Labour Government Not least, for pensioners generally, we have written the Christmas bonus into the law and prevented the recurrence of what happened twice under our predecessors when the Christmas bonus was not paid at all But if those are our achievements on the broad front—

Mrs. Margaret Beckett (Derby, South)

As the Minister is talking about how good the Government's record is on the Christmas bonus, would he like to refer to the commitment that I seem to recall the Conservatives making before 1979 to double the Christmas bonus? Will the Government actually do that?

Mr. Newton

I am unaware of any commitment that we made to double the Christmas bonus Such challenges come oddly from an hon Lady who was, as I recall, a member of the Administration at the time when, two years running, no Christmas bonus at all was paid My answer to the hon Lady, if I may lapse into the vernacular, is simply what a nerve.

Let me turn from what I said about the generality of our achievements for pensioners to some of the more limited measures that we have taken, which I think have been recognised by some Opposition Members, not least the hon Member for Birkenhead (Mr Field) They have not been recognised as widely as they should be Although they are not necessarily of benefit to pensioners generally, they have brought significant additional help to important groups of pensioners with particular needs.

For example, I remind the House that since May 1983 men over 60 who are sick, disabled or unemployed can qualify immediately for the higher long-term rate of supplementary benefit Men over 60 who are not working no longer need to sign on as unemployed to be awarded national insurance credits Let me remind the House also that the capital limit for supplementary benefit was raised to £3,000 in November 1983, and changes have also been made in the smaller capital limit for single payments—a significant additional help to those many pensioners who have modest savings and previously found themselves denied benefit.

Let me remind the House further that since November 1984 people who return to this country after the age of 70 have been able to qualify for the non-contributory over-80s retirement pension. Before that change was made they had to fulfil a 10-year residence test before their 80th birthday. At the moment before the other place is a Bill that provides for abolishing the married women's half test, with effect from December 1984, so that married women who were over 60 in April 1979 will be able to get any retirement pension earned by their own contributions even if they did not pay national insurance contributions for half their married life. That was a discriminatory measure, and we have been happy to propose that the House should remove it. In recent proposals brought by the Government to the House, we have made it clear that we intend to abolish the lower married women's rate of the over-80s pension, and pay everyone the full rate from November 1985.

Those are not proposals that affect every pensioner, but they are targeted on groups with particular needs, for which I think we are entitled to claim credit from the House and, indeed, from the country.

Perhaps most important of all is a point which the right hon. Member for Tweeddale, Ettrick and Lauderdale did not touch upon and which I do not expect to hear mentioned by the Opposition Front Bench. I refer to the Government's most important single achievement in relation to retirement pensions, which has nothing to do with the pension itself. Our achievement in dramatically reducing the rate of inflation has ensured that pensioners' benefits and savings reasonably maintain their value and purchasing power.

The air of scorn of some Members on the Opposition Front Bench does them very little credit. They should go out into the country and ask pensioners how they feel about the Government's achievements in reducing inflation and how much easier that makes their lives than they were when prices were rising at more than 20 per cent. per annum. The Opposition should talk to the grass roots.

Mr. Frank Field (Birkenhead)

I do not wish to cramp the Minister's style, but will he spend some time not just reviewing what he alleges to be the Government's achievements but telling the House what the Government intend to do? As a result of the "new Beveridge" that the Secretary of State has brought forward, how many pensioners will be better off and how many millions will be worse off?

Mr. Newton

I was about to come to the figures and the Green Paper, but lest the hon. Gentleman think that I am trying to fend him off I should say that the Government are proposing an important series of structural reforms.

The hon. Gentleman is one of the few people in the House who may already have appreciated the significance of adopting for income-related benefits a common base of income assessment and a co-ordinated set of rules, and its importance for rational social security planning and the use of resources throughout the country. The Government feel that it is right to concentrate first on those structural reforms because whatever resources are available in the social security system it will be impossible to ensure that they are effectively used if we do not have a structure capable of using them effectively. When the House has had an opportunity to come forward with proposals concerning this structure and the Government have produced final proposals, then will be the time to consider in detail how the resources should be applied within that structure. That is what will determine the figures which so interest the hon. Gentleman.

Within any structure, decisions have to be made from time to time about the level of resources. It would not be sensible to give the kind of figures requested by the hon. Gentleman in advance of the structure being settled. Only the figures for the actual benefit rates from April 1987 will properly allow the hon. Gentleman to make such calculations. It is sensible to get the structure right and then to decide what the resources are to be and how they are to be deployed within the structure.

Mr. Field

Did the Government follow that procedure when they discussed the reforms in private? Is the Minister saying that the proposals were approved by the Department, the Cabinet Committee and the Cabinet itself without the Secretary of State putting any figures to them at all? Was the Cabinet happy to see at some later stage how individual groups would be affected? If the Cabinet was not satisfied with a discussion on that basis, why should the House be satisfied now?

Mr. Newton

In the course of the social security review the Government have, of course, satisfied themselves that the structure proposed can be sustained at a cost that the country can afford.

Mr. Field

rose—

Mr. Newton

I shall give way again in a moment. The hon. Gentleman might at least let me finish my answer to his general point.

The point that the hon. Gentleman has failed so far to take—and I should like to carry him with me on this— is that whether we have the proposed structure, the present structure or any other structure that people come up with, decisions have to be taken year by year about the resources to be applied within the social security system. That cannot escape any Government, and the Labour Government many times found themselves taking what they no doubt regarded as very difficult decisions for just those reasons.

Given that within any structure Governments have to take decisions about resources, and as it would plainly be absurd at this stage to try to settle benefit rates for April 1987, the important issue for the Government to put before the House and for the House and the country to consider is whether we are proposing a sensible structure within which the resources, whatever their level, can be sensibly deployed.

Mr. Field

Most of my constituents would be far happier with a scheme that is complicated and difficult to understand but which pays more money than with a Rolls-Royce scheme which pays only half the benefits, and I shall be happy to take that debate to the country. Is the Minister really saying that the Prime Minister approved the scheme without knowing how many millions of pensioners would be better or worse off?

Mr. Newton

I have already given my answer to the general question that the hon. Gentleman raised. As one or two of my hon. Friends have pointed out from a sedentary position, although I have the highest regard for the moderation with which the hon. Gentleman put his views in the House and for his knowledge of the social security system—which is greater than that of most of us — the views that he attributes to his constituents, whether accurately or not, are not views that I would expect him to endorse. If the hon. Gentleman, as one of the leading experts in the House on the social security system, is saying that he is interested only in additional resources regardless of whether the system is capable of directing them effectively to people in need, frankly he does nothing but damage to his own credibility.

Mrs. Beckett

rose—

Mr. Newton

I will give way this time, but much as I am enjoying the debate I shall have to resist the temptation to give way any more because many other Members wish to take part.

Mrs. Beckett

The Minister has said some very kind words about my hon. Friend the Member for Birkenhead (Mr. Field), but he does his own reputation no good by trying to sustain the argument that the amount of money that people receive matters less than the way in which the money is delivered. If he. really believes that, his understanding of the social security system and those who draw on it is infinitely less than we had previously imagined. Is what the Minister has just said a statement of what the Government are offering — a streamlined system with less money? If so, that merely confirms our worst fears.

Mr. Newton

I had intended to respond with almost as many kind remarks about the hon. Lady as about her hon. Friend, but in the past 30 seconds or so she has forfeited the right to those kind words.

Mr. Field

Just answer the question.

Mr. Newton

Not only did I in no way suggest that the structure was more important to claimants or anyone else than the level of benefits, but I made it quite clear—I hope that I carry both hon. Members with me on this— that a social security system which is not capable of using any given quantity of resources to the best effect, targeted effectively on those in greatest need and with the greatest claim to support from the rest of the community, is not a satisfactory system. What is more, such a system would end up wasting some of whatever money was put into it.

Mrs. Kellett-Bowman

Will the Minister accept that the elderly have a strongly developed sense of fair play? If they can see exactly how they and others benefit from the social security structure, they will be very much happier than they are with the present complicated system.

Mr. Newton

I entirely accept that helpful intervention from my hon. Friend.

I should like to move from the Government's record, as indeed I was being urged to do by the hon. Member for Birkenhead, to the way in which the concern shown in that record is carried through into the objectives and proposals in the review.

It is significant that the inquiry into provision for retirement was the first of the reviews to be established. Our aim is to ensure a sound basis of social security on which pensioners can safely rely. Briefly, I shall set out the main review proposals.

First, the basic state pension remains the foundation of state provision. To use the phrase in the Green Paper, it is one of the twin pillars of our approach to social security and a vital part of the improved partnership between the state and the individual that were are creating. The Green Paper states:

The Government remain entirely committed to this"— the basic retirement pension—

and will continue to ensure that it retains its value". Pensioners, with other social security beneficiaries, will have two upratings in the 16 months from November 1985 to April 1987 This will be carried out on the historic basis, taking the latest practicable measure, so that each uprating will be on time

On top of the assurance given on the basic retirement pension, we have made it clear that the rights of existing pensioners or anyone retiring before the end of the century will not be changed by the proposals on the state earnings-related pension scheme All existing rights at the time of the change will be honoured in full For men aged 40 or over, or women aged 35 or over, their SERPS rights will be enhanced as a firm additional basis for the individual, personal or occupational pensions that they be able to build up under the proposals

Mr. Heffer

I am sure that the hon Gentleman agrees with me that if people were living purely on the basic pension they could not manage to survive They survive because they receive supplementary benefit, yet it is that benefit and the various benefits that go with it, such as the heating allowance, that the Government intend to affect Can the Minister assure us that those people living on benefits will receive more, or is it the intention of the Government, as it appears to us, to muck about with benefits so that people living at that level will be far worse off?

Mr. Newton

I hope that the hon Gentleman will forgive me if I come in a moment to the incomes support scheme — our proposed restructuring of supplementary benefit—to which I believe he was referring, and to the wider issue that he raised I wish to complete my remarks about our proposals for additional pensions over and above the basic state retirement pension

With the continuation of the state earnings-related pension scheme for men aged over 50 and women aged over 45 at the time of changeover, and the proposal for enhanced rights for men aged between 40 and 50 and women aged between 35 and 45, and for the protection of SERPS rights at the time of changeover for others, we have provided a firm basis on which people can build additional entitlement through the new arrangements that we propose to introduce for occupational pensions, whether in a firm or on an industry wide basis, or for personal pensions It means that, for the first time, almost everyone in work will be able to build their own entitlements to their own pensions and will have a specific right to contributions from their employers towards that.

During the years in which those rights are building, they will represent a major social advance—removing the present "two nations" in pensions—and will be a major foundation for even greater independence and the possession of personal ownership rights in a way that has already been reflected in the powerful desire of people to own their homes In some ways, this is a parallel development to home ownership, and I believe that it will come to be seen as a major social reform.

Mr. Frank Field

Since the Government have made it clear that the aim of the review is primarily to tackle poverty, could the Minister address his mind to the problems of poverty in old age? With regard to the proposal that people should not be in SERPS but should build private provision, does he expect fewer or more people to be poorer at the end of their working lives?

Mr. Newton

Our purpose is to achieve precisely what has been happening as a result of the growth in occupational pension schemes during the 1950s and 1960s, which almost came to a halt after the introduction of SERPS: it is to build a position in which everyone retiring shall not need to fall back on additional income-related provision. It would be a rash man who would forecast whether, under the existing structure or in the future, that aim will be achieved, but it is a major objective of our policy to ensure that everyone going into retirement does so with an income adequate — if possible, more than adequate—to sustain himself.

Mr. Field

If that is the aim, why are the Government setting the minimum provision at 4 per cent., when the private sector says that about three times that level will be needed to guarantee a pension that would achieve the Government's objective?

Mr. Newton

We thought it right to set the figure in the Green Paper at a level which balances two different considerations. The first is the one which the hon. Gentleman and I have just been discussing, and the general aim to ensure adequate incomes for pensioners in retirement. The other is that we must keep an eye on the effects on employers' costs and people's take-home pay. Therefore, it is a balance between the predictions that can be made about any given contribution level, and the impact today. Liberal Members did not deal with this point in their comments on the basic state retirement pension and their desire to increase it. We must balance those considerations against the bills that must be paid, whether by those providing employment or by those in employment. The 4 per cent. figure is very much a minimum, and it is entirely open to people to add to that provision on their own account, to negotiate with their employers for a larger employer's contribution, or to come to whatever arrangements they wish, provided that those minimum requirements are met. The minimum requirements were set because we also considered the employment and other factors that arise in the present world.

Mr. Charles Kennedy (Ross, Cromarty, and Skye)

Does the Minister believe that the minimum requirements are sufficient on their own?

Mr. Newton

Yes. We shall, of course, consult those concerned with providing pensions and annuities, and we shall listen to points made on this or any other issue arising from our proposals. The Green Paper is a consultative document. We have already started the process of consultation with those concerned, and we shall take note of what they tell us. But the hon. Gentleman should recognise that under our proposals the only group of people who will be entirely dependent on the 4 per cent. minimum contribution for their additional pensions will be those who, by most standards, although not perhaps by the hon. Gentleman's standards, are very young, that is to say, men under 40 or women under 35, who have a good while to go before retirement and, therefore, have a considerable time to build up their contributions.

All the groups above that age will either have then-protected or enhanced SERPS rights as well or, in the case of men over 50 and women over 45, they will have their full SERPS pension. One reason we have cast our proposals as we have is that if this was all that was to be provided for people in those older age groups, it would not be possible to build up sufficient provision by the lime of retirement. For that reason we have come forward with this proposed structure.

In conducting the review and putting forward our proposals in the Green Paper, we have borne in mind the needs of pensioners not only in relation to SERPS or the basic state retirement pension. Pensioners and many other people are at present partly dependent on supplementary benefit for their incomes, and they have faced great problems with the immense, sometimes mind-boggling, complexity of the existing supplementary benefits system.

Some of the figures are familiar to the House—the 16,000 paragraphs of instructions and the 40-page index. Indeed, there is now a third volume of the S manual. Within all those complicated instructions there is a multiplicity of different types of payment, which means that people are often uncertain about what their entitlement should be. There will be tremendous advantage, not least for pensioners, in our proposed move to a simpler, clearer income support structure within which it is easy to work out entitlement and understand it.

As the House knows, we are proposing a set of basic benefit rates incorporating premium rates for particular groups, including all pensioners over 60, lone parents and the long-term sick and disabled. A significant further move which I hope will help set at rest the mind of the hon. Member for Liverpool, Walton (Mr. Heffer), is that within the pensioner group we are proposing an additional premium rate for the over-80s. They are most likely to have additional needs arising from growing old age and additional frailty. As a result of the premium payment for all pensioners together with the additional premium payment for the over-80s, and given an additional premium for those between 60 and 80 for whom there is an indicator of additional need — for example, as measured by receipt of disablement benefits — in line with the premium for the sick and disabled, we have created a structure which is far simpler and far more likely to meet the general needs of pensioners than the one at present.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Is it reasonable to try to assess the amount of money to be allocated to these premiums by establishing what is now spent on heating additions, for example, under the existing supplementary benefits scheme so that they could be spread over all the premiums, or is that a completely cockeyed way of looking at it?

Mr. Newton

I am not quite sure what the hon. Gentleman is asking, but I think I can answer him by saying that we have made it clear that we are not looking for savings from our proposals for the main structure of supplementary benefit. Broadly, our intention is to put back into the simplified structure of rates, including the premia to which I have just referred, the money that is currently spent on various additional requirements. Principally they are heating additions, but also include diet additions, baths additions, laundry additions and a variety of other additional payments which are part of the complexity of the present system. However, in setting the premium rates we shall have regard to the existing distribution of additional requirements and expenditure of the kind to which the hon. Gentleman referred. I hope that that answer follows the general lines of the one he wanted and that it is an indication of the way in which our minds have worked in coming forward with the proposals.

There are two other important points about the replacement proposals for the supplementary benefits scheme. First, with regard to the income support proposals, we are proposing a further, very important change in the capital rule which I believe will be widely welcomed by many pensioners. That is the introduction of a tapered rule running from £3,000 to £6,000 in place of the present £3,000 capital cut-off—[HON. MEMBERS: "Hear, hear."] I am glad to hear that endorsement from the Conservative Benches and also to acknowledge the nods from the right hon. Member for Tweeddale, Ettrick and Lauderdale and his hon. Friends. It is clear that they also welcome that move, just as it will be welcomed by many pensioners.

Secondly, the other half of the supplementary benefits replacement is that we are separating into the so-called social fund a number of the highly complex regulation arrangements which currently exist for meeting a variety of specific needs. These include the single payments arrangements, the urgent needs arrangements and, to a significant extent, those arrangements which are directed towards community care needs. We believe that these new arrangements will provide flexibility in dealing with the needs of special cases—their needs as whole people— which now prove extremely difficult in the detailed regulation system, particularly the detailed regulations for single payments.

Very much part of our thinking which has helped develop our ideas on the social fund is the belief that by operating with specially trained officers we can build on the experience which the Department has gathered since 1980 through the work of special case officers. We can also work more closely than has sometimes been the case in the past with those who are often concerned with the needs of the same claimants in local authority social services departments. That will enable us to build up policies which, for example, are much more effectively directed towards helping people who might need special help because they are coming out of institutions or hospitals and back into the community. It could be that they need special help, in conjunction with local authority social services departments, to ensure that they do not require institutional or hospital care.

Mr. Heffer

This sounds absolutely marvellous, but what are the limits in relation to the social fund? If there are clear cash limits, what happens if a number of people at a given moment have special needs but the limit is reached? Those of us who live with grass roots people —[Interruption.] Some of us do live with grass roots people, and many of them are our constituents. Can we have an assurance that, when there are genuine special needs, such people will receive benefit under the new system?

Mr. Newton

We intend that the social fund should operate within an annual budget. That will entail our making arrangements similar to those we make in health authority funding, where many of the same problems can arise. The budget will be allocated to local DHSS offices and the pattern of expenditure, priorities and the need to hold reserves at regional level will be assessed. Nothing that I have seen of existing social provision, where the concept of annual budgeting is part and parcel of annual operations, leads me to believe that we cannot devise effective arrangements for a flexible system which meets needs

Alongside the simplified and, I believe, significantly improved structure of supplementary benefit which we are proposing we also propose a system of housing benefit which is much simpler, clearer and, we believe, more effective in meeting needs In response to the hon Member for Birkenhead, I said that for the first time the proposed income support system and the proposed revised housing benefit system will be based on the same assessment of income and in accordance with consistent rules It is significant to pensioners and others that, for the first time, we shall have a system of housing benefit that deals even-handedly with those on income support and those who are not

As the hon Member for Birkenhead has obviously spotted, people on supplementary benefit have 100 per cent of their housing costs reimbursed whereas those not in receipt of supplementary benefit but perhaps have only fractionally more income have only 60 per cent of their housing costs met That gives rise to the problems which have led to the extreme complication of housing benefit supplement We are proposing equal treatment for people on the same income, whether it is derived from supplementary benefit or another source That is a major gam in fairness and equity.

The right hon Member for Tweeddale, Ettrick and Lauderdale will have realised that I cannot give figures that he wanted [HON MEMBERS "Ah "] I am not running away and will try to avoid the temptation of repeating everything that I have already said

In addition to those common rules and the common basis for assessment of income for housing benefit and supplementary benefit, the premium rates for pensioners on the new income support scheme will carry through into housing benefit They will become what are known as housing benefit needs allowances.

Everything I say about structural questions and the folly of attempting now to set benefit rates for April 1987 also applies to the calculation of housing benefit because that will be determined by the income support rates set in the replacement supplementary benefit system and by the rate of taper that we are proposing.

In any structural reform such as we are proposing there will be swings and roundabouts Some people will gain and others will lose We have made it clear that we intend to ensure that there are no cash losers in the change to the income support scheme We have stated our anxiety to make effective transitional arrangements to protect those who need to be protected, as any reform is bound to affect entitlement We shall consider the implications of the proposal, which I believe is right in principle, for everyone to pay about 20 per cent of their rates The proposal has widespread support on the Benches behind me and, I believe, elsewhere, as it will restore people's interest in what their elected councillors do We have said several times that we shall give appropriate consideration to what is required in that regard as it affects people on supplementary benefit.

We intend to answer the question posed by the right hon Member for Tweeddale, Ettnck and Lauderdale The proposal for payment of 20 per cent or so of rates should apply to people on income support and to those who receive only housing benefit and have no income support. I hope that our stance is clear. I cannot give the House an absolute guarantee that there will be no losers, because of the nature of the changes. I am giving an assurance that we shall have in mind what the right hon. Gentleman said when setting rates and establishing the transitional arrangements.

I have taken a lot of the House's time—fairly, I hope I can claim—responding to questions. I will leave it to my hon. Friend the Parliamentary Under-Secretary to wind up the debate and to comment on death grant. I should like to observe, however, that everyone gets only £30, which is of very little use and that it is unsatisfactory that only those on supplementary benefit receive full help with funeral costs. We are proposing that genuinely adequate help should be available to those who need help to meet funeral costs rather than only to those on an existing means-tested benefit. The right hon. Gentleman's proposal would not achieve that end. His proposed £250 for everybody would not be enough help for people with no means. I hope that the right hon. Gentleman will reconsider his proposal.

The review's purposes are to meet the social conditions of today and those which we can foresee for the rest of the century, to create a simpler and fairer system so that people, not least pensioners, genuinely get the benefits to which they are entitled, and to create a soundly based system that can deliver the promises it makes. Nobody has a greater interest in our achieving those objectives than pensioners, and we mean to see that they are secured.

5.40 pm

Mrs. Margaret Beckett (Derby, South)

It is right that the first aspect of the Green Paper should be the proposals that affect the elderly, because, leaving aside the rhetoric, the Government's attitude to pensions most clearly reveals the twin purposes of their reviews. First, there is the obsession with cutting public expenditure for the sake of cutting, or, perhaps, for the sake of the few individuals —the better off—who alone have reaped the benefit of the cuts. Secondly, there is the obsession with destroying public services—financial or otherwise—simply because they are public services.

The most significant change that the Green Paper has proposed is the phasing out of the state earnings-related pension scheme. The more we consider the matter, the more extraordinary this decision seems. Already it appears that contributors to the scheme — the few who are allowed to stay in SERPS—will, at best, pay slightly more without receiving improved benefits. The vast majority of people will pay substantially more and receive substantially less, especially as those in occupational schemes will lose the state's hedge against inflation and the standards against which those schemes have been measured.

We have yet to learn the costs of abolition in terms of tax concessions on the compulsory private pensions with which the Government plan to replace SERPS, although there seems every likelihood that they will run to several thousand million pounds. We are aware that the Government have argued during and before this debate that massive and unforeseen changes have made the abolition of SERPS necessary. The Government have not explained at all—never mind to our satisfaction—why these changes were not understood, not only in 1975, as the Government now suggest, but in 1981 when the bulk of the statistics on which this policy is based were published. The Government have not explained why the conclusions were not understood in 1983 when the- Prime Minister gave one of her famous assurances or even in 1984 when the Secretary of State gave his assurance. The statistics for pensioners and for the contributory population that are used now are almost identical in every respect to those that were used years ago.

What happened between the assurance in 1984 by the Secretary of State and June 1985 to bring about this massive change in understanding and in policy? Ii is not that there has been a massive change in the anticipated number of pensioners or in the ratio of contributors to non-contributors. The Secretary of State produced a half-baked, half-thought-out plan, justified by reference to a misinterpreted opinion poll, for what he called "personal portable pensions." That is not even easy to say. Ii was a plan not just for privatising, but for individualising pensions. The trouble with the plan was that, the more people looked at it, the more they pointed out that no one in his right mind would buy the right hon. Gentleman's portable pension when he could get a much better deal from the existing state scheme. Full transferability, guarantees against inflation and a pension with a decent maturity period were all provided in the state pension scheme. That scheme was a much better bet than any private scheme. One after another individuals and the institutions that advised the Secretary of State published articles or wrote privately pointing out to the right hon. Gentleman that no one would buy a personal portable pension unless the Secretary of State first abolished the superior state scheme.

We all realise to our cost that telling the Prime Minister that the state is doing something better than the private sector—that the administrative costs are lower so that the state scheme gets even better value for money than the private sector—is like a red rag to a bull. The Prime Minister knows what she believes and she does not want to be confused with the facts. She knows that anything that the state provides must be bad—that it must be worse than the private sector. If, by some chance, the state scheme is better than the private sector scheme, her motto is "Get rid of it quickly before anyone finds out."

Because the Government must acknowledge that they are replacing a good pension scheme with a worse one at a higher cost, it has been necessary to preach doom and gloom about how SERPS has not really been a good scheme because it has been so wickedly over-generous to pensioners. We have heard before, and no doubt shall hear again, reservations about the necessity for and the wisdom of the Government's proposals — whether it is rhe example of the Phillips committee howlers in 1954 or the Government's own Social Security Advisory Committee's devastating criticisms a year or so ago.

Even leaving aside all the other questions about the accuracy or truthfulness of the Government's claims about the problems with SERPS, one major issue remains. The Government Actuary points out, and is quoted as saying in the background paper to the reviews, that the possible rise in contributions that he identifies will occur at the level given only if the link between pension upratings and earnings is restored — the link that this Government abolished in 1980 and that they have always refused to restore. While the basic pension remains linked only to prices, its value over the years will be so eroded that, even if the Government do not lay a finger on SERPS, eventually the total pension will be sufficient to equate only to the value of the pension today.

Those who have no entitlement to SERPS because they have not yet found a job, or those who are not wanted by the private insurance companies because they are on the dole or sick, will remain heavily or totally reliant upon the basic pension and will end up completely reliant on whatever scheme replaces supplementary benefit by the end of the century or later. Even on the Government's own predictions before they decided to abolish SERPS, at the end of the century there will still be a million pensioners on supplementary benefit. I shall not bother to ask the Minister how many more he thinks there will be if the Government abolish SERPS, because I do not suppose that he can tell us that either.

Apart from the value of the pension itself, the Government's argument that we cannot afford to let SERPS continue has been severely damaged. If the Government continue to link the basic pension only to prices, the contributions will ultimately reach not even the predicted 20 per cent.—the figure that the Government love to cite—but

less than half of that", in the Government Actuary's words. We can forget all the weeping and gnashing of teeth about the cost of SERPS. The Government did a demolition job on SERPS five years ago, in 1980, and it is totally gratuitous for them to return to it now.

That is not the point of this proposal. The point is that SERPS, plus an eroded basic pension, is still better than a private pension plus an eroded basic pension, and that is why SERPS has to go.

My hon. Friend the Member for Birkenhead (Mr. Field) asked the Minister whether he could give an assurance —wisely, the Minister was not drawn on that point— that the personal portable pension, or whatever the new plan is, will give as good a pension provision as or better than SERPS would have provided. The Minister knows that the answer is, "No, it will not." The Government, in their consultative document, specifically ruled out giving any guarantees on the value of personal portable pensions. Indeed, they said that anyone who took out such a pension could not rely upon any fallback or guarantee from the state—presumably, other than supplementary benefit or the basic pension—because that person would be taking an individual risk and would be out on his own. If the new scheme is as good as or better than SERPS, there would be no need for the Government to warn the people whom they wished to remove from those pensions that the Government would not pick up the pieces.

The Minister said a good deal about the Government's record and how grateful pensioners are. I do not know whether the hon. Gentleman has tried recently asking pensioners how grateful they are. He is fond of pointing out the dangers of inflation. We all recognise that inflation has undesirable consequences, but under the Labour Government the real value of the pension increased by 20 per cent. It seems to be difficult for Conservative Members to grasp that simple fact. Despite the problems that we faced, we managed to help those drawing the pension then and, by establishing the scheme that the Government attack in these reviews, to provide for the pensioners of the future. This Government are attacking both.

Mr. Newton

I hesitate to interrupt the hon. Lady, but, in view of her remarks, I must ask whether she would care to comment on the adjustment in 1976 to the uprating method, which did not take account of several months of rapidly rising inflation and cut what in today's money would be at least £1 billion from the amount that pensioners would otherwise have received. I remind the Liberals, since they introduced this debate, that the Lib-Lab pact was made the following year.

Mrs. Beckett

Whatever may be the criticisms of the record of the Labour Government, we still improved pensions in real terms by 20 per cent., which is more than the present Government have managed to do.

I remind the Minister of another simple fact which I have drawn to his attention on other occasions. In our whole period of office, we had only as much from the North sea in terms of income as the Government have received every month throughout their period of office. Even with our problems, we managed to increase the real value of the pension by 20 per cent., so perhaps we should hear rather less about how great the Government's record has been. The first thing that the Government did was to erode the basis of the improvement, the link with earnings, although they still paid lip-service to their concern for the elderly.

Although SERPS is most significant in the sense of revealing the purpose of the reviews, neither the proposals on SERPS nor the reviews themselves represent the whole of the attack on the elderly that we have seen in recent years. I am not even referring to what the Minister said about changing uprating. He knows that his Government have saved money by changing the basis of uprating. They have saved money on three occasions by postponing by a week or two the payment of pensions. They have saved money by reducing heating allowances.

Most of all, the Government have saved money on pensioners by the massive cuts in housing benefit. I might have said more about the cuts that we have already seen — and predicted — in housing benefit, except that previous debates have shown that there is very little point in asking Ministers to give us more indications of who will be affected and to what extent. We know that the Government have the figures but do not intend to reveal them to us. As they are, according to the Minister, so good, it is surprising that we have not been told about them. The Government are not usually reluctant to claim credit for being generous to the populace. As I have said, we know that there will be cuts in housing benefit, and we strongly suspect that occupational pensioners in particular will be the sufferers.

The most vulnerable among the elderly have been consistently among the hardest hit. The leader of the Liberal party referred to the forced increases in water rate which are being brought about by the Government. They follow hard on the heels of a series of forced increases in fuel costs, which have fallen particularly hard on pensioners. The pensioners who are poor enough now to be drawing supplementary benefit are precisely those pensioners who often fall foul of the system of single payments to which the Minister referred.

A wide range of problems which affect everyone who is poor bear even more harshly on the elderly. I have recently received some communication from chiropodists —I hope that Minister will be able to comment on it later — about the hardships caused to pensioners in regard to single payments, and the wholly inadequate grants which are received—if, indeed, they are received at all. Some people have too many deformities of the feet to wear ordinary shoes but are not sufficiently severely affected to justify the wearing of surgical shoes. Many pensioners find that, if they can get assistance, it is wholly inadequate to meet the cost which they have to bear. In that context, as in many others, it was pointed out to me very forcefully that the cost to the state of chiropody charges and the cost to individuals in pain and discomfort greatly outweighs the cost of a more sensible system.

Although the Minister spoke with touching confidence in his new proposals for a social fund, which he seems to think will be better than the single payment system, the Opposition have even more worries and concern about his proposals than we have about the existing scheme—and, heaven knows, that is saying something.

The leader of the Liberal party referred to problems connected with the death grant, and I am aware that the Parliamentary Under-Secretary of State will be replying on that point. When the Secretary of State for Social Services made his recent statement, my hon. Friend the Member for Oldham, West (Mr. Meacher) referred to people having to have a pauper's funeral. Conservative Members sought to discount what my hon. Friend said. If they do not like that term, they may be more touched by the term "parish funeral." In the folklore of our parents and grandparents, that was always something devoutly to be avoided. To be buried by the parish was regarded as a great stigma and source of shame. The more I hear about the Minister's proposals for a social fund, the more it seems to me that they will result in the reintroduction of the stigma.

I was entirely unconvinced when I heard the Secretary of State say that the lack of an appeal process will not fall foul of the European Court. I noticed that the Secretary of State was prepared to put the blame on the Minister for Social Security if that did not turn out to be the case.

We are also concerned about the staff at the DHSS. I am not sure whether they will retire early, die of heart attacks, have nervous breakdowns, be murdered or lynched, but I am sure that there will be a substantial increase in the turnover of DHSS managers.

Mr. Newton

The entire basis of the scheme was largely discretionary until it was put into regulations in 1980. The notion that a modest return to discretion, in an area in which regulations have not worked very well, will defeat a system which operated largely on the basis of discretion for so many years cannot be supported.

With regard to death grant, the terms "pauper's funeral" and "parish funeral" refer to something which can still, in theory, exist—burial by the local authority. The local authority still has that duty in certain cases. In my experience, supplementary benefit single payments are not seen as being the same as a pauper's funeral. The hon. Lady is drawing a misleading and wrong parallel in suggesting that they are the same.

Mr. Deputy Speaker (Mr. Harold Walker)

Order. It would be better if, instead of having ministerial interventions, particular points were dealt with in the reply at the end of the debate.

Mrs. Beckett

The elderly are also severely affected by the changes in the provisions concerning board and lodging. The elderly are affected, as are other groups, by the ceilings imposed on board and lodging. If the lodging in which the elderly have been staying has charges above the ceiling, or if there is a wish to increase the charges, which would take them above the ceiling, that is a matter of considerable concern to them. Assurances were given that such matters would be looked at.

A particular problem which has been drawn to my attention recently, affects handicapped people who are just under 65 and eligible to have varying sums paid to their account, the maximum being £198, because they are under 65. It is my understanding that on the day people become 65 — if it happens to be more than a year since the regulations became law — they are now eligible for a payment of only £138.60. That is a reduction of £60 in the payment which can be made. I am told that that has already begun to happen to people in nursing homes. Indeed, I have a case—I shall pass it on to the Minister—of a home in which two or three such people are already affected. Obviously, it is a very serious matter, not only for the homes which are trying to provide proper nursing care but for the individuals who are affected. I find it hard to believe that even this Government intended that there should be such appalling side effects.

There are also the problems which arise where margins in homes for the elderly are cut to the bone. There is a fear that it may be necessary to reduce the level of provision of the very services that the Government have asked them to provide under the code of practice, such as proper training for staff and proper care for residents.

I understand that there are considerable differences of opinion arising between local offices as to who is to decide whether the level of fees is appropriate for the area concerned, although I recognise that the whole intention was to take some of the discretion away from local offices. In some areas, it is being said that payment above the ceiling can be made for a substantial period, while in others it is being said that the new figures must be implemented immediately. I hope the Minister will look into the question of how much discretion is being permitted.

Our main concern in the debate is the overall problems faced by the elderly of today. They include those who struggled to bring up their families before the introduction of the welfare state, the men—all too few—who fought in one or perhaps two world wars, and all too many of their widows. They include those who worked and struggled to establish a better society and who hoped to crown the victory that we commemorated this year with a society dedicated, for the first time in our history, to the principle of from each according to his or her ability and to each according to his or her needs — in other words, the principle of the welfare state.

It is a tragedy that, towards the end of their lives, they should be seeing a Tory Government who are not only trying to undo everything that most of them worked for but are making it plain, by their attitude to the pensioners of the future as well as to those of today, that they reject that fundamental principle of the welfare state. It is still among the most elderly that the greatest reluctance exists to claim the benefits to which they are rightfully entitled — even benefits for which they and their families have paid—because they feel the stigma of charity, not rights, hanging even over the welfare state.

I must tell the Minister frankly that, in my opinion, the real meaning of the reviews, for the elderly and for everybody affected by them, is that, whatever the Government may say, their desire is to reintroduce that stigma. They may not use those words, but that is what their words mean.

Not long ago a comedy show ran on television for almost as long as the present Government have run. It was called, "Never mind the quality, feel the width." The proposals that we are debating today are, unfortunately, as poor in quality as we fear they will be narrow in generosity.

6.2 pm

Mrs. Virginia Bottomley (Surrey, South-West)

Today's debate is concerned with the problems of the elderly. In my constituency, the elderly deeply resent being referred to only in relation to their problems. Indeed, some may feel that an advantage of televising the debates in another place is that all can see the contribution to public life that is made by many over retirement age. Most pensioners are fit and able to assist their families. More importantly, they are able to make an enormous contribution, in voluntary organisations and other types of service, to the community.

When talking to pensioners today one discovers that income maintenance is not their greatest fear, though it is understandable that the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) should have referred to income. After all, at the time of the Lib-Lab pact, with inflation running at more than 25 per cent., many pensioners were afraid that they would not have sufficient income to see out their lives.

In fact, pensions have kept up with the cost of living, and during the past 30 years there has been a substantial shift in resources in favour of pensioners. The result is that today many pensioners are better off per head than the households of those in work.

Pensioners are worried mainly by the fear of isolation and alienation. It is clear from recent census returns that many more elderly now live alone. With people living much longer, there has been a dramatic increase in the number of over-80s, and these are causes for concern.

In recent years, under Conservative rule, there has been a 15 per cent. increase in resources devoted to the personal social services, a 20 per cent. increase in real terms in expenditure on the health services and there are more nurses, district nurses, doctors, health visitors and so on. All of that has made for a great improvement in assisting the elderly. More important than even those services is the way in which they are used, and there have been many initiatives in care in the community, with people being brought into voluntary organisations so that the elderly can be helped to live at home.

I am vice-chairman of the National Council for Carers and their Elderly Dependants, an organisation with approaching 50 branches throughout the country, helping informal carers such as those to whom the leader of the Liberal party rightly referred. These people selflessly look after those who, wherever possible, can live at home. The Department has given assistance to the NCCED and incorporated them in plans and initiatives. There are, however, many other groups in the community helping to make the elderly feel valued and important. They include the WRVS and Age Concern, whose members know a great deal about training and the needs of the elderly.

Last week I visited some housing developments for the elderly in my constituency I saw with pride the great variety of provision that is being made, including sheltered housing, cluster housing and good neighbour schemes I was made aware of the way in which developments are embracing some of the new technologies For example, it is possible to have a radio link with a headquarters so that those in difficulty can call for help.

It is all too easy to polarise provision and only to consider whether it is provided by the state or the private sector The provision of old people's homes has been a controversial area, and I welcome the new regulations for the registration of homes for the elderly Over the years there have been many articles and research projects highlighting the treatment of people in homes for the elderly Recent research at the university of Bath made it clear that under the new procedures many such homes in the state sector would have difficulty getting registered and becoming approved as private homes.

Recent events in Southwark at the Nye Bevan home have provided a particularly appalling example of what can happen under local authority provision We need a partnership and balance between private, voluntary and local authority homes, and it is wrong to suggest that there is some type of hierarchy.

The elderly want to feel acknowledged and valued members of the community They want the Government to sustain then: policies for the Health Service, making sure that patient care is given priority and that the resources available are used effectively They want to see the social services maintained and, where possible, improved They want support for informal carers, for all those who voluntarily, giving then own time, help others Above all, they want flexibility and choice so that they may have dignity in their old age, making a contribution to the community while in their active years of retirement, then being supported with the help they need on becoming more frail towards the end of their lives.

6 8 pm

Mr. Frank Field (Birkenhead)

It is customary to comment on points made by the previous speaker I hope that the hon Member for Surrey, South-West (Mrs Bottomley) will forgive me if I do not do that on this occasion, though I confess that if I were a Conservative Member speaking in this debate, following the announcement of a major review of the welfare state, I should have made a contnbution similar to hers It was clever in the way it distracted attention from some of the immediate plans of the Government I shall refer to some matters that were raised by the right hon Member for Tweeddale, Ettrick and Lauderdale (Mr Steel) and my hon Friend the Member for Derby, South (Mrs Beckett), the first being to question how the Secretary of State was able to boast that his review of the welfare state, which will result in another Beveridge, could be presented to Parliament without one figure to show how individual groups of claimants would be affected.

The Minister of State answered that question today by saying that the Government were concerned with the structure of benefits and that once the consultation period was over the figures would be provided I have a suggestion which puts a different light on what is really going on We have read much in the press about the success of the Secretary of State and his team in fighting off Treasury attacks on the welfare state. Is it possible that it was a clever ploy by the Secretary of State to make his statement on Monday without giving any figures? Is it possible that that was part of a deal that he had to strike with the Chancellor of the Exchequer? Is it possible that the efforts of the Treasury to cut welfare provision will continue as we embark on this year's review of public expenditure?

Has all that resulted in Ministers at the Department of Health and Social Security being forced to talk only about the structure, when hon. Members in all parts of the House want information about the rates of benefit so that we can work out who among our constituents will be better off and how many thousands among them will be worse off?

The Minister's clever ploy was no mere accident. He was pushed into it. It takes more than nerve for the DHSS team to come to the House and behave in this way because only a few weeks ago the Secretary of State and the Minister of State savaged my hon. Friend the Member for Oldham, West (Mr. Meacher) for presenting proposals which he had not fully costed. We were told that it was outrageous, irresponsible and typical of the Labour party. Today the Government propose a major overhaul without providing a single figure.

Perhaps the Minister can say whether my analysis is correct. I do not wish to score points, but if I am right and the Treasury is still after cuts of £2 billion or £4 billion the support of Government Back Benchers will be needed to fend off an attack. Ministers must not take pleasure in mystifying themselves and their own Back Benchers about what they are up to.

The state earnings-related pensions scheme is to be abolished. That will mean a worse deal for women and for low-paid workers. Despite the Minister of State's debating skills, when asked whether the alternative will be superior in terms of tackling poverty he was reticent. The private sector says that if workers are to build up contributions over their lifetime to afford a pension which will prevent them from being in need in old age, contributions must be between 12 and 14 per cent. of their earnings. The Government are talking about contributions of 4 per cent. SERPS is to be abolished, but the alternative will not achieve the Government's objective of taking people off means tests and making fewer people less dependent on state support.

The Government are loose in their use of language. Certain phrases appeal to their Back Benchers and many people in the country. They say that we must target resources to those in greatest need. That is a good phrase, but let us examine what the Government are doing— although that is difficult since we have no figures.

Let us examine the simplification involved in replacing the supplementary benefit scheme with the income support scheme. The Government intend to simplify the scheme by abolishing all the additions to basic benefit which are currently given for heating, diet and special laundry needs. According to Government language, there could not be better targeting than that because the extra allowances are given only if a dietary, heating or laundry need can be shown.

The Government's alternative is a premium that will apply to everyone at present in that category. The jam which was spread less thickly amongst those in greatest need is to be spread more thinly amongst all people in that category. Even without the figures, we can see that some of the Government's objectives will not be achieved.

I hope that two clear messages result from the debate today. One reason why the Goverment have not provided any figures in connection with this major overhaul of the welfare state is that the struggle about the level of welfare support is continuing between the DHSS and the Treasury. Once that dispute is settled and the figures are available we shall know the extent of the cuts. Whenever hon. Members ask how many people will be better off and how many millions will be worse off, Ministers will not reply with a straight answer. It is right for the leader of the Liberal party to sound a note of worry that millions will be worse off as a result of the review, although we may not be able to put exact numbers on it until later in the year.

SERPS has faults and the Government are correct to say that we have a problem with an aging population which is increasing relatively faster than our working population. Despite those problems, the Government are abolishing SERPS which is the only method on the statute book which guarantees bridging the link between poverty and old age for most people. The Government's alternative will not achieve that. There will be many more poor pensioners in the future. I hope that the messages are received loud and clear in the country.

6.16 pm

Mr. Anthony Steen (South Hams)

If I were a Labour Member — I hope that I never shall be — I should probably make a speech similar to that made by the hon. Member for Birkenhead (Mr. Field) if I understood the subject as he does, but I shall not follow his line. I want to explore the wider issue discussed by the leader of the Liberal party.

The debate has tended, like so many others, to focus on money. The hon. Member for Birkenhead concentrated on money. He is an expert on such matters, but money indicates something about attitudes. The extent of Government expenditure on the elderly tells us something about the Government's attitude.

Last year £6.5 billion, or 40 per cent. of the Health Service budget, was spent on the elderly. Does that mean that the Government care about the elderly? Would the Opposition say that the Government were more caring if they spent 50 per cent. of the budget on the elderly? What is the cut-off point or the starting point of caring?

Hon. Members on both sides of the House are caring, and even if we spent a few more billion pounds it would not mean that we were more caring. The Labour party thinks that it has a monopoly of caring. It has a habit of championing minority groups such as the elderly, the handicapped and the disadvantaged. Anyone who is not quite up to the next man is labelled "disadvantaged" and immediately attracts the Labour party's interest.

Today the Liberal party is trying to upstage the Labour party by arguing that it can do even better for the elderly than the Labour party and that it cares even more. No party has a monopoly of caring. The test of who cares most is not decided by who spends most. The elderly must have opportunities for maintaining good health and human dignity. The dignity of the elderly is most important. Society in various parts of the world views its elderly in many different ways. In the east the elderly are still revered as the heads of the family. In developing countries the elderly play a full part in family life. In many European countries they continue to head the family business. The elderly have the status of experience, wisdom and prudence.

In Britain, the elderly and their problems are seen as something with which the state must deal—it is not for the family to look after the elderly, but for the Government. The trade union movement continues to fight to lower the retirement age, but unwittingly it is compounding the problem. There is an ever-growing number of retired and elderly people. The term "elderly" tends to be synonymous with being retired from paid work.

Old age begins in Britain when one becomes a pensioner, and pensioners are becoming pensioners as early as 50. They switch from being part of society to being an adjunct to society. It is rather like Cinderella. One day one is in a job and the next day one is old — someone who attends Christmas parties and wears funny hats.

Rather than being revered, our elderly tend to be patronised. They receive concessions for travel and special prices at cinemas. Yet the major problem is life expectancy, which is increasing in leaps and bounds. We are spending £17.4 billion a year on health care and as a result it has improved dramatically. Whereas in 1985 there were about 3.5 million people over the age of 75, by the year 2050 there will be nearly double that number—6 million people. Whereas this year just over 500,000 people are more than 85, by 2050 there will be nearly 2 million—three times as many. That is one aspect that has not been mentioned in the debate. We must consider the scale of the problem and the increased life expectancy of society. We therefore have the prospect of increasing numbers of people spending a quarter of a century or more of their lives as pensioners.

There are two problems. First, where will all those retired people live for a quarter of a century of their lives? Secondly, what will they do with their time? What will they do day after day when they are retired and have nothing to do? A large majority of retired people will continue to live in their own homes—whether owned or rented. However, there will be an increasing need to build special-purpose bungalows and warden-controlled complexes, and that entails an increase in public expenditure.

There has been a growth in the number of residential homes. In 1982-83, expenditure on the care of the elderly in residential homes rose from £39 million to £102 million. Expenditure for last year is estimated at £190 million. While private homes provide better value and lower costs than local authority homes—[Interruption.] Oh yes they do. I do not know why Opposition Members are making a noise. They know that what I am saying is absolutely right. Private homes provide very much better value than local authority homes. I shall not bore the House with statistics, but I have them to hand, as does my hon. Friend the Minister. Although private homes provide better value than local authority homes, the cost of keeping the elderly in private homes rose from £39 million in 1982–83 to £190 million this year.

There is a further advantage: caring for the elderly in private homes entails half the cost of keeping an elderly person in a geriatric bed in a hospital, the current cost for which is £243 a week. As the population lives longer, the burden and the cost on the state will continue to increase—

Mr. Willie W. Hamilton (Fife, Central)

What burden?

Mr. Steen

It is a very real burden on the state. The state will not refuse to accept that burden, but it is a burden.

I am sure that Opposition Members will agree that the one way in which the Government can endorse their family policy is to encourage more people to look after their own. I have never understood why the Government do not give some benefit and tax relief to those devoted people who look after their elderly and frail parents. They dedicate their lives to looking after their families. And it need not be only parents; it could apply to uncles and aunts. It is a better way for retired people to live, and would not be a strain on the state. Yet the Government continue to refuse to give tax relief to those looking after their families.

Mrs. Beckett

The hon. Gentleman is making a comment that Opposition Members often make. The reason why the Government do not provide such help is simple: they seem to be quite incapable of distinguishing between cutting public expenditure and getting value for money.

Mr. Steen

I should have expected a helpful remark like that from the hon. Lady, and I am sorry that I gave way.

Not only will the Government save money by giving tax benefits to those who look after their own, but it is far better that the elderly should live with their families. I hope that my hon. Friend the Minister will say something about that when he replies.

Money and housing appear to be the nitty-gritty of the problem facing the elderly, but I believe that there is a more sinister problem—loneliness. The House has not addressed that point in the debate. The problem of loneliness will eclipse all other problems as the elderly live longer. They need a purpose in life. I have met few who are ecstatic at the prospect of retirement, especially early retirement. They see little future in their lives, there is little prospect of paid work to augment their pensions and they have few opportunities to do something in society. I am grateful to my hon. Friend the Minister for what he said about voluntary work.

Loneliness is one of the worst and most intangible conditions of our time, especially for the retired living in our large urban areas. What are they supposed to do for a quarter of a century? They cannot travel on a bus with their concessionary fares all the time; they cannot play bridge or visit the museums or eat at luncheon clubs all the time. What are they supposed to do other than watch television and wait for a knock on the door? The Government need to help them find a new purpose, a new role and a new aim. People will be increasingly out of paid work at a younger and younger age.

We have a vast and increasingly fit army of young retired people who have a wealth of experience, knowledge and skills. We have to find a task and a purpose for them. There is a tremendous waste of resources. [Interruption.] The hon. Member for Birkenhead appears to be either anxious to leave the Chamber or in some discomfort. Although he is very good at juggling with statistics, he overlooks the importance of the humane aspect of caring for the elderly. It is all about the real problems of living, rather than simply playing around with statistics and money. It is the problems of loneliness, caring and having a part to play in society. I am sure that the hon. Gentleman will understand that—

Mr. Frank Field

The hon. Gentleman appears to be advocating a charter for busybodies.

Mr. Steen

The hon. Gentleman may say that, but this evening we are airing the grievances and problems of the elderly. We must tackle those.

I asked what an elderly person would do for a quarter of a century. He cannot travel on a bus the whole time, or watch television the whole time. What is he supposed to do?

Mrs. Kellett-Bowman

Does my hon. Friend accept that the Government's plans for a flexible decade of retirement would go some way towards meeting my hon. Friend's point?

Mr. Steen

Yes. My hon. Friend always puts her finger on it. I am glad she is joining in the debate.

We have debated many matters this evening, and I hope that I have made a short but helpful contribution. It was right for the leader of the Liberal party to raise the problems of the elderly. I regret that so few Opposition Members feel that this is a topic of such importance that they wish to join the debate. I am glad that a few members of the Liberal party, though only a few, are present and also that a few members of the Social Democratic party are here. I am pleased that many of my right hon. and hon. Friends have spoken in the debate. I support the Government amendment. We are on the right path towards helping the lonely and the elderly.

6.31 pm

Mr. Michael Meadowcroft (Leeds, West)

I am sure that the hon. Member for South Hams (Mr. Steen) will be pleased to hear that I intend to put the other side of the coin. I do not know why he regards six Back Benchers of his own party as a large number. If he does, he is innumerate or is exaggerating. I do not accept that if people do not pay rates directly through their rates bill they are not contributing to rates income. I fear a cop-out by industry if it regards rates as being paid simply by ratepayers. Every customer and employee of a company pays its rates. The Confederation of British Industry recognises that fact and has pointed out to its employers and customers that high rates affect viability. It wishes to alter that position.

The social security reviews are defective because they do not tackle linkages. Although I agree with the hon. Member for South Hams that a case can be made for extra expenditure upon the social services or social security, there are many other problems that can be tackled without spending extra money. Normally they can be dealt with by linkages. Some houses are under-occupied and could be used by families. They remain under-occupied because there is insufficient sheltered housing for single people. It is a waste of resources which the single elderly deplore. The clearance of inner city areas has contributed towards the huge escalation in costs. The small, old houses that people prefer to live in have been demolished. Clearances are still taking place and ought to be stopped.

If elderly people wish to remain in their own homes, an adequate attendance allowance might make it unnecessary for them to enter institutional care. An attendance allowance would be far cheaper than institutional care. The social services have a part to play by providing day centres which enable the elderly to be fed properly. The voluntary sector can help. The community transport project takes people to the day centres. The National Health Service can also play its part by providing community nursing. If all these services were pulled together, better and cheaper care would be provided for individual needs. The social security reviews have failed to deal with the problem in that way. They have simply shifted money around from one needy pocket to another.

6.34 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

This has been a very useful and worthwhile choice of subject, particularly since the social security reviews were published this week. The alliance has chosen the problems of the elderly as one of the first subjects to be debated. This is the first opportunity to scratch the surface of the debate that will take place between now and the publication of the White Paper.

I appreciate the lengths to which the Minister for Social Security went to listen to the views which were expressed and then, with great skill, to skirt around the answers that were sought. The Minister should not rest too much upon this Government's apparent laurels. My most enduring impression of the day when the reviews were published was not of the Secretary of State for Social Services being given a characteristically easy time because of the hysterical reaction of the Opposition Front Bench spokesman. It was of several pensioners marching outside carrying placards saying, "Pensioners say 'No' to Fowler".

When he opened the debate, my right hon. Friend the leader of the Liberal party rightly criticised the lack of figures. The lack of figures in the published volumes compounds the error that was pointed to by many people at the time of the reviews: that they were being conducted on a revenue-neutral basis, which meant that examination of the hidden welfare state provided by tax benefits would be precluded. Therefore, it is difficult to make constructive comments about the suggestions. The Minister for Social Security engaged in an almost theological discussion about the relationship between the financial aspect and the structure at which we should aim. He seemed to be trying to make a virtue out of a vice. At least, he said that the absence of vice in itself constituted a virtue. The Minister claimed that the absence of damning figures about who would lose and at whose expense some gains would be made was to be welcomed. It is rather like the words of the old song:

I've danced with a man, who's danced with a girl, who's danced with the Prince of Wales. Nobody has seen the culprit but everybody has passed by at some point. The review figures seem to have passed through several hands, but they are not available when we want to debate them.

The hon. Member for Birkenhead (Mr. Field) made a similar point. He pointed out that the Government actuaries have been both for and against SERPS. My right hon. Friend the leader of the Liberal party said that we could not back the Government's course of action over SERPS because of the way they have gone about it. SERPS was set up after all-party consultation. If it is to be restructured, modified or done away with completely, it should take place only after there has been all-party discussion. We also oppose its modification because there is to be no major increase in the basic flat rate pension. Most people accept that this would be an important counter-balance if there were to be any change in SERPS.

Finance is one of the great defects of the social security reviews. The social fund will be a major contributor to the view that the public form about the reviews. There is interaction in the social fund between the benefits system and the personal social services. It will be cash limited. A system of discretionary grants and loans will be operated. The Secretary of State for Social Services wants the social fund to be used as a pump-priming mechanism in order to move people through the care in the community programme. This demonstrates that the Government tacitly acknowledge that the amount of money available to help the elderly through the care in the community programme is insufficient, that it is being damaged by the rate capping proposals of the Department of the Environment and that the joint funding arrangements are unsatisfactory because of the tapering financial arrangement and the relationship between the health authorities and the local authorities on account of the local authorities having to shoulder more of the burden. The Government are trying to find an additional source of money to help to prop up joint funding and the financing of the care in the community programme. That highlights the difficulties in funding and the fact that there will be an even greater drain on the social fund, which will be under great pressure.

The hon. Member for Surrey, South-West (Mrs. Bottomley) spoke about the role of the voluntary organisations. As my right hon. Friend the leader of the Liberal party has said, it is important to remember that much can be done. The voluntary organisations have a great role to play. However, as the hon. Member for Surrey, South-West knows through her patronage of the National Council for Carers and their Elderly Dependants, the role that can be played is threatened and made more difficult by the financial pressure under which the statutory sector now has to operate. Directors of social services who are faced with difficult choices are more likely to reduce or contract in the voluntary rather than in the statutory sector.

The other points that have come out of the debate are closely linked to what have been described by the Liberal leader as the "pessimistic assumptions" underlying the entire report. In an interview in the Daily Telegraph towards the end of last year, the Leader of the House said that he thought that there was great room for increasing employment in the front-line caring services. Instead of considering further cuts in the social services network, we should be trying to create jobs in that area. Indeed, during the last election campaign, the alliance suggested that 100,000 jobs could be created within the front-line caring services.

As has been pointed out, more needs to be done to locate, recognise, and then introduce mechanisms of support for those who care for others on an unrecognised and informal basis. The welfare state may be in difficulties now, but it would be in a state of total collapse and disorder without their contribution. The extension of the invalid care allowance to married women is another area in which we should like progress to be made. Unfortunately, however, that seems unlikely as a result of the reviews.

I appreciate that the Minister will specifically deal with the death grant. The Minister for Social Security stated his concern or objections about the system that we would propose, which would involve a higher £200 or £250 death grant, available across the board and reclaimable from the estate. He fairly pointed out that even that would not be enough for some people. But it is surely not beyond the wit of the DHSS to devise a structure whereby at the time of burial and of greatest distress to the relatives and dependants there would be no need to go through the difficulty and indignity of having to make some special application, perhaps subject to interview. They could receive the initial payment as of right. If it then proved to be too much, the money could be reclaimed from the estate, but if the sum proved to be too little, the discretionary element could come in later and additional payments could be made. I do not see why that should sit so uneasily beside the Government's proposals.

We are glad to have had the opportunity to raise issues concerning the elderly that arise from this week's social security reviews and from the problems which all hon. Members see every day in their constituencies. We are only sorry that social security reviews which could have been radical and genuinely reformist and more redistributive will not be so. As the Institute of Fiscal Studies has already said, the elderly will be one of the groups to suffer most from those reviews.

The points that have been made, coupled with the difficulties over rent support and having to contribute to a rating system with which the Government themselves are dissatisfied, give us little confidence that the problems of the elderly are fully recognised and appreciated, or that they will receive due attention from the Government. The SDP/Liberal alliance will certainly continue to bring the problems and the priorities of the elderly to the fore both in the House and elsewhere.

6.46 pm

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

I am happy to start on at least one note of agreement with the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), in that the debate has been useful and interesting. Within a short time many important points have been made by hon. Members on both sides of the House. In the 15 minutes left to me, it will obviously be impossibl to reply to all of them, and so I hope that hon. Members-will understand if I do not try to do so. However, I shall certainly try to respond in writing to any points that I cannot touch on now.

We welcome the use that the Liberal party has made of its Opposition day, particularly as it gives us the opportunity to set the record straight. Since 1979, we have had a proud and creditable record of caring for the elderly. The debate gives us an opportunity, however, to shed yet more light on the important and exciting proposals introduced on Monday by my right hon. Friend the Secretary of State in his social security review. But given the opportunity that the Liberals had, it is surprising that they should have decided to focus on such a subject, especially when one considers their record and their collaboration in keeping the Labour Government in office through the notorious Lib-Lab pact. I well understand that the hon. Member for Stockton, South (Mr. Wrigglesworth) is doubly responsible, because he was not then in the SDP; he had not forsaken his allegiance to the Labour party. But it is important that people should be reminded again and again of the dangers of inflation. Those dangers apply to everyone, but particularly to the elderly. A party that collaborated with another party that succeeded in achieving an inflation rate of 112 per cent. over five and a bit years has much to answer for to the elderly.

Mr. Steel

I do not wish to lessen the time available to the Minister, but he must recall that during the 18 months of the Lib-Lab pact inflation was reduced from 20 per cent. to 8 per cent.

Mr. Whitney

I should point out that the hon. Member for Stockton, South was quite happy with the deal when the change from the method of accounting in effect denied over £1 billion in today's terms to this country's pensioners.

My right hon. Friend the Minister has already responded to most of the points raised by the leader of the Liberal party, but he has left me to comment on the personal social services. It is important to put the Government's achievements on the record. I agree with the right hon. Gentleman that the personal social services are a vital element in the Government's aid to the elderly, and that is why we take great pride in the fact that between 1979–80 and 1983–4 expenditure increased, in real terms, by 18 per cent. For example, net expenditure on local authority residential homes amounted to something approaching £365 million in 1983–84, an increase of about 12 per cent. I could go through the list, and I should be happy to write to the right hon. Member to explain still further the significant increases that have taken place in this sector, which he recognises as important.

Mrs. Beckett

As this is the second time that Conservative Members have taken credit for the Government's record in social services, I should remind them that most of that record comes from the spending of Labour councils, for which they have been criticised. The Conservative councils have a pretty rotten record.

Mr. Whitney

If the hon. Lady looks at the facts, she will understand that that is not the case, but I hope that she will not object to the fact that spending has increased by 18 per cent. in real terms. Therefore, it is a little puzzling to know why — except for the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) who seems to have some understanding of the impact of inflation on the pensioners—hon. Members are constantly pressing us for yet more.

When we talk about pensions, what is referred to as the alliance becomes an even more puzzling creature than it usually is—it is more like a hydra-headed amoeba than an alliance, and most of the heads are quite small. In the Liberal party's response to my right hon. Friend's pension inquiry, it suggested that the target should be to raise the basic pension of a married couple to two thirds the average male earnings. The cost of that would be about£10 billion. It would increase the load of national insurance contributions on employer and employee by about 50 per cent. I wonder whether either pensioners or the working population have any concept of what that Liberal party proposal would mean both for employment and the national economy.

I understand that there are two separate parties within the alliance, but the puzzle is that there seem to be two parties within the SDP. We were pleased to notice that the SDP spokesman in the other place, Lord Roberthall, recognised the tremendous subject that had been opened up. He said that he wanted

to congratulate the Government on grasping this nettle at last, which is so full of promise. I think that most important in what the noble Baroness has said is the reference to the problems of the future I think our grandchildren are living in a fool's paradise, because the rapid change in the age structure"—

Mr. Speaker

Order. I am reluctant to stop the hon. Gentleman, but I trust that he is not quoting a Member of the other place.

Mr. Whitney

I apologise, Mr. Speaker. I was seeking to paraphrase but it became something more than that.

The noble Lord was pointing out the dangers of living in a fool's paradise because the rapid change in the age structure means, as was pointed out earlier, a much smaller number of workers having to pay for a larger number of pensions. It is with that problem that we sought to deal through the proposals that we have made on the phasing out of SERPS.

I am happy to deal with some of the points that the hon. Member for Derby, South (Mrs. Beckett) made because clearly she has failed to understand the impact of our present economic commitments. It is necessary for any sensible Government, as has been widely recognised, to take a careful look at these obligations. The assumptions to which the hon. Lady referred showed a wide variation, but the arguments do not rest on these assumptions alone. If SERPS were to continue unchecked, that would earmark a large slice of public expenditure, and not necessarily direct it where it is most needed Part of the cost of SERPS would go to boosting occupational pensions, and the central question is not whether we can afford SERPS, but whether the state should be in the business of providing' second tier pensions.

Mr. Steen

I do not wish to disturb my hon. Friend's recitative, but will he deal with the point — [Interruption.] If my hon. Friend can hear me above the Liberal party's bad behaviour and rabble-rousing, will he direct his mind to my idea that the Government could save quite a bit of money and do a lot of good in developing family and community care by encouraging elderly people to live at home and giving the people with whom they live tax concessions and benefits?

Mr. Whitney

I recognise that as an objective, and some of the moves that the Government have made suggest that we are moving in that direction. I am seeking for the figures, which I cannot find, but the community programme that we have already suggests that we are moving in the right direction and that we recognise the importance of that. I hope that my hon. Friend will recognise as well that a balance has to be struck. For example, the extension of the invalid care allowance, as my hon. Friend the Minister for Social Security has made clear on a number of occasions, is regarded as one of many desirable objectives. However, the problems of the Government as opposed to those of the SDP or the Liberal or Labour parties is that we have to have the responsibility of making choices. We understand the dangers of inflation, not least to retired people.

The hon. Member for Derby, South made an interesting claim about the importance of Beveridge. I think that she was seeking for the quotation:

From each according to his abilities, to each according to his needs. However, she seems to be opposed to any proposal that we are making within the review to target more effectively the available resources. If she would think a little more carefully about

to each according to his needs"; she would see that better targeting, which is promised in the review, will achieve exactly that.

I am seeking to answer as many as I can of the important points that have been made, but it will be difficult for me to cover them all in the available time. The hon. Member for Ross, Cromarty and Skye spoke about the need for integration of taxes and benefits, and we recognise that as a desirable objective in many ways. However, there are serious problems, with which my right hon. Friend the Chancellor of the Exchequer is looking forward to dealing.

There has been much talk of Beveridge and I refer hon. Members and particularly the right hon. Member for Tweeddale, Ettrick and Lauderdale to what Sir William Beveridge, himself a Liberal, said:

The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family. Those are the objectives that my right hon. Friend the Secretary of State's review will achieve.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 156, Noes 267.

Division No. 230]	[7 pm
.AYES
Alton, David	Cox, Thomas (Tooting)
Anderson, Donald	Craigen, J. M.
Archer, Rt Hon Peter	Cunliffe, Lawrence
Ashdown, Paddy	Dalyell, Tam
Ashley, Rt Hon Jack	Davies, Rt Hon Denzil (L'lli)
Atkinson, N. (Tottenham)	Davis, Terry (B'ham, H'ge H'l)
Banks, Tony (Newham NW)	Dewar, Donald
Barnett, Guy	Dobson, Frank
Barron, Kevin	Dormand, Jack
Beckett, Mrs Margaret	Dubs, Alfred
Bell, Stuart	Dunwoody, Hon Mrs G.
Benn, Tony	Eadie, Alex
Bennett, A. (Dent'n & Red'sh)	Edwards, Bob (Wh'mpt'n SE)
Bermingham, Gerald	Evans, John (St, Helens N)
Blair, Anthony	Fatchett, Derek
Boyes, Roland	Field, Frank (Birkenhead)
Bray, Dr Jeremy	Fields, T. (L'pool Broad Gn)
Brown, Gordon (D'f'mline E)	Foot, Rt Hon Michael
Brown, Hugh D. (Provan)	Forrester, John
Brown, N. (N'c'tle—u—Tyne E)	Foster, Derek
Bruce, Malcolm	Foulkes, George
Buchan, Norman	Fraser, J. (Norwood)
Callaghan, Rt Hon J.	Freeson, Rt Hon Reginald
Callaghan, Jim (Heyw'd & M)	Freud, Clement
Campbell—Savours, Dale	Hamilton, James (M'well N)
Canavan, Dennis	Hamilton, W. W. (Central Fife)
Carlile, Alexander (Montg'y)	Hancock, Mr. Michael
Clark, Dr David (S Shields)	Hardy, Peter
Clarke, Thomas	Harman, Ms Harriet
Clay, Robert	Harrison, Rt Hon Walter
Clwyd, Mrs Ann	Hattersley, Rt Hon Roy
Cocks, Rt Hon M. (Bristol S.)	Haynes, Frank
Cohen, Harry	Heffer, Eric S.
Coleman, Donald	Hogg, N. (C'nauld & Kilsyth)
Concannon, Rt Hon J. D.	Holland, Stuart (Vauxhall)
Conlan, Bernard	Home Robertson, John
Cook, Frank (Stockton North)	Howell, Rt Hon D. (S'heath)
Corbett, Robin	Howells, Geraint
Cowans, Harry	Hoyle, Douglas

Hughes, Roy (Newport East)	Pavitt, Laurie
Hughes, Sean (Knowsley S)	Penhaligon, David
Hughes, Simon (Southwark)	Pike, Peter
Hume, John	Powell, Raymond (Ogmore)
Janner, Hon Greville	Prescott, John
Jenkins, Rt Hon Roy (Hillh'd)	Randall, Stuart
John, Brynmor	Richardson, Ms Jo
Johnston, Russell	Robertson, George
Jones, Barry (Alyn & Deeside)	Robinson, G. (Coventry NW)
Kaufman, Rt Hon Gerald	Rowlands, Ted
Kennedy, Charlesv	Shore, Rt Hon Peter
Kilroy—Silk, Robert	Short, Ms Clare (Ladywood)
Kirkwood, Archy	Silkin, Rt Hon J.
Lamond, James	Skinner, Dennis
Leadbitter, Ted	Smith, Cyril (Rochdale)
Lewis, Ron (Carlisle)	Snape, Peter
Lewis, Terence (Worsley)	Soley, Clive
Lofthouse, Geoffrey	Spearing, Nigel
McCartney, Hugh	Steel, Rt Hon David
McCrea, Rev William	Stewart, Rt Hon D. (W Isles)
McDonald, Dr Oonagh	Strang, Gavin
McKay, Allen (Penistone)	Straw, Jack
McKelvey, William	Thomas, Dafydd (Merioneth)
MacKenzie, Rt Hon Gregor	Thompson, J. (Wansbeck)
McTaggart, Robert	Tinn, James
Madden, Max	Torney, Tom
Marek, DrJohn	Wallace, James
Martin, Michael	Warden, Gareth (Gower)
Maxton, John	Wareing, Robert
Maynard, Miss Joan	Weetch, Ken
Meacher, Michael	Welsh, Michael
Meadowcroft, Michael	Wigley, Dafydd
Mikardo, Ian	Williams, Rt Hon A.
Millan, Rt Hon Bruce	Wilson, Gordon
Morris, Rt Hon J. (Aberavon)	Woodall, Alec
Nellist, David	Wrigglesworth, Ian
Oakes, Rt Hon Gordon
O'Neill, Martin	Tellers for the Ayes:
Orme, Rt Hon Stanley	Mr. A. J. Beith and
Paisley, Rev Ian	Mr. John Cartwright.
Patchett, Terry

NOES
Aitken, Jonathan	Clark, Hon A. (Plym'th S'n)
Alexander, Richard	Clark, Dr Michael (Rochford)
Alison, Rt Hon Michael	Clarke, Rt Hon K. (Rushcliffe)
Amess, David	Clegg, Sir Walter
Ancram, Michael	Colvin, Michael
Arnold, Tom	Conway, Derek
Ashby, David	Coombs, Simon
Baker, Nicholas (N Dorset)	Cope, John
Baldry, Tony	Cormack, Patrick
Batiste, Spencer	Cranborne, Viscount
Beggs, Roy	Critchley, Julian
Bellingham, Henry	Crouch, David
Bendall, Vivian	Dickens, Geoffrey
Benyon, William	Dorrell, Stephen
Biffen, Rt Hon John	Douglas—Hamilton, Lord J.
Biggs—Davison, Sir John	Dunn, Robert
Blackburn, John	Durant, Tony
Blaker, Rt Hon Sir Peter	Edwards, Rt Hon N. (P'broke)
Boscawen, Hon Robert	Eggar, Tim
Bottomley, Mrs Virginia	Emery, Sir Peter
Bowden, A. (Brighton K'to'n)	Evennett, David
Bowden, Gerald (Dulwich)	Fallon, Michael
Bright, Graham	Favell, Anthony
Brinton, Tim	Fletcher, Alexander
Brown, M. (Brigg & Cl'thpes)	Fookes, Miss Janet
Bruinvels, Peter	Forsyth, Michael (Stirling)
Buck, Sir Antony	Forth, Eric
Burt, Alistair	Fowler, Rt Hon Norman
Butcher, John	Fox, Marcus
Butler, Hon Adam	Franks, Cecil
Butterfill, John	Fraser, Peter (Angus East)
Carlisle, John (N Luton)	Freeman, Roger
Carlisle, Kenneth (Lincoln)	Gale, Roger
Cash, William	Galley, Roy
Chalker, Mrs Lynda	Gardiner, George (Reigate)
Channon, Rt Hon Paul	Gilmour, Rt Hon Sir Ian
Chope, Christopher	Goodhart, Sir Philip

Gorst, John	Lawler, Geoffrey
Gow, Ian	Lawrence, Ivan
Greenway, Harry	Lee, John (Pendle)
Gregory, Conal	Lennox—Boyd, Hon Mark
Griffiths, Peter (Portsm'th N)	Lester, Jim
Ground, Patrick	Lilley, Peter
Grylls, Michael	Lloyd, Ian (Havant)
Hamilton, Hon A. (Epsom)	Lloyd, Peter, (Fareham)
Hamilton, Neil (Tatton)	Luce, Richard
Hampson, Dr Keith	McCrindle, Robert
Hanley, Jeremy	MacKay, Andrew (Berkshire)
Hannam, John	MacKay, John (Argyll & Bute)
Hargreaves, Kenneth	Major, John
Harris, David	Maples, John
Harvey, Robert	Mather, Carol
Haselhurst, Alan	Mawhinney, Dr Brian
Hawkins, Sir Paul (SW N'folk)	Maxwell—Hyslop, Robin
Hawksley, Warren	Mayhew, Sir Patrick
Hayes, J.	Mellor, David
Hayward, Robert	Montgomery, Sir Fergus
Heddle, John	Moore, John
Henderson, Barry	Morrison, Hon C. (Devizes)
Hickmet, Richard	Morrison, Hon P. (Chester)
Hind, Kenneth	Murphy, Christopher
Hirst, Michael	Nelson, Anthony
Hogg, Hon Douglas (Gr'th'm)	Newton, Tony
Holland, Sir Philip (Gedling)	Nicholls, Patrick
Holt, Richard	Onslow, Cranley
Howarth, Alan (Stratf'd—on—A)	Page, Richard (Herts SW)
Howarth, Gerald (Cannock)	Patten, J. (Oxf W & Abdgn)
Hubbard—Miles, Peter	Percival, Rt Hon Sir Ian
Hunt, John (Ravensbourne)	Pollock, Alexander
Hunter, Andrew	Powell, William (Corby)
Jackson, Robert	Powley, John
Jessel, Toby	Proctor, K. Harvey
Johnson Smith, Sir Geoffrey	Raison, Rt Hon Timothy
Jones, Gwilym (Cardiff N)	Renton, Tim
Kellett—Bowman, Mrs Elaine	Rhodes James, Robert
Kershaw, Sir Anthony	Robinson, Mark (N'port W)
King, Rt Hon Tom	Roe, Mrs Marion
Knight, Gregory (Derby N)	Ross, Wm. (Londonderry)
Knight, Mrs Jill (Edgbaston)	Ryder, Richard
Knox, David	Sackville, Hon Thomas
Lamont, Norman	Sainsbury, Hon Timothy
Lang, Ian	Sayeed, Jonathan
Latham, Michael	Shaw, Sir Michael (Scarb')

Shelton, William (Streatham)	Twinn, Dr Ian
Shepherd, Colin (Hereford)	Vaughan, Sir Gerard
Shepherd, Richard (A/dridge)	Viggers, Peter
Shersby, Michael	Waddington, David
Silvester, Fred	Wakeham, Rt Hon John
Sims, Roger	Walden, George
Skeet, T. H. H	Walker, Cecil (Belfast N)
Smith, Tim (Beaconsfield)	Walker, Bill (T'side N)
Spencer, Derek	Waller, Gary
Spicer, Jim (W Dorset)	Ward, John
Stanbrook, Ivor	Wardle, C. (Bexhill)
Steen, Anthony	Warren, Kenneth
Stern, Michael	Watson, John
Stevens, Lewis (Nuneaton)	Watts, John
Stevens, Martin (Fulham)	Wells, Bowen (Hertford)
Stewart, Andrew (Sherwood)	Wheeler, John
Stradling Thomas, J.	Whitney, Raymond
Sumberg, David	Wiggin, Jerry
Taylor, John (Solihull)	Winterton, Mrs Ann
Taylor, Teddy (S'end E)	Winterton, Nicholas
Terlezki, Stefan	Wolfson, Mark
Thomas, Rt Hon Peter	Wood, Timothy
Thompson, Donald (Ca/der V)	Yeo, Tim
Thompson, Patrick (N'lch N)	Young, Sir George (Acton)
Thornton, Malcolm
Thurnham, Peter	Tellers for the Noes:
Townsend, Cyril D. (B'heath)	Mr. Tristan Garel—Jones and
Tracey, Richard	Mr. Michael Neubert.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved., That this House recognises the Government's achievement in increasing the value of the retirement pension and welcomes, the Government's continued commitment to protect its value, congratulates the Government on carrying out a thorough review of the social security system, and endorses the aim of ensuring a coherent and soundly based benefit structure to meet the needs of pensioners and others.