Postponed proceedings on Question,
That the draft Social Security Benefits Up-rating (No. 2) Order 1986, which was laid before this House on 1st December, be approved.
§ Question again proposed.10.14 pm
§ Sir Brandon Rhys Williams
I am grateful to you, Mr. Speaker, for allowing me to resume my speech—[Interruption.]
§ Sir Brandon Rhys Williams
Before the House moved on to other business, I was explaining why, in my opinion, our reliance on selectivity has ended in failure. I gave three reasons. The first is because it goes against the spirit of the age: it is wrong that we should divide the nation into first class and second class citizens. Secondly, it is contrary to the Government's central precepts by which we try to encourage our citizens to work and save. If we have some 14 million people dependent on means-tested benefits, they are people who have no particular reason to save and not too much reason to work. Finally, it has ended in failure because the system is leading rapidly to administrative breakdown.
This week the London Citizens Advice Bureaux have produced a report which is comprehensive and extremely compelling reading. I hope that my right hon. and hon. Friends in the Department of Health and Social Security will look extremely carefully at its findings. I think it would be true to say that hon. Members who represent London know that what is written in the report is unfortunately all too true.
What the report describes is the chaos of the administrative system under which we handle the supplementary benefits and the case work and personal interviews involved. I have often brought the attention of the House to the fact that in the administration of supplementary benefit and national insurance the staff of the departments are required to make more than 90 million manual entries every week.
The report of the bureaux, with telling photographs, shows the type of premises in which the face-to-face interviews must take place. It draws attention to the staff shortages and the difficulty of giving people adequate training to handle the enormously complex system upon which we rely to make selectivity work. It draws attention to the number of mistakes that are made, inevitably, in interpreting the rules. It shows the tragic amount of waiting time and the inhuman conditions in which people are obliged to take their turn for an interview in order to make their claim.
One of the compelling reasons why we must hasten to abandon our reliance on selectivity is the enormous adminstrative cost and the amount of time which dedicated officials have to give to produce the results, which can give no satisfaction to them or to the claimants.
The system is intended to relieve need in a human way, but in fact it is creating intense hardship, bitterness, uncertainty and delay. No wonder that we find that a rapidly growing area of crime is crimes of violence against staff in the offices of the DHSS.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
Surely one of the most important skills that has to be developed is that of interviewing the clients. This is where training is not as good as it ought to be. I am sure that the hon. Gentleman will agree that it is essential that these interviewing skills are of the highest order.
§ Sir Brandon Rhys Williams
I might be disposed to accept the hon. Gentleman's opinion if it were not for the fact that, from my observation, the system has to be changed radically. We cannot continue to run the welfare state to provide a basic income guarantee founded on face-to-face interviews for millions of claimants.
However much effort we divert into training of staff, the system has proved itself to be unacceptable and unworkable. We must move away from the reliance on selectivity that is dividing the nation and producing, as I have said before, a sub-culture of people in our society—a large element of the nation—for whom the impulse to save and work is being rapidly undermined.
When looking at what the House is trying to do when uprating these orders and keeping the machinery going while it slowly sinks into the mud, we should ask ourselves, "Could we place more reliance on the insurance principle, and could national insurance be revived?" In an earlier intervention, it was pointed out that national insurance benefits are not enough. That is one of the reasons why we have such a large number of claimants who need to apply for supplementary benefit. Their national insurance contributions have not procured them a benefit which is enough for them to rely on; so they have to apply for additional benefits.
National insurance was from its inception under the difficulty that it needed a Government subsidy, and the Government subsidy appears once again in these orders, although it is being reduced quite arbitrarily from one percentage figure to another. I do not think that there is any rational explanation for why the Treasury contribution to the national insurance fund was what it was last year or is what it will be next year. The whole conception of national insurance has cracked, because the money that can be produced by flat rate contributions is not large enough. When, some 10 years ago, we went over to earnings-related contributions, we said goodbye to the insurance principle in any actuarial sense.
We have produced a system in which the yield of the income tax has to subsidise the welfare state. For some reason best known to the Treasury, it insists on clinging to the idea that people's national insurance contribution and their income tax contribution are completely separate and that what one pays in income tax goes into one fund and what one pays in national insurance contributions and what the employer pays in national insurance contributions goes into a completely different fund. I suggest that that administrative nonsense should end.
National insurance has become a sham. It would be far better to recognise that we are running a system which, in effect, is taking from each according to his capacity and giving to each according to his need. It might be said that that is a growing-up of the whole conception of national insurance and putting in its place gradually, and perhaps half consciously, a life-cycle system of obligation and entitlement. People draw benefit at the beginning of their lives when they are not able to make a contribution; they make their contributions while they are of working age; and they revert to the status of claimants on retirement 1457 and take their money back. I am attracted by the idea of the life-cycle of contribution and entitlement, and I believe that we want to build on it.
Looking at it from the administrative point of view, one of the axioms that my right hon. and hon. Friends must obey is the need to eliminate personal casework in very large quantities and quickly. If they do not accept that, let them consult the offices of the DHSS which are facing the problem of the monumental volumes of casework which they have to do at the moment. I consider that we should find large categories of claimants who can be handled by computer, week in, week out, without their situations being deemed to be continuously changing and needing to be reassessed. Child benefit is an example that we ought to follow when dealing with pensioners and other large categories of people.
I hope that, before next year when we consider orders such as these yet again, the Government will commit themselves to a wholly new approach. I think that we want similtaneous reform of income tax payments and allowances; national insurance contributions and benefits; housing allowances, subsidies and reliefs of every kind; and supplementary benefit. The whole system of redistribution of income in this country needs to be put on to a modern footing which is socially sound and administratively effective.
I should like to make this recommendation. We should move to a computer-based basic income guarantee which is as simple as it can possibly be, based on universal benefits and a universal requirement to contribute from income. It should be introduced in the first instance on a revenue-neutral basis. I would like to increase child benefit substantially, at least for the under-fives.
Apart from that, I am not suggesting major changes in the amount of the individual family's spending power from what they have at the moment. If we were to introduce a system of the kind I am recommending, it would constitute something which every family would be able to rely upon, whether in work or not—about half the equivalent of supplementary benefit rates at the present time.
This, I suggest, would be an extremely liberating process because it would then be up to the claimants themselves to select whether they really needed supplementary benefit or whether they could manage without. Those who had the spirit and the independence to take part-time work or to manage for a time on their savings or to make other arrangements to carry on from week to week would not need to go through the humiliation and the misery of claiming supplementary benefit. They would be people who could rely on their own resources and initiative, and would be free to act like other first class citizens to maintain themselves as best they could be their earnings or by whatever means they chose. There would be no hardship to the people who felt it necessary to apply for supplementary benefit because they would be perfectly entitled, as they are now, to say that they needed the other half of their benefit, which would be reliant on individual case work. I do not know how many people, if they were offered half supplementary benefit without any means test or question, would opt to claim the balance and how many of them would be content with the half benefit. But of course there would be a substantial saving if one is looking at it purely from the point of view of Exchequer outgoings. If there were 100,000 or 500,000 claimants who decided to opt not to insist on claiming the balance, it 1458 would allow us to improve their benefits as time went by, or to make other dispositions in the balance of obligation and entitlement that I have spoken of.
I beg my right hon. and hon. Friends to realise that we cannot go on as we are. There has got to be fresh thinking, and this is the type of approach which is in line with public expectations.
It is also practical in terms of computer technology. I hope that this idea will be considered. It is a way of restoring to people an incentive, an encouragement to work and to save, giving them back their self-reliance and taking the terrible burden of casework off the staff of the DHSS.
§ Mrs. Elizabeth Shields (Ryedale)
I shall refer briefly to two of the instruments in particular. First, I shall mention child benefit. The alliance certainly welcomes the increase of 15p in child benefit, but there is no real reason to congratulate the Government because that sum fails to make good the 1985 cut. That would require a 15p increase.
Such an increase has been supported by many different people inside and outside Parliament since the child poverty figures issued by the Child Poverty Action Group show how the fiscal system has during the past 25 years tended to move against families with children.
It is a fact that DHSS figures show that in 1983 400,000 children lived below supplementary benefit level and nearly 4 million lived on an income of up to only 40 per cent. above the supplementary benefit level. Yet child benefit is a much more cost effective way of helping those families where the head of the family is in work than making cuts in direct taxes, especially for the 250,000 working families with children whose incomes are below the tax threshold. It is also more effective than family income supplement which reaches only half of those eligible and which aggravates the poverty trap.
The Secretary of State said earlier this autumn that child benefit is agood, sensible way of bringing help to families.I agree with that, but the Minister does not really demonstrate his fondness for child benefit. Action, as we all know, speaks louder than words. Child benefit is worth less today than the combined value of family allowances and child tax allowances were in 1955. In the case of the second and subsequent children it is £2.70 less.
Secondly, £200 million has been cut from the housing benefit scheme since its introduction and the present housing benefit uprating marks two further cuts amounting to a total of £68 million. The rent rebate taper which is the difference between the needs allowance and the income of a family has been increased from about 17 per cent. or 21 per cent. to 29 per cent. and now stands at 33 per cent. There could be even higher tapers under the 1986 Act, thus decreasing the housing benefit yet again.
The Secretary of State for Social Services says that the average losses will be small, but averages must conceal much greater losses for some people. The Child Poverty Action Group has calculated that a couple with two children earning £110 gross, in receipt of family income supplement and housing benefit, and paying average rent and rates will lose £1.47 a week. The Minister knows that people claiming housing benefit can ill afford to lose this money, or any similar sum.
1459 There are allied problems, such as those concerning students, with the cuts in housing benefit. Because of the shortage of accommodation in the areas around a university or college campus, students are frequently asked to pay rent during the long summer vacation to retain a specific flat or room in the following year. Only discretionary housing benefit is payable under these circumstances, and the burden then falls on parents, many of whom are simply unable to cope with the amounts demanded for the 10 or 12 weeks of the long vacation. When the provisions of the Social Security Act 1986 come into effect, even this discretionary allowance will no longer 1460 be available. Lack of support for students in this position could result in the abandonment of courses, and the loss of talent to the community.
The hon. Member for Teignbridge (Mr. Nicholls) is no longer here, but he earlier made some remarks about alliance policies. We believe that the Government, any Government, have a basic duty to care for the weakest and most vulnerable in our society. Pensioners, the unemployed and those on a fixed income come into this category. As the alliance is fully aware of the fiscal implications of policy, we would look at the needs of the hardest hit today before giving away tax cuts that mainly benefit those in employment or in a sound financial position. We would prefer to see an improvement in both child and housing benefits instead.
§ Mr. Nick Raynsford (Fulham)
I shall address simply the housing benefit uprating and concentrate on the changes in regulations, which come at the end of a long, sad story of cuts in housing benefit over the past four years since the DHSS took over responsibility for the benefit from the Department of the Environment. The story bears repeating briefly.
In 1981, the Government published a consultation paper, called "Assistance with Housing Costs", and proposed a new reform of the system for helping people to meet their housing costs. They proposed the amalgamation of assistance under supplementary benefit and the old rent rebate and allowance and rate rebate schemes. The argument advanced by the Government was that this would create a more fair and simple system that would be better for claimants and easier to administrate.
The reality—although Conservative Members will not like this—was described in a newspaper not known to be sympathetic towards the Labour party as the greatest administrative fiasco in the history of the welfare state. When the Government tried to introduce a reform supposedly making benefits fairer to claimants and simpler to understand and administer, there were vast, long delays and people waited days, weeks, months for benefit. People were evicted from their homes because they had not got the benefit, there were massive complications and failure to calculate benefit entitlement because it was hugely complex, very unsatisfactory and entirely deserved the epithet given to it by the newspaper that I have quoted.
One might think that a Government who were responsible for such disgraceful bungling, which caused a great deal of hardship to poor people, might adopt a little humility in their approach towards the administration of this benefit system. They might have accepted that they have failed rather dramatically to deliver a decent, fair service to people in need, and accept a case for reform based on the principles that they were advised at the time they should have adopted in 1981, but did not. Those principles were a genuinely simpler system without cuts penalising claimants, ensuring that the people were given an adequate level of support to enable them to meet their housing costs.
The Government might also ponder the fact that the housing benefit scheme became more important, and therefore more expensive, partly because the Department of the Environment was pursuing a policy that deliberately increased the rents that were paid by both council tenants and private tenants. The withdrawal of subsidy forced up rents in the public sector and also encouraged rent officers to fix higher rents in the private sector. Therefore, tenants were paying higher rents. Government Ministers and the Department of the Environment justified the increase on the grounds that means-tested benefits would be available for poorer people so that they did not suffer loss.
What was the response of the Department of Health and Social Security? Again and again Ministers have said that the expenditure on housing benefit has been increasing too fast and that it must be cut. That is gross hypocrisy. The Government have deliberately cut the Department of the Environment's expenditure by forcing up rents and have justified it on the ground that there will be means-tested benefits to protect poorer people, but 1462 when those means-tested benefits begin to involve extra cost Ministers say that they do not like it and that they will cut the cost.
Since the introduction of housing benefit in 1983, the Government have not had enough humility to admit that they have made a mistake and that they ought to tread more carefully in future. Instead, insensitively and arrogantly, this Government have sought on six occasions since 1983 to cut benefits to those who are dependent upon housing benefit. What a record for this Government. The proposals that we are debating tonight represent the sixth successive cut in housing benefit in the last three years.
The result has been an increase in the tapers for those whose incomes are above the needs allowance. They were 17 per cent. on rent and 6 per cent. on rates in 1982 when the DHSS inherited the scheme. The tapers had run at that level for the previous 10 years while the Department of the Environment administered the scheme. In the last four years those tapers of 17 per cent. and 6 per cent.—a total of 23 per cent.—have been increased, and by next April they will be 33 per cent. on rent and 13 per cent. on rates—a total of 46 per cent. That is exactly twice the level that applied just four years ago.
Benefit is being withdrawn from households at twice the rate at which it was withdrawn previously. It is intensifying the poverty trap. It means that for many families on low incomes every additional pound that they earn will be almost completely swallowed up through the withdrawal of tax, national insurance and housing benefit.
The poverty trap problem is clearly illustrated by the comparison with 1979, the last year of the previous Labour Government. A household paying tax and national insurance and getting housing benefit, rent and rate rebates lost 65p of every pound that was earned. The rate of withdrawal now being introduced by a Government who had the temerity and the extraordinary insensitivity in their social security Green Paper and White Paper to claim that they were reducing the poverty trap means that next April that same household will lose 84p in every additional pound that it earns. Although the rate of tax has been reduced, the loss of benefit for every additional pound that is earned will be so steep that 84p of it will be lost. What a deplorable poverty trap. What a deplorable lack of incentive to poorer people to earn more income.
If that applied to wealthy people, Conservative Members would be clamouring about the appalling rate of taxation that was discouraging initiative and entrepreneurs, but when it applies to poor people they say nothing. They go along with it and accept it. It is a classic case of double standards. What is acceptable for poor people they would deplore if it applied to rich people. That is disgraceful hypocrisy on the part of the Government.
We heard another form of hypocrisy two nights ago during the debate on mortgage support when we were told that the Government had to make cuts in supplementary benefit for poor people getting help with their mortgages because the assistance was too generous in comparison with poorer households in work. Now, two nights later, we see exactly what the Government believe in doing to poorer households in work getting means-tested housing benefit. They will face a faster rate of withdrawal of their housing benefit because the tapers have been increased. That is from the same Government that pleaded the case for greater equity between those in work and those who are unemployed. These regulations will penalise poor families in work. That is gross hypocrisy.
1463 The cuts adopted by the Government over the last four years have weighed heavily on many poorer households. To date, those cuts have come purely through adjustments in the formula by which housing benefit is assessed—the tapers and the non-dependent deductions and so on. But now we are discussing a further change in the assessment, a further cut by the Government. Not content with making the taper steeper and reducing people's benefit by that route, they are also fiddling the formula by which housing benefit is assessed.
That formula is the needs allowance which has been in use for many years. That is a traditional formula designed to reflect the needs of low-income families in work—the group of people about whom, supposedly, the Government are concerned. That needs allowance formula will be adjusted this time, according to the Government. They are no longer prepared to uprate that formula in accordance with the time-honoured tradition. They will no longer take into account people's housing costs, which have always been taken into account in the assessment of the needs allowance.
The formula is an arcane one and I do not propose to go into it. Its key point is that housing costs have always been taken into account, because that was the fair way to reflect the needs of households on low incomes, in work and receiving housing benefit. That has now been dropped and the Government will no longer take account of housing costs. Why is that? Have they put forward an intellectually cogent argument for doing that? Have they said that they have looked at the indexes and have decided that they are no longer valid and need to be reappraised? Not at all. They have simply decided that here there is scope for more cuts, for taking more money away from poor people so that they can satisfy the Treasury that their budget is being cut.
This crude, underhand measure breaks the time honoured tradition of uprating housing benefit. That tradition goes back to a former Conservative Government who, in 1972, introduced the rent rebate scheme. That formula stood the test of time through the 1970s, and the 1980s, but it is now to be ditched by this Government in a crude and underhand way in an attempt to make cuts. What is most disgraceful about it is that when we debated the interim uprating in July the Minister did not take housing costs into account. I wrote to him privately about that and said I was worried that it had not been done.
I am quite open about my correspondence with the Minister and he is free to reply to me. In his reply the Minister said that the Government did not feel it was appropriate to take housing costs into account because this was an uprating in an interim period during which it was impossible to make projections of how housing costs would arise during that period. He said that clearly—the word he used was clearly—the Government would take into account the increase in rent and rates when assessing the following April's uprating. Did they take them into account? The Minister will say that they did, but they simply ignored them and uprated by other factors.
§ Mr. Major
The hon. Gentleman has put that in writing and I noticed that he fed it to his hon. Friend the Member for Derby, South (Mrs. Beckett) for her speech. From our exchange of correspondence he knows the position well, and I am surprised that he keeps reiterating precisely the 1464 same point. The hon. Gentleman lectures the House about the administrative difficulties of local authorities at the time of the 1983 reforms and thereafter. Does the hon. Gentleman think that it is administratively easier for local authorities to take into account what he calls an arcane formula for needs allowance or the cash changes that we made in July and now? Does he not recall that in July the local authorities were more than content for us to use the formula that we used then and subsequently on this occasion?
§ Mr. Raynsford
I am pleased to be able to reply to the Minister. On the first point, I shall continue to repeat what I said, because it is true. It is true that in his letter to me in July the Minister said that clearly the Government would take rent and rate increases into account when they came to fix the appropriate needs allowance for next April. Now we come to the reality and the Government have made no allowance for rent and rate increases in fixing that allowance. I am sorry that the Minister led me to believe that one thing was going to happen last July but has now done something very different. He will have to face that fact.
Secondly, on administration, the Minister knows, I hope, having been responsible for the administration of the scheme for some time, that local authorities expect good advance notice from the Government of the precise figures—the appropriate needs allowances. They are then fed into their computers, because the vast majority are computerised. Most local authorities will not delve into the formula that is adopted in the administration of the scheme. I am not talking about their assessment of what is fair to their claimants. They will await the statutory instrument from the Government and put it into practice if they have good advance notice.
The Government's record is shabby. They have frequently given late notice indeed about adjustments in the needs allowance, in the tapers, in the non-dependant deductions—all made to make cuts. Local authorities have had great difficulty in putting the Government's wishes into effect because of the lack of advance notice.
The Minister's pretence that there is any administrative complication in applying a figure set by a Government in a statutory instrument which the local authority then applies as a basis for assessing housing benefit calculations suggests that the Minister has less practical experience about the implications of administering the housing benefit scheme than he should have.
The Government's record on housing benefit is a sad, shabby and shameful one. It is one of which any Government should be ashamed and they should seek to improve the benefit system to claimants rather than make further cuts. Labour Members can only deplore the Government's abominable failure over the past four years to honour the pledges that were set out in the consultation paper, "Assistance with housing costs". We look forward next year to the election of a Government who will care and will administer a proper housing benefit scheme in the interests of poorer people.
§ Mr. Jeremy Corbyn (Islington, North)
It is a curious method of governing that on the day of the royal wedding free school meals were taken away from 500,000 children in Britain and on the penultimate day before the House rises for the Christmas recess the Government are showing 1465 their deep concern for the poor of this country by making them considerably poorer by the measures that they are seeking to push through the House tonight.
If the Government were seriously concerned about eliminating poverty in Britain they would not be putting these measures before us tonight but would be putting forward measures considerably to increase child benefit, not just by the small amount by which it is being increased tonight, and to dramatically improve the housing benefit and statutory sick pay arrangements in Britain.
Quite honestly, the position of Britain's poor is a disgrace and it has become considerably worse in the past seven years. If Conservative Members, who seem anxious to leave this place to go home to their beds, thought about it, they could walk from this House and in 10 minutes they would find several hundred people with no homes to go to, sleeping by Waterloo station and the National theatre. That is the disgrace and that is the issue which the orders do not address one bit. The degree of total homelessness in London now is greater than it has been for many decades.
As hon. Members go home—some of them in chauffeur-driven cars—they will go past people having to sleep on the streets tonight, and it is not very warm out there. Ministers might decide that the simplest thing in the world is to attack local authorities who are attempting to do something about the problems, but the answer lies in their hands. They have chosen to do nothing about it.
I want to raise a couple of issues and I hope that the Minister will have the courtesy to listen to what I have to say and possibly, just possibly, answer some of the points that my hon. Friends the Members for Fulham (Mr. Raynsford) and for Derby, South (Mrs. Beckett) have tried to put to him during the debate. They are serious matters and we bring them to the House because they have been brought to us by our constituents and people in other parts of the country.
The hon. Member for Kensington (Sir B. Rhys Williams) was talking about poverty levels and the way in which the social security system has not solved poverty in this country. Indeed, the poverty trap is perpetuated by some of the measures before us tonight. Any examination of social security legislation since it was introduced after the war will show that supplementary benefit, which was meant to be a safety net, has now become the staple existence of millions of people in this country. Nine million people in Britain are living below supplementary benefit level, and, if one takes the EEC poverty level, which is 140 per cent. of supplementary benefit, one is talking about several million more in what is, after all, supposed to be the seventh richest country in the world. Matters will get worse when the Social Security Act 1986 is finally put into operation bit by bit rather than get any better.
We should examine the measures we are being asked to agree tonight. Obviously I welcome any increase in child benefit. Who would not? However the number of children living in serious poverty at present is very large. DHSS figures alone admit to 400,000 children living below supplementary benefit level in 1983. Several hundred thousand, if not millions more, live below EEC recommended poverty levels. In all conscience I ask the Minister whether the increase in child benefit does any more than go some way towards redressing the cuts that have already been made in the past few years? Is he not aware that child benefit is the most effective way of getting real benefit to the poorest families. It is more effective than 1466 cuts in taxation or any other method. I think that the Minister probably agrees with that, but whether he is prepared to say so is another matter.
My hon. Friend the Member for Fulham knows far more about housing benefit and understands the housing benefit system better than I do and, I suspect, better than the Minister. In fact, I wish that my hon. Friend the Member for Fulham was the Minister instead of the present incumbent. We will have to wait for an election for that to happen. It is important for the House to understand that the housing benefit system has continually reduced the amount of real benefit available to people living in very great poverty by the changing of the tapers that has gone on continuously. The other side of that, which is of great concern to many people, is that when they are in receipt of housing benefit and there is a direct payment through to the local authority for that benefit from their supplementary benefit problems occur. Due to staff shortages and inefficiency within the DHSS there are frequent problems about payments getting through. That results in the local authority concerned believing those people are in rent arrears. I have tried many times to get an accurate assessment of the figures involved. However, I suspect that the Government's continual attacks on mainly Labour controlled local authorities for the level of rent arrears has something to do with non-payment of moneys owed to local authorities by the DHSS in respect of rent through housing benefit. Will the Minister look into that problem because he has not done so up to now?
While he is doing that, will he look into the future a little bit. Under the Social Security Act 1986 that he so avidly supports and that will come into operation, those people on housing benefit will have to pay a proportion of their rates. In areas such as that which I represent the rates are high. I am not proud of that and nor is the local authority—[Interruption.] Nobody is proud of the fact that the rates are high. The rates are high because of the amount of rate support grant that has been cut from my local authority in the seven years since the Government came to power. Conservative Members well know and understand that, and if they bothered to examine the books of inner urban local authorities they would begin to see some of the problems that those local authorities and the people within them suffer.
§ Mr. Raynsford
I respect my hon. Friend's suggestion that Conservative Members should study local authorities' books, but would it not be more appropriate if they urged their colleagues in the Department of the Environment to ensure that they act legally in future in setting the rate support grant?
§ Mr. Corbyn
My hon. Friend is correct. It ill becomes the Conservatives, who lecture the Opposition on law and order, to have to admit that they have been breaking the law for years. Far be it from me to want anyone to be punished with the full force of the law, but if its full force can be used against miners and printers, why should it not be used against Tory Ministers?
The third area—
§ Mrs. Beckett
Perhaps my hon. Friend did not hear the rather ill-mannered interjections of the hon. Member for Stockport (Mr. Favell) about jobs for the boys. Perhaps my hon. Friend would like to comment on the money that has been given to the City, the jobs for the City boys and 1467 the finance for the boys who support the Conservative party and the Government, who are the most corrupt Administration that we have known for 20 years.
§ Mr. Corbyn
I am grateful to my hon. Friend for her intervention. I had not heard the interjection from a sedentary position of the hon. Member for Stockport (Mr. Favell). If the hon. Gentleman is making allegations or accusations about the way in which local authorities employ people, he should examine the recruitment method of authorities, especially in inner London. They are trying to ensure that racial and sexual discrimination are not practised. They are trying to ensure that genuine, real jobs are created by meeting the needs of inner urban areas. It ill becomes a Government who have poured out so much in tax handouts to the super rich and poured so much money into the City to lecture local authorities about efficiency and jobs for the boys. If the hon. Gentleman reflects, he might regret having made such remarks.
The abolition of the middle rate of statutory sick pay will affect about 400,000 payments per year. Statutory sick pay exists because recipients need to maintain some standard of living while they are sick. The Government are punishing individuals for being sick and off work as a result of it. Does the Minister realise the fear that increasingly is with many about the lack of sick pay from their employment, including those who have not completed a certain amount of service? I have met constituents who have pleaded with their doctors, who have wanted to sign them off work, to allow them to remain at work by not signing them off. They have done so because they knew that their sick pay would be insufficient or because they knew that no sick pay would be paid. They have not wanted to see their family in poverty or fall behind with rent, mortgage, and hire-purchase payments. If we are to live in a caring society, the order relating to statutory sick pay must be rejected emphatically.
When the Social Security Bill, as it then was, was being considered in Committee, we discussed briefly the efficiency or otherwise of the delivery of benefits and the effect of various uprating orders. It is interesting that the Greater London citizens advice bureau has conducted a survey on the performance of DHSS offices. I hope that the results of the survey have been sent to all hon. Members, including the Minister, and that the Minister has read it and will respond. The survey says:
that nearly three-quarters (74%) of all offices failed 'very frequently or frequently' in their statutory responsibility to assess and pay benefit in 14 days. There were also alarmingly high figures for frequent or very frequent incidences of the following problems: errors in claimants benefits (62%), mislaid papers causing delays (91%), delays in visiting claimants (85%), claimants having to wait more than an hour to be seen (94%)".The CAB report recommends that action should be taken in improving contact with the DHSS and improving reception areas, improving methods used in providing emergency services and assessment and in dealing with instances of urgent need, improving specialist services, improving the system that is used to clear up backlogs and improving the retrieval system.
At the heart of these problems is the level of staffing in DHSS offices and the inadequate training that many staff receive. I have taken the trouble to visit DHSS offices to discuss these matters with staffs. Many recruits enter the 1468 DHSS with a determination to do something to implement the existing system. They may not be very happy with the system, but they recognise that it does something for those in their area and they feel a natural sympathy for claimants. They find after a few months that they feel brutalised because of staff shortages and other problems. The result is quite serious incidents of violence in DHSS offices. I totally deplore that violence. The real culprits are not those who sit on either side of the glass partitions but those who sit on the Government Front Bench and in the DHSS offices. I hope that the Minister will look seriously at the CAB's report, discuss it with the CAB and make improvements in those offices.
I asked a question about the number of social claims that have been referred to out of town offices from London. I asked it because staff in the DHSS offices in my constituency had raised these matters. Two weeks ago, there was a dispute at Archway Tower. I attended the picket line and discussed the issues with the staff in dispute. On 17 December, I received the Minister's answer to my question, which stated:arrears of claims for single payments in some London officeswill bedealt with by outstationed units in Chatham and Broadstairs.I was told that a number of those claims had been dealt with. It is unsatisfactory for the DHSS to be dealing with a backlog of cases from inner urban offices—in this case London; no doubt, it happens elsewhere—in out of town offices as a way to save money, because London weighting is not paid. The Department is removing cases from the local offices which should deal with them. Ministers should understand the trauma that people suffer in trying to get single payments and have their cases dealt with and the people who turn up absolutely penniless in my office and at that of my hon. Friend the Member for Fulham because of lost papers, misplaced files, and so on. That is not usually the fault of DHSS staff. It is the fault of decisions deliberately to understaff those offices and make them such appalling places. I hope that the Minister will seriously and sensitively approach the problem.
We are being asked to approve these uprating orders. They in no way meet the problems of poverty that are the lot of so many people as we approach Christmas. They in no way meet the real needs of people. We need a Government who will be concerned about eliminating poverty rather than about marginalising, managing and condemning poverty, which is what the Government have done.
§ 11.2 pm
§ The Parliamentary Under Secretary of State for Health and Social Security (Mr. Nicholas Lyell)
On the whole, this has been a good-natured and thoughtful debate. I hope that the Opposition will listen thoughtfully to some of the points that I make in reply as I argue the Government's case and express more of an overview than the hon. Member for Fulham (Mr. Raynsford) has in any of his recent speeches. May I respectfully say that he gets somewhat on tram lines in his argument. I suggest that he applies his very able brain to the yawning gap in the Labour party's case, which I hope briefly to expose.
I reject the general criticism made by the hon. Member for Derby, South (Mrs. Beckett). It is not true to say that, since 1979, there has been a decline in the standard of 1469 living of those out of work. The hon. Lady rightly qualified her position with what are not perhaps weasel words but are at least curious words. She qualified it by saying that, of course, this was in comparison with those in work. That is why there is such a yawning gap in the Opposition's argument.
Before answering the specific points raised by hon. Members, including my hon. Friend the Member for Kensington (Sir B. Rhys Williams), I shall consider our overall social security spending. When we are criticised for spending too little, it is right that the House and the country should remember that there has been a massive 35 per cent. increase in spending on pensions and benefits by the Government since 1978–79—£11 billion in real terms. Most of that expenditure relates not to unemployment but to increases in the number of payments to the elderly, the long-term sick and the disabled and to the £4.5 billion real increases in the average overall benefit paid, particularly to low-income families in work and those categories to which I have referred.
Britain's position should be compared with that of other European countries. The proportion of gross domestic product spent on support of the elderly is the third highest in Europe. The only countries that do more are France and Denmark. Indeed, the latest figures that we have from France relate to 1983, the height of the French Government's Socialist experiment from which they had to renege so rapidly in more recent years. Those countries exceed our provision only by exacting far higher taxes and contributions from those who have to pay for the benefits.
§ Mr. Corbyn
I am interested in the Minister's comments. Can he compare the levels of pension payments in all European contries? If he did that, he would find that the British level of standard old age pension is among the lowest of all the EEC countries. The level of poverty among British pensioners is one of the highest.
§ Mr. Lyell
If the hon. Gentleman were to make a study of that, he would realise that the narrow way in which he has asked his question ignores many aspects of the benefits and other measures of support received by the elderly in this country. He is mistaken if he believes the point that underlies his question.
We must balance what we spend with what we expect the working population to pay—the amount that we expect them to meet in the costs of that expenditure. For example, a married man with gross earnings of £150 a week—that is not far short of three quarters of average earnings and fairly close to the average earnings of a manual worker—pays at present £13.50 a week in national insurance contributions and more than £23 a week in tax if his wife does not work. That is five times the amount that the same man would receive in child benefit if he has one child and is close to the total of the current rate of basic retirement pension for a single person.
The large increases in benefits argued for so vehemently by some hon. Members and especially by the hon. Member for Oldham, West (Mr. Meacher) and picked up, by implication, by the hon. Member for Derby, South would mean increases in that man's contributions and taxes as well as in those of better-off workers.
We believe that it is fairest to all to limit the burdens that we place on those in work and on employers while still protecting those dependent on social security benefits against rises in the cost of living as we have done. The proposals achieve that balance.
1470 The hon. Members for Fulham and for Derby, South should examine the fundamental weakness of the Opposition's case. It is curious that we have heard nothing from the hon. Member for Oldham, West about uprating, but I will pick up the points that he made in our earlier debate this evening, which underlie the comments made by the hon. Member for Derby, South. The Opposition's proposals—the £3.5 billion or £3.6 billion, all to be taken from the rich—do absolutely nothing for the poor.
§ Mr. Lyell
I will give way in a moment when the hon. Gentleman has had a chance to listen to what I have to say. We heard a great deal about the promised £5 and £8 increase in basic pension, the £3 that is to be added to child benefit and the extension of the long-term rate of supplementary benefits for the long-term unemployed and we heard earlier the claim that Labour can finance that by taxing £3.6 billion from the supposedly very rich. However, we have yet to hear, despite the repeated demands from myself and my hon. Friend the Minister, a clear explanation of the details—or perhaps I should say the major aspects of that proposition. Does the hon. Member for Oldham, West intend to raise supplementary pensions in line with retirement pensions? I would assume that he does and that is the only way to ensure that the poorest pensioners gain least from the increase. I would assume that he would also want to increase the children's scale rates in supplementary benefit in line with child benefit for the same reason and housing benefit in line with both. If so, and the hon. Member for Fulham may realise this—
§ Mr. Lyell
Not just yet. The hon. Gentleman must accept that the costs of the proposals would not be £3.6 billion but £4.6 billion. Many pensioners on supplementary benefit and families on low incomes will be interested to learn that Labour's much-vaunted generosity consists of giving with one hand and taking away with the other.
Perhaps after Christmas the hon. Gentleman would also like to explain, for the benefit of widows and the long-term sick and disabled, what he intends to do about the benefits that they receive which are at present linked to the rate of retirement pension. His response and the hon. Lady's speech have demonstrated that a grasp of the realities of public expenditure are not their strong point. If they were given the chance to put their plans into action, they would cost, not £3.6 billion, but £5.6 billion. I am interested to hear what the hon. Gentleman is so keen to tell me.
§ Mr. Raynsford
I am happy that the Minister should give way. It ill becomes a Minister who is once again justifying fiddling the uprating formulas to make £40 million from cuts in benefits to poor people to attack the Opposition for the implications of putting their formula for helping poor people into practice. Earlier, the Minister took great credit for the additional expenditure that the Government have provided—I grant that they have—on social security. That is because the number of people in poverty and dependent on social security has increased. If he takes so much credit for that, why do the Government use the increase in expenditure on housing benefit and single payments repeatedly as an excuse for cutting them?
§ Mrs. Beckett
I have listened with great care to what the Minister has said. He seems to be under a misapprehension. We are debating the uprating under this Government, not the uprating that the next Labour Government propose to introduce. [Interruption.] The Minister for Health should have a little patience. He attends these debates rarely and, perhaps, does not understand. If the Minister cares to read the record he will see that we have frequently given the answers to the questions he asks. Perhaps he would now like to answer the question that we have asked him consistently—
§ Mrs. Beckett
Wait a minute. If, as the Minister argues, the sum of £3,600 million is inadequate to meet the cost of the £5 and £8 increase for pensioners, what size of an increase would it meet? Will he now tell the House why the Government gave them 80p instead of whatever they think £3,600 million from the wealthiest taxpayers could afford?
§ Mr. Lyell
I shall answer my question in a moment. The Guardian on 24 October carried an article on how Labour would pay the bill. This is a classic example from the hon. Member for Oldham, West. The answer is that Labour will not pay the bill. The article states:we are adamant that beyond our two central overriding pledges, no other commitments can be guaranteed until the books are opened on coming into office.[HON. MEMBERS: "Ah."] The fact is that £3.6 billion will do nothing for the poor. The fundamental argument of the hon. Lady's case that a Labour Government will uprate the pension—
§ Mr Lyell
Everything in ordinary child benefit or ordinary pension is clawed back unless the supplementary pension, child scale rates and so on are increased. I invite the hon. Lady to read my speech and to invite her hon. Friends, including the right hon. Member for 1472 Birmingham, Sparkbrook (Mr. Hattersley), to study it. They will find that the money is all clawed back. It means nothing. That is the yawning gap in the Opposition's case.
Now I shall answer the points made in greater detail by hon. Members and my hon. Friend the Member for Kensington.
With regard to statutory sick pay a point was made concerning losses. However, no acknowledgement was made by the hon. Lady or others of the transitional protection for all those who are currently at the middle rate. Even when there are those who theoretically have losses, it does not necessarily mean that employees will get less. We have encouraged occupational sick pay schemes, and statutory sick pay has stimulated such schemes. If we go back to 1977, 80 per cent. of people were in such schemes and we know that the figures have significantly increased.
§ Mr. Lyell
In a moment.
With regard to housing benefit, the fact is, as we have said often, that it does go too far up the income scale. It is nonsense that 7 million households, something like a third, should receive housing benefit. I know that this is delightful for the hon. Member for Fulham, as he has spent his entire professional life in this work and he certainly understands it. Figures like 44p or 84p roll off his tongue. I respect him, but I would respect him more if he examined the weaknesses in his case instead of nitpicking around the details.
§ Mr. Lyell
In a moment, but let me just finish my point.
Most losers lose less than 25p. Those who lose more are generally those who are at the upper end. All those who lose are on incomes that are above supplementary benefit level. I am sure that that would be acknowledged by the hon. Member for Fulham.
§ Mr. Raynsford
The Minister has said that housing benefit goes to too many people. Does the same logic apply to mortgage interest tax relief? That also is a housing benefit that goes to rather more people on higher incomes. If it is appropriate to make cuts, would it not be more appropriate to make them from that benefit, which goes to higher income groups, rather than from poor people who depend on housing benefit to meet their housing costs.
§ Mrs. Beckett
May I take the Minister back to something a little less exciting to his hon. Friends? Did I hear the Minister correctly? I think that he said that statutory sick pay had stimulated the development of occupational sick pay schemes. That cannot possibly be true and I would like to know what evidence he has for that. As far as I can recall, the last data available on occupational sick pay schemes were published in 1977 and relates to 1974. That was, in any case, before the statutory sick pay scheme was introduced. There is no new evidence 1473 about occupational sick pay schemes unless the Minister has some new fund of evidence that he has not made available?
§ Mr. Lyell
The point that I was making—obviously I have not made it sufficiently clear for the hon. Lady—is that although we do not have a complete survey—80 per cent. of people had schemes going back to the 1977 figures which go back to 1974. We are aware that there have been substantial increases since then and we believe that statutory sick pay has been a significant influence on that growth.
§ Mrs. Beckett
How can the Minister possibly say that there has been a substantial improvement if the last evidence that we have is from 1977? He must justify such a statement being made to the House.
§ Mr. Lyell
If the hon. Lady goes on intervening too much she will find that I get armed with fresh material. Without going into too much detail I refer the hon. Lady to a study completed by Income Data Services published in June 1984 which considered the matter. I am very surprised that the hon. Lady was not aware of it. I advise the hon. Lady, once again, to look, rather more carefully at the yawning gap in her own case rather than spend time on the kind of minute detail that has been the substance of her speech.
The hon. Lady was again wrong to suggest that heating allowances had been uprated on the basis of a stale and outdated measurement period. Far from being outdated and stale, it is the most recent possible—from January to September 1986, during which time fuel prices fell by 0.1 per cent. One can hardly get more stable than that. The higher rate heating additions increased in July, and the money is now in pensioners' hands. I should have thought that she would have noticed and applauded that.
On child benefit, the hon. Lady quite reasonably asked how people would get a form when maternity grant ends. The Government are anxious that people should know about and understand the benefits that they should get, and we are taking a great deal of trouble to improve our forms. Six of them have now won plain English awards. There will be a tear-off coupon on the leaflet entitled, "Babies and Benefits", which all mothers can pick up at antenatal clinics. I suggest that that will be an extremely helpful method.
§ Mr. Corbyn
The translation of information and forms was mentioned in the then Social Security Bill Committee. What progress has been made with a multilingual approach to giving benefit information and advice?
§ Mr. Lyell
I am not omniscient. While I know that we are giving that matter careful thought, I cannot say how many languages are involved.
My hon. Friend the Member for Kensington, and later the hon. Member for Islington, North (Mr. Corbyn), asked about the London citizens advice bureau report. I was in King's Cross and Camden seeing the citizens advice bureaux only last week, when I discussed the very topics that are dealt with in the report.
1474 It is simply not right to describe the overall position as chaos. Weekly benefits, which are the fundamental income support—to use the new term—of millions of people, are being paid efficiently, week in, week out in the overwhelming majority of cases. I do not deny that there have been pressure points. There have been take-up campaigns. We are not opposed to take-up campaigns as long as they are properly liaised and dealt with. Our objective is to deliver benefits as swiftly, efficiently, carefully and effectively as possible.
There have been pressure points, but we have been acting on them—not since we received the report, which was only yesterday, but since the beginning of the year. Moreover, the interim staff complement increases have been taking effect since May. They have helped significantly to overcome backlogs. Almost all of the 5,175 extra staff are in place. There are still one or two offices in which we are trying to build up to the complement, but most are in post.
My hon. Friend the Member for Kensington will approve of the fact that we are in the process of major social security reforms in the shape of simplification, common methods between benefits, which will be of great help, and computerisation. We have local office microcomputer projects, which help people to deal with cases more quickly and trace papers, and—which is even more significant in the long term—computerisation in the local office project. The system is wholly suitable for computerisation. It is the largest computerisation in western Europe. It is much larger than the NASA computerisation and should be completed between now and 1992. It is an important and valuable advance.
The hon. Member for Islington, North should not criticise outstationing. At Chatham and Broadstairs only the backlog in some cases of single payment schemes have been outstationed, and that has been done simply to help the staff to get through the work more efficiently and to get benefits delivered to those entitled to them in the inner cities. I say in all sincerity that it is a sensible policy, and competent staff in the inner cities have nothing to fear for their jobs.
§ Mr. Corbyn
While my question about outstationing related to the office in my constituency, there are wider implications. Is the Minister aware that the trade unions representing the civil servants who work in the DHSS have made representations continuously about staff shortages and the problems they face over the backlog under the single payment scheme? Is he further aware that the outstationing of that work merely deals with an immediate crisis whereas there is a long-term problem involving levels of understaffing in many inner city offices?
§ Mr. Lyell
I repeat that outstationing is helpful and that staff have nothing to fear. I should be happy to talk to the hon. Gentleman about the matter, and I hope we shall get his encouragement because the policy is designed to help his constituents.
The growth of personal pensions, occupational pensions and the overall benefits for the elderly that are likely to result from our schemes will be helpful.
§ Sir Brandon Rhys Williams
I wish to pay tribute to the staff, particularly of inner London offices. They do a stupendous job and perhaps only British civil servants can make the system that we are now using work as well as it does. But like Galileo, I have to say, "Eppur si muove." The fact is that the system is breaking down. My hon. and learned Friend can say what he likes, but we cannot go on as we are.
§ Mr. Lyell
My hon. Friend is not giving credit for the great efforts that are being made, though I appreciate that he speaks with sincerity on this subject.
The provisions of the orders and regulations strike a fair balance. The value of the main long-term benefits is being protected without major increases in the contribution burden on the working population and the structure and administration of the social security system is being progressively simplified and improved.
To those such as the hon. Member for Derby, South who demand higher benefit increases I must point out that social security spending has, as I said, increased since 1978–79 by over 35 per cent. in real terms. I ask the House to reflect on that and on the Government's achievements in the sphere of social security and to support the orders and regulations.
§ Question put and agreed to
That the draft Social Security Benefits Up-rating (No. 2) Order 1986, which was laid before this House on 1st December, be approved.—[Mr. Major.]