§ Order for Second Reading read.
§ Mr. Deputy Speaker (Sir Paul Dean)
Mr. Speaker has selected the amendment in the name of the right hon. Member for Plymouth, Devonport (Dr. Owen).
§ The Secretary of State for Social Services (Mr. Norman Fowler)
I beg to move, That the Bill be now read a Second time.
This Bill gives effect to the proposals set out in the White Paper on social security published last month. The White Paper itself followed what has been the most extensive examination of the social security system since the war. It started in the autumn of 1983 with the inquiry into retirement. That was followed by an examination of family support, housing benefit and supplementary benefit. The Bill sets out three major objectives which flow from the reviews.
The first objective is to ensure that many more people in this country should have a pension of their own. What we want to achieve is a major extension of occupational and personal pensions. Over the last 20 years, that occupational pension coverage has remained static. That has been the case not just in the so-called years of pension blight at the end of the 1960s and the early 1970s, as pension provision was debated and re-debated; it has continued to be the case since. The result is that we have two nations in pensions— 11 million who have the advantage of their own occupational scheme, but another nation of 10 million who have no scheme of their own. All the evidence is that people without additional pensions of their own would welcome the opportunity to have one. The Bill makes it easier for both employers and employees to set up new pension arrangement while at the same time preserving the basic pension unchanged and a modified second-tier state earnings-related scheme.
The second objective is to seek to concentrate help in areas where that help is needed. The evidence of the social security review is that the present system fails to do that in a number of ways. The position has changed over the last 20 years. Any diagnosis of need shows that some of the most difficult problems are faced by low income families with children. Families with children now make up more than half of the people living on the lowest incomes — unemployed families, but also low-income families in work. At the same time, there is the totally indefensible position where families can be worse off in work than out of work and where families can lose income as their gross wages rise. Through the family credit proposals and the family provisions of income support the Bill will enable us to direct more help in those areas. It will help us to tackle both the unemployment and poverty traps, and it will enable us to provide more help for disabled people on low incomes who are a group who stand in special need.
The third objective of the Bill is to ensure a simpler system of social security. One of the most common complaints from the public is that the system is at times one of bewildering complexity. This is in the interests neither of claimants nor of the staff who have to administer 820 it. The Bill will simplify the individual benefits and put income support, housing benefit and family credit on a similar basis.
The Bill will go further than that. It will introduce common rules for the different benefits; and it will also simplify the present complexities of the contracting-out rules for the state pension scheme. The point of the changes is this. Over the next 10 to 15 years we will be introducing a new computer strategy for social security. This will be the biggest computer operation of its kind ever undertaken in this country and its cost will be up to £2 billion. The effect will be radically to improve the service we give to the public. Side by side with those changes, we want to achieve a simpler structure for social security. That, too, will help in providing a better service, and that is what this Bill aims to do.
The first part of the Bill deals with pensions and the first six clauses give for the first time in this country the right to a personal pension. What this means in practice is that anyone, whether they be a member of the additional state scheme — SERPS — or a member of an occupational scheme, can choose instead to have a personal pension. In other words, the pension is personal to the individual and is fully portable from job to job. Personal pensions will be accumulated on a money purchase basis, with contributions qualifying for tax relief. Each person will be able to choose the kind of pensions saving scheme that he wants and the kind of body that he wants to run his savings scheme.
The significance of that last measure is that it will not just be life insurance companies which will be able to provide pension savings schemes, but building societies, banks and unit trusts. That will not only give the public a wider choice and a greater say in how their savings are invested; it will also increase competition between providers of pensions, to the benefit of the consumer.
Proof that that kind of system can work effectively in the public interest comes from the United States. There, a wide range of financial institutions can provide individual retirement accounts and over the past five years the number of retirement accounts has increased from about 4 million to over 20 million. But what has been even more significant is that competition has driven down the administrative charges which the public have to bear and improved the choice for the public.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
If the schemes are so successful in other countries and increase competition, why is the Secretary of State giving 2 per cent. as an extra bribe, compared with people who are in occupational schemes, to persuade people to move into personal pension plans?
§ Mr. Fowler
I shall come to that point. It is entirely reasonable to give an incentive over a five-year period to those people who do not have schemes of their own.
§ Mr. Fowler
The 2 per cent. is an incentive given over a five-year period. It seems to be in line with what the public want. If hon. Members study the social security review, they will find that we went to great trouble to find what the public's view was. [Interruption.] It is not the view of the hon. Member for Oldham, West (Mr. Meacher). It is what the people of this country want. We 821 found that the vast majority of people in this country want a pension of their own. The Bill tries to give them that right and encouragement.
If personal pensions are to provide an additional pension on top of the basic state pension, it is clearly right that people should be able to contract out of the state earnings-related pension scheme. Clause 2 will allow them to do so. The minimum contribution required to qualify a personal pension for contracting out will be the amount of the contracted-out rebate — the reduction in national insurance contributions at present available only to those in salary-related schemes. As an additional incentive to people to set up their own personal pension arrangements, we shall be adding 2 per cent. to the amount of the contracted-out rebate for the five years from April 1988.
§ Mr. Fowler
I shall give way when I have finished this point.
The Bill provides for the administrative arrangements for paying over the minimum contributions and the extra incentive to the personal pension of an employee's choice. Those will be paid through my Department. An employer who does not wish to supplement the minimum contribution will simply pay full rate national insurance contributions. We will then pay over the difference between the full rate and the contracted-out rate to the personal pension provider. That will mean that an employer need not, unless he wishes to do so, play any part in the administration of his employees' personal pensions.
The amount of the contracted-out rebate from 1988 will be the subject of a consultation document prepared by the Government Actuary which I shall be issuing shortly. The amount of the rebate is calculated actuarially to reflect the cost to a salary-related pension scheme of providing guaranteed minimum pensions. Clearly, in a contributions-based pension scheme, the concept of a guaranteed minimum pension has not the same application, but an essential feature of contracting out of the SERPS is that the guaranteed minimum pension is deducted from the state additional pension at retirement. We shall reflect that in contracted-out personal pensions by deducting an amount equivalent to the guaranteed minimum pension from the state additional pension which someone with a personal pension will receive.
Hand in hand with choice must go effective investor protection. The Bill, taken with the Financial Services Bill currently before the House, will enable us to achieve a proper measure of investor protection. As clause 2, with schedule 1, provides, a personal pension scheme will be able to be contracted out only if it satisfies proper requirements, and the Occupational Pensions Board will have to be satisfied that it does so before approving it for contracting out.
Personal pension schemes will have to comply with the regulations concerning their investments, the amount of their administrative charges and the calculation and securing of their members' protected rights, which come from the payment of minimum contributions. The bodies providing personal pensions will also be subject to the regulatory framework set out in the Financial Services Bill. In addition, clause 12 provides the powers to control advertising.
§ Mr. Marlow
I can tell from the complexity of what my right hon. Friend was saying why he wanted to finish the point that he was making.
In response to the point made by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), is it not the case that, even with the additional incentive of 2 per cent. over five years given to the personal pension plan, the individual will have a splendid deal—he will have the choice to provide a pension scheme which suits his own purpose—and at the end of the day, is the taxpayer not better off than if the person were to continue with SERPS rather than have his own personal pension scheme?
§ Mr. Fowler
Yes. It is in the nation's interest generally that as many people as possible should be building up their own pensions for retirement. My hon. Friend talked about complexity, but the complexity of pensions arises because of the retention of SERPS. As I understood it, the hon. Member for Birkenhead (Mr. Field) had been arguing rather vigorously over the last month for just that.
§ Mr. Fowler
It is not only personal pensions that we are concerned to encourage but the spread of occupational pension schemes where there is substantial scope for expansion. Up to now there is no doubt that employers, particularly small employers, have been discouraged from starting new schemes by the fact that only schemes promising a benefit related to salary could contract out of the state earnings-related scheme. That is an open-ended commitment which not all employers can reasonably be expected to take on. The Bill provides an alternative route to an occupational pension.
Clauses 6 to 12 enable pension schemes based on a defined level of contribution—money purchase schemes —to contract out of the state earnings-related scheme. In other words, the test that the employer must satisfy is a contribution test rather than an open-ended benefit test. I believe that that will be a real inducement to employers to set up schemes. It will also give the wide range of bodies offering personal pensions new opportunities to set up pension savings schemes. That can be done for individual companies or for groups of companies and one result is that industrywide schemes are encouraged under these proposals.
In essence, the contracting-out requirements for a money purchase employers' scheme will be the same as those which I have outlined for personal pensions. The minimum qualifying contribution will be the amount of the contracting-out rebate, and the 2 per cent. addition to the contracted-out rebate will also apply.
What this will mean in practice is that someone—this emphasises and underlines the point made by my hon. Friend the Member for Northampton, North (Mr. Marlow) —who now relies entirely on SERPS can, if that is his wish, instead get a sizeable contribution to his own pension at no extra cost to himself or his employer. As an illustration, with a contracted-out rebate of 5.5 per cent., a man on average manual earnings of £170 a week wculd, including the 2 per cent. incentive and tax relief on his share of the rebate, have almost £600 a year to put into his own pension. That is the point that my hon. Friend was making.
§ Mr. Tony Favell (Stockport)
Is there not one further enormous advantage to be gained from going into a private 823 pension scheme? Private schemes are funded, whereas the state earnings-related pensions scheme is not. That means that the more people there are in private pension schemes, the better it will be for taxpayers in future generations.
§ Mr. Fowler
That is substantially correct. There is a point on the whole question of funding schemes, rather than the state pay-as-you-go scheme, to which I should like to refer when I discuss my proposed modifications to the state earnings-related pension scheme. So far as new occupational schemes are concerned, the technical annex published with the White Paper shows that many people could expect to do better by opting for a personal pension rather than by staying in SERPS. On the assumption of a 3.5 per cent. real rate of return on investment, the annex shows how good an investment this can be for everyone of 40 or under.
Clause 11 will ensure that all members of occupational pension schemes and everybody with a personal pension will be able to pay an additional voluntary contribution —that is not a matter of controversy —to boost their pension rights up to the limits allowed by the Inland Revenue. In other words, this becomes a right for the individual, rather than dependent on the decision of the pension scheme.
The remaining clauses in part I provide for modifications to the state earnings-related pension scheme to reduce its costs in the next century. The effects of leaving the scheme unchanged are clearly set out by the Government Actuary in the report published with the Bill. His report shows quite clearly that the earnings-related pension alone will increase in cost from barely £200 million a year now to £25.5 billion in 2033. This means that the total cost of the state pensions scheme—basic pension and earnings-related pension together—would rise from under £16 billion a year now to £49 billion a year in 2033, provided that the basic pension was uprated in line with prices. If, as the hon. Member for Oldham, West advocates, it was uprated in line with earnings, the cost would be almost £73 billion a year — requiring a national insurance contribution of over 27 per cent. That is stated in the Government Actuary's report. I do not believe that, faced with that evidence, any responsible Government can ignore these estimates and predictions.
We know that the cost of the state earnings-related scheme is set to increase sharply. We know that that cost is borne not by a fund which has been invested but on an entirely pay-as-you-go basis by the contributors of the time —our children, young people now starting out on their careers. We know that the ratio of those contributors to pensioners worsens. In other words, there will be an increase of 3.5 million pensioners between 2003 and 2033, while the contributing work force remains the same. We know that if the plans continue unchanged, the decisions of future Governments will inevitably be pre-empted. If those Governments wanted to devote more resources to caring for the elderly, through, for example, the Health Service or social services, the public resources would be already committed.
I do not believe that we should hand that kind of debt down to future generations. It is for that reason that we have modified SERPS so that the emerging cost of the scheme is reduced by about £12.5 billion by 2033.
§ Mr. Michael Meacher (Oldham, West)
Will the right hon. Gentleman accept that the Government Actuary's report in no way justifies the conclusions he is trying to draw about the unaffordability of SERPS? Is he aware that the combined employer and employee contributions have, in the six years of this Government, increased by 5.5 per cent.? An increase to 27 per cent. is proposed, which is only slightly more over a 40-year period than has already occurred in the past six years. The right hon. Gentleman has chosen the year 2033, but the report shows that, 20 years on, the 27 per cent. figure falls to 24 per cent. Paragraph 38 of the Government Actuary's report states:Growth in real earnings tends to hold down the projected contribution rate.The only reason it is as high as 27 per cent. is simply because the Secretary of State in this Government is assuming an economic growth rate of only 1½ per cent.
§ Mr. Fowler
That intervention was very revealing, especially the first point. The hon. Gentleman was clearly saying that we should be concerned about the 27 per cent. national insurance rate because that was something that the nation would be able to afford. I do not believe that that is a fair representation of the position. However, it sets out starkly what the hon. Gentleman is prepared to see in the extra burden of national insurance and of tax.
It is true that after 2033 there is an evening-off, but we have to get through the period from 2030 to 2033. If the hon. Gentleman's position is that 27 per cent. national insurance rates are OK, doubtless this will not cause him any problem, but most people in this country will find it a problem. Paragraph 42 of the Government Actuary's report shows that the modified state earnings-related pensions scheme will mean that national insurance contribution rates will remain constant, but, if SERPS is left as it is, contributions will go up by some 20 to 30 per cent. above current levels.
§ Mr. Meacher
Will the right hon. Gentleman accept that his latter point only applies because the Government are assuming economic growth forecast rates of half the level with which the Chancellor of the Exchequer likes to regale the House? If it were a 3 per cent. rate, the 27 per cent. joint contribution rate would be nowhere near that level. The rate would probably be in the low twenties.
Will the right hon. Gentleman take on board another point in the Government Actuary's report? Paragraph 36 states:The notional rate of contributions to the national insurance fund in 1986–87 on the same assumptions as in the long-term projections regarding unemployment proportions contributing etc. would be 15.7 per cent.The table below shows that, in 2053, the rate is 15 per cent.—lower than it is now. How can that be such a problem? Does the right hon. Gentleman accept that the other corollary of his argument is that he is proposing to cut the level of the additional component by half in the next century?
§ Mr. Fowler
The hon. Gentleman is getting excited, but he always does. He is misrepresenting what the report says. It cannot be denied that there will be a substantial increase in the cost of the state earnings-related pension scheme. No one, apart from the hon. Gentleman, is seeking to deny that. It means also that national insurance contributions will go up. No one, apart from the hon. Gentleman, is seeking to deny that. During that period, the ratio of contributors to pensioners will decrease. I do not 825 think that even the hon. Member for Oldham, West is trying to dispute that. There will be 3.5 million more pensioners, and the number of contributors will remain the same.
The hon. Member for Oldham, West cited one assumption from the Government Actuary's report. There is a range of others, including an unemployment assumption of 6 per cent. All the assumptions in the Government Actuary's report are not uniquely unfavourable.
I am sure that we shall debate these issues in Committee. I shall certainly serve on that Committee. I should like to correct one report in The Guardian today which suggested that the Government were unwilling to have the hon. Member for Oldham, West lead the Opposition in Committee. It is the united wish of the Government that the hon. Gentleman should lead the Opposition in this matter.
I should emphasise that the changes will not affect those nearest to retirement. The changes to SERPS do not affect anyone retiring this century. The rights of anyone retiring up to 1999 are entirely unchanged, while there is a period of transition up to 2010. At the same time, the basic pension remains unchanged by any of these proposals.
The Bill will reduce the cost of the state earnings-related scheme in three ways. First, additional pension rights under the state scheme will be based on a lifetime's average revalued earnings, rather than on the best 20 years, as now. This puts the state scheme on a par with the guaranteed minimum pension from occupational schemes. We recognise that special protection is needed for those who are bringing up children or are looking after someone who is disabled, or who are themselves disabled. In these cases, these years will not be counted in the working life over which earnings are averaged.
The second change is that the earnings-related pension, and the guaranteed minimum pension from contracted-out schemes, will in future be based on 20 per cent., rather than 25 per cent., of average revalued earnings. All rights built up between 1978, when the state earnings-related scheme started, and 1988, when the changes in the Bill will take effect, will be honoured at 25 per cent.
The third change concerns a requirement on contracted-out pension schemes to inflation-proof guaranteed minimum pensions once they are in payment. The state additional pension is fully protected against price rises and, because people get the difference between that and their guaranteed minimum pensions, the state effectively inflation-proofs the guaranteed minimum pension. Discussions with employers and pension interests in the wake of the Green Paper convinced us that it was reasonable to require contracted-out schemes to undertake a limited amount of inflation-proofing.
The Bill therefore provides for contracted-out schemes to inflation-proof guaranteed minimum pensions in payment up to a ceiling of 3 per cent. a year. The state additional pension will remain fully protected. Similarly, annuities from contracted-out money-purchase employers' or personal pension schemes will be increased in line with inflation up to the 3 per cent. ceiling.
§ Mr. Roger Freeman (Kettering)
My right hon. Friend knows that Conservative Members strongly support all his personal pension proposals. My right hon. Friend proposes to offer this excellent incentive to occupational pension schemes which become contracted out after 1 January 826 1986. I am sure that we shall want to return to that point to examine its implications. Will my right hon. Friend briefly confirm that occupational pension schemes and final salary schemes have played and will continue to play an important part in the provision of private sector pension schemes?
§ Mr. Fowler
That is an entirely fair point. The Government are seeking to provide further options With respect to pensions. We are not saying for one moment that money purchase is the only route. Clearly, there are many excellent final salary schemes. We are saying, however, that for small employers there are sometimes disadvantages in setting up an occupational pension scheme. We are providing extra options for occupational pensions and personal pensions. Of course, the good final salary scheme will remain. We shall support it.
The second part of the Bill covers the three income-related benefits — income support, which will replace supplementary benefit: family credit, replacing family income supplement; and housing benefit. Clauses 19 to 21 basically bring together all three income-related benefits and put them on a common basis. That is a move of major importance. Much of the inequity and complication of present arrangements lies in the different rules for different benefits. At present, for instance, allowances for children are provided at different levels and on different structures in each benefit. The Bill will seek to put that right. All three benefits will be assessed on the same basis. Because we envisage family credit rates keeping ahead of those for income support, we tackle the unemployment trap.
The common basis of assessment will be net income. People will be assessed on income after tax and national insurance contributions have been paid. That will end the position where a reduction in benefit as earnings rise can actually leave people worse off. The use of net income will therefore virtually eliminate the worst of the poverty trap, where marginal tax rates can be in excess of 100 per cent.
Income support will replace supplementary benefit and will be a significant improvement on it. In particular, it will tackle the complexity which bedevils the present system and which is one of the reasons why supplementary benefit requires 40,000 staff to administer it. Income support will be based on standard rates rather than the array of weekly additions and the system of single payments. But those rates must clearly reflect the general needs of particular groups.
Income support will seek to achieve that. It will consist of a personal allowance. In addition, there will be a family premium plus addition, as now, for each dependent child. Premiums will be added to the allowance for pensioners — with a higher premium for the over-80s — and disabled and lone parents. An extra family premium will be paid for each disabled child in a family.
We have recognised throughout that, however well designed a general scheme may be, there is no way of anticipating special or emergency needs. People will still face losses because of sudden or unexpected crises. A domestic crisis may mean large, unforeseen spending. There will still be people who find difficulty in budgeting.
My hon. Friend the Minister for Social Security, who chaired the inquiry on supplementary benefit, will say more on this matter and on income support when he replies; but it is to meet these needs that we are proposing the social fund, with which part III deals. The aim of the fund is that we should be able to respond to individual 827 needs and circumstances. It seems to us that it is not possible to achieve that aim within the context of a detailed regulatory structure — like that for income support —which is linked to a formal adjudication system. Instead, local social fund officers will have the flexibility that a regulatory structure will deny.
These officers will be operating within the framework set out in clauses 32 and 33. As part of that framework, I shall issue directions and guidance to them, which will be published. I shall set up careful monitoring arrangements to ensure that the fund is operating properly. There will be a review procedure where a decision is challenged. This will be designed to ensure that the case has been handled properly and in accordance with my guidance.
§ Mr. Andrew Bowden (Brighton, Kemptown)
I submit that the social fund officers will have a difficult task. I appreciate that it is right that they should be able to judge individual cases and have considerable flexibility. What worries me—I hope my right hon. Friend the Secretary of State will comment on this — is that inevitably one could get two similar cases in different parts of the country judged by two different social fund officers coming up with different conclusions. In the light of that. will he consider whether there should be a fall back position which would enable applicants, under certain conditions, to apply for an independent tribunal?
§ Mr. Fowler
I understand the concern and feeling on the issue. We will listen to the arguments during the debate. I am seeking to have a review process which is essentially local and which deals with the cases locally, personally and urgently, rather than going to the elaboration of the adjudication process that we have at the moment. I am open to argument on that. It may be that other hon. Members will wish to put forward alternative suggestions on how it could be done, and the Government will listen to the arguments.
§ Mr. Fowler
I am conscious that I am liable to go on for a long time if I give way to everyone but I shall give way to the two hon. Members.
§ Mr. Frank Field
As the Secretary of State says that the aim of the social fund is to meet individual needs, how can he guarantee that that objective will be met with the cash limit to the fund?
§ Mr. Fowler
I am concerned that, whatever the budgeting arrangements, there should be no question of turning down applications because, for example, a local office has run out of money in mid-year. We will maintain contingency arrangements to meet unexpected demands which put great pressure on the allocation of individual offices. I can give that assurance to the hon. Gentleman.
§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
On the right to independent appeal on the social fund, I am sure that the House notes that the Secretary of State is willing to take suggestions from hon. Members. He must already know about the document published this month entitled theSpecial Report by the Council on Tribunals.The council is chaired by Lord Gibson-Watt and includes, as an ex officio member, the Parliamentary Commissioner 828 for Administration. Does the Secretary of State not consider it a damning statement when the report says, on the lack of an independent appeal:The Council on Tribunals believe this proposal to be misconceived",and stresses:It would abolish a right of independent appeal which has existed for over 50 years."?Why does the Secretary of State have to listen to further comments when he has something as authoritative as that?
§ Mr. Fowler
The hon. Gentleman must understand that I have not only read that but I have talked with the council and with Lord Gibson-Watt. We are concerned to find a means whereby such a decision can be reviewed without the elaborate adjudication system that currently exists. The reason for that is that the sort of decisions we are talking about are local, personal and urgent decisions. As I have made clear, I would much prefer that to be reviewed in a different way. In other words, I am not seeking to say that there is not a case for a review; clearly there is. I am saying that the debate should be about the kind of review that there should be.
The payments for maternity and funeral expenses for people on low incomes, for which clause 32 provides, will be grants. There will be no question of recovery from the applicant, although funeral expenses may be a charge on the estate of the dead person. as they are now. It is also our intention that payments given under the general heading of community care—for example, to make it possible to keep in the community or bring into the community someone who might otherwise be in long-term care — should also be in the form of grants. Other payments would normally be recoverable loans, but they would be recoverable by deduction from weekly benefit subject to sensible rules. I once again stress the aim of making the administration of the social fund as flexible and responsive as we can.
The family credit scheme, which is to replace family income supplement, is set out in clauses 19 to 21. The House will accept that family income supplement was always intended to be short term and small in scale. I do not believe that it has been satisfactory or that there is a case for leaving family income supplement as it is. I believe that family credit is a much more effective way of helping low-income working families. We would expect twice as many such families to benefit from it as do now from family income supplement, and we expect to spend some £200 million more a year on it.
Entitlement to family credit will be based on net income. The maximum credit will consist of an adult credit plus a child credit for each child. Clause 27 will provide for payments of family credit by the employer through the wage packet. There is an important point: in 60 per cent. of cases we expect payment to be simply an offset to tax and national insurance contributions. In other words, the visible tax burden will be reduced or eliminated. Payment through the wage packet marks a genuine step towards greater co-operation between the tax and social security systems, which many hon. Members on both sides of the House would want to see. Where both parents are working more than the 24 hours a week needed to qualify for the credit they will be able to choose in whose wage packet it should be paid. Let me stress that the payment of child benefit will be unaffected and will continue to go directly to the mother. 829 The illustrative figures which we published with the White Paper show what family credit will mean to working families on low income. We expect nearly 400,000 working families to be better off as a direct result of the change.
On housing benefit, our major aims are greater coherence with the other income-related benefits, and a simpler system. The number of tapers — the rate at which benefit is withdrawn as incomes rise—will be reduced from six to two, one each for help with rent and rates. By treating employed and unemployed people alike, we shall get rid of the two separate systems which at present exist in housing benefit and also eliminate housing benefit supplement.
The clauses set out the framework for regulations which will determine the shape of the housing benefit scheme. Clause 28 provides for regulations which will enable local authorities to modify the housing benefit schemes for war pensioners in particular. Clause 30, which is based on current legislation, sets out the framework for funding housing benefit through subsidies. It includes, in subsection (4), a power which will enable me to help authorities with the one-off costs which they may incur in implementing the new arrangements.
Clause 20(5) repeats the existing power to prescribe a maximum payment for housing benefit. That power—as is the position now —could allow the Government to require every householder to contribute towards their domestic rates. The Government made clear in the White Paper our commitment to the principle that every householder should bear some of the cost of providing local services; but the House has now heard the proposals announced today by my right hon. Friend the Secretary of State for the Environment to undertake a much wider reform of local government finance. This includes the proposition that all adult residents — not just householders — should contribute to the cost of local services.
The proposed social security structure will have to be developed in the light of the discussions on the Green Paper. One option would be to extend the present rebate arrangements to the proposed new community charge. That could be done only after introducing new primary legislation. As stated in the Green Paper, the Government will need to consider that and other options as the debate on the local government proposals develops. It is clearly right that the current provisions should remain flexible while the House considers those linked issues.
§ Mr. Donald Stewart (Western Isles)
I am grateful to the Secretary of State because he has given way a good deal. Age Concern Scotland brought to our attention the figure for the sum that the old would have to contribute towards their rates. Is he aware how unfair that could be to people in Scotland, where the average rating is double that in Wales?
§ Mr. Fowler
It was exactly for such general reasons that I said that it was right to consider the different options for rates and the rebate system, whatever it may be.
That is also one of the reasons why the detailed figures that we have provided to illustrate the effect of the reforms of income-related benefits can do no more than that. They are illustrations of the possible effects on one set of assumptions. It would be foolish to set benefit levels so far in advance of the start of the scheme. They will be settled 830 in the autumn of 1987, along with the uprating of benefits generally, which will take place at the same time as the new arrangements are introduced.
We have, however, made it clear that we intend to spend substantially more on family credit than is now spent on family income supplement. The income support rates are overall ahead of the present rates of supplementary benefit and weekly additions. We have also made it clear throughout that we intend a reduction in the scale of the housing benefit scheme.
Part IV covers benefits under the Social Security Act 1975. The main provision, in clause 34, is to replace the existing widow's allowance with the tax-free lump sum widow's payment of £1,000. The payments for maternity and funeral expenses under the social fund will mean realistic help when it is needed for the groups who need it most. This is a more effective form of provision than the present inadequate and virtually universal maternity and death grants, which are abolished by clauses 35 and 37. The maternity grant has been the same for 17 years, and the death grant at its present level of £30 for 19 years—only £10 more than when it was introduced in 1949.
At present, my Department administers some 30 different benefits with their own often complex and different rules. There may be good reasons for some differences, but in too many cases the differences arise simply because the benefit system has grown piecemeal. In themselves, the differences can be a serious source of confusion for claimants and staff alike. Throughout the social security review, it has been our conviction that more can be done to provide common rules for common, general purposes. Part V tackles that problem directly.
§ Mr. Fowler
I am sorry but I shall not give way again.
Part V brings into line many of the different rules that at present exist. In particular, it applies common rules to the time for claiming and paying benefits, and to the recovery of over-payments. The Bill also brings together the rules of adjudication so that they are broadly the same for all benefits.
One aspect of the simplification is streamlining the legislation. Clearly, the new schemes will be easier to understand if people can find the relevant legislation and powers in one place.
§ Mr. Bennett
Will the Minister give way on that administrative point? How many sets of statutory instruments did the Secretary of State's Department issue last year? Will he confirm that, under this measure, more statutory instruments will be issued each year, and that scrutinising them will place a considerable burden on the House?
§ Mr. Fowler
I understand the hon. Gentleman's interest, but his intervention confirms me in my view that I should not have given way. His statement is inaccurate, and deals with precisely the point that I am coming to.
§ Mr. Fowler
The hon. Gentleman should not get so excited. If he will wait a moment, I shall reply to him.
Our object has been to describe the main structure of the income-related schemes in the Bill. That is both clearer and more detailed than, for example, the present housing 831 benefit legislation, which contains the broadest of regulation-making powers. Historically, income-related schemes, because of their nature, have relied more heavily on regulations than the contributory benefits. That is not a matter of historical dispute. They are quite properly more subject to change to meet changing needs. Our aim has been to strike a balance between a clear indication in main legislation of the basic purpose and structure of these schemes taken together, and retaining the necessary flexibility in their administration.
The regulations, like those for housing benefit now, will be subject to the negative procedure, as will those for income support and family credit, but we recognise that both Houses will want to scrutinise and debate the detailed proposals for the introduction of the three income-related benefits. The Bill provides for the regulations to be subject to the affirmative procedure when they are introduced.
Another aspect of the simplification is a reduction in the number of regulations. In the clauses covering income support, we are reducing some 20 regulation-making powers for the present supplementary benefit scheme to about 15. Part V carries that simplification further forward. Clause 41 alone, for example, will replace 61 regulation-making powers exercised in 15 sets of regulations with 20 powers to be exercised in one set. Clause 52 will bring the uprating of benefits, which at present is covered by an order and 12 sets of regulations, under one order and one set of regulations.
Those changes will make social security legislation more compact, clear and manageable. They will also make the system as a whole easier to computerise. The scale of social security makes it essential that we have a modern system providing the modern service which the public are entitled to expect. The reforms in the Bill will create a structure which lends itself to that. Hand in hand with those reforms goes one of the most ambitious computer strategies ever undertaken in this country. That strategy is the key to modernising the management of social security.
The reforms set out in the Bill are fundamental. They follow the most comprehensive review of social security since the last war and the most detailed ever consultations with the public. They propose a new framework for social security which will serve the public better in the future.
For years hon. Members on both sides of the House have spoken eloquently of the need for reform, but a Government must do more than simply recognise the problems in social security. They must put forward solutions, and set out a programme for action based on clear principles and with clear objectives.
In the Bill we have a programme which will confer new rights in pensions. We will set the pensions of the future on a sound basis, and we will give to millions of people new opportunities in planning for their future. We have a programme which cuts through the unnecessary complexities of much of social security, and concentrates on what should be its central aim—directing help to those who need it most. We have a programme which will tackle the most notorious aspects of the unemployment and poverty traps, and which will give more support to disabled people as well as to those low-income families who too often face difficulties today. That is a programme for reform which deserves the support of the public.
832 The House cannot turn its back on the problems that undeniably exist. Our responsibility is to act. In order to take the action that is needed, I ask the House to give the Bill a Second Reading.
§ 6.9 pm
§ Mr. Michael Meacher (Oldham, West)
The Secretary of State for Social Services concluded his speech by saying again today that the Bill is the culmination of the biggest review of the welfare state since Beveridge. Such a grandiloquent claim deserves to be tested. There are six fundamental criteria by which any genuine reform of social security—and the Opposition agree that reform is necessary—should be judged.
First, any real major reform of social security should bring about a greater measure of social justice and fairness in society.
Secondly, it should be rooted in an independent assessment of need with benefit levels pitched at an adequate level to meet those needs and thereby enable people freely to participate in the life of their communities.
Thirdly, the review should be based on the aim of preventing poverty arising in the first place, through the collective pooling of risks and resources, not merely based on the relief of poverty.
Fourthly, the review should be designed to give independence to individuals and families. It should not trap them into dependence. People should, by their own efforts, be able to re-establish themselves—as I am sure they would wish—as contributors to society.
Fifthly, any genuine reform of social security would reduce means-testing which is bureaucratic and expensive for the state, inhibits full take-up of entitlements and is highly stigmatising and demeaning for the individual.
Sixthly, since the tax benefits interface represents different facets of a single integrated system, social security reform should be inseparable from reform of the tax system and the whole operation of the fiscal welfare state.
I submit that the Bill fails on every one of those counts as it is not concerned with greater social justice. Cutting benefits by over £750 million and redistributing a smaller cake among the same poor groups is the opposite of increasing fairness. There has been no assessment of need whatsoever. Instead there is simply a black hole in the middle of the Government's scheme. There is no minimum or bottom line, no principles or statements of what income for British citizens is minimally adequate to meet needs.
There is nothing new in the Bill that will help to prevent poverty. The Bill is based on the narrowest possible role of social security in relieving poverty and it will not help people to get back on to their own two feet. Indeed, the social fund's repayable loans and the requirement on even the poorest in our society to pay 20 per cent. of their rates bill will undoubtedly drive people deeper into poverty and debt.
So far from reducing means-testing, the Bill will certainly increase dependence on means-testing by abolishing the death grant and the maternity grant and by reducing widows' benefits and additional pensions. There is no linkage in the Bill with tax reform. Contrary to what the Secretary of State said towards the end of his speech, the number of workers in the poverty trap will actually increase under the Bill by about 125,000. 833 It is not simply the whole strategy of the Bill that is at fault. There are two other fundamental criticisms to be made of the Government's handling of the exercise. The Government systematically ignore and directly repudiate known public opinion on virtually every proposal in the Bill. The contrast with Beveridge could scarcely be more stark. In 1943 Beveridge observed:The main result of studying the volume of evidence is to show how much agreement there was, even before my report was made, upon all its main principles.By comparison, the Fowler Green Paper attracted near unanimous hostility. Yet despite that, hardly any of the original proposals were significantly changed, either in the White Paper or in the Bill. The Secretary of State talked about consultation, but I suggest that the idea of a public consultation exercise has been exposed as a fraud. In the one area where the Government have significantly been forced to change their tune over the abolition of SERPS they have substituted alternative proposals for which, as far as I know, there is not a shred of public sanction or support.
§ Mr. Meacher
I suggest that the matter should be put out to public consultation and we will then know. That has not happened.
§ Mr. Fowler
Before the hon. Member for Oldham, West (Mr. Meacher) goes off about public consultation, would he like to remind the House what happened under the Labour Government? The hon. Gentleman may even have been a Minister at the DHSS at the time. When the Labour Government examined supplementary benefit, did they not send a group of officals around the country? Is that how the hon. Gentleman proposes that public consultation should be carried out? What does the hon. Gentleman mean?
§ Mr. Meacher
At least the public officials took account of public opinion and at least they produced changes — a framework of entitlements which the Government inherited in 1979–80 which were an enormous improvement on what existed before and from which the Government are now departing. That is different from holding a framework of public consultation and then systematically ignoring everything that the public said.
The other fundamental criticism of the construction of the Bill that has already been mentioned and upon which I shall elaborate as it is important is the extraordinary arrogation of power into the hands of the Secretary of State as proposed in the Bill.
The Bill has no substance. Rather it is a licence for government by regulation. Under the Bill the Secretary of State is granting to himself unprecedented power to change benefit levels in future without using legislation. He will be able to cut and sabotage the benefit system without consultation, with minimum parliamentary scrutiny and, indeed, without notice. Clause 33(10) of the Bill shows the flavour of the open-endedness and the all-embracing nature of the Secretary of State's self-ascribed power. It states that—An officer shall determine any question under this section in accordance with any general directions issued by the Secretary of State, and in determining any such question shall take account of any general guidance issued by him.If the detailed plans by which he intends to use his regulatory and direction-giving powers are not published now or in the course of the Bill, the Bill degenerates to the 834 status of little more than a constitutional facade. The Opposition expect the full regulations to be made available before the Bill reaches the end of its Committee stage.
Moreover, the existing checks on the arbitrary use of power by the Secretary of State are being weakened. The Bill strengthens the Secretary of State's powers to avoid referring proposals for prior scrutiny by his own advisory committee, the Social Security Advisory Committee, the Industrial Injuries Advisory Committee and the Occupational Pensions Board. Appeals to the commissioners on grounds of fact regarding unemployment, maternity and sickness benefit are to be abolished. Appeals on single payments are to be replaced by internal reviews by civil servants administered under the social fund arrangements and the Secretary of State, not the adjudicating officer, will in future have the power to decide claimants' rights to benefit. That last provision goes a long way towards eliminating the right of appeal.
In effect, the measure is another Bill in that centralising and authoritarian mould that has so much been the distinctive hallmark of the Government over the last few years. I want to make it absolutely clear that the Opposition unequivocally reject the revised proposals on SERPS which reduce its value by nearly half—by no less than £12 billion — by the next century. The Secretary of State sought to justify that huge cut by claiming that it is unreasonable to impose such an unsupportable burden—in his view—on our children. It is the Secretary of State's proposals which will be so unfair to our children. Under his proposals our generation will still get the full SERPS pension, unaffected by the Bill, and our children retiring next century will not. They will suffer from all the penalty clauses in the Bill.
I put the question back to the Secretary of State. Does he think it fair that our children should be forced to support us at the full pension rate of SERPS while we at the same time legislate under the Bill to prevent them having the same advantage? My reading of human nature is that most people are perfectly willing to contribute generously to others as long as they know that they in their turn wi11 get the same advantage. But I also believe that people deeply resent being forced to contribute to others if at the same time they are then denied the same advantages themselves, particularly if those who will be denying them those advantages are those of whom they have been the benefactors. How can the Secretary of State possibly justify that?
§ Mr. Fowler
Very easily, if I might say so. As the hon. Gentleman rightly says, the Bill does not change SERPS for those who are nearest retirement. It is important that that is underlined and that the public understands that no one who retires this century will be affected by these proposals because clearly those who are nearest to retirement will find it most difficult to build up a pension. It gives those who are retiring in the early part of the next century the opportunity to build up a pension of their own. The hon. Gentleman has only to go to the technical annex to see the estimates of those pensions. He will see that the own pension that we are providing for the public is an extremely good deal for the public.
§ Mr. Meacher
I shall come to that point because I have evidence to show the exact reverse.
The Secretary of State talks about people wanting their own pension. What they want is a good pension. It makes 835 no difference to them whether it is provided in the state or the private sector. What matters to them is its value. That is the crucial point.
The Secretary of State has not answered the point that I was making, that we are imposing on our children, about whom he is allegedly so concerned, the burden of supporting those of us who remain within the SERPS scheme at the full level of benefits now, but they will not get that same benefit from their children thereafter. They will be substantially disadvantaged. It is our children who will be the main losers under the Bill.
§ Mr. Meacher
I want to move on. I have a great deal to say.
We reject the Government's revised SERPS proposals because they will drastically curtail pensioners' living standards next century and because such detrimental action is anyway unnecessary. I say advisedly that it is unnecessary because — I think that this puts it in a nutshell as best I can—in the past 30 years the number of pensioners in Britain has risen by 150 per cent. and their share of total disposable income has doubled from 7 per cent. in 1951 to 15 per cent. in 1985. SERPS sought to increase pensioners' share of disposable income by just 5 per cent. over 40 years—by any standards, a modest goal compared with what has already been achieved since the war. Therefore, I can say with great certitude—we can support this statement—that there is no question but that SERPS is perfectly fundable without any unreasonable strain on the economy. The Government Actuary has produced no projection which suggests otherwise.
The Secretary of State has sought to make great play today with his claim that by 2035 the burden of pensions on the working population will be too great. But independent experts have suggested that the critical factor is the overall dependency ratio, that is, taking account of the number of children as well as the number of elderly people relative to the working population. That is a fact that the Secretary of State did not take into account. Calculations by Professor Bernard Benjamin of the City university's actuarial science unit show thateven on extreme assumptions … the overall dependency ratio will not be much larger than it was in 1951 when, unlike now, manpower was in short supply.
§ Mr. Michael Stern (Bristol, North-West)
Is the hon. Gentleman seriously suggesting that the Government, however respected the professor is, should base their plans on predictions of the number of children that will be born in 30 years' time?
§ Mr. Meacher
That is certainly one answer, but this is an exercise that the Government Actuary, as well as the Secretary of State and anyone who seriously thinks about this, has to take into account. We are talking not just about in 30 years' time but over the next 30 years. Certainly the overall dependency ratio is critical. It is not just the number of workers relative to the number of people in retirement that is important; it is also the other part of the dependent population—children. Estimates have to be made and can be predicted demographically within a margin of error. This is what I am saying and that, I think, 836 is right. Therefore, I repeat that the case for any cuts in SERPS, let alone the cut of 50 per cent. in the Bill, has not been made and is unwarranted.
The changes in the Bill, if carried through, could have a devastating effect. The technical annex of the Green Paper which the Government have issued shows that by the time a man retires, having contributed to modified SERPS throughout his working career from age 16, he will get a pension which will be little more than the present value of the basic pension alone as a percentage of earnings. I repeat that because it is an important assessment. He will get little more than the present value of the basic pension alone as a percentage of earnings. Indeed, the measure of the pension cut in the Bill is that for those remaining in the state scheme the gap between pension and earnings will be made even wider than it is now— Precisely what SERPS was intended to remove or reduce.
The truth is that the Fowler proposals are deliberately designed to make the SERPS scheme so unattractive that it can no longer compete with private pension schemes. That is precisely the message of the tables in the technical annex. In almost every case personal pensions and occupational money purchase schemes yield a better pension than SERPS as modified under the Bill.
What is so deceitful about the technical annex is that it omits comparisons with the unmodified SERPS— the scheme as it is now. I put down a question to obtain those figures and they were finally given in Hansard on 17 January at column 746. They showed that for most people the present SERPS scheme offers pensions distinctly better than those obtainable in the private sector. That is true even though the technical annex gives illustrative figures for private pensions based on optimistic rates of return over prices of 3 per cent., 3.5 per cent., and 4 per cent. If a more realistic 2 per cent. rate of return is assumed, the figures look worse still for private pensions.
It is for that reason, because the comparisons with the present SERPS scheme are so bad for the private sector, that the Government are now trying to tilt the balance back by offering a substantial bribe— I repeat "bribe" — to those transferring to private schemes between 1988 and 1993. They are offering a contribution rebate of 2 per cent. of earnings, to be paid for, unjustifiably, by the rest of the working population.
§ Mr. Fowler
The hon. Gentleman is simply mistaking the position. Is not the significant point about the table not only the comparison—if the hon. Gentleman takes the rebate plus the 2 per cent. incentive—but that the return on, say, 3.5 per cent., or even less than that, on 3 per cent., for someone aged 60 now who is a low earner, about whom the hon. Gentleman talked, from an occupational or personal pension is not only better compared with modified SERPS but also better compared with full SERPS—the kind of SERPS scheme that he advocates?
§ Mr. Meacher
In most instances that is not the case —the only possible exception is the male high earner. That is a distinct category but for most people that is not the case. The right hon. Gentleman has fiddled the figures by assuming a rate of return that is historically unjustified. If we take a more realistic figure and exclude this substantial rise for which the rest of us will have to pay — as we have paid for the discount on council house sales—there is a different picture.
There is no pension scheme that provides a better pension level for the vast majority of those in it than 837 SERPS, especially for women, for long-term unemployed, the sick and disabled and those who are unable to complete a full-time working life. Members of private schemes will no be immune from Fowler's cuts. There is a crucial policy change which is not openly stated in the White Paper or the Bill —the abandonment of the 1979 commitment given by this Government to increase the basic pension in real terms as standards of living rise. The White Paper and the technical annex both assume that the basic pension will be frozen in real terms. Thus if real earnings rise by 1½per cent. annually the basic pension will be no less than halved as a percentage of earnings by the time a 16-year-old reaches retirement. That loss will hit all pensioners whether their second-tier pension comes from SERPS or from a private scheme. The losers will be counted not in millions but in tens of millions.
The present proposals for the social fund are utterly unacceptable.
§ Mr. Meacher
On the social fund? I do want to move on. I know the hon. Gentleman has considerable interests and when he makes his speech I shall listen attentively. The Secretary of State spoke for 55 minutes and I do not want to do a disservice to the House by taking as long as he did.
As for the social fund, compared with the present funding of single payments, the budget is being cut back sharply. The Government have not told us by how much and it would be helpful if the Secretary of State would say what the total budget for the social fund will be. I will gladly give way if he will do so. Last year, it was £260 million on single payments. What will the budget be for the social fund? It is a important omission from the Bill and if the Secretary of State will tell us I will gladly give way.
§ Mr. Fowler
I have already made it clear to the Select Committee on Social Services. I find it extraordinary that the hon. Gentleman should refuse to give way to my hon. Friend but invites me to answer. I have made it clear to the Select Committee, whose Chairman is here, that the decision will be taken later and will be taken in the light of circumstances. There is no mystery about it.
§ Mr. Meacher
That is the usual waffle that we have come to expect from the right hon. Gentleman when he is caught in a difficult corner. Leaked documents—they may or may not be correct—have suggested that the figure would be £100 million which represents a 60 per cent. cut. It would be helpful if the Secretary of State would say whether that is true.
If there are substantial cuts many people in real need will get nothing—even if they do get something it will be in the form of a loan. To repay that loan a claimant will be driven, for the first time by any Government, below the supplementary benefit poverty line. That must drive families deeper into debt. There will be recourse to charities but their incomes are declining. The present social services will be pushed into the role of a secondary poor relief agency, which is not what it should be doing. The social fund, which is discretionary and cash-limited, will move support back into the era of the Poor Law. It is akin to sealing the valve on a pressure cooker while keeping the heat on. I make a prediction that sooner or later, under these proposals, there will be an inevitable explosion.
838 There will be no access—unless it is written into the Bill later—to independent appeal by claimants against the decisions of the local Department of Health and Social Security officers. For that reason the normally staid quango the Council on Tribunals is absolutely outraged. In a special report issued a few days ago the council describes the proposals asthe most substantial abolition of appeal rights since the council was set up in 1958.What the council objects to is not just the loss of the right of appeal but more basically that the officials who administer the fund will not be accountable to anyone.
The Secretary of State says that, after all, he is in favour of some kind of review. If he has discussed this with the Council on Tribunals, why is it not in the Bill? Why do we have to wait for these matters when it has already been fully discussed?
§ Mr. Andrew Bowden
The hon. Gentleman knows my views about tribunals. Does the hon. Gentleman agree that it is important that the local officers, the social fund officers—who we all accept will have a difficult task—should have significant flexibility and should be able to use their judgment and experience in studying individual cases? One of the difficulties which I find and which I suspect is shared by many hon. Members is that when cases go to the DHSS and we make special appeals on behalf of constituents, the manager often does not have the necessary flexibility to deal with cases. I hope and believe the social fund officers will have that flexibility.
§ Mr. Meacher
I respect the hon. Gentleman's views. The situation has arisen precisely because this concept was tried up until 1980. There was discretion but there was great difficulty in standardising it for the reasons the hon. Gentleman has given in earlier interventions. There then followed S manuals with thousands of loose-leaf pages which changed continually. Untrained clerks found it extremely difficult to operate the system fairly and uniformly throughout Britain. We therefore switched to the system which was brought in by the Government in 1980—a framework of rights. Now we are to switch back. All the disadvantages which persuaded the Government to make the change in 1980 will reappear. This time the difference is that there will not be the amount of money available to show the discretion and flexibility which we all agree is necessary.
§ Mr. Meacher
No; I must get on.
Our main objection to the income support proposals is that they divide the poor into the deserving and the undeserving with the unemployed marked out as the undeserving. They are the only major group for whom there is to be no premium. A Policy Studies Institute survey published this month shows that poverty is much more heavily concentrated on unemployed families with children than on any other group within the population. The survey shows that about half of the couples on supplementary benefit run out of money most weeks before their next giro arrives. More than half have experienced acute anxiety about money problems. More than half, both parents and children, were missing items from a basic wardrobe and more than half were in debt. Yet it is on this group that some of the heaviest losses are being concentrated. 839 Indeed, I read in the papers that the Secretary of State is even pursuing this group to the point that he is close to an agreement with the building societies to stop their mortgage interest payments being met when they are forced to claim supplementary benefit. That is gratuitously callous and can only lead to eviction and homelessness. Other key groups in poverty will lose badly under the new income support proposals.
The technical annex had the gall to suggest that lone parents will gain from the change to the tune of £1.70 a week. That is illustrative of just how tricky a document it is. One must assume that the Government have deceptively taken lone parents with no heating or other additions, no subsidiary housing costs, no single payments and in receipt of short term benefits to arrive at this conclusion. If all of those points were taken into account, there would not be a gain, but a whopping loss of about £13 a week.
The worst hit will be the disabled who even this Government might have been expected to regard as deserving. A severely disabled person might at present receive a domestic assistance allowance and a diet and heating allowance adding up to something over £56 a week. The Bill would replace that with a premium at a level for a single person of £12.25 or, for a married couple, of £17.45 a week. The loss of £40 to £50 a week for a severely disabled person can be described as little other than catastrophic. It will force a considerable number of disabled people out of their own homes against their will and into institutions. Moreover, the state will incur substantial extra cost in providing residential care costing some £200 to £300 a week. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), the country's first Minister with responsibility for the disabled, will express his great anxiety about these measures.
The Bill is not about the reform of welfare: it is primarily about cuts in welfare—nearly £1 billion of them, affecting nearly 4 million people, most of them pensioners. Before the Secretary of State disagrees, let me say that there is one tell-tale piece of evidence which reveals the Bill's true nature. Every major welfare Act of the past half century has had at its heart the commitment to promote the welfare of those in need. That was the central message which was stated explicitly in terms in the Unemployment Act 1934, the Old Age and Widows' Pensions Act 1940, and was evident in the establishment of the National Assistance Board in 1948 and of the Supplementary Benefits Commission of 1966, and the passing of the Supplementary Benefits Act 1976 and the Government's Social Security Act 1980. It is of the greatest significance, now that discretion is being brought back via the social fund, that for the first time in 50 years any such commitment is completely absent from the Bill. I suggest that the omission is more than symbolic. It is an indisputable sign that the Bill's real meaning is the repudiation of a welfare society in favour of a return to the Victorian traditions of the Poor Law.
The Bill represents a hallmark of the type of society that the Government really believe in. The Government may claim to believe in owner-occupation for all, but swingeing cuts in housing benefit for poorer owner-occupiers belies that. The Government claim to believe in community care, but the pointed lack of any premium for 840 carers and the huge cuts in domiciliary financial support belie that. The Government claim to believe in law and order, yet they produce a social fund which will be a cauldron containing a lethal mix of destitution, despair and, possibly, violence. The Government claim to believe in helping the poorest, yet unemployed families with children and the severely disabled—some of the very poorest people —will be badly penalised by the Bill. The Government claim to believe in incentives, yet the number of families in the poverty trap with a more penal marginal tax rate than company directors will increase by 250,000 under this Bill. The Government claim to believe in the family, yet by insisting on paying family credit to the man through the pay packet they reveal that they are far more concerned to reduce wages than to tackle family poverty.
This is an unpleasant and damaging Bill, inspired by some of the ugliest Thatcherite instincts. In view of the crumbling erosion and eclipse of Thatcherism which we are now witnessing, there is no future for the Bill. It never had any political mandate and it commands no popular support. If passed, it will be an electoral millstone. Like the Government, it must and will go.
§ Mr. Francis Pym (Cambridgeshire, South-East)
It seems clear from the speech of the hon. Member for Oldham, West (Mr. Meacher) that the Bill will generate a great deal of controversy. It certainly includes a great deal of detail on social security and therefore the Committee stage will be extremely important. I had the impression, listening to the two opening speeches, that this Bill is an ideal example of one on which a timetable at the outset would be advantageous.
I wish to speak not about the details of the Bill, important though they are, but about the broad context of the Bill. In the debate on the Loyal Address, speaking about domestic policies, I referred to the social objective of policy—improving standards of care and service—and the economic objectives of policy—providing that care and service as cost effectively as possible. I referred to the balance that must be struck between those two objectives.
In the particular field of social security, looking into the future and using the technology that is now available to us, I see those two objectives being brought remarkably close together because it will be possible to organise a much better system and to administer it much more efficiently. Unfortunately, the Bill takes no significant steps in that direction. To be fair to my right hon. Friend, he did not produce the Bill with the intention of making major steps in that direction. I should like to press him to go much further.
The Bill is essentially a continuation of the constant piecemeal amendment of the methodology that we have had for 40 years. The complexity of the present arrangements has been demonstrated clearly by the speeches of my right hon. Friend the Secretary of State and the hon. Member for Oldham, West. When the present system was introduced 40 years ago, it was based on clear principles and established facts, beginning with well researched estimates of family means and family budgets. Those estimates had been much discussed for many years. No such estimates exist in contemporary society, however, and no such estimates exist as a background to the Bill. 841 The rates of benefit today are the result of decades of ad hoc adjustment and quite a long way removed from any well-researched foundation in fact.
The Bill is yet another range of adjustments, some beneficial and others not. We know that there are gainers and losers. My right hon. Friend claimed that it represents some fundamental change. I find it very difficult to see how that point of view can be maintained. That is why there will be so much controversy about it. A genuinely fundamental reappraisal is essential in view of the huge social and economic changes and of the huge new opportunities that are now available. My criticisms of my right hon. Friend's Green Paper, his White Paper, and of the Bill are that they provide evidence of the need for a new framework, a new philosophy and new principles to govern our provision of social security in the circumstances of today.
We know that we are not dealing adequately with poverty. We shall not be able to deal with it adequately until we agree to define it in an up-to-date way. The first requirement of an effective social security system is that it should alleviate poverty and hardship and try to prevent them. That can be done only if benefits are based on objective, up-to-date calculations of the needs and the costs of families of widely varying compositions. No such calculations exist today. I urge my right hon. Friend to set that work in hand. That is an essential preliminary to the creation of a modern, effective social security system.
There are other requirements, but I will mention only a few. One requirement is a strong and positive incentive to work. An end to the poverty trap is a clear need, because that trap acts as a major disincentive. People must be encouraged to earn, which means that they must be able to enjoy the benefits of their labours. We must discourage state dependence, encourage self-reliance, and make it worth while to work.
We must promote family life and sound social values. The extent to which we subsidise single mothers and marriage break-ups is a cause of the increasing number of lone parents, which any sound policy and strategy must seek to discourage. I do not speak against their needs, but we require a Bill that encourages families.
Yet another requirement is that the system must be simple to understand and simple to administer. The present system is neither of those things, because circumstances are much changed. The Bill does not bring about any significant improvement. That is especially shown in part V, and clause 41 in particular, which envisages a collection of rules, which I expect will be indeterminate, uncertain to some extent and capable of different interpretations in different places and in different circumstances. Selectivity is nice in theory, but it has difficulties in practice.
I wish to make three recommendations to the House as to how we should proceed in future. First, the Government should not rest upon the Bill. They should move forward and institute a review that we can all accept as a major long-term, fundamental review that encompasses all forms of state benefit and all aspects of direct personal taxation. The continued separation of those elements is a main cause of the present complexity and incoherence. There must be a planned relationship between benefits and personal taxation. I should like those elements to be integrated, but if it is proved that that is going too far, there must at least be a planned relationship. I believe that intégration is possible and will prove to be the correct policy.
842 All benefits and personal taxes should be the responsibility of one Department. I am aware that there is considerable resistance to that proposal, which is perhaps human, because Departments have their own interests. However, that resistance must be dispelled.
The process of taking money from those thought capable of affording it by means of taxes and of giving benefits to those who are judged to be in need are two sides of the same coin. Today, those processes are still considered separately. It is high time that they were brought together. I do not know whether the Green Paper on personal taxation that is to be introduced by my right hon. Friend the Chancellor of the Exchequer on Budget day will go in that direction, but I hope that it will.
The review would be appropriate for a Royal Commission, which is out of fashion these days for no good reason except that it might produce a report that did not say what the Government wanted. I do not mind how it is done or what the body is, but we must choose the vehicle that will provide us with the best answer.
My second recommendation is that the whole approach to the modernisation and recasting of the social security system should be broadly based across the political spectrum. Obviously there will be political argument and controversy, as there should be. However, the objective is to secure maximum public consent. Political differences cannot be eliminated altogether, and I do not suggest that anyone should try to do so, but to allow a major issue to become a party political football would be a negation of statesmanship. Many of our education problems derive from the abandonment of the broad agreement on education that used to exist between the parties. It is sad for our children that that is not true today.
In social security we deal with the lives and needs of individuals and families. It is our duty to make not only the best provision, but to provide a simple, understandable and stable system which is not subject to constant change as a result of any war between political parties. The British people deserve better than that.
My final recommendation is that the so-called basic income approach should be taken seriously. That is the most hopeful way forward. A basic income approach or any other approach is not a panacea. There is no panacea. I shall not detain the House by describing the basic income system, with which many hon. Members are familiar. However, the system is simple to understand and to administer. It deals with the poverty and unemployment traps. It alleviates and even prevents poverty. It encourages positive social values and provides an incentive to earn. The system's problem is its cost. If, under careful examination, it is discovered to be too expensive, even a partial basic income scheme would be a huge improvement in modern circumstances.
I ask for a more far-seeing and far-reaching approach to our social security system. It is time that we stopped tinkering with it. Today's statement on rates shows a fundamental approach to that problem. I wish to see a similar approach in this area. I suspect that some speeches in tonight's debate will contain ample evidence of the need for a totally new approach to this vast and vital topic.
I should like the review or Royal Commission to conduct its work in public. It will take time for people to grasp the issues involved. It is important that they grasp and understand the issues, because millions of people are directly affected. We wish to take those people with us. It was largely all the discussion and the time and trouble 843 taken in the 1930s and 1940s that led to the extraordinary measure of agreement throughout the country when the welfare state was finally introduced. That is a good principle and a good pattern to follow.
The process of complete review is long. It lasts for more than one Parliament. I urge my right hon. Friend, in addition to the Bill and all the work he is doing, to make a start on that gigantic process now.
§ Mrs. Renée Short (Wolverhampton, North-East)
The House will have been interested to hear the thoughtful speech of the right hon. Member for Cambridgeshire, South-East (Mr. Pym), and I am sure that his plea for more time to consider the proposals and to return with better ones will be echoed in the hearts of many people inside and outside the House. Many of the representations that I have received from individuals and an enormous range of voluntary organisations have been highly critical of many of the proposals in the Bill. They also criticised the Green Paper and the previous White Paper.
As the Secretary of State and the Minister will know, the Select Committee on Social Services has been heavily engaged in examining the proposals for the reform of social security. First, it considered the proposals in the Green Paper, then those in the White Paper and, more recently, the Bill. We were given very little time to carry out that enormous and complicated programme, and only today have we published the minutes of evidence of our session last Wednesday with the Secretary of State and the Minister.
In our report on the Green Paper, we urged the Secretary of State to prepare his new proposals for reform with great care, giving plenty of time for consultation. The original proposal was that the changes would be implemented in April 1987. Except for maternity and funeral expenses, the period has been extended to April 1988. We are glad that we shall have a little more time for consultation on the operational details, but I wonder why the Government are rushing ahead with the Bill. It seems to be undue haste since more time has been given for consultation.
The Bill affects many areas of policy and will be affected by other changes. The proposals to reform the rating system may have a major impact on housing benefit; payment of family credit through the wage packet will be affected by the long-awaited proposals for the reform of personal taxation; the proposed worrying changes in students' entitlement to benefit must be related to the student grant, which is the responsibility of the Department of Education and Science; and other proposals seem to conflict with Government policy on home ownership and housing improvement. The Government do not seem to have taken those interactions fully into account, but since they have more time to consider the matter, they can do so.
The first part of the Bill deals with pensions. Despite the Select Committee's firm recommendation that legislation on pensions should be delayed pending further consultations, the Government are pressing ahead. We have had only 44 days to examine the completely new proposals put forward in the White Paper for a modified 844 SERPS. Those changes will have effects well into the next century, so they must be properly thought out and proper time must be given for this.
It is disappointing that the Bill contains no proposal for a flexible age for retirement. I remind the House that, four years ago, the Select Committee produced a report on the age of retirement which proposed that we should work towards flexible retirement based on a notional pension age of 63 for both sexes. At the time, the Government accepted our recommendation. Why does not the Bill contain some provision for it? I hope that this matter will be raised in Committee. If the Government shilly-shally for too long, the European Commission might have something to say about it. I hope that they will take the point on board, because I know that the Secretary of State has received much critical comment on the matter.
The Bill also deals with income-related benefits. In our report on the Green Paper, we welcomed the broad structure proposed by the Government, provided that it gave people adequate weekly incomes as of right. But we pointed to some areas that needed further thought. The Government have modified some of their proposals in the light of recommendations from the Select Committee and from outside organisations. We are pleased that all couples will now receive the over-25 rate of income support and that families with more than one disabled child will receive an extra family premium for each disabled child.
The Government have expressed their determination to do more to help families with children. We welcome the proposal for a family premium for families on income support. Unemployed families with children are the poorest in our so-called prosperous society, and the Prime Minister should give some attention to that section of our community. However, assuming, as the Bill does, a family premium of £5.75, the Government's figures suggest that families on income support will, on average, gain only £1.40 a week. That takes no account of what they will lose after the abolition of single payments. If the Government want the family premium to go a long way to helping poor families with children, they must put it at a much higher level than £5.75. I hope that they will be more generous.
The Government hope to help low-income families by replacing family income supplement with family credit. The fact that it is based on net income and so will avoid the worst of the poverty trap has been welcomed. But more controversial is the fact that it will be paid through the wage packet—so usually to the father rather than to the mother — not to the parent who has primary responsibility for the children. I hope that we can persuade the Secretary of State to reconsider that proposal.
The Government have expressed the admirable intention of doing more for the disabled. The Select Committee welcomed the idea of a disability premium for disabled people on income support. However, we voiced our concern about severely disabled people, who at present may receive £20 or £30 a week in additional requirement payments. It cannot be right that they should have to go to the social fund for their everyday needs. I hope that the Secretary of State will reconsider our proposal for a two-tier disability premium.
The Select Committee was also worried that disabled people who do not receive severe disability or long-term incapacity benefits will be ineligible for the disability premium. It may not be a large group, but it is important 845 that those people do not lose out. I hope that the Secretary of State will change the rule, because it will adversely affect the disabled.
It is disappointing that the income support proposals do not take more account of the needs of pregnant women. In several reports, the Select Committee has shown its anxiety about the widening gap between the perinatal mortality rates for classes I and V. Mothers on income support will get less to cover their maternity needs than at present: they will receive about £75 from the social fund instead of the £25 universal maternity grant and, on average, about £60 in single payments. I hope that the Secretary of State will reconsider the amount of help that can be given with maternity expenses.
In its report on the Green Paper, the Select Committee gave a cautious welcome to the idea of a social fund, while stressing that it needed much more consideration. That criticism still applies. Claimants can now apply for grants to meet special needs, but under the social fund they will be replaced largely by loans. That has serious implications for poor families. For many years, in my constituency, poor families have been helped to get the basic necessities of life by the understanding and speedy action of the DHSS officers in Wolverhampton. I pay a warm tribute to them for their unfailing help and for doing their best for many distressed, anxious and bewildered people, coping with what to them appeared to be insuperable problems. Those officers must be allowed discretion to give grants, not loans, where they believe it appropriate. I hope the Secretary of State will take that point on board as well. To enforce repayment of these loans is a retrograde step, and I hope the Secretary of State will think again about that, because to try to get more money out of poor people to repay loans for things they urgently needed to retain their quality of life seems inhumane.
It is said that the Government's proposals for the reform of housing benefit will produce a better and simpler system and will save something like £450 million. The proposals have been drawn up without a proper comprehensive review of housing costs, and the rent and rates rebate system has been considered in isolation and without looking at taxation, rent levels or housing policies generally. That also seems to be a retrograde step.
This is the second time in five years that major changes in housing benefit have been introduced without proper analysis of the needs involved. Many of the Government's proposals will involve employers in the administration of social security allowances for their employees. Employers will pay out family credit and statutory maternity allowance and will be concerned with employers' contributions for personal pensions. That involvement is highly objectionable to many people including, it seems, the members of the CBI who sent a sharp note to the Secretary of State. How will the Secretary of State take all these objections on board?
Some of the proposals contained in the Bill are good and some of them are extremely bad. A great deal remains unclear. Most of the important changes are not spelt out in the Bill, but will have to be brought in at a later stage, presumably by regulations and by subordinate legislation. So much is unknown and uncertain in the Bill, which relies on what has gone before in Green and White Papers, that in many respects the House is being asked to sign a blank cheque. That cannot be accepted and I am sure that hon. Members on both sides of the House will want to express their anxiety.
§ Mr. Roy Galley (Halifax)
We on the Government Benches must welcome the two contributions from the Opposition Benches. The hon. Member for Wolverhampton, North-East (Mrs. Short) has given a balanced speech based on the work of the Select Committee. The hon. Lady put forward a carefully constructed catalogue of criticisms. Nevertheless, she said that some parts of the Bill are good, and that is a welcome admission from the hon. Lady. The hon. Member for Oldham, West (Mr. Meacher) would have been better advised to take the more balanced approach of the hon. Lady. As usual, he rather over-egged the pudding and on the basis of his performance one feels that as long a the Welsh windbag and the Lancashire loony loom large upon the Opposition Front Bench, England need not tremble because not enough people will be foolish enough to cast their votes for such a concoction of Opposition spokesmen.
In a balanced debate, there has to be an admission to the good things in this Bill. There has to be a major improvement in the net income assessment as a common criterion for many of the benefits. I welcome the alleviation of the poverty and unemployment trap with the abolition of marginal rates of taxation of 100 per cent. and more. One must also welcome the considerable additional help for those who are seriousluy sick, and a fair income support system that will be more readily understood and a direct help to those most obviously in need.
The Bill proposes a more equitable and more easily understood housing benefits system. Family credit will have a better chance of helping many low-income families and will allow greater scope for trying to increase and improve the take-up of that benefit. Many considerable advantages will flow from this Bill and one must welcome also the genuine consultation exercise. My right hon. Friend has taken on board many of the points made to him. It is a tribute to him that he has made such a major change on SERPS between the Green Paper and the Bill. He has taken on board a number of the points made in the Select Committee report, in particular the point about a higher rate of benefit for under-25-year-olds with children on income support, and the separate rate and rent tapers in the housing benefits scheme.
Having given that general welcome to the Bill, I should like to mention two aspects about which I have an axe to grind. Obviously, under any form of supplementary benefit it is difficult for people to make ends meet. Although, in terms of total national income, our social security system is exceedingly generous, single pensioners often have difficulty in making ends meet. There has to be a considerable differential between single and married pensioners, but very often single pensioners have much the same overheads for housing and heating and general maintenance as a two-person household. Of course their housing costs are taken fully into account when they are entitled to supplementary benefit, but there are other inelastic overheads which cause single pensioners to have a rather harder time.
My right hon. Friend will say that the single person's pension is 60 per cent. of the married couple's pension, and that that general principle operates throughout the system. He will also point to the premium arrangements in the Bill which suggest that a little more will be given to the single pensioner household with premium rating. It 847 may now be opportune to look more carefully at the income coming into a single household and into a two-person household to make sure that we have got it right for single people.
The Green Paper proposed a presence test for those in receipt of income support. It said there should be a nationality and/or residence qualification for the receipt of benefit. That proposal has been omitted from the White Paper and the Bill and I hope that my right hon. Friend will reconsider that omission. In some respects this is a complex area and one needs to deal with the differing circumstances of settlement and of visits. For people settled here, either permanently or for extended periods, we have reciprocal arrangements with a series of countries and there are special arrangements within the EEC. The special EEC arrangements apply to the employed, the self-employed and national insurance pensioners.
Specific benefits, primarily contributory benefits and some disablement benefits, are covered by the agreements. There are no legal requirements to give the main non-contributory benefits, primarily supplementary benefits, to EEC nationals in Great Britain. There is also a series of reciprocal agreements with non-EEC countries, which vary in detail from one agreement to another. In the main, they apply to contributory benefits and seek to protect contribution records and entitlements as people move from work in one country to work in another. Noncontributory and income-related benefits are not usually within the scope of these reciprocal agreements, so that in principle a presence test would not conflict with the reciprocal agreement.
With the exception of people covered by reciprocal agreements, it would not normally be possible for people coming here to settle to obtain contributory benefits, unless such people were the dependants of people who had an adequate national insurance contributions record. The main benefits where a presence test could be applied will be non-contributory benefits, primarily income suport. One may be able to extend that to housing benefit, family credit and one or two other benefits.
In principle, supplementary benefit is available, as income suppport will be in future, to anyone in Great Britain who satisfies normal conditions for eligibility. It is wrong that someone should be allowed to settle here and that the long-suffering British taxpayer should have to pick up the tab for benefit immediately on his arrival. There are arrangements for the sponsorship of entrants to the country where a person or persons can give undertakings to maintain the sponsee. Such arrangements are by no means universal. One way to apply a presence test might be to make such arrangements compulsory and universal if the entrant is not able to maintain himself.
§ Mr. Jeremy Corbyn (Islington, North)
Is the hon. Gentleman aware that many dependants come to this country to stay legally with relatives who give an undertaking to maintain them while they are living here but who later find, because of low pay or because they have to live on benefit themselves, that they are unable to maintain their dependants? Is the hon. Gentleman seriously suggesting that we should condone penury and poverty because of the application of immigration laws to social security legislation?
§ Mr. Galley
What I am saying is that it seems unreasonable that many people should, on arrival on our shores, be able to claim immediately supplementary benefit and that the British taxpayer should have to pick up the tab. Alternative arrangements are possible. Sponsorship would be one way of coping with the difficulty. Many countries will take no one for settlement without a work permit. So we have a much more generous system than other countries.
§ Mr. Galley
If the hon. Gentleman will allow me to proceed with my argument, I may be able to answer some of the points which he wishes to raise.
In general, visitors to this country or overseas students cannot obtain benefit, but that rule has not been applied to all EEC nationals. A limited number of supplementary benefit payments have been made to EEC nationals, although the number has been reduced in recent years. Stricter rules are in operation to stop abuse and only to allow the payment of benefit to those seeking work.
Visitors should not be able to obtain benefit paid for by the taxpayer when there is no appropriate reciprocal arrangement. If people are genuine visitors, they should be self-supporting. If they are seeking work, they should be sent back home because we do not have enough jobs for all our people who want work. There is no apparent legal reason to give a non-contributory benefit to a casual visitor from the EEC or elsewhere. There may be cases where exceptions should be made—for example, with political refugees—but usually it will be possible to deal with exceptions under the regulations covering urgent cases.
People have been rightly resentful when scandals have arisen—as, for example, with holidaymakers from the EEC who have claimed benefit during a holiday in this country, and the recent case of the wealthy Nigerian family who were maintained for a time at the ratepayers' expense. The Bill provides an opportunity to clarify the law and to make a blanket legal requirement that someone should be resident here for at least 12 months before being able to claim benefit, unless he is covered by appropriate reciprocal agreements.
It may be argued that that would put us in bad odour with our European partners, but, as I have demonstrated, we have no legal duty on non-contributory benefits. It may be argued that it would be administratively expensive, but surely it could not be more expensive than the labyrinthine regulations which exist already. It may be argued that such a rule would leave this country open to accusations of racism. That could not be sustained, because the rules would apply whatever the nationality of the person concerned. They would apply to all visitors; they would apply to that half of settlers who come from the old Commonwealth and foreign countries as well as to that half who come from the new Commonwealth.
I urge my right hon. Friend to insert in the Bill a provision for a presence test, at least for income support and preferably for a wider range of benefits. That would simplify the system and would be fairer to the British taxpayer.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: 849this House declines to give a Second Reading to a Bill which seeks to reform pension policy without first securing an all party consensus on the proposals; which, whilst reducing the long-term cost implications of the State Earnings Related Pension Scheme, fails to reflect adequately the pension requirements of the low paid and to increase the state retirement pension; which cuts housing benefit whilst at the same time requiring claimants to meet 20 per cent. of their rates bills; which introduces the concept of a cash limited social fund involving local discretion and no right of appeal; and which fails to make sufficient progress towards the integration of the tax and benefit systems.I wish to explain why the Liberals and the Social Democrats are asking the House to decline to give a Second Reading to the Bill. The reasons are stated ad longam on the Order Paper. That enables me to make a shorter speech.
Two principal items in our reasoned amendment were referred to effectively by the right hon. Member for Cambridgeshire, South-East (Mr. Pym) when he talked about the need for consensus and for a fundamental review, following the logic of his argument, of the integration between the tax and benefit systems. Obviously the right hon. Gentleman has been called away urgently to the Dining Room, but I shall use my best offices to make sure that the Committee of Selection nominates him to the Standing Committee which will deal with the Bill. There is obviously a great deal of competition to become a member of the Standing Committee. I look forward to the right hon. Gentleman being able to expand on both those points more eloquently and with more experience than I could in Committee.
The reasoned amendment is not exhaustive, otherwise a much longer Order Paper would have been needed to accommodate it. The revision and modification of the state earnings-related pensions scheme are being done to the prejudice of the lower paid and some other disadvantaged groups. The state retirement pension is not at an adequate subsistence level, as it should be; steps should be taken to put that right. If we had been in a position to influence matters, we would have given that high priority.
In the amendment we have referred to cuts in housing benefit, to the requirement to meet 20 per cent. of the rates bill of people on supplementary benefit, and to the social fund being cash limited, discretionary and not subject to appeal. All those important items have been referred to in the debate.
In the context of the background of the Government —the House is entitled to draw conclusions from this—I am intrigued that in 1982, before the election, quite spirited public debates took place about Conservative views on the development of what was then called family policy. Views were expressed in the Cabinet policy review committee and the family policy unit at No. 10 about how the Conservatives were dealing with the public expenditure problems. Only a few short months later we had an election, but the Conservative manifesto did not face up to some of the important questions that were being asked. Some of the issues were ducked.
As soon as the election was over reviews were instituted by the Secretary of State. We supported the reviews as far as they went, although we were anxious because they were to be nil cost reviews. As a result of the reviews this Bill has been brought forward which will insinuate all the reforms neatly within one parliamentary Session, if the Secretary of State is lucky. He has come here beating his chest like Tarzan—it is a pity about the spectacles—and talking about the consultation process. A lot of paper was moved around, but many people felt that it was one-way 850 traffic with very little being given by the Government. Although the Government may well have been listening, there has been no exchange of views. The conclusion that the House may draw from the way the reform is being done is that the Secretary of State is afraid of an election.
The main changes are to be implemented in April 1988. Why does not the Secretary of State get the Bill on the statute book and leave it? Why does he not fight the election on the basis of the Bill and implement it afterwards? Nobody could then say to him that there had been some evasion of these very difficult issues — I agree that they are difficult issues—at the hustings. If he did that, he would get my support and I would consider what he has to say with greater care.
I listened very carefully to what the Secretary of State said about the rationalisation of the regulations. It was news to me, and I listened with interest. If it happens, I will welcome it, but the Minister must understand that the Standing Committee will labour under tremendous difficulties because of the lack of detailed regulations. The only way in which the Committee can work sensibly is for the Department to do everything in its power to supply detailed notes on clauses which, as we all know, are of great assistance to the members of the Standing Committee. If he does not do that, the whole thing could become a charade.
The Secretary of State's aim, stated in his foreword to the White Paper, is to make the system simpler. I do not believe that it is possible to do so, and to achieve better targeting, at no cost. It is a contradiction in terms. An attempt to improve the targeting implies an effort to take individual circumstances into greater account. The Government cannot make the system simpler unless they put more resources into it. We all know—and there may well have been valid reasons for it — that the Government have, if anything, taken resources out of the system in the past six years. So the possibility of simplicity is a chimera. It is impossible to achieve it against a background of no cost. The Secretary of State would receive warmer support from me for much of what he is doing if he were able to lubricate—to put it no higher than that—the wheels of his reform with a little extra money.
I would add that if the Secretary of State is looking for simplicity he should not be going about de-indexing and reducing child benefit, because if he wants a simple, effective and cheap way of delivering benefit there is no better way than that.
I turn to a very important point which will be considered again in Committee. The Policy Studies Institute has been looking at the effect of the reforms, with single payments being withdrawn in favour of the income premium, and is very worried about it. At present, on average, families with children gain about £3 a week from single payments. One-parent families get a little less, and pensioners and families without children much less. As I understand the system, table 17B of the technical annex suggests that in future families with children will, on average, gain only £1.40 a week. If we add to this the negative figure of £3 which they receive at present and which will be withdrawn, we end up with a net loss of £1.60 a week.
The Government are trying to target families with children—they say that they have the greatest need—but 851 because of the way in which the single payments interface with some of the proposals for income support they will achieve precisely the opposite in some circumstances.
There is evidence that there will be massive regional variations in how this will affect people. A report of the Northern Ireland Assembly shows that, of every 1,000 live cases in Northern Ireland, 720 involved single payments. The average payment was £113 per case. That differs from London, where the figure is only 240 to 250 single payments per live 1,000 cases, and where the average payment is £80. In Scotland, in which I have an interest, 702 live cases out of every 1,000 rely on single payments, and the average payment is £110.
It is very difficult to deal in averages. The statistical annex is a minefield of trouble when we talk about averages, if we do not take care. I hope that if this sort of regional imbalance shows up, the Government will take steps to deal with people in regions like Northern Ireland —and this Bill is getting precious little attention from hon. Members there; they are apparently interested only in their civil war, as far as I can see. I want the Government's assurance this evening that they will seek to deal with them.
The system is supposed to be more financially secure in future. I agree with that aim. At the time, in 1975, as the Secretary of State knows, we took the view that we were storing up financial troubles for ourselves in the future. But the Government have adopted a position where they now appear to break the consensus. They seem to be saying that the welfare state is now predicated only on economic growth and development. To some extent, that is true, but the obverse of that argument is that, for social cohesion to persist and for the economy to have the advantage and benefit of that social cohesion, some resources will have to be put in. Yet the general tone and tenor of the Government and the way in which they have acted in the past does not augur well for that.
We will look at the pensions proposals very carefully. The modification of SERPS is not my preferred solution, but I give the Secretary of State my assurance that in the course of debates in other places we will deal with it as constructively as possible. On the social fund, as referred to by my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy), the Committee on Tribunals has the most authoritative argument that I have seen against the present refusal of the Government to have some sort of inbuilt, independent appeal system. As I read the document, it appears to me that the present proposal goes as far as saying that ministerial accountability will be denied. That is to say, if I have a constituent whose case is reviewed locally and is given a duff decision, I cannot complain to the Minister. If that really is the case, we are in trouble. I should like the Minister to clear this up when he replies to the debate.
Turning to the 20 per cent. rates contribution, I deliberately sat through the statement on the Green Paper this afternoon and I listened very carefully to what was said, because the Secretary of State, dealing with questions when the Green Paper was produced, implied very strongly that everything would sort itself out in the wash and that we should not worry about it too much because the changes in train for local government 852 financing would deal with that point. I heard nothing this afternoon to make me any more sanguine that people on supplementary benefit will not be lambasted by this.
The clause on this subject should not be in the Bill. Arguments about local accountability are fine. Local accountability is important, and we should deal with it, but not in this Bill, not through social security. There are other ways which can be pursued in other places. It is iniquitous to include it in the Bill
The most important thing is consensus. It is certainly crucial in the pensions industry. There has been much argument about whether there should be two separate Bills and about the way in which some of the changes have been brought forward without proper discussion in the industry, particularly the new 2 per cent. bribe that was foisted on us. However, I give the Treasury Bench an assurance that in the course of discussions I will seek to be as constructive as possible, because if we cannot achieve agreement on the system we shall not get agreement on benefits. One party may well think that more resources should be devoted to this; another party may feel that fewer should be given. I will bend over backwards to help achieve consensus because it is in everyone's interest to do so.
§ Sir Brandon Rhys Williams (Kensington)
I regret that I cannot give a welcome to the Bill. Of course, there are many good things in it. The Secretary of State and the Minister of State are good Conservatives, good Christian Democrats, on whom, as the House knows, we can all rely for their humanity and competence in everything that they do. But it seems to me that the ship of Cabinet solidarity has beached them, in this Bill, back at Speenhamland, and I am very reluctant to follow them there. They seem to me to have got stuck. I predict that it will not be long before Parliament has to come back to the whole subject, even if this Bill goes through significantly amended and improved.
I realise that my right hon. and hon. Friends will not like what I have to say, but at least I hope they will agree that I have the merit of consistency. I intend to abstain on Second Reading of the Bill and, unless it is drastically amended in the course of its further progress, I shall have no choice but to vote against it on Third Reading.
I object to the underlying principle on which the Bill is constructed. It seems to be quite inconsistent with the Government's own major aims, which we on the Government Benches all support. It also has practical effects which I believe will be particularly adverse to the types of people of whom we have large numbers living in Kensington. These are people who probably would never consider voting for me, so what they may think about the Government perhaps is not of direct relevance, but I am their Member of Parliament, and I must speak up for them.
I hope that I may be chosen to serve on the Standing Committee, although I have substantial criticisms to make of the Bill.
§ Sir Brandon Rhys Williams
The value of the work of the House is diminished if hon. Members who do not always act as they are directed by the Departments and do not speak on behalf of particular outside interests are regularly excluded, as I have been in recent years, from the work of its major Committees. 853 The Bill has been advertised as a major reform, and so we have to go back to the basic principles of the redistribution of income. What is the basis of entitlement? We have been over this ground often. Entitlement can be based on need, on a record of contributions or on citizenship. The Conservative party in 1974 and again in its manifesto for the election of 1979 chose citizenship. It chose the scheme which used to be known as the tax credit scheme and what I now call the BIG idea—the basic income guarantee. It supported the idea of one nation in benefit, one nation in taxation. There are many critics of the tax credit or basic income guarantee scheme. They say that it cannot be brought in until the computerisation programme of the Inland Revenue and the DHSS has been completed. Of course, that programme of computerisation could be enormously simplified and accelerated if we got clear our thinking on the subject of the redistribution of income before we put in the computers, instead of afterwards. Therefore, I do not accept that excuse.
There is also no doubt whatever that a basic income guarantee scheme could be introduced on a strictly revenue-neutral basis. It is not true that it has to be postponed to the Greek kalends because it is too expensive and the country cannot afford it. There is no reason why a basic income guarantee could not be introduced in the first instance on a purely revenue-neutral basis. What happened to it in due course could be a matter for the balance of opinion in Britain between taxpayers and beneficiaries as to what would be the right measure of redistribution of income as time goes by.
In the Bill my right hon. Friends pay lip service to the idea of contributions as the basis of entitlement, but in fact the Bill is relying on evidence of need as the principal basis of claim. I find that quite unacceptable. It seems to me to constitute a U-turn by the Conservative party which might be described as the revolt of the strong against the weak.
Selectivity, I know, seems the best way to reduce the marginal rate of taxation while still coping adequately with the relief of hardship; but it has well-known disadvantages. To what extent have my right hon. and hon. Friends been able to overcome them in the Bill?
First, it is divisive because it tends to separate those in need from those in work. It is disincentive, because as a person works to better himself, he runs into very high effective rates of deduction from earnings. It makes thrift unprofitable because saving renders a person ineligible for benefit. As it depends largely on personal casework, it relies on an element of discretion, that is to say, the means test. which may lead to inequality of treatment and real injustice, possibly hardship in certain cases. Also, of course, particularly in the face of Government propaganda for people to stand on their own two feet, it is humiliating for those who have to admit that they have fallen short of self-reliance.
Have my right hon. Friends, has the Department, coped adequately with these well-known difficulties? They have produced palliatives, some of which are ingenious, but I do not think that the Bill meets the underlying problems inherent in the principle which they have allowed to creep in.
As to the immediate problems of the welfare state, I have drawn attention very often — hon. Members on both sides of the House have done so—to the fact that for the moment we have some 8 million people who are reliant on supplementary benefit. Is the figure higher than that now? That is two nations with a vengeance.
854 We have to do something about this situation. We cannot wait until 1988 or afterwards. We have a huge and increasing black economy. We have a steady loss of sense of community. We have a breakdown of social discipline. We know all these things in the type of inner city constituency which I represent. We have a rising generation lacking in motivation except towards crime.
I do not think that the Bill will alter this underlying situation at all. We also have the administrative problems which are leading to virtual breakdown, in spite of the dedication of people working in the DHSS offices, of the existing system. It is a matter of urgency to tackle this.
Some time ago in a parliamentary answer I learnt that the DHSS has to make more than 90 million manual entries every week in the administration of supplementary benefit and national insurance. It has hived off housing benefits to local authorities, but that reform has still not proved itself to be an administrative success. Now they are bringing employers into the system in the Bill. From the answers that my right hon. and hon. Friends gave in the Social Services Committee on 22 January, which I think should be brought to the attention of all Members who are interested in the subject, it is clear that the administrative problems of this reform are still unsolved. In the Bill there is much too much reliance on subsequent orders which is another way of increasing the powers of the Executive and diminishing the power of the House. I do not welcome that. We ought to have been given the solutions to the problems, not merely an indication that they will be solved somehow outside our field of view.
Today we had a very important statement on the reform of the rates, which I welcome most warmly. However, it seems to me that it will have the effect of bringing millions of small contributors into the rating system. I am sure that will prove impossible unless we have a simultaneous move to the integration of taxation and benefit in some kind of basic income guarantee system.
I wish to say a few words about family stability. The House must be concerned about that. It is not a party issue. I think that returning the payments for children to the wage earners rather than to the mother is a blunder in the Bill. I have seen the defence of this idea which my right hon. and hon. Friends have produced. I cannot accept it. For one thing, there are 7 million reasons why it is a bad idea politically. Apart from that, it is a bad idea intrinsically, and we should stick to the principle that the child benefit belongs to the child but is drawn by whichever parent is directly responsible for the maintenance and care of the child, or by the responsible authority, as the case may be. I do not think it is progressive to put the money back into the pay packet.
We still have the problem that single people will gain at the expense of married couples: two single people living together will do better than if they decide to go through a form of union. I also think that the Government are wrong to retreat from their commitment to maintain child benefit and to continue to make it payable to the mother. As this is something on which much has been said before, I will not elaborate on it.
§ The Minister for Social Security (Mr. Tony Newton)
The White Paper is explicit, as was the Green Paper, that child benefit, as defined, will continue to be paid to the mother.
§ Sir Brandon Rhys Williams
The Government's policy, plainly, is to phase out child benefit and to rely on 855 benefits related to need, not to universal benefits. My hon. Friend tries to assure me that that is not so, but I am not confident that I can rely on his assurance. [Interruption.] I am not saying that my hon. Friend is not saying what he believes in good faith. He is not the type of Minister with whom anyone would quarrel on the grounds that he did not speak in good faith.
Last year, when the Government decided not to continue with the uprating of child benefit in line with rises in the real value of the tax allowance from which child benefit took over, that was the first break. Nothing that my right hon. Friends and hon. Friends have said since leads me to assume that from now on child benefit will continue to move upward in accordance with changes in GDP, as I should prefer, or of families' real cost of living.
On the subject of incentives, from a hasty analysis of the Bill it seems that the low-paid in many cases will be worse off than they are now. I realise that if we rely on selectivity we must try to produce clear water between what people receive if they are not working and what they receive when they go out to work, even with low wages. The Government are seeking to raise the tax thresholds, which is understandable, but, simultaneously, they must rely on the reduction in the real levels of benefit to produce that clear water. With that policy, there is a danger of social instability and even explosions, of which we have had too many in recent months. We do not want to create further circumstances in which people will feel alienated from the rest of society.
What the Bill proposes with regard to housing benefit means cutting much too fast a benefit which I admit has also grown much too fast. One could say much more about the way the increase in housing benefit has led to rent increases; but cutting housing benefit too fast will not bring down rents simultaneously. It will merely cause severe hardship to thousands of people in inner London. I represent many of those people. I believe that the reform will still not be acceptable even if it is postponed until 1988. That is relevant to inner city areas such as north Kensington, but I dare say that it is also relevant to many other areas elsewhere with high rents.
Mrs. Hermione Parker has done some analytical work on the Bill's effects which hon. Members should study. Cuts in housing benefit will be felt, in particular, in the areas of highest rents. The Bill represents a redistribution of income from householders to non-householders and away from inner cities in favour of areas where rents and rates are lower. How can the hon. Member for Kensington support such a measure?
I should like to say a few words about the state earnings-related pension scheme and the reform of occupational pensions. The Bill contains some helpful moves in directions which I have advocated for a long time, and I welcome them. However, I made my maiden speech in 1968 on the importance of the transferability of existing pension rights in occupational pension schemes. I might have been depressed had I known that 20 years later we should have made virtually no progress on the transferability of existing accrued rights.
I have pointed out to my right hon. Friends that that movement could have been stimulated by tax changes without any breaches in the basic undertakings under which occupational pension schemes have been set up; but they have preferred not to follow that advice. I am sorry 856 to say that my right hon. Friend the Chancellor of the Exchequer appears to have truckled to the life offices. I regret that.
With regard to future benefits in the private sector, the move towards the liberalisation of the provision of occupational pension schemes is excellent and one of the Bill's best features, but it should be based on a core of money purchase entitlement. I am always suspicious when I see the introduction of money transfer systems under which some people gain more than they should on the basis of their contribution record, because somewhere we shall find a corresponding element which is not getting what it has paid for.
The basic core scheme should be related directly to contributions—contributions which are enough. What do we find? Employers' contributions in the private sector will be a statutory 2 per cent. only. Many employers will pay much more and indeed already do. Many employees also make their own contributions to the schemes. In the public sector, however, the value of the Government's contribution is about 17.5 per cent. in addition to incomes. That produces a satisfactory rate of pension, but where will we get if the employers' rate of contribution in the private sector is only 2 per cent.? The employers' contribution should be at least 10 per cent. It already is, because at present the employers' national insurance contribution is 10.45 per cent. That money should not just flow into the Exchequer as part of general revenue: it should be seen as the employers' contribution, in addition to wages, to their employees' retirement benefits. Without adequate contributions, the benefits cannot be sufficient to meet social needs.
In all the circumstances, I think that it would be better if my right hon. and hon. Friends were to withdraw the Bill and give the subject a great deal more study. However, if the Secretary of State is not disposed to do that, I hope that he will be willing to make major changes to diminish the worst of its damaging effects.
§ Mr. Tom Pendry (Stalybridge and Hyde)
The House has listened to a brave and cogently argued speech from the hon. Member for Kensington (Sir B. Rhys Williams). I shall begin by agreeing with a few basic and obvious truths. I might as well get my accord with the Secretary of State out of the way as quickly as possible. Yes, the case for reform of social security benefits is overwhelming; yes, few people in Britain can be happy with the present system; and, yes, the present system is too complex to be understood by the majority of people. Overlapping benefits also baffle most hon. Members.
However, no one should be in any doubt that the Government's proposals have anything to do with trying to rectify or remedy those complexities. They are about saving money, in line with the Government's general policy, and doing so at the expense of the poor.
The Bill is an expression of the views of the most Rightwing elements within the Tory party. The main thrust of the Government's proposals is the antithesis of Beveridge's proposals and the major tenets of post-war social security legislation. It is right that Beveridge's assumptions were challenged, revised and adapted in legislation by successive Governments in line with the shift of the social patterns of the 1960s and 1970s. We should be doing the same in the 1980s. Life at the time of Beveridge was different from life today. Divorce was rare, 857 married women in employment were rare, and illegitimate births were not commonplace. It is not surprising, therefore, that in 1986 the Government should be looking at changes in social behaviour and patterns and adapting legislation accordingly.
The role of women in society has changed, there are more one-parent families and increased unemployment, but the Bill is almost antediluvian. It is not in line with those changes. The Bill's assumptions must be challenged. The prime function of social security legislation should not be the relief of poverty. At best, one could say that the Government may be trying to do that, but Opposition Members would argue that the proposals increase poverty. More should be done to prevent poverty and to provide an adequate level of income sufficient for a recipient to live a confident, self-respecting way of life.
Many aspects of the Bill spell bad news for millions of people. I shall focus on some of the concerns of my constituents. Recently, my local authority, Tameside council, carried out an extensive survey on how the many provisions of the Bill would affect the plight of many of my constituents. We have heard about the plight of old-age pensioners, single parents, and others. Hon. Members might not yet have referred to the plight of students, but I hope they will before the end of the debate.
The Tameside survey revealed the little short of catastrophic effect on many of the people living in my area. In view of the Government's overt support for home owners, is it not ironic that they are targeted for a special cut? They will lose £1.85 per week, which is paid as an addition to cover insurance and repairs. In Tameside about 5,800 owner-occupiers will be affected. Between 1984 and December 1985, 150 evictions among the same group took place because of mortgage foreclosure —300 per cent. up on the figures for the past three years. For a party that purports to be the party of the family, the Conservative party has an odd way of showing it.
Recently, the value of child benefit was cut by 5 per cent., which was a reduction of 35p a week per child, or £18.20 a year. My constituency has about 50,000 children, and the loss to the children and to Tameside's local economy will be about £900,000 a year.
The family credit scheme is hardly an adequate substitute. The Secretary of State has mentioned that two out of every five families who need extra support will not get it.
The problem in providing free school meals for low-income families is that, unless the family receive these meals because of their low income, only those who claim credit will receive any financial compensation. Only 22 per cent. of the parents in my constituency who claim free school meals—those not on supplementary benefit—receive family income supplement. Families with parents who are sick, disabled, widowed or divorced will lose out, as their income will be above the income support level. We know that Tameside and other councils are providing meals for these children. From 1988, my council and others will be forbidden to help.
The Secretary of State has said that proper help will be available from the social fund to help low-income families, but this help will have to be from a fixed budget, and at the discretion of the Department of Health and Social Security, with no right of appeal.
The Secretary of State did go a little way towards meeting our case today, and I hope to persuade him to set up a proper appeals machinery. The Tameside welfare 858 rights unit is extremely successful in appealing on behalf of my constituents against decisions of the DHSS. According to its last annual report, it had a 76 per cent. success rate on behalf of people living in Tameside.
What will happen to these people in the future? Without an appeal system, who will give the unit the £230 for removal costs that it got for one of its claimants, the £104.30 for clothing that it got for another, or the £538 owed by the DHSS to a claimant to have electricity reconnected? What about the sums in excess of £100 for furniture? Without the appeals system, the unit argues that these people will be left empty-handed.
If extra support is needed for families who are not in work, will the levels of the new income support scheme be sufficient to cover all the needs of women who have recently given birth, and their babies? This category is one of the groups to whom Tameside welfare rights unit frequently give advice. Sums secured from the DHSS average £150 per claimant. Will those people be given this help in future? Maternity grant of £75 is less than half what is needed. In a take-up campaign in my area to assist people to purchase bedding, 2,378 people received an average of £50 each—812 people in Hyde, one part of my constituency, alone.
The Secretary of State has argued that he intends to increase help for families with more than one disabled. child, and that special attention is being given to disabled people. I would ask him how one of my constituents will feel who has ill health. She has been treated for malnutrition, is not actually disabled, but needs extra heating and a special diet. The costs add up to £17.55 per week.
The family of a child with severe digestive problems receive £17.69 per week. They are not unusual in that the disability from which their daughter suffers means that they need extra heating, special diet and help with laundry because of incontinence and replacement clothes.
I could go on, but I should like to draw to the attention of the Minister some of the proposals in relation to housing benefit, because the situation there is no better. A constituent of mine, who lives in Welbeck road in Hyde, is 52 years of age and receiving supplementary benefit. She was signing on as unemployed and received £29.50 a week supplementary benefit. She has two working daughters, 19 and 18, who earn £32 and £30 a week respectively. The effects of the existing housing benefit cuts since November 1985 mean that these two daughters are now assumed to contribute £10.40 per week each towards housing costs. They are respectively £5 a week and £4 a week worse off than they would have been if they had given up their jobs and claimed benefit. That is what the Secretary of State says he is trying to prevent.
The Bill will make no difference to the poverty trap of my constituent and her two daughters. Indeed, it will make the situation worse. Her benefit will increase from £29.50 to £30.60, out of which she will have to pay water rates, and 20 per cent. of her domestic rates. I wrote to the Secretary of State on 27 November last year to outline the absurdities of the housing benefit scheme which this case reflects. An answer was received on 16 January this year to say that inquiries are taking longer than expected.
I believe this is not an isolated case. We must have an explanation, and fast, and I hope that the Minister, when he winds up this debate, will give us an assurance that these absurdities will be ironed out in the near future. I know that some of these constituency cases can be tedious, 859 but I make no apologies for bringing specific cases to the attention of the House, because we on this side of the House live in the real world, not in the fantasy world of the Secretary of State. Therefore, this is not something which I regret.
Clearly, the Bill targets when the next general election will take place—the autumn of 1987. No Government with any sense will go to the country after the effects of the Bill have been felt by the millions of people who are going to be made worse off as a result.
The Opposition must step up our campaign and ensure that every person affected by the Bill knows what will happen as soon as the Conservatives return to power—if they do. That is the size of our challenge. I am sure that my colleagues agree that we shall take up that challenge. We have to put across the message that we are going back to the days of the Poor Law and the soup kitchen, when malnutrition was rife and pawnshops were commonplace. It is a disgrace to a country which gave birth to the welfare state that we have to say those things. The best that can be said of the Bill is that it will see the death of this rotten and uncaring Government.
§ Mr. Martin M. Brandon-Bravo (Nottingham, South)
I am grateful for the opportunity to express in broad outline my support for the Government's objectives in the Bill. The comments from both sides of the House show that we are all measuring and judging the Bill by three criteria—our sense of caring, our assessment of needs, and the inevitable yardstick of affordability.
We are spending £41 billion on this aspect of Government expenditure. Although that figure is always in the newspapers, we should continue to repeat it. It struck me as odd that the hon. Member for Oldham, West (Mr. Meacher) referred, effectively, to a sum of that magnitude as being likened to the cost of a Victorian poor law. The figure of £41 billion may trip off the tongue in this place, but it is in no way Victorian poor law provision.
If we are honest with ourselves, we know what we mean by "needs". All hon. Members are confronted in their constituencies not necessarily by needs but by expectations. All too often, one gets the uncomfortable feeling that people's expectations are in danger of destroying the very base from which those expectations can be delivered. The fairy story of the goose that laid the golden eggs has a moral which the House should not set aside too easily.
I do not think that a single hon. Member does not care. We are often confronted in our constituencies not so much by needs but by the philosophy, "I am entitled;" "I want;" "I must have." We want a system that allows all people —especially those who, for whatever reason, are not able to sustain themselves—to live with some dignity. We must take needs and affordability on board in making our judgment.
I welcome particularly the dual role that the Bill sets out — the role of the state, and the encouragement of personal pension provision. The Opposition have said that the Government have not changed a thing. I should have thought that the change in approach to SERPS was a major change made in the light of consultation. I am sorry that no member of the Social Democratic and Liberal mésalliance is present, because I do not know whether the 860 article that appeared in May last year in a national newspaper is correct. That article seems to say that the views of at least the leader of the Social Democrats are now very much in line with the revised proposals of my right hon. Friend the Secretary of State.
The right hon. Member for Plymouth, Devonport (Dr. Owen) argued that sex discrimination in our pension system should be abolished and that people should retire at 65. I am not sure whether the ladies would be happy with that. He also said that he would like to give people the option of retiring between 60 and 65. That seems to be in line with Government policy.
I am grateful for the portable personal pension scheme. I am on my third pension scheme—two of the pension schemes in which I was involved are frozen because I changed jobs. As this profession is precarious, I suppose that I have to take account of the possibility that I shall have to start a fourth pension scheme. Millions of people rely on company or personal pensions. Under the Bill, millions more people will have that dependence on such pensions. We should say loudly and clearly and as often as possible, "Heaven help those company pension funds and those personal pensions if the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the hon. Member for Oldham, West get their hands on people's pension funds for use in their lunatic Socialist schemes."
I do not think that even Ministers would think it amiss if I said that we still have a long way to go in simplifying housing benefit, but we are moving towards simplification. At least we have now taken on board that net income will be the basis of the income test and not gross income. That is a step in the right direction. I should like to express my thanks to Ministers for listening to representations—
§ Mr. Brandon-Bravo
Of course I am special. I am more persuasive than the hon. Member for Stalybridge and Hyde (Mr. Pendry).
Under clause 28, district councils will be able to exempt war pensions from the exclusion that appears to be proposed in the Green Paper.
§ Mr. Brandon-Bravo
In some case, there was genuine concern in my city that we would be taking £8 from war pensions. I am delighted that that has been put right.
§ Mrs. Beckett
I was seeking to save the hon. Gentleman from potential embarrassment. I do not know how closely he has looked at the Government's concessions. I understand that local councils can do what the hon. Gentleman suggests only within the overall housing benefit budget. Presumably this means that local councils will have to make changes or savings somewhere else. I have not had a chance to go into this matter as thoroughly as I should have liked, but I suggest, knowing the Government and their record, that the hon. Gentleman should look carefully at this concession before saying too much about how the Government have given it.
§ Mr. Brandon-Bravo
If the hon. Lady is correct and the concession is not as great as I have said, she may be assured that Conservative Members will press our senior colleagues strongly on that matter. War widows are the last group from whom we would want to take one penny. 861 Under the housing benefit heading, the Association of District Councils has made a number of comments. Out of the hoary old mechanism for funding more of this and more of that comes the mortgage interest tax relief, estimated at £3.5 million in 1984–85. While it might be of academic interest to compare mortgage interest tax relief with what we spend on housing benefit, I do not think we are comparing like with like. They seek to achieve different things. The hon. Member for Birkenhead (Mr. Field) may laugh, but they set out to achieve totally different objectives. I see no logic in saying that, because one has housing benefit, one should have mortgage interest relief, or vice versa.
If mortgage interest tax relief produces a property owning democracy, nobody in the House, except perhaps those on the lunatic fringe, would seek to dispute that home ownership has brought about, and is bringing about, much social stability that would otherwise not exist.
I will not go into great detail on the social fund. The hon. Member for Stalybridge and Hyde listed a number of single payment situations in his constituency. We have all been confronted with them. Some of the decisions of the Department of Health and Social Security offices are puzzling under the existing regulations and no doubt will be just as puzzling under the new.
Without being too precise on the figures, because I would not wish to embarrass the constituent whose experiences I am drawing on, I could not help but feel that there was something wrong with the existing system when I was confronted by somebody complaining that the DHSS proposed to award him only £X for the need that he expressed when he believed that he needed £2X. I, as would most of my colleagues, said that I would write to the DHSS and ask it to re-examine the case and produce a report. I have total admiration for the work of our local DHSS offices. The office wrote back and confirmed that my constitutent had not only been offered £X but that in the previous two years he had received £5X. That £5X was fast approaching £2,000.
That is the sort of anomaly which occurs under the present system. Therefore, 1 can understand that the Government, in seeking to have at least some control over what we spend, are taking on board the anomalies in the present system.
I am grateful for one phrase from the Minister which relates to the statement made this afternoon on the revisions of rates. I can understand why the Secretary of State for the Environment could not give the sort of answers that were sought because his was not the responsible Department. If the result of the examination of the cost of living and the indices on which uprating is considered is that elderly people, in particular, will have their 20 per cent. rebate of rates, or whatever it is, built into their old-age pensions, they have nothing to fear from the Bill.
I know that I speak for many of my hon. Friends when I say that, much as we want a review of social security and support the Bill, we are equally certain that in no way do we want the financial security of our senior citizens to diminish by one penny.
§ Mr. Frank Field (Birkenhead)
For the first time since 1979 it has been a pleasure to sit on the Opposition Benches over the past couple of weeks. We have witnessed an outbreak of warfare which is not usually seen on the 862 Government Benches. Sadly, however, there has now been an outbreak of that most deadly virus beloved by the Whips called loyalty. That loyalty leads to what is called a closing of ranks.
I thought it would be helpful to the Minister when he sums up if I put some of the objections to the Bill Which ordinary loyal Conservatives would have put if that outbreak of loyalty had not occurred.
As a Conservative Member I would have to begin by declaring self-interest. The self-interest would be that as each day passes the dreadful day of judgment, as the Prayer Book calls it, is approaching. In other words, the election gets ever nearer. [Interruption.] I wish the Opposition Front Bench would allow some of their hon. Friends to get on with their speeches. As that dreadful day of judgment approaches the electorate's mind is concentrated wonderfully on whether it will win under the scheme. I thought it would help the Government to concentrate their mind when they vote tonight if we look at the losses that will be experienced in marginal Conservative seats if the Bill goes through.
Looking at the Government's own figures, a little over 500 very elderly pensioner households will lose. Likewise, some 3,000 other pensioner households will lose if the Bill goes through unamended. In addition to the loss suffered by pensioners, about 1,500 other non-pensioner households in those constituencies will lose. In addition to that, if that list was not long enough, almost 500 working families who earn their poverty will be made worse off by the measure. If I could not rise to greater heights than that of self-interest I would be concerned that about 5,500 households in my marginal seat would be made worse by the move.
There are other objections to the Bill if one is of the Conservative persuasion. The second objection that Tory Members should be putting tonight is that the Bill makes a mockery of practically everything that the Government say about incentives. Every major statement from the Government Benches is a plea to build a society which encourages and rewards those who try to stand on their own two feet. What does the Bill do? Looking at the appendix we find a significant increase in the number of families who will face marginal tax rates in excess of 70 per cent. Although the Secretary of State is right in saying that technically the Bill solves the poverty trap problem and that most families would not be faced with a 100 per cent. tax rate, that solution is brought about by significantly increasing, in fact doubling, the number of those who face a marginal tax rate of more than 70 per cent. Given that we have had Tory Budgets which have said that that is a marginal tax rate that those at the top of the tree should not have to face, is it one that is tolerable for those at the bottom?
Thirdly, the Bill makes a mockery of Government statements that their policy is about targeting help on those in most need. It is significant that, despite the length of the Secretary of State's opening remarks, which almost ran to an hour, he did not say whether there will be more or fewer poor people as a result of the Bill. The existing resource, besides making a substantial saving for the Exchequer, will be shuffled around among the poor. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) drew on the Policy Studies Institute study, which highlighted how desperately placed unemployed 863 families were. If one had to opt for one group which was suffering the worst poverty, one would single out the unemployed. Yet they will lose most under the proposals.
The proposals also seek to deal with incentives to work for young workers. The premiums are being structured so that those under the age of 25 are penalised. Yet the households in greatest need are those with young families, and most young families have young parents. Indeed, among working class households family formation begins at a very early age. Those households in greatest need will lose under the measure, while other households composed of older non-pensioners will gain, although their needs will be less. That is hardly sensible targeting. If the Government were interested in targeting, they would put a greater premium on children. However, they dare not do that for the reasons that the hon. Member. for Kensington (Sir B. Rhys Williams) outlined. Given the Government's stand on slowly phasing out child benefit, they would land themselves in severe problems regarding incentives to work with income support payments to children way above child benefit levels. I am pleased that the hon. Gentleman has returned to the Chamber. I salute the noble way in which he presents the views and needs of his constituents.
The fourth reason why a loyal Tory Member should be worried is that the cornerstone of family policy until 1979, when the Conservatives won the election, was to build on child benefits. Yet they are now slowly phasing out that benefit. The Government's claim that they are shifting the tax burden from families with children to those without children, that is, reversing a trend that has gone on under both parties for 30 years, now has a hollow ring.
The fifth reason for voting against the Government relates to the provisions of family credit. Any sensible Tory Member knows that the Government's influence is limited and that they cannot pretend that they can arbitrate in marriages where there are severe difficulties. However, as it is possible to weight the outcome of the argument in those struggles in some families, we all know that too many of our female constituents get a rough deal from their husbands. In the past, therefore, Tory Governments have ensured that resources go to the woman rather than the man. As the hon. Member for Kensington said, we all understand why the Government are switching the additional support from FIS to family credit and from women to men. However, we do not accept that argument, and it will certainly not be accepted in our constituencies.
The sixth reason is that the measure concentrates even more power in the Minister's hands instead of decentralising it. My hon. Friend the Member for Oldham, West (Mr. Meacher) highlighted the extent to which this is an enabling Bill, giving the Minister extraordinarily wide powers to introduce regulations. That might be a sensible approach if the Government's track record on statutory instruments was good. However, on the board and lodging regulations, for example, a constituent of mine, Simon Cotton, has been taking the Government to practically every court in the country and beating them. That suggests that no sensible group of people would assign the power in this Bill to the Government.
A further reason why Conservative Members should be unhappy with the measure is the loss of appeal on single needs payments. Some hon. Members have already referred to theSpecial Report by the Council on Tribunals,864 in which the council states that it does not accept the Government's argument. It comes to the following conclusion:The people most affected by this proposal are among the most vulnerable in our society. Very good reasons are needed before the abolition of the right to an independent appeal in such circumstances, an appeal which has existed for over 50 years. It would probably be the most substantial abolition of a right of appeal to an independent tribunal since the Council on Tribunals were set up by Parliament in 1958.So much for a party that not only used to pay lip service to people's rights but ensured that those rights were enshrined in our courts and tribunal system.
If those were not powerful enough reasons why the measure should not command Conservative support, a further reason is that the measure further erodes the tax base. People will be bribed through the tax system to opt out and buy private pension provisions. A party which believes it is important to cut the rate of tax must know that every tax benefit concession makes it more difficult to deliver tax cuts because those tax cuts are being handed out in the form of tax privileges.
Those are the reasons why Conservative Members should vote against the measure. About 5,500 households in every marginal Conservative seat will be worse off, which means about 8,000 voters will lose money. The Bill makes nonsense of the Government's talk about incentives. The targeting of help on those in greatest need is irrational. It shows the poverty of the Government's commitment to build up the child benefit system, and so to shift the tax burden from those with children. It substantially alters power within the family, especially in families where there are difficulties between husband and wife, from the wife to the husband. It unnecessarily concentrates power in Whitehall and the Minister, instead of devolving it. It wipes away an appeal which has existed for about 50 years. Finally, it will make it even more difficult for the Government to deliver their promised tax cuts. Any one of those reasons is a good reason why Conservative Members should join us in the Lobby. All eight reasons should ensure that the Government are in severe difficulties.
§ Mr. Andrew Bowden (Brighton, Kemptown)
Few would deny the need for reforms in the social security system, and many would say that those changes should be radical. During the past 50 years there have been many changes. For example, pensioners have nearly doubled in number.
My first anxiety about the Bill is that, unless it is changed drastically and receives wide support, the changes will inevitably prevail for only a limited period. If we have learnt any lesson from social security legislation in the past 40 years, it must be that, when there has been no consensus or broad base of all-party agreement, a change of Government brings a change in legislation. That cannot be good for anybody. It cannot be good for the Secretary of State and his colleagues who wish to put the legislation on the statute book, for the industry or for the pensioners of tomorrow.
Much though I would like to, I will not spend any time on part I of the Bill because of the limitations of time. However, there are still so many gaps in part I that the Government must provide a great deal more information in Committee that they have in the Bill and in the Secretary 865 of State's speech. It is unlikely that I will be appointed to the Committee, but I will read the proceedings with great interest.
I should like to remind the House of the group that is most affected by changes in the social security system. Let us examine the basic facts of social security benefits as a percentage of income. For couples without children, that is 5 per cent.; for couples with children, it is 8 per cent.; for single people, it is 9 per cent.; and for one-parent families, it is 45 per cent. However, at the top of the table are pensioners, with 60 per cent. of their income comprising social security benefits.
I am deeply concerned about the effect that these proposals will have upon pensioners, particularly in relation to housing benefits and rates. In many areas, that is not as clear as the Green Paper and the White Paper implied.
There is broad agreement in the House that the rating system is unfair. It would therfore be utterly wrong to change a situation in which many pensioners get the equivalent of a 100 per cent. rate rebate until the rating system has been reformed. To take action before that would make it even worse for those pensioners who face rate bills and others who at the moment receive 100 per cent. rate rebates. I will not discuss water rates, but it is scandalous that there is not a rate rebate system for water rates as well.
Although I have not heard every speech tonight, I do not believe that any hon. Member has touched on the problems faced by owner-occupiers on relatively low incomes, with the state pension and a non-inflation-proof firm's pension. There is a significant number of such people. Since 1970, that non-inflation-proof firm's pension has been reduced in value in real terms by 80 per cent. For many in that section of the community, particularly when their non-inflation-proof firm's pension is small, housing benefit was some small compensation for the destruction of the value of their firm's pension and/or their savings.
The destruction of the value of that pension was in no way the responsibility of those people. They had retired. All hon. Members know who was mainly responsible for that; all political parties have some responsibility, but I submit that the Opposition have the greatest responsibility. Whoever brought that about and whatever the reasons for it, it is quite wrong that such people should now have their benefits withdrawn because when they first retired they could live on their income. They did not live like kings, but they had a reasonable income, for which they had worked and saved for so many years.
I warn the Government that they should not penalise that group unreasonably. These people worked hard and long for their retirement and were determined not to have to rely on state supplementary benefit or upon their families but wanted to stand on their own feet when they retired. They saw their real income undermined and destroyed. The Conservative party has time and time again said that that group should receive special help, consideration and assistance. It would be an unforgivable kick in the teeth for those people if a large part of all of their housing benefit was removed.
The carers for pensioners are another group which I should like to consider in the broadest sense. Those who care for the elderly and the disabled save the country and the Exchequer countless hundreds of millions of pounds a year. They need more understanding and help. They 866 should not have to wait until the end of the decade or rely on the careful in-depth inquiry in relation to the disabled and the operation of carers for pensioners. They need help now.
I am sure that all hon. Members are aware of cases like one I know. A lady in my constituency has given up her life to look after her mother. That lady has a full-time job and is a very capable person. She gets up extra early in the morning to ensure that she leaves her mother comfortable. She goes to work happily, she does not have too far to travel, and in her lunch hour returns to see if her mother needs anything urgently, to get her something to eat and do the essentials. She then returns to her place of work in the afternoon.
That lady's lunch is a sandwich on the bus coming from work to home in her lunch hour or on her return to work after seeing her mother. That person is absolutely dedicated, feels socially isolated and has made immense sacrifices year after year in carrying out those. responsibilities to her mother.
§ Mr. Bowden
I should like to give way, but time does not permit.
I ask the Government to look at that group to see what additional help can be given to them. The basic needs of carers are greater than the needs of fit people of a similar age, and they should be given due consideration.
Like the hon. Member for Birkenhead (Mr. Field), I am concerned about sections of the Bill. However, although it might be against my better judgement, I will support the Government tonight. I must tell the Government Front Bench that they have a long way to go fully to convince me that the Bill will produce, as the Secretary of State said at Blackpool in 1985:A system that is modern, clear and fair, one which answers real need wherever the need is to be found.
§ Mr. Dafydd Wigley (Caernarfon)
The misgivings of the hon. Member for Brighton, Kemptown (Mr. Bowden) are shared by Members from both sides of the House and I hope that the Government take note of them. Before addressing myself to the content of the Bill, I want to refer to its enabling nature. We have heard the Secretary of State refer to the number of regulations in other legislation that will be replaced by this Bill. He was quick to his feet on that point. He was obviously aware that he was vulnerable and had his defence already worked out.
There are far too many regulations here. I counted 24 references to facilitating regulations to be made in the Bill, giving rise to some 85 separate provisions. In addition, a number of orders and directions give enormous power to the Secretary of State. There is a real danger that regulations coming before the House will not receive adequate attention. The House must also bear in mind that it can accept or reject statutory instruments but not amend them. I hope that thought will be given to that when such legislation is forthcoming in the future.
I also hope that detailed notes on clauses will be given to the Committee so that we can understand them properly and that the Secretary of State will say how he will use the regulations in each context.
I think that we all agree that there is a need for legislation to revise, simplify and streamline social 867 security, but it should seek to make social security easier for the people and they should get it as an entitlement. The Bill does not do that. It aims at reducing the overall resources and it does not apply itself to the question from the viewpoint of welfare rights.
We in Wales are particularly worried because some of the groups who are shown to be losing in the context of the Bill are pensioners, those who are in work on low incomes without children and unemployed people, and we have a large proportion of those in Wales, perhaps larger than in the population as a whole. As a result, the Bill's impact will be that much worse in Wales.
Tonight I shall oppose the Bill because I have grave misgivings about most of it, but there are one or two points that I welcome and that I want to put on the record. For example, I welcome the first step towards providing portable personal pensions. That is long overdue; although one can argue about the way in which it is done and the details of it, at least we are moving in the right direction.
However, there is a real loss for many people as a result of other provisions, particularly the loss that pensioners will experience. In the 60-to-79 age group 57 per cent. of pensioners will face a net loss of benefit as a result of the Bill. In the 80-year-old and older group 43 per cent. will be worse off and only 33 per cent. better off. That should not be the objective or the effect of such a Bill and we should not pass a Bill that has such an effect.
The area that gives me greatest misgiving is the abolition of single payments and the social fund that is coming in its place. The changes in that area cause concern to many people. A survey of the effects in my county estimates that two thirds of those in receipt of supplementary benefit, unemployment benefit and supplementary pension will, on average, be some £7 a week worse off. Different hon. Members quote different figures, but this matter should be looked at in depth, office by office, in the DHSS to assess exactly what effect the change will have.
There is a real danger of payments being discretionary, and therefore varying from area to area. They will vary at the whim of the manager. That will put the managers of DHSS officials in a difficult position. They may be influenced by personal attitudes and it is not clear to the potential beneficiaries what is available and what they should be going for, where there is no question of entitlement. All those are matters about which we should be unhappy, particularly since there is no appeal procedure. Before 1980 the chairman of the Supplementary Benefits Commission described that situation as inequitable and arbitrary. Now, without an arbitrary procedure, the system is even more so.
If we are to rely on loans, there is a danger that we shall be causing even greater problems for many people. In Scotland, where payments under section 12 of the Act are more wide-ranging than under section 1 in England and Wales—I am thinking of children now—they have been moving away from loans to outright payments. This is for four reasons—first, there are administrative problems relating to loans; secondly, the therapeutic effect of loans applies only to a very few cases; thirdly, it is unrealistic to expect people on low incomes to repay loans; fourthly, it is not always helpful to replace one debt with another. We should take that Scottish experience very much to heart before we consider going down that road.
868 We must also be certain that local offices are not cash-limited in a way that will prevent people having their real needs properly met. I am particularly concerned about funeral and maternity expenses and the danger that people will feel that they have to plead poverty in order to obtain assistance. We should always bear in mind the dignity of those people who have to resort to those sources for assistance.
The sick, disabled and elderly in my constituency need considerable help towards their heating costs. The way in which the Bill changes those provisions will have a serious effect. The social fund payments will not reach many of these people. The changes will lead to real suffering and, I suspect, a greter level of debt and probably more disconnections among those client groups.
The position is bad enough in Wales. Many of the old industrial areas have a damp climate and the housing is totally inadequate. In other areas, the situation is worse. For example, in Scotland there is great concern about the cold climate allowance. I pay tribute to the work of the hon. Member for Dundee, East (Mr. Wilson) in that context. The present state of affairs is bad enough for those parts of the United Kingdom which have a cold climate, but it is particularly so in Scotland. Scotland is effectively discriminated against, but under the new system it will be even worse off.
The only possible source of extra heating allowance would be a cash-limited social fund, but it appears that even that may not even be intended for use in regard to the heating allowance. I hope that the Minister will be able to deal with that issue and clarify the position tonight. Thousands of people, mostly old, are dying from cold-related illnesses in Scotland every winter and, to a lesser extent, elsewhere. The position is unacceptable and the review does nothing to improve matters.
The hon. Member for Kemptown referred to those who care for elderly people and the disabled. The Government are aware of the general concern about the position of carers in our society from a number of reports and representations that have been made. The Bill does not consider their need in any special way. There is a danger of putting off consideration until the Government have looked at the overall survey of disablement needs. But the carers need consideration, not in the context of disabled people but in the context of their own needs and entitlements. That consideration should relate to income forgone. Whereas many can work with difficulty, many more give up jobs and make enormous sacrifices in order to look after somebody who is dear to them, and in doing so they save enormous funds for the state.
An enormous work load could be placed on social workers as a result of these changes. There could be additional work in explaining to people what their rights are, how to get their entitlements and how to sort out the system. I fear that this work load will be severe not only on the social workers but on the employees of the social security offices. It will be a tremendous burden and the work will be time-consuming. Social workers' time that could be spent on case work will be spent sorting out problems arising from these changes.
There is also the question of the availability of finance for the local social services departments to enable them to make up the losses that will come from this legislation —for example, the changes in section 1 payments for children. 869 The Bill will affect disabled people and those who are moderately disabled will lose out. The position of carers — many of whom are women — is unsatisfactory. Women are also affected by the change in maternity allowances and the payment of family credits to the husband's pay packet. There is also the unsatisfactory position of widows.
The effect of the Bill on children and young people is unacceptable. A moment ago we heard about school meals, and I touched upon family credit payments. Students are also feeling the squeeze more and more. I ask the Government to analyse section 1 payments to see what the exact effects of the change may be for children.
Most of all, the Bill affects people who depend on the state. We should be seeking a Bill of clarity, entitlement, simplicity, efficiency, speed and—most of all—fairness. This Bill is discretionary, unclear and unimaginative. At best, the Bill is a lost opportunity, at worst it is a severe blow to many people who cannot help themselves.
§ 9 pm
§ Mr. Michael Stern (Bristol, North-West)
I welcome the Bill in general but, inevitably, given its size and complexity, I will concentrate my remarks on pensions. I welcome the part of the Bill dealing with pensions because it will achieve two necessary actions — it will bring some reality and some additional benefits into occupational pensions. The first thing it will achieve is what might be called the right to exit.
The House is aware that with the growth of occupational pension schemes, both in industry and in public service, there has also been a growth in the number of people who wanted to get out of those schemes but until now were unable to do so. I am sure I am not alone in speaking to teachers who, over the years, have grown more and more unhappy with the rigidities and apparent unfairness of their pension scheme. Until now they have had no alternative. Members of the disciplined services have—until the advent of the Bill—been under a lifelong threat that if a disciplinary hearing went the wrong way so too did their life's savings. Indeed, I have heard, within the corridors of this House, one or two Members who look forward to the right to opt out into an approved personal pension scheme because they have not accepted the generally promulgated myth that our pension scheme is the best of all worlds.
It is not only in the public services that the right to opt for an appropriate personal pension scheme is important. There have also been inappropriate old-fashioned pension schemes in the private sector. It was frequently a condition of employment in a company that an employee should, after a time, belong to the pension scheme. This happened in my own constituency in a substantial company where there are large numbers of employees who have witnessed the company discriminating unfairly in the funding of its own pension scheme as between one group of employees and another. Such people have been powerless to do anything until now. The new freedom that is promoted by the appropriate personal pension scheme is welcome.
I welcome the general provisions of the Bill concerning pensions because it has taken on board what no previous Government have taken on board—that SERPS was too big, was getting bigger and had to be cut down.
The word consensus has been mentioned several times today and it appears in the Liberal amendment. It implies agreement among all parties that taxpayers' money should 870 be spent in a certain way. I might be naturally suspicious, but when I hear that word in this context, I immediately ask myself, "Who is being ripped off'?" The people being ripped off in this case are future taxpayers and pensioners, part of whose livelihoods is being blithely promised away by people who will not be around when the bill arrives. I suggest that the word consensus should be replaced with the word conspiracy.
I mildly regret my right hon. Friend the Secretary of State's decision not to abolish SERPS. The arguments in the Green Paper were valid. He would have made a cleaner break with the past and put the funding of future state pensions much more beyond doubt if he had gone the whole hog. I am, nevertheless, delighted to accept the decision in the Bill. I warn him, however, that, if I am lucky enough to be selected as a member of the Standing Committee, there will be at least one hon. Member who will want to ensure that he has gone far enough to limit the cost of SERPS so that it can be afforded by future taxpayers and pensioners.
The Government Actuary's report shows that the costs of SERPS should be bearable. I congratulate my right hon. Friend on the honesty of his proposals regarding SERPS. He should not hesitate to consider the figures closely and he should be prepared to revise them if it is shown that the costs could still be too great.
Right hon. and hon. Members have said that the Bill consists largely of indications of draft regulations. As the Bill will be completed by the regulations, I suggest that it is difficult to read the Bill without having some idea of what will be in those regulations. I commend to my right hon. Friend the example set by the Occupational Pensions Board concerning emergency memorandum No. 48 of October 1977. The regulation was published within days of Royal Assent but only six months before the relevant legislation was due to come into force. We are considering legislation that will not be complete until the regulations have been published. Will my right hon. Friend consider at least publishing draft regulations even before Royal Assent so that we know what we are talking about?
There are lacunae in the Bill, especially regarding personal pensions. If they are not filled by the draft regulations, they could give a wholly false idea of what my right hon. Friend is trying to achieve. The Bill does not say, for example, that a member of an appropriate personal pension scheme will have a right to a death-in-service benefit. There is no indication in the Bill, although there is in the White Paper, that a member of an appropriate personal pension scheme will have a right to commutation. Nor is there any indication that he will have a right, as does the holder of a retirement annuity, to opt for a scheme that gives a five-year guarantee of payment of pension. There is no indication in the Bill of what investment powers trustees will have, or of who will be entitled to be trustees.
I encourage my right hon. Friend the Secretary of State to extend his thinking a little further on one or two aspects of the Bill. There has been some criticism this evening of the 2 per cent. rebate that has been offered for new contracting-out schemes. I applaud the principle. It benefits the public to give as much encouragement as possible to contracting-out schemes.
However, when it comes to pensions, thinking is often slow. Given that the full story will not be known until all the regulations are passed, insurance companies and other pension providers will have to look through all the new regulations and documentation. By the time many pension 871 providers are in a position to offer the appropriate scheme, much of the five-year period that has been suggested for the additional incentive will have been lost. As that period passes, the incentive will grow less, week by week. I hope that my right hon. Friend will be encouraged at least to take power to extend the five-year period to ensure that the incentive has the maximum effect.
Other points in the Bill will no doubt be commented on in detail, but there is one point on which my right hon. Friend could act now. It has been generally recognised that the annuity market, which the Bill requires to be opened up, must be much larger than the current market. By 1990, when the first annuities will need to be purchased or provided, the annuity market will have changed significantly. I hope that my right hon. Friend will introduce proposals to aid the expansion of the market into the new opportunities that the Bill promotes. At the very least I hope that my right hon. Friend will confirm as early as possible that his Department will co-operate with the studies that are taking place to ensure that the annuity market can be extended to the width that is required for the Bill to work.
I have spoken over my time limit on one part of the Bill, so I shall not comment on the attitude of the Opposition. Despite the criticism, the Bill could be, and I believe will be, a starting point for major reforms of pensions and other areas to increase personal freedom and create opportunities for ordinary people to improve their position. It will meet current needs better and it will enable more effective and faster response to the changes that are taking place in society to be made.
§ Ms. Jo Richardson (Barking)
I have listened to practically every word of the debate, and it appears to me that almost all the speeches contained a critical note about the Bill. I underline the suggestion that the Government should take it back and reconsider it. Perhaps they should make a fundamental examination of our social security system in a proper way.
Despite the Government's continual claims, the review completely fails to address the dramatic and fundamental change in the position of women. Several hon. Members have mentioned the problems that women will face arising from the passage of the Bill.
Since Beveridge, there has been a dramatic and fundamental change in the position of women in society in general and in the family. The Bill is extremely difficult to read, and we shall have to grapple with a complicated and detailed package. It ignores the consistent pressure from women, women's organisations and the Equal Opportunities Commission for the radical and simultaneous reform of social security, pensions and taxation. We cannot consider one part without considering the others at the same time if we are intent upon eradicating discrimination.
The Bill will introduce practices and measures that will actively extend and reinforce inequality and disadvantage for women. The review has contemptuously ignored the developing EC law on equal treatment in social security, which is bound to lead to yet another spate of lengthy and costly legal battles and ignominious defeats for the Government in the European Court. The Government have deliberately obstructed all EOC and EC-supported 872 improvements for women. For example, they placed obstructions in the way of equal pay for work of equal value, which has made it difficult for women to claim; they refused to extend the invalid care allowance to married and cohabiting women; and they refused to adopt even the most minimal provision for parental leave and leave for family reasons.
The Bill hits women at two levels. First, it makes it more difficult for many women to get the support that they need to provide themselves and their children with a decent standard of living. Secondly, in some areas, it reinforces the dependency of women upon their partners —a concept which more and more women reject and which the Labour party will work to ensure is reversed.
I wish to point out some of the ways in which I and many women's organisations believe that women will be disadvantaged under the Bill. Much has been said tonight about pensions, which form a complicated part of the Bill. SERPS pays women a full pension five years earlier than men. Women who transfer to a personal pension or to a purchased occupational pension scheme will lose that advantage under the Bill. The pension payable at 60 could be one third lower than that payable at 65.
The Green Paper, which was produced so many months ago, said in paragraph 1.54:The provision of annuities by insurance companies is normally on the basis of differential rates for men and women. But the Government do not believe that it would be acceptable to have women placed at a substantial disadvantage in terms of the pension they would receive for contributions paid at the same rate and up to the same age. The resulting funds must produce the same pensions. To achieve this will require insurance companies to provide annuities for this purpose on a common basis for both sexes … the Government recognise that it will be a major departure for the insurance companies and will wish to discuss the implications with them.So far, so good.
However, the White Paper stated:This was welcomed by the consumer bodies and the Equal Opportunities Commission, but received with reservations by insurance companies — The Government will therefore consult with insurers on the basis that annuities from the proceeds of contracted-out personal and occupational pensions should give all men and women at the same age the same annuity for the same amount of money.It remains quite uncertain whether the insurance companies can be persuaded to offer annuities to women on the same terms as men.
The second point about SERPS is the abolition of the best 20 years formula. That will arouse indignation and dismay among women who welcomed that part of SERPS because it gave them the opportunity to work, to take breaks at home, and to take the best 20 years and have a pension.
My third brief point on SERPS is about survivors. A survivor, usually a widow, will no longer be able to inherit the whole of her spouse's pension but only half of it. The Government argue that the present rules are too generous, but they were introduced as a deliberate measure to improve the situation of widows. The need for such a measure will be all the greater if the opportunities for women, especially married women, to earn a decent personal pension are dramatically reduced by the Government's other proposals.
I hope that the questions I have raised about pensions will be answered honestly by the Minister, because many hundreds of thousands of women are looking anxiously at what the Government propose to provide for them in this Bill, and they will see the Bill and the provisions about 873 SERPS as being detrimental to their future. I have a number of other points, but I do not propose to go into all of them because I do not have time. They are about matters that specifically disadvantage women.
My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) talked about the maternity grant. Some 72,000 women expect to receive maternity grants in 1985–86. In 1983 some 170,000 payments were made. Approximately 500,000 mothers who would have qualified for maternity grant will lose the £25 under the new proposals. Those who do not qualify for supplementary benefit, income support, family income support or family credit will lose the £25. Another 170,000 families on supplementary benefit will also lose an average of £13. There are massive gains and massive losses, but there are also tremendous differentials.
The Select Committee on Social Services, chaired by my hon. Friend the Member for Wolverhampton, North-East, has always recommended that the maternity grant should be based on entitlement. As I understand it, under this Bill the maternity grant will be paid from the social fund and will be discretionary. The Government have made much of the fact that the grant is £25 at the moment and will be increased to £75. That was mentioned at Question Time this afternoon. A grant of £75 is far too low, and will put us in fifth place in the seven EEC countries that pay such a grant. Luxembourg pays £630 and France pays £557. Parents magazine estimates that it costs £702 simply for baby clothes and equipment. The magazine also says that, according to its calculations, the average loss of the woman's salary is between £5,000 and £6,000.
The maternity grant should be paid as of right, should not be a discretionary payment from the social fund, and should be increased to at least £125. Even that is not sufficient to buy the baby items set out in the DHSS list. The DHSS calculated their cost at £160. That list is used by Department officials when deciding claims for single parents.
The payment of £75 will be less than some mothers receive at present. Those on supplementary benefit can get £85 in single payments, so the poorest and most vulnerable mother who currently can get £85, not through the maternity grant but through single payment benefits, will lose that and will get instead £75 if she goes to the social fund.
Many points could be raised, but no doubt we can deal with them in Committee. I am concerned that no provision is being made for mothers under 16 years. They do not qualify for supplementary benefit or for family income supplement and they will have no right to maternity grant. They also lose the right to free milk and vitamins. It is strange that the Conservative party, which professes to care about young people and families, should ignore so totally the needs and problems of mothers under 16.
The loss of free milk and vitamins, which will be abolished for those on income support, is a sore point. That benefit will be lost by 250,000 women and children. Babies born to poor families run twice as much risk of stillbirth or early death as those born to the professional classes. More than anyone else, the children in poor families need free milk and vitamins.
I could talk about many other things such as widows' allowances and pensions. I shall not do so but simply point out that the Bill is an absolute disaster for the overwhelming majority of vulnerable women. We shall 874 fight the Bill very hard on their behalf because they have no opportunity to come to the House and tell us of their experiences. We shall have to put those experiences before the Government and hope that they will listen carefully and will reconsider the Bill.
§ Mr. Bill Michie (Sheffield, Heeley)
I wish to express appreciation at being given time to speak, limited though it may be. I shall honour my promise to be brief because I did not expect to get in. I shall make briefly as many points as I can but obviously we can discuss the Bill more fully in Committee.
Despite the Government's claims, the Bill will not gibe more help to families. According to the White Paper, the key objective of the reform is to directmore resources to areas of greatest need, notably low income families with children.When we consider the illustrative figures in the White Paper, at first it seems that families will get an extra £5.90 per week on transfer from supplementary benefit to income support. But families will no longer get help though the other payments that are made at the moment. For instance, the average family in Sheffield gets a water rates payment of £1.20, a general rates payment of £1.50, a heating allowance of £2.20 and other payments of £3.20.That means that the average family in Sheffield will be £1.85 a week worse off.
I wanted to give the House many examples but I shall deal with just one which highlights what the Bill will do to people in need who trust politicians of all persuasions to pass legislation which helps rather than hinders them.
My Sheffield claimant is a female in her late fifties. She has been unemployed and dependent on state benefits for over 10 years. She lives on a large inner city estate which needs improvement and repair. Her income is at present £47 a week. This includes a number of "additional requirements" payments. She is a diabetic so gets an allowance of £3.70 a week. She has a higher heating addition of £5.40 a week. She suffers from bronchitis and has had half a lung removed because of cancer. She also needs extra heating because the house is hard to heat. Being in such poor health, she has contracted a skin complaint for which she needs at least one bath a day, two to be absolutely right. Unfortunately, the basic benefit allows for one bath per week.
It is pretty obvious from the Bill that this lady is likely to have her income reduced from £47 a week to £33 a week. That does not take into account the electricity bills which people like her will have to pay. These are genuine people: they are not fictitious; we are not producing them out of thin air. They are people to whom I have spoken and who have allowed me to use them as examples without giving their name. This lady's benefit will be reduced to £33 a week, without taking into account the cost of electricity at £150 per quarter.
The importance of benefits to the people of this country, and certainly to those in Sheffield, is unbelievable. The areas that I represent are inner city areas, where we have massive unemployment, problems of permanent unemployment for black school leavers and problems of bad housing. All these people will suffer more because of this Bill.
Although I have seven or eight pages of notes with me, I will, on instructions from my colleagues, come to a conclusion. I make this point—that if I cannot keep the 875 House I will keep the Committee. I shall lay stress time and again on all the clauses of the Bill and the anomalies and the injustice caused to ordinary people.
§ Mrs. Margaret Beckett (Derby, South)
The Secretary of State said, initially at least, with pride—although he may be less proud about it these days—that the reviews and the Bill which comes from them were the most significant social security proposals since Beveridge. That at least Opposition Members echo. I will go further than the Secretary of State and say that the Bill represents the most significant statement of belief to emerge from the Conservative party in a generation, a statement which perhaps shows that the Conservative party or—in view of the remarks of some of the Secretary of State's hon. Friends tonight, I should be kind and say the Conservative Government—no longer believes in the welfare state.
The welfare state is founded on two basic tenets. It is meant to be for everyone. All contribute what they can when they can, so that when they are in need they can claim as of right. The Secretary of State is threatening the first fundamental tenet by his targeting, by defining the poor ever more harshly, tightly and rigidly, seeking to move further and further away from the idea that we all have a stake in the welfare state. In the social fund, as I shall show in a few moments, we see a major breach of the right to benefit that is the second basic tenet of the system.
On Second Reading we look not just at the broad sweep of the Bill's proposals but a little at its background. The background is quite simple and straightforward: the Government's desperate need to cut public expenditure, which has driven them now to measures that they would not perhaps have contemplated when they were first in power but which they now dare to propose. At a time when even the Confederation of British Industry says that the Government's priority should be to cut unemployment, and not taxation, the Secretary of State proposes to make further substantial reductions and structural changes in the social security budget. But if the Government were to take steps to cut unemployment that would in itself have a major effect in reducing the costs to which the Secretary of State so often refers.
The proposals in the Bill follow after, I suppose, rather than from the proposals in the reviews, because even the reviews themselves did not go far enough for the Secretary of State. There are the proposals to make everyone pay 20 per cent. of their rates, to attack people's entitlement to interest payments on their mortgages. These are the Secretary of State's own bright ideas. On pensions, in particular, the review body did not go as far as the Secretary of State wished, although he has sought consistently and skilfully to obscure the fact. He has heavily implied—never actually said—that the pensions proposals before the House stem from new facts which emerged in the course of the review, not known when the scheme was drawn up in 1975. It is perhaps a little unfortunate for the Secretary of State that those who serve on his reviews, and the Government Actuary, who all have their personal and professional reputations to consider, so speedily dissociated themselves from the proposals he put forward, if not in their name, certainly under the cover of their participation.
876 The Secretary of State tells us what a wonderful deal his personal pensions are although, when he issued the consultative document, everybody said what a rotten idea they were and how much worse they were than the state earnings-related pension scheme. If his personal pensions proposals are beneficial and provide such wonderful pensions, why is it that one of the few explicit parts of the Bill is that in which the Goverment make it plain that they will deem that somebody has a certain pension entitlement for a certain level of contributions, irrespective of whether the person is actually getting the money, and that they will base the topping up payments on deeming that that money is received? The Secretary of State must expect that some people at least will get less money than they expected for him to have bothered to write that into the Bill.
The Secretary of State keeps talking about people having a pension of their own as if a pension by any name is valued by some means other than the amount that it will buy. I have this vision—I think it must be the Secretary of State's vision—of some outraged pensioners of the future coming to his successor, claiming that they cannot afford to eat and being told, "At least your pension is your own". I do not think that it will go down very well. Anybody who takes out a personal pension will get substantially less value for money because the administrative cost of such schemes is about three times that of the state scheme and substantially more than that of good occupational pensions.
There are many unanswered questions about personal pensions, not least among them the question of how such a policy will be treated in assessing capital. If somebody is unfortunate enough to become unemployed, how will it be assessed and set against the benefit and what will happen to somebody who is taking out a personal pension but loses his job and may not be able to keep up the premiums? It seems to me that there is a serious risk that such a person, if forced to surrender the policy, may lose not only the advantage of earnings of those years in work, which will be lost in the SERPS scheme that the Secretary of State promises to modify, but also the possibility of having an extra pension entitlement because of the way in which that pension entitlement is to be secured.
As to the income support scheme, many hon. Members have drawn attention to its disadvantages. I must say a little more about the way in which the Government are treating the unemployed in the income support scheme. At a time when everybody agrees, even the Government, that the unemployed in justice should get the long-term rate of supplementary benefit as it is now, it is outrageous and indefensible to put forward in the Bill proposals that bring them not even to that rate, proposals which, when one includes the effect of the abolition of single payments, the intention to make people pay 20 per cent. of their rates and the proposals on mortgages, almost certainly mean that the Government, who claim that they cannot do anything to help the unemployed find work, are to reduce their standard of living even below what it is today.
My hon. Friend the Member for Oldham, West (Mr. Meacher) drew attention to the potentially enormous losses of the most severely disabled, in some cases up to as much a £50 a week in terms of standard of living, and for those newly disabled it will be in cash terms. In other parts of the Bill, as the Spastics Society has pointed out, it is the disabled who are likely to lose most from the abolition of reduced rate contributions. It is precisely they who are 877 likely to be trying to find work to enable them to have some independence and income of their own, although they are not able to sustain that work over long periods.
The proposals on family credit have been so effectively demolished by so many hon. Members, including the hon. Member for Kensington (Sir B. Rhys Williams), that it hardly needs me to dwell on them further.
The losses on houses benefit will be enormous. For many pensioner couples it will be something like £3 to £5 a week and for the young perhaps up to £12 a week when the combination of their benefits is calculated. The young, whether students or others, will be among the major sufferers from the Bill. One is almost driven to conclude that the Government are deliberately penalising the young when one considers the range of measures that strike at them. They and their parents must wonder in what type of dream world the Government live when they realise that 24 and 25-year-olds are expected to live at home and to be heavily dependent upon their parents. The Government seems to imagine that by forcing them into that position they are contributing to family solidarity.
The most iniquitous proposal, apart from that relating to the level of benefits for the unemployed, is the social fund. It is the worst proposal any Secretary of State has come up with for 50 years. When I listen to or read Ministers' words on that proposal, I can barely believe what they are saying, let alone imagine that they believe it.
On 22 January, the Secretary of State told the Select Committee that he was worried about the disabled, the network of additional requirements and the detailed and intrusive questioning through which people might have to go to prove that they were entitled to additional benefits. He believes that it will be better to do that through the mechanism of the social fund. How does he imagine that the social fund will work if it is not through detailed and intrusive questioning? That is what it is all about. It is hardly credible that the Secretary of State should defend his proposals upon the grounds on which they should be attacked.
The social fund will be a nightmare for the civil servants who have to try to administer it and a nightmare of desperation for claimants—all of proven need—who realise that staff in local offices will have to choose to whom they can make payments because they will not have the money to recompense them all. We are back to the days of charity and the denial of payment as of right.
It is all the more appalling that it is on the social fund that the rights of independent appeal are, in effect, completely to vanish. Many hon. Members have referred to the work of the Council on Tribunals. I was pleased to hear the Secretary of State say that he will reconsider the proposal. I do not know why he had to wait until tonight to say that because the council made it clear in its report that it has been pressing him to look at the proposal for weeks. We shall be pressing him on the point.
Parliament and the indpendent bodies that it has set up to scrutinise social security legislation will lose their powers under the Bill. There are at least 12 clauses—it has been claimed that there are 24 different areas—in which the Bill falls back on regulations which, as all hon. Members will be aware, come before the House for a decision but cannot be amended. They must be passed or rejected as a whole. The Government's track record on regulations is abysmal. Time and time again they have 878 closed their ears to warnings, even about the legality of regulations, and time and time again they have been proven to be wrong.
I fear that the Government are putting everything into regulation because they do not know how they will carry out the proposals contained in the Bill. The hon. Member for Macclesfield (Mr. Winterton) said that he had counted the number of times in the Select Committee that the Secretary of State said that the Government had not decided what to do about that or had not made up their mind what to do about the other. A major proposal, such as statutory maternity pay, which the Government told us would be included in the legislation, is not in the Bill. The Bill was only recently published and the Government are already adding new clauses because they did not have them drafted in time.
What is more, the Government have not finished tabling the regulations from last year's social security measure which was, in its way, comparatively minor. I am told that one of the most fundamental sets of regulations on disclosure of information will not be available until Easter. With such a track record, how can this House or another place put the powers that the Secretary of State seeks into the hands of so incompetent an Administration?
The hon. Member for Kensington, in a brave speech, said that the proposals would be put to the country in the general election. Wisely, he advised the Secretary of State to withdraw the Bill.
I warn the Secretary of State that the Opposition intend to take the campaign against the Bill into every constituency. Our aim is to force the Government, as he has been advised, to withdraw a Bill which clearly is not ready to be presented to the House. If he will not do that, we give him fair warning that his party and his Government will deserve to end up where it will end up —in the wilderness, for generations.
§ The Minister for Social Security (Mr. Tony Newton)
This has been a constructive debate on social security. For most of the time, it has been conducted in a good natured way. I shall try to respond to the debate in a comparable way, picking up as many points as possible. I should like to touch briefly on some of the broader points raised by hon. Members.
I think that I speak for my right hon. Friend the Secretary of State in saying that nothing would please us more than to believe that it was possible to tackle on the basis of consensus the problems of the social security system. However, when confronted by an Opposition who appear to regard with equanimity the possibility of 27 per cent. combined national insurance contributions, and who wish apparently to have a national investment board of some kind to control and direct the activities of pension funds and to control forcibly some of those investments by repatriating some of them from abroad, significantly damaging the pension entitlements built up in those funds, I beg leave to doubt the room for consensus. If consensus is to be a description of a position in which those who will not face up to reality have a veto on tackling problems for ever, I do not think that any responsible party or Government could adopt that position.
My right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) will understand me when, against that background, I say that the suggested approach of a Royal Commission seems to suffer from some of the same 879 disadvantages. Unless it were able to produce results or was based on consensus, one would have the same problem of deferring action on difficult problems. Although there were not many matters on which I agreed with Sir Harold Wilson, I am inclined to think that there was some force in his comment about Royal Commissions taking minutes and wasting years.
Against the background of our social security problems, I think that there is a risk of our ending up after five years with a report that was out of date before it was even produced, and that no serious action could be taken until the middle of the next decade at the earliest. I do not believe that the problems are of a nature that permits that sort of delay.
§ Mr. Pym
That is only one possibility. There must be alternatives. To say that there is no way forward is possibly an error. We must find a way that will help create that broad sense of agreement which is a fundamental necessity from the point of view of our nation and for the recipients of the benefits we are trying to provide.
§ Mr. Newton
My right hon. Friend seems to be more optimistic than I am about the prospect of producing such a process confronted by the present Opposition Front Bench or, indeed, any Opposition that we are likely to have. However, may I say something which I hope he will feel responds in a different way to one of the themes of his speech for which I and my right hon. Friend have great sympathy — the reference to the desirability of tax benefit integration, or greater co-ordination, which has come up time and again in the debate.
Looking at the British tax system, which was the subject in which I took most interest during my first five years in the House, and the British social security system, with which I have sometimes been almost too closely involved as a Minister in this Department for nearly four years, I have concluded that, because of their present complexities, both systems will require significant simplification before it will be possible to move forward. My right hon. Friend the Chancellor of the Exchequer and his Conservative predecessors have already taken significant steps in simplifying some aspects of the tax system. I have no doubt that my right hon. Friend the Chancellor will put forward proposals carrying that process forward when he produces his Green Paper.
The proposals in the White Paper mark a massive step forward in simplifying the social security system in a form in which it would be far more realistic than at any time in the past generation to begin to think more constructively and positively about the type of integration people want. I can make no promises about the way in which that process will be carried forward. However, I believe that the Bill provides a better basis from which to move towards those objectives.
In one respect, the Bill marks a significant step towards closer co-ordination—the family credit proposals. The proposal is to pay through the pay packet in a way that will appear to the majority of beneficiaries as a direct offset to their tax and national insurance contributions. Those hon. Members who pay lip service —I do not include my right hon. Friend the Member for Cambridgeshire, South-East in this—to the idea of tax benefit integration and go on to denounce the family credit proposals because they involve payments through the pay packet appear to be 880 trying to have their cake and eat it in the biggest possible way. Perhaps those hon. Members mean more than lip service.
§ Mr. Favell
Has there been any progress towards persuading the Inland Revenue, rather than the hard-pressed Department of Health and Social Security, to administer the family credit system?
§ Mr. Newton
Further development in either department is not something on which I would wish to speculate in advance of any further publication by my right hon. Friend the Chancellor. We have had agreement on the proposal that my right hon. Friend the Secretary of State put forward in the White Paper. That is a helpful move in the right direction.
§ Mrs. Elaine Kellett-Bowman (Lancaster)
Although women do not want just to have their cake and eat it, they feel strongly that family allowances should be paid to the woman. Often that is the only source of income for women in many levels of the social strata. Women will be hard hit if the family allowance is frozen and payments are made to the husband. I assure my hon. Friend that women feel strongly about this.
§ Mr. Newton
I understand my hon. Friend's point. I do not think that she was present during my brief exchange with my hon. Friend the Member for Kensington (Sir B. Rhys Williams) when I made it absolutely clear, as do the White Paper and the Green Paper before it, that child benefit will continue to be paid to the mother.
Another point that is relevant, although not conclusive, concerns family income supplement. About 40 per cent. of those benefiting from family income supplement—a significant proportion of those who will benefit from family credit—are single parents. The argument about whether the money is given in the pay packet or in any other way is irrelevant to the question of who gets the money. In practice, instead of having to collect payments from two different sources in an inconvenient way, many single parents—the majority are likely to be women—will receive payment through the pay packet in an undoubtedly more convenient and sensible way.
It is odd that there is such an astonishing fuss about the proposal to pay family credit through the pay packet on the ground that mothers are disadvantaged or their interests are not properly taken into account. I made this point the other day to the Select Committee on Social Services. So far as I am aware, at no stage in the history of social security has anyone come forward with a proposal to pay supplementary benefit scale rates for children to the mother instead of to the father, who is normally the claimant. In other words, we appear to be confronted with a proposition where what has been acceptable throughout the years in relation to child scale rates payable for children is unacceptable when applied to low-paid families in work. That is logical nonsense. [Interruption.] If I understood the sedentary intervention of the hon. Member for Oldham, West (Mr. Meacher), he said that the supplementary benefit payment goes to both parents. The fact is that one of them is the claimant and all the payments go to him or her. In most cases it will be the man. He receives the child scale rate for children as part of his total payment of benefit. I do not understand why what is appropriate for those who by definition are unemployed, and probably the poorest of all, becomes totally unacceptable concerning low-paid families in work. 881 The hon. Member for Oldham, West made many comments on pensions. I want to make one simple point. The Government's case is not that it is inconceivable that the present arrangements for SERPS could not be afforded on certain optimistic assumptions. Our proposition is that it is not responsible to make promises for a generation ahead when we cannot be certain that that generation will be able to fulfil them. That is not because of the burden we might be imposing on people who might not be able to sustain it, but because it is not right to make promises to pensioners about what they will be paid and risk not being able to pay it when the time comes. That is the point which the hon. Member for Oldham, West persistently refuses to face.
In the statistical contortions with which the hon. Gentleman sought to defend the responsibility of the present SERPS system he seemed to miss a point of which I hope he will take cognisance. His argument was that, on rather more optimistic assumptions in respect of, for example, real earnings growth than those contained in the Government Actuary's report, there would be no problem or that there would not be enough of a problem to worry about.
On the record of the previous Labour Government for real earnings growth, all the figures in the Government Actuary's report would be worse than those in it already. In other words, given the present Labour party policy and the previous Labour Government's record, we would have a bigger problem than the one we foresee. That is hardly surprising because the previous Labour Government were not even able to stick to the promises they made to existing pensioners, let alone those for future generations.
The hon. Member for Oldham, West was a member of the Government who fiddled the uprating changes in 1976–77 in a way that deprived pensioners of about £1 billion at current prices because they changed the basis of the uprating.
§ Mr. Meacher
Will the hon. Gentleman accept that what counts is the increased value of the pension over a six-year period? Over the six years of the Labour Government there was a 20 per cent. increase and over the past six years of Tory Government the increase has been about 3 or 4 per cent.
§ Mr. Newton
What also counts is whether the Government fulfil their commitments. The Labour Government manifestly did not fulfil the commitments they made to pensioners in 1976–77 and there is no basis on which the hon. Gentleman could pretend that they did.
I am afraid that I do not have time to answer all the points that have been made during the debate. The Opposition, throughout this review and in other discussions on social policy over the past four or five years, have persistently talked as if the welfare state had been established whole, entire and pure some 40 years ago and is to be preserved as some sort of ancient monument regardless of changes in society, changing needs and the purposes it seeks to meet. We are seeking to adapt it to meet modern needs, and that is what the Bill will help to achieve.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 24, Noes 276.883
|Division No. 52]||[10.00 pm|
|Ashdown, Paddy||Bruce, Malcolm|
|Beith, A. J.||Campbell-Savours, Dale|
|Carlile, Alexander (Montg'y)||Meadowcroft, Michael|
|Clay, Robert||Owen, Rt Hon Dr David|
|Freud, Clement||Penhaligon, David|
|Hancock, Michael||Steel, Rt Hon David|
|Heffer, Eric S.||Stewart, Rt Hon D. (W Isles)|
|Howells, Geraint||Wigley, Dafydd|
|Hughes, Simon (Southwark)||Wilson, Gordon|
|Johnston, Sir Russell||Wrigglesworth, Ian|
|Kirkwood, Archy||Teller for the Ayes:|
|Livsey, Richard||Mr. John Cartwright and|
|Loyden, Edward||Mr. David Alton.|
|Adley, Robert||Couchman, James|
|Aitken, Jonathan||Cranborne, Viscount|
|Alexander, Richard||Currie, Mrs Edwina|
|Amery, Rt Hon Julian||Dickens, Geoffrey|
|Amess, David||Dorrell, Stephen|
|Ancram, Michael||Douglas-Hamilton, Lord J.|
|Arnold, Tom||Dover, Den|
|Ashby, David||du Cann, Rt Hon Sir Edward|
|Aspinwall, Jack||Dunn, Robert|
|Atkins, Rt Hon Sir H.||Emery, Sir Peter|
|Atkins, Robert (South Ribble)||Evennett, David|
|Baker, Nicholas (Dorset N)||Eyre, Sir Reginald|
|Baldry, Tony||Fairbairn, Nicholas|
|Banks, Robert (Harrogate)||Fallon, Michael|
|Batiste, Spencer||Farr, Sir John|
|Beaumont-Dark, Anthony||Favell, Anthony|
|Bellingham, Henry||Fenner, Mrs Peggy|
|Bendall, Vivian||Fletcher, Alexander|
|Benyon, William||Fookes, Miss Janet|
|Best, Keith||Forman, Nigel|
|Bevan, David Gilroy||Forsyth, Michael (Stirling)|
|Biffen, Rt Hon John||Forth, Eric|
|Blackburn, John||Fowler, Rt Hon Norman|
|Body, Sir Richard||Fox, Marcus|
|Bonsor, Sir Nicholas||Fraser, Peter (Angus East)|
|Boscawen, Hon Robert||Freeman, Roger|
|Bottomley, Peter||Fry, Peter|
|Bottomley, Mrs Virginia||Gale, Roger|
|Bowden, A. (Brighton K'to'n)||Galley, Roy|
|Bowden, Gerald (Dulwich)||Gardiner, George (Reigate)|
|Boyson, Dr Rhodes||Gardner, Sir Edward (Fylde)|
|Brandon-Bravo, Martin||Garel-Jones, Tristan|
|Bright, Graham||Glyn, Dr Alan|
|Brinton, Tim||Goodlad, Alastair|
|Brooke, Hon Peter||Gow, Ian|
|Brown, M. (Brigg & Cl'thpes)||Gower, Sir Raymond|
|Browne, John||Greenway, Harry|
|Bruinvels, Peter||Gregory, Conal|
|Bryan, Sir Paul||Griffiths, Sir Eldon|
|Buchanan-Smith, Rt Hon A.||Griffiths, Peter (Portsm'th N)|
|Buck, Sir Antony||Grist, Ian|
|Budgen, Nick||Ground, Patrick|
|Bulmer, Esmond||Grylls, Michael|
|Burt, Alistair||Gummer, Rt Hon John S|
|Butcher, John||Hamilton, Hon A. (Epsom)|
|Butler, Rt Hon Sir Adam||Hamilton, Neil (Tatton)|
|Butterfill, John||Hampson, Dr Keith|
|Carlisle, John (Luton N)||Hanley, Jeremy|
|Carlisle, Kenneth (Lincoln)||Hannam, John|
|Carlisle, Michael||Hargreaves, Kenneth|
|Carttiss, Michael||Harris, David|
|Cash, William||Harvey, Robert|
|Chalker, Mrs Lynda||Haselhurst, Alan|
|Channon, Rt Hon Paul||Hawkins, C. (High Peak)|
|Chapman, Sydney||Hawksley, Warren|
|Chope, Christopher||Hayes, J.|
|Churchill, W. S.||Hayhoe, Rt Hon Barney|
|Clark, Hon A.(Plyn'th S'n)||Hayward, Robert|
|Clark, Dr Michael (Rochford)||Heathcoat-Amory, David|
|Clark, Sir W. (Croydon S)||Heddle, John|
|Clegg, Sir Walter||Henderson, Barry|
|Cockeram, Eric||Heseltine, Rt Hon Michael|
|Colvin, Michael||Hickmet, Richard|
|Coombs, Simon||Hicks, Robert|
|Cope, John||Higgins, Rt Hon Terence L.|
|Cormack, Patrick||Hind, Kenneth|
|Hirst, Michael||Moynihan, Hon C.|
|Hogg, Hon Douglas (Gr'th'm)||Mudd, David|
|Holland, Sir Philip (Gedling)||Neale, Gerrard|
|Holt, Richard||Nelson, Anthony|
|Hordern, Sir Peter||Neubert, Michael|
|Howard, Michael||Newton, Tony|
|Howarth, Alan (Stratf'd-on-A)||Nicholls, Patrick|
|Howarth, Gerald (Cannock)||Norris, Steven|
|Howell, Rt Hon D. (G'ldford)||Onslow, Cranley|
|Howell, Ralph (Norfolk, N)||Oppenheim, Phillip|
|Hubbard-Miles, Peter||Oppenheim, Rt Hon Mrs S.|
|Hunt, David (Wirral W)||Ottaway, Richard|
|Hunt, John (Ravensbourne)||Page, Richard (Herts SW)|
|Hunter, Andrew||Parris, Matthew|
|Hurd, Rt Hon Douglas||Patten, Christopher (Bath)|
|Irving, Charles||Patten, J.(Oxf W & Abgdn)|
|Jackson, Robert||Pattie, Geoffrey|
|Jenkin, Rt Hon Patrick||Pawsey, James|
|Jones, Gwilym (Cardiff N)||Peacock, Mrs Elizabeth|
|Jones, Robert (Herts W)||Percival, Rt Hon Sir Ian|
|Jopling, Rt Hon Michael||Pollock, Alexander|
|Joseph, Rt Hon Sir Keith||Porter, Barry|
|Kellett-Bowman, Mrs Elaine||Portillo, Michael|
|Kershaw, Sir Anthony||Powell, William (Corby)|
|Key, Robert||Powley, John|
|King, Roger (B'ham N'field)||Prentice, Rt Hon Reg|
|Knight, Greg (Derby N)||Price, Sir David|
|Knowles, Michael||Proctor, K. Harvey|
|Knox, David||Pym, Rt Hon Francis|
|Lamont, Norman||Raffan, Keith|
|Lang, Ian||Rathbone, Tim|
|Latham, Michael||Renton, Tim|
|Lawler, Geoffrey||Rhodes James, Robert|
|Lee, John (Pendle)||Ridley, Rt Hon Nicholas|
|Leigh, Edward (Gainsbor'gh)||Ridsdale, Sir Julian|
|Lewis, Sir Kenneth (Stamf'd)||Rifkind, Rt Hon Malcolm|
|Lightbown, David||Rippon, Rt Hon Geoffrey|
|Lilley, Peter||Roe, Mrs Marion|
|Lloyd, Ian (Havant)||Sackville, Hon Thomas|
|Lloyd, Peter (Fareham)||Sainsbury, Hon Timothy|
|Lord, Michael||St. John-Stevas, Rt Hon N.|
|Lyell, Nicholas||Shaw, Giles (Pudsey)|
|McCurley, Mrs Anna||Silvester, Fred|
|Macfarlane, Neil||Skeet, Sir Trevor|
|MacKay, Andrew (Berkshire)||Soames, Hon Nicholas|
|MacKay, John (Argyll & Bute)||Spence, John|
|Maclean, David John||Spicer, Michael (S Worcs)|
|McNair-Wilson, M. (N'bury)||Stern, Michael|
|McNair-Wilson, P. (New F'st)||Stevens, Lewis (Nuneaton)|
|McQuarrie, Albert||Taylor, John (Solihull)|
|Major, John||Taylor, Teddy (S'end E)|
|Malins, Humfrey||Terlezki, Stefan|
|Maples, John||Thompson, Donald (Calder V)|
|Marlow, Antony||Thompson, Patrick (N'ich N)|
|Marshall, Michael (Arundel)||Thorne, Neil (Ilford S)|
|Mates, Michael||Thurnham, Peter|
|Mather, Carol||Townsend, Cyril D. (B'heath)|
|Maude, Hon Francis||Tripper, David|
|Mawhinney, Dr Brian||Twinn, Dr Ian|
|Maxwell-Hyslop, Robin||Vaughan, Sir Gerard|
|Mayhew, Sir Patrick||Wakeham, Rt Hon John|
|Mellor, David||Walker, Bill (T'side N)|
|Merchant, Piers||Walker, Rt Hon P.(W'cester)|
|Meyer, Sir Anthony||Wardle, C.(Bexhill)|
|Miller, Hal (B'grove)||Watson, John|
|Mills, Iain (Meriden)||Watts, John|
|Miscampbell, Norman||Wheeler, John|
|Mitchell, David (Hants NW)||Whitfield, John|
|Moate, Roger||Wiggin, Jerry|
|Monro, Sir Hector||Wood, Timothy|
|Montgomery, Sir Fergus|
|Moore, Rt Hon John||Tellers for the Noes;|
|Morris, M. (N'hampton S)||Mr. Tony Durant and|
|Morrison, Hon C. (Devizes)||Mr. Mark Lennox-Boyd|
§ Question accordingly negatived.
§ Main Question put forthwith, Pursuant to Standing Order No. 41(Amendment on Second or Third Reading):—884
§ The House divided: Ayes 278, Noes 201.887
|Division No. 53]||[10.15 pm|
|Adley, Robert||Dykes, Hugh|
|Aitken, Jonathan||Emery, Sir Peter|
|Alexander, Richard||Evennett, David|
|Amery, Rt Hon Julian||Eyre, Sir Reginald|
|Amess, David||Fairbairn, Nicholas|
|Ancram, Michael||Fallon, Michael|
|Arnold, Tom||Farr, Sir John|
|Ashby, David||Favell, Anthony|
|Aspinwall, Jack||Fenner, Mrs Peggy|
|Atkins, Rt Hon Sir H.||Fletcher, Alexander|
|Atkins, Robert (South Ribble)||Fookes, Miss Janet|
|Baker, Nicholas (Dorset N)||Forman, Nigel|
|Baldry, Tony||Forsyth, Michael (Stirling)|
|Banks, Robert (Harrogate)||Forth, Eric|
|Batiste, Spencer||Fowler, Rt Hon Norman|
|Beaumont-Dark, Anthony||Fox, Marcus|
|Bellingham, Henry||Fraser, Peter (Angus East)|
|Bendall, Vivian||Freeman, Roger|
|Benyon, William||Fry, Peter|
|Best, Keith||Gale, Roger|
|Bevan, David Gilroy||Galley, Roy|
|Biffen, Rt Hon John||Gardiner, George (Reigate)|
|Blackburn, John||Gardner, Sir Edward (Fylde)|
|Body, Sir Richard||Garel-Jones, Tristan|
|Bonsor, Sir Nicholas||Glyn, Dr Alan|
|Boscawen, Hon Robert||Goodlad, Alastair|
|Bottomley, Peter||Gow, Ian|
|Bottomley, Mrs Virginia||Gower, Sir Raymond|
|Bowden, A. (Brighton K'to'n)||Greenway, Harry|
|Bowden, Gerald (Dulwich)||Gregory, Conal|
|Boyson, Dr Rhodes||Griffiths, Sir Eldon|
|Brandon-Bravo, Martin||Griffiths, Peter (Portsm'th N)|
|Bright, Graham||Grist, Ian|
|Brinton, Tim||Ground, Patrick|
|Brooke, Hon Peter||Grylls, Michael|
|Brown, M. (Brigg & Cl'thpes)||Gummer, Rt Hon John S|
|Browne, John||Hamilton, Hon A. (Epsom)|
|Bruinvels, Peter||Hamilton, Neil (Tatton)|
|Bryan, Sir Paul||Hampson, Dr Keith|
|Buchanan-Smith, Rt Hon A.||Hanley, Jeremy|
|Buck, Sir Antony||Hannam, John|
|Budgen, Nick||Hargreaves, Kenneth|
|Bulmer, Esmond||Harris, David|
|Burt, Alistair||Harvey, Robert|
|Butcher, John||Haselhurst, Alan|
|Butler, Rt Hon Sir Adam||Hawkins, C. (High Peak)|
|Butterfill, John||Hawksley, Warren|
|Carlisle, John (Luton N)||Hayes, J.|
|Carlisle, Kenneth (Lincoln)||Hayhoe, Rt Hon Barney|
|Carlisle, Rt Hon M. (W'ton S)||Hayward, Robert|
|Carttiss, Michael||Heathcoat-Amory, David|
|Cash, William||Heddle, John|
|Chalker, Mrs Lynda||Henderson, Barry|
|Channon, Rt Hon Paul||Heseltine, Rt Hon Michael|
|Chapman, Sydney||Hickmet, Richard|
|Chope, Christopher||Hicks, Robert|
|Churchill, W. S.||Higgins, Rt Hon Terence L.|
|Clark, Hon A. (Plym'th S'n)||Hind, Kenneth|
|Clark, Dr Michael (Rochford)||Hirst, Michael|
|Clark, Sir W. (Croydon S)||Hogg, Hon Douglas (Gr'th'm)|
|Clegg, Sir Walter||Holland, Sir Philip (Gedling)|
|Cockeram, Eric||Holt, Richard|
|Colvin, Michael||Hordern, Sir Peter|
|Coombs, Simon||Howard, Michael|
|Cope, John||Howarth, Alan (Stratf'd-on-A)|
|Cormack, Patrick||Howarth, Gerald (Cannock)|
|Couchman, James||Howell, Rt Hon D. (G'ldford)|
|Cranborne, Viscount||Howell, Ralph (Norfolk, N)|
|Currie, Mrs Edwina||Hubbard-Miles, Peter|
|Dickens, Geoffrey||Hunt, David (Wirral W)|
|Dorrell, Stephen||Hunt, John (Ravensbourne)|
|Douglas-Hamilton, Lord J.||Hunter, Andrew|
|Dover, Den||Hurd, Rt Hon Douglas|
|du Cann, Rt Hon Sir Edward||Irving, Charles|
|Dunn, Robert||Jackson, Robert|
|Durant, Tony||Jenkin, Rt Hon Patrick|
|Jones, Gwilym (Cardiff N)||Oppenheim, Rt Hon Mrs S.|
|Jones, Robert (Herts W)||Ottaway, Richard|
|Jopling, Rt Hon Michael||Page, Richard (Herts SW)|
|Joseph, Rt Hon Sir Keith||Patten, Christopher (Bath)|
|Kellett-Bowman, Mrs Elaine||Patten, J.(Oxf W & Abgdn)|
|Kershaw, Sir Anthony||Pattie, Geoffrey|
|Key, Robert||Pawsey, James|
|King, Roger (B'ham N'field)||Peacock, Mrs Elizabeth|
|Knight, Greg (Derby N)||Percival, Rt Hon Sir Ian|
|Knowles, Michael||Pollock, Alexander|
|Knox, David||Porter, Barry|
|Lamont, Norman||Portillo, Michael|
|Lang, Ian||Powell, William (Corby)|
|Latham, Michael||Powley, John|
|Lawler, Geoffrey||Prentice, Rt Hon Reg|
|Lee, John (Pendle)||Price, Sir David|
|Leigh, Edward (Gainsbor'gh)||Proctor, K. Harvey|
|Lewis, Sir Kenneth (Stamf'd)||Pym, Rt Hon Francis|
|Lightbown, David||Raffan, Keith|
|Lilley, Peter||Rathbone, Tim|
|Lloyd, Ian (Havant)||Renton, Tim|
|Lloyd, Peter (Fareham)||Rhodes James, Robert|
|Lord, Michael||Ridley, Rt Hon Nicholas|
|Lyell, Nicholas||Ridsdale, Sir Julian|
|McCurley, Mrs Anna||Rifkind, Rt Hon Malcolm|
|Macfarlane, Neil||Rippon, Rt Hon Geoffrey|
|MacKay, Andrew (Berkshire)||Roe, Mrs Marion|
|MacKay, John (Argyll & Bute)||Sackville, Hon Thomas|
|Maclean, David John||Sainsbury, Hon Timothy|
|McNair-Wilson, M. (N'bury)||St. John-Stevas, Rt Hon N.|
|McNair-Wilson, P. (New F'st)||Shaw, Giles (Pudsey)|
|McQuarrie, Albert||Silvester, Fred|
|Major, John||Skeet, Sir Trevor|
|Malins, Humfrey||Soames, Hon Nicholas|
|Maples, John||Spence, John|
|Marlow, Antony||Spicer, Michael (S Worce)|
|Marshall, Michael (Arundel)||Stern, Michael|
|Mates, Michael||Stevens, Lewis (Nuneaton)|
|Mather, Carol||Taylor, John (Solihull)|
|Mawhinney, Dr Brian||Taylor, Teddy (S'end E)|
|Maxwell-Hyslop, Robin||Terlezki, Stefan|
|Mayhew, Sir Patrick||Thompson, Donald (Calder v)|
|Mellor, David||Thompson, Patrick (N'ich N)|
|Merchant, Piers||Thorne, Neil (Ilford S)|
|Meyer, Sir Anthony||Thurnham, Peter|
|Miller, Hal (B'grove)||Townsend, Cyril D.(B'heath)|
|Mills, Iain (Meriden)||Trippier, David|
|Miscampbell, Norman||Twinn, Dr Ian|
|Mitchell, David (Hants NW)||Vaughan, Sir Gerard|
|Moate, Roger||Viggers, Peter|
|Monro, Sir Hector||Wakeham, Rt Hon John|
|Montgomery, Sir Fergus||Walker, Bill (T'side)|
|Moore, Rt Hon John||Wardle, Rt Hon P. (W'cester)|
|Morris, M. (N'hampton S)||Wardle, C. (Bexhill)|
|Morrison, Hon C. (Devizes)||Watson, John|
|Moynihan, Hon C.||Watts, John|
|Mudd, David||Wheeler, John|
|Neale, Gerrard||Whitfield, John|
|Nelson, Anthony||Wiggin, Jerry|
|Neubert, Michael||Wood, Timothy|
|Nicholls, Patrick||Teller for the Ayes:|
|Norris, Steven||Mr. Mark Lennox-Boyd and|
|Onslow, Cranley||Mr. Francis Maude.|
|Adams, Allen (Paisley N)||Bell, Stuart|
|Alton, David||Bennett, A. (Dent'n & Red'sh)|
|Archer, Rt Hon Peter||Bermingham, Gerald|
|Ashdown, Paddy||Bidwell, Sydney|
|Ashley, Rt Hon Jack||Blair, Anthony|
|Ashton, Joe||Boothroyd, Miss Betty|
|Atkinson, N. (Tottenham)||Boyes, Roland|
|Bagier, Gordon A. T.||Bray, Dr Jeremy|
|Banks, Tony (Newham NW)||Brown, Gordon (D'f'mline E)|
|Barnett, Guy||Brown, Hugh D.(Provan)|
|Barron, Kevin||Brown, N. (N'c'tle-u- Tyne E)|
|Beckett, Mrs Margaret||Brown, Ron (E'burgh, Leith)|
|Beith, A. J.||Bruce, Malcolm|
|Buchan, Norman||Kennedy, Charles|
|Caborn, Richard||Kilroy-Silk, Robert|
|Callaghan, Rt Hon J.||Kinnock, Rt Hon Neil|
|Callaghan, Jim (Heyw'd & M)||Kirkwood, Archy|
|Campbell, Ian||Lambie, David|
|Campbell-Savours, Dale||Lamond, James|
|Canavan, Dennis||Leadbitter, Ted|
|Carlile, Alexander (Montg'y)||Leighton, Ronald|
|Cartwright, John||Lewis, Ron (Carlisle)|
|Clark, Dr David (S Shields)||Lewis, Terence (Worsley)|
|Clarke, Thomas||Litherland, Robert|
|Clay, Robert||Livsey, Richard|
|Clelland, David Gordon||Lloyd, Tony (Stretford)|
|Clwyd, Mrs Ann||Lofthouse, Geoffrey|
|Cocks, Rt Hon M. (Bristol S)||Loyden, Edward|
|Cohen, Harry||McCartney, Hugh|
|Concannon, Rt Hon J. D.||McDonald, Dr Oonagh|
|Conlan, Bernard||McKelvey, Williams|
|Cook, Frank (Stockton North)||MacKenzie, Rt Hon Gregor|
|Cook, Robin F. (Livingston)||McNamara, Kevin|
|Corbett, Robin||McTaggart, Robert|
|Corbyn, Jeremy||Madden, Max|
|Craigen, J. M.||Mallon, Seamus|
|Crowther, Stan||Marek, Dr John|
|Cunliffe, Lawrence||Marshall, David (Shettleston)|
|Cunningham, Dr John||Martin, Michael|
|Dalyell, Tam||Mason, Rt Hon Roy|
|Davies, Rt Hon Denzil (L'lli)||Maxton, John|
|Davies, Ronald (Caerphilly)||Maynard, Miss Joan|
|Davis, Terry (B'ham, H'ge H'l)||Meacher, Michael|
|Deakins, Eric||Meadowcroft, Michael|
|Dewar, Donald||Michie, William|
|Dixon, Donald||Mikardo, Ian|
|Dobson, Frank||Mitchell, Austin (G't Grimsby)|
|Dormand, Jack||Morris, Rt Hon A. (W'shawe)|
|Douglas, Dick||Nellist, David|
|Dubs, Alfred||Oakes, Rt Hon Gordon|
|Dunwoody, Hon Mrs G.||O'Brien, William|
|Eadie, Alex||O'Neill, Martin|
|Eastham, Ken||Orme, Rt Hon Stanley|
|Edwards, Bob (W'h'mpt'n SE)||Owen, Rt Hon David|
|Evans, John (St. Helens N)||Park, George|
|Ewing, Harry||Patchett, Terry|
|Fatchett, Derek||Pavitt, Laurie|
|Field, Frank (Birkenhead)||Pendry, Tom|
|Fields, T. (L'pool Broad Gn)||Penhaligon, David|
|Fisher, Mark||Pike, Peter|
|Flannery, Martin||Powell, Raymond (Ogmore)|
|Forrester, John||Prescott, John|
|Foster, Derek||Radice, Giles|
|Foulkes, George||Randall, Stuart|
|Fraser, J. (Norwood)||Redmond, Martin|
|Freud, Clement||Rees, Rt Hon M. (Leeds S)|
|George, Bruce||Richardson, Ms Jo|
|Gilbert, Rt Hon Dr John||Roberts, Ernest (Hackney N)|
|Godman, Dr Norman||Robertson, George|
|Golding, John||Robinson, G.(Coventry NW)|
|Gould, Bryan||Rogers, Allan|
|Gourlay, Harry||Rooker, J. W.|
|Hamilton, James (M'well N)||Ross, Ernest (Dundee W)|
|Hamilton, W. W. (Fife Central)||Rowlands, Ted|
|Hancock, Michael||Ryman, John|
|Harman, Ms Harriet||Sedgemore, Brian|
|Harrison, Rt Hon Walter||Sheerman, Barry|
|Hart, Rt Hon Dame Judith||Sheldon, Rt Hon R|
|Haynes, Frank||Shore, Rt Hon Peter|
|Heffer, Eric S.||Short. Ms Clare (Ladywood)|
|Hogg, N. (C'nauld & Kilsyth)||Short, Mrs R.(W'hampt'n NE)|
|Holland, Stuart (Vauxhall)||Silkin, Rt Hon J.|
|Home Robertson, John||Skinner, Dennis|
|Howells, Geraint||Smith, C.(Isl'ton S & F'bury)|
|Hughes, Dr Mark (Durham)||Smith, Rt Hon J.(M'ds E)|
|Hughes, Robert (Aberdeen N)||Snape, Peter|
|Hughes, Roy (Newport East)||Spearing, Nigel|
|Hughes, Simon (Southwark)||Steel, Rt Hon David|
|Hume, John||Stewart, Rt Hon D.(W Isles)|
|John, Brynmor||Stott, Roger|
|Johnston, Sir Russell||Strang, Gavin|
|Jones, Barry (Alyn & Deeside)||Straw, Jack|
|Kaufman, Rt Hon Gerald||Thomas, Dr R. (Carmarthen)|
|Thompson, J. (Wansbeck)||Williams, Rt Hon A.|
|Thorne, Stan (Preston)||Wilson, Gordon|
|Tinn, James||Winnick, David|
|Torney, Tom||Wrigglesworth, Ian|
|Wardell, Gareth (Gower)||Young, David (Bolton SE)|
|Weetch, Ken||Tellers for the Noes:|
|Welsh, Michael||Mr. Sean Hughes and|
|White, James||Mr. Allen McKay.|
§ Question accordingly agreed to.
§ Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).