§ Order for Second Reading read.3.41 pm
§ The Secretary of State for Social Services (Mr. John Moore)
I beg to move, That the Bill be now read a Second time.
The Bill which I commend to the House today is a short one, but it achieves a good deal in a few clauses. Most important, it provides the background for yet another major extension of our training programme for young people who have left school at 16 or 17 and who have not found work. It also reinforces the contributory principle which has underlain the qualification for national insurance benefits since the time of Beveridge. The Bill provides a statutory basis for payments to those in greatest need during exceptionally cold weather, and, following certain legal judgments, it restores the original intentions of Parliament concerning attendance allowance and the calculation of earnings of claimants' dependants.
I begin with training. The House will be familiar with the background. Before 1979 there was no national programme for the training of young people. From nothing, we have built up, first through YOP and since 1983 through the YTS, to today's position where we offer a guaranteed place of quality training to every 16 and 17-year-old in the country. The scheme has so far helped well over 1 million youngsters. Two thirds of them have then gone straight into jobs, or into further education or training. The quality of the training is appreciated by the trainees who have shown in polls that by a huge majority they consider their YTS experience worthwhile. Over 100,000 employers are now participating, demonstrating their commitment to producing a work force of greater kills to meet the demands of today's job market.
The Government's view is that we cannot and should not abandon all interest in the education and training of our young people who have left school aged 16 but have not been able to get a job. Until their 16th birthday the Government are responsible for seeing that they get full-time education. Thereafter, they are free to decide what to do—to continue their formal education or to enter the employment market. For those who have been unable or unwilling to do either, society has, until this Government's youth training programme began, been content thereafter to let them sink or swim; no matter that the world now demands for most jobs higher skills than are readily attainable at school.
We could not accept that view. The Government's financial commitment to youth training now runs at over £1 billion a year. As the length of YTS has grown and as the guarantee of a place is firm, unemployment for 16 and 17-year-olds need no longer exist.
Furthermore, the training allowances for those on YTS have been set at a rate well above the basic supplementary benefit rates for most young people. As I said, unemployment for young people need not exist. They have every incentive, including financial incentives, to avoid it, and now they have every opportunity as well.
That has raised the question in the public mind—is it then right to pay benefit to those who refuse a place, have 656 left school and are not in work? Is that right in two senses? First, is it right to draw young people into a benefit culture when the opportunity is there for the taking to acquire the skills and experience to get on to the employment ladder, to be independent and self-reliant? Secondly, is it right to ask taxpayers, many of them far from well off and many of them young, to subsidise those who deliberately choose to ignore this opportunity? We propose——
§ Mr. Robin Cook (Livingston)
The Secretary of State has referred three times to those youngsters who deliberately choose not to go on YTS. He will be aware that the Bill does not propose to withhold benefit from those youngsters who deliberately choose not to go on YTS. It proposes to withhold benefit from all 16 and 17-year-olds, many of whom have never been offered a place on YTS, never mind refused it, and at least 2,000 of whom tried to get a place on YTS last year but could not find one.
§ Mr. Moore
I will continue for a little and then give way, as is my custom.
We included the proposal in our election manifesto that we would guarantee a place on YTS for every school leaver under the age of 18 not going directly into a job. We said in the manifesto that we would take steps to withdraw entitlement benefit from young people under 18 who chose to remain unemployed. I believe that that answers the point made by the hon. Member for Livingston (Mr. Cook) in his intervention.
The manifesto was fully endorsed by the public on 11 June. We are now putting before the House the legislative implications of our manifesto commitment. That YTS guarantee in the manifesto, the bridging allowance in the Employment Bill that will be discussed in the House tomorrow and the benefit changes in the Social Security Bill make up the new arrangements for the under-18s, so that no young person who is able to take up a YTS place will have the option of living off the taxpayer.
§ Mr. Nellist
My question is in two parts. Is the Secretary of State's guarantee on a par with the guarantee offered in the Tory party manifesto on child benefit? Secondly, is it not true that young people today do not need coercion on YTS, but jobs? There are 2,700 youngsters on YTS in Coventry, 4,000 16 to 18-year-olds were unemployed in July this year, but there are 481 vacancies at the jobcentre. The official unemployment figures for Coventry as a whole show that 22,000 people are unemployed. That means that there are 47 unemployed people for every vacancy. Instead of conscription on to YTS, we could do with another 46 jobs for the unemployed to bring full employment to the area.
§ Mr. Moore
The public expressed their view of the Conservative party manifesto at the general election on 11 June with regard to the opportunities for youngsters. I will consider that matter later in my remarks.
657 I want to explain how the system will work. When a youngster leaves school at 16 or 17 having decided not to take formal education further, but does not immediately go into work, his parents will be able to claim child benefit——
§ Mr. Moore
I hope to cover many points in my speech, including those that the hon. Lady might wish to raise.
As I have said, the parents will be able to claim child benefit for an extended period provided—and this is the key proviso—that the child is registered at a careers office or jobcentre or on a YTS course. For summer leavers, the period runs another four months until the end of December and for Christmas and Easter leavers it runs an extra three months. Benefit stops of course as soon as the youngster takes a job or YTS place.
By the end of that extended child benefit period, we guarantee to have arranged a YTS place for any youngster who wants one. I emphasise that point to the hon. Member for Livingston. The scheme of course is not compulsory.
§ Mr. Moore
When the child benefit period runs out, there will be no income support for under-18s except in very special cases generally where for one reason or another it is impossible for the youngsters to take up a YTS place. Those exceptions will be spelt out in regulations to be made under the Bill.
§ Mr. Moore
Perhaps the hon. Lady will allow me to complete this passage. It might be helpful if Labour Members allowed me to express the position clearly. As always, I shall then be happy to give way, although it may be that we can avoid the need for the hon. Lady to ask questions that I am now seeking to answer.
We will ensure that those young people who are not currently required to be available for work—the severely disabled, the long-term sick and one-parent families, for instance—will not be adversely affected by the change. They will continue to receive benefit without any time limit. Others, such as orphans and youngsters who are necessarily living away from home because of a risk of physical or sexual abuse, will be entitled to income support during the child benefit extension period only. During this period they will be able to take advantage of the YTS guarantee and secure a training place which will carry with it payment of the training allowance at a higher rate than their benefit, so enabling them to continue to live independently.
I recognise that it will not be possible to prescribe in advance all categories of young people for whom, exceptionally, payment of income support will be appropriate. The Bill therefore gives the Secretary of State a discretionary power to direct that, exceptionally, a young person should be treated as though he is in one of the prescribed groups. This power will be used in circumstances in which it is judged that severe hardship would result if income support was to be withheld.
If a young person has started a YTS place or a job and for one reason or another the place or job comes to an end before his 18th birthday, he is guaranteed another YTS place. This YTS place might take several weeks to arrange. 658 In the meantime we shall be paying him the YTS bridging allowance, and provision for that is made in the Employment Bill that will come before the House tomorrow.
§ Ms. Armstrong
The Secretary of State said that young people will be guaranteed a place of quality on the YTS scheme, but his colleague told me in answer to a question in July that at present the quality of YTS could not be guaranteed, and he admitted that my area in particular had enormous difficulty in finding sufficient places of quality that will produce a skill at the end of the training period. That is because mine is an area of high unemployment. What will the Secretary of State do to ensure that YTS places are of quality, and what tests will there be to ensure that the young person can legitimately say, "This scheme is of a quality that will enable me to get a job at the end of it"?
§ Mr. Moore
My right hon. Friend the Secretary of State for Employment will be addressing the specific guarantee offered within the YTS scheme, and I am sure that he will assure the hon. Lady and the House about the extent to which the scheme will give an absolute guarantee of a job or a replacement job. That will provide the kind of quality assurances that the hon. Lady seeks. The absolute guarantee is expected to come into effect in September 1988, so there is still a little while before then. However, I expect that the hon. Lady will wish to address that point to my right hon. Friend tomorrow.
§ Mr. Andrew Rowe (Mid-Kent)
Does my right hon. Friend accept that, to the extent to which this new regulation will get us away from the suggestion that the YTS scheme is some kind of punishment but rather that it is a wonderful opportunity for people to learn some skill, it will be widely welcomed? Can he possibly reassure those excellent YTS managers in my area who have expressed to me some anxiety that they may be faced with one or two unwilling conscripts whereas up to now they have had nothing but creative volunteers for whom they have provided excellent experience?
§ Mr. Moore
I am delighted that my hon. Friend has drawn attention to what I said earlier about the outstanding success of our attempt to ensure that we have a better trained population who will be needed for the new work skills. Obviously my hon. Friend will want to draw his remarks to the attention of my right hon. Friend the Secretary of State for Employment tomorrow, not only about the success of YTS but also about the way in which it can obviously be improved.
§ Mr. Moore
I have so far given way with considerable ease, but I now wish to continue.
Let me make it quite clear—and this is important—that the purpose of these proposals is not to save public expenditure. On the contrary, the net effect of these arrangements will be to add to public expenditure, not reduce it. The saving on benefit payments covered by the Bill will be £84 million in a full year, net of higher costs of child benefit. That, however, will be more than offset by the additional cost of the YTS programme.
The arrangements will fulfil our manifesto commitment, including our promise to look after those who cannot be available for training. Our mandate is clear: 659 public support is overwhelming. I have little doubt that our proposals would also be supported by Beveridge if he were alive today. Beveridge wrote thatfor boys and girls there should ideally be no unconditional benefit: their enforced abstention from work should be made an occasion for further training".It comes as no surprise that the Labour party has forgotten its Beveridge. Nor is it surprising that, as usual, Labour Members are out of touch with the requirements of today. Their opposition shows a staggering indifference to the needs of the young and the legitimate rights of the taxpayer. However, I predict that before too long the designer Socialists will ensure as spectacular an about-turn on this issue as we witnessed on council house sales.
The Bill also contains measures that emphasise the contributory principle in qualifying for national insurance benefits, and reinforce the original purpose of unemployment benefit. That purpose was to insure those who are accustomed to earnings from employment for short periods of unemployment while they seek work. Clause 5 strengthens the connection between previous contributions and entitlement. The Bill provides that, to qualify for unemployment or sickness benefit, a person must have paid, or been credited with, national insurance contributions in the past two years, not just the last year. It is now possible for a person on average earnings to fulfil the last-year condition on national insurance contributions paid simply on nine weeks' work. Once the Bill becomes law, it will be possible for such a person to qualify on the basis of nine weeks' work in each of two years. In addition, for unemployment benefit alone, the person must have paid contributions in one of those two years, not, as now, in any year.
The latter condition will not apply to sickness benefit, to ensure that a person who believes that he has recovered from a long-term illness is not penalised for returning to work and then falling ill again, only to find that he cannot obtain benefit because the relevant year contains only credits and no paid contributions. Such a person need not be deterred from returning to work, because he can be confident that if he has the misfortune to fall ill again he will continue to qualify on the basis of the credits awarded to him while he was ill.
As part of this package of contribution changes I propose also to amend the Social Security (Credits) Regulations so that credits for short-term benefits will no longer be awarded to people entering the national insurance scheme for the first time—mainly, of course, young people—to help them to satisfy the contribution conditions at an early stage. Otherwise, we should have the curious effect that the people least affected by the change requiring contributions to have been paid for two years would be youngsters who had never been in employment, and yet who would receive such credits to give them a flying start. It makes no sense to make unemployment benefit more easily available in such circumstances, and there is no longer the same need to make sickness benefit more easily available, as severe disablement allowance is now available in appropriate cases without any contribution record. But credits will continue to be awarded for those in full-time education or training after school for any tax years after and including the year in 660 which the person reaches age 18, and the provisions for awarding credits for long-term benefits, such as retirement penion, to young people will remain unchanged.
§ Mr. Robin Cook
Before the Secretary of State moves on to the next clause, may I invite him to consider the combined effect of the two clauses to which he has just spoken? Let us suppose that a school leaver obtains employment after leaving school, works for 18 months and is then made redundant on the basis of "last in, first out". He finds that, after 18 months steady work, he is now unemployed. Under the clause to which the Secretary of State has just referred, there is no prospect of his having made contributions to unemployment benefit; and, under the first clause to which the right hon. Gentleman addressed himself, he will no longer have any entitlement to income support for those under 18. Is the right hon. Gentleman really suggesting that the school leaver should be denied any benefit—that he should go back home, and his parents should draw child benefit?
§ Mr. Moore
No, I am not. He will be entitled to the bridging allowance, as well as to the YTS opportunities.
Clause 6 extends a principle that is already a feature of our law. Unemployment benefit was never intended for those who have retired and no longer seek work. That is why, since 1981, those over 60 receiving an occupational pension of more than £35 a week have had their unemployment benefit abated. Since 1981, however, the picture has changed. There has been a considerable growth in the number of people under 60 who are receiving occupational pensions. It is entirely consistent with the original intentions of unemployment insurance to propose that abatement should apply from the age of 55.
§ Mr. Nellist
Why has the Secretary of State increased the hardship by saying that abatement should apply from the age of 55? Anyone with an occupational pension of over £35 a week will lose, pound for pound, his unemployment benefit. If the Secretary of State is not prepared to withdraw the clause, why has he not at least index linked the £35? As it was introduced six years ago, it should now be over £48. Those who take early retirement would not then lose up to £700 in the first year of unemployment. A millionaire with, say, £100,000 of investment income a year will not lose a penny, but a worker in, say, Talbots of Coventry who has paid into an occupational pension scheme will lose, pound for pound, everything over £35 a week.
§ Mr. Moore
The hon. Gentleman is making a series of different points, which I imagine he will want to raise in Committee.
I accept that there has been no uprating since the figure of £35 a week was established. The hon. Gentleman asks why no change is being made at this point. The prime reason is the changing pattern of occupational pensions. The last change was made in 1981. For economically inactive men aged 55 to 59—not working, not seeking work, the long-term sick and those with occupational pensions—the figure was approximately 29.6 per cent. Today the figure is 43.6 per cent. There has been a radical change, and it is one of the factors that has to be taken into account, as well as the relationship between the real reason for unemployment benefit and the impact on a person's income. Unemployment benefit will not be extinguished for a single person until income reaches £66.50. For a married couple the figure is £85.90.
661 Other clauses in the Bill arise from recent legal decisions. Attendance allowance was first introduced in 1971. Its success as a valuable contribution to the extra needs of the long-term sick and the disabled has exceeded every expectation for it. About 600,000 now receive it and Government spending on it has risen under this Government by £500 million in real terms, or about 140 per cent. All of this occurred on a very broadly accepted view of what sort of care need was envisaged by Parliament in establishing the day and night time care conditions. But a Court of Appeal decision in the case of Mrs. Moran seemed to challenge what had been accepted for years.
The court decision seemed to suggest that one of the night time conditions for the allowance could be met if, in order to prevent substantial danger, it was necessary for the carer simply to be on hand. The implication was that actual intervention by the carer need be comparatively rare, and for most nights of the week the carer's sleep could be uninterrupted. This interpretation threw the law into confusion. It undoubtedly cut across the Attendance Allowance Board's understanding of what it was intended to mean. This Bill would restore the law to what it was believed to be by emphasising that for the night time condition to be satisfied active supervision was envisaged—a wakeful and watchful presence. We have consulted the Attendance Allowance Board on the change and it is in complete agreement with our approach. This Bill would leave the alternative night time condition relating to the person's need for help with bodily functions absolutely unchanged.
§ Miss Marjorie Mowlam (Redcar)
After the Government lost in the courts in the case of Moran against the Secretary of State they moved the goalposts in the House of Commons. The Minister has obviously never looked after a sick or elderly person, otherwise he would never have put forward this proposal.
§ Mr. Moore
Because of the inaccuracy of the hon. Lady's remarks, I see no reason why I should refer to personal issues. I am seeking to address the issues that relate to the Moran case. The law, and the practice of the law, as interpreted by Parliament, was as it was, but the courts took a different view of the law. The Government are seeking to put the law back on all fours with what it was previously.
§ Mr. Frank Field (Birkenhead)
I am grateful to the Secretary of State for giving way, as Mrs. Moran was one of my constituents. Does not part of the misunderstanding arise from the fact that the Secretary of State thinks that Parliament interprets the law? Parliament lays down the law. The tribunal system and the courts then interpret the law. Did not the Secretary of State mislead the House when he suggested that there was some uncertainty about the law? By three to nothing the Court of Appeal threw out the Government's case. When the Government said that they might go to the House of Lords, the Court of Appeal was very tough and said that the Government would be wasting their time. The Government did not go to the House of Lords. They came back to this place to try to overthrow the Moran decision.
I have two questions for the Secretary of State. First, when will Mrs. Moran be paid? Secondly, does not clause 1 of the Bill, which takes the attendance allowance away from tens of thousands of people who may be eligible for 662 it, tarnish the image that the Minister put forward last week, when he suggested that he was making great advances for the disabled?
§ Mr. Moore
I have made it quite clear that the Government are seeking to put the law back to where it was and as it had been interpreted by Government arid Parliament. I cannot at this stage say when the position with regard to Mrs. Moran will be finalised. The hon. Gentleman knows that that is out of my hands. I wonder whether he would mind repeating his second point?
§ Mr. Field
The first point that I put to the Secretary of State is in his hands. The tribunal has ruled and the Court of Appeal has ruled. Mrs. Moran has waited for many months for her benefit. When will she be paid? Secondly, last week the Secretary of State tried to appear to be an effective Minister who supports the disabled. Does it not therefore tarnish his image if he intends to take benefit away from tens of thousands of very disabled people?
§ Mr. Moore
The hon. Gentleman knows only too well that his first point relates to the Attendance Allowance Board. Both the Government and Mrs. Moran are awaiting a decision on that point with great interest and urgency. The Government's proposals in this Bill seek to put the law back to where the Government thought it was. The hon. Gentleman referred to tens of thousands of very disabled people. Examination so far has uncovered only 700 cases where there is expected to be a different interpretation.
In clause 9, similarly we propose that for the purposes of entitlement to an increase of benefit for a dependant, an occupational pension received by the dependant——
§ Mr. Robin Cook
My hon. Friend the Member for Birkenhead (Mr. Field) asked the Secretary of State when Mrs. Moran will be paid. Will he answer that question'?
§ Mr. Frank Field
If the Secretary of State is not disputing the decision by the Court of Appeal, why, four months later, is Mrs. Moran still waiting for her payments?
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Order. The Minister has made it clear that he does not wish to give way.
§ Mr. Moore
This matter has take up considerable time. If there is a need for further clarification, I will be happy to ensure that my hon. Friend the Minister for Social Security and the Disabled makes clear Mrs. Moran's position by the end of the debate. I know that the hon. Member for Birkenhead (Mr. Field) has an honourable tradition of fighting for his constituents.
§ Mr. Field
On a point of order, Madam Deputy Speaker. Can you advise me on the matter of furthering 663 my constituent's interests. There is no dispute about Mrs. Moran's circumstances. The case has been to the tribunal and the Court of Appeal. I am anxious to ensure that she is paid before the Bill becomes law because clause 1 is about denying her benefit——
§ Madam Deputy Speaker
Order. The hon. Gentleman knows that that is not a point of order for the Chair. He has made his point.
§ Mr. Moore
Indeed, the hon. Gentleman has made his point. However, to reassure him, because there is a legitimate point beyond the case of Mrs. Moran and there may be other cases in the pipeline, I will ask my hon. Friend the Minister to help in such matters before the Bill becomes law. It may be helpful if we include advice on that in the reply to the debate.
In clause 9 we propose that for the purposes of entitlement to an increase of benefit for a dependant, an occupational pension received by the dependant is to be treated as if it were earnings, whether or not the dependant also has earnings from employment. This proposal follows a decision of the social security commissioners which showed up unintended inconsistencies in the law. Again, I believe that the spirit of the law is clear. Dependency additions are intended for those whose dependants have little of no means of supporting themselves. Occupational pension is as much as any other source of money.
Additionally clause 2 completes the Government's changes to the industrial injuries scheme by providing the same pension to industrial widows as to national insurance widows. The cash advantage that the majority of industrial widows enjoy over national insurance widows has been frozen at 55p ever since 1967, under successive Governments. Following consultation on this subject and on the other reforms of the industrial injury scheme which we have already carried through, we made provision for this change in the Social Security Act 1986. However, we thought it right that existing industrial widows should continue to receive a retirement pension based on their own contributions on top of the widow's benefit. The Bill therefore replaces the 1986 provisions to achieve this. Future industrial widows will continue to have a particular advantage, which is that they will not have to meet a contributions condition. They will be able to receive national insurance widows benefit including, where appropriate, the new £1,000 tax-free cash grant payable on bereavement.
This clause also replaces reduced earnings allowance for those retiring in future by a new benefit called retirement allowance. The new benefit is intended to compensate broadly for reduced pension entitlement brought about by reduced earnings following injury, and will be uprated in line with inflation.
Some clauses in the Bill are required to tidy up the law or put matters beyond doubt. Clause 7, for example, makes clear that local authorities can, in an emergency, make an agreement with me to make social security payments on the Government's behalf and that I have the right to refund them for the payments and their reasonable costs. Clause 3 and clause 10 will ensure our ability to introduce family credit and the social fund's loans and grants system smoothly next April.
Those are purely technical amendments, but the House may like some account of those affecting the social fund, 664 which are set out in schedule 3 of the Bill. The amendments in paragraphs 4 and 7 in particular are designed to clarify my powers to allocate and reallocate money from the social fund, and to give directions and guidance to social fund officers. As well as restating the existing powers in the Act, paragraph 4 makes it explicit that I can vary allocations in the course of a year if necessary—for example, to accommodate an unforeseen contingency such as a hurricane or to match a new local office catchment area. It also spells out the possibility of making allocations of recoveries from loans if we decide to do this in the years later than 1988–89. Paragraph 7 gives greater detail about the powers under section 33 of the 1986 Act to give directions and guidance to social fund officers, specifically in relation to maximum and minimum payments and payments in instalments or lump sums. It also enables me to establish and clarify whether loans or grants are appropriate to meet particular needs and to remove from the social fund officer the duty to determine whether to award a payment in certain circumstances. That would be relevant, for example, in the case of repeat applications made within six months without a change of circumstances.
Clause 10 also enables us to continue a scheme for exceptionally cold weather payments after this coming winter. The arrangements for this winter were, of course, announced last week and continue the criteria which enabled us to bring timely extra help to nearly 1 million people last winter. That was double the number who had received help in any previous winter. The criteria for triggering the payment to those groups most in need were quite clear. The improvement to the scheme announced last week by my hon. Friend the Minister of State makes claiming the special payments easier. Once a claim has been made during a qualifying period of cold weather, it will be treated as a claim for any subsequent unusually cold spell which triggers payments. The present statutory basis for exceptionally cold weather payments ends with the abolition of single payments as part of the social security reforms. Clause 10 would enable us to continue such payments beyond this coming winter. The payments will be grants from the social fund, analogous to the grants which we have been making since April 1987 from the fund for maternity and funeral payments. There has been some debate in the press about this and it may be helpful for Labour Members if I make it absolutely clear that that is outwith the amounts I indicated for the social fund cash limit on Tuesday.
§ Mr. Nigel Griffiths (Edinburgh, South)
There are hundreds of thousands, possibly millions, of pensioners who are dependent on that extra £5 a week during cold weather. Will the Minister confirm that, although the present system is mandatory and one that the Government and the DHSS are bound to honour, he intends to introduce a discretionary system so that people will not receive payments as of right?
§ Mr. Moore
That is quite wrong. As I have said, the exceptionally cold weather payments, as with maternity and funeral payments, are regulated and not discretionary. They are outwith the cash limits, but they come from the social fund.
This is an important Bill. It contains a variety of provisions. Although some are purely housekeeping, others, as hon. Members on both sides recognise, are of 665 greater significance. For instance, our proposals for modifying the contribution conditions for short-term benefits will strengthen the link between benefits, participation in work and the payment of contributions. The proposed extension of the abatement of unemployment benefit brings the arrangements more into line with retirement patterns in the late 1980s. Both these amendments produce modest, but necessary, savings in public expenditure. We are also taking steps to prevent new interpretations of the law resulting in increases in benefit expenditure, and to ensure that the important social security reforms, which come into force next April, will operate as intended. The Bill fulfils at the earliest opportunity our commitment to the electorate to take measures to prevent young people from going straight from school into reliance on state benefits. We propose an increase in public expenditure to give them the opportunity of good quality training with a reasonable weekly allowance. This demonstrates our determination that they should be helped to make the very best of their talents, to make something of their future, and to build prosperous and personally satisfying lives.
I commend the Bill to the House.
§ Mr. Robin Cook (Livingston)
This Bill has a certain familiar ring to it. First, it provides the annual amendments to the Social Security Act 1986. It is only a year since the House passed that Act, which we were told at the time would be a major piece of social security legislation, comparable in its own way to Beveridge, which would weather the test of the next 40 years. There have been only two parliamentary sessions since we passed the Act and in each of them the Government have presented us with a Bill to pour mortar down the cracks that have already been discovered in the 1986 Act.
I should begin by mentioning, charitably, to the Secretary of State that we have uncovered a provision in this Bill that makes nonsense of one of the sections that remain of the 1986 Act. In charity to the parliamentary draftsmen, we shall assume that it was a deliberate error to see whether Ministers could spot it. We shall not spoil their fun by pointing that out to the Minister, nor will we spoil our fun in debating the third annual amendment to the 1986 Act in 1989.
The second familiar ring to the Bill is that it runs in a well-worn Government groove in that they have presented us with yet another social security Bill that excludes further groups of claimants from benefit. One potential result is that 170,000 unemployment claimants could drop off the unemployment register. Once again, the House is being invited to vote for a cut in registered unemployment, not by providing more work for the unemployed but by erecting even more obstacles for those who receive the benefit that obliges even this Government to count them as unemployed. I therefore regret that this new Secretary of State has been guilty of a such an example of lateral thinking and has presented us with a Bill that merely extends the work of his predecessor.
I am aware of the conventions of the House, and I have guddled around to find something in the Bill that I can welcome on behalf of the Opposition. That is the greatest challenge that the Bill presents to any constitutional Opposition. The best that I can come up with is to welcome the fact that the Secretary of State has included provision for severe weather payments, which gives us a 666 guarantee that some payments will continue in 1989 and beyond. But that is as far as I can go. With the best will in the world it is impossible to work out what that scheme will be. Schedule 3 says:Payments may also be made out of that fund"—the social fund—in accordance with this Part of this Act, of a prescribed amount or a number of prescribed amounts to prescribed descriptions of persons, in prescribed circumstances to meet expenses for heating which appear to the Secretary of State to have been or to be likely to be incurred in cold weather.".I am aware that you, Madam Deputy Speaker, will be as mystified as I am about what we are being asked to vote for in that schedule. It is plain that the House is being put in the position, as it frequently has been over the past few years on social security legislation, of giving the Secretary of State power to pay whoever he likes at whatever level of income he chooses.
Since the Secretary of State is left with a degree of discretion by that paragraph, I put it to him, in considering how he interprets it, that there are a number of improvements that he could make to last year's scheme, which proved so restrictive that in February the only pensioners who qualified were those living in or around Okehampton and Cornwall.
One change that the Secretary of State should consider making is the removal of the ludicrous requirement that any seven-day cold spell must begin on a Monday. Unfortunately, in the past the frost has proved incapable of grasping the administrative convenience of starting any cold snap on the beginning of a working week. I hope that when the Secretary of State considers these prescriptions he will provide for the scheme to cover any seven-day period.
But if that provision is unsatisfactory, the remainder of the Bill is flatly objectionable. I turn to the most profound change of all. Since 1948, the qualifying age for social security has been 16 years. The Bill raises that qualifying age to 18 years. It is an odd time to choose such a change, because in 1948 few school leavers were unable to obtain work. If ever there was a time for removing benefit on the ground that those who were not working were workshy, surely it was 1948, when the age was chosen as 16 years. Even as late as the mid-1970s, over three fifths of school leavers went straight into work. Last year, less than one fifth of school leavers were able to obtain work. Yet, at a moment when it is more difficult than at any time for the past 40 years for those who are leaving school to obtain a job, they are to be denied the right to any benefit if they fall unemployed.
The Bill does not follow what the Government said in their election manifesto. They said that they would withhold benefit from those who deliberately chose to be unemployed. There is no evidence of a serious problem of youngsters refusing to go on YTS. The latest monthly figures relate to May 1987, when 17,500 youngsters entered YTS. In that same month a mere nine youngsters had their benefits stopped under the 13-week rule for unreasonably refusing to go on YTS. It would therefore be something of a sledgehammer to crack a nut to present the House with a Bill to resolve a problem created by nine people per month. However, that is not what the Bill does; it denies benefit to everybody under 18 years of age.
The latest figures show that 92,000 16 and 17-year-olds draw supplementary benefit. As Lord Young has said that the Government intend to deny benefit to those who choose to lie in bed, it is worth considering who are those 667 92,000. Perhaps the largest group are those who are taking advantage of the 21-hour rule to take part-time education. According to the Government's own estimates, about 30,000 of that 92,000 are currently studying part-time in colleges or in further education. Under the 21-hour rule one can study for two A-levels. For those youngsters who choose that option it may be an entirely rational choice. It will give them a qualification to go on to further and higher education that YTS would not. I would have thought that a Government that keep telling us that they are in favour of expanding choice for the individual would have hesitated before removing that choice from 30,000 youngsters.
A growing number of teenagers are homeless. In the main they do not leave home for flippant or trivial reasons but because of intolerable tension at home. I was glad to hear the Secretary of State say that benefit will still be paid to those who have left home because of violent or sexual harassment. As someone who represents a constituency with a large number of teenagers, I am able to say that the most common single reason why teenage girls leave home is sexual harassment by a stepfather or step-figure within the home. I welcome the fact that it may still be possible for such youngsters to obtain benefit, but the mind reels at the thought of those girls having to prove to a social security officer sexual harassment in the parental home as a qualifying condition for benefit.
The Secretary of State is in a better position than anyone else to know—given his Department's difficulties with regard to Cleveland—how difficult it can be to establish sexual abuse or harassment. I would not wish to send constituents along to the DHSS office to discuss such matters over the table. Even if they succeed in obtaining benefit, on the terms that I understood the Secretary of State to explain to the House, it will be only for a limited time, until they go into YTS.
The problem in that regard, as Opposition Members will be aware, is that no board and lodging allowance is attached to YTS. The moment one enters a YTS scheme one may qualify for a higher weekly benefit, but one will lose the benefit necessary to keep a roof over one's head. How the Secretary of State imagines that in those circumstances one can maintain an independent existence defeats me.
Among those 92,000 people are a large number for whom work and unemployment are intermittent and recurring experiences. Far from being workshy, the teenage unemployed make desperate attempts to obtain work. They demonstrate the flexibility that the Government keep preaching to the rest of the work force. In any three-month period, one out of every five teenagers will experience unemployment. At any one time, one in eight teenagers will be in temporary employment. A large part of that teenage work force is taking work where it can find it and holding it for as long as it can. The Government are saying that every time teenagers fall through a hole in the system and drop out of work, through no fault of their own, they will not qualify for benefit; they will have to return home and ask their parents for pocket money.
I asked the Secretary of State about the school leaver who worked for 18 months after leaving school, but who then became unemployed and who, under this measure, could not obtain income support. The Secretary of State responded by saying that he would be entitled to a 668 bridging allowance only if he opts to go on a YTS project. In effect, the Government are saying that someone who may have worked for 18 months, and who in the course of that time may have obtained relevant work experience and possibly become semi-skilled, should not expect to look for work again but should accept that the sole way in which they can receive benefit is by agreeing to go on a YTS project. That is precisely what the Government are saying in this measure. They cannot escape the fact that they have taken national insurance contributions from such a person for a year and a half but are now turning round and denying that person any form of benefit.
I have spelt out the reasons why we object to this measure in its human terms, but let the House be clear about the fact that we openly reject the principle that YTS should be made compulsory in the way in which it has been made compulsory by the Bill. Moreover, just about everyone associated with YTS does the same. The Youth Training Board and the Institute of Careers Officers have rejected this principle. The MSC has rejected this proposal and, as late as July this year, wrote to the Government saying:The Commission's position on this matter is clear. It has been repeated many times, most notably as one of the 5 cardinal principles of the design of the Y.T.S. We have always recommended that the scheme should be one in which participation is voluntary, whether by the employer or the young person. That remains our view.It does not lie with the Secretary of State to take credit for the success of the scheme run by the MSC when he so flatly rejects its advice about what will make the scheme succeed in the future.
This proposal for youngsters must be seen in the context not of a plan for Government training but of what the Government have done to the labour market for teenagers. This proposal follows previous Government measures such as the young workers scheme, which subsidised the poverty wages of teenagers, or the removal of the protection of the wages councils to anyone under 21. Now, with this measure, they are creating a pool of labour which will be deskilled and casual and which will be looking for temporary jobs. The Government are effectively taking these young people one step further towards forcing them to provide cheap labour for any employer who is prepared to exploit the opportunity that the Government are creating for them. For that reason, as well as because of the human consequences, when the Division is called we shall vigorously oppose the Bill and that measure within it.
§ Mr. Nellist
Does my hon. Friend agree that, although there may well be many working on the ground in YTS who are attempting to give some element of training, the real reason why the YTS was set up was revealed by Sir John Hoskyns in 1981, when he was a member of the Prime Minister's think tank and wrote the paper on the scheme? He said that the scheme was designed to increase the differential between adult and youth wages. Over the past six or seven years the scheme has continually been used to drive down the general level of young people's wages.
§ Mr. Cook
My hon. Friend is right. It is clear that, on average, the real income of those below 21 has declined over a decade during which the real income of those over 21 has increased. It can only be a matter of time—if the House lets the Government get away with this measure 669 —before the Government come back with similar measures for the group between 18 and 24 to compel them to enter into mandatory forms of training as well.
Clause 1 hits the smallest number of claimants of any clause, but that does not remove the fact that it is the meanest of all the clauses. It reverses a court decision. Having been beaten in the courts by Mrs. Moran, the Secretary of State is using his majority in Parliament to beat Mrs. Moran in Parliament. In a parliamentary answer the Government gave the categories of people who might benefit from the Moran judgment:people who suffer from epilepsy, diabetes, haemophilia, heart attacks and angina, or multi-sensory handicaps; elderly people who suffer attacks of confusion; and children who are mentally handicapped or hyperactive, or who suffer from asthma or cystic fibrosis."—[Official Report, 23 March 1987; Vol. 113. c. 78.]It would be difficult to come up with a list of more vulnerable people who more clearly need as much help as they can get. Clause 1 is specifically devised to stop them getting the help to which the court ruled they were entitled.
There is one particularly objectionable feature of the clause which my hon. Friend the Member for Birkenhead (Mr. Field) tried to draw to the attention of the Secretary of State. Since the Moran judgment some 6,000 people have applied for attendance allowance on the basis of that judgment. We know that it was 6,000 because the Government admitted that figure as late as July this year. On all previous occasions when social security legislation has been changed to deny benefit, it has been accepted that those who have lodged their claims are entitled to have them assessed and the benefits paid at least up to the date when the law was changed. Clause 1 does not do that. It employs a cunning form of wording by which it will apply to any applicant whose claim has not yet been determined by the Attendance Allowance Board.
I must pick up the question asked by my hon. Friend the Member for Birkenhead. As far as we are aware and in so far as we can make sense of the comments of the Secretary of State, Mrs. Moran's application has not yet been determined by the Attendance Allowance Board. The Secretary of State said clearly that the case was before the board. On that basis, it is difficult to understand how Mrs. Moran will obtain payment of the attendance allowance if the Bill goes through Parliament before the Attendance Allowance Board reaches a decision on her case. I am bound to say with the greatest respect and affection for Mrs. Moran that, even if the board lets her case through, there is no hope of the other 5,999 getting through.
§ Mr. Frank Field
My hon. Friend was paying such careful attention to the Bill's wording that he did not have a chance to look at the face of the Secretary of State as he was reading it. The right hon. Gentleman looked surprised on hearing his interpretation. Will my hon. Friend give way to the Secretary of State so that he can clarify this point?
§ Mr. Moore
I was looking surprised because, although I understand the intricacies of this matter, I made it clear in answering one of the many interventions of the hon. Member for Birkenhead (Mr. Field) that I hope that my hon. Friend the Minister will make it clear that we shall look more than sympathetically at any amendment that might be addressed to the clause to ensure that any cases in the pipeline—[Interruption.] If I may, I should like 670 to explain this important point. It covers many individuals. When the Bill was drawn up we sought a commencement provision that was simple to understand and apply. I know that my hon. Friend the Minister wants to be precise when he concludes the debate and to show that we will taken into account what might be called pipeline cases.
§ Mr. Cook
I began by saying that this was the second annual Bill to amend the Social Security Act 1986. This is a new first in social security legislation in that we have an undertaking to consider an amendment before the opening speeches have even finished. It would be churlish, however, not to welcome what the Secretary of State has said. I press him on this point: when that amendment comes forward, it must in all conscience, protect the position of all those 6,000 applicants who had lodged claims before Second Reading.
I move from the clause that affects the smallest number of claimants to the one that affects the largest number—the one that will remove unemployment benefit from 350,000 claimants by tightening the contribution rules. Most of those 350,000 claimants will qualify for income support, but the Government's estimates tell us that 50,000 of that 350,000 will get none. Even those who get some will get income support at a lower level than unemployment benefit. One can make two points on this proposal. First, it will affect tens of thousands, if not hundreds of thousands, of claimants who have paid national insurance contributions for decades but whose contributions just happen to be defective in the two relevant years. Secondly, it will hit the low paid worst because they need longer in which to accrue the necessary number of contributions. They are then caught in the trap of being paid least while at work and they are now also to be paid least when they are out of work.
The next largest group of claimants affected consists of mothers and their children who are to lose welfare food. The Maternity Alliance advises me that no fewer than 220,000 mothers and children will lose their entitlement to welfare food or free milk. That entitlement is worth £1.75 per week per person entitled to the milk or £3.50 if, as is likely, two members of the household are entitled to the benefit. One consequence of the change is outstandingly perverse; irrespective of their income, pregnant girls under the age of 16 will lose entitlement to free milk daily during the pregnancy. That means that the very group of people most likely to give birth to underweight babies are to be denied free milk. In other words, the mothers most in need of nutritional help will be certain not to get it. I suppose that that is in line with the Government's criteria; the fact that they need the benefit most is the most sensible reason for denying it to them. As the Secretary of State seems to be undertaking to amend the Bill, I hope that when he considers the clause he will reverse its effects to ensure that free milk is available to pregnant girls under the age of 16.
I turn to the part of the Bill which deals with the second age group most affected by the increase in unemployment over the past decade. Those who have suffered most from the unemployment crisis fall into two groups. We have already discussed school leavers and young people. The second group constitutes older members of the work force who find that when redundancies are thought necessary they are singled out for early retirements. If they foolishly volunteer for redundancy and leave the factory they find that it is extremely difficult to get work again outside.
671 The Bill lowers from 60 to 55 the age at which unemployment benefit is reduced by any occupational pension received by the claimant. As a result, 27,000 men and women between the ages of 55 and 60 will lose all entitlement to unemployment benefit. I have two observations to make. First, the clause affects the very people towards whom the Government might be expected to feel warmly. They have shown thrift and foresight in providing for themselves—qualities that the Government constantly seek to urge upon the work force. They have provided themselves with an extra income against their retirement. Now, as a reward for taking the Government's advice, they are to have their right to unemployment benefit taken away, even though they may well have paid national insurance contributions for the 40 years since they entered the work force.
Secondly, the Government cannot get away with presenting the proposed further reduction in the age level as an extension of the principle which says that those over the age of 60 have already retired. When introducing the provision for those aged between 60 and 65, the then Secretary of State, the right hon. Patrick Jenkin, said:Unemployment benefit is intended for unexpected and unforeseeable contingencies. It really cannot be said that retirement at the end of a pensionable career—this clause applies to people over 60 years of age—constitutes unemployment in the accepted sense of the word."—[Official Report, 15 April 1980; Vol. 982, c. 1046–47.]Is any member of the Treasury Bench willing to stand up and say that unemployment at 55 does not constitute unemployment in the accepted sense of the word and that it is better regarded as retirement? Unemployed people over the age of 55 do not regard themselves as retired. Indeed, the Government have unveiled the results of a survey showing that only 3.5 per cent. of those between the ages of 55 and 59 who are out of work regard themselves as retired.
One third of those between the ages of 55 and 59 are now out of work and by 1990 more than half of them will be out of work. Indeed, that is already the case in the north and the north-west. They are out of work not because the north and the north-west are more affluent or because there is greater emphasis on leisure and early retirement but because that is where the redundancies take place. The more that older workers become unemployed, the more necessary it is for them to have unemployment benefit and the less case there is for taking their entitlement away from them.
In total, the Bill would extinguish the right of 400,000 claimants to benefit. It would reduce the right to benefit of a further 300,000 claimants. The odd thing is that most of those 700,000 people will live in Conservative Members' constituencies. Unfortunately, that is inevitable, simply because there are so many Conservative Members. The kindest malediction that I can offer any hon. Member who votes for the package of cuts is that those of their constituents who are affected by turn up at their surgeries and demand to know why he or she did so.
In the financial memorandum I cannot find a single clause that will result in a net increase in expenditure. According to the financial memorandum, the total saving to the Department of Health and Social Security will be £275 million. Tomorrow, the House will hear the Autumn Statement of the Chancellor of the Exchequer. We understand that the Chancelor is likely to tell us that tax 672 revenues are buoyant and that public sector borrowing is down. He will undoubtedly tease us on the subject of his Budget intentions but it is most likely that he will leave himself room for a further cut in income tax next March. This Second Reading debate provides an ironic counterpoint to tomorrow's statement on the Government's expenditure plans. We believe that there can be no case for the Government cutting benefits for the poorest while they are able to find the money to cut the taxation burden on the wealthiest. That is why we shall vote against the Bill tonight.
§ Mr. Robert Key (Salisbury)
The Bill is a matter of high political contention. Passions will run high during the next few hours. The usual dogmas will be aired—probably by hon. Members on both sides of the House. We shall hear of the problems of inertia in social security and social security payments. We shall hear much of reforming zeal, whether successful or unsuccessful, from both sides of the House. But we are really talking about legislating for people and their families.
I shall concentrate on what is common political ground. We need go no further than clause 1 to find the provision concerning the attendance allowance. One family in my constituency has two haemophiliac children, one of whom is affected with the AIDS virus. He is HIV positive. I have been fighting a battle on that family's behalf to try to ensure that they receive attendance allowance. One would think that that would be basic and simple enough. My efforts have failed and the case has brought to my attention some of the nonsense that we talk when discussing these matters of high political contention. Instead we should all be trying to solve the problems of individual families such as the family that I mentioned.
Some 1,200 haemophiliacs in this country are now HIV positive. They have been contaminated by blood products from blood donations in the United States and the Third world. It is now required that such blood products be treated, so that we can now ensure that they will not infect those whom they are supposed to help. However, the United Kingdom is not self-sufficient in blood products, despite the promises of successive Governments since 1977. Thank goodness, we have moved a long way to achieving the aim. However, many of those who have been infected would not have been infected had we been self-sufficient before.
Many of the 1,200 people—such a tiny number, but we still cannot get it quite right—are ill and cannot work. Some have infected their wives. Some are children. All of the 1,200 are subject to the fear and prejudice—understandable though they may be—of the public. None of them can have life insurance to protect their families. None of them can have children without the risk of their children contracting AIDS. None of them can have endowment mortgages and none can be married or have a girl friend without the risk of infecting their partners. A total of 57 haemophiliacs have AIDS and 41 have died. That burden is in addition to coping with haemophilia, a life-threatening disorder. I had a haemophiliac in my class when I was a teacher. I know of the harrowing difficulties that he had to face every day of his life, without the extra problem of AIDS.
The urgent need is for the Government to provide a special weekly benefit to provide life insurance for the dependants of sufferers and for mortgage protection for 673 the home. In addition, the Government should set up a discretionary fund to help victims and their families. That would go a long way towards easing the financial, family and social burdens suffered by such people.
The Select Committee on Social Services recently accepted that compensation and special life insurance arrangements for haemophiliacs deserved careful consideration. Understandably, the Government are worried about the implications for negligence claims. I accept that the NHS was acting in good faith in providing blood products which, tragically, were contaminated. I do not believe that blame attaches to the Government. This is not a party political matter. The strength of feeling on both sides of the House is illustrated by the early-day motions tabled recently.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
What is the Government's reaction to the hon. Gentleman's representations on behalf of his constituents?
§ Mr. Key
I am coming to that. I shall tell the right hon. Gentleman exactly what happened. An all-party meeting is to be held on Thursday to discuss this matter and representations are being made to my right hon. Friend the Secretary of State.
This is a matter of good government. I admired the speech by the Secretary of State in September when he outlined the inescapable choices for health care provision. We have been challenged by him to think the unthinkable. That is right. We all support, at the least, the safety net provision in the Health Service. When the individual cannot cope, try as he might, the state will uphold him with dignity. Where the market cannot provide, the state has a role.
No insurance company can be expected to insure inevitable certainty. I challenge my right hon. Friend to take a bold political decision and to instruct the lawyers in the Civil Service to find a formula which will erect a ring fence to protect this special category.
For this small, unique and tragic group the unthinkable has happened. It is unthinkable that any British Government should fail to respond. It is not enough to say that all the usual social security benefits are available for these sufferers. They are there to be tried, but the family to which I referred failed in its attempts to get the attendance allowance. The family has suffered enormously socially. The child was expelled from his playgroup by the democratic decision of the other parents. I can understand that, but what a tragedy it is. The child now attends a normal primary school where welfare assistants are with him from the moment he enters the school gates to the moment he leaves. He can never be left alone, so nighttime care is essential.
In that respect clause 1 is important because it redraws the boundaries for attendance allowance. It will make it more difficult for such children and their parents to get attendance allowance. I urge my right hon. Friend to give careful consideration to the effects of that clause on haemophiliacs.
§ Mr. John Home Robertson (East Lothian)
Will the hon. Gentleman also urge the Secretary of State to bear in mind that, because of the nature of haemophilia, haemophiliacs often belong to the same family? Three members of one family in my constituency are affected and the most appalling burdens are placed upon that family.
§ Mr. Key
That is the point. The condition runs in families. Often two or three children in one family are affected, and that compounds the financial and social burdens.
The normal social security arrangements do not necessarily apply to such families. They have to fight every inch of the way. I am busy supporting the appeal by the parents to which I have already referred. Have we all to fight that hard every inch of the way for every family who are unfortunate enough to have haemophiliac children who are HIV positive? What quality of life will a family have if they have to spend their entire time fighting for social security benefits? What effect will it have on the children?
I salute the courage of those who are struggling to create a spring for their children when they know that they will probably never see a summer. Those families deserve, and must surely receive, compassionate treatment from our Government.
§ Mr. Frank Field (Birkenhead)
It is a pleasure to follow the hon. Member for Salisbury (Mr. Key), for two reasons. First, he raised an issue of enormous importance. I am sure that the Secretary of State was aware of the support from his own Back Benchers for the hon. Gentleman's speech and I am certain that we shall return to the issue on a number of occasions. Secondly, the hon. Gentleman deserves to be congratulated for keeping in order. That shows that he is a skilful parliamentarian.
It is a convention to congratulate a Secretary of State when he comes before the House to present his first measure. I do not congratulate the Secretary of State this afternoon, not because of any lack of generosity of spirit, but because I believe that the Secretary of State himself is unhappy with the Bill. The right hon. Gentleman bravely indicates his disagreement, but I shall illustrate, by pointing to five clauses, how the Bill is in direct contradiction to the Secretary of State's speech prior to the Tory party conference, about the welfare society that he wishes to create under his stewardship.
In that speech the Secretary of State emphasised the need to encourage independence. I do not think that that is the whole of the remit for any welfare society, but it is important and therefore moves which take us away from that objective are serious.
Let us examine clause 1 of the Bill which is intended to overturn the success of one of my constituents, Mrs. Moran, and the lawyer who helped her, Nicholas Warren. If we are to believe what the Government spokesman said to the Court of Appeal, that was a success, far in excess of what the Secretary of State has defined today.
I thought, like the hon. Member for Salisbury, that the move would extend the scope of the attendance allowance to those people who are disabled and were excluded. We thought that it would provide extra help for people who are caring for others, accepting that where that help was not provided by the families, the state would provide the care.
We must examine the Secretary of State's rhetoric about his wish to extend independence. If clause 1 is passed it will be more difficult for families to survive and to care in the community for people whom they love. It will be easier for them to crack up and easier to deliver such people from their families to the state for it to care for them.
675 I ask Government Members to think carefully about where the measure will lead us. They might not be affected by some of the cuts and changes of this Bill, but they will be affected by the move which I have just described. One of the great successes of the attendance allowance scheme is that it is not class based. It cuts across classes and helps all families who care for someone who needs care and attention, day or night. There will be pressure about the Bill at the surgeries of right hon. and hon. Gentlemen. I hope that that pressure arrives before Report stage.
The next clause contradicts the Secretary of State's declared aim for a welfare state. It removes people's entitlement to unemployment benefit until they have paid even more contributions, and makes it more likely that they will be dependent on means-tested supplementary benefit. Again, we must ask the Secretary of State what his rhetoric means. The national insurance scheme is the means by which many working people collectively obtain security against the form of dependence that he wishes to reduce, yet the Bill will increase the number of people who have to seek means-tested assistance. Is that the Government's aim? Is that what the right hon. Gentleman was outlining in his speech before the Tory party conference?
I wish to put a slightly different emphasis on the clause affecting the entitlement to benefit of 16 to 18-year-olds than did my hon. Friend the Member for Livingston (Mr. Cook). I would not oppose the change if the Secretary of State would assure us that the proposed training schemes will be of such a standard that we would be happy to go on them ourselves or to send our children. I would be less worried about the change if that condition were fulfilled.
I should also be less anxious if people with a genuine grievance about the quality of their training had the right to an effective appeal and could appear before a tribunal before the punishment period of 13 weeks had expired. The Secretary of State may know that representatives of various London boroughs brought many claimants to the House today to brief us for the debate. One of the many urgent issues raised was the length of time that claimants must wait before their appeals are heard. In my constituency claims lodged in January are being heard this month. A welfare rights worker from Greenwich told us that the borough is now hearing cases which were lodged 16 months ago.
I hope that the Secretary of State will satisfy us about those two matters. Will the YTS schemes be good enough for our families? What is he proposing to do about the appeal system so that those who have a genuine grievance about the quality of their training or who are in dispute with their employers who bully them—some employers do bully their employees, although most do not, thank goodness—can appear before an appeal tribunal quickly?
The other important matter which causes the Secretary of State disquiet is the social fund. We know from leaks during the summer recess that, when he saw this provision in the draft legislation, he was so horrified about how it would work that he sought to have it removed. He was anxious that the social fund should not be cash-limited, as it will now be. I do not know whether the report in The Guardian by David Hencke was completely accurate. I am happy to give way to the Secretary of State if he wishes to correct the record, but I think that he has a good nose for 676 trouble and smelt the difficulties that he would face as a Minister, just as many constituents will have to face appalling difficulties if the provision goes through unamended. Indeed, he was so anxious to scrap the proposal that he was prevented from doing so only by the former Secretary of State when he said that the Government would lose face if the change were accepted. The Secretary of State may lose face, anyway. How much better it would be to lose face earlier in the day rather than later.
I am not one of those who claim that he has lost face over clause 1. I am rather pleased with the announcement that he made about it, if I understood him correctly. I wish to ask the Secretary of State a question, and will be happy to give way so that he can respond. Are we clear that, before the Bill reaches the statute book, all those—not just Mrs. Moran—with claims pending for attendance allowance will be given a decision, and that they will not be caught by any retrospective legislation under clause 1?
§ Mr. Field
I thank the right hon. Gentleman for his reply. Matters are becoming clearer to me and, therefore, to our constituents.
As my hon. Friend the Member for Livingston said, the Government are penalising those who have provided for their retirement, who will lose the employment benefit for which they have paid. It is not a charitable handout; they earned it. The Secretary of State knows that if he was running a private company and tried to change the rules in this way, he would end up in the divisional court, the Court of Appeal and the House of Lords, and would no doubt lose his case.
What message can we take from this debate to those who have put away money in the form of occupational pensions, who will be penalised by the Government? What do we say to those who come to our surgeries and say, "We have responded to the themes of the Thatcherite Governments, we have tried to look after ourselves, but in return we will lose our occupational pensions"? Those pensions will be taken into account when housing benefit is computed, will make them ineligible for supplementary benefit, and now they lose when claiming unemployment benefit. How do we address that group of our constituents on any of the questions of equity, but especially as the Government say that they want more not fewer people to be independent of the state?
I end as I began, by saying that I am sure that this rather miserable little measure is not one of the right hon. Gentleman's choosing. He inherited it. The more that he tucked down his head today and tried to read through his speech, the more I became convinced that he was unhappy with it, as he should be. No other social security Minister has had to come before the House to introduce so many cuts in benefit and to make so few advances in the welfare state. Above all, he should be unhappy because in the summer he confidently outlined the structural changes that he wanted to make to the welfare state to encourage independence and lessen dependence. The sad aspect of 677 this whole ragbag of a measure is that, while it takes away many benefits from large numbers of people, it does not structurally alter the welfare state one little bit.
§ 5.8 pm
§ Mr. Simon Burns (Chelmsford)
I am grateful to you, Madam Deputy Speaker, for calling me to address this House for the first time. I confess that I rise with some trepidation, but fortified in the knowledge of the kindness with which it is customary for right hon. and hon. Members to hear the first speech of a new Member.
I take great pleasure and pride in having the honour to represent the constituency of Chelmsford and in succeeding its distinguished former Member Norman St. John-Stevas, who for 23 years diligently served the people of Chelmsford. I know that in this House he was renowned as a witty and formidable debater and his lasting achievements will be his championing of the arts and the Select Committee system that was established while he was a pioneering Leader of the House of Commons. This House's loss will be another place's gain.
It is with pride that I would like to describe my constituency. It consists of Chelmsford itself, the county town of Essex, and a number of small, attractive villages ranging from Boreham in the north to Margaretting in the south. In its time, it has been the home of Sir Walter Mildmay—who served the great Queen Elizabeth I as a counsellor with distinction and loyalty—to Trollope, to Goldsmith and to Sir Nicholas Tindal, who became a celebrated chief justice and showed great courage in defending the hapless Queen Caroline.
During the past 25 years Chelmsford has changed radically from being a small, quiet market town constituency—proud to have been the first town in the country to light its streets with electricity—to being the third fastest growing town in Europe. It has fortunately avoided the social problems that often accompany such rapid expansion. It ensured that, as the whole East Anglian region developed economically, it led and not followed. My constituents have played a vigorous and successful role in increasing the prosperity of the region. It is fortunate that, at less than 6 per cent., the rate of unemployment is well below the national average. That can be partly attributed to the fact that its local industries are broadly based. It mixes a strong manufacturing base with a thriving service sector.
As some hon. Members may know, it is the home of the jewels in the crown of defence contractors. Marconi Communications Systems, in the teeth of fierce overseas competition, only two weeks ago secured a potential multibillion pound order to supply high frequency anti-jamming equipment to the United States navy. Marconi Radar supplies the Royal Navy with the Sea Wolf. Marconi has been in Chelmsford since 1899, and it was due to the innovative powers of the young Marconi that, in 1910, Dr. Crippen was arrested on the SS Montrose for murder, and in 1912 a number of lives were saved when a distress signal, designed by Marconi, was picked up from the stricken Titanic.
The embryo of broadcasting took shape in Chelmsford in 1920 when Dame Nellie Melba broadcast the first song recital from the Marconi works in New street. In addition to Marconi being the largest single employer in my constituency, employing more than 8,000 people, there are 678 a number of other manufacturing companies—such as RHP, which provides ball bearings, and Britvic—which provide valuable employment.
Chelmsford has the second largest commuting population in the country, with more than 12,000 brave people using Network SouthEast every day to travel to Liverpool street to work in the city and other parts of London.
I want to say something about the National Health Service in Chelmsford. We have two excellent hospitals—St. John's, which is in my constituency and which is a major maternity hospital for the area, and Broomfield, which is just outside my constituency boundaries, but which provides health care for all my constituents. During the election many people to whom I spoke on their doorsteps said that they were confused by what they were reading in the newspapers about conditions in the Health Service. They had used the facilities in my constituency and had nothing but praise for the dedicated staff in the hospitals and the first-rate equipment that provides excellent health care. Frankly, they resented the attacks on the Health Service that were being made day after day. They, with first-hand experience through the care they have received, know quite condfidently that the Health Service is safe in the Government's hands.
It was interesting that, on my visits to local businesses during the summer, time after time entrepreneurs told me that they could not find skilled workers to fill the many vacancies in the East Anglian region. They welcome the fact that the Government have placed great emphasis on training, especially for youngsters through the youth training scheme and the technical and vocational education initiative. However, many of my constituents have been bewildered that youngsters of 16 and 17 have been able to spurn school work and YTS and move effortlessly, and seemingly without shame, on to supplementary benefit. That is why I am sure many people in Chelmsford and especially employers, will welcome clause 4 of the Bill.
Many of my constituents are concerned—as is my right hon. Friend the Secretary of State—about the dependence mentality in modern Britain. I share and echo that concern. The Conservative Government are committed to providing material help to those who genuinely need it, allowing those who are under-privileged and less well-off—through no fault of their own—to share in the greater prosperity of the new Britain that we are creating. But we are also, rightly in my view, concerned that the taxpayers' money that we use for such acts of compassion should go to those in genuine need. I do not believe that the calculated choice of state-subsidised indolence qualifies as genuine need or should divert resources from more deserving cases, such as the elderly, the disabled, the handicapped and those who live in areas less fortunate than my own where the economic revival has been slower to occur.
My constituents will welcome the commitment that the Government are giving to young people by providing for every person under the age of 18 a place on YTS except when they are still in full-time education or in employment. Just as important, my constituents realise that the proposals before us tonight provide a means of encouraging more youngsters to acquire skills and valuable work experience so that they are then better qualified to compete in the highly competitive jobs market.
679 I do not want to impinge on your patience any longer, Madam Deputy Speaker, especially as I am always mindful of an incident that occurred in the Chelmsford shire hall in 1938. That incident was the last recorded episode of spontaneous combustion when a garrulous lady blew herself into flames at a hunt ball.
§ Mr. Ronnie Fearn (Southport)
Before I commence my speech, may I say how much I enjoyed the maiden speech of the hon. Member for Chelmsford (Mr. Burns). The hon. Gentleman has impressed us considerably with his first speech. I was especially impressed when he mentioned that unemployment in Chelmsford was 6 per cent. In my constituency it is 17.8 per cent., so I envy him that. He certainly told us a good deal about the history of Chelmsford, and I know a lot more about it now. I hope to visit Chelmsford one day. I feel that he will be a great asset to the House and I know that hon. Members on both sides will congratulate him on his maiden speech.
The Bill consists of a series of mean-minded schemes whereby the Government can claw back money from those who need it most. It will also allow the Minister to alter the mistakes in the Social Security Act 1986. Clause 1 displays a particularly mean and small-minded attitude to the relatives of ill and disabled people. It undermines much of the progress that has been achieved and will, in the long term, cost the taxpayer more and cause even more problems for those relatives.
Clause 1 is yet another example of the Government moving the goal posts when they have lost an argument. The clause reverses the effect of Moran v. the Secretary of State for Social Services. That case entitled a severely disabled person—for example, someone subject to epileptic fits and who requires the presence of someone on "standby"—to the higher night time rate of attendance allowance. If the Bill is passed, the person providing that supervision will be required to be awake for a prolonged period or at frequent intervals before the claimant can qualify for that rate. Precautionary supervision will not be enough.
Clause 2 means that the reduced earnings allowance will be paid to people who have suffered accidents at work, or who have suffered from an industrial disease, and as a result cannot earn as much as they did before. Previously, REA was payable after retirement, but was frozen at the amount payable immediately before retirement. As I see it, clause 2 and schedule 1 will remove entitlement to REA after retirement if the amount of REA payable was under £2. For those whose REA was £2-plus, a retirement allowance will replace REA. That allowance will be 25 per cent. of the REA payable, or 10 per cent. of the maximum level of disablement pension, whichever is less. However, it will be uprated annually. Before the Bill is passed those entitled to REA after retirement will continue to receive it, but the amount of the payment will be frozen and not updated.
I also note that the total amount of industrial injuries benefit, including REA, payable after retirement is to be cut from 140 per cent. to 100 per cent. of the maximum rate of disablement pension. Industrial death benefit is to be abolished for deaths occurring after 11 April 1988 with the higher weekly rate of IDB being restricted to the level of widows' pensions. The net effect of these petty cuts is 680 to reduce the protection available to victims of industrial accidents and disease, particularly after they retire. The cuts will be particularly felt by those who become victims towards the end of their working lives. The cuts will save only £3 million in 1989–90, rising to £11 million in 1990–91.
With regard to clause 3 of the Bill, why is the Minister so anxious to change from primary legislation to regulations? Is it because it will allow the Minister to avoid future detailed parliamentary scrutiny?
What of clause 4? It is the avowed aim of the Government, and particularly of the Secretary of State, to support individual independence, yet clause 4 will have the opposite effect. By removing 16 and 17-year-olds from income support the Secretary of State is forcing thousands of young people into dependency on their parents while reducing the amount of money available to their families for their upkeep from £19.40 a week to £7.25.
What will happen to young people who have left home and are estranged from their parents? What will happen to those who left to avoid domestic violence of child abuse? What will happen to young single parents or those young people abandoned by their parents? They are able to claim income support only if they are specially exempt by the regulations; otherwise they are at the mercy of the Secretary of State—and we all know that his record of generosity is far from good.
Potentially, clause 4 could lead to unimaginable hardship for some young people. Many young people will be forced to take up a YTS that is totally inappropriate or face a life of poverty. Some young people may even be deprived of any independent means and may be forced to turn to crime.
By this legislation the Government wish to withdraw benefit from young people who choose, deliberately, to be unemployed. However, there is no evidence that that is a particularly large group. Regulations already exist to reduce the benefit of those who refuse to take up YTS or leave early for no good reason.
Official figures show that between December 1983 and April 1987, some 25,502 people suffered a reduction in benefit for voluntary unemployment. Of those, the vast majority were early leavers from YTS, and only 2,225 had refused an offer. On average, each year 8,000 young people leave YTS early and only 750 people refuse to enter a scheme out of a total of 1.6 million people. In other words, the scope of the proposals is out of proportion to the size of the problem. The Minister is using the proverbial sledgehammer to crack a nut.
In clause 5, the contribution conditions for unemployment and sickness benefit are made stringent—claimants will have to work continuously for a two-year period. This will seriously hit many young people, married women and seasonal workers, forcing them back to dependency on means-tested benefits. I am informed reliably by the citizens advice bureaux that this will enable the Secretary of State to save £10 million in 1988–89, rising to £70 million in 1990–91. But at what a shameful cost.
In regard to clause 7, will the Minister tell us which other bodies will be entitled to arrange to pay benefits during an emergency? Will this be a back-door way of introducing privatisation?
Clause 10 gives too much power to the Secretary of State, who will effectively be judge and jury on the running of the social fund. I am extremely concerned about the power of the Secretary of State when he seeks to allocate and reallocate funds as he sees fit. If he can reduce the 681 funds available without warning the social fund and social fund officers, he could put those officers in an intolerable position. They would be unable to advice claimants adequately because they would not be sure whether funds would be available to meet claimants' needs. Such a system would be completely inflexible and a recipe for disaster. Once again, there is potential for considerable hardship and distress if loans that are expected to be repaid are not repaid.
I am extremely concerned that the money available for severe weather payments should be included in a separate budget from the social fund, because of the difficulty of predicting demand. It is vital that old people should be able to put their heating on in the extremely cold weather that we experience every year, secure in the knowledge that they will not be forced into debt. Why is there no provision for a right of appeal against the refusal of any claim for a severe weather payment? That appears to be extremely unjust.
I congratulate the Minister, because the Bill is more carefully drafted than most, but many of the proposed cuts in national insurance-based benefits seem counterproductive; they will lead to an increase in claims for the means-tested income support. The Government clearly feel that this can be financed by the cuts in income support for 16 and 17-year-olds.
There are so many cuts and retrograde steps in the Bill that will hit parents, children, elderly, disabled or sick people that we will most certainly be voting against it.
§ Dame Jill Knight (Birmingham, Edgbaston)
I, too, would like to offer my warm congratulations to my hon. Friend the Member for Chelmsford (Mr. Burns) on a graceful and competent maiden speech. He has a perfect right later to have a small celebration of his great success. One of the things I admired about his speech was his firm adherence to the tradition of the House—the oak of tradition which has given us the Galleries, the panelling, the seats and the Floor of the House, and much more—the confidence of hundreds of years. More of the new Members coming into the House would do well to follow the example of my hon. Friend by having a great respect for tradition.
This debate reminded me of when I visited Disneyland some two or three years ago. In the haunted castle section I saw a picture which, when viewed from one point, was extremely beautiful, calming and even uplifting, yet from only two or three steps away was horrible, wicked, evil and cruel.
I have listened with interest to the speeches of Opposition Members and I find them extraordinary. The hon. Member for Southport (Mr. Fearn) has claimed that the Bill is intended to be used to claw back money from those who need it most. That is untrue. More money is to be made available under family credit for those who need it most, which is what we all want. I am sorry that the hon. Gentleman has spent his time in the Chamber this afternoon failing to hear what my right hon. Friend the Secretary of State had to say. Some of his criticisms of the Bill were based on false conclusions and did not reflect my right hon. Friend's explanation of this measure. If the hon. Gentleman had listened, at least one or two of his worries would have dropped from his shoulders.
§ Mrs. Margaret Beckett (Derby, South)
The hon. Lady claimed that the Government are being more generous to 682 those who are in greatest need. How is it that the parliamentary draftsmen have made the terrible mistake of identifying a net saving if the Bill's provisions are implemented?
§ Dame Jill Knight
I have already said that public money should be directed to those who need it most. The Government should be given credit for directing more money to those who are in that position and for not paying out money to those who do not need it.
It is time that someone spoke on behalf of those who have to foot the bill. The letters in my mailbag and the remarks that are made at my surgeries often reflect considerable anger that money is provided for people who do not need it. The social security budget is running at about £44 billion per annum, which is a tremendous sum. Those who contribute towards that sum from their hard-earned wages, salaries or whatever have the right to know that their money is being used to help those who are in need and not wasted on those who are not. Many who pay taxes are less well off than some of those who receive benefits. It infuriates the poorer taxpayer when he finds that he is paying out money to youngsters who choose deliberately to remain unemployed.
It is right that the Opposition should draw attention to youngsters who are trying to get jobs but cannot do so, but it has been outlined clearly that the training system that is to be offered to them is such that if they refuse to take a place on it they will forfeit unemployment pay. What is so bad about that? The people of West Germany and other European countries have already introduced a regulation that denies unemployment pay to youngsters who choose to remain unemployed and not receive training. We always hear a great deal about other European countries when it suits the Opposition's book to make comparisons, but in this instance our European neighbours take exactly the same approach as ourselves.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
If the hon. Lady wants to draw a comparison with West Germany, would it not be fairer to give a fuller account and contrast the level of youth unemployment and youth opportunities in that country with those in the United Kingdom and the attendant real value of benefits as a proportion of a national wage in West Germany as opposed to one here? I think that she will find that benefits in West Germany provide a considerable contrast to the paucity of benefit levels here.
§ Dame Jill Knight
The hon. Gentleman cannot get away with that. The Germans take the reasonable and sensible view that is being taken on the Government Benches, and surely that is right. He knows as well as I do that comparisons of welfare benefits between one country and another are almost impossible to make in a reasonably short speech.
§ Mrs. Elaine Kellett-Bowman (Lancaster)
Has my hon. Friend considered whether the Hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) is aware that the amount paid in wages to someone undergoing tuition or an apprenticeship in West Germany is infinitely less than the sum paid in Britain?
§ Dame Jill Knight
I am sure that the hon. Gentleman is so aware. That is why I said that he could not get away with it.
683 I am most anxious that the need of industry for better training of young people should be met. It is unfortunate that at present it is not. I am pleased that part of what we are discussing will lead to an improvement in training.
The Opposition spokesman, the hon. Member for Livingston, (Mr. Cook), who made his speech and rushed off for something that is doubtless terribly important, having left a most competent deputy in his place, the hon. Member for Derby, South (Mrs. Beckett), said that he was concerned that young girls would no longer be able to leave home unless they could prove that it would be difficult and perhaps unhappy for them not to do so. He gave the example of young girls being subjected to sexual harassment.
The taxpayer expresses concern from time to time that he should be forced actively to encourage young children to leave home. Let it be clear that young girls who leave home are in considerable danger, as are young boys. Many of them come to London, and I do not wish to dwell on the fate that awaits some of them. It is true that taxpayers' money has actively encouraged this to happen in the past, and it is no bad thing if we are moving away from that.
§ Ms. Armstrong
I am sure that the Hon Lady will be aware that there are other emotionally stressful situations, such as those that are being experienced in Cleveland. It remains unclear whether, after a couple of months, there will be the entitlement to benefit. This is an issue that needs to be clarified and I thank the hon. Lady for allowing me to intervene.
§ Dame Jill Knight
I am all for clarification. I can assure the hon. Lady that the concern to which I have referred exists. It is no part of the taxpayers' remit to break up families or to assist young ladies who would be infinitely better cared for in their own homes. That is all that I am saying.
We have heard a good deal about the attendance allowance. Again, this is an example of the Disneyland picture. I understood that the attendance allowance was introduced so that those entitled to it—those who need it to be looked after day and night—could be cared for adequately. The Government are not moving the goal posts. Instead, they are providing clarification. I have fought Governments over various welfare benefits in my time as much as anyone else——
§ Dame Jill Knight
I shall finish the point that I am making before giving way again.
It was always clear that the attendance allowance was introduced to assist those who need care day and night, and who, without such care, would be a danger to themselves or others. I have always understood that to be the nature of the allowance.
I remember being greatly upset about the case of a constituent amputee who was unable to receive the benefit to which I thought he was entitled because his leg had been amputated one inch lower than the point that would have triggered the payment of benefit. I was angry about that man and fought his case hard. However, in the final 684 analysis it was not, of course, for me to say whether he should get attendance allowance; it was for the doctor who cared for him to say whether he could walk with the help that he had received.
Surely it is not for us to say whether a person needs constant attendance. We give that responsibility to doctors by saying, "Does the patient need constant care? If so, the constant care allowance will be payable." As I understand it, that has not changed. However, the courts, as courts do sometimes, throw a different interpretation on what the rules were thought to be. I am afraid that I do not consider that the provisions are moving the goal posts in the way in which some Opposition Members appear to think.
I turn now to the single payments that are to be abolished by the Bill. Considerable annoyance has been expressed to me by people who have seen entire flats, from the carpets and curtains to three-piece suites, being furnished by the DHSS. Many people have said to me, "I have a job making ends meet. I need a new carpet in my sitting room but I would not dream of asking the taxpayer to pay for it."
§ Dame Jill Knight
No, I shall not give way. I must be allowed to finish my sentence.
It seems that nothing will satisfy Labour Members other than more and more taxpayers' money being poured out whether or not people are in need. I advise those Opposition Members that many thousands of people in this land do not look to the DHSS to provide them with a new carpet. They save up for it in the normal way as all of us have done.
§ Mr. Corbyn
I thank the hon. Lady for giving way. Will she join me in deploring the way in which the DHSS is deliberately delaying making single payments for furnishings, floor coverings, cookers and clothing in advance of the social fund so that hundreds of people in my constituency, and in others in inner urban areas, are denied any furnishings for their flats and are forced to sleep on the floor because of the incompetence of the DHSS, which is not making the single payments that it is required to make by law?
§ Dame Jill Knight
It is outrageous for the hon. Gentleman to use his position in this House to attack good and efficient servants who try their best to carry out the remit that has been laid upon their shoulders.
§ Dame Jill Knight
No, I shall not give way to the hon. Gentleman again. If he has something to say he should say it in his own speech. Does he honestly think that anyone should be allowed to go along to a DHSS office and say, "I haven't got a carpet but I shall take a cheque right now, thank you very much"? I am afraid that I do not agree with that.
§ Dame Jill Knight
No, I shall not give way to the hon. Gentleman because he does not know what he is talking about.
§ Dame Jill Knight
No, Opposition Members must recognise that DHSS money is not automatically endlessly supplied to people who simply feel like asking for it. Where there is real need——
§ Dame Jill Knight
Just a minute. Where there is real need the DHSS will pay. The hon. Gentleman is asking that there should not be any proof of real need, and on that point I cannot agree with him. I shall give way to the hon. Lady now.
§ Mrs. Beckett
I am grateful to the hon. Lady for giving way. She has accused my hon. Friend of not knowing what he is talking about. I recommend that the hon. Lady read the fifth report of the Social Security Advisory Committee, the Government's own advisory body, which states:some expenses cannot realistically be budgeted for from within present benefit rates.That was before the Government lowered the present benefit rates in their uprating statement the other day.
§ Dame Jill Knight
That is nothing like what the hon. Gentleman said. That fact is that those who need help to furnish their flats or homes can get loans for special items under this measure. That is right when 95 per cent. of people pay their own bills and save up for what they need. Those people have the right to ask us in this House to ensure that we are careful with their money. I should add that those loans are interest-free, which is a very good thing.
I direct my hon. Friend's attention to the abolition of the weekly additions—the heating, diet and laundry payments. I understand that most such additions will be covered safely by the new premiums. However, I wonder whether there is not a little break in the net. I refer especially to some disabled people who are newly reaching the stage of needing multiple additions. It is possible that they might be worse off. I know that the Government do not intend that those in real need should be worse off as a result of the Bill. I hope that my hon. Friend will consider the position of those few people who may be caught in that trap. [Interruption.] Opposition Members may not like it, but I shall speak whether or not they do.
In a letter that I have received from the Maternity Alliance, and which I have read carefully, it is claimed that clause 11 cuts eligibility for welfare milk. The letter states:Two hundred and twenty thousand families on low incomes and on family income supplement will lose the benefit.I turned keenly to clause 11 to see what it stated. Clause 11 is a perfect example of the art of the parliamentary draftsman in that few people can understand more than two or three words of it. However, it is absolutely clear from clause 11 that the Maternity Alliance's charge is not borne out. As I understand it, welfare milk for pregnant girls under 16 will be provided where the girl is part of a family that receives income support—I hope that the position is as I have understood it—and that if such a girl is a member of a family that is in receipt of family credit, the family will receive £2.55 per week instead, with which to buy the milk. Therefore, I cannot see that such alarmist suggestions are true.
I was amused that page two of the letter states:I would ask you to support an amendment either in Committee or at the third reading designed to protect the right of pregnant women and children to free welfare milk.I can remember a time when schoolchildren left their milk, especially girls, who thought that it was a fattening drink, in scores of bottles in the playground. Therefore, I am certainly not prepared to ask that all pregnant women or children always receive free welfare milk.
686 As I said earlier, if people are poor and cannot afford what they need I shall fight for them to my last breath. However, I shall not support those who are wealthy enough to pay for what they need getting it from the taxpayer who is poorer than them.
This afternoon we have heard Opposition Members say that public money should continue to be paid to people who choose to be unemployed, who become unemployed by choice, and to people who, according to the doctors—it is not our judgment—do not need constant attention. According to Opposition Members, people who would be able to furnish their flats by saving up should instead be paid out of the public purse, and income support should continue to be paid to encourage youngsters to leave home. Opposition Members take an extraordinary view of the Bill. I know that my hon. Friends will join me in the Lobby in supporting the Bill most fervently.
§ Mr. Bill Michie (Sheffield, Heeley)
First, I congratulate the hon. Member for Chelmsford (Mr. Burns) on his speech. I certainly enjoyed the first part and I believe that he knows a great deal about Chelmsford, although not much about youth unemployment and the problems that it brings to families and neighbourhoods.
The hon. Member for Birmingham, Edgbaston (Dame J. Knight) made her usual controversial speech without facts and she certainly did not listen to some interventions. It was most unfair to make a little remark about my hon. Friend the Member for Livingston (Mr. Cook) not being present. I do not know why he left the Chamber, but I must congratulate him on his foresight.
It is less than a year and a half since we last debated a Social Security Bill. Now we have another Bill which not only amends the bad legislation of the past, but which, despite the Government's denials, undoubtedly introduces new cuts for those in need of help and those on the lowest incomes. It was said that during the passage of the Bill in Committee in 1986 at least 1 million words were spoken, and my right hon. and hon. Friends and I who are here today will no doubt be present tomorrow to start yet another such batch of words.
§ Mr. Michie
As my hon. Friend says, we still have our voices. One million words are a great many words. I do not mind one million words being spoken, but I object to the fact that, despite them, we did not change the Government's mind and that millions of people are affected by the legislation.
In Committee in 1986, a Conservative Member confessed that the legislation affected just about every family one way or another. All have old people, many have claimants and many have children and disabled people. Although this Bill is not as large as the 1986 one, it will have similar effects on many thousands of families. It makes me wonder what goes through the minds of Conservative Members when, last week, they endorsed millions of pounds to subsidise the underwriters of the City and at the same time drafted legislation taking money from the poor, the vulnerable and those least able to defend themselves. I wonder what goes through their minds when they remove the rights and entitlements of 687 people who cannot articulate for themselves, unlike so-called underwriters who can and do so with greater influence. To take money from the poor is unjustifiable; to introduce new devious regulations which make it harder for those who cannot defend themselves to claim and receive entitlements is unforgivable.
It is not easy to make claims on behalf of constituents, especially claims for attendance allowance. I am glad that there seems to be some movement on that for those who need that allowance. It is difficult enough now, without any change in the regulations to make it more difficult. I am sure that many of my hon. Friends have fought cases for attendance allowance and lost them under the present legislation, never mind the new. I fought a constituent's case for two years and believed that we were near to winning it, but, unfortunately, he died a week before the final decision was to be made. There is no compensation for that. His widow had looked after him for two years while we argued the case. He was 60 years of age and only five stone in weight. I do not know what we must do to prove that someone is ill and needs constant attention. It is bad enough now, never mind in future.
Young people and families will be severely affected by clause 4. Obviously, the hon. Member for Edgbaston thinks that none of the needy will lose money, only skivers. I object to her suggestion that some of my constituents who will lose money under the Bill are skivers. They are not skivers by any stretch of the imagination. They have told no lies and their needs are great. But Government Members cannot recognise those needs through the glass of a champagne bottle, as they are viewed in some Tory constituencies.
It is a con to say, "We are extending family allowance. Aren't we generous?" We all know what the legislation is about; it is about saving money. The Government will pay £7.50, which is a frozen sum, and avoid paying income support. That is what the Bill is about and there is no argument about it. I would have more respect for the Government if they said that, instead of claiming that they were helping all those in need. Once again, the unemployment statistics are being massaged as the legislation ensures that 17-year-olds must stay at home with their parents, whether or not they are welcome and whether or not their parents can afford it.
The Bill will cause massive hardship to many families who are already suffering from unemployment and deprivation, particularly those in our northern cities. Therefore, I hope that the Government have the heart to change it and protect families in greatest need.
As usual, married women will suffer yet further cuts or at least have some of their privileges, rights and opportunities removed under clause 5. Entitlements will be more closely tied to full-time and continuous work. Obviously, that is not the case for many women who take time off for maternity leave or to look after the family. That always seems to be the job of women and I hope that one day we shall change that. Then, of course, more men in the House will moan about the lack of opportunity in legislation, such as in this Bill.
Each clause and schedule will be closely examined and opposed in Committee, whether it deals with attendance allowance, family credit, income support for young people, the reduction of the earnings allowance, industrial injuries and benefits, or a range of other benefits, such as 688 severe weather payments and pensions which will also be adversely affected by the Bill. Those of us who serve in Committee will challenge all the Bill's propositions, if necessary line by line as we have done previously, to protect the poor, the old, the needy and the disabled in our constituencies. They are not getting a good enough deal now, without our taking further moneys from them.
§ Sir Brandon Rhys Williams (Kensington)
I am bound to express several reservations about the Bill, but I shall not elaborate on them clause by clause because I hope to have the honour of contributing in Committee or during the remaining stages of the Bill. That will provide an opportunity to ask Ministers to expound precisely on the impact of aspects of the Bill which are causing me and others considerable anxiety.
I hope that the House will forgive me if I consider the philosophy of the Department in introducing the Bill and the forecasts of what future policy is to be on the whole problem of the welfare state. I should like particularly to consider the economic factor, the relationship with the tax system and the social factors involved in the whole business of the redistribution of income. If we do not have a clear idea of our strategy we may make serious mistakes in our tactics.
Obviously, the Government have done a great deal to redress the balance between energy within the economy and inertia. We want to release the dynamic forces which will make the country more prosperous and find ways of getting rid of the various problems which prevent people from achieving the best for themselves and their families in creating wealth and making themselves independent citizens.
In the higher income ranges, the Government have released an enormous amount of energy and they are very much to be praised for that. There is still more to be done. I should like to see the end of higher rate tax altogether. I said that as long ago as 1971 when I served as a member of the Standing Committee on the Finance Bill and I have not changed my view. It must be counter-productive to bring pressure to bear on the people who are best able to create wealth and use the best discretion in the way in which they handle their investments. However, that is by the way.
At the lower levels of income, the Government have unfortunately not been successful in overcoming the problems of inertia among very large numbers of people. Britain today has the look of a country where there is not a large number of people available to do low-paid work. That, of course, is not the case; it is an illusion which we have brought on ourselves because our system for the redistribution of income is so very unsatisfactory.
I want to give the House some figures. The figures for the number of people claiming supplementary benefit clearly shows us that there has been a steady increase in the size of what one might call the static element in the economy—the people who are not or should not be contributing anything in terms of the creation of wealth. The Library has very helpfully provided me with the figures today. In November 1977, the number of supplementary benefit claimants was 2,991,000. By 1981–82, the figure had risen to 3,725,000. By February 1986, it had gone up again to what one might call the disastrous figure of 4,938,000. Those are claimants; I am not referring to their dependants. But by February 1987, 689 the provisional figure for those claiming supplementary benefit had gone over 5 million, the exact figure being 5,008,000.
We do not know what the figures for the current year or next year will be. There is good reason for hoping that the figure will have declined somewhat, partly because of the extremely welcome reduction in the number of people unemployed and partly because a certain number of people are now able to rely on their occupational pensions in retirement instead of having to claim supplementary benefit in order to have enough to live on.
However, if we want to gain a measure of the true extent of the static element in our economy, we have to look at the total number of people, including claimants and dependants, in a single figure. That figure has risen from 4,759,000 in November 1977 to a figure that we now believe must be over 8 million, possibly as much as 8.5 million.
The steady rise in the number of people engaged in the redistribution of income industry handling that number of claims and looking into the number of people who need such support, is adding nothing to real wealth. I do not know the size of the redistribution of income industry, but when we take the private sector into account as well, including all the small employers giving a lot of time to the calculation of PAYE, the industry must employ at least 150,000 or perhaps 200,000 people. Between the lot of them, they are not adding a single pound to the actual output of the nation.
I want to consider the total number of people in Britain on income-related assistance before I leave that point. I do not think that the House has really appreciated the impact of an answer that I received from the Department of Health and Social Security on 14 April 1986. My right hon. Friend who is now Chief Secretary to the Treasury—I welcome his appointment there—stated that for the most recent available date, then 1983:an estimated 14 million people were living in families receiving supplementary benefit, housing benefit or family income supplement."—[Official Report,14 April 1986; Vol. 95, c.271.]What a very discouraging environment for so many of our young people, if we think of the number of young people among those 14 million living in a state of dependency on means-tested benefits of one kind or another.
My right hon. Friend the Prime Minister has been greatly praised by members of all parties because she has revived people's ambitions to take work in order to better themselves and free themselves from dependency. All Conservative Members would wholly endorse that. We also believe in the Prime Minister's maxim that people should save, be thrifty and careful with their means so as to build up a nest egg for themselves and their dependants.
When the Prime Minister says those things, she touches a chord to which everyone responds—or should respond; but among the 14 million people receiving means-tested benefit there will be a very large number who unfortunately will calculate that what the Prime Minister has to say about work and thrift somehow does not apply to them, because if they take the sort of work which they are likely to be able to obtain—which will provide rather low wages—they calculate that by the time that they have paid for decent clothes to maintain their appearance at work, travelled to work and met other incidentals, the family will be less well off than if they continued to draw benefit and remained in idleness. Of 690 course, a very large number will also calculate that if they enter the black economy—continuing to draw benefit but also doing something from time to time to get a little money from here or there—they will be doing the best thing of all for their families.
It is not a satisfactory social or economic situation to hold such a large number of people in dependency on means-tested benefit; and it is a matter for regret that my hon. Friend the Secretary of State, in his decision this year not to uprate child benefit, has tipped another 40,000 or so people on to the heap who are already dependent on means-tested benefit and no longer able to class themselves as first-class citizens.
When one considers the social factors of a nation where such a very large number of people are dependent on means-tested benefits, what would one expect to find? What would we expect to happen when so many people have to see themselves as having a subordinate status? Child allowances, whether in the form of child benefit or the allowances to people claiming supplementary benefit, are really rather modest in relation to the actual cost of raising a child in decency. So one would expect to find an increase in the number of broken marriages. One would expect to find a rising number of children in one-parent homes. One would expect to see anxiety showing up in the consumption of tranquillisers and other drugs that actually undermine people's capacity for work and also lead them into criminal activities.
The persistence of evidence shows that subordinate status corresponds to the likelihood of below-average maternal and infant health; and of course we know from the perinatal mortality figures that social class is a very important corresponding factor in ill health. One would expect to find low school achievement where there is a high proportion of people living in conditions where they are obliged to rely on income support—for example, in the inner cities where the depressed tone of home life is reflected in below average academic performance of children and their participation in school life.
One would also expect to see a rise in crime. One would expect people desperate for more money from one place or another to indulge in handbag snatching, burglary, mugging, trading in stolen goods and the growth of the black economy, as they are stimulated by low income and the sight of plenty enjoyed by the more fortunate members of the population. One would expect to see a look of stagnation in our inner cities where a large number of people are of subordinate status and do not find it worth while to take regular paid work.
Of course, those are the things one would expect to find where there is such a large number of people dependent on means tests; and that is, indeed, exactly what we do find. The Government are faced with a serious problem.
Does the Social Security Bill help? Is the strategy of the Department right? I am bound to say that I do not think that the Bill significantly helps. In some ways, it seems to me that it actually makes matters worse; and I am not confident that the Department's strategy is right.
The existence of this large subordinate element is particularly adverse for women in Britain. One reason is that the tax system is not yet based on a unisex principle. In addition, when women take unskilled work, which is what is often offered to them when they belong to this unhappy subculture, they are generally very low paid. However, when families break up it is the mother who is generally left with the responsibility for the children. and 691 the extra allowance that we pay for one-parent families does not go very far when the rent has to be paid and the children fed and clothed.
I hope that the House will forgive me if I look a little more deeply at the implications of what is now known as targeting, which a few years ago was called selectivity and before that used to be called the means test. It is not just the alienation of a large part of the population or the reluctance to work or save that creates this large mass of inertia that is holding back the performance of the economy. There are other problems which we must analyse and find solutions for.
Let us consider for a moment the reluctance to claim which people feel when benefits are targeted via the means test. We know that child benefit achieves almost 100 per cent. take-up but unfortunately we have learnt that the take-up of family income supplement is as low as only 50 or 60 per cent. Although we hope that the new family credit will achieve a higher take-up and confer more benefit, it will not hit the target 100 per cent., and no one claims that it will. Therefore, for a large number of people, targeting will miss the target. That is tragic when one considers the plight of very low-income families with children to look after.
People do not claim partly because of pride, and those are possibly the people whom we respect the most. At the other end of the scale, failure to claim is also due to incompetence, such as the inability to read and write or an inability to find one's way in English, as with many of my own constituents. Equally, the reluctance may be caused by the struggle of claiming, the hours of waiting, the humiliation and the circumstances in which people must make their claims in the DHSS offices. It might also be calculated that there are certain snags, because if people take work that does not last very long, they may find themselves in a very bad state thereafter.
Another problem about targeting which the Department should take into account is that it does nothing for people who are just above the level at which they are entitled to claim. Those people deserve our consideration. I am not happy about this emphasis on targeting, and I therefore wish to comment on income support in relation to income tax and national insurance.
It is rather an anomaly that we have brought down income tax to 27p for investment income, but for the working population income tax still stands at 36 per cent. That is because national insurance has been virtually taken into the income tax system and taxation therefore bears more heavily on those who work for their income than on those who depend on income from investments. It is almost as if we have got it the wrong way round; but that is how it is.
There are three grounds of entitlement for positive payments in our income support system. The first is proof of need, which is the basis for entitlement to supplementary benefit and the other means-tested benefits. There are also the national insurance contributions, and they are substantial. The national insurance contribution is a heavy tax to pay on top of the standard rate of income tax. It produces entitlement to the basic pension, to unemployment and sickness benefit and to certain other national insurance benefits which people are able to claim without proof of need, but on evidence of their contribution record. The third positive payment 692 system is the citizenship entitlement. That allows people to claim child benefit. There can therefore be positive payments on grounds of need, on the record of one's contributions or simply because of citizenship. The Department has never really clarified its intentions as to which of those grounds of entitlement it favours.
There is another hidden welfare state that does not produce positive payments but which achieves the same result by negative allowances. That is the hidden welfare state which is contained within the income tax system. A single person is allowed to deduct from his or her income £2,425 before paying tax, which, if my calculations are right, has a net worth of about £900 a year at the present standard rate of tax. However, a married person is entitled to claim £3,795 before paying tax. That is a difference of £1,370, and, with income tax at 27p in the pound, I calculate that it puts the married person at an advantage of £370 a year over the single person on the same income.
We have now abolished the child tax allowance, which was a further way of differentiating between people with different family circumstances and which originated at the end of the 18th century with William Pitt. We now pay a child benefit instead, which is worth £377 for each child. A married person therefore pays £370 less tax than a single person on the same income, and a married family with a child gets a further £377 of net spending power for each child in the family. Had the amount been raised this year in accordance with the principle that we apply to the married person's benefit and extended to child benefit on the Lawson-Rooker-Wise formula the benefit would have gone up by another £16 a year. One might say that, in taking that sum away from 6,750,000 mothers—or whatever the number is this year—my right hon. Friend is not depriving them of a great deal; but his decision has caused much concern both in the House and throughout the country because of the implications of his gesture at this time.
I should like to think that it is simply that, in the struggle with the Treasury for resources to improve other parts of the welfare services, my right hon. Friend has been obliged to make a concession of some kind. I do not know whether that is true, but I would like to think that it is. In that case, one can possibly make an excuse for his having decided not to uprate the child benefit this year because currently other things are being introduced that will add to the outflow of money to people who need it. I hope that before the Bill leaves the House it will include a provision that adds child benefit to the other benefits hidden within the tax system and which go up with the cost of living in line with the Lawson-Rooker-Wise principle.
Child benefit is something that we should discuss, because, although an uprating is not in the Bill, there are references to it in the legislation. I do not think, therefore, that I shall be out of order if I say a few words about it. Let me run quickly through some of the arguments used by people who have not thought very deeply about child benefit. They say that it churns money around—takes it away and hands it back—and that that is not a practical method of administration. In fact, child benefit is by far the cheapest benefit that we have. No case work is involved, it can be handled by computers, and it is paid every week regardless of the ups and downs of family income. The churning argument does not convey very much meaning in the computer age.
It is also said that the rich do not need it. When I tackle people who say that, they always admit that tax cuts for 693 wealthy people are good and are part of Conservative strategy, but they do not like the idea of rich people drawing child benefit. There are 4 million people who pay more in tax than they receive in child benefit, and for those 4 million it preserves the differential in favour of the family with children, compared with married couples with no children to support. Cutting the real value of child benefit, or cutting it out altogether, would narrow or eliminate the differential between families with children and those without. I cannot see why we should take away that differential in any particular area of the income scale.
§ Dame Jill Knight
Has my hon. Friend had the experience, as I have, of receiving communications—in this instance, it was a telephone call—after last week's discussion? A couple told me that they drew their child allowance only twice a year, to take on holiday as an extra sum. Does my hon. Friend approve of that?
§ Sir Brandon Rhys Williams
Some people make their own choices about how they handle their family budgets, and we believe in people making their own choices. What we need to know is whether the children in that family are deprived or neglected when their parents spend that money on a holiday. How people handle their own budgets is a matter for convenience and discretion.
What is undeniable is that, if there were no child benefits—particularly for the 2.5 million who receive more in child benefit than they pay in tax—there would be much more deprivation among children. They would be expected to go on wearing shoes that do not fit any more for longer, or to eat carbohydrates instead of protein. There would be other reasons for the living standards of our child population being depressed. Some parents may not feel disposed to give up things to which they have become accustomed, and may feel that the children do not need quite as much as they would have spent on them if there had been more money coming in.
However, to say that child benefit should be ended because some parents waste it is like saying that education should be stopped because some children waste their time at school. I do not know whether the memory of my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) goes back as far as mine, but I can remember what children looked like in south Wales during the depression, and they do not look like that in Britain now. One reason for that is that mothers have child benefit—albeit a small amount, but money in their own handbags—and the vast majority of women, thank God, spend it for their children's benefit, because they really care about their children. Of course, it is easy to find examples of people who do not, or do not seem to. That does not mean, however, that the 99 per cent. of mothers who are careful, and who do their best for their children, should be forced into deprivation.
Cutting down the real value of child benefit, or cutting it out altogether, narrows or eliminates the differential between families with children and families without them. I do not see why that differential should cease to exist for people who are better off. The Lawson-Rooker-Wise principle, which I think has been adopted on both sides of the House, preserves in real terms the differential between single people and married couples in the tax system. But it is not quite true to say that, when my right hon. Friend the Chancellor proceeds to a further cut in the standard rate of tax, he leaves the hidden welfare state with the same relationships between the different elements.
694 Cuts in the standard rate actually diminish the difference. A cut in the standard rate across the board is to the greatest advantage of single people, because they do not receive the tax concessions that are given to married couples. I believe that this year's tax cut was to the advantage of single people to the tune of about 50p a week. That is not very much, but another 2p off would make it £1 a week, and so on, by comparison with married couples on the same income.
One of the main objectives of tax cuts is to overcome the poverty trap, and to give the subordinate community more incentive to work. However, the percentage of total income taken in income tax from the national average wage of a married couple is now down to only 16 per cent. There is not much scope left for further large cuts in income tax. The idea of bringing in initial low bands of income tax, which is sometimes recommended, is, I believe, administratively impossible and a nightmare.
§ Mr. Neil Hamilton (Tatton)
My hon. Friend is quite correct in saying that the average amount of income tax payable in those circumstances is 16 per cent. What matters, however—and this is relevant to what he said earlier—is the marginal rate of tax. That is what gives the disincentive about which we are so concerned. The marginal rate, if we take into account the base rate of income tax and national insurance, is 39 per cent.
§ Sir Brandon Rhys Williams
I am grateful to my hon. Friend for that helpful intervention. It is true that, for those entering work from part of the static society, the marginal rate of tax is likely to be 36 per cent. if they are receiving a worthwhile wage. But it is not that element that creates the poverty trap and fences people in. It is the loss of benefit that hits them suddenly and creates the disincentive to improve their lot.
Of course, I welcome reductions in taxation—who would not? However, if we are to do something about the enormous, inert mass of people in a subordinate position, it is on the benefit side that we need fresh ideas. Tax cuts go to the entire population, and are not targeted at the people whom we are trying particularly to help. That is why we need to concentrate on what happens to the benefits if we are the do something significant about the poverty trap.
I know that many people say, "This is a humiliating handout. It would he nicer if we could stand on our own feet and not be dependent on this kind of credit." I am not certain how many people feel humiliated about drawing child benefit, but nearly 100 per cent. take it up, and the people to whom I have just referred, who are on modest incomes and are just above the benefit level, really need it. I do not think that we should think only in terms of the parents who are able to send their children to Eton. Among the 4 million who draw child benefit but who pay more in tax than they receive in benefit there may be 1,000 Eton parents. However, the vast majority of couples with two children, particularly those on the national average wage or thereabouts, actually value the £14.50 net of tax that is coming in each week, especially as it is paid directly to the mother.
I believe that the right solution is to revive the concept of national insurance. The way to do that is to look again at what used to be called the tax credit system, but which I now prefer to call the basic income guarantee. I do not 695 want to delay the House with too many further arguments, but I should like to say a few words about the basic income guarantee.
I think that we are all agreed, on both sides of the House, that in no circumstances will we force people through the bottom level of destitution so that they are unable to sustain life on the incomes available to them. If we insist that everyone must have some kind of basic income guarantee, let us try to provide it a little better than we do now. I do not like the strategy of the Department in this Bill, which seems to be to chivvy the inert element in the economy into the productive area by reducing the amount of benefit in certain cases, and restricting the eligibility for benefit in others. That is an unsatisfactory approach in a society that is able to look forward confidently to further tax cuts for those on the productive side of the economy.
Surely it would be better to give the millions who are now obliged to depend on means-tested benefits, with the resulting loss of self-respect and motivation, a helping hand. We should let them have an opening, an opportunity to choose to work to better themselves or to put savings aside for their dependants that is not, substantially, a fruitless waste of effort.
Let me read a few words from a document published in 1979. It states:Our social security system is now so complicated that even some Ministry officials do not understand it. Income tax starts at such a low level that many poor people arc being taxed to pay for their own benefits. All too often they are little or no better off at work than they are on social security.This was one of our principal reasons for proposing a tax credit scheme. Child benefits are a step in the right direction. Further progress will be very difficult in the next few years, both for reasons of cost and because of technical problems involved in the switch to computers. We shall wish to move towards the fulfilment of our original tax credit objectives as and when resources become available. Meanwhile we shall do all we can to find other ways to simplify the system, restore the incentive to work, reduce the poverty trap and bring more effective help to those in greatest need.That is from the Conservative manifesto for the general election of 1979. Another paragraph in the same section reads:We welcomed the new Child Benefit as the first stage of our tax credit scheme. One-parent families face much hardship so we will maintain the special addition for them.I could also read from the White Paper "Proposals for a Tax Credit System" that was published in 1972, but I shall confine myself to two sentences of it. It says:The tax-credit scheme cannot of itself offer a complete solution to all the problems of poverty. But to those within it, and this includes the great majority of people at work and everyone in receipt of the main national insurance benefits, it offers the prospect of a system of family support which would be easier to understand than the present one, which would provide its benefits largely automatically and which, being integrated with the tax system, would extend the benefit of tax allowances to people who have insufficient income to pay tax.That White Paper was studied by the Select Committee on tax credit that was headed most ably by my hon. Friend the Member for Croydon, South (Sir W. Clark). I am sorry that he is not here now. Perhaps I might remind the House of the conclusions of his Committee after it had studied the tax credit proposals. It said:The effect of the scheme is to give the same treatment to the very large majority of the population, with scope for 696 differential treatment by giving selective help to those in greatest need and levying differential taxation on the highest paid.Had I been my hon. Friend the Member for Croydon, South I should not have added that. But the report continued:It would spread the effects of fiscal policy systematically. It should therefore be adopted; but in recommending the scheme we are not endorsing any particular level of tax, or credit or relativity. Selection of these levels will remain the essential ingredient of the policies of the Government of the day.The objections to tax credit, brought out subsequently to those reports, were twofold. The first was that it would cost too much. The second was that the computers were not ready to do it. On the question of what tax credit would cost, a tax credit scheme—or basic income guarantee—could be pitched at any level of benefit and at any level of tax. It could be made revenue-neutral. It could even be introduced in such a way as actually to reduce the outgoings from the state.
On the question of computers, the right way to introduce computers into the redistribution-of-income industry is to do the thinking first: to decide what it is that we want computers to do, now that they are available, and then to start on the choice of equipment and writing the programmes. We see in today's edition of The Guardian the tangle that my right hon. Friend the Secretary of State is trying to cut through by new policies covering computerisation; but there is also a separate programme for the computerisation of the pay-as-you-earn system.
Much of the work that is being done by these two teams working on computerisation, who are taking all these years to get on with their job, is entirely wasted, for the simple reason that the thinking has not been done first. They are therefore trying to produce a system that will afterwards be a flexible one, rather than to set up a system that meets the requirements that have been designated from the start. If we had started in 1979 on a revenue-neutral tax credit scheme, it could now have been working for several years and we should not be faced with the huge inert mass of unemployed and unhappy people that we have at the present time.
A later occasion may possibly be the right one for me to make specific recommendations as to the way in which a super-simple basic income guarantee could start to be introduced, even in the next Budget. If they are interested in it, I shall be glad to write to my right hon. Friends.
The effect of the reform in the first place would be to reduce administration dramatically on the tax side for small employers and large employers too, and also for the Inland Revenue. There would be savings on the benefit side, too, because I am convinced that if we offered a basic income guarantee which was worth even half of what people are entitled to claim in supplementary benefit, hundreds of thousands would exercise the choice not to claim the balance of their supplementary entitlement but would prefer to go out into the world of work, keep their savings and avoid the humiliation of having to claim means-tested benefit.
There would of course be very substantial savings if we could induce a large number of people to rely upon a small basic income guarantee instead of the full amount of their supplementary benefit. Those savings could then be put into making the level of the basic income guarantee more satisfactory and a better stepping stone for those who want to lift themselves out of dependency. I believe that a basic 697 income guarantee would give hundreds of thousands of people the opportunity take work without breaking the law and without hardship to their families.
I shall say no more at this point, but I hope that what I have said in this speech will he noted by my right hon. Friends. I hope that some study will be made of the possibilities of a different strategy from the Department's present course, which I am convinced is socially divisive, economically most unsatisfactory and truly disastrous for Britain.
§ Mr. Nigel Griffiths (Edinburgh, South)
In my work with the disabled over the past eight years I have seen the consequences of this Government's policies on the disabled. Far from targeting the cash on the disabled, the Government have tightened the screw.
The biggest losers under the new Bill will be new disabled claimants. Some of them will lose over £3,500 a year. Severely handicapped people living at home, perhaps with elderly parents, will lose help to heat their baths and rooms; they will lose assistance with laundry costs; they will lose cash for warm replacement clothing; they will lose a contribution to their diet; they will lose any special money for blindness. There will he a net loss of £72 a week over our present system, after payment of the new income support and the highest rate of the new severe disability payment.
Last week the Chancellor of the Exchequer provided a platform for the profiteers. Today the Government had the chance to provide a platform for the poor, but instead of doing just that the Chancellor will in future years save over £42 million from 360,000 disabled people who need help with laundry. The Government will save £7 million from 69,000 incontinent disabled people who need baths. The Government will save £5.5 million by cutting out of the present system 63,000 handicapped people who need clothes. As part of a £400 million cut, the Minister will save a further.£49 million from 164,000 especially disabled people who receive a special heating addition.
The Chancellor's savings do not stop there, because 2,800 kidney patients will lose over £1.5 million as part of an £80 million cut, while 4,500 housebound handicapped people will lose up to £48.70 a week—and more. Furthermore, 35,000 blind people will lose up to £7.70 a week to save the Chancellor £2.5 million. Moreover, 6,000 people with relatives in hospital, whom they are visiting, will lose £1.5 million, as the fares to visit their relatives are withdrawn.
The Prime Minister claims that she wants to set people free. Where is the freedom for the senior citizens who will be unable to heat their baths or their rooms? Where is the freedom for the blind householder who cannot afford a telephone? Where is the freedom for the kidney patient who cannot afford a proper diet? Because of this measure, they have no freedom. Sadly, that is how this Government apparently want it to be.
§ Mrs. Virginia Bottomley (Surrey, South-West)
I shall not take up the remarks of the hon. Member for Edinburgh, South (Mr. Griffiths). How anyone can make sense of them, after the Government have spent £2.5 billion more, in real terms, since 1979 on the disabled, I do not know. The Government have spent 70 per cent. more, in real terms, than they did in 1979, and they intend to 698 spend an additional £60 million next year on the disabled. It does not therefore seem to be worth while to take up the hon. Gentleman's remarks.
However, I wish to comment on the speeches of two other previous speakers. I refer, first, to the new hon. Member for Chelmsford (Mr. Burns). As has been said already, he made an exellent maiden speech. I went to speak for him several months ago, and I was very impressed. On behalf of his 12,000 commuters, he was busy travelling up and down on the train in an effort to improve the services that the commuters receive. Clearly, virtue was rewarded, and we welcome him to the House.
I want to speak in more depth following the remarks of my extremely distinguished hon. Friend the Member for Kensington (Sir B. Rhys Williams). He has studied the question of income maintenance and family support in great depth and with great knowledge. He appreciates the profound questions involved. He is not somebody who considers short-term political interest; he has a real understanding of the incredibly complex network of social security benefits and tax supports. He spoke with feeling about the need for a basic income guarantee.
The area with which I am most concerned is the danger of failing to co-ordinate a strategy for the support of children. He rightly said that we provide benefits for those in financial need, for disablement and on terms of citizenship. Many of us feel that as a country we rightly support the vulnerable in their old age and in their youth and that, rather than a preoccupation with the redistribution of income between families with or without children, it should be seen more in terms of income maintenance throughout a lifetime.
For those hon. Members who are concerned about whether families are genuinely in acute financial need when receiving child benefit, I should like to make two comments. First, many people receive mortgage interest relief regardless of their financial need. Indeed, the better off one is, the more one benefits from that. I am aware of no plan to turn mortgage interest relief into housing benefit.
Secondly, it is increasingly said that there is a profound distinction between receiving a benefit and a tax relief. I appreciate that the ground has changed in this respect. Over a decade ago there were those who argued—I was among them although I was not at that time a Member of the House, but I spoke to a Committee in the House—about the importance of changing child tax allowance to child benefit. Nobody begrudged the well known Duchess of Westminster, who always seems to be mentioned in this context, having some financial recognition for her children, but it was argued that it was not right that she should have a greater recognition for her children than others. The child tax allowance meant that her needs were more greatly recognised. Therefore, child benefit, which gave all children equal financial recognition, was more appropriate.
We now live at a time when the social security budget is running at £44 billion. Understandably, every benefit is the subject of the greatest scrutiny. There are some who argue that benefits should be provided only to those in financial need—there are many other examples where benefits are allocated in terms of citizenship or disablement, but I understand the point—and if that is an overwhelming view, I would reluctantly support the reintroduction of child tax allowances. Now that the rate 699 of tax has been reduced so dramatically, the powerful arguments that appertained 10 or 15 years ago are no longer so powerful.
I would argue, in support of my hon. Friend the Member for Kensington, that child benefit has the advantage of having no stigma attached to it. It is easily taken up and provides a continuous form of income. In his statement last week my right hon. Friend the Secretary of State understandably decided to give much more financial help to low-income families because, as he argued, 3 million children would not benefit from the increase in child benefit. Therefore, he rightly gave more money to income support and family credit. The same process takes place when those families want to go to work. It is only by having child benefit that they do not then suffer from the poverty trap.
A further point in support of child benefit is that low-income families are frequently in a state of uncertainty and change. It is easy when describing a benefit structure to envisage every family as being financially static throughout the year. It is easy to imagine them like a photograph in which people are earning a certain amount and their responsibilities and accommodation are static. The reality for low-income families—my first job was working for the hon. Member for Birkenhead (Mr. Field) doing a research project on the budgeting of low-income families—is that they are in a frequent state of flux. People's domestic situations change, their income changes with longer or shorter hours and their accommodation changes. Therefore, child benefit provides the stability that is required.
I feel deeply and strongly that it is high time that 16 and 17-year-olds were no longer able to claim benefit in their own right. Many teachers have complained to me that it is difficult to secure regular attendance at school from 16 and 17-year-olds or those even younger. They have complained that it is easy and enticing for youngsters of that age to leave school, do nothing and claim social security—[Interruption.] I am interested by the reaction of Opposition Members, following the remarks of the hon. Member for Livingston (Mr. Cook). I urge Labour Members to study the New Statesman with more care. A month ago the writers of an article on the youth training scheme said:The youth training scheme … has emerged with real potential for improving education and training beyond 16 … Yet it too has been largely scorned by the left. There are signs that belatedly some of these schemes are now gaining support in Labour circles. As one of the most senior officials of the Labour-controlled"——
§ Ms. Armstrong
Will the hon. Lady accept that part of the agrument in the article was that we should encourage more young people to stay on in full-time education by making sure that they have the income support to enable them to do so? Will she acknowledge that that is the thrust of the argument?
§ Mrs. Bottomley
The hon. Lady is not correct. The article is arguing strongly in favour of staying on at school. I will read a few more sections to make the point. The article does not mention income support for those staying on at school. Perhaps the hon. Lady would prefer to find separate ammunition for that point.
The article goes on: 700As one of the most senior officials of the Labour-controlled ILEA told us 'You could argue that the MSC has done more for improving the opportunities of working-class children than the ILEA has ever done.'On the matter of staying on at school after 16, the article said:Labour has been guilty of an abysmal lack of vision for the mass of pupils. The contempt for the YTS of many on the left has been proved wrong.We have seen further examples of that today. It goes on:YTS, as Tessa Blackstone remarks, is the first time this country has really done anything to help working-class kids after 16.The article went on:When Neil Kinnock spoke in the north in the election campaign, he deplored the fact that at 16 school leavers couldn't get jobs. This may be understandably extending sympathy to youngsters, but it is a naive and dangerous message. In our knowledge-based economy, there will be no decent jobs for the uneducated in future: Labour economists all say the same—everyone needs a broad-based education till at least 19, and throughout life. Young people must not be encouraged to think that they should be getting work at 16. On the contrary the message should be—as it is in France—that staying on is the norm.
§ Mr. Robin Cook
I assure the hon. Lady that her commitment to further education is most welcome. In the light of that commitment, will she address her mind to the problem of the estimated 30,000 16 and 17-year-olds attending further education colleges under the 21-hour rule who will be unable to do so if the Bill is enacted because income support will be withdrawn? Does she think that a youngster who is studying for two A-levels would be better off spending his time on a YTS course? Is that the best future that the hon. Lady can offer that teenager?
§ Mrs. Bottomley
I would be the first to argue that there could be more rationalisation of the mechanisms for providing assistance to those in further education or for those who are receiving education maintenance allowances. The basic point of the Bill—which the electorate thoroughly appreciated in the election campaign—is that there can be no justification for offering 16 and 17-year-olds who are living at home an allowance to stay at home except in exceptional circumstances or while they are bridging the gap before a training scheme.
I spent many years working with youngsters who, after the age of 16 years, were turned out from the education system with nothing to show for it. The YTS has been a most remarkable achievement. My hon. Friends will have visited many projects in their constituencies; a month of two ago in my constituency I visited a YTS course on computer familiarity. I saw there youngsters who had failed or been switched off by school, yet they were interested and motivated by training and learning and developing their skills. The former chairman of the MSC pointed out that of the 400,000 youngsters who had taken part in the scheme in a given year, their average level of achievement was one CSE.
Much more can be done. If we look at the factors that lie behind poverty, three essential aspects emerge: first, staying on at school or training; secondly, the length of time that a man or woman spends in his first job; and, thirdly, family breakdown.
The remainder of the Bill is concerned with tidying up or rationalising measures. Mention has been made of the social fund. I welcome its establishment. The single payment system had become the tail that wagged the social security dog. It was unpredictable, unfairly distributed 701 throughout the country and consumed the most ludicrous amount of time. I support adequate basic scale rates and a social fund that can do the job properly. In terms of providing assistance to those low-income families who are in work rather than just dependent on benefit—as will now be possible for maternity payments and funeral grants—it is a great step forward.
Again, I share the concern of my hon. Friend the Member for Kensington about creating a dependency culture.
§ Mr. Alistair Darling (Edinburgh, Central)
Will the hon. Lady accept that the vast majority of people who apply for a single payment do so because they are poor? Under the social fund rules they will be invited to incur a debt to the social fund. Those poor people will now not only be dependent on payments such as those that they can get, but on repaying a debt that, because of the nature of their income, they cannot afford.
§ Mrs. Bottomley
Those who are on low incomes fall into different categories. Some will be on a low income in the long term but others will be on a low income between like events, so the facility to obtain a loan will be extremely welcome. I do not agree with the hon. Gentlemen that there is a coherent link between those who claim single payments and those who do not. It is by no means the case that those who are the hardest up claim the single payments. Those who claim the single payments know how the system works. Above all, the social fund provides a more flexible method of response.
§ Mr. Darling
Will the hon. Lady accept that if Parliament sees fit to set up any benefit system, it is only right that everybody should apply for it? If some people know the ropes and can apply, all credit to them. We should be trying to create a system where everybody receives that to which they are entitled. Tory Members oppose child benefit because it has a high take-up rate and is easy to understand.
§ Mrs. Bottomley
I do not think that the hon. Gentlemen can be addressing his remarks to me, since I argued in favour of simplicity and proper scale rates, not a Legoland welfare state.
§ Mrs. Kellett-Bowman
Is my hon. Friend aware that for two years running many of my constituents applied for £800 for identical items and were startled when they did not receive that amount for the second year?
§ Mrs. Bottomley
That is one of many similar examples. The point is the vast amount of time that is taken up in administering the single payment system.
As to the concern that the welfare state builds up like Legoland, where one benefit is added to another, I noticed that in the social security uprating statement there were no fewer than seven Hansard columns of benefits. My hon. Friend the Member for Salisbury (Mr. Key) spoke of the needs of haemophiliac families, and I have a similar example in my own constituency. I debated as to the right way forward if we are not to tack on yet another benefit or yet another case to that total for which one needs not only to have stayed on at school for two years but another 10 years to master the different intricacies of the system.
I applaud the remarks of my right hon. Friend the Secretary of State, who said that he is determined to rationalise further our welfare payment system. My right hon. Friend is right to emphasise that the thriving 702 economy and welfare of our people depend on wealth creation rather than wealth distribution. The Government can afford to pay £44 billion on social security, with yet further increases, because of their success in mastering the economy. Pensioners, for example, have experienced an 18 per cent. increase in real terms since 1979. This, and more, can be achieved because of our economic success and growing prosperity.
§ Miss Marjorie Mowlam (Redcar)
At the beginning of her speech the hon. Member for Surrey, South-West said that she admired the hon. Member for Kensington (Sir B. Rhys Williams) because he was not guided by short-terrn political interests. If the hon. Lady admires the hon. Gentleman for that, I am sure that she will vote against the Bill because it is guided by one thing only—short-term political interest.
I thank the hon. Member for Kensington for his clear and deep understanding of the importance of the child benefit legislation. He clearly understands the importance of paying that benefit to women so that they can use it directly for children. I hope that those on the Government Front Bench were listening to that point.
I emphasise another point that the hon. Gentleman made—the importance of people who fall just below the benefit level. Many people in my constituency—many widows who receive a pension from ICI or British Steel—fall just below that benefit level and, as a result, experience hardship. I hope that the Ministers were listening to the hon. Gentleman's comments. In view of his detailed and caring understanding of the Bill, I hope that they sign him up for the Standing Committee, to which he would make a useful and valuable contribution.
I emphasise the importance of placing the Bill in the context of social security legislation that has gone before it. The Government and the two previous Tory Governments have constantly attacked the social security system. I shall give a couple of examples to support that statement: the failure to uprate child benefit in line with inflation, and the cut in the single payment that was introduced in August 1986. The hon. Member far Birmingham, Edgbaston (Dame J. Knight), who was quick to criticise other people for not being in the Chamber, has now left. She clearly failed to understand the importance of single payment benefits and of the cut that has been experienced since August 1986. That is a cut of 50 per cent. The number of people receiving single payments fell from 2.4 million in the first six months of 1986 to 1.25 million in the first six months of 1987. That meant an expenditure cut from £173 million to £49 million. If the hon. Member for Edgbaston had stayed, she would have seen the importance of those single payments.
The Government's changes to the attendance allowance in clause 1 show right at the beginning of the Bill the type of cuts that the Government want to impose on people receiving some kind of benefit. Those who are already severely disabled will face greater difficulty.
The hon. Member for Salisbury (Mr. Key), who has also left the Chamber, made a useful contribution about the importance of considering haemophiliacs suffering from AIDS. A 16-year-old teenager in my constituency is in that position. I hope that. Ministers listen carefully to hon. Members when they talk about the importance of considering other people in this category.
703 It is important to realise exactly what the Secretary of State is doing with clause 1. He is reversing the decision reached in the law courts in the case of Moran v. the Secretary of State for Social Services in March 1987. The Government lost a point in the courts, so they are moving the goal posts by changing the law. Many people will be handicapped by this change. The lawyer speaking on behalf of the DHSS in the Moran case listed the groups who would be handicapped.
§ Miss Mowlam
That is absolutely right. That Government lawyer said:It will affect, the Secretary of State believes, potentially a large number of claimants, because it affects not only epileptics which is the case before your lordships, but probably also diabetics, mentally retarded children, hyperactive children, asthmatic children, children with cystic fibrosis, certain cases of elderly people who suffered severe attacks of confusion, certain cases of strokes, and, in some cases, haemophiliacs possibly.That is a detailed list of the claimants who will be affected by the changes in clause 1. It is interesting that the Secretary of State has said that 1,200 people will be affected, whereas during the Moran case the Government talked about many thousands. Clearly, there has been a jiggling of the figures. As soon as we have a law that is implemented sensibly and humanely, thereby benefiting those whom it was intended to assist, the Government change the rules.
I want to talk about clause 4 only briefly because my hon. Friend the Member for Birkenhead (Mr. Field) has already spoken eloquently on the importance of this clause for young people. No young person over 16 and under 18 will be entitled to income support unless, to quote the Bill,it appears to the Secretary of State that severe hardship will result to that person".The Secretary of State will decide what is severe hardship. Ironically, when the Social Security Bill was discussed last year in Standing Committee a Conservative Member—the hon. Member for Norfolk, North (Mr. Howell)—proposed an amendment along the lines of clause 4. The then Minister for Social Security—the hon. Member for Braintree (Mr. Newton)—spoke against it, saying:Unless or until we could offer an absolute guarantee that a training place would be available on the day that a young person left school or otherwise became entitled to supplementary benefit, or unless we were prepared to leave such a young person without support until a place was available, there would have to be a surrogate social security system to fill that gap."—[Official Report, Standing Committee B; 4 March 1986; c. 547.]The previous Minister for Social Security clearly understood the problems that a clause such as clause 4 would present.
The Cleveland county careers office cannot guarantee every 16 or 17-year-old a place on YTS. It is impossible. This must mean that the Government are now prepared to leave young people without support. I should like the Minister to offer us an alternative explanation, if he can, because Cleveland can see no alternative.
The previous Minister for Social Security was keen to say that certain disabled youngsters who received financial assistance would also be ruled out under the earlier legislation and would continue to receive assistance. We are interested to know exactly which disabled young people in the 16 to 17-year-old grouping are involved 704 under this legislation. Clearly, there are people who are disabled to such an extent that they would fit the category without any question marks being raised, but many other young people with limited disabilities would have trouble on some YTS schemes. Will they fall into the net? Will they receive any income support as a result of this legislation? Will the Minister force managing agencies to take on young people? Unless employing managing agencies are forced to do so, there will be no places available.
I should like the Minister to look closely at lines 17 to 20 of clause 4(2) on page 4 of the Bill which imply that every young person who claims entitlement on the ground of severe hardship will have no right to appeal to a social security appeal tribunal if refused payment. This will happen because there is no right of appeal against the decisions of the Secretary of State. Is there a chance for young people to appeal? If not, much of what we have heard from the Government about individual freedom, choice and rights is clearly empty words meant for elections and not for the next four years of Government.
Clause 10, with schedule 3, refers to cold weather payments. There is a tendency among Conservative Members to talk before elections about pensioners when it suits them and after elections to forget pensioners—because there are only two pensioners in the Cabinet—and the problems they face. Must we wait, as we waited last year, for 700 old people to die of hypothermia before we look more carefully at cold weather payments? Must we wait for about 35,000 old people to die from cold-related illnesses, as they did last year, according to Age Concern'? Must we wait for the Government to look at those figures before they consider the payments in more detail?
Of course we are pleased that cold weather payments are subject to regulations and are not discretionary, but we should like the Minister to consider a number of aspects. Why is the trigger level at 0 deg C? Is that too harsh? Should it be relaxed? Is the present £5 payment sufficient, or is it, as many Labour Members think, totally inadequate to meet the bills that many will face in cold weather? Are the cut-off points—under two years and over 65 years—right'? Many would argue that up to four years or over 60 years are much more realistic levels for the operation of cold weather payments.
I hope that Ministers have listened to the arguments on the Bill's details which have been put in all honesty by hon. Members on both sides of the House. The hon. Member for Edgbaston emphasised the problems that she perceived and referred to people receiving benefits as though they were scroungers or skivers. The hon. Lady clearly does not hold surgeries or talk to her constituents. Week in, week out at my surgery I see constituents who do not have a bed to sleep in, who do not have cooking utensils. These people are not skiving or using the system; they are desperately in need. The Government should realise that and understand the problems that people face. They should also look again at their arguments. They say that they do not want to create a culture in which people depend on benefits. The way to change matters is not to start fiddling around with benefits and depriving those at the bottom end of the scale but to look at the labour market and to start to create the jobs that will solve the problem for them.
§ Mr. Neil Hamilton (Tatton)
I am delighted to follow the hon. Member for Redcar (Mrs. Mowlam). She made 705 an able and telling speech, although I did not agree with much of it. Her speech was not as controversial as those of my hon. Friends the Members for Birmingham, Edgbaston (Dame J. Knight) and for Surrey, South-West (Mrs. Bottomley) appeared to have been—judging by the noise from Labour Members. Like my hon. Friend the Member for Kensington (Sir B. Rhys Williams), I hope to pour some healing balm upon the debate and introduce another thoughtful note.
I welcome the Bill in general because it continues the reform that we have set out to achieve of the vast and virtually incomprehensible mass of benefits that we have inherited, created by ad hoc decisions over 40 years. Clause 4 in particular, seems to constitute a return to the form of social insurance envisaged by Beveridge. Beveridge had it in mind when he put forward his scheme that if there were an unrestricted right to benefit there would be a danger that people would come to rely upon it and that it would sap their desire to work in certain circumstances. Beveridge said that after three or four months of unemployment, work should be offered instead of benefits. I remind Opposition Members—in case they missed the opening speech of my right hon. Friend the Secretary of State—that Beveridge wrote:for boys and girls there should ideally be no unconditional benefit: their enforced abstention from work should be made an occasion for further training.
§ Mr. Corbyn
While the hon. Gentleman is on the subject of William Beveridge, will he accept that Beveridge also wrote "Full Employment in a Free Society" and was concerned about the elimination of poverty through the creating of jobs in society? The Government, on the other hand, are hell-bent on punishing the poor for being poor and on making the poor pay for the Government's impoverished economic policies.
§ Mr. Hamilton
It seems to me that the only punishment being inflicted on the poor in the hon. Gentleman's constituency is that they should have him as their representative, and he should remember that Beveridge was writing in rather different times on the subject.
Conservative Members contend that the development of the benefit system and the tax system that it has spawned to pay for itself has been a major cause of Britain's relative economic decline—certainly until 1979. The changes that we are now making will reverse that state of affairs. As we know, unemployment is falling faster in this country than anywhere else in the developed world.
While the Bill is good in itself, we need to go further and faster. I confess to having been disappointed by the results of the Fowler reviews. We have not done enough to deal with what my hon. Friend the Member for Kensington refers to as "churning", but which I prefer to describe as a vast exercise in carrying coals to Newcastle. We take money out of a person's pocket with one hand, only to put it back with the other. During the process, we have to pay administration costs and we create disincentives because of the high levels of taxation necessary to finance the process.
We should go further to reduce benefits and taxation while continuing to provide a safety net for those in real need. We need only look at the tables produced in "Economic Trends" from time to time. The latest figures on the effects of taxes and benefits on household incomes were published in July 1987. The figures show the extent of this exercise in carrying coals to Newcastle. The net 706 beneficiaries of the welfare state in its present form are those on very low incomes indeed. The vast majority of people are paying for their benefits, and more than paying for them. Even for those on incomes as low as £3,500 a year—in some cases less—the break-even point is reached. It is not sensible or desirable to have a system in which probably as many as two thirds of the population—and perhaps as many as three quarters—pay for benefits out of their own pockets.
If we are to achieve our objectives of becoming a low-tax society, with all the economic incentives that that implies, we must deal with that problem. We need an even greater dose of radicalism than we have had so far. I suggest that we should be radical in the opposite sense to that recommended by my hon. Friend the Member for Kensington in relation to child benefit. I appreciate my hon. Friend's arguments about basic income guarantee. We have rehearsed those arguments in the House on a number of occasions and I am always interested to hear what he has to say. However, I do not believe that a basic income guarantee can deal with the fundamental flaw in the present system, which is the necessity for the disincentive of higher marginal rates of taxation in order to provide universal benefits. It would be much better to seek to target the benefits more directly and distinctly. In that sense I take the opposite view from my hon. Friend the Member for Kensington about the form of social security that we require.
Others of my hon. Friends—most of whom are not in the Chamber at the moment—take a different line again. They are what we might call the Contras of the Conservative party. They inhabit the jungles and thickets of places such as Old Bexley and Sidcup and Chesham and Amersham and from time to time they come out in their guerrilla war against the Government to take pot shots at my right hon. Friend the Secretary of State and others. Last week I heard my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) call my right hon. Friend the Secretary of State following his statement about child benefit, "insensitive". I can think of some of my right hon. Friends to whom the word "insensitive" might apply but I have never thought that my right hon. Friend the Secretary of State fell into that category. For my right hon. Friend the Member for Chesham and Amersham, distance is lending disenchantment; the further he moves from the Government's general aims the more difficult he finds it to understand what we are trying to achieve.
My right hon. Friend the Member for Chesham arid Amersham is joined in his opposition to the Government's aims by Opposition Members who have now become the yuppies' greatest friends; not only do they want to help the American underwriters, Goldman Sachs, but they want to provide child benefits for those on the highest incomes. They want child benefit to be increased so that the person paying income tax at the marginal rate of 60 per cent. derives the greatest benefit, equal to about £18 a week. They also want to increase it in such a way that the poorest people in this country gain nothing. That is what the effect of an increase in child benefit would be because for every increase in child benefit, other income-related benefits would have to be reduced.
Child benefit, which now costs £4.5 billion a year—10 per cent. of the social security budget—is a vast weight upon the economic, productive system of this country. The cost is equivalent to 4p on income tax., to a 707 20 per cent. increase in all personal allowances and to 4 per cent. on VAT. Child benefit is extremely poorly targeted. As has pointed out, the Princess of Wales is a beneficiary of child benefit. I know that Labour Members—with the exception of the right hon. Member for Chesterfield (Mr. Benn)—support the monarchy, but I had not realised that their enthusiasm for the institution went so far as to require the subsidy that it receives to be increased.
Child benefit is poorly targeted and the majority of its funds are wasted. The standstill in child benefit rates this year is welcome but I should like to move towards its abolition and to a complete rearrangement of benefits for children in poorer families.
§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
How would the hon. Gentleman reply to his hon. Friend the Member for Kensington (Sir B. Rhys Williams) and others who say that the level of take-up for family income supplement, for example, is so pitifully low that we must be missing many that we wish to target? How will he overcome that?
§ Mr. Hamilton
The child benefit system should remain a cash benefit for those below the income tax threshold and become an allowance for those above the threshold. I would gross the benefit up so that the individual subject to taxation is as much in pocket as if he had a cash benefit. We would then concentrate on reducing the marginal disincentives to work inherent in the present high tax rates.
§ Sir Brandon Rhys Williams
I respect my hon. Friend's arguments, although I do not agree with him at all. I wonder whether he is anxious to reduce the rate of tax, the benefit of which goes mainly to single people and simultaneously to end the distinction between the money we leave in the hands of married couples and in the hands of married couples who also have children to support. What is wrong in thinking that we ought to help people with children to support and not put them on the same basis as other couples without families?
§ Mr. Hamilton
Not having children myself I cannot be expected to support my hon. Friend in that. The system that I propose would not work in quite the same way that my hon. Friend envisages. I am suggesting a child tax allowance, grossed up for tax purposes according to one's marginal rate of tax. It will not be spread among childless couples, but targeted upon couples with children.
§ Mr. Kennedy
Even if that were to work—I am sceptical—will we not lose the beauty of the child benefit system which is that it finds its way directly to the caring parent? Nine times out of 10 that person is the mother. Would not that safeguard be lost under the hon. Gentleman's proposal?
§ Mr. Hamilton
One cannot generalise in that way. I know that the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) is gallant but not everyone behaves in that way. To say that some fathers might not be so careful to protect their children's interests whereas mothers would is not borne out by experience. There is no way of knowing what the difference in take-up rate would be, but I cannot see any logical reason for saying that fathers are less likely to be solicitous of the interests of their children than mothers.
708 My proposal would go a long way towards restoring some of the essences of the welfare state. After all, in 1949 a married man with two children had to earn twice the family allowance trigger point before he paid any tax at all. Today, that married man with two children qualifying for supplementary benefit pays income tax on 25 per cent. of the supplementary benefit rate. That is ludicrous. People designated as being way below the poverty line are subject to income tax. It cannot be right to preserve a system under which people receive benefit from the state as well as being major contributors to the income tax system.
I believe that low taxation will encourage people and help to relieve absolute poverty. That is what we are about in the Conservative party. As my right hon. Friend the Secretary of State said in a thoughtful speech recently, the welfare state has been with us in a variety of forms for a long time and Conservative Governments have made considerable additions to it over the years. I believe the evidence to be incontrovertible. The low tax economies around the world have the highest economic growth and therefore the highest ability to relieve poverty in its absolute sense.
A report published by the World Bank compares the growth rates of high-tax and low-tax countries. Twenty countries were examined. The low-tax countries had a 7.3 per cent. growth per annum in the 1970s compared with 1.1 per cent. in high-tax countries. There was a 9 per cent. growth in employment opportunities in low-tax countries compared with less than 1 per cent. growth in high-tax countries. As the report said, higher rates of economic growth allow an expansion of the tax base, which generates increased revenues to finance the more rapid expansion of expenditure on Government services such as defence, health and education.
I do not accept that reductions in taxation will be obtained at the expense of those on low incomes. Lower taxation is the engine of growth, which gives us greater resources with which we can then reduce the burdens of the less fortunate in our society. We shall never bring tax rates down sufficiently so long 'as we continue with universal benefits such as child benefit.
I applaud the Secretary of State's speech on 26 September on the future of the welfare state. He said:Dependence in the long run decreases human happiness and reduces human freedom. We believe the wellbeing of individuals is best protected and promoted when they are helped to be independent, to use their talents to take care of themselves and their families, and to achieve things on their own, which is one of the greatest satisfactions life can offer … welfare measures, if they are to really promote economic and social welfare, must be aimed ultimately at encouraging independence, not dependence.I believe, therefore, that a reduction in the universality in benefits with a reduction in the tax rates which are necessary to pay for them, would bring about that independence to which my right hon. Friend addressed himself in that speech. Many people have been made more dependent because high taxes have removed their independence. Many millions of people have been pauperised by the welfare state which was designed to assist them. It has achieved the opposite.
The Speenhamland system has been reborn in the second half of the 20th century. Not only does the system sap the individual's independence, it fails to provide adequately for those in need. A good example is the death grant with which the Government have dealt. It was a miserable £30 which did not even begin to pay for the cost 709 of a funeral. It was a universal benefit to which everyone was entitled, but now we can provide for those in real need at a distressing time without spreading the benefit among those who do not need it. I should like that principle to be extended to other areas of the welfare state.
I welcome the Government's broad theme in the Bill and in last week's statement on upratings. I particularly welcome clause 4. It represents a welcome step in the right direction even if it applies at present only to those in the 16 to 18-year-old group.
I disagree with the hon. Member for Livingston (Mr. Cook) if he was saying that the change proposed in the Bill represents a change in the principle of the social security system. When the present system was introduced in the 1940s, 15-year-old school leavers were never entitled to claim national assistance immediately, as it was payable only from the age of 16. We propose to introduce a provision applied during the regime of a Labour Government. In effect, we are returning to a system which Beveridge advocated and which the Labour Government of the late 1940s accepted.
We are not making a huge jump in principle by making the change in clause 4. It is a common-sense measure which will be widely welcomed throughout the country. It can never be right for us to subsidise deliberate idleness, nor can such idleness be right for those who may be tempted to be sustained by it. Young people have everything to gain from training and career development. They have nothing to gain from simply sitting on their backsides on the dole, for whatever reason. The measure is designed to reduce that temptation and, therefore, it is greatly to be welcomed.
We have made enormous advances in the introduction of training for young people since 1979. We should never forget that virtually nothing was done for the training of young people until this Government came into office in 1979. The youth opportunities programme and later the youth training scheme, now extended to two years, have benefited more than 1 million people since 1983.
§ Mrs. Alice Mahon (Halifax)
The hon. Member for Tatton (Mr. Hamilton) appears to believe that training began only in 1979. Does he know anything about the industrial training boards, which produced very good trained people, yet were abolished by this Government? Does he not know that we had an excellent apprenticeship system which paid the rate for the job as the young person grew older?
§ Mr. Hamilton
We discussed the arguments for industrial training boards in the last Parliament. I know that the hon. Member for Kingston upon Hull, East (Mr. Prescott) wishes to introduce a 1 per cent. training levy on employers to extend the industrial training board scheme, although those boards were not as successful as the hon. Lady might think. Many employers who had to pay for the boards did not regard them as cost-effective. Previous Governments, both Conservative and Labour, have done little in this direction, so this Government deserve credit.
Since 1983, I million youngsters have benefited from the youth training scheme and more than two thirds of them have gone into jobs, further education or other training schemes. We must be concerned about the other one third. That is one of the reasons why we introduced this clause. During the debate on the Employment Bill tomorrow, we shall be able to fit the remaining pieces into the jigsaw and that will greatly benefit young people.
710 We are making this change in the interests of young people. If young people have come to the job market in recent years with exaggerated expectations which could not be met and, as a result, remained unemployed unnecessarily, that is possibly due to their diminished means of fulfilling those expectations. That, in turn, is a result of the failure of our education system, particularly in the deprived inner-city areas, not least because of the anti social attitudes of the Labour councils which control those areas, but I do not intend to go into that matter.
I welcome clause 5 because, under its provisions, we shall return to the principle of social insurance which Beveridge supported and which dates from the beginning of the national insurance system in the early years of this century. Unemployment benefit was never intended for those simply taking early retirement. I know from personal experience, however, that that has been a widespread feature. Indeed, my father retired early and availed himself of unemployment benefit because he was entitled to do so under the rules of the scheme. Millions of people have done that. In my constituency in 1979, ICI employed some 20,000 people, a great many of whom retired early under the excellent ICI pension arrangements. It is probable that thousands of them availed themselves of unemployment benefit, although they were by no stretch of the imagination unemployed.
§ Mr. Hamilton
I am reluctant to give way again because I am aware that many hon. Members wish to speak in the debate.
The Government are restoring the national insurance system to the purpose for which it was founded. Far from what the hon. Member for Livingston said, we are not moving away from the radical scheme of Beveridge—rather, we are completing the scheme that he envisaged. I would like the Government to go further and faster down that road and reduce the burden of the welfare state and reduce its scope so that it covers only those in real need.
§ Mr. Robert N. Wareing (Liverpool, West Derby)
It is clear that parsimony and meanness are the hallmarks of this legislation. Indeed, the main objectives are to reduce public expenditure and take away people's rights. It was well planned, because, in a letter to me of 11 February 1987, the former Under-Secretary, the hon. and learned Member for Mid-Bedfordshire (Sir N. Lyell), said:In recent years the rate of increase in the number of single payments has grown out of all proportion to the numbers on benefit. For example, in 1985 over 4 million single payments were made at a cost of around £308 million—increases of over 40 per cent. in numbers and costs in that one year alone. No Government responsible for proper planning and control of expenditure could regard this level of growth without concern.The Minister stated that the cost of single payments in 1985 was £308 million. Yet this Government, defying the Social Security Advisory Committee's advice that the social fund was unworkable without an expenditure of £350 million, are now budgeting for £200 million. Vie assume that that£200 million will include loans to be repaid to the budget by poor people. They often live in miserable circumstances—the sort of circumstances apparently unknown to the hon. Members for Birmingham, Edgbaston (Dame J. Knight) and for Surrey, South-West (Mrs. Bottomley), whose interventions were tragedies dressed as comedies.
711 Some 6,000 people claiming attendance allowance are having their cases determined by the Government, yet, taking the April 1988 uprating into account, the Government will save only £60,000. If epileptic, diabetic and other disabled people—some 300,000 of them—were to claim, the cost would be only £3 million in a social security budget that this Government claim will cost £44 billion.
The Government must make up their mind why they are reversing the decision of the Court of Appeal. Are they saying that the judges misunderstood the law, or are they saying that the law was wrong? If the former, why did the Government not appeal to the House of Lords? I suggest that it was because the House of Lords may have given the same answer as the Court of Appeal.
I must raise a point about young people and income support. The infamous Lord Young said that young people are lying in bed in the morning. I wish that he would come to my constituency in Liverpool and utter those words. I do not know what the Merseyside police bill would be, but I would take a chance on it. Another Tory who addressed the Tory party conference at Blackpool said that people in Liverpool and on Merseyside were not trying to find work. He said that if only they would come down the motorway to Bournemouth, where he lives, he would show them how to get work. They took him at his word, hired a coach and went to Bournemouth. That Tory had to have a police cordon around his house because of the wrath of the Merseyside people. When he was approached, he had to withdraw his comments. When the Merseyside people went to the jobcentre in Bournemouth, they found that there was no question of finding a job easily or of obtaining accommodation.
The Government recently commissioned a survey that showed that the number of unemployed school leavers who preferred to go on the dole rather than remain on benefit amounted to only 0.2 per cent. In other words, more than 99 per cent.—on the Government's own figures—are eager to find work and training. If this measure is passed, the Government will have to find an extra 100,000 YTS places, at the very least, to accommodate all those unemployed school leavers who require assistance. Currently, 70,000 to 80,000 school leavers have not yet had the offer of a YTS place. Will unemployment benefit be ended after the first, second or third offer?
Many young people want to undertake real courses. I know that some YTS courses have their attributes, but there can be no doubt that many are regarded by young school leavers wanting additional educational training as nothing more than Mickey Mouse courses. Indeed, some of them have been proved to be just that. Some youngsters opt to study part-time courses at colleges of further education. At the college that I attended before I came to this House, numerous young people were studying for three A-levels. I know that my hon. Friend the Member for Livingston (Mr. Cook) mentioned two A-levels, but it is possible to do 18 hours a week—six hours each on three A-level subjects. Those young people are gainfully employed studying to improve their prospects, but they will now suffer through the further education cuts.
Many people who are remote from colleges of further education opt for a correspondence course. What will happen to them? Will their unemployment benefit be 712 docked because they have taken a course with the Rapid Results College or some other institution? Is that the Government's answer to those who really want to find work and do far from lie in bed all day? This is supposed to be the Government of choice, but what choice will they offer those young people? How will they police the system? Will there be an army of snoopers? I am sure that that is on the cards.
The social fund proposals remove the right to additional help for the major expenses not covered by weekly benefit. Even under the present system of single payments, many people find it difficult. They rely on single payments for the provision of, for example, a gas cooker. They are often forced to go to a second-hand salesman who would sell them a cooker that might be dangerous or might break down in a relatively short time. Now, under the three-year rule introduced by the Government's regulations in August, those poor people often have to go without any cookers.
The social fund payments will not be administered in an objective way. Indeed, there will be no payments, only loans. Such loans will be given to people who are in dire need and who will have great difficulty in finding a way to repay them. Those loans will depend upon the subjective decisions of managers and social fund officers at local DHSS branches. If the social fund budget is to be limited to £200 million, will it include the amount owed by claimants on outstanding loans? There is nothing in any statement that I have seen to refute that suggestion. In fact, only £60 million has been set aside for grants, yet the social fund is supposed to cover maternity and funeral loans as well.
There is no doubt that when more and more poorer people are forced by the cash-limited social fund to look elsewhere—indeed, there is a provision in the Bill that they should go to other bodies first; voluntary organisations have been mentioned—they will go to local authorities. Those local authorities are already hard-pressed. Indeed, at present local authorities are unable to stand by their present statutory and legal obligations.
Let us consider the position of the Chronically Sick and Disabled Persons Act 1970, which was introduced by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). As Minister for the Disabled in September 1977 he said:The interpretation of the law"—the 1970 Act—is, of course, a matter for the courts. But I am advised that local authorities have a clear statutory duty under the Chronically Sick and Disabled Persons Act to meet identified and accepted needs in respect of all the services in Section 2.I am further unequivocally advised that services given under this Section may not be withdrawn in the absence of a reduction of need. This means that any authority which sought, for example, to withdraw a telephone provided under the Act, solely on the grounds of financial expediency, would he breaking the law.
§ Mr. Alfred Morris
My hon. Friend has raised a very important point. He has accurately reported the legal advice given to me as a Minister. Is he aware that, from all my inquiries, the advice given to my successors is in no way different? Voluntary organisations, often for disabled people, are increasingly concerned about the impossible position in which local authorities have been placed.
§ Mr. Wareing
That is my point. Even in the present circumstances of stringency imposed by the Government 713 —withdrawal of rate support grant, penalties, the targets and the expenditure levels that have been set by central Government—the Chronically Sick and Disabled Persons Act is not being enforced by councillors. They are being made to break the law by the Government. Such councillors will break the law on a larger scale as more and more people are forced to go to social services departments as a result of the Government's reversion from single payments to the social fund. There is no doubt about that.
This is the Government who stand aside and let councillors in Liverpool be disqualified and surcharged for trying to enforce the law with regard to social services and housing policy. This is the Government who supposedly believe in the rule of law, but will sit back and allow local authorities simply to defy the Chronically Sick and Disabled Persons Act 1970.
The social fund is to be forced upon us with social fund officers asking intrusive questions of old and disabled people. Confidentiality is likely to be breached as local authorities and voluntary organisations are asked to provide information to social fund officers. All that will happen if this legislation is allowed to go through.
One thing is quite clear: the words of the former Secretary of State for Social Services will not be carried through if this measure reaches the statute book. On 3 June 1985 the right hon. Member for Sutton Coldfield (Mr. Fowler) said:We shall ensure that the structural changes"—in social security—will not result in cash losses by those who are now in receipt of supplementary benefit."—[Official Report, 3 June 1985; Vol. 80. c. 49.]When we look at the Government's proposals for the cash-limited social fund, who can any longer believe what was said then?
During the general election campaign many of us will remember a famous party political broadcast by my right hon. Friend the Leader of the Opposition. It certainly stole the day as regards election broadcasts. However, there was another election broadcast that I remember very clearly. It began with the tune "I Vow to Thee, My Country". We then saw the former Secretary of State for Social Services and the Battle of Britain fliers going off in their Spitfires and Hurricanes and the hazards that the people in those years—45 years ago—suffered during the second world war. The patriots on the Conservative Benches—who no doubt will be wearing their poppies and attending cenotaphs on Sunday—might bear in mind that many of those who, 45 years ago, were desperately fighting for the liberty of the British people, are precisely the sort of people who will now suffer as a result of the institution of the social fund and the attacks upon poor people through this Bill.
The measure before us represents a continuation of this reactionary Government's punitive expedition against the poor. the old, the unemployed and the disabled. The Government speak with a large majority, but we, on the Labour Benches, represent the large majority of people who are poor and disadvantaged. We represent the conscience of all that is decent in our society. We will fight this unworthy Bill clause by clause in Committee. Our opposition must not stop there. We must make common cause with all those organisations and individuals outside this House. No Minister should appear in public or on a platform outside the House without being constantly 714 reminded of the people's wrath. That should be a deserved, consequence of this further attack on the standard of living of those in our society least able to defend themselves.
§ Mr. Patrick Thompson (Norwich, North)
I am grateful for the opportunity to speak in this debate. I support the basic principles underlying the Bill, and the Social Security Act 1986.
Although I listened with care to the hon. Member for Liverpool, West Derby (Mr. Wareing), I could not find anything which contradicted the basic thrust of what the Government are trying to achieve. The hon. Gentlemait raised all sorts of detailed criticisms and worries about what might happen, but he made no logical case against the Government's basic aims. I shall remind hon. Members what those are and make a few remarks about one or two aspects of the Bill.
The Government aim to encourage greater independence by, for example, reducing the disincentive to work which results from the poverty and unemployment traps; to simplify the system, and help it to provide, on the basis of easily identifiable and understandable criteria; to concentrate help directly on those whose needs are greatest, such as low-income families with children, and to improve the service to the public by making the system easier for the claimant to understand, and for the staff to administer.
I spelt that out because I find it difficult to differ from any of those basic aims. I have heard nothing from Opposition Members suggesting that they would differ from those basic aims. After all, how could one disagree with the concept of giving more help to those in greatest need? That must be the right way in which to proceed, and if that is the aim of the Bill—and no hon. Member who has spoken has convinced me that it is not—it is worth supporting. That does not mean that the Bill is perfect in every respect and that Conservative Members should not criticise its detail. Indeed, Conservative Members have criticised points of detail during the debate. That is right as it is important that the Bill should finish up in the best possible state to help the people we all serve.
One of the aims of the Bill is to simplify the system. That is a subject dear to my heart as many of us dine out by quoting the social security regulations. I sympathise with my right hon. Friends on the Government Front Bench. I do not know how anyone can understand the present system. I will use the opportunity of this debate briefly to pursue my own hobby horse, which is that we must somehow get away from the appalling English which is used in the social security regulations. We must also get away from the sort of drafting which is used in parliamentary Bills. I was trained as a scientist, and I have spent a great deal of time trying to understand the language of parliamentary drafting, never mind the language of social security regulations.
Even if I am alone in this campaign, I shall continue to speak out and say that we shall never improve the system and help people until we address this problem and make the regulations comprehensible to ordinary people, and, for the benefit of hon. Members, improve our system of drafting. This is not the time for me to suggest how we should go about that, but perhaps another opportunity will present itself.
Anyone who has read the regulations must admit that they are hopelessly complex and cause endless difficulty to 715 constituents and to hon. Members trying to help their constituents. I hope that my right hon. and hon. Friends on the Front Bench will take my remarks seriously and not consider them as a diversion from the main discussion about the Bill.
Two Conservative Members have spoken about the ideal way forward being to combine the tax and social security system. In the 1970s it used to be called the tax credit scheme. My hon. Friends the Members for Kensington (Sir B. Rhys Williams) and for Tatton (Mr. Hamilton) had in mind different end products. I would ask my right hon. and hon. Friends on the Front Bench, when they look further ahead, not to forget that, in the long run, if we are to achieve the objectives set out in the Bill, we should eventually draw together the tax and benefit systems. It may seem out of date to refer to the old tax credit system, but I make no apology for reminding hon. Members about that concept and suggesting that we move back in that direction when the opportunity arises.
We should move away from the sterile debate that so often takes place in the Chamber that is based on the claim, "We can do better than you for the poorer people of Britain." There has been a great deal of that from Opposition Members during this debate. Anyone can claim—this happened during the general election campaign—"We can do better. We can spend more." However, we all want to help the poorer people in our society. We all want to help families, and we all want to help the disabled. I am sure that there is no disagreement about that. Every constituency Member holds surgeries and we are all aware of the problems. We are all trying to address the problems in the best way possible.
It should be the Government's aim to target benefits and resources on those in real need, and in that context I wish strongly to support the change that is proposed in clause 4 for those under 18 years of age. It is surely a step in the right direction. I am being told repeatedly by employers in Norwich that they cannot find skilled people for certain jobs. It is becoming an increasing cry. I could provide chapter and verse, as set out in correspondence, to support this contention. There is no question but that there are opportunities for young people. No one can say that the unemployment problem has disappeared, especially for older people, but there are opportunities for those who are skilled, particularly if they are young.
We must move away from the idea that it is all right for a young person to draw unemployment benefit or income support, whatever we care to call it. If there are opportunities—and I am satisfied that there are—we must get people out of the habit of thinking that that is a normal option.
§ Mrs. Beckett
I have listened to the hon. Gentleman with what patience I can muster, but I can take no more. Does he not recognise that it is the cuts in decent training, which was provided before the Government came to power, that have caused the difficulty in identifying sources of skilled labour? Decent training cannot be replaced by the youth training scheme.
§ Mr. Thompson
The hon. Lady has anticipated my next argument. When I was a parliamentary candidate for the constituency of Barrow-in-Furness in Cumbria, I became aware of the youth opportunities programme of the then Labour Government. That was in 1977–78. I merely say 716 that the youth training scheme eclipses anything that the Opposition did when they were in government. I do not understand how they have the brass neck to suggest that their record of youth training measures up to what we have now.
Of course we are all in favour of better apprenticeship schemes and more training opportunities. I am not suggesting that YTS is the only way in which young people can be helped or trained, but at least the Government have provided a two-year scheme that guarantees every young person between the age of 16 and 18 years the chance of training if that opportunity is not found in some other way. The Government's record is so superior to that of the Labour party when it was in power that I am astonished that Labour Members are intervening on this issue.
§ Mr. Tom Clarke (Monklands, West)
I have listened to the debate, and especially the references to the YTS, with great interest. I have an open mind on these matters, so it would be of considerable help to me if the hon. Gentleman could name any of his right hon. and hon. Friends whose sons and daughters are participating in the youth training scheme.
§ Mr. Thompson
I have no children of my own, so I cannot refer to my own family. I have no list of the children of Opposition Members that sets out what they are doing. I have no idea what the sons and daughters of Members are doing. I reject the implication that lies behind the hon. Gentleman's intervention, which is that Conservative Members do not have children participating in the youth training scheme. That is a nonsensical suggestion and it is unworthy of the hon. Gentleman to advance it.
It is important that we develop and improve the YTS. There has been criticism of it today and I would say that, on the whole, the scheme is excellent in Norwich, but there are other areas where it could be improved. I am sure that my Front Bench colleagues will agree with me when I say that we must look to improve it still further. It cannot be perfect and so there must be room for improvement. I agree with hon. Members on both sides of the House who say that we must make the scheme better still. That is fair comment.
The hon. Member for Livingston (Mr. Cook), who spoke from the Opposition Front Bench, talked about the money implications in the Bill and claimed that everything in the Bill was directed to reducing expenditure. The YTS is a perfect counter to his remarks. If we are placing more and more people in the YTS—it is on record that the Government are spending vast sums on the scheme—there are spending implications in the Bill that will be good for young people and amount to a commitment to further training.
I shall refer briefly to payments from the social fund, which are dealt with in clause 10 and schedule 3. I do not understand the provisions that relate to heating costs. If they mean that we are working towards a better system for dealing with cold weather problems and emergencies such as those which faced us a year or so ago, they are to be welcomed. When my hon. Friend the Minister replies, I hope that he will spell out more clearly the effect of these provisions.
I hope that my hon. Friend the Minister will also clarify the loans provisions. Many of my constituents want to know how loans will be dealt with within the terms of the 717 social fund. Much nonsense has been talked about loans this evening, and it is important that we all understand fully when the loans will be provided, and in what circumstances.
It is extraordinary that Opposition Members should try to outbid us. It is all very well for them to talk about their record and claim that the Labour party cares more than other parties, but what is the Labour party's record? I can remember the last Labour Government. I remember also the cuts in the hospital programme that were due to the economic crisis. In addition, I can remember the winter of discontent and the effect that that had on the disabled and poorer people. Let us consider their failure to keep benefits and pensions in line with inflation, even though they promised to do just that. That leads me to conclude that action is better than words.
I support the Bill, even though there are details of it that can be improved. I know that the Government's intentions are right and that it is correct to direct help to where the need is greatest.
§ 8.9 pm
§ Mr. John Battle (Leeds, West)
First, I shall comment briefly on the tone and thrust of the Bill. The explanatory and financial memorandum starts with a positive tone. It refers tofresh provision for schemes for the distribution of welfare foods.It refers also to providingfor the payment of travelling expenses".It sets out a range of amendments to social security law that will be effected by the Bill and suggests that there will be increased provision for those who are in need of social security in our society. However, the language of provision and enabling is notably absent from the accompanying press release of the Department of Health and Social Security which was published on 23 October, which opens with an aggressive negative. It reads:This Bill implements the Government's manifesto commitment to withdraw entitlement to income support from people under 18 who deliberately choose to remain unemployed. It does this by removing the general entitlement to income support of 16–17-year olds.Far from increasing or introducing fresh provisions, the Bill reduces entitlement and withdraws provisions. It is emerging from the debate that hon. Members of all parties need a lot of convincing that it will not short-change those who are in real need.
Those of us who remember the great review by the previous Secretary of State may recall that that Bill was amended in detail in the other place. However, when the Bill returned here, in defiance of the amendments that had been tabled, it was passed on the royal wedding day, with the result that the Government have had to come back to amend the Bill because they did not take any notice of the amendments that were tabled then. That review failed, which is why we are discussing a second attempt to change the provisions.
However, this Bill sets out to change the basic conditions for entitlement to income support for those under 18 years, despite the assurances that were given to the contrary during the Fowler review. It also continues the Government's policy shift from primary legislation to legislation by regulation. That increases the discretion factor in social security provision and in turn, will result in unjust treatment between individual claimants and will 718 seize up the system with appeals being made against the proposed legislation. Its impact will be to reduce access to benefits and to reinforce means testing.
It would be interesting to know whether the emergency provisions contained in clause 7, relating to local authorities, are not the start of a shifting of the responsibilities of the DHSS on to local government. I would like to know from the Minister whether the Government envisage that, at some date in the future, the social fund will be administered by local authorities, and whether limits will be placed on clause 7. I hope that we shall not see a shift so that local authorities will bear the burden of social security and will once again be the administers of the poor law. That would be a means of taking the poor in our society out of the national budget so that they would no longer be the concern of the Treasury.
I should like to focus on the impact of clause 4 which will remove entitlement to benefit from unemployed 16 and 17-year-olds who are not in work, in full-time education or on YTS. The clause is based on the assumption that young people "deliberately choose unemployment." The Government's own commissioned research found that 91.1 per cent. of unemployed school leavers preferred to work rather than to remain on benefit. That statistic is given in the Department of Employment's research paper No. 61, which is entitled "Youth Unemployment: Social and Psychological Perspectives". Of those interviewed a year after leaving school who had failed to find work, the study found that only 0.2 per cent. said that they "prefer the dole". The report concluded:It would not be correct to say that the young unemployed find unemployment attractive. It would seem that there are very few indeed who would rather not have a job.To tackle that tiny minority, the Government are prepared to introduce a blanket of removal of benefit from virtually all 16 and 17-year-olds. However, there are already rules in legislation to prevent abuse of the benefit system. Claimants must be available for work and be willing to take up any reasonable offer of work or approved training, including youth training schemes, or be penalised under section 20 of the Social Security Act 1975.
Perhaps there are hidden assumptions behind the manifesto commitment that is spelt out in the Bill, such as the remarks made by the former Secretary of State for Employment, now the Secretary of State for Trade and Industry, who talked ofyoung people lying in bed in the morning as an alternative to YTS",despite the fact that the evidence shows the opposite. It is not a case of subsidising idleness, which is what some Tory Members, such as the hon. Member for Tatton (Mr. Hamilton) have asserted. Indeed, the opposite is true. At the end of each year since 1984 the so-called Christmas undertaking of a guaranteed place on a youth training scheme has been consistently unfulfilled, with up to 4,500 youngsters still waiting for a place at the year end. There is a real shortage of places, not least in my constituency in Leeds. Indeed, there is a shortage throughout the country and, as other hon. Members have said, there is a need for a further 100,000 places to provide those guaranteed places.
The assumption that young people are moving straight from school into a benefit culture was made surprisingly plain in the Minister's statement. The concept of an alternative "benefit culture" is presumably to be set 719 against and contrasted with the "enterprise culture" which is at the heart of the Government's attitude. As one Conservative Member has suggested, the language of social security is important. However, it seems that in some cases benefits are regarded as perks that the poor deserve, but, there is no mention of the hidden welfare state and the real tax benefits that are given to the rich. I should like a Bill to be introduced to tackle tax evasion. That would be a sign that that receives equal treatment with social security issues. The real dependent culture is that of those who have a short-term addiction to personal tax cuts at the expense of the poor. I am reminded again of the language of social security: some are creditworthy and can get credit—they are the better off in our society—but the poor are regarded as having debts. What is "credit" for some is treated as "debt" for others.
Accusing young people of being addicted to a benefit culture is to treat our young people as if they were the problem. The House should give the clear message that young people are not the problem. They should be recognised as the future of this country and encouraged to develop a sense of contributing to our positive future development. They should be given practical opportunities and support to do so.
Last week the Prime Minister proclaimed:There is no such thing as 'society'. There are individual men and women and there are families.Even such radical individualism acknowledges the family. After the great Fowler review the Government acknowledged:Financial support should still be given to those who assume the extra responsibilities of bringing up children.If clause 4 is retained it will put intolerable strains on families. Young people will be totally dependent on their parents, and the amount of resources that will be available to families for their upkeep will be reduced from the £19.40 per week which is proposed from April 1988, to £7.25 which is the frozen level of child benefit that was introduced last week. Surely we cannot put extra responsibilities on to the family without an obligation to provide adequate financial support. We cannot have it both ways. Cutting benefit from young people and saying at the same time that they have a take-up of child benefit will not work if child benefit is put into the permafrost and is unable to support families.
As was pointed out last week in the Daily Telegraph this Bill, like its predecessor is the price for the Government'sfailure to make good its promises to reform the tax system".During the Fowler review the Government refused to allow consideration of the tax and benefit systems to be taken together. Conservative Members have already referred to that. Last week the Daily Telegraph went on to suggest:A review of the social security system should be extended to the array of hidden subsidies from the Government to less deserving causes.That call for a full review of benefits and taxation suggests that the Secretary of State's predecessor radically failed in his job of overhauling social security so as to deliver social justice. That is why we are picking up the pieces in this short Bill.
Tonight we have proposals to squeeze the contributions to the poor, but tomorrow the Autumn Statement on the 720 economy will demonstrate the country's ability to tackle and root out poverty. If, as the Chancellor of the Exchequer announced last week,our robust economic health and sound public finance put us in the strongest possible position,surely we have a responsibility to ensure that all can participate in that economic health rather than force the poor to pay for the Chancellor's tax-cutting experiments. The Bill will further remove the poor from an entitlement to a stake, as of right, in our national economic development. Perhaps the time has come to take tonight's debate and tomorow's statement together. Perhaps the time has come to begin seeking justice for the poor.
§ Mr. Lewis Stevens (Nuneaton)
The speech of the hon. Member for Leeds, West (Mr. Battle) was more moderate in tone than the speeches from some Opposition Members, but it was on the same wavelength—that the Government had not done what they would have done and that the Government's actions have an impact on the poor. Indeed, the Government's actions do have an impact on the poor. The hon. Gentleman mentioned tomorrow's Autumn Statement. A great many benefits of the past four years have resulted from the Government's successes and economic achievements, and from the way in which the Government have allowed the developments to continue.
Clause 4 has given rise to criticism of the YTS from Opposition Members. They claim that the training is not what it used to be under the industrial training boards. Indeed, the people who have made some youngsters doubtful of the YTS sit on the Opposition Benches. They said, "Don't go on the YTS. It's cheap labour and not good enough. We should go back to the type of training we had in the old days." Since the introduction of the YTS, which had and still has its faults, we have seen remarkable developments both in the improvement of training within companies and in liaison with the educational system, technical colleges and so on, and a change in attitude among those advising young people and of young people towards the YTS. Opposition Members should go and talk to some young people on the schemes and see how they appreciate the training and recognise its worth.
It has been said that there is a shortage of places, so the proposals cannot be introduced with confidence. Indeed, they can. Although there may be shortages, the converse is also true: there is a shortage of young people to take up some of the opportunities that exist and employers cannot get some young people for their schemes. Good YTS schemes exist. In 1986, the then Secretary of State said that some schemes would not be introduced until there were sufficient places. By and large, there are sufficient YTS places for the proposals in the Bill. That is consistent with what the Government have said in the past, and they are taking us forward.
Given that young people have the options of further education, training and jobs, surely it is right that they should not be allowed to reject those opportunities out of hand and then expect taxpayers and the state to look after them. That is asking too much when provision has been made. We have the best training provision that the country has ever known. We have a long way to go and we shall certainly talk about that tomorrow when we discuss the Employment Bill. Nevertheless, the training available below the higher education levels is the best that we have seen. Much of the training under previous systems, 721 including some training boards, was out of date and inadequate for the future. Because it was inadequate the Government scrapped it, and employers welcomed that move.
The first clause is important. It marks a change of attitude in offering young people opportunities and ensuring that those opportunities exist.
§ Mr. Ian McCartney (Makerfield)
Will the hon. Gentleman present some factual analysis to show that young people in the north-west, part of which I represent, are shying away from youth training schemes, any other MSC schemes, or further education and accepting the principle of the dole? Last year in some parts of Makerfield nine out of 10 young people did not have the opportunity of a real job. It is an insult for the hon. Gentleman to stand here and parrot-phrase and lecture those young people who want a job opportunity. If he supports the clause, will he provide a factual analysis to show that so many young people are lying in their beds or sitting at home refusing opportunities? That does not exist in my constituency.
§ Mr. Stevens
I hope that that does not exist, but I doubt whether the hon. Gentleman's constituency does not have some people in that position. We are talking not about many, but some people. The percentage of young people of 16 and 17 years of age registered unemployed is not increasing. Some 10 per cent. of 16-year-olds and 15 per cent. of 17-year-olds——
§ Mr. Stevens
Some 10 per cent. of 16-year-olds are registered as unemployed. I do not suggest that large numbers are in that position.
Opposition Members have attacked the clause dealing with attendance allowance. As I understand it, that clause seeks to return the position on attendance allowance to what people thought it was. The case that came before the courts changed most people's thinking on what the law stood for. I understand that about 300,000 people could have claimed under the law as the courts interpreted it. The clause is merely a tidying-up operation to restore the law to what people believed it was.
We accept that attendance allowance is a sensitive issue, and it will always be. It has been and still is of tremendous help, but there are anomalies. I have a sad case in my constituency of a mother with young twins who are mentally and physically handicapped. For children before the age of two, no attendance allowance is payable. One twin has serious health problems and oxygen must be available almost all the time. That is a special case. But eligibility for attendance allowance at other ages undoubtedly needs to be considered in detail.
I appreciate that if we removed the restriction on attendance allowance for children under two years of age, it would open doors to all sorts of questions. Anybody who has children under the age of two has a big commitment, and babies, especially twins and triplets, place an enormous burden on the parents.
§ Mr. Nellist
As the grandparents of Vicki and Alexandra Storer live in my constituency, and I, too, have been approached by the family, how would the hon. Gentleman respond to my intention—on which I hope to elaborate, if not during the money resolution debate, in 722 Committee or, failing that, on Report—to table appropriate amendments so that chronically sick and disabled children, such as Vicki and Alex, are eligible for attendance allowance? That would allow their mother assistance and the orange badge which is crucial for their parents, so that they need not park the car hundreds of yards from the hospital, leaving them not only with a double buggy with two disabled kids, but an oxygen cylinder to carry.
§ Mr. Stevens
The hon. Gentleman is aware that I have some sympathy with his comments. I would not have mentioned that case had I not seen it as an anomaly in our present circumstances. It is not easy simply to change things, and there are other cases where disabled and other people are affected. Those cases relate not simply to attendance allowances, but to other parts of the social security regulations.
My hon. Friend the Member for Norwich, North (Mr. Thompson) referred to the drafting and language used in social security and DHSS matters. I agree with what my hon. Friend the Member for Norwich, North has said about the difficulty of understanding the regulations and that creating problems for local offices and people in receipt of the allowances, but I want to pay tribute to some of the work that has been done by the Department in improving leaflets, documents and forms over the past four years. Those documents may not be perfect, but an enormous amount of work has been done and I congratulate the Department on what it has achieved. There is a long way to go, but we have seen definite improvements. I am sure that, like some of the "plain English" campaigns, we can find passages within the regulations and documents that are far from perfect. Nevertheless, the Department has done much to improve the position.
I also want to comment quickly on the social fund. The social fund has been criticised ever since the day it was introduced in the Social Security Bill that became the Social Security Act 1986. The social fund is a sensible way in which to make money available to people. It can he used for grants and loans. Within the social security system, it is not unreasonable that some people who suffer a one-off financial burden should be helped by being able to borrow money and pay it back. It has always been a source of frustration and annoyance to some people in receipt of social security and supplementary benefit that such benefit appears to be given unfairly in one-off payments. I am not suggesting that it is given unfairly. However, some recipients often have the impression that others are receiving an unfair advantage. The opportunity to borrow in some cases or to receive grants in others can and will work very successfully.
The Opposition have often criticised the Government over their treatment of the disabled. I wonder how much Opposition Members know about what is really happening. In his statement last week, my right hon. Friend the Secretary of State for Social Services said that instead of the 4,500 people currently receiving in excess of £6 in the form of benefits for the disabled, he anticipated that more than 7,000 will receive the new supplement of £24.75. Our intentions in the Social Security Act 1986 and our intentions in this Bill, which will further consolidate the 1986 Act, are targeted where the resources are most needed and should give help where it can best be used. That pattern was set by the previous Secretary of State for 723 Social Services and I am sure that my right hon. Friend the present Secretary of State will carry matters to a satisfactory conclusion.
§ Mr. Jeremy Corbyn (Islington, North)
I was a member of the Standing Committee that considered the Social Security Bill in 1986. It has already been said that one million words were spoken during the Committee stage of that Bill. For every word that was spoken, at least eight people either are already worse off or very soon will be worse off as a result of that particularly pernicious piece of legislation.
We have yet another Social Security Bill which seeks to build on all the principles of the earlier, nasty legislation. In other words, it removes the safety net protecting against poverty in this country; it increases the power of discretion of local DHSS offices and gives the Minister enormous powers of direction and regulation to deal with what he terms are the problems of the age.
In reality, throughout the country at the moment there is a frisson of fear running through young people as they see before the the spectre of industrial conscription. The same fear is running through people who at the moment rely on benefit which they receive as of right, but which in future will be means tested. They will have to go cap in hand to the DHSS for loans. Before them they see a Government hell-bent on punishing the poor for being poor. Beveridge did not seek to punish them for being poor: he sought to construct a social security system to eliminate poverty.
Beveridge recognised that the elimination of poverty also arose from an economic policy that eliminated unemployment. This Government glory in mass unemployment and in punishing the poor for the poverty that they suffer as a result of the Government's policies—[Interruption.] If Conservative Members find this funny, they should tell that to the unemployed and poor in their constituencies. That is where the Government's policies are working. That is where the misery created by the Government is being lived out.
§ Mr. Corbyn
I treat this subject very seriously. I wish that Conservative Members would do the same. If they did that, they would not support this nasty piece of legislation tonight.
The cuts that have taken place since 1985 amount to many millions of pounds in social security benefit either in the loss of payments or changes in regulations. I will list five areas where cuts have taken place since 1985. First, maternity allowance has been cut by £36 million. Secondly, halving the mortgage interest rate for unemployed people has resulted in cuts of £38 million. Thirdly, reducing the rent taper on housing benefit has resulted in cuts of £28 million. Fourthly, abolishing the death grant has led to £18 million cut and, finally, abolishing maternity grant has led to another £18.5 million cut. That means £138.5 million just from those few items.
I speak on this subject with some feeling. Since 1983 my constituency has seen a 20 per cent. increase in the number of people claiming supplementary benefit to the extent that the two DHSS offices at Finsbury park and Highgate, 724 which cover most of my constituency, now have a total of 38,500 people claiming supplementary benefit. That is the price that my constituency has had to pay for another four years of this Conservative Government. The Government say that they are concerned about inner-city areas. If they were, they would not be seeking to increase the poverty, dependence and cap-in-hand mentality that they have sought to introduce with this Bill.
There are many aspects of the Bill that I could cover. However, we must consider the problems that already exist in the DHSS. I have seven surgeries a month in my constituency. I see a very large number of people in my surgeries. Most of the cases are housing, immigration or social security problems. Many of the social security problems are caused by non-payment of benefit which should be paid as of right to the claimants.
It is easy and cheap for people to blame the staff in the DHSS. I do not necessarily do that. In fact, I do not blame them at all. They have suffered cuts in the past seven years. They have suffered from under-training, compulsory transfer and the threat of privatisation. It is hardly surprising in such an atmosphere, that queues build up and delays and wrong payments accumulate. In the offices in my constituency, there are regularly fights as security guards have been brought in to look after the staff and the building. The atmosphere is one of the absolute bedlam.
That atmosphere occurs every week because people cannot get emergency payments. God knows what it will be like when the social fund comes into operation. People will be queuing up to get a loan and will be told, "The till is empty and the cupboard is bare. Wait until next April and come back." That is what life is like for people on supplementary benefit in my constituency. If any Conservative Member does not believe me, let him take a bus to the Archway tower, queue up and see what it is like. It is not far away from this place.
There are many parts of the Bill about which I have strong feelings. There are seven that I wish to mention. The discrimination that will lead to loss of benefit for many people suffering from disabilities is a standing disgrace. The treatment of disabled people is disgraceful in any event. There is a lack of effective legislation and lack of support by the Government for the legislation that was effectively introduced by my hon. Friend the Member for Monklands, West (Mr. Clarke). That is also an absolute disgrace.
Equally, the delay in implementing the family credit proposals is unsatisfactory. We cannot begin a new piece of legislation such as this when the last piece of legislation has not been cleared up.
As for young people, I detect the usual Tory trick of hunting the scapegoat. They seem to think that somewhere in this country a 16-year-old is lying in bed in the morning instead of going out and getting a job. Their solution is to have an army of officials to hunt down this idle, feckless, useless 16-year-old, as if that will solve all the problems. However, in reality the Government know perfectly well that that is not the issue. Very much the issue is the fact that we have abolished the industrial training boards and taken away the possibility of decent training opportunities for young people. Instead we are forcing them to go from one YTS scheme to another, back on to the dole, back on to another scheme and back on to the dole.
That means that we have the most untrained, disillusioned young people of any industrialised country. 725 The Government know that to be the case. They know very well that all their proposals lead only in the direction of appeasing the basest of instincts among Tory Members of Parliament and Tory party conference-goers—and there is no baser person than a Tory party conference-goer—as well as the worst elements of the gutter press. They are seeking to punish young people for being young and unemployed and wanting something to do. That is what the Bill does.
From the contribution conditions implicit in the Bill it is clear that young people and married women will be excluded from some benefit. It is another hidden cut in social security, similar to the one that I mentioned earlier.
With regard to emergency payments, I find part of the Bill suspicious. It talks about "any other body" that might make emergency payments. What other body might do it, apart from the DHSS and the local authority? Will the Government privatise emergency payments and hive them off to loan clubs, pawnbrokers, banks, charities and so on? There is something insidious and suspicious about this. The Minister should clear up this misunderstanding now or remove that provision in Committee.
The most disgraceful aspect of the Bill is the way in which the social fund is envisaged and how it will operate. In Committee on the last Bill, we drew attention to the wrong-headed thinking in having a social fund at all, with the idea that it should be a fund from which people should borrow and that it should be cash-limited. Bit by bit, the information has crept out via the odd letter here, the odd quip at the Tory conference there, the odd leak to a newspaper and the odd announcement in the House. It is clear that the total fund will be extremely inadequate—only £200 million, when the Social Security Advisory Committee recommended £350 million. Only £60 million will be in the form of grant, and outstanding loans will count against the total value of the social fund in any particular DHSS office.
The situation will be chaotic, even if the DHSS decides to administer the fund in the most scientific way possible on 1 April each year, based on the number of claims in the previous year. What will happen if there are major redundancies, if people move in and out of the area and if people suddenly need supplementary benefit because of changed economic circumstances? There will be the most horrendous mess, and the Government know that perfectly well.
In addition, the drafting of the schedule dealing with the social fund is so vague that it will be perfectly possible at a later stage for the Minister or a hard-pressed local office or authority to decide to charge claimants the administrative costs of running the social fund. There is a big hidden agenda within the social fund, and the Minister should clear up the matter now. If he does not, he will be harassed and hounded from now until 1 April to clarify what the social fund means and how it will actually operate. If the Bill goes through, many people will be carefully watching how the social fund operates after 1 April. Some of us believe that money will run out in constituencies such as mine long before it runs out in some of the wealthier places that are represented by Conservative Members.
There is also the question of cold weather payments, their administration and the system that will operate. My hon. Friend the Member for Livingston (Mr. Cook) referred to the sheer lunacy of having cold weather payments that relied on cold spells running from Monday 726 to Sunday. He is absolutely correct. The chaos of last winter was also wrong. Very few people received the cold weather payments that the Government promised them. There was also the Government's rejection of the idea of a flat-rate payment that was proposed by the Labour party during the election. That at least would have removed the fear of winter heating charges from elderly people.
It is a disgrace that more than 200 elderly people die each January from hypothermia because of their inability to pay for the adequate heating of their homes. That is a disgrace in any society that calls itself civilised Hypothermia is not known in many other European countries. It is known as the disease affecting the old and the poor that occurs in this country. I strongly support a standing payment for elderly people to remove the fear of cut-offs, cold meals and cold homes during the winter.
I would also make the gas boards pay back some of the money they are making from privatisation by abolishing standing charges for the elderly, and I would do the same in respect of electricity.
The discretion open to the Minister in the operation of the social fund is ominous. He will have the discretion to change things as time goes on and administrative conveniences arise. From the speeches of Conservative Members one would not believe that we are living in a country in which 6 million people live below the poverty line and where 11,000 people will be sleeping on the streets of our major cities tonight because they have no homes to go to. Instead of dealing with the problems of hungry and poor children, old people suffering from cold and the homeless, the Bill systematically attacks those people for being poor, cold and old simply because they are an administrative inconvenience or possibly because they are an obscene sight to Ministers driving home from the House and passing Charing Cross station.
When we conclude the debate on this awful period in our history, I believe that the Government will go down as one who ruined the welfare state that was designed to eliminate poverty and who sought to fiddle the unemployment figures rather than deal with the problem. They sought to make young people scapegoats. even though all those young people wanted was a decent life and job. Above all, the Government have lit the candle of opposition to their proposals. Thousands of people now realise the common interest between young unemployed people, claimants, mothers who want decent maternity pay and poor pensioners. The Government are building up a coalition of opposition that will eventually defeat them—[Interruption.] Conservative Members may smirk, but eventually that opposition will remove them. The people of this country will not tolerate the obscenity of deliberating creating poverty amidst plenty or shelling out millions to satisfy the City and stockbrokers last week while this week they are impoverishing the poor.
§ Mr. Jacques Arnold (Gravesham)
I should like to speak in support of the Bill, and, in particular, clause 4, which gets rid of the provision for paying unemployment benefit to those under the age of 18. In my view, those payments have done much to sap the moral fibre of far too many of our young people. A provision that gives something for nothing creates a moral basis that is extremely dangerous for too many young people. However, the withdrawal of those payments must go hand in glove, as the Government intend, with improving the 727 quality of our YTS schemes. We have many excellent schemes, the overwhelming majority of which provide us with a basis for our young people to gain skills for life.
Like many other hon. Members, I spent the summer recess visiting the YTS schemes in my constituency. I saw, for instance, the computer technology scheme, from which 90 per cent. of young people have gone on to good, well-paid jobs in my constituency and beyond. Those very people were deemed failures at school, but thanks to YTS, they have gained skills that have given them a future, and a future with self-respect.
§ Mr. Allan Rogers (Rhondda)
Will the hon. Gentleman explain what will happen to the young unemployed in my constituency, where unemployment is running at about 40 per cent? What will they do when there is no help for them—no YTS scheme, or no job opportunity after any such scheme if it existed? I do not think that the youngsters in my constituency lack moral fibre. As I said last week in the debate on defence, throughout my constituency can be seen memorials to people who were prepared to fight and die for their country. That is more than I can say for many of those who support the Conservative party. What about the way in which they fraternised with Hitler?
§ Mr. Arnold
I shall ignore that last point. I trust that the hon. Gentleman has gone round his constituency constructively looking at the new YTS schemes and giving full encouragement to the youngsters in those schemes, as I have done.
As well as the computer technology scheme that I mentioned, I have seen a highly successful scheme for developing skills in the building trades, as well as excellent schemes to develop secretarial skills. Again 90 per cent. of those so-called no-hopers have gone on to good, well-paid jobs which have developed their self-respect and capabilities. I have also seen a scheme in the cable industry the heavy industry for which the Labour party claims to speak. Those courses are very successful.
§ Mr. Arnold
I have already given way to the hon. Member. I shall make my speech, and I shall be interested to hear his later.
As well as all those youngsters in my constituency who are on YTS schemes, there are those who are not on such schemes. I found a good example of why we need this proposal during the last general election campaign, when I was canvassing on my own. A poor, misled youngster had left school without even looking at YTS—and why? Because he had swallowed the claptrap from the local Labour party that it was some kind of slave labour, and was living on the very benefits to which the Labour party would condemn him. That lad had no future. He was wallowing self-righteously in self-pity—and for what? For the delight of the Labour party?
I told that young man that his future, for which the Labour party seemed to care nowt, lay in obtaining the right skills for success in the future.
§ Mr. Arnold
The hon. Gentleman asks what skills. If he had listened quietly to what I had to say, he would have heard a number of them. Those skills are giving some 90 per cent. of the people on those schemes—[Interruption.]
§ Madam Deputy Speaker
Order. If the hon. Member for Glasgow, Pollock (Mr. Dunnachie) has something to say, will he please rise in his seat and ask the hon. Member who has the Floor to give way?
§ Mr. Arnold
The skills to which I have referred are precisely the skills which are of use to the young people in my constituency.
§ Mr. Tony Favell (Stockport)
I am grateful to my hon. Friend for giving way. Let us suppose that two years after leaving school, two youngsters apply for a job. One has been on the dole for two years—thanks to the encouragement given by the Labour party—and the other has been on a YTS scheme. Which one will get the job?
§ Mr. Arnold
It is absolutely clear that the one who will get the job is the one who has the skills, thanks to the Government's YTS schemes. The key to getting a job rests with our young people obtaining skills, and not imagining that jobs are due to them as of right.
Let me return to the moral point. Opposition Members would condemn young people to fester in self-righteousness and unemployment. That is bad for young people, and it is also bad for those in work, because they know—and feel resentful—that the tax that they pay is going to the mates with whom they were at school, and who are not bothering to get off their backsides and find a job or training. That is the moral point.
I have heard talk of cost cutting. Getting rid of unemployment benefit for those under 18 will clearly save money for the Department of Employment. That saving is deemed to be about £84 million, but far more relevant is the additional money that the Government will spend through extending and developing the YTS schemes for the youngsters whom we are discussing. The Government are likely to allow a net increase between the two Departments of some £60 million to provide the skills for our young people's future.
§ Mr. Nellist
This is the first time that the hon. Gentleman and I have crossed swords since he came to my constituency in 1983 to campaign on behalf of the Tory party, and left some three weeks later. Does he realise that since he tried to obtain the seat the number of registered unemployed—apart from the fiddled statistics—is now just over 22,000? The number of vacancies is 481. That means that, for every vacancy in Coventry, there are 46 unemployed people. How does the hon. Gentleman, with all his hypocrisy and concern about idleness and people not trying hard, equate that with 46 unemployed for each vacancy? Even if they all looked for a job 24 hours a day, and even if tomorrow morning all of those 481 vacancies were magically filled, there would still be 45 unemployed for every one who obtained a job. Can the hon. Gentleman explain that?
§ Mr. Arnold
These are exactly the arguments of despair that the hon. Member for Coventry, South-East (Mr. Nellist) peddled at the election when I contested the seat with him. That is why it should be noted that the swing 729 against the hon. Gentleman was the largest swing against Labour throughout the urbanised west midlands. So much, therefore, for the hon. Gentleman's arguments.
§ Mr. Nellist
On a point of order, Madam Deputy Speaker. Far be it from me to get up on a soap box, but, of the 57 seats in the west midlands, the third highest swing to Labour was——
§ Mr. Arnold
I was referring, Madam Deputy Speaker, to the election at which I fought against the hon. Gentleman—the general election of 1983.
This measure should be introduced to cut out unemployment benefit for those under 18, but it should be introduced in a sensitive manner. The measure provides for a new YTS bridging allowance between the drawing of child benefit and before the take-up of a YTS place. We are saying to young people, "If you can't get a job, get trained. The option, at the expense of the taxpayer, is not to sit on your backside and earn benefit, because that money will be better spent on our schools and hospitals."—[Interruption.]
§ Madam Deputy Speaker
Does the hon. Member for Lancaster (Mrs. Kellett-Bowman) wish to raise a point of order?
§ Mrs. Kellett-Bowman
Yes, Madam Deputy Speaker. Is it in order for the hon. Member for Rhondda (Mr. Rogers) to give the Hitler salute?
§ Madam Deputy Speaker
That is certainly not in order. I did not see the hon. Gentleman do that, but if he is behaving in that way I hope that he will cease immediately.
§ Mr. Arnold
The message that has to go out to our young people must be absolutely clear: that they must find a job, or stay at school, or retrain. We have to tell them that if they want to sit on their backsides, they will not do so at the expense of the taxpayer, because we have far better things on which to spend taxpayers' money—on our schools, hospitals and pensioners. There is no soft option in this life, and our young people must be educated to realise that there is no soft option.
§ 9.1 pm
§ Mrs. Margaret Ewing (Moray)
What I shall remember most about this debate is the tone of the speeches of Conservative Members, not least the speech of the hon. Member for Gravesham (Mr. Arnold). With one honourable exception, their speeches were marked by arrogance, divisiveness, the perpetuation of myth, an attack on people in poor circumstances and straight populism. It is a far cry from the days of lain Macleod. On the Conservative Benches there seems to be very little left of the humanitarian approach to members of society who are less fortunate than they are. I remind the hon. Gentleman that if he wants to talk about election statistics, at the last general election his party lost the equivalent of a whole football team north of the border. Not the least reason for their failure was that the people of Scotland rejected the kind of philosophy that has been so ably demonstrated by the hon. Member for Gravesham. He is part of the reason for the continuing and developing north-south and Scotland-England crisis.
730 Reference has been made to the Beveridge report. The Government have not answered the question that I asked them only last week: what they define as the poverty line. There is an argument about the definition of poverty. If the Government are unwilling to accept the existing level of poverty, will they kindly tell us what they believe is the poverty level and how many people they intend to remove from the poverty trap by this legislation?
It is said that the Bill is part of the process of rationalising a system that we all accept is very complex. We would accept that argument if rationalisation were taking place in our social security system, but rationalisation is being used by the Government as a cloak to cover the dagger of the cuts that they are imposing. No reference is made by them to the additional strains that are being placed on DHSS staff who have to cope with new legislation, and also with amendments to legislation. Their work is becoming extremely difficult, because of so many new Acts and the rapidity of change.
Clause 1 deals with the attendance allowance. I welcome the apparent concession that was made earlier in the debate, and I look forward to hearing the exact details and clarification of this concession in the closing speech from the Treasury Bench. If, as was claimed by the Secretary of State, the Government are returning to the original intention of the law, why was the House of Lords ruling not pursued and recognised as the law that should have been implemented in this legislation? I should like to know whether any estimates were made on the level of take-up that would have been likely on a measure such as was envisaged in the Moran ruling in the House of Lords. It seems strange that no precise figures or costs were ever published. It seems that the Government did not undertake any estimates.
I should like to reiterate the reference by the hon. Member for Leeds, West (Mr. Battle) to Department of Employment research paper No. 61, which, in table 4.1, points out that 91.1 per cent. of unemployed school leavers prefer to work rather than remain on the dole. That belies the sort of argument we have heard from Conservative Members. Only 0.2 per cent. of the people interviewed said that they would prefer to remain on the dole; that shows the willingness of our young people to take up employment opportunities.
I speak as a Member representing a rural constituency that has become known as one of the unemployment black spots in the Highlands of Scotland. In the past eight years the constituency has changed from being relatively well-off in terms of employment prospects to being one of the most dismal by the time we managed to defeat the Conservative in that seat. Part of the problem faced by many of the young people in my constituency is that even where there are YTS opportunities they tend to be centred in Aberdeen or Inverness where the bulk of our manufacturing and industry is centred. That means that there are few opportunities for a young person wishing to undertake YTS training in industry in my constituency. There are some very good projects operating but there is a difficulty for many who have to travel far to find employment opportunities. They experience great expense in travelling and in some cases have to find lodgings in the cities. We need the creation of employment, not the continuation of schemes or social security legislation which adversely affects those people.
Clause 10 and schedule 3 of the Bill deal with the social fund. I have a personal interest in the severe weather 731 payments because, as some hon. Members will recall, during the 1970s, I regularly asked various questions about hypothermia. At the time it was thought of as a ridiculous stance to take. The then Labour Government did not accept the arguments we were putting forward. I am glad that the work started by my party in the 1970s and subsequently followed through by my party chairman, Gordon Wilson, with the introduction of several pieces of private Member's legislation in the last Parliament, has stimulated so much interest among so many hon. Members. I hope that we shall move towards something better than that mentioned in the Bill.
I will not rehearse all the arguments that relate to severe weather payments. They have been dealt with by other hon. Members. However, I remind the House that it is generally colder in the north. We have longer winters, chill factors and winds that contain a great deal of dampness. The points of measurement used by the Government in their current legislation often do not relate well to all surrounding areas. In my constituency the measurement for severe weather payments is taken on the east coast when it would be much more sensible to have the point of measurement somewhere such as Aviemore. That would be closer to the temperatures that we experience in Tomintoul and Dufftown. I am sure that the Secretary of State knows that the Tomintoul-Cockbridge road gives one of the first indications of winter because it is always the first to fill in when there is snow. I do not approve of the idea of a week being only from Monday to Sunday for the purpose of severe weather payments. Surely there must be something more appropriate.
Finally, I should like to deal with the handicapped. I have a letter from MENCAP, a particularly well known organisation working with the handicapped. It has cited one or two examples of what would happen as a result of this legislation. A single parent with one child who is aged under 11 years and another who is over 11 years, one of whom is mentally handicapped, receives the attendance allowance, and the mother is in receipt of invalid care allowance. The present weekly entitlement for that family, if it took all of its entitlement, would be £117.45. An analysis of the same family after 1 April 1988 shows that it would receive £81.15 only, which is almost a 30 per cent. reduction. The Government must look carefully at how they are treating the disabled in this legislation.
The 1986 Act has already affected many disabled people. I have received a letter from Grampian regional council, which says that as a result of the 1986 Act it is now unable to give the concession of cheaper school meals to children attending special schools. They will now have to pay the same rate as everyone else and free milk will no longer be supplied to children in primary 1 and 2. Surely that is one of the unkindest cuts of all.
I am conscious of the time, but I wished to make a few points about the Bill to outline the reasons why plaid Cymru and Scottish Nationalist party members will vote against this legislation. We do not consider it to be a step towards the eradication of poverty but a step that will make life even more difficult for those who are most vulnerable.
§ Mrs Alice Mahon (Halifax)
It has been pointed out that huge amounts of money are given to the social 732 security system, but for millions of people it is their sole source of income; it is the only way in which they can support themselves and their families.
The present level of benefits is disgracefully low. However, what I have heard in the debate leads me to believe that that level will be further reduced. Despite messing about with figures, the Government cannot hide the fact that the level of benefits is very low and that they will be reduced still further.
I have heard comments in the debate that have shocked me, particularly from the hon. Member for Birmingham, Edgbaston (Dame J. Knight). The hon. Lady tried to make out that people living on benefit were quite well off—if she were in the Chamber I would be able to point this out—yet anybody who is under 18 years of age, if they are lucky enough to receive benefit when the Government have finished with this Bill, will have only £19.40 to live on. Do Tory Members consider that amount to be adequate for anybody to feed themselves?
The Bill will do nothing to help those people in Halifax who rely on benefits. Even worse is the decision to move away from one universal benefit of which women have been particularly glad since it was introduced—child benefit. The Government are acting in a most irresponsible manner. It is a complete reversal of their manifesto promises. They stated thatchild benefit will continue to be paid as now.The Government are cheats and confidence tricksters. They are without honour because the spirit of that manifesto commitment has been completely reneged upon by the Minister's refusal to uprate benefits in line with inflation. I believe that it is the beginning of the end of child benefit as a universal benefit.
With regard to some of the arguments about selectivity and targeting, the Government cannot argue against the popularity of child benefit, for which there is almost 100 per cent. take-up. The reason why it is so popular is clear. It is not means-tested; it does not stigmatise the claimant; and it is socially acceptable. It gives mothers the only income that many of them receive in their own right, because under the system they are deemed dependent. Indeed, the Prime Minister has spoken of its benefits, if only in rather peculiar terms.
The Bill hits another vulnerable group—young people, who are refused the right to choose whether to go on YTS. The word "choice" is important. It is ridiculous to argue that enforcing acceptance of a YTS place gives a choice. Reference has been made to the thousands who will not be offered a place and who will be given a bridging loan, but that is not satisfactory. The Opposition are not happy about what will happen to young people trying to escape from domestic violence or sexual abuse. There will be only a bridging arrangement for them. I listened to the Secretary of State renege on the child benefit commitment. I do not feel that those children will be protected by the Government.
I have heard unbelievable rubbish talked about YTS, as though it were a panacea for all training ills. I have taught those who have come for off-the-job training and listened to their horror stories. Many of the schemes are good, but many are not; they are merley substitutes for jobs that involve no training. Kids have spoken to me about being on a two-year interview and being blackmailed into taking unpaid overtime. I have listened to many complain of sexual harassment and not dare to say anything when they feel conscripted.
733 The Government should not say that YTS is the answer to training. Some schemes are good and are topped up, but many are repressive and contain no training elements. Young people do not refuse to go on these training schemes because they want to skive. Conservative Members do not seem to know anything about the real world. Young people are taught by the education system that they will later earn their living and participate in society, but that is denied to thousands of them.
The Secretary of State has admitted that thousands of pensioners and many disabled people will be worse off. I should like to know specifially whether income support will compensate patients on supplementary benefit who receive an extra £18 for life-saving dialysis treatment and are given assistance to pay for their heating and diet. One of the meanest aspects of the Government's scheme has been the treatment of people who need carers and their attendance allowance. Conservative Members have no idea of the sacrifice that carers make. Have they no concept of the stress imposed not only on carers but on the people for whom they care? The human element must be considered. Will we have to beg to care for people in the community? Many people are in the community because of the Government's community care policies which have pushed people out into society without adequate community care provision.
I believe that there is an overwhelming case for a redistribution of income and wealth. That is why I believe in the welfare state. The Opposition think that that is the only way to achieve a fairer and more equal society. That is what makes me a Socialist. The Government will go to any lengths to get rid of the welfare state. The Bill is another nail in its coffin. This measure is also damaging to democracy.
The Bill provides for a further expansion of ministerial powers. This detailed legislation gives one person the right to decide who can eat, who can be looked after, whether a person will he paid if he refuses to go on a scheme and, ultimately, who lives or dies—[Interruption.] We are talking about those issues. There is no getting out of it. Conservative Members should remember, if they are going to vote for the legislation, that that is exactly the issue about which we are talking.
Completely to ignore advice from inside and outside the House about the dire consequences for millions of people if benefits are cut yet again is the hallmark of an authoritarian state; it is to freeboot over the people who need us most. There is no mistake about that. Governments who, like this Government, restrict the democratic process to Ministers alone are prone to resort ever further to authoritarianism. I argue that that is alien to our way of life.
§ Mrs. Margaret Beckett (Derby, South)
This has been an interesting and, in some ways, revealing debate. Those hon. Members who were present early in the debate will certainly know more about Chelmsford than they did, and I congratulate the hon. Member for Chelmsford (Mr. Burns) on the assured manner of his maiden speech, if not on his controversial observations.
The debate revealed, too, that I have done the hon. Member for Birmingham, Edgbaston (Dame J. Knight) an injustice in recent years by believing that she was for some reason unable to see the conflict between the Government's declared aim—which she celebrates so 734 often—of helping those in the greatest need and. proposals such as those in the Bill. Today the hon. Lady finally made it crystal clear that her definition of need is fully as rigorous and restrictive as even this Government could wish. She made it quite clear that Mrs. Moran, the constituent of my hon. Friend the Member for Birkenhead (Mr. Field), does not pass her test of need—and nor do many others suffering from illnesses from epilepsy to cystic fibrosis.
The debate also revealed that Ministers were not wholly seized of the effects that we believe clause 1, as drafted, would have. We welcome the readiness of the Secretary of State to consider amendments, and we hope that he will not restrict it to this clause. The Secretary of State said that clause 1 simply restored the law to what the Government believed it to have been. I hope that he will be aware that the Disability Alliance has suggested that the Government advertently or otherwise, are substantially tightening up the law as they understood it before the Moran case. We shall press them on that in Committee, and we hope that they will consider an amendment if it turns out that there is substance in our arguments.
The Bill cuts still further the entitlement to industrial injuries benefits. It was noticeable throughout that Conservative Members were torn between the desire to deny that there were cuts and the desire to applaud the Government's justification for them. The Government suggest that now that they have renamed and redefined severe hardship allowance as reduced earnings allowance it should cease to be paid on retirement and be replaced by a retirement allowance. That sounds innocuous enough. However, for many, and perhaps most, of those who now receive the allowance the change will mean a drop in income of some £19.35 a week on retirement. For people whose incomes are not exactly high even now that is a substantial sum to lose. We believe that the Government will find it hard to defend the change, and we shall press them further on it.
Will the Minister touch briefly on clause 3? the provision has not been dealt with in the debate, largely because it is opaque to say the least. Will the Minister assure us that the Government do not intend to use this apparently technical clause to separate the date of claim for family credit from the date of payment for reasons of administrative convenience?
Much has been said about clause 4. Almost all the Tory Members who have spoken have claimed that the clause implements the Government's manifesto pledge to deny benefit to those who refuse the offer of a YTS place. Let me repeat what has been said over and over again by Opposition Members, although apparently not understood by Conservative Members. The clause does not deny benefit to those who wilfully refuse to work. The Government can do that under existing legislation, although that has proved necessary only on a comparatively few occasions.
The Bill denies benefit as of right to all 16 and 17-yearolds, including those who have never been offered a YTS place. The benefit will be denied as of right to those who find themselves in that position through no fault of their own. The Secretary of State blustered bravely about the YTS guarantee when it was pointed out to him that there were inadequate places on YTS to accommodate those whom he now intends to go on the scheme. An estimated 100,000 extra places are needed to implement that guarantee. I do not see where they will come from between 735 now and next April. This means a reduction in family income of £11.50 a week for families entitled only to child benefit rather than to income support at £18.75.
We have been reminded that some people might be entitled, in some circumstances, to a bridging allowance. But if this does not carry an entitlement to other passported benefits it means a lower income for the family as well as for the young person. The only exception to the denial of benefit will be where severe hardship is recognised by the Secretary of State. My hon. Friend the Member for Halifax (Mrs. Mahon) referred to that.
I was going to ask the Secretary of State how he defined severe hardship, but I listened with horror to what he said when opening the debate. He referred to young people who left home because they were the victims of physical or sexual abuse. He appeared to suggest that even they would be entitled to draw benefit only for a restricted period. If being the victim of sexual abuse is regarded as only a temporary hardship, I wonder who will benefit from the Secretary of State's definition and discretion in this cause. Under the board and lodging regulations young people who have so suffered cease to be entitled to help when they reach the age of 19. Is that what is intended in the Bill? Because of the way in which the Bill is phrased, we know that there will be no appeal against the Secretary of State's decisions. We intend to raise that in Committee.
I shall disregard comments about the lack of moral fibre among our young people. Moral fibre is probably all they can afford because they certainly will not be able to afford a high fibre diet. What strikes me forcefully about the debate is the total lack of understanding by Government Members. It is bad enough, humiliating and embittering enough, to be forced to take part in a make-work scheme because some overpaid and pompous Minister thinks that young people are lying in bed and rejecting the wonderful opportunities that he is offering. It is even worse to be forced into doing a job which is needed and is of value but without proper conditions of work or proper wages. Those are the only alternatives offered to young people in the Bill.
The Bill represents just the latest in a series of attacks on young people. It will raise between £300 million and £355 million. The Government have saved that at the expense of young people in recent years. It never seems to occur to the Government that in their ceaseless attacks on the young they are sowing the wind and that sooner or later we shall reap the whirlwind.
No justification has been offered for tightening contribution conditions for unemployment and sickness benefit. When that is added to the recent abolition by the Government of partial benefits paid as some return for partial contributions—one of the many areas in which the link between contributions, paid or credited, and benefit entitlement is being steadily reduced—it paints an alarming picture.
There is an honourable case for extending benefits to those who have had no opportunity to make contributions, through no fault of theirs. There can he no case—none has been made—for withdrawing benefits when substantial contributions, perhaps over a working lifetime, have been paid.
The Secretary of State claimed that many, especially women and young people, will lose their right to 736 unemployment benefit and be forced, at best, on to means-tested income support, but that the long-term sick need not be deterred by the Bill from seeking work. That does not appear to be so. It seems to us that someone who is long-term sick and seeks work but cannot sustain it may lose entitlement to invalidity benefit. We shall seek to explore that in Committee, and if we are right I hope that the Secretary of State will reconsider. It is ironic if this is what the Secretary of State calls reducing dependence on the benefit structure.
There has been a further cut for those drawing their occupational pensions at 55 years of age. Most people in that position have been pushed, if not forced, into early retirement. They are already losing by that decision.
The hon. Member for Tatton (Mr. Hamilton) spoke of those who exercised a voluntary choice to retire early, and I am sure that that is very nice for them. However, most of those who retire at 60 lose on the pension that they would have gained had they been able to continue work until 65. That must be even more true for those who retire at 55; they will be even heavier losers on their occupational pensions. The Government now propose to withdraw the entitlement to unemployment benefit—for which, in many cases, people will have contributed all their working lives. The fact that they will lose everything over £35—which, when introduced, was at least more than the basic state pension, but now is substantially less—only adds insult to injury.
The hon. Member for Edgbaston, in referring to the clause on welfare foods, said that it was quite wrong of the Maternity Alliance to claim that 220,000 women and children would lose entitlement to free milk. I hope that the hon. Lady is, for once, correct and that the Minister will reassure us on that point. The hon. Lady demonstrated the ignorance of those on the Conservative Benches about what the Government are doing with the social fund. I remind her of what the Government's Social Security Advisory Committee said a year ago——
§ Mrs. Beckett
I got it right last time; the hon. Lady obviously did not read the report. It said:some expenses cannot realistically be budgeted for from within present benefit rates.It also referred to the setting of adequate rates for personal allowances. Since the SSAC made those remarks, the Government have published figures for income support that are demonstrably lower than the present benefit rates that the committee said did not allow people to save to meet expenses that would otherwise be claimed for as single payments.
Also, the SSAC set a framework for the budget for the social fund and said that the minimum, even with benefits maintained at past levels, would be £350 million if the scheme were to be workable. What has been offered by the Government? I remind hon. Members who may or may not have been here for the uprating statement that the figure has been set at £200 million with reduced basic benefits—especially for the unemployed, who are those most dependent on single payments.
For the benefit of those who may not have ploughed through every word of the social fund manual, and to give the flavour of what is intended, I shall pick out four issues that it highlights. First, even loans are not available to meet fuel costs in most circumstances, even though, as 737 anyone who knows anything about the subject will know, it is most often fuel costs that create the greatest burden of debt. There is a reference—I would not wish to mislead the House—to some help for fuel costs, and it casts an interesting light on the Government's view of the circumstances in which the future long-term unemployed are likely to live. It is possible to make a claim against the social fund for non-mains fuel costs—for example, oil or bottled gas. It is not possible in any circumstances to claim, even for a loan, for the cost of paying mains fuel connection charges. That casts an interesting light on the twilight world in which the Government expect such people to dwell in future.
The second point that I want to highlight is a fact which comes out clearly in the manual but which did not come out clearly when we debated the matter about two years ago. It is that those who are proven to have the highest possible priority need, those who are proven to have the right to make at least a claim against the social fund because they are in the highest priority group, those who are demonstrably proven to have the greatest need of all because, on examination, it is proven that their income is too inadequate to repay a loan even were it to be offered, will not receive one single penny in assistance. They are demonstrably the most desperate of all, but they will go utterly without help.
§ Mr. Key
I represent a large number of low-paid agricultural workers. They know that there are alternative arrangements for the payment of energy costs. They do not involve loan payments, but are sensitively agreed between the electricity authority in particular but also, where appropriate, the gas authority, and the person concerned. Those authorities could scarcely have made more favourable arrangements for had debts and for circumstances where people are unable to pay. Furthermore, the Gas Consumers Council has made exceptionally good arrangements following privatisation.
§ Mrs. Beckett
I am glad that the people in the constituency of the hon. Member for Salisbury (Mr. Key) are so fortunate. I cannot say the same for my constituents. I believe that the hon. Gentleman has misunderstood what I have said. First, I was talking about what help might he available in the circumstances of fuel debts. Secondly, I cited the case of people—no matter what the identified need—who can prove that they are in desperate circumstances, that they are so poor that they cannot repay a loan if offered, but who will not receive a penny in assistance. That more than anything shows what the social fund is about.
The third issue that I would like to highlight is one that has become clear only after the publication of the Bill. We are aware from the draft manual and from the publication of the full manual that social fund officers have been told not to keep a waiting list. Therefore, if they have to turn down an application which has every validity, which is from a family in proven need, simply because there is no money left in their budget, they are not allowed to put that claim on one side until money becomes available, perhaps in a succeeding period.
We are now told in the Bill that the Government have deliberately taken powers to ensure that if, in any circumstances—including those where there is no question about need, no question about a priority group, no question about the difficulties—a claimant is turned 738 down for no other reason but that there is no money in the budget, that claim cannot be reconsidered for six months. That is an outrage and a disgrace.
The fourth issue that I should like to highlight in the social fund concerns guidelines given by the Government to social fund officers on exercising their generosity. The Government state:Social fund officers should under no circumstances make an award which cannot be paid from the local office budget.If they are forced not to make an award because of the budget, social fund officers may not review the case in less than six months.
My hon. Friend the Member for Birkenhead (Mr. Field) regretted that the Bill does not alter the structure of the welfare state and does not alter the structure of the benefit system. For once, I think that, uncharacteristically, my hon. Friend is wrong. The hon. Member for Tatto:n (Mr. Hamilton) said that the Government were going back to the principles of national insurance. In fact, the Government are going back on the principle of national insurance. The principle of that scheme was that people should pay into the system of national insurance when they were in the position to contribute so that they were able to draw, as of right, when they had need. It is that principle that is being undermined at every stage in the Bill.
The Government say that their proposals for social security are about people standing on their own feet. In fact, they are cutting people's feet from under them. Many Conservative Members spoke movingly in this debate—it has been a good debate—about their wish to help those in real need. This Bill is a depressing check list of those who do not qualify in the eyes of those compassionate souls who spoke so movingly. Those who do not qualify include the epileptic or those with cystic fibrosis; the young unemployed denied the opportunity to work; the occupational pensioner pushed out of work before time; and the poorest of all whose very poverty deprives them of being considered for loans from the social fund.
This is a bullying Government and, in common with all bullies, they pander to the strong and trample on the weak. We shall fight to prevent that.
§ The Minister for Social Security and the Disabled (Mr. Nicholas Scott)
I shall start with what may turn out to be the only non-controversial feature of the debate to which I shall refer during the few minutes that separate us from a Division. I wish to echo the tribute that has been paid by many hon. Members in all quarters of the House to my hon. Friend the Member for Chelmsford (Mr. Burns) on his maiden speech. My hon. Friend spoke of the distinguished record of his predecessor in this place, and we all echo that. He spoke too with wit, knowledge of his constituency and of the subject that we are debating. I hope that he will contribute frequently to our debates on social security and related matters.
Any legislation of the sort that we are discussing, which involves the unemployed, the sick and the disabled, and their entitlements, should have the closest possible scrutiny within the House. I am delighted to take note from the hon. Member for Derby, South (Mrs. Beckett) that we can expect in Committee to have just that scrutiny. I hope that the hon. Lady will recognise, having herself had to endure a rather breathless canter through her speech because we 739 both agreed to let other hon. Members participate and take some of our time, that it would be impossible for me to take up all the points that she and others have made. However, I welcome the long list of subjects of which she has given notice that she wishes to discuss in Committee.
I welcome that sort of discussion, but listening to the hon. Lady, and the hon. Member for Livingston (Mr. Cook) earlier, and one or two other contributions from other Opposition Members, it would be possible to gain the impression that the Bill, rather than being a brief, sensible and responsible measure to improve the administration of the considerable sum that we spend on social security, is an all-out assault upon the welfare state as we know it.
In the coming financial year, the Government will spend about £46 billion on social security. The Bill will save about £80 million in the coming financial year. That will be more than offset by extra expenditure on the youth training scheme. To put these matters into perspective for the benefit of Opposition Members who regard the Bill as an assault upon those in need, and especially the young, it costs twice as much in public expenditure terms to have a young person on the YTS rather than on supplementary benefit or income support. We are investing considerable sums to ensure that young people receive the training that they need to fit them for employment.
There will be some savings as a result of the enactment of the Bill, albeit it modest ones. I believe that these savings are sensible, and in essence this modest measure is designed to achieve three objectives. First, it is designed to achieve some tidying of the extremely complex pattern of social security legislation that has grown up over the years. Next April we shall be embarking upon a system of income support which, overall, will be simpler, easier to administer and easier to understand. It will make it easier to get help to those who most need it. It will be the most fundamental change in social security that we have had since the end of the second world war. It is only right that in this Bill we should take the opportunity to correct any mistakes or inaccuracies that we can find in existing legislation before the changes come into place.
The second objective of the Bill is to ensure that we target the resources that are available on those who most need help. I am conscious that even on the Government Benches there are those who regard the concept of targeting as somehow ill judged. There are even some Opposition Members who regard it as a dirty word. It means in practice that the Government are determined to seek to use what must be finite resources, vast though they are in the social security area to meet almost insatiable demands, in a sensible and compassionate manner in providing for those who need most help.
The third main buttress of the Bill is designed to encourage as many young people as possible to take advantage of the training schemes that are available to them. This was dealt with in some detail by my right hon. Friend the Secretary of State.
The hon. Member for Livingston has asked whether the Bill and the reforms of next year have been set to withstand the strains of the next 40 years of the social security system. I would make no such claim. There will be fundamental changes that will set a pattern that will be of help 740 overwhelmingly to those who most need help in our society but I am sure that we shall need to make subsequent changes as the years pass.
I turn now to some of the detailed points that have been made during the debate—first, to the contribution made by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). Many of his points were properly related to the legislation that we are discussing, but some raised questions, not only for Ministers at the Department of Health and Social Security, but for Ministers in other Departments, not least the Treasury. His comments presented us with the basis for a debate that may, in future, command increasing attention.
However, he was rather less generous to us in recognising the steps that the Government have already taken in seeking to alleviate the unemployment and poverty traps, not least by using net rather than gross income to assess family credit and housing benefit, by bringing more generous help to double the number of people in receipt of such benefit by moving them from family income supplement to family credit, and by aligning the assessment rules for income-related benefits so that people on the same income level are treated in the same way whether they are in or out of work.
My hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), who has sent me a note to explain why she cannot be present in the House, discussed child benefit. I know that she is especially concerned about the universality of that benefit. However, I must make the point—I know that my right hon. Friend the Secretary of State has done so previously—that in deciding not to uprate child benefit in tune with inflation this year, we saved 30p on child benefit for each claimant. In public expenditure terms, that saved £120 million on child benefit from next April.
However, from next April if one combines the rates of income support and the introduction of family credit, those beneficiaries with children will be supported by no less than an extra £320 million. At the same time, child benefit will remain a most important benefit, which will, of course, be paid to the mother. I remind the House that family credit will also be paid to the mother.
§ Mr. Scott
No, I shall not give way. With respect, the hon. Member for Derby, South did not give way, and I have cut down my time to answer these points.
I wish to deal especially with the important issue of the attendance allowance, which was raised by the Opposition's Front Bench spokesmen and by other Opposition Members. I should remind the House that the attendance allowance is a tax-free, non-contributory weekly benefit that is paid in recognition of the extra costs associated with long-term severe disablement. The medical conditions for entitlement to the allowance are based on the disabled person's need for care from another person in the form of attention in connection with bodily functions or continual supervision to avoid substantial danger.
It has not been mentioned during the debate that the attendance allowance is paid at two distinct levels. There is a lower level for someone who needs attendance during the day or during the night, and a higher level if a person needs attendance at night as well as during the day. Those conditions must be satisfied over six months before the 741 allowance is payable. Decisions on whether or not the allowance is payable are made by an independent Attendance Allowance Board and by doctors who are specially designated to make decisions on behalf of the board.
If Opposition Members believe that the Government are being mean about the attendance allowance, I should remind them of what has happened to the attendance allowance under this Government. Over a period of six years since the Tory Government came into office, the numbers in receipt of attendance allowance have increased from 314,000 to 585,000—that is an increase of about 86 per cent. In real terms, expenditure on the allowance has increased by 104 per cent., from £350 million in 1979–80 to £846 million in 1987–88 at constant prices. That is the level and measure of our commitment to attendance allowance and the House should be congratulating rather than criticising the Government for it.
§ Mr. Nellist
Given the Minister's obvious pride in his description of the Government's record on attendance allowance, will he comment on the case that I mentioned in an intervention in the speech of the hon. Member for Nuneaton (Mr. Stevens)—we both have members of the family concerned in our constituencies? Will he extend attendance allowance to chronically sick and disabled children under the age of two? The Storer family have twins, Vicki and Alex, who are 18 months old and so physically and mentally disabled that their mother needs to have oxygen cylinders permanently on hand, as well as all the ancillary requirements for children of that age. She is unable to get an orange badge for her car [Interruption.] The Minister may be exasperated, but this is a serious matter for the family whom we represent. If he is so proud about the scheme, will he extend it to children under the age of two?
§ Mr. Scott
It is typical of the hon. Gentleman wholly to abuse my giving way to him when I am so short of time. The conditions are for the Attendance Allowance Board. Attendance allowance is not generally paid to children under two because naturally they need constant attendance by their parents. This point was also raised by some of my hon. Friends and I shall certainly look into it, but that is the logical reason why attendance allowance is not paid for children under the age of two.
The case of Mrs. Moran is of particular concern to the hon. Member for Birkenhead (Mr. Field). The court decided that the Attendance Allowance Board had erred in denying that Mrs. Dorothy Moran, who had been receiving the lower rate allowance since 1983 on account of her daytime attendance needs, required the allowance for continual supervision at night. The court of appeal gave a wider interpretation of continual supervision than had hitherto been accepted by Parliament as a whole and those who had taken a particular interest in this matter.
Until the court's decision the Attendance Allowance Board had operated the provision as requiring a need for active supervision by someone who was awake. The court held that the provision could include passive, standby supervision, even by someone asleep. Intervention to prevent substantial danger need only be rare. Clause 1 is merely intended to return us to the position that existed before the Court of Appeal judgment. It does that by making it clear that at night a disabled person qualifies for the allowance if he needs the wakeful and watchful 742 presence of another person for a prolonged period or at frequent intervals in order to avoid substantial danger to himself or others.
§ Mr. Scott
Perhaps the hon. Gentleman will allow me to complete the point. It may be that I shall cover his question and I have already had to deal with the hon. Member for Coventry, South-East (Mr. Nellist).
Disabled people who require frequent attention at night in connection with their bodily functions or who need a prolonged period or frequent intervals of supervision in other circumstances will continue to receive the higher allowance. Against that background it is not unreasonable to provide for this change in the law.
§ Mr. Cook
The Minister stated that the intention of the clause was to restore the position of the law as it was before the court ruling. The clause, as drafted, goes well beyond that and will deny the claim of the 6,000 people, including Mrs. Moran who submitted a further application following the court ruling. Whatever view that the Government may take as to what the law should be, surely they will permit the claims of the 6,000 people who have submitted claims following that court ruling.
§ Mr. Scott
The hon. Gentleman has made an assertion. However, that assertion is not supported by the Attendance Allowance Board, which supports the change that we are introducing and believes that it restores the position to what it was before we made the change.
The Attendance Allowance Board will review Mrs. Moran's case in due course, following the Court of Appeal judgment. It will decide whether she satisfies both the daytime and night-time conditions of entitlement. It has decided that on first sight that is not so. She has been asked to make further representations and to submit any further evidence in support of her case. Her legal advisers have provided that extra information and the board is considering it. It is hoped that Mrs. Moran will receive a final decision in the very near future. If the decision is in her favour, she will receive an enhancement of her current lower rate allowance replaced by a higher rate allowance with arrears back to the date on which the board certified that she first satisfied the medical conditions.
§ Mr. Scott
The hon. Member for Livingston raised this issue earlier and said that he was concerned about cases in the pipeline at the moment. It is right that we should deal with such matters before the debate draws to a close.
I recognise the full force of the argument that the hon. Member for Livingston put forward about cases in the pipeline. He asked me whether any cases entered before Second Reading could be dealt with and whether I would introduce an amendment to the Bill to that effect. I will do better than that. I will ensure that any cases in the pipeline up until the time that the Bill receives the Royal Assent will be so dealt with and an appropriate amendment will be introduced by the Government in Committee for that purpose.
I detected that the hon. Member for Livingston was having a little fun with the Government in his opening remarks. I can confirm that there will be an appeals procedure for exceptional cold weather payments. Once again, the Government will introduce an amendment to that effect. The hon. Member for Livingston had great fun 743 with us about a series of mistakes that he alleged existed in current legislation. I might just mention that Okehampton is in Devon, not Cornwall.
§ Mr. Frank Field
I am grateful to the Minister for his clear statement about Mrs. Moran's rights. I also thank him for his very clear statement tonight on behalf of the 6,000 other people with claims pending.
§ Mr. Scott
I thank the hon. Gentleman for his typically reasonable approach to what I hope was a constructive announcement.
In particular, I want to mention the disabled. The House is very worried about the severely disabled. By moving next year to a system of income support, with personal allowances topped up by premiums that will be targeted on groups, we shall have a more simple and easily understood system which will be for the long-term benefit of people who need help and especially the disabled. It means that those who presently have many additional requirements will of course receive transitional protection after next April. People who would otherwise have received many additional requirements will receive less benefit than their predecessors receive at the moment. I am conscious of that. My right hon. Friend the Secretary of State in his uprating statement last week said that he was also conscious of that. However, we are referring to very few people. We are talking about hundreds, not thousands. However, I am seeking ways in which it may be possible to address the particular circumstances of that small group of people.
I ask the House to recognise that with regard to the provision for the disabled, under income support we are providing an extra £50 million to meet their needs. We are also providing a new allowance—the severe disability premium—which will come into existence next April at a cost of about £8 million at a rate of £25 a week. That will contribute substantially to meeting the extra needs of disabled people.
This is a sensible and necessary Bill. It is important because it will encourage—and I say encourage, not conscript, coerce or force—young people towards the training that is so important for their futures and for the social and economic future of our country. It not only encourages them towards training and enables them to better fit themselves for the employment market, it moves them away from a damaging downward spiral from dependence on benefits.
It is also sensible and necessary because it ensures that resources are directed at those who most need them. It will also help to ensure the smooth running of the social security system when that is reformed next April. Of course, nothing is for ever. We shall want to see that as needs change, we too change and that we reform the system to make sure that it is continually updated to be in tune with the needs of those who most need help in our society.
§ Question put, That the Bill be now read a Second time:—
§ The House divided: Ayes 328, Noes 238.747
|Division No. 38]||[10 pm|
|Adley, Robert||Amess, David|
|Alexander, Richard||Amos, Alan|
|Alison, Rt Hon Michael||Arbuthnot, James|
|Allason, Rupert||Arnold, Jacques (Gravesham)|
|Arnold, Tom (Hazel Grove)||Favell, Tony|
|Ashby, David||Fenner, Dame Peggy|
|Aspinwall, Jack||Field, Barry (Isle of Wight)|
|Atkins, Robert||Finsberg, Sir Geoffrey|
|Atkinson, David||Fookes, Miss Janet|
|Baker, Rt Hon K. (Mole Valley)||Forman, Nigel|
|Baker, Nicholas (Dorset N)||Forth, Eric|
|Baldry, Tony||Fowler, Rt Hon Norman|
|Banks, Robert (Harrogate)||Fox, Sir Marcus|
|Batiste, Spencer||Franks, Cecil|
|Beaumont-Dark, Anthony||Freeman, Roger|
|Bellingham, Henry||French, Douglas|
|Bendall, Vivian||Fry, Peter|
|Bennett, Nicholas (Pembroke)||Gale, Roger|
|Benyon, W.||Gardiner, George|
|Bevan, David Gilroy||Gill, Christopher|
|Biggs-Davison, Sir John||Gilmour, Rt Hon Sir Ian|
|Blackburn, Dr John G.||Glyn, Dr Alan|
|Blaker, Rt Hon Sir Peter||Goodhart, Sir Philip|
|Body, Sir Richard||Goodlad, Alastair|
|Bonsor, Sir Nicholas||Goodson-Wickes, Dr Charles|
|Boswell, Tim||Gorman, Mrs Teresa|
|Bottomley, Peter||Gorst, John|
|Bottomley, Mrs Virginia||Gow, Ian|
|Bowden, A (Brighton K'pto'n)||Gower, Sir Raymond|
|Bowden, Gerald (Dulwich)||Grant, Sir Anthony (CambsSW)|
|Bowis, John||Greenway, Harry (Eating N)|
|Boyson, Rt Hon Dr Sir Rhodes||Greenway, John (Rydale)|
|Braine, Rt Hon Sir Bernard||Gregory, Conal|
|Brandon-Bravo, Martin||Griffiths, Sir Eldon (Bury St E')|
|Brazier, Julian||Griffiths, Peter (Portsmouth N)|
|Bright, Graham||Grist, Ian|
|Brittan, Rt Hon Leon||Ground, Patrick|
|Brooke, Hon Peter||Grylls, Michael|
|Brown, Michael (Brigg & Cl't's)||Gummer, Rt Hon John Selwyn|
|Browne, John (Winchester)||Hamilton, Hon A. (Epsom)|
|Bruce, Ian (Dorset South)||Hamilton, Neil (Tatton)|
|Budgen, Nicholas||Hampson, Dr Keith|
|Burns, Simon||Hanley, Jeremy|
|Burt, Alistair||Hannam, John|
|Butcher, John||Hargreaves, A. (B'ham H'll Gr')|
|Butler, Chris||Hargreaves, Ken (Hyndburn)|
|Butterfill, John||Harris, David|
|Carlisle, John, (Luton N)||Haselhurst, Alan|
|Carlisle, Kenneth (Lincoln)||Hawkins, Christopher|
|Carrington, Matthew||Hayes, Jerry|
|Carttiss, Michael||Hayhoe, Rt Hon Sir Barney|
|Cash, William||Hayward, Robert|
|Chalker, Rt Hon Mrs Lynda||Heathcoat-Amory, David|
|Channon, Rt Hon Paul||Heddle, John|
|Chapman, Sydney||Hicks, Mrs Maureen (Wolv' NE)|
|Chope, Christopher||Higgins, Rt Hon Terence L.|
|Churchill, Mr||Hill, James|
|Clark, Dr Michael (Rochford)||Hind, Kenneth|
|Clark, Sir W. (Croydon S)||Hogg, Hon Douglas (Gr'th'm)|
|Colvin, Michael||Holt, Richard|
|Conway, Derek||Hordern, Sir Peter|
|Coombs, Anthony (Wyre F'rest)||Howard, Michael|
|Coombs, Simon (Swindon)||Howarth, Alan (Strat'd-on-A)|
|Cope, John||Howarth, G. (Cannock & B'wd)|
|Couchman, James||Howell, Ralph (North Norfolk)|
|Cran, James||Hughes, Robert G. (Harrow W)|
|Currie, Mrs Edwina||Hunt, David (Wirral W)|
|Curry, David||Hunt, John (Ravensbourne)|
|Davies, Q. (Stamf'd & Spald'g)||Hunter, Andrew|
|Davis, David (Boothferry)||Hurd, Rt Hon Douglas|
|Day, Stephen||Irvine, Michael|
|Devlin, Tim||Irving, Charles|
|Dickens, Geoffrey||Jack, Michael|
|Dicks, Terry||Jackson, Robert|
|Dorrell, Stephen||Janman, Timothy|
|Douglas-Hamilton, Lord James||Jessel, Toby|
|Dover, Den||Johnson Smith, Sir Geoffrey|
|Dunn, Bob||Jones, Gwilym (Cardiff N)|
|Durant, Tony||Jones, Robert B (Herts W)|
|Emery, Sir Peter||Kellett-Bowman, Mrs Elaine|
|Evennett, David||Key, Robert|
|Fairbairn, Nicholas||King, Roger (B'ham N'thfield)|
|Fallon, Michael||Kirkhope, Timothy|
|Farr, Sir John||Knapman, Roger|
|Knight, Greg (Derby North)||Riddick, Graham|
|Knight, Dame Jill (Edgbaston)||Ridley, Rt Hon Nicholas|
|Knowles, Michael||Roberts, Wyn (Conwy)|
|Knox, David||Roe, Mrs Marion|
|Lamont, Rt Hon Norman||Rossi, Sir Hugh|
|Lang, Ian||Rost, Peter|
|Latham, Michael||Rowe, Andrew|
|Lawrence, Ivan||Rumbold, Mrs Angela|
|Leadbitter, Ted||Ryder, Richard|
|Lee, John (Pendle)||Sackville, Hon Tom|
|Leigh, Edward (Gainsbor'gh)||Sainsbury, Hon Tim|
|Lennox-Boyd, Hon Mark||Sayeed, Jonathan|
|Lightbown, David||Scott, Nicholas|
|Lilley, Peter||Shaw, David (Dover)|
|Lloyd, Sir Ian (Havant)||Shaw, Sir Giles (Pudsey)|
|Lloyd, Peter (Fareham)||Shaw, Sir Michael (Scarb')|
|Lord, Michael||Shelton, William (Streatham)|
|Luce, Rt Hon Richard||Shephard, Mrs G. (Norfolk SW)|
|McCrindle, Robert||Shepherd, Colin (Hereford)|
|Macfarlane, Neil||Shepherd, Richard (Aldridge)|
|MacGregor, John||Shersby, Michael|
|MacKay, Andrew (E Berkshire)||Sims, Roger|
|Maclean, David||Skeet, Sir Trevor|
|McLoughlin, Patrick||Soames, Hon Nicholas|
|McNair-Wilson, M. (Newbury)||Speller, Tony|
|McNair-Wilson, P. (New Forest)||Spicer, Jim (Dorset W)|
|Madel, David||Spicer, Michael (S Worcs)|
|Major, Rt Hon John||Squire, Robin|
|Malins, Humfrey||Stanbrook, Ivor|
|Mans, Keith||Stanley, Rt Hon John|
|Maples, John||Steen, Anthony|
|Marlow, Tony||Stern, Michael|
|Marshall, John (Hendon S)||Stevens, Lewis|
|Marshall, Michael (Arundel)||Stewart, Allan (Eastwood)|
|Martin, David (Portsmouth S)||Stewart, Andrew (Sherwood)|
|Mates, Michael||Stradling Thomas, Sir John|
|Maude, Hon Francis||Sumberg, David|
|Mawhinney, Dr Brian||Summerson, Hugo|
|Maxwell-Hyslop, Robin||Tapsell, Sir Peter|
|Mayhew, Rt Hon Sir Patrick||Taylor, Ian (Esher)|
|Meyer, Sir Anthony||Taylor, John M (Solihull)|
|Miller, Hal||Taylor, Teddy (S'end E)|
|Mills, Iain||Tebbit, Rt Hon Norman|
|Miscampbell, Norman||Temple-Morris, Peter|
|Mitchell, Andrew (Gedling)||Thompson, D. (Calder Valley)|
|Mitchell, David (Hants NW)||Thompson, Patrick (Norwich A)|
|Moate, Roger||Thorne, Neil|
|Moore, Rt Hon John||Thornton, Malcolm|
|Morris, M (N'hampton S)||Thurnham, Peter|
|Morrison, Hon C. (Devizes)||Townend, John (Bridlington)|
|Morrison, Hon P (Chester)||Townsend, Cyril D. (B'heath)|
|Moss, Malcolm||Tracey, Richard|
|Moynihan, Hon C.||Tredinnick, David|
|Mudd, David||Trippier, David|
|Neale, Gerrard||Trotter, Neville|
|Nelson, Anthony||Twinn, Dr Ian|
|Neubert, Michael||Vaughan, Sir Gerard|
|Newton, Tony||Viggers, Peter|
|Nicholls, Patrick||Waddington, Rt Hon David|
|Nicholson, David (Taunton)||Wakeham, Rt Hon John|
|Nicholson, Miss E. (Devon W)||Waldegrave, Hon William|
|Onslow, Cranley||Walden, George|
|Oppenheim, Phillip||Walker, Bill (T'side North)|
|Paice, James||Waller, Gary|
|Patnick, Irvine||Ward, John|
|Patten, John (Oxford W)||Wardle, C. (Bexhill)|
|Pawsey, James||Warren, Kenneth|
|Peacock, Mrs Elizabeth||Watts, John|
|Porter, Barry (Wirral S)||Wells, Bowen|
|Porter, David (Waveney)||Wheeler, John|
|Portillo, Michael||Whitney, Ray|
|Powell, William (Corby)||Widdecombe, Miss Ann|
|Price, Sir David||Wiggin, Jerry|
|Raffan, Keith||Wilshire, David|
|Raison, Rt Hon Timothy||Winterton, Mrs Ann|
|Rathbone, Tim||Winterton, Nicholas|
|Redwood, John||Wolfson, Mark|
|Renton, Tim||Wood, Timothy|
|Rhodes James, Robert||Woodcock, Mike|
|Yeo, Tim||Tellers for the Ayes:|
|Young, Sir George (Acton)||Mr. Robert Boscawen and Mr. Tristan Garel-Jones.|
|Abbott, Ms Diane||Flynn, Paul|
|Allen, Graham||Foot, Rt Hon Michael|
|Anderson, Donald||Foster, Derek|
|Archer, Rt Hon Peter||Fraser, John|
|Armstrong, Ms Hilary||Fyfe, Mrs Maria|
|Ashley, Rt Hon Jack||Galbraith, Samuel|
|Ashton, Joe||Garrett, John (Norwich South)|
|Banks, Tony (Newham NW)||George, Bruce|
|Barnes, Harry (Derbyshire NE)||Gilbert, Rt Hon Dr John|
|Barnes, Mrs Rosie (Greenwich)||Godman, Dr Norman A|
|Barron, Kevin||Gordon, Ms Mildred|
|Battle, John||Gould, Bryan|
|Beckett, Margaret||Grant, Bernie (Tottenham)|
|Beith, A. J.||Griffiths, Nigel (Edinburgh S)|
|Bell, Stuart||Griffiths, Win (Bridgend)|
|Benn, Rt Hon Tony||Grocott, Bruce|
|Bennett, A F (D'nt'n & R'dish)||Hardy, Peter|
|Bermingham, Gerald||Harman, Ms Harriet|
|Bidwell, Sydney||Hattersley, Rt Hon Roy|
|Blunkett, David||Haynes, Frank|
|Boateng, Paul||Healey, Rt Hon Denis|
|Boyes, Roland||Heffer Eric S|
|Bradley, Keith||Henderson, Douglas|
|Bray, Dr Jeremy||Hinchliffe, David|
|Brown, Gordon (D'mline E)||Hogg, N (C'nauld & Kilsyth)|
|Brown, Ron (Edinburgh Leith)||Holland, Stuart|
|Buchan, Norman||Home Robertson, John|
|Buckley, George||Hood, James|
|Caborn, Richard||Howarth, George (Knowsley N)|
|Callaghan, Jim||Howell, Rt Hon D (S'heath)|
|Campbell, Menzies (Fife NE)||Howells, Geraint|
|Campbell, Ron (Blyth Valley)||Hoyle, Doug|
|Campbell-Savours, D N||Hughes, John (Coventry NE)|
|Canavan, Dennis||Hughes, Robert (Aberdeen N)|
|Carlile, Alex (Mont'g)||Hughes, Roy (Newport E)|
|Cartwright, John||Hughes, Sean (Knowsley S)|
|Clark, Dr David (S Shields)||Hughes, Simon (Southwark)|
|Clarke, Tom (Monklands W)||Hume, John|
|Clay, Bob||Illsley, Eric|
|Clelland, David||Ingram, Adam|
|Clwyd, Mrs Ann||Janner, Greville|
|Cohen, Harry||John, Brynmor|
|Coleman, Donald||Jones, Barry (Alyn & Deeside)|
|Cook Robin (Livingston)||Jones, Martyn (Clwyd S W)|
|Corbett, Robin||Kaufman, Rt Hon Gerald|
|Corbyn, Jeremy||Kennedy, Charles|
|Cousins, Jim||Kilfedder, James|
|Crowther, Stan||Kinnock, Rt Hon Neil|
|Cryer Bob||Lambie, David|
|Cummings, J||Lamond, James|
|Cunliffe, Lawrence||Leadbitter, Ted|
|Cunningham, Dr John||Leighton, Ron|
|Dalyell, Tam||Lestor, Miss Joan (Eccles)|
|Darling, Alastair||Lewis, Terry|
|Davies, Ron (Caerphilly)||Litherland, Robert|
|Davis, Terry (B'ham Hodge H'l)||Livingstone, Ken|
|Dewar, Donald||Livsey, Richard|
|Dixon, Don||Lloyd, Tony (Stretford)|
|Dobson, Frank||Lofthouse, Geoffrey|
|Doran, Frank||Loyden, Eddie|
|Douglas, Dick||McAllion, John|
|Duffy, A. E. P.||McAvoy, Tom|
|Dunnachie, James||McCartney, Ian|
|Dun woody, Hon Mrs Gwyneth||McCusker, Harold|
|Eadie, Alexander||Macdonald, Calum|
|Eastham, Ken||McFall, John|
|Evans, John (St Helens N)||McGrady, E K|
|Ewmg, Harry (Falkirk E)||McKay, Allen (Pemstone)|
|Ewing, Mrs Margaret (Moray)||McKelvey, William|
|Fatchett, Derek||McLeish, Henry|
|Fearn, Ronald||Maclennan, Robert|
|Field, Frank (Birkenhead)||McNamara, Kevin|
|Fields, Terry (L'pool B G'n)||McTaggart, Bob|
|Fisher, Mark||McWilliam, John|
|Flannery, Martin||Madden, Max|
|Mahon, Mrs Alice||Rowlands, Ted|
|Marek, Dr John||Ruddock, Ms Joan|
|Marshall, David (Shettleston)||Sedgemore, Brian|
|Marshall, Jim (Leicester S)||Sheerman, Barry|
|Martin, Michael (Springburn)||Sheldon, Rt Hon Robert|
|Martlew, Eric||Shore, Rt Hon Peter|
|Maxton, John||Short, Clare|
|Meacher, Michael||Skinner, Dennis|
|Meale, Alan||Smith, Andrew (Oxford E)|
|Michael, Alun||Smith, C. (Isl'ton & F'bury)|
|Michie, Bill (Sheffield Heeley)||Smith, Rt Hon J. (Monk'ds E)|
|Millan, Rt Hon Bruce||Smyth, Rev Martin (Belfast S)|
|Mitchell, Austin (G't Grimsby)||Snape, Peter|
|Molyneaux, Rt Hon James||Soley, Clive|
|Moonie, Dr Lewis||Spearing, Nigel|
|Morgan, Rhodri||Steel, Rt Hon David|
|Morley, Elliott||Steinberg, Gerald|
|Morris, Rt Hon A (W'shawe)||Stott, Roger|
|Morris, Rt Hon J (Aberavon)||Strang, Gavin|
|Mowlam, Mrs Marjorie||Straw, Jack|
|Mullin, Chris||Taylor, Mrs Ann (Dewsbury)|
|Murphy, Paul||Taylor, Rt Hon J. D. (S'ford)|
|Nellist, Dave||Taylor, Matthew (Truro)|
|Oakes, Rt Hon Gordon||Thomas, Dafydd Elis|
|O'Brien, William||Turner, Dennis|
|O'Neill, Martin||Vaz, Keith|
|Orme, Rt Hon Stanley||Wall, Pat|
|Patchett, Terry||Wallace, James|
|Pendry, Tom||Walley, Ms Joan|
|Pike, Peter||Wardell, Gareth (Gower)|
|Powell, Ray (Ogmore)||Wareing, Robert N.|
|Primarolo, Ms Dawn||Welsh, Andrew (Angus E)|
|Quin, Ms Joyce||Welsh, Michael (Doncaster N)|
|Radice, Giles||Wigley, Dafydd|
|Randall, Stuart||Williams, Rt Hon A. J.|
|Redmond, Martin||Williams, Alan W. (Carm'then)|
|Rees, Rt Hon Merlyn||Wilson, Brian|
|Reid, John||Winnick, David|
|Richardson, Ms Jo||Wise, Mrs Audrey|
|Roberts, Allan (Bootle)||Worthington, Anthony|
|Robertson, George||Wray, James|
|Robinson, Geoffrey||Young, David (Bolton SE)|
|Rooker, Jeff||Tellers for the Noes:|
|Ross, Ernie (Dundee W)||Mrs. Llin Golding and Mr. Frank Cook.|
|Ross, William (Londonderry E)|
§ Question accordingly agreed to.