HC Deb 12 November 1987 vol 122 cc590-651
Mr. Speaker

We now come to the debate on the three social security instruments. I remind the House that, pursuant to the order of the House on 6 November, they are all to be taken together.

5.27 pm
The Minister for Social Security and the Disabled (Mr. Nicholas Scott)

I beg to move: That the draft Social Security Benefits Up-rating (No. 2) Order 1987, which was laid before this House on 3rd November, be approved. As you have said, Mr. Speaker, with this we are to take the following: That the draft Income Support (General) Regulations 1987, which were laid before this House on 10th November, be approved. That the draft Social Security (Claims and Payments) Regulations 1987, which were laid before this House on 10th November, be approved. The motions enable us to debate today three main items —the Income Support (General) Regulations 1987, the Social Security (Claims and Payments) Regulations 1987 and the Social Security Benefits Up-Rating (No. 2) Order 1987, which implements the up-rating announcement that was made by my right hon. Friend the Secretary of State on 27 October. The first of the instruments sets out the detailed provisions for the new income support scheme, the basis for a more coherent and aligned structure for income-related benefits. The second set covers the rules across the range of social security benefits for claiming and paying state support. The third covers the general increase of social security benefits from next April. All are important. Since about 70 per cent. of the population of this country live in families who are in receipt of some income from benefit, the importance is underlined. Certainly, they fully justify the time that the House intends to spend debating them today. Indeed, I hope that the House will understand if I set out not in detail or chapter by chapter the coverage of the regulations, but at least the background to each of the sets in some detail.

The House will have noticed that the income support and claims and payments regulations contain two minor changes—in regulations Nos. 15 and 48 respectively— from the versions that were originally made on 3 November. The changes were required to meet legal questions that were raised prior to consideration of the regulations by the Joint Committee on Statutory Instruments. The House will understand and appreciate that we moved quickly to clarify the areas of doubt in response to the concerns expressed and to re-lay the regulations to avoid any delay in the House's consideration of them.

The regulations are the outcome of the most significant changes in the patterns of income-related benefits that we have had since the end of the second world war. They follow a review that began in 1984 with consultation and oral hearings and proceeded through the publication of a Green Paper and further consultation in 1985. A White Paper followed later that year, and there were many hours of consideration in Parliament during the passage of the Social Security Act 1986. Since then, work has continued on implementation and especially on the detailed regulations that were made available on a wide basis in draft form in July this year.

The regulations bring together the main provisions of the new scheme in one set. They replace four complete sets of regulations in the present scheme and parts of three others. The regulations are clearly laid out, with separate sections covering different parts of the scheme. We have produced—I hope that the House will find it useful—a detailed memorandum explaining the provisions. In view of that, I do not propose to provide a chapter-by-chapter description of the provisions. Hon. Members will have been able to read the details for themselves. Instead, I shall highlight particular points in the regulations in relation to the objectives for reform that we set for ourselves in the Green Paper.

In that document, we set out the aims of the reform. They were to produce a system that is easier for claimants to understand, to improve operational effectiveness to enable a better service for claimants, to target resources on those facing the greatest pressures, to encourage self-reliance, to ensure fairness between the position of people on benefit and others on low incomes, and to achieve greater alignment with other income-related benefits. All objectives are reflected in the regulations before the House.

Mr. Tony Marlow (Northampton, North)

My hon. Friend will note that the one provision that gives rise to a great deal of disquiet on this side is the decision in real terms to lower child benefit. Inflation goes up but child benefit stays the same. My hon. Friend will know also that it is the intention of our right hon. Friend the Chancellor of the Exchequer to reduce taxation later this year. What the Government are doing — I hope not with forethought — is taking money from families with children and giving money to those families or individuals who do not have children. We are taking money from families and giving it to the dinkies: down the kids and up the dinkies. With double income and no children, one gets more money. If one has one income and several dependants, one gets less money. As a member of the party that believes in the family, can my hon. Friend give us some reassurance that the Government have taken note of the policy and intend to do something about that element of the tax-paying public—that family element of the tax-paying public—which is becoming worse off under this manoeuvre?

Mr. Scott

I am interested to learn that my hon. Friend perhaps has greater insight and greater information about the intentions of my right hon. Friend the Chancellor of the Exchequer than have even some Members in the Administration. Apart from that, if my hon. Friend can control himself for a little longer, before I come to the end of my remarks I shall deal specifically with the decision of my right hon. Friend the Secretary of State not to uprate child benefit. I know that the matter is important to all hon. Members, and I shall deal with it in due course.

The first two objectives that I outlined before I gave way to my hon. Friend provide a system that is easier for claimants to understand and for staff to administer. Those two things are linked. There can be no doubt at all to anybody who has anything to do with the operation of the system of supplementary benefit that the scheme is cumbersome and confusing. The difficulties are a barrier to claimants understanding their entitlement, to those who advise them and to the staff of the Department of Health and Social Security whose duty it is to administer the rules. The system has developed piecemeal over the years— like Topsy, it has just growed. New provisions have been bolted on to the original structure, until the central purpose of the supplementary benefit scheme, which is a guarantee of a weekly income for claimants with the minimum of fuss and the maximum of efficiency, has been lost in the complexities.

It has often been said in the past that there are about 16,000 separate regulations governing supplementary benefit. That is not exactly true ; there are some gaps in the numbering. Certainly, when we get to the end of the instructions we get to the 16,000 mark. That in itself is a measure of the complexity and scale of the rules and regulations that have developed over the years. We should be concerned to simplify and clarify the provisions in any scheme that replaces supplementary benefit.

At the moment, the supplementary benefit scheme bases the amount of help given for normal living expenses on age, family circumstances, household status, length of time on benefit and potential entitlement to over 20 weekly extra payments. Because the permutations are virtually endless, there can rarely be a simple answer to the apparently straightforward question, "What am I entitled to?" All the evidence is that many claimants have little understanding of how their benefit is worked out. That lack of certainty must also serve as a barrier to take-up —no doubt we shall hear something about that matter this afternoon—by those, particularly pensioners, who could get help if they applied.

Under the new scheme, support for living expenses will be based on age, family circumstances, and the group to which the claimant belongs. That will usually be decided on the basis of routinely collected information — for example, receipt of other benefits. That is covered in part IV of the regulations and the associated schedules. Therefore, it will be far easier to explain to, say, a single pensioner or an unemployed couple with young children what level of support is provided for their living expenses. For staff, too, it will mean that decisions will be simpler and more straightforward.

The assessment of most claimants' needs will be simpler than it is now. I recognise that, of course, by definition, in an income-related scheme, there will have to be detailed rules regarding the treatment of income. If it is possible for a claimant to have a particular source of income, however rare, the rules must do their best to provide for it.

Also, in part V and the associated schedule, we have tried to do two main things in regard to resources. We have achieved some worthwhile simplification of the rules. For example, at present there is a special disregard of the first £1,500 of the surrender value of life insurance policies. That means that claimants and life insurance companies can be put to the bother and difficulty of working out the value to see whether it affects a claimant's entitlement to benefit. In the new scheme, such surrender values have been totally ignored when assessing benefit. Again, under the present system, if a local education authority makes a discretionary maintenance allowance for somebody staying on at school, there is a limit to the amount that can be ignored or disregarded—£7.50 for a school and £9.50 for a further education college. From April. all such payments will be disregarded without limit.

In future, payments in kind will be ignored. All the measures represent improvements for claimants and a reduction in the complexity of workload for staff.

Mr. Frank Field (Birkenhead)

One of the objectives that the hon. Gentleman hopes that the new scheme will achieve is that it will give simple answers to possibly complicated questions. I ask one simple question, to which I should like a simple answer. Under the new scheme, will payments be made in advance or in arrears? It is unclear from the regulations.

Mr. Scott

I shall refer to the way in which we shall seek to align payments so that claimants will not have some benefits paid in advance and some paid in arrears. I shall outline in detail how those systems will be aligned.

Mr. John Fraser (Norwood)

Many of my constituents are concerned about housing costs. In Brixton, where the crime rate is regrettably very high, it is the understanding of people who manage homes that are being adapted for the elderly that the cost of door entry phones and burglar alarms will be disallowed from housing costs if they are not purpose-built. They cannot understand why, if we want to protect the elderly and disabled from crime, these security measures should be disallowed. Will the Minister comment on that?

Mr. Scott

Subject to business arrangements, next week we shall discuss housing benefit regulations. The hon. Gentleman is saying that, under the housing benefit regulations, alarm systems that have not been purpose-built—thus, the charges are not an integral part of a payment to the individual for housing — should be provided under the housing benefit system or perhaps by local authorities through personal social services. I am sure that we shall discuss this matter in detail in the debate next week.

Mrs. Alice Mahon (Halifax)

I accept that there are complications with some benefits, but when the social fund is introduced will the Minister draw up a list of what people can claim?

Mr. Scott

I shall cover that matter next week, in particular the efforts that we shall be making to explain in clear detail how the new system will operate next April. Perhaps when I arrive at that part of my speech, the hon. Lady will ask me any questions that arise.

The second objective of the regulations is to provide greater clarity of difinition in other circumstances. The regulations on students' income, earnings from self-employment and attribution of income now incorporate matters that were previously included in guidance. More of the detail has been put on the face of the law. It will be of benefit to staff and claimants' expert advisers to have more of the detail brought together in the regulations.

Those changes will make it easier for advisers and hon. Members, who have a heavy case load in this regard, to explain the new scheme to claimants or potential claimants. Over the past few years we have made significant improvements — I am here addressing the point that was made by the hon. Member for Halifax— in the standard of our leaflets and other publicity material. An important objective of the reforms is to develop further this better information to claimants and their advisers. As part of the communications strategy, we are revising all the leaflets and claim forms for income support.

The information will be on a number of different levels. There will continue to be general leaflets explaining the broad outlines of the scheme for specific groups of claimants. In particular, during the reassessment of cases from November, all claimants will receive a leaflet explaining how their new entitlement is worked out. That will address the point that was was raised by the hon. Member for Halifax. We are revising the claim form so that it will include more explanation of the rules for claimants and will be laid out in an uncluttered and I hope less intimidatory format. It is intended to reduce the need for follow-up questions, which delay benefit awards.

Finally, we shall produce a full guide to the main rules of the scheme. This will replace the old supplementary benefit handbook, with which many hon. Members will be familiar. It will cover much the same ground but it will be free and freely available to those who advise claimants. We believe that the freely available new guide will prove a valuable document for claimants who wish to find out more detail of the benefit rules and will be of considerable help to various individuals and organisations advising them.

Mr. Richard Holt (Langbaurgh)

Most of the problems in this regard concern not the initial assessment but the subsequent appeal. Will my hon. Friend say something about the appeal mechanism, which currently is cumbersome and slow? Do the Government intend to revise that system, paperwise or mechanically, so that people who have been refused benefit in the first instance can obtain simplified information, such as that which is available to first-time claimants?

Mr. Scott

I hope that the simple application of the scheme in moving from supplementary benefit to income support will improve not only the original adjudication but the subsequent appeal. I am conscious of my hon. Friend's point and I shall address it in the changeover next April. The change-over itself should be of considerable help in that regard.

These measures are part of a dual strategy to make the system easier and to improve communications with those whom we are seeking to help. It is not realistic to argue on the one hand for improved publicity, a better service, a simplified system and further progress on take-up, yet on the other for the retention of every dot and comma of what most people would agree is an extremely complex scheme. Better communications, an improved service and changes to simplify the rules go together.

Mrs. Mahon

The Minister has not answered my original question. The social fund will be operated through the discretionary powers of a social security officer. I admit that, currently, benefits are complicated, but will there be a list of benefits that people know they have a right to, or will it be discretionary? If it is discretionary, one part of the country will receive different treatment from another. Will the information in the leaflets be specific about the matters that are basic and important to people on low incomes?

Mr. Scott

As the hon. Lady knows, elements of the social security system are regulatory, but provision is made in them for the discretionary loans system. We shall ensure that any publicity—leaflets and so on—will make clear the different aspects of the fund. There will be regulations covering the operation of the social fund, which will be subject to the negative procedure. I have no doubt that the Opposition Front Bench will seek to debate these matters in due course; I should be very surprised if they did not seize that opportunity.

Under the new scheme the main way that extra resources will be targeted on claimants with particular needs—this is another of the aims that I mentioned—is the system of premiums. The detailed structure and amounts are detailed in schedule 2. Extra help will be given to parents, lone parents, disabled people and, for the first time, from day one on benefit, to all families with children. My right hon. Friend the Secretary of State has recently announced the proposed rates for next April and published a revised illustration of the impact of change. I am sure that the House does not expect me to repeat the changes that were announced in his statement.

Our plan is to spend more, not less, on income support than if supplementary benefit had continued and been uprated in line with inflation. There are particular improvements for families with children and those who are receiving the disability premium. The published illustration implies extra resources in real terms compared to the present scheme for those groups of over £100 million for families and over £60 million for people receiving the disability premium.

Mr. Frank Field

The Minister said that the Government will spend more money, but will he give some information that I have tried, but failed to obtain in parliamentary questions? Is he saying that the proposed scheme will involve spending more money that if the supplementary benefit system had been uprated, taking into account the fact that the number of claimants is rising year by year and that the new scheme will have to cover 20 per cent. of the rates? Taking into account those factors, is he saying that claimants will be better off under this scheme?

Mr. Scott

Taking into account the £200 million that we will be putting into transitional protection, we shall expect to spend more on weekly support for income support claimants than we would have spent had we uprated the supplementary benefits weekly payments in line with inflation, which would have been our alternative to introducing the new system. The answer to the hon. Gentleman's question is yes.

Mr. Field

I am not sure what the Minister is saying yes to.

Mr. Scott

As I said, in 1988–89 more money will go into income support than would have gone into supplementary benefit uprated in line with inflation for the year 1988–89.

Mr. Field

With respect, that is not the question that I asked. I asked whether the sum would be more taking into account the facts that supplementary benefits would be increased, that during the year there would be more claimants and that the calculation must exclude the 20 per cent. on rates. That was my question, and not the more simple question to which he answered yes.

Mr. Scott

If I have understood the hon. Gentleman's question, the answer is still yes. However, we can pursue the matter in correspondence if the hon. Gentleman has detailed points to raise. My assessment is still that more resources will be going into income support next year.

Mrs. Margaret Beckett (Derby, South)

It would help the House to have clarification of the Minister's remarks. If I understand him correctly, he is saying that, taking into account the increased number of claimants and the fact that people will have to pay 20 per cent. of their rate bills, there will still be more money because of the money that is being put into transitional protection.

Mr. Scott

The transitional arrangements account for part of the resources that we shall be putting into income support next year. On the number of claimants, it is worth making the point that we are already experiencing a fall in the number of those claiming unemployment benefit, and we hope that that will continue. In spite of that, I believe that extra resources will be going into the system of income support for the coming financial year.

Let me remind the House of what I was saying; in a sense it follows on from the interventions. Much of the discussion about the effects of the transition to income support — perhaps the Government have played some part in this — has centred round breaking down claimants into gainers and losers. Some may have gained the impression that, when the new arrangements are introduced on 1 April next year, individual claimants will lose in cash terms. That is completely misleading. Wherever hon. Members stand on the merits or otherwise of the change from supplementary benefit to income support, they—and, indeed, all those concerned with the matter—should be at pains to remove the doubts and uncertainties that some existing claimants still feel.

Existing claimants who need it will have the cash value of their benefit maintained. That should be made clear. Ratepayers will also be guaranteed—

Mr. Robin Cook (Livingston)

Will the hon. Gentleman give way?

Mr. Scott

I shall certainly give way to the hon. Gentleman when I have finished making this point.

Ratepayers will also be guaranteed cash in hand to meet the average value of the contribution to rates that they will be expected to make from next April. It is an inescapable fact that any significant reform on any realistic resource assumption must have different effects on different claimants' entitlement. I have described the structural change that we shall be making next April, but I emphasise once again that the transitional protection that we will give will be a major cushion to change for existing claimants.

Mr. Cook

The Minister will admit that those who have a cash benefit that exceeds their entitlement will get no increase next year. The 750,000 claimants whose cash benefit exceeds the entitlement by £5 a week are likely to get no increase in 1989 either. Moreover, if a claimant succeeds in re-entering the labour market but finds himself unemployed again at some stage next year, he will then receive less benefit than he received before he went back to work. How on earth can the Minister reconcile that with the known instinct of his Government to provide incentives for people to go back to work?

Mr. Scott

We are moving to a new system. If one moves from a system that has tended to concentrate on a complex process of deciding benefits against the background of thousands of regulations governing precise individual needs to a system that provides a basic personal allowance and premiums targeted on groups of people rather than on individuals, there is bound to be an unevenness of impact. New claimants will know the position and, as I said, extra resources will be put in overall. By the transitional protection arrangements we shall ensure that no existing claimants lose in cash terms.

As the schemes develop, hon. Members will have an opportunity if necessary to raise in the House the justice or otherwise of claimants who were receiving benefit before April 1988 being compensated in some way for inflation in future. That matter will have to be discussed on the Floor of the House. No doubt it will be discussed in terms of the way in which Governments allocate their resources from year to year. However, the Government should be given credit for providing comprehensive transitional protection for existing claimants as we move to a new system, which will be simpler and easier to understand and which, once bedded down, will be recognised as a great improvement on the existing complex system of supplementary benefits.

Mr. Frank Field

Will the hon. Gentleman give way?

Mr. Scott

I almost feel as though other hon. Members are getting more of an opportunity to speak than I am. I give way to the hon. Gentleman.

Mr. Field

My point relates to the transitional arrangements. Has the Minister had a chance to examine the statement in which his right hon. Friend the Secretary of State announced the proposals to the House? I understood the hon. Gentleman to say in reply to one of his hon. Friends that whereas some people would be caught under the transitional arrangements and would not get an increase in cash terms this year they would get an increase in subsequent years because the transitional arrangements would be inflation proof. That puzzled me because that is not how I understand transitional arrangements to work. If they did, they would last almost indefinitely—until people stopped claiming benefit. Is he saying that while income support will be increased only in line with prices the transitional arrangements will be kept in line with those price increases?

Mr. Scott

I shall check back on what my right hon. Friend said. In essence, we are committed at the moment to protection in cash terms of existing claimants—except for disabled people who receive domestic assistance in excess of £10 a week, who will receive not only cash protection but inflation protection. Perhaps that is the point on which the hon. Gentleman has picked up.

The fourth aim of the reforms was to increase self-reliance. This will be done in part by giving claimants a set income for them to manage—in much the same way as others in society, many of whom are little better off than those on income support. The present scheme, with its implied detailed breakdown into this or that expense, undermines that aim. It cannot make sense these days to run a benefit system that has us asking claimants how much they spend each week on washing powder. In addition, the regulations in chapter VI of part V provide for important changes in the treatment of capital. At present, capital of more than £3,000 debars someone from benefit completely. In future, the upper limit will be doubled to £6,000, with reductions in benefit only for those with savings between the two amounts. The success of this Government in bringing down inflation has made saving much more worthwhile. The new rules for income support encourage that.

The level of part-time earnings that will be ignored for benefit purposes is being improved to £15 for people receiving the disability premium, lone parents, and unemployed couples who have been on supplementary benefit or income support for two years. That is provided for in schedule 8. With unemployment now falling, we hope that this will encourage more claimants to regain contact with the world of work.

The last two objectives in the Green Paper—fairness across work boundaries and alignment with other income-related benefits — are also fully reflected in the regulations. The present mismatch of rules for help for those in and out of work or on similar incomes can leave someone worse off from taking a job or after meeting their housing costs. The last problem led to the creation of housing benefit supplement. Anybody who has had anything to do with that benefit will not see it as a sensible or easily understood benefit. The need for that will end next April.

The regulations we are considering today and those on family credit and housing benefit, which will be before the House shortly, achieve this by providing a common approach to the assessment of resources, based on net earnings. That is covered in part V. At the same time, we have taken the opportunity to align many of the detailed rules, ending, wherever possible, the differences—often quite small — that now exist between supplementary benefit, family income supplement, and housing benefit. As a result of those changes, under the new scheme people will be treated in a consistent way. In particular, housing benefit will be assessed on the same basis whether claimants are in or out of work. The maximum adult payment in family credit will be made at the level of the income support couple's personal allowance and, because of the planned increase in spending, more help will go to support low-income families in work.

That common approach in the income-related benefits has been generally welcomed, whatever other criticisms people may make of the transition to income support. It has been possible only because income support itself is less complex than supplementary benefit.

The House may be relieved to know that that leads me to my concluding remarks on the first set of regulations, those concerning income support. I believe that few hon. Members would argue that the present supplementary benefit scheme is the ideal model of a benefit system. There can be only one answer to the question, if supplementary benefit did not exist would anybody seek to invent it in its present form? I recognise that people have views and criticisms of particular proposals and of what we are doing as we move to the new system. However, it has been depressing for me, coming fresh to this subject, to feel that much of the logic of the criticisms I have heard has been a defence of the status quo, sometimes from sources that had been critical of that status quo until we decided to change it. That is a sterile approach and I believe that change is needed urgently if we are to produce a benefit structure more suited to modern-day needs.

That is the aim of the regulations before the House. We consider that the new income support scheme provided for in detail in the general regulations achieves a more coherent system, which is better able to direct extra help where it is needed, is more readily understood by claimants and paves the way for a better standard of service.

We are moving to a new system. The regulations set out clearly the basis upon which we will be embarking upon that. No benefit rules can be set in stone for ever. We, and I am sure Labour Members and the variety of organisations which properly seek to defend the rights and interests of those in need in our society, will no doubt be monitoring the regulations with great care.

Mr. Marlow


Mr. Scott

I believe that the provisions in the regulations provide the right structure for help.

Mr. Marlow

Will my hon. Friend give way?

Mr. Scott

I will give way to my hon. Friend. I have never failed to do so.

As I said, they do provide the right structure for help. No doubt it will be necessary to develop them in the future in order to ensure that they are up to date in seeking to provide for the inevitable needs of society in the future.

Mr. Marlow

I am sorry if I appeared to be agitated, but my hon. Friend said "finally" on a couple of occasions and gave the impression that he was about to finish his sentence and depart from his speech. My hon. Friend said that he would tell the House the logic of the Government's decision with regard to child benefit, and we are waiting with bated breath for my hon. Friend to tell us. I know that one of the points my hon. Friend might suggest is that we want to target that benefit—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. It might be helpful if we listen to whether the Minister does suggest that.

Mr. Marlow


Mr. Scott

I am sure that I can be of assistance to my hon. Friend if he will give me a moment. We are discussing three different sets of regulations. I have just come to the conclusion of the first set, on income support, and I am now going on to deal with the next two sets of regulations. I hope that I will deal with them more briefly than I have been able to do so far because of the way in which I have given way to hon. Members here and there. I give my hon. Friend a solemn assurance that before I sit down finally I will deal with the point he raised earlier, which I undertook to cover.

I turn now to the draft Social Security (Claims and Payments) Regulations 1987. They cover all social security benefits and set out the administrative rules—which are not unimportant when we consider a social security system —which we intend will operate from the start of the income support scheme. The Green and White Papers on the reform of the social security system expressed the intention to pursue common rules to bring about greater harmonisation and simplification. These regulations replace in whole or in part separate provisions in 10 existing statutory instruments. They represent a significant move towards a more easily understood benefit scheme.

There are four main changes from current practice. The first covers the time limits for claiming benefits. That is an essential element for efficient administration of the schemes. We asked the Social Security Advisory Committee to consider and report on the subject. Its report and the Secretary of State's response were published in March of this year and most of the committee's recommendations have been incorporated in the regulations. The general thrust is to move away from the complicated and often contentious concept of "good cause" for failing to claim earlier. For example, a person claiming retirement pension or widow's benefit will be able to receive benefit for up to the statutory maximum of a year before the receipt of the claim, without having to give reasons or show "good cause" for the delay in claiming. That is a step in the right direction.

Secondly, there is at present a considerable mismatch between the periods for which benefits are paid. Contributory benefits such as unemployment benefit and the incapacity benefits are paid in arrears. Supplementary benefit is paid in advance. Consequently, someone receiving unemployment benefit with supplementary benefit receives payments which cover two separate and distinct periods. A vast majority of claimants find it difficult to understand how that comes about. Because it is difficult to understand as well as to administer, we propose to pay income support in arrears to nearly all claimants below pension age. Pensioners and widows will be paid income support in advance in line with retirement pension and widow's benefit. We will be bringing those two separate schemes into alignment.

Mr. Frank Field

I promise that I will not rise again during the Minister's speech. Will he take this opportunity to underline what a big change he has announced? His last statement was probably the most significant he has made so far. Does he realise the pressure that it will bring about in offices which already face pressure close to breaking point? Constituents will be turning up without a penny. They will be told that under the old scheme they would have registered and obtained benefit from that day forth but that now they may have to wait for seven days without any money. What advice will he give staff who may worry about their own physical safety under the new rules?

Mr. Scott

I sometimes give way with trepidation but never with reluctance to the hon. Gentleman because I acknowledge his skill in this subject, and the questions he raises may help to clarify the situation. Therefore. I shall never be reluctant to give way to him.

I think that the new system will be simpler and more clearly understood. It will be helped by the fact that, as part of the package, we will disregard last earnings, which were not disregarded under the previous system. They will be disregarded completely in terms of the calculation for income support. A clear majority of claimants come on to benefit from work. Claimants will now be able to use any final earnings to live on while awaiting their first benefit payment. They will no longer be excluded for the period covered by their last earnings. That is, I believe, a far more sensible arrangement than the present pattern. If there are particularly hard cases, I believe that the social fund will be able to operate to provide help. I think that the improvement that I have mentioned will deal with most of the hon. Gentleman's worries on the alignment front, and that it will be generally welcomed and will prove beneficial.

The third change is that it will be possible to make deductions from retirement pension, unemployment benefit and incapacity benefits when paid with income support if it has been decided that the direct payment of benefit to a third party is necessary—for example, to prevent the risk of disconnection for fuel debts. At present, if a pensioner's sole source of income is supplementary benefit, direct payment can be made to a fuel board. However, that may not be possible if the pensioner receives the same overall amount of benefit, but made up in part of retirement pension and in part of supplementary benefit. Again, I consider that a sensible arrangement.

Finally, we have introduced a new provision covering the suspension of benefit. In Committee on the Social Security Act 1986, Ministers undertook to review the suspension rules, particularly as they applied to cases involving an appeal to the Social Security Commissioners. We propose that the social security appeal tribunal award may be suspended for a limited period only while consideration is given to an appeal to a commissioner. If within one month the claimant is not given notice that an application for leave to appeal has been made, the suspension will lapse.

Overall, the regulations will make for more effective and economical administration, and, I believe, will be more clearly understood by claimants.

We also have before us today the Social Security Benefits Up-rating (No. 2) Order, which is of direct interest to a large proportion of the population at all levels of income. As I said at the outset, about 70 per cent. of the population live in families receiving some income from social security benefits. The most sizeable group of social security benefit recipients are pensioners. About 9.8 million people receive a retirement pension of some kind, at a cost this year of some £18.5 billion. The number of pensioners has risen by 1 million since the Government came to office, and will continue to rise fairly steadily to a peak of nearly 13.5 million in about 40 years time.

Let me deal with a point which has been raised across the Floor of the House. However desirable increases in the basic pension may appear, they cannot simply be viewed in the short term. Raising the level of the basic pension creates an obligation for the future which it would be irresponsible to ignore. For that reason, we took the view when we came to office that it was right to update pensions by the increase in prices rather than by the previous Government's formula of prices or earnings, whichever was the higher.

Ours is a guarantee that protects the pensioners' standard of living, but creates no long-term obligation which might arise beyond the country's ability to meet it. The order therefore provides for an increase in retirement pension of 4.2 per cent., in line with price movements between September 1986 and September 1987. That uprating will raise the basic pension by £2.65 for a married couple and £1.65 for a single person. Most people will receive a larger cash increase, because the uprating will also apply to graduated pension, which is received by two thirds of pensioners, and to earnings-related pension. The amount of earnings-related pension payable is increasing rapidly, and SERPS can add over £20 a week to the basic entitlement of a person retiring this year who has been on average earnings. I stress that, because many people persist in claiming that we have abolished earnings-related pension, a claim that its 1.8 million recipients would find difficult to understand.

The order covers all the contributory benefits and the non-contributory benefits for disablement. As my right hon. Friend the Secretary of State announced on 27 October, it proposes an increase in all those benefits in line with the retail price index movement. I shall not take up more of the House's time in commenting on that, because I wish — to the great relief of my hon. Friend the Member from Northampton, North (Mr. Marlow)—to deal with child benefit, which is an interest shared by both sides of the House.

The House will know that the order does not propose an increase in child benefit on this occasion. It is important for hon. Members to remember, however, that it does increase one-parent benefit to £4.90 and child dependency additions to £8.40. Regulations will also be laid before the House to increase the maternity payment under the social fund by £5 to £85. All those are benefits that go to families with some degree of special need.

The assistance for families on income support, and our proposals for family credit for low-income working families with children all concentrate help on those in most need. Child benefit, by contrast, goes to all families with children, regardless of income. The wives of hon. Members who are in the Chamber tonight, or hon. Members themselves who have children under 19 in full-time education, will receive £7.25 a week from tax revenues as a result. Child benefit is, and will remain, a valuable contribution to the extra costs that every family incurs as a result of bringing up children. I must declare my own current interest in the matter! It will remain an important element in meeting those extra costs, and the purpose will continue to be met whether the benefit remains at £7.25 or goes up by 30p.

Mr. Marlow

I thank my hon. Friend for giving way, and I apologise for intervening earlier.

My hon. Friend will be well aware that child benefit, although we are a much wealthier nation, now gives less to families than child tax allowance used to give 20 years ago. My hon. Friend rightly said that what we want to do is to target money to the poorest families. Conservative Members are all very much in favour of that, but if we are going to find and target that money, why are we taking it from other families, rather than from the general taxpayer?

Mr. Scott

We have identified families on low incomes, whether they are on income support or in work, as one of the groups that particularly need help. Government is about allocating priorities, and we believe that giving extra help to those low-income families is a higher priority than providing a 30p increase across the board. The saving is some £120 million. That has made a contribution—less than half, but still a contribution—to finding the extra £300 million that we are putting into benefits for families on low incomes.

Mr. Robin Squire (Hornchurch)

If I may use my hon. Friend's language of priorities, let me ask whether he accepts that a consequence of this order of priorities is that between 30 and 40 per cent. of families entitled to receive the new family credit will not be claiming it. This is a consequence of priority being given to chasing a relatively small sum from families who are relatively well off.

Mr. Scott

My hon. Friend makes several assumptions about take-up in the new system of family credit. The new scheme will, I believe, be generous. We are assuming that it will apply to twice as many families as have benefited—

Mrs. Beckett

That assumption is based on the most dubious grounds.

Mr. Scott

The hon. Lady will no doubt play her part, as we in the Government will play ours, in seeking to draw attention in the community at large to the new system of benefits. Already we reckon that it will go to twice as many families as before, and it will be much more generous. I believe that our communication strategy, and the fact that the general changeover to income support and the new pattern of benefits that we are introducing in April next year will doubtless arouse considerable interest throughout the country, will help take-up.

Our experience on the take-up of benefits is that it is those who are entitled to comparatively small amounts who decline to take up benefit. Those who are entitled to the larger amounts on any particular scheme tend, on balance, to claim. I see no reason why that should change when we introduce the new scheme.

I emphasise that increases in child benefit would not have given an extra penny to those families who were most in need—those already on income-related benefits. What matters to them is the level of child support that comes through the income support scheme and family credit. That is why, as I said, we are putting an extra £300 million into those benefits next year against the saving—30p, not uprated this year — of £120 million which would have gone to the uprating of child benefit. That will ensure that the extra money available goes directly to those with the greatest needs, whereas the major benefit of an increase in child benefit would have been to people in the upper half of the income range.

It would not be right at this point to redistribute resources in that way. I hope that, on reflection, the House, arid, in particular, my hon. Friends who talk to me about this and who I know care passionately about this, will agree that our decision for 1988 is the right one. I commend the instruments to the House.

6.20 pm
Mr. Robin Cook (Livingston)

It may be for your ease of mind, Mr. Deputy Speaker, if I assure you that the Opposition have no intention of trying to take the debate through the night. Unless seriously provoked, we shall not oppose the business motion at 10 o'clock. We recognise that it will he for the convenience of the House to reach decisions at 10 o'clock. One reason why it will be for the convenience of the House, and why it is important that the House should avail itself of that opportunity, is that the House should be given the opportunity to reject the income support regulations, which will leave 4 million current claimants, and over 4 million dependants in the households of those claimants, worse off.

The uprating order, as the Minister recognised, is significant chiefly because of the benefit that is not uprated —child benefit. When the Secretary of State made his uprating statement in the House, I teased the right hon. Gentleman with the promise in the Conservative manifesto that child benefit would continue to be paid as now. I then added that we were no doubt intended to take that observation strictly literally.

I offered that observation in jest. However, it has since emerged from some press reports that that line in the Conservative manifesto was carefully honed; that a decision had already been taken before the election that child benefit would not be uprated this year. Indeed, we are advised by Mr. Hugo Young that, in a briefing to Conservative party candidates, the then Secretary of State was informed by some candidates that they intended to ask him in open session what that meant and were requested not to do so because he was anxious not to tell the conference. If a decision had been reached by the Government before 11 June, not to uprate child benefit, that decision should have been shared with the electorate before 11 June so that it could have taken part in the decision-making process.

One reason why I find the decision not to uprate child benefit perverse is that this is a Government who are constantly and cheerfully cutting taxes without the same kind of anxiety about whether the benefits of those cuts in tax necessarily go to those most in need.

Child benefit is a replacement of a tax allowance. I have no doubt that if it had been retained as a tax allowance the Government would happily be uprating it in line with inflation, although the case for doing that is exactly the same as the case for uprating child benefit. Indeed, in a sense, the case for uprating child benefit is more progressive since, after all, an increase in a cash benefit is of greater value to low-income families, who may not be paying taxes, and of less value to high-income families, who will be obtaining the tax allowance at the higher rates.

The decision not to uprate child benefit has two consequences. First, it increases the poverty trap. The Minister ended by saying that one reason why the Government were persuaded not to increase child benefit was that increasing child benefit did not help those most in need — those on means-tested benefit. One of the ironies of the decision not to increase child benefit is that it will increase the number of people on means-tested benefit.

We are grateful to the Minister for replies to two parliamentary questions which tell us that another 10,000 people will qualify for family credit as a result of the freeze, and a further 5,000 will qualify for income support. In other words, another 15,000 households will be put into the means-tested trap—the poverty trap. Child benefit is the best single way of helping families out of the poverty trap, precisely because it is a benefit that does not go down as their income goes up and as they attempt to make their way in the labour market.

The second consequence is that the decision will tilt the balance of distribution of income in the household from the mother to the father. It is the mother who bears most of the cost of the children, and those costs are increasing. Next April, thanks to the Government's decision in the Social Security Act 1986, those families not on income support — not on means-tested benefit—will find that they no longer qualify for free school meals. Half a million children from families whose parents are in work will lose entitlement to free school meals next April. That will cost the mother in those families, on average, £3 per week per child. As the chances are that if such mothers have one child in that category they will probably have two, it is likely to cost many mothers £6 per week.

It is odd that, at the very time when the Government are to impose that additional burden on the mother, they should choose to freeze her child benefit, the one income that she can claim on her own. Labour Members cannot accept the claims of Conservatives to be the party of the family when they plainly are not prepared to be the party of family benefits. They cannot have their claim to be the party of the family on the cheap.

Child benefit is not uprated at all. The other benefits in the uprating order are, but they are uprated only in line with prices, not earnings, although earnings are going up twice as fast as prices. Let me respond to what the Minister said about the effect of that on pensions. He said that the effect of the order would be to maintain pensioners' living standards, but we must be more precise than that about the effect. The effect of uprating pensions in line with prices, not earnings, is to maintain the purchasing power of the pension, but it is also to make sure that those pensioners who are dependent on the basic state pension do not share in the improvement in the living standards of the rest of the population. Indeed, they are left behind with a benefit that is constantly shrinking as a proportion of average income.

In 1979 the single pension was equivalent to 20.4 per cent. of gross male earnings. In 1988, as a result of the order, that proportion will have shrunk from 20.4 per cent. to a beggarly 17.2 per cent. I would not pretend that 20.4 per cent. was an adequate figure for the basic state pension —far from it—but at least under the previous Labour Government that figure did not shrink. It did not shrink because the previous Labour Government linked the pension uprating to earnings. That link, as the Minister acknowledged, was the first to be broken by the Government.

It was arguably the worst cut in benefit that we have seen from the Government, despite the many occasions on which they have broken benefit links. Had that link been retained, next April the single pension would, in cash terms, be worth £9.20 a week more and the pension for a couple would be worth £14.60 a week more. That may not qualify as serious money in the City of London, but it would make a big difference to the weekly budget of many British pensioners.

I note from the figures on the impact of these changes, which are published by the Government, that, on average, the income of those 3 million pensioners who are dependent on state benefits will go down. The average entitlement of people under 80 years of age will go down by £1 per week, and the average entitlement of those pensioners over 80 will go down by 30p per week. That will happen to some of the most vulnerable in our community.

An entertaining perspective to that reduction in entitlement was provided by the wit and wisdom of our Prime Minister. You may have noticed, Mr. Deputy Speaker, that last week the Prime Minister did her Christmas shopping at a Marks and Spencer store, in the course of which she purchased a cashmere sweater. I note that she stated that she purchased the cashmere sweater because she is unable to wear wool next to her skin. I am touched to discover that there is at least one human frailty that I share with the Prime Minister. No doubt it is because of our thin skin.

On purchasing the cashmere sweater, the Prime Minister observed to the assembled throng of shop girls, As you get older you need your comforts—the comfort of cashmere. I would not go so far as the Prime Minister and describe the comfort of cashmere as a basic need, or suggest that a loan should be available out of the social fund to pay for the purchase of cashmere sweaters, but I agree with the Prime Minister that as one gets older one needs some comfort. One needs the ability to pay for the heating in one's home, to pay for the use of public transport or to pay for the occasional treat for the grandchildren. As a result of the decline in the value of their pension, even those comforts are as far beyond the income of some pensioners as is the purchase of a cashmere sweater.

The other regulation that is of even greater contention is the one on income support. It scraps supplementary benefit and puts into place the new benefit system that was the centrepiece of the Social Security Act 1986. The Minister described the lengthy process behind the regulation and the long period of mass consultation. I have difficulty in reconciling that with the reality of the reviews that were carried out by the previous Secretary of State, which took place in committees chaired by Ministers from the DHSS and were packed with the Government's friends from the Adam Smith Institute and the Institute of Directors. The Green Paper was written at a weekend conference held in a stately home. Even the agenda was classified "secret". One senior civil servant who was present made the diverting comment that the most open discussions were to be found in the gentlemen's room.

We have several fundamental objections to the structure of the income support system that is proposed in the regulations. The most fundamental is that the regulations sweep away all the additions that at present help claimants to get by. Those are the additions which the previous Minister of State, in a moment of Olympian disdain, described as "the twiddly bits" of the social security system. They may be "twiddly" to the Minister, but they are important to claimants. They include, for instance, additions for diet for those who suffer from diabetes or other medical conditions ; additions for laundry for claimants who are incontinent or who have children who wet the bed; additions for hot water for claimants who need more than the one bath a week that they are allowed under the supplementary benefit regulations and additions for heating for claimants who need additional warmth in their homes or who have the misfortune to live in one of the houses that were devised by architects who had lost the art of insulating houses, assuming that the tenant would be able to put up with constantly high fuel costs.

I noticed that last week the Prime Minister—no doubt in a fit of inadvertence—said that last winter heating additions totalled £430 million. She took pride in that fact and told the House that that was a "record" amount. However, she omitted to advise the House last week that tonight we would he invited to pass a regulation that embodies a structure that cancels every one of those heating additions and abolishes that £430 million additional help for claimants. We are invited to do so at the very time when electricity prices are to increase by 8 per cent. to fatten up the electricity boards for the private sector.

We are told that the change represents targeting. In fact, the extinction of all those weekly additions for specific and particular needs is the precise reverse of targeting. It is shooting blind without regard for the individual circumstances of claimants. It will undoubtedly leave behind many casualties who will be worse off.

I concede to the Minister that my hon. Friends and I are not enthusiastic about means-tested benefits, but we accept that there will always be a case for a means-tested benefit as an income of last resort. However, the Government are offering the worst formula of a means-tested benefit, entitlement to which will be measured by reference to income, but the benefit of which will not be measured by any judgment of the claimant's needs.

The needs of the claimant are to be met, and the additions are to be replaced, by the new premiums for certain categories, but those premiums will not compensate for the abolition of all the weekly additions. Any claimant who currently manages to obtain two or more additions is almost certain to be worse off. Some claimants, especially disabled people, will be spectacularly worse off. Several disabled claimants face a loss of entitlement of up to £50 per week. There may be only a few hundred people in that category, but we know from the Government's own statement on the impact of the changes that 20,000 disabled claimants face a weekly loss of entitlement of more than £5.

That group should not be among the losers. It is blunt targeting that results in making worse off those in our community who are most in need of help. What makes their loss of entitlement especially offensive is that the House is asked to approve the change before the Government have received the results of their own survey of the needs of disabled people and the extent of disability in our country. If there is a case for changing the benefits of the disabled in a way that will leave so many people losers, that case should be made after, not before, the Government have received the results of the survey.

Mr. Scott

Would the hon. Gentleman argue, by the same token, that we should not have provided the extra resources that will help disabled people when we introduce income support? Overall, about £60 million extra will help to meet their needs. We are introducing a system under which 85 per cent. of people under the age of 60 who receive disability premium, will gain or be unaffected in real terms. About 44 per cent. will gain more than £5 per week. Would the hon. Gentleman have wanted that to be held up also?

Mr. Cook

If the Minister is to provide that additional help, of course it will be welcome. However, it should not he provided or paid for—as is happening under the change in income support—by reductions in the benefit of other categories, including reductions for other disabled people, 80,000 of whom will be worse off as a result of the change—20,000 by more than £5 per week. Moreover, the figure of 85 per cent. that the Minister quoted as the number of disabled people who will be better off relates only to disabled people who are aged under 65. As most disabled people who at present obtain weekly additions by reason of their medical or other disabilities are over 65 years of age, it is partial pleading to claim that most of those who are aged under 65 will benefit from the change. Most of those disabled people who are over 65 will suffer from the change.

There are other claimants who do not qualify for any premium. As we are discussing disabled people, let us consider the position of those who have given up work to care for a disabled relative. Many tens of thousands of women have left the labour force to work full-time looking after an aged relative. That is exactly the kind of step that I should have thought the Government would wish to encourage as part of their philosophy of care in the community. At present, those women qualify for the longterm rate of supplementary benefit. As a result of the change they will qualify only for the single person allowance, with no premium. They will be £5 per week worse off, even if they are not in receipt of any weekly additions. If they receive a weekly addition, they will be £10 or more worse off per week.

I know that we will be told that their benefit will be protected. However, in this case "protection" means that their benefit will be frozen and will not be increased, and because the drop in the entitlement of carers is so large, they are unlikely to receive any increase in their benefit until 1990. Moreover, those who choose to leave the labour force to care for a disabled elderly relative after April next year will find that they obtain benefit only at the new reduced rate. They may find themselves living in the same street as someone in identical circumstances, who is providing an identical service, but they will receive £5 or £10 a week less. They will not find that fair or reasonable.

Carers who are currently in receipt of benefit and whose income is protected may take a seasonal job next summer —some people do if such work is available—and they will find it unreasonable when they return to claim benefit to discover that their benefit is £5 or £10 less than they had received in the spring of this year. That will not seem like progress or reform to them; it will seem plain daft.

There is another layer of discrimination in the regulations that deserves attention. The Minister pleaded that simplicity was one of the merits and virtues of the new system. However, one of the odd features of the system —I would hardly call it simplicity—is that there are now five different entitlements to benefit, depending on the age of the claimant or his or her partner. That seems a rather odd complication. In seeking to assist the Minister to achieve simplicity in the benefit system, I suggest that he could achieve greater simplicity by dropping the bizarre discrimination against single people under 25. Under the new regulations they will receive £7 less than a single person over 25. The social security system will now be the only system in the whole of our legislation that recognises a unique and distinct age of majority to be 25. That bears no relation to reality of life at 24.

It is possible that people who have worked for a number of years and who have left the labour force because of redundancy will discover that, after those several years of work, they have an entitlement to income support at the junior level only. It will be possible for service men to complete a term of engagement, to be discharged and find, if they attempt to obtain income support, that they are not entitled to the full adult rate.

Long before the age of 25 I was a separate householder, living in my own right in my own house. I should be very surprised if that was not the case with the Minister. Indeed, when the Bells call us for the Division at 10 o'clock tonight, I should be extremely surprised if the overwhelmingly majority of Members voting were not living by themselves or with their own families by the age of 25. Frankly, I think that it would be ludicrous for us to vote for a reduced level of entitlement for single people under 25. That plainly supposes that they are a reasonable, partial burden on their parents, despite the fact that most unemployed young people tend to be found in the households of low-income parents.

I note that the National Association of Probation Officers predicted—it is in the position to know—that the reduced entitlement for young people is likely to result in an increase in poverty-related crime. That would not be surprising because, in truth, this discrimination has no logic in the benefit system and, given the need of young people, no justification. The sole reason for this discrimination against unemployed people under 25 is that it is part of the many attempts by the Government to rig the labour market for the young unemployed and force them to settle for lower wages, worse working conditions and more insecure employment. We reject that discrimination.

We also reject the basis on which the system will create invidious distinctions between different categories of claimants. That was perfectly expressed by the Social Security Advisory Committee, which was, after all, set up by the Government to advise them. With regard to the premium system, the committee observed that it represents a sophisticated variation on the theme of deserving and undeserving poor with higher rates going to sympathetic groups such as the elderly or the disabled and lower rates to groups such as the unemployed, whose plight is liable to evoke less popular sympathy. Our benefit system should not be based on moral approval for people's reasons for drawing benefit. It should be based on their need for benefit and not by reference to the particular reason why they find themselves claiming it.

I have listed our objections to the structure of the new system. It should be admitted—I cheerfully concede it— that those objections have been put to the Government over the past three years since they first produced the proposals. However, we have failed to make headway in persuading the Government to amend the structure.

Tonight at least we have a new dimension to the debate. For the first time we have the figures to fill in the blank spaces in the regulations. Until the other week the only figures that we had for the level of income support were those in the annex to the 1985 White Paper. We were always told that those figures were purely illustrative. Indeed, in one sense they certainly were illustrative, because there was never any attempt to explain how they were derived.

The central weakness of the review carried out by the previous Secretary of State was that at no time during the review, and during the consultations before or after the publication of the Green Paper, did the Government attempt to measure the needs of the claimants. It was a nil-cost review, which simply consisted of redividing a fixed sum in a different way for the same number of people. We do not know whether the resultant figures are adequate for the needs of claimants. We do not even know how the present level of supplementary benefit has been put together.

We know what the level of supplementary benefit is supposed to cover, because regulation 4 of the current regulations tells us. The full list published in regulation 4 of the supplementary benefit regulations, shows that the benefit is supposed to cover food, household fuel, the purchase, cleaning, and replacement of clothing and footwear, normal travel costs, weekly laundry costs, miscellaneous household expenses such as toilet articles, cleaning materials, window cleaning, and the replacement of small household goods (for example, crockery, cooking utensils, light bulbs), and leisure and amenity items such as television licence and rental, newspapers, confectionary and tobacco. All those things are to be covered by a weekly single person's allowance of £30.40. We do not know whether that can be done—nobody at the DHSS has attempted to demonstrate that it can. Indeed, the Government have shown a stunning lack of interest in whether what they claim is covered by benefit can be purchased within the terms of that benefit.

We are aware that £30.40 ostensibly includes a notional £11 a week for food. The DHSS has not attempted to prove to us whether it is possible to feed oneself on £11 a week. Frankly, I rather doubt whether many hon. Members, certainly those on the Conservative Benches, could feed themselves for a day on £11. Certainly when one Conservative Member tried three years ago to live for one week on that level of supplementary benefit he was in darkness by the end of the week because he could not afford to turn on the light and was cadging free drinks in the pub because he could no longer stand his round.

Mr. Frank Field

Where is he now?

Mr. Cook

He is standing free drinks to hon. Members on a Sunday afternoon.

We have been assured that the figures in the White Paper were illustrative. There was always the hint held out to us that the real figures would be better. Time after time when we referred to the illustrative losers in the annex to the White Paper we were reminded that those were illustrative figures and that we could not assume that there would be as many losers when the real figures were unveiled. We now have those real figures, and they are worse than the figures in the 1985 White Paper.

Mr. Scott

indicated dissent

Mr. Cook

The Minister shakes his head, but I believe that I will carry him with me before I finish, unless he wishes to get into real difficulty with his right hon. Friend the Secretary of State.

To understand my argument it is necessary to take account of the alleged compensation for the cut in housing benefit. That cut in housing benefit arises from the exclusion of 20 per cent. of rates from coverage under housing benefit. Just before the election the Government, by the sheer stark unpopularity of their proposals, were obliged to commit themselves to compensate claimants on income support for that additional expenditure on rates. The additional burden of rates that claimants will face has been costed at £1.30 a week, but that is an average figure.

I was grateful to the Minister for his reply to my parliamentary question in which he admitted that "slightly under half' of all claimants will end up paying more than £1.30 per week. However, some of them will be paying spectacularly more than £1.30 a week. If hon. Members care to step outside the Chamber they will find themselves in the Inner London borough of Westminster. It is Conservative-controlled. The average weekly rates burden to be faced by those currently on housing benefit, but who will lose the entitlement to claim benefit for one-fifth of their rates, will be double £1.30.

In the Minister's own constituency of Chelsea the average weekly payment that his constituents will have to make for rates will not be £1.30—it will be £2.30. Even if they received the £1.30, they would end up £1 a week worse off.

Mr. Scott


Mr. Cook

With the greatest respect to the Minister, the source of that increase has vastly more to do with the way in which the Government have starved and garrotted local authorities in Inner London by the purse strings than with any spending decision that the authorities made.

Nevertheless, I shall leave aside the cavilling point whether £1.30 is fair or not. Let us accept the figure and turn our attention to how it is accommodated in the income support figures. A moment's reflection will demonstrate that it has not been accommodated in those figures. A parliamentary written answer to myself sets out a table providing for the uprating of the 1985 White Paper figures. It is perfectly clear that the working principle on which the DHSS has proceeded is that of taking the figures in the White Paper and uprating them by the Rossi index —that is, the RPI, less housing costs.

It need not surprise us that the DHSS has chosen the Rossi index, because it is the lowest index of inflation that could be found, so it is to be expected that the DHSS would use it. All the premiums are uprated fully by the Rossi index; but if we examine personal allowances for couples, in particular, and if we assume that the 1985 figure was uprated by Rossi, and then look for the excess over Rossi, we find that the additional element that has been added to the personal allowance for couples is not £1.30 at all—it is a beggarly 30p a week. At some stage in the process £1 has been lost in the pipeline.

I want to turn now to the Minister's vigorous shaking of the head when I suggested that the £1.30 had not been compensated for. When I responded during the statement on uprating and accused the Secretary of State of misleading the House in this matter, he was very hurt and chided me for doubting his word and for suggesting that he would do anything quite so heinous as to mislead the House. Very well, then: I shall give the Minister the choice, and I shall be grateful if he will tell us what he prefers. Either he can say that the 1985 figures have been fully uprated, in which case the Department has patently not compensated the income support claimants for the additional and new rates burden, or he can say that the Department has compensated the income support claimants for the new rates burden, in which case he is obliged to admit that the 1985 figures had not been honestly uprated. The DHSS can have it one of those two ways, but not both. If the Minister is now trying to tell us that the £1.30 is completely present, he must admit that when I suggested earlier that the White Paper figures had not been fully uprated, I was absolutely correct. They had not ; £1 is missing.

Logically, if the net benefit in income support is now lower than in 1985, there must be more losers after we allow for the new rates burden. The Government are reluctant to admit that there are more losers, but they have at least admitted that there will be 3.7 million losers, three quarters of a million of whom will lose more than £5 a week. None of those 3.7 million will receive a penny increase in their benefits in April next year. The three quarters of a million who lose more than £5 a week are unlikely to receive a penny in their benefit in 1989, either. They will have to wait until 1990 for their next uprating. They will all face a new weekly charge for rates burden, averaged at £1.30—in many cases it will be double £1.30. They will all find that they have no entitlement to single payments, because those have been abolished. If they try to find a substitute for single payments, they will be obliged to take a loan from the social fund, for which repayments will be deducted from their benefit, leaving them with an even lower, more meagre income.

It is not surprising that, on that basis, income support has few friends. The Minister of State referred to the lengthy consultation process. One of the curious features of that process is that the review bodies never published the evidence they received. However, we have the evidence of the survey that was carried out by the Child Poverty Action Group. Of 50 organisations that submitted comments on income support, Child Poverty Action Group counted 47 that were either flatly against it or heavily critical of it. The group could find only three of the 50 that supported income support. They were: The Association of British Chambers of Commerce; The Association of Independent Businesses; and the Monday Club.

I do not comment on whether those organisations might be politically favourable to the Government. I do them the charity of assuming that they came to the issue with open minds and allowed the free play of intellect to shine on those minds, coming to the conclusion that, on balance, they liked the proposal because it appealed to them intellectually. But those organisations are not conspicuous for representing claimants on benefit. The financial directors of those chambers of commence have no conception of the skills of budget management required by claimants to keep body and soul together from one week to the next.

My hon. Friends and I have that conception. We represent those claimants and work with the communities in which they are found in large numbers. We see them weekly. We know the poverty and the hardship that they experience. We know the loss of dignity and self-respect that comes from being unable to clothe their family or heat their home. We know that we cannot tolerate the level of benefit becoming worse, or the poverty growing deeper. That is why we shall vote against the regulations tonight.

6.58 pm
Sir Ian Gilmour (Chesham and Amersham)

The hon. Member for Livingston (Mr. Cook) certainly drew some blood, particularly on the subject of the disabled, but I am sure that, on reflection, he will agree that the idyllic picture that he tried to draw of what happened to pensions under the Labour Government bore little relation to what actually occurred. The system by which he sets such store did not operate in 1976, or 1978, and had the Labour Government won the 1979 election, it would not have operated in 1979, either. At the most, the system had a one in two rate of striking, which was not very effective.

My hon. Friend the Minister made a convincing speech, which was fortunate, because we did not, therefore, notice that quite a lot of time was spent on it. Of course, he gave way generously to several hon. Members during that speech. He gave a convincing rationale why we are changing from supplementary benefit and moving away from the family income supplement. Indeed, he was so convincing that I shall not extol the benefits of the change any further, because he did that much better than I could.

I want to ask one or two questions about the disabled, and comment on one or two areas about which my hon. Friend's remarks leave me less happy, one of which is the future of child benefit. Of course, we all welcome my hon. Friend's statement that, as has been said before, we shall spend £60 million more on the disabled this year. However, the organisations that represent, look after or help the disabled are exceedingly worried about some aspects of the scheme. I was rather hoping that my hon. Friend might have been able to give us more reassurances than he has been able to this afternoon. I trust that when my hon. Friend replies to the debate he will put many of our minds at rest, and particularly those of the people who run the organisations for the disabled.

Is it really true that, as has been estimated by some of these highly responsible and respectable organisations, at least 40 per cent. of the newly disabled pensioners, and at least 50 per cent. of newly disabled younger people will he worse off under the new system than they would have been? Is it true that about 280,000 new claimants will be worse off? If that is true, how do the Government justify it? If it is not true, perhaps my hon. Friend will give us the correct figure. I know that those people will not be worse off than they are now, because at present they are not getting the money at all, but I should like to know whether they will be worse off than they would otherwise have been. If they are going to be, that cannot be right at a time of tax cuts, because people who are about to become disabled beneficiaries should not be treated worse than their predecessors. I hope that my hon. Friend will have some interesting and heart-warming things to tell us on that subject.

I and many of my hon. Friends have been accused of having historical views about child benefit. I do not mind having historical views, because very often such views are rather good. Anyway, the Government are taking a more historical view because they are going back to the 1930s. The great word nowadays is targeting, which is really Orwellian Newspeak for means testing. When we say that it is better to have targeted benefits for families with children rather than child benefit, we are really saying that the means test is a good thing. I am not sure that many people take that view.

So-called targeting does not work. My hon. Friend was extremely optimistic about how many people would take up these new means-tested benefits for children. I welcome these benefits and congratulate the Minister on getting the necessary money and in a moment I shall turn to how the benefit will be paid for. However, I do not know why he is so optimistic about the take-up rate and why he thinks that there will be a greater take-up than there has been in the past. The Government's figures seem to show that only about 60 per cent. of people will take it up. Therefore, the Government's intention on child benefit will hurt about 40 per cent. of the worst off. The failure to increase child benefit will not make the worst-off people better off; it will make them even worse off.

My hon. Friend the Member for Northampton, North (Mr. Marlow) said that it was good to have this extra £300 million, but he asked why it should be paid for, at least partly, by other families with children. The Minister did not altogether meet that point and an uncharacteristic element of waffle was contained in his answer. I was unable to discern a great deal of meaning in what he said. There is a logical fallacy here. If we are to give so-called targeted, which really means means-tested, money to families with children, where is the logic in reducing child benefit? The answer is that there is no logic there at all.

I do not know whether the Minister is reading a newspaper or studying child benefits. He said that the benefit goes to all children. Child benefit should go to everybody. That is why it is a good benefit. It is said that it costs £4.6 billion, but as my hon. Friend well knows, that is art accounting fallacy, because it is largely a tax allowance. At the very most it can be said to be public expenditure only in respect of those who pay more income tax than they get in child benefit. Therefore, the suggestion that it costs £4.6 billion is quite wrong.

Some of my hon. Friends and the Government seem to hold the view that it is perfectly all right to get any number of allowances in order to avoid paying tax. This takes in mortgage tax relief, married person's relief and single person's relief. That is apparently perfectly acceptable, but as soon as the money is paid out it somehow becomes wrong. We all know that there are two sides to a balance sheet. Not paying in on one side is exactly the same as taking money out on the other side. I hope that we do not hear any more about the great mass of resources that is being put into child benefit, because it is not true. As I say, it is an accounting fallacy.

Child benefit is the best benefit that we have and has a far greater take-up than my hon. Friend with his great optimism about these matters will be able to match. It is paid to the mother and, above all, it does not deepen the poverty trap. It has been admitted that what is being done this year will increase the poverty trap. Another 15,000 families will be means-tested for benefits, and that is thoroughly wrong. I hope that that will never happen again.

Mr. Neil Hamilton (Tatton)

My right hon. Friend is not quite correct when he says that child benefit does not contribute to the poverty trap. The need to pay for the benefit requires income tax thresholds that are much lower than they would otherwise be and income tax rates that are much higher than they would otherwise be. As income tax bites on levels of income that by any standards are fairly low, child benefit is not only a disincentive but an engine of poverty.

Sir Ian Gilmour

As I say, it is basically a tax relief. I do not know how that could be called a disincentive. As soon as the worst-off people earn any more, their benefit goes down and they are trapped. That does not happen with child benefit, and that is why it is such an excellent benefit. The failure to uprate it this year is a bad blot on the review. I hope that such a mean-minded and unjustifiable thing will not happen next year.

7.8 pm

Ms. Dawn Primarolo (Bristol, South)

I am grateful for this opportunity to make my first speech to this House. I am sure that many hon. Members are aware that my predecessor was Mr. Michael Cocks, now Lord Cocks of Hartcliffe. He represented Bristol, South for 17 years and during that time was Chief Whip in the Labour Government. In his maiden speech in 1970, he described Bristol, South as an industrial constituency with workshops, housing, transport and all the necessities required to enable a community to go about its daily life.

That is no longer the case in Bristol, South. Its industry is devastated to the point where there is only one major employer left. It is in the hands of Lord Hanson and we are not too optimistic about its future and his commitment to Bristol, South. Our housing is devastated and, as a result of deregulation, our transport services are poor and we have very few community facilities. I believe that new Members should bring to the House their experience of life and add it to the debates in order to make sure that people from all walks of life have their views reflected in the Chamber and in legislation.

As I say, Michael Cocks made his maiden speech in 1970, when I was 16. The debates on these regulations and the debates that we had last week on the Social Security Bill have caused me to reflect on what was on offer to me in 1970 and what is on offer now to our 16 and 17-year-olds. As other hon. Members have said, it is also interesting to note what is on offer for under-25-year-olds. I am not saying that in 1970 everything was rosy, but some things were different, including the opportunities open to young people. The choices open to me as a 16-year-old were that I could stay on at school and obtain qualifications and go on to further education, apprenticeship or go into some form of full-time employment. Although we had criticisms of the opportunities that were available to us, the one thing we had was hope for the future and the feeling that we were moving forward and that things would improve.

When I look at young people's lives in Bristol, South, today, I see despondent, disappointed and rejected young people who believe that we do not value them as individuals in our society. Indeed, the legislation put forward by this Government confirms them in such views. Young people are denied financial independence and the proposals in the Social Security Bill will force them into work without choice through low-paid youth training schemes. They have problems of homelessness, alcohol abuse, and glue sniffing. We expect young people to deal with all the problems of our society without our help and support.

If we expect young people to respect our institutions and our values, to look to the future with hope, to take up and develop our values, we should show them the respect that is due to them as young people. If we do not, if we write off generations as we are doing, if we say to young people, "We do not care; go away; you do not count; you are not entitled to anything," which is what the Government are doing, we will store up a backlash for which we will all pay dearly. We cannot expect them to have our values if we are not prepared to value them as young people. We cannot say, "You are not entitled to choose your career."

The Government have said a great deal about freedom of choice and have employed a great deal of rhetoric in persuading everyone that they have the right to choose, yet under these proposals 16 and 17-year-olds are not permitted to choose their careers. They are not allowed financial independence if they refuse to be forced into YTS.

The Government are dealing with that age group in such a way because they are seeking to force down their expectations. That is part of an overall labour market strategy, to force down all wages and make us a low-wage economy. We should take every opportunity to point that out. If one looks at the jobs that are offered and advertised on television for the under-25s, time and again one finds that the wages are YTS rates.

Under the regulations being discussed today, 7 million adults and children will depend on the new income support scheme. Hon. Members have mentioned that the proposals for benefit will not supply the basic requirements that people need to live, such as a nutritionally adequate diet. The DHSS has issued advice to its adjudication officers on expenditure on food to be expected by a claimant family —that is two adults and two children of primary school age. That amount is £28.60 a week and was set without any consideration of whether one could provide a balanced diet with that sum. That amount is provided in paragraph 4736 of the S manual of the DHSS.

Separately, the Department has decided to educate people on eating well and on nutritious diets. Through speeches and advertisements it is encouraging us to eat a healthy diet and stating why that is important. The London Food Commission calculated that the cost of the recommended healthy diet was £48.04 a week for that same family of two adults and two primary school children. Therefore, why is it that families on income support are denied the difference of £19.44 a week and are denied the opportunity to have a balanced diet? If one calculates what a family could buy with that money, the result is a diet that would be deficient in calories, with too much protein, low on fibre, high on fats and short on iron and calcium for children.

Why is it that healthy diets do not apply to people on income support? Why is it that the Government have two separate levels? Would it not have been a good idea if the two sections of the Department that proposed those matters had spoken to each other before they set the level of benefit for claimants? School meals were mentioned. In Avon, the county in which I have my constituency, parents have to pay 80p per day per child for a school meal. Those parents who will be taken out of the free school meal service will not only devastate the service and the people who work in it, mainly women; it will also mean that parents simply will not be able to pay that level of contribution.

Of the other items that one is expected to buy from income support, similar research by researchers Bradshaw and Morgan has been carried out on what families spend on clothing. The survey came out with absurd results of what people are entitled to buy. A woman will be able to afford a coat once every five years, a pair of shoes once every one and a half years and various items of underwear, one at a time, approximately every two and a half years. Perhaps some hon. Members make their clothes last that long, but it is a fact of life that the standard of clothing today is such that it simply does not last. The Government are saying to people that they are not entitled to eat properly or to dress in clothes that are adequate, because they are being used as pawns so that the Government can force down the wages of those in work.

In Bristol, South, because we are no longer the industrial constituency that we were, as a direct result of the Government's economic policies, many people claim supplementary benefit. The Bristol, South DHSS office is the second largest in our region. People in Bristol, South, whether or not the Government are making the system less complicated, understand clearly that the regulations will create a two-tier system, under which people will be forced back into low-paid jobs because the Government are too mean to give them the rights to which they are entitled. When young people look back on how they were treated, I hope that they will reflect that there were some hon. Members who said that they did not want them thrown on the rubbish tip, who did not believe that they were not valued in our society, who believed that they had a contribution to make and who treated them with respect. It is not the Government who will be remembered for doing that.

7.19 pm
Mr. Robin Squire (Hornchurch)

It is a genuine pleasure to follow the hon. Member for Bristol, South (Ms. Primarolo) at the conclusion of her maiden speech. She represents one of the few Labour constituencies in the south, south-west or south-east of the country outside London, so the strain on her might be argued to be rather heavier than on other hon. Members. She delivered a fluent, assured, spirited and questioning speech which was of great credit to her and which I am sure will be held in great esteem by the House. It was a controversial speech but none the worse for that. No doubt she will find that when she rises to her feet and makes similar contributions she might have a slightly more animated response from Conservative Members. However, I am sure that she will be able to cope with that.

One small but important quibble I have with the hon. Member's speech is that I would like to endorse, in stronger terms than she perhaps felt she could, her comments about her predecessor. Michael Cocks was well respected on both sides of the House as a man of considerable achievement. I put it on record that I thought he was an admirable parliamentarian.

I wish to concentrate on the uprating order and child benefit, and during my speech I shall quote from a couple of letters that I received only today from constituents. I welcome not only the way that my hon. Friend the Minister moved the orders but the uprating of the pension fully in line with our election pledge, which I am sure is welcomed by many of the elderly in my constituency. That uprating was regardless of the wealth of the pensioner.

I strongly regret, I know in company with many Conservatives both in the House and outside, the decision by the Government not to uprate child benefit this year. That loss of 30p a week may seem small to some people, but to poorer families and even some not-so-poor families it represents a sizeable sum. When it is, as an alternative, to be put into a means-tested benefit, it can only result in an increase of those in the poverty trap. We are told that 10,000 extra families will be dragged into the poverty trap. Those people will lose 70p for every £1 of net extra income they receive.

However others may interpret our election manifesto, I was quite clear as to what it meant and in this area not only was I in full support of what the Government were doing, but thought that it was fully in line with what we had been saying and carrying out during our years of government since 1979. Along with several other hon. Members, I received today a petition organised by the Save the Child Benefit Campaign, on which were some 40,000 signatures collected in a short time. I have no doubt that, had the organisers wished to extend the time of the campaign, they could have gathered many more signatures from all constituencies. Their concerns on child benefit are shared by hon. Members in all parties.

One letter I received today from a constituent was about child benefit. It states: I am writing to protest about the proposed freezing and ultimately abolition of the family allowance". I hope that will not happen. The letter continues: The family allowance was adjusted, supposedly, to take the place of tax allowances for children and to put some money straight into the hands of the mothers of children instead. The amount of money involved, especially in the case of these people who have two or three children is not small either, and is a necessary part of a family's income, even when one of the parents is employed. I know that in our family, even with my husband in a good job, the family allowance is essential for paying the bills and is not frittered away on luxuries. Those are not my words but those of a constituent. She is right.

Had we not made the change from the tax allowance, as my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) has pointed out, there can be little doubt that the child allowance would have been increased. We can only guess at the sum, but since the single man's allowance has been increased by 14 per cent. in real terms since 1975 and the married man's allowance by 17 per cent., we can make a reasonable guess that the child allowance would have been increased by about 15 per cent. That compares with a decrease in real terms.

Perhaps we are at a stage when tax allowances are good and benefits are bad. If so, I urge my hon. Friend the Minister to redouble any efforts he is making and to consider reintroducing the tax allowance. However we tackle it, we must find ways of reaching out to people who will lose because of this decision.

I was pleased the other day to hear that the Government hope that the take-up of family credit will be 70 per cent. We all share that hope, particularly against the background of the family income supplement having a take-up of 50 per cent. Only last year the Government expressed the expectation that it would have a 60 per cent. take-up. So even before the benefit has come in, we are on an upward path. Let us hope that the reality meets the Government's expectation.

Whichever figure we take—I will stick to 60 per cent. —it is inescapable that a significant proportion of the poorest families will not benefit from the extra money which the Government are properly putting into family credit, because they will not take the benefit. That is the nub of the concern which I share with a number of my hon. Friends.

We rightly talk much about encouraging people to improve themselves, to gain work where they are unemployed or to get better paid work when they are poorly paid, but they need a platform on which to build. It must not be assumed that we wish to have a society in which every benefit is means-tested. That would be a bad society. I am backed in that view by a very good article a short time ago in The Times by Hermione Parker, who said: If you look at the arguments in favour of freezing out child benefits or pensions, you find they rest entirely on the immediate advantages of public expenditure savings, without regard for the effects on self-reliance, self-esteem and family life. Already a disproportionate number of families with children are forced to depend on means-tested benefits. Without child benefit still more families would be taxed into poverty during the vitally important years of child-rearing. We would be moving towards the American system where there is no child benefit and where over-reliance on means-tested welfare has produced a massive ever-increasing underclass. To allow the US experience to be repeated in Britain would be unmitigated folly. I have suggested in the past, as my hon. Friend the Minister knows, that we examine ways of reform. If we do not revert to tax allowances, perhaps we should consider taxing the 5 per cent. of taxpayers who pay at the higher rate. It is only two years since the Government's Green Paper appeared, so we know that the arguments for taxing at the standard rate are not good. The Government rightly dismissed the proposal only two years ago because of the extra administration, among other reasons, and also because it would represent a massive switch of resources from those with children to those without.

I urge some of my hon. Friends not to get too hung up on the elimination of all benefits. There are many more obvious targets—company cars and mortgage interest spring immediately to mind—which go much more than child benefit to the better-off.

Last year even The Economist—scarcely an organ of other than rectitude in spending—pointed out in its conclusion to an article on the whole question of benefits and taxation: There is only one way to raise take-up and reduce … marginal rates : give the same benefit to everybody. The snag is that some of the cash goes to those who do not 'need' it. True: but three-quarters of families with children have a household-income-per-head that is below average. Hon. Members who still wish to see child benefit phased out have to take that into account and have to find a way, which I certainly would applaud, of increasing the take-up of any means-tested benefit until it is at or near 100 per cent.

Another area of child benefit which concerns me is the role it plays in many families as an assistance to the woman in the household; sometimes, indeed, it is her only income. Again today—it must be my lucky day—I received a letter from a constituent on this point. She wrote: This is not a heart-wrenching letter of woe or dire poverty, but a letter from an ordinary constituent, who is also the mother of children under five, asking you not to phase out, means test or tax child benefit. I do not desperately need the money to feed my starving children. I need it for my own sense of pride. It is the only money I can call my own to spend as I want, without prior consultation to my 'bread-winning' husband. The only money I do not have to ask for. Example: 'Pete, the children need new shoes and I need some tampons. Can I have some extra money?' Answer: 'Do they need new shoes again already and I thought you bought some tampons last month.' This is why I want my child benefit (which, incidentally, I think I more than earn). The only alternative is returning to work, If I can find a child-minder and if I can find a job. Anyway, I thought your party wanted to preserve family life. That constituent, who apparently does not support me, writes in tones that I can endorse and with which I think many of my hon. Friends will find sympathy.

Those of us who support child benefit do not regard ourselves as stuck in the past, to quote what my right hon. Friend the Secretary of State said recently. We regard ourselves as willing to embrace new ideas but those ideas must not and cannot be at the expense of some of the poorest in society. For those reasons, sadly I say to my hon. Friend that I shall be unable to support the instruments.

7.32 pm
Mr. Ronnie Fearn (Southport)

I congratulate the hon. Member for Bristol, South (Ms. Primarolo) who gave us a clear understanding of the problems of young people in her constituency. I am sure that we shall hear much more from the hon. Lady. She will be an asset to the House.

By far the most disappointing feature of the uprating order is the decision not to increase child benefit. Many hon. Members have already spoken about that decision, but I should like to emphasise the point. Child benefit is currently £7.25. I am perplexed by the attitude of the Secretary of State, who has made it abundantly clear in speeches and interviews that he wishes to encourage individual independence. The decision not to increase child benefit will have exactly the opposite effect. It undermines the future of child benefit and I believe that it represents a move towards the Secretary of State's preference for means-tested benefits.

The freeze will mean a loss of 30p or 4 per cent. in real terms. To keep up with inflation, the benefit would need to be increased to £7.55. To make up the 35p cut in November 1985, it would need to be increased to £7.90. The latest cut seems to be the death knell for child benefit. The Government fail to understand that child benefit is an aid to self-reliance because it acts as a base on which families can build. The freeze will draw an extra 10,000 families into dependence on means-tested benefits.

When the Secretary of State announced the shameful decision to peg child benefit at £7.25, he attempted to justify his decision by increasing the funds available for family credit and income support, but families on family credit will not receive extra resources and they will be no better off than if he had decided to increase child benefit in line with inflation. Those on income support will also be compensated for the freeze in child benefit, but, worryingly, in two-parent families this will probably mean a transfer from the mother to the father. One of the best features of child benefit is that it is payable to the caring parent, usually the mother, thus ensuring that the children are really helped by child benefit. Widespread research has shown that problems can arise and that children may not receive the money if the benefit is not paid to the mother.

I am also greatly concerned that the transfer of resources to means-tested benefits will significantly reduce the take-up rate. Another of the good arguments in favour of the retention of child benefit is that it has a remarkable take-up rate of 100 per cent. By contrast, two out of live eligible families will not claim family credit, according to Government figures, and take-up for income support will also be much lower.

I urge the Minister to recognise the merits of child benefit, especially its ability to provide stability despite the fluctuating circumstances of the family's income, and the protection that it provides to children by providing a measure of independent finance for mothers. If the Minister persists in his attempts to move towards means testing, or if he really is contemplating the eventual abolition of child benefit, he will make families more dependent on state benefits, rather than achieving his avowed aim to encourage self-reliance.

My next point deals with the income support flat-rate premium set out in regulations 17 and 18 of part II. The greatest worry to me in the income support scheme is the flat-rate premium system. This will adversely affect thousands of people with disabilities, who will receive less money from income support than they do under the present supplementary benefit scheme. I am not satisfied that the disability premiums will be adequate replacements for the long-term rate of supplementary benefit and the loss of weekly additions.

The main problem with the flat-rate system is that it is geared to the needs of bureaucrats and the convenience of their computers, not to the daily needs of people living with a disability. Will the Minister accept that life is not as neatly ordered in the real world as it is in Whitehall? The real world is filled with individuals with different needs and problems. That is nowhere more true than with disabled people and their difficulties. These various difficulties, whether of a medical nature or concerning their personal circumstances, cannot be accommodated by a flat-rate system. It simply means that some people will inevitably lose and will face great hardship and misery as a result.

The change to income support will mean a loss of between £5 and £50 for thousands of people with disabilities and it will hit the severely disabled worst of all. The restrictive nature of the severe disability premium will cause great difficulties. Many carers will not claim attendance allowance because that would make the disabled person ineligible for the severe disability premium.

There is a suggestion in the Social Security Bill that, if anyone over the age of 18 stays at the house, the severe disability premium will not be paid. That is quite distressing. The narrow qualifying conditions for disability premiums will disqualify many thousands of people who can claim weekly additions at the moment. I ask the Minister to think again and retain a more flexible and fair system of weekly additions for people with widely differing needs.

According to Government figures, 80,000 people classified as sick and disabled claimants will be worse off as a result of the change to means-tested benefits. If disabled pensioners and disabled people who are unemployed are taken into account, that figure rises to about 500,000 people who will lose as a result of the changes in supplementary benefit. I have been told that there will be more than I million losers as a result of the Social Security Act 1986. That is sad enough, but the fact that so many thousands of those are disabled people, many severely disabled, is an outrage and presents a poor reflection on a supposedly civilised society.

Mrs. Beckett

Will the hon. Gentleman give way?

Mr. Fearn

I am just concluding my remarks.

For the reasons that I have given, we will be voting against the instruments.

7.41 pm
Mr. Jacques Arnold (Gravesham)

Like the hon. Member for Southport (Mr. Fearn), I first became a Member of the House in June. In common with other hon. Members, I have found that one of the greatest difficulties arises in addressing cases in my surgery, and especially cases involving social security matters. I have come across the very complex regulations and the 16,000 numbered clauses that apply to supplementary benefit. I find it very difficult to understand the regulations and so decide whether the constituent concerned has been treated fairly and in accordance with them. If I could not discover whether my constituent was being treated fairly, what hope had my constituent? Invariably, those constituents are in some difficulties and are not necessarily familiar with so many volumes of regulations and the thousands of clauses.

In the Government's proposals tonight, I am attracted by the opportunity for simplification of the way in which we handle the social security system. I particularly commend the proposals for family credit and its sister benefit, income support. Both those benefits provide a far more comprehensive system of support for those in need in the community. I have examined the various projections and note that the benefits would be at the disposal of no fewer than 470,000 families, which is double the number of families covered under our present system of family income support. That will gather into the net more of those in need on the margins than we provide for at present.

The new system will allow us, in addition, to concentrate resources on those most in need. Now that the figures are coming before the House, it appears that the Government intend to include an additional £200 million in the operation of the two benefits to which I have referred. That is money over and above the amount that would have been put in had we simply uprated the present supplementary benefit system next year. Any change to a major new system of social security benefits obviously brings gainers and losers. I have been encouraged by the fact that the Government have made detailed provisions for the protection of those who would not be entitled to as much benefit under the new system as they are entitled to at present. Some £200 million will be earmarked for that specific purpose to ensure that those people are not adversely affected.

It is significant that, according to the proposals, more than two thirds of those currently on social security benefit will gain or not be adversely affected by the new system of benefit. Indeed, it is far more interesting to note that one fifth of those on benefit—880,000 people—would gain at least an extra £3. That is a very significant funnelling of support for those most in need. It is also significant to note that one tenth of those families benefiting from social security—430,000 people—whom we could quite rightly describe as the most needy, would gain in excess of £5 a week per family from the Government's reform. That is significant. If we are a nation with a conscience, we should concentrate more resources on those most in need.

Many hon. Members have expressed concern tonight over the non-uprating of child benefit. I must admit that when I heard that child benefit was not to be uprated I regretted that greatly. I assure the House that my wife regretted it even more than I. However, I hope that other hon. Members will ask themselves the question that I asked myself, "Should we as hon. Members, and as well paid people, indiscriminately benefit from uprating, regardless of our income and need?" I have a sneaking suspicion that my family and other better-off families should not necessarily benefit from the resources available to those in need.

Mrs. Beckett

I hope that the hon. Gentleman recognises, in view of his remarks about child benefit, that although he refers to families "indiscriminately benefiting" from the award of child benefit, if instead of child benefit the money is put into tax allowances in relationship to children or in other areas, people like the hon. Gentleman would do a great deal better out of that than out of child benefit? It seems to me that the hon. Gentleman is crying crocodile tears.

Mr. Arnold

That intervention presupposes, if not giving an increase is deemed to be saving, that the resources thus saved are being ploughed back to those least in need. One can go into semantic arguments about the Budget and tax treatment, but when we consider the social security budget now and next year—the subject of this debate—it is significant to see where the increases are to be applied.

I do not see why well-off families should indiscriminately receive the same increase in the same benefit as those families that are most in need. Every hon. Member knows of needy families in their constituency. If the increase was to benefit those most in need, perhaps it would be justified. However, the families most in need which already receive income-related benefit would not benefit from an uprating of child benefit. They would lose pound for pound on their income-related benefits for the increase in child benefit. With the proposal not to uprate, we are not giving an indiscriminate increase to those in society who are better off, and we are not failing to give an increase to those who are at the bottom of the pile and rely on income-related benefit. Bearing in mind the assumption that the so-called saving will be ploughed back to the rich through the tax allowance, it is significant that the hon. Member for Derby, South (Mrs. Beckett) did not take account of the fact that the concentration of benefit on those most in need in the next financial year is proposed to be £300 million. Against that, we should offset only £120 million for the amount that would have been spent on paying the uprating of child benefit. Not only is the saving going directly to families most in need, but the Government are applying additional resources. That is significant.

When the country, in all conscience, provides resources for families in need and adversity, it is vital to concentrate such resources on those most in need rather than carry out the impossible task of spreading money over the entire community, in the desperate hope that money will somehow find its way through to the needy. It is far more relevant to try to find humane and effective ways of getting benefit to families most in need.

7.51 pm
Mr. Jim Cousins (Newcastle upon Tyne, Central)

Thank you, Mr. Deputy Speaker, for allowing me to speak tonight as the new Member for Newcastle upon Tyne, Central. Despite its difficulties, my constituency is well-kept, lively and diverse. Its tradition of inventiveness and skill is equally diverse. Our turbines and one or two beverages are famous. It is not generally known that my constituency gave Andrews liver salts and Lucozade to Britain. I have to report that the Lucozade factory was recently closed down. My constituency still retains a presence in many important aspects of research and enterprise.

The main problem that my constituency faces is under employment. Those who are in work and those who are out of work are well qualified but are not performing at the level of their potential and capacity because there are no plans to realise it. Therefore, the assumption that those on benefits are part of a benefit culture, as the Minister expressed it last week — a sort of lost tribe of the feckless, the incompetent, the dependent and the incorrigible—is deeply objectionable. How can I explain to a highly qualified researcher in my constituency, who, after years of benefit, gets three hours of work a week in a lab and loses all her benefits under the full extent normal rule, that the present Government believe in incentives and the work ethic?

Many of those on income-related benefits do not claim the benefits to which they are entitled. Only recently, the Minister revealed that there are 4 million new supplementary benefit claimants each year. The total number of those on income-related benefits is only 8.5 million. The matter could not be clearer. Claimants are reluctant to claim. They stop claiming as soon as they can.

I am sure that many hon. Members will want to join me in wishing my predecessor, Piers Merchant, well in his new post as director of publicity for Northern Engineering Industries, one of our great Tyneside firms which, according to the statements made last week by the Secretary of State for Energy, is a sunrise industry—or so we hope. At almost exactly this time last year, my predecessor was engaged in his famous experiment of spending a week on the dole. He served his party loyally, faithfully and well on the Standing Committee which examined the Social Security Bill 1986. When his week was over, he said—all honour to him for saying it—that the key parts of the Bill and the present benefits system were a matter of regret to him.

His conclusions closely bear upon the regulations. He wanted the ill-named long-term rate of supplementary benefit—£12 a week more than the basic rate—to be a true long-term rate. That rate has always been denied to the able-bodied in that wonderful spirit of medieval poor law that is the true ancestor of the regulations. He did not want it to be confined to those who could he regarded as vagabonds. After only a week, Piers saw that extra resources were needed to restore the morale and motivation of the long-term unemployed and that the extra cash would not destroy their work ethic but preserve it.

Regulations 10 and 22 spell out all too clearly the Government's distrust of those on benefit — a distrust which finds expression in high marginal rates of taxation by benefit withdrawal, which have steadily increased during the life of the Government. Such high marginal rates of tax on the least well off are neither fair nor efficient in terms of the workings of the labour market. A Government who pride themselves on deregulation should surely be prepared to deregulate the least well-off. Cuts in single payments will mean more dependence on hostel accommodation and board and lodging, even in the face of the cuts in benefit to the under-25s, yet the possession of a permanent home is a key step to anchoring all of us in the community and restoring us to full membership in it.

Perhaps I should have said, a warm home. The regulations end all the heating additions on which many people, particularly those in the north, depend. My constituency benefits from one of the most sustained local authority heating improvement programmes in Britain. The regulations, on top of the cuts in heating additions of 1985, will make sure that many new radiators will stay switched off.

Piers wanted also to raise the earnings disregards from their present low levels. It is true that the regulations raise the disregards from £4 to £5 a week. That is the first increase for over 10 years. A special disregard of £15 is being introduced, but it is limited to those whom the Government are willing to spare the worse effects of their prejudices—the over-60s who have been on benefit for more than two years, the disabled, and the wonderful collection of special individuals: part-time firemen, auxiliary coastguards, persons engaged part-time in the manning or launching of a lifeboat and a member of any Territorial Army or reserve force. In the interests of simplicity, work incentives and labour market flexibility, why could not the disregards be extended to all?

After one week, Piers Merchant realised that the black economy might be the last refuge of enterprise and motivation for the long-term unemployed. The regulations end the disregard for child care costs, on which the incentive to work of so many low-income women depends.

The Government have already admitted that the projected cuts will introduce a marginal tax rate of 85 to 89 per cent.—94 to 96 per cent. if national insurance contributions are included. That is how the Government seek to imprison people who are on benefit and punish people who have a few savings, a small work pension or a small income. Will somebody tell me where the 20.8 per cent. net return on capital that is implied in the tariff income schedule of the regulations will be obtained?

Since October 1986, 4 million people have signed on for unemployment benefit and 4.3 million people have signed off. There could not be greater proof that, even where unemployment is highest and of the longest duration, the will to work and some kind of grey labour market is still functioning. Even if it means losing the transitional protection from these regulations, thousands of my constituents will take up short-term employment and, as a consequence, lose their protection. Their lost benefits will swell the coffers for tax cuts for the most wealthy. The Government accord the wealthy incentives that they destroy for the least well off. Without this transitional protection, the structure of benefits makes 43 per cent. of present claimants worse off, according to Government figures, and that includes 700,000 families with children.

These regulations attack the incentives to work and basic neighbourly comforts and principles; they punish savers, deny the respectability of those on benefit and subject their pride and endurance to ever harsher tests.

Conservative Members are concerned about the future of Latin. They will know that radicals go to the root. The Tory radicalism implied in these regulations is tearing up the roots on which British Conservatism depends. As good Socialists, we shall vote against these regulations, but I hope that wise Conservatives who have an eye to the future will join us in destroying them.

8.2 pm

Mr. Tim Boswell (Daventry)

It is a pleasure to follow the maiden speech of the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), for a number of personal reasons. First, it seems only a short time since I made my maiden speech; secondly, I have considerable affection for Newcastle; and, thirdly, he paid such a generous and extended tribute to his predecessor, Piers Merchant. It is some index of my newness in the House that I do not remember Piers, but the hon. Gentleman could not have quoted him or brought him to our attention more clearly. The hon. Gentleman made a model speech; it was clear, elegant and not without controversy. He was trenchant and put his points in a manner that we enjoyed. We shall look forward to hearing from him in the future.

Although she is absent, I congratulate the hon. Member for Bristol, South (Ms. Primarolo) on her maiden speech. She also was clear and we look forward to her presence on the Social Security Bill in Committee as well as in the Chamber.

In the short time that I have been here I have spoken once on social security regulations. It was seasonally inapposite, because we were discussing the Christmas bonus in the middle of July. I hope to return to that subject in the future, but on that occasion I made some remarks about the principles of uprating.

I shall begin by discussing the issues on the uprating order and then make one or two more specific, targeted points about particular aspects of the regulations.

Uprating is bound to be our main concern, because it is our most expensive. This represents a straightforward, proper and adequately foreshadowed benefit increase, unlike the measure of tergiversation of system that afflicted Opposition Members when they were in government, as to whether to estimate in advance or rectify in arrears. In both cases they fell behind.

There have been two significant changes in our approach to social security upratings and overall upratings in particular. For many years—probably since 1909 and Lloyd George—we have been dominated by the Lloyd George model of retirement provision. We have considered matters in terms of a state-provided basic pension, without considering the overall income position of retired people. The position has changed with the growth of the occupational or state earnings-related pension. These additional elements now amount, on average, to about half the total provision for pensioners and have almost caught up with the basic retirement pension. In a year or two, they will cross over, which is why the real increase in pensioners' incomes of 2 per cent. per year has been greater than that of the population at large, although both have been significant.

When that happens, we will have to acknowledge that it leaves a problem for those who are dependent on the basic retirement pension. We all met such people during the election campaign, and we hear from them now. By definition, they tend to be older pensioners who have retired for a longer period. I hope that, in the long term, Ministers will consider uplifting pensions with that target category in mind. Perhaps we could consider an increase in pensions at the age of 75, when the chances of part-time work are reduced but when costs are increasing and mobility diminishing. Perhaps we could consider clawing that back on a tapered basis against occupational pensions.

The second general matter is the inexorable onward march of demographic factors. I received a helpful written answer from the Minister this week. I asked him about the number of pensions in payment and their average amount ; the figures were rather striking. I asked the Minister to take the period 1979–80 and estimate its comparison with 1988–89 on the uprated basis. In the earlier period, among men, there were 3.04 million retirement pensioners receiving an average of £21.13 a week. There are now some 200,000 more—3.22 million—receiving £40.80 a week. Among women—these figures are not invidious but remarkable—the number of pensions in payment have increased from 5.47 million at an average of £19.94 a week to 6.12 million at an average of £38.40 a week. There has been a substantial increase in the number of retirement pensions. That partly accounts for the Government's problem of not being able to uprate more than to keep pace with inflation.

I shall put the figures on a weekly basis, because that brings out their salience for individuals and for the Government. The weekly cost has gone up from £179 million by 104 per cent., so that retirement pensions now cost £366 million a week. In 1979–80, the average payment was £21.01. A further 825,000 people now receive a pension, and the average payment is £39.22. If those people, God bless them, had not appeared on the scene and the money had been redistributed to the number of people receiving pensions in 1979–80, we would now be in a position to pay a basic retirement pension averaging out at £43–02 a week—which would put pensioners nearly £4 a week ahead in real terms.

Let me put those figures in global terms and annualise them. The cost of the completely unacknowledged, unvoted and inevitable increase in the number of pensioners has been approximately £1.7 billion a year in additional pension provision. That is why it is difficult for any Government to promise large increases in the overall retirement pension.

I come now to the more detailed points that I wish to raise—

Mr. Tom Clarke (Monklands, West)

The figures that the hon. Gentleman provided from the Minister's letter were extremely interesting. To give the House the complete picture, can the hon. Gentleman tell us the contributions that those pensioners made? After all, he is talking about a contributory pension scheme.

Mr. Boswell

That is a relevant factor because, as we all know, we pay as we go and have done since Lloyd George the general issue is that, for a number of reasons— including reasons to which Opposition Members have drawn attention, although they may be less ready to do so today—the number of contributors at any one time has not increased. We are paying more, on a more or less static base. If the hon. Gentleman wishes to pursue the matter, the figures are in the written answer, to which he may wish to refer.

Let me again put down a marker regarding haemophiliacs infected with the AIDS virus. One of the requests of the Haemophilia Society is that there should be a measure of weekly payments to such people. As the House knows, my hon. Friend the Member for Staffordshire, South (Mr. Cormack) has a prominent interest in the matter. With a number of supporters from all parties he has tabled a early-day motion as part of the pressure on the Government, to which there are now signs of a helpful response. I know from experience the arguments that officials will advance about the dangers of setting a precedent. I am certainly prepared to concede to the Government the principle that the settlement must take place but should be ring-fenced so that it does not create a precedent.

I note that the regulations provide for a proper regime of deductions direct from benefits in cases of debt—for example, to electricity boards, or electricity companies as they may well be in the future. I welcome that, while making the point that it is generally better to pay people their entitlements and get them to settle their obligations. We have a problem with my very go-ahead local electricity board the East Midlands electricity board, which will supply card meters so that people can work out their budgets for themselves. Unfortunately, one of my district councils will not have the meters installed in its houses because it is frightened that if they are not recharged with a prepaid card the gas central heating system will be interfered with. The provision is a second best, but the Government are right to make it.

I have two points that have a bearing on various kinds of disability. I understand that there can be a substantial administrative delay in paying invalidity care allowance, which has a knock-on effect on social security. One of my constituents retired in August and his pension entitlement in respect of his wife was reduced because his wife had received an invalidity care allowance for a few weeks in February. For some reason, those payments were still in the computer and the local office had to make a temporary adjustment, but the matter has still not been put on a formal basis.

Finally, I refer to the problem of a constituent of mine in relation to benefit payable to people in nursing homes. The House will bear with me if I do not cite the details, for reasons that will become apparent. My constituent has, and had before retirement, spinal arthritis, and is effectively completely immobilised. She went into a home in my constituency in January. The DHSS was paying her the full uplifted benefit of £230 a week. Her son-in-law and family wished to move elsewhere. It was discovered., I think, in anticipation of that fact, that she should have been paid the lower rate of £175. There was no question of the local office—with which I have had no difficulty —reducing her benefits to the lower rate retrospectively, but the office properly said that it could not pay out benefit at an incorrect rate and wished to make the adjustment with immediate effect.

The lady was extremely ill and that would have meant moving her to another home and moving her again when her family moved elsewhere. The alternative was that the family be saddled with a debt of £55 a week. I am afraid that the problem was overcome by the expedient—if that is the right word—of recertifying her as terminally ill, which is why I did not wish to give her name. It would help if, without setting a precedent, such cases could be dealt with with some administrative flexibility in local offices, to avoid automatic deductions.

Social security is now a gigantic business. One third of our total budget is committed to it. The onward march of demography makes it inevitable that there will be an onward march of cost. We cannot find resources for additional measures such as those to which I have referred, without at least considering the possibility of making changes elsewhere, which may reduce expenditure in certain respects. If that is done because the needs have changed, I welcome it, and I welcome in particular the Government's readiness to grasp some of the nettles and make some necessary changes.

8.17 pm
Rev. Martin Smyth (Belfast, South)

I apologise to the House for not having heard the opening speeches, so I cannot really comment on them. No doubt the hon. Member for Daventry (Mr. Boswell) received a helpful reply from the Minister.

While I was preparing for the debate I sought some information from the Secretary of State for Northern Ireland. I asked whether I could have a table relating to Northern Ireland such as has been supplied in respect of Britain. I received the unhelpful answer, "We don't have those figures in that form. We shall be applying the scheme in Northern Ireland in the same way as in England arid Wales but with a little bit more emphasis on the family." That seems rather absurd, as I understand that social services are applied equally throughout the kingdom.

I recognise the last point made by the hon. Member for Daventry. It does not seem to be an isolated use of the practice of classifying people as terminally ill. That highlights one of the problems of our social security scheme. I know of a nursing home that had to increase its tariffs. The DHSS was not in a position to pay the higher rate until a kindly local doctor certified the resident concerned as terminally ill. I submit that we are all entitled to receive such a diagnosis because we are all under a sentence of death. That highlights a problem of equality and the proper use of funds in social service provisions.

I congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on his maiden speech. H e shared with us some insights into his constituency. I have to admit that I would have preferred to see some of the other bottled stuff go to the wall rather than Lucozade. The hon. Gentleman's tribute to his predecessor was well made. I do not know whether I would be right in hoping that he might receive the same sort of promotion as his predecessor. I should like to think that the hon. Gentleman's argument on behalf of his constituents and the people who need social security will not merit the same fate at the polls as Piers Merchant received.

I see two particular problems. First, an increase of funding for social security has been mentioned and I understand that there seems to have been a fair bit of clawback in the past because funds have not been used. When we make apparent provision, are we really making sure that those who require it and ought to have it are receiving it? Secondly, how is it that so many of us in the House, especially Conservative Members, seem to be persuaded that we are benefiting the most needy in our society, when those who labour in voluntary societies and care groups tell us that it is at that level of provision that the most needy will be suffering?

During the Secretary of State's statement on the changes I asked him whether he thought it wrong that in April 1988 people would be worse off than they are now if they seek to make provision for the needy. He responded with a reference to the upgrading of the provision which a person is entitled to receive before becoming ineligible for supplementary benefit. However, I was dealing with a problem that I am convinced all hon. Members have had to face in the past and, I suspect, will have to face in the future. With the upgrading of the pension, some people will be brought out of the range of housing benefit and other assistance. Therefore, in April 1988 they will be worse off than they are now, but the Government have said that there has been an increase in inflation. Sooner or later we have to grapple with the problem of how we can provide for those in genuine need without penalising others and making them less well off.

It is nice in the Chamber when we talk about the provisions we make and argue that we do not need child benefit and so on. However, in the world outside, there are many who do need that. I hope that before long, as the scheme comes into operation, we will bend our minds in an effort to provide aid for those who need it and not clawback or make provision on the cheap.

Reference has been made to the clawback provision for invalid care allowance. A woman who provides support in the home is entitled to invalid care allowance. However, if her husband claims for invalid care allowance she will not receive it. Therein lies a failure of the past that should be rectified in the future. It is desperate that an enlightened society should say glibly that it is doing its best to help the needy in society. The best is not good enough. We ought to do better. When we are seeking to remove funds from some sections to help others I suspect that we face the condemnation of the Master himself who said: These ought ye to have done, and not to leave the other undone. I plead that we care for the needy.

8.25 pm
Sir George Young (Ealing, Acton)

I should like to underline the comments made by the hon. Member for Belfast, South (Rev. M. Smyth), who congratulated the two maiden speakers. The hon. Members for Newcastle upon Tyne, Central (Mr. Cousins) and for Bristol, South (Ms. Primarolo) both spoke with a confidence and composure that few of us can recall displaying when we made our maiden speeches in the House, whenever that was. I look forward to hearing from them both in the near future.

I endorse what was said by my hon. Friend the Member for Daventry (Mr. Boswell) about the state retirement pension. My hon. Friend the Minister made the point well that, as occupational pension schemes bite, as more people are able to make provision during their working lives for their retirement, and as the value of savings increases, so fewer pensioners are totally dependent on the state retirement pension. Perhaps I was just unlucky during the recent election campaign, but all the pensioners on whom I called happened to be among the minority who still depend solely on the state retirement pension.

One has to remember that in 1979 we told that group that the country was going through a difficult time, that we were trying to get the economy right and that we would uprate their pensions in line with prices so that there was no deterioration in their standard of living. Happily, things are now better. They can see that the economy has improved, and I hope that at some time in the years ahead we will enable those whose only income is the state retirement pension to enjoy the living standards that the economic policies have brought about and which nearly everyone else is now enjoying, but which they cannot enjoy because they are too old to return to work. The scheme floated by my hon. Friend the Member for Daventry is worth exploring, because that section of our community is in danger of being bypassed by the economic prosperty that is beginning to flow over the rest of us.

I should like to concentrate my remarks on child benefit. I underline some of the reservations of at least two of my hon. Friends. The Minister made the best possible defence of the Government's decision to freeze child benefit, but it was incomplete, because, inevitably, he looked at it through the eyes of a Minister responsible for social security who has a large number of claims on his budget and is under pressure to keep public expenditure down. Therefore, he is obliged to try to "target" his budget as effectively as possible. It is wrong to look at child benefit solely through the eyes of such a Minister.

One has to look at the origin of child benefit, because it is not just a social security benefit. It was a child tax allowance. I was one of the two Front-Bench spokesmen for the Conservative party when the child benefit was introduced. In fact, it was the first leg of a tax credit scheme devised by the outgoing Conservative Administration in 1974. Certainly it was never in the minds of those who spoke for the Conservative party in 1976 that the new child benefit would be viewed narrowly, as it is apparently being viewed now as a social security measure, totally disowning its ancestry as a tax allowance.

The political litmus paper turns one colour if we say that the money is really a child tax allowance, and another if we call it part of public expenditure. We have become slightly confused by the fact that child benefit is lumped with social security. Its treatment is dealt with during the autumn public expenditure round instead of, as would have happened if it were treated as a tax allowance, in the more expansive mood that seems to come over the Government during the spring when they draw up their Budget proposals.

If we look at child benefit, we see both its tax parentage —it is tax-free and universal—and its social security parentage—it is a cash payment paid by the order book through the post office. My hon. Friend the Minister was right when he said that if it is a social security benefit it should be targeted. However, that prompts the question whether it was ever right for it to be a child tax allowance. I am very much of the view that it was.

It is a basic principle of taxation that no individual should begin to pay tax until he has managed to discharge his basic obligations to house, clothe and feed himself. Hence we have the personal allowance of about £2,500, below which no one should pay tax. When a person marries and his wife does not work he receives the married person's allowance, which recognises the additional obligations that he incurs if he has a wife to support. Child tax allowance was a wholly logical extension of that principle, recognising that a taxpayer with children had responsibilities and obligations, and that his ability to pay tax was less than that of another taxpayer with no such responsibilities. That important principle was maintained when we introduced child benefit — a principle of horizontal equity between taxpayers with children and those without. Now it is in danger of being eroded by the decision to freeze child benefit.

I understand that that was a pragmatic decision, in the rather narrow context of how we should spend the resources available within the social security system. However, there is no logic behind it. If we say that it is a child tax allowance, it should be uprated in line with the personal allowance or the married man's allowance. If, on the other hand, we consider it a social security benefit, we should target it and progressively phase it out. The party seems to be marking time while it decides on the future of child benefit.

While the money at stake this year may seem relatively small — 30p a week — there is an important principle behind it. Many Conservative Members share my anxieties. I hope that that principle of trying to secure equity between taxpayers with children and those without will not he entirely abandoned, because I fear that that would lead to inequity in our society.

I leave those thoughts with my hon. Friend the Minister, who, I know, fights his corner as hard as he can. Many of my remarks are addressed to the Treasury rather than to my hon. Friend. Nevertheless, as well as that 30p, an important principle is at stake.

8.32 pm
Mrs. Alice Mahon (Halifax)

Let me begin by congratulating my hon. Friends the Members for Newcastle upon Tyne, Central (Mr. Cousins) and for Bristol, South (Ms. Primarolo) on their excellent maiden speeches. I was particularly impressed with their defence of people who will really need champions when the regulations come into force.

I listened carefully to the Minister when he talked about significant changes, which he said were necessary. I wish to challenge that: I think that they represent one of the most vicious attacks on the welfare state and the benefit system that we have witnessed since the war. There has been a steady erosion of benefits, coupled with growing unemployment and more people falling into poverty. For a time, there was a kind of consensus; now it has been broken. The Green Paper that led to what we are discussing tonight heralded the change. It warned us of the return to pre-war conditions.

My hon. Friend the Member for Livingston (Mr. Cook) highlighted a point on which I interrupted the Minister: the complicated nature of benefits. My hon. Friend observed that there were five different claims according to age. Yet, when I asked the Minister about the social fund, he said that it would be easier and simpler. I have been talking to social workers who are horrified at the proposed changes. They say, along with most of the groups representing benefit claimants — the Minister has not convinced me that they are wrong and he is right—that, although the present system is not perfect and is certainly far too complicated, it is at least possible to look up one's entitlement in regulation. That will not be possible with the social fund. Benefit will then be discretionary, and we shall become involved in definitions of the deserving and the undeserving poor. Let me give some examples.

I keep asking myself what the young have done that the present Government find so horrific. The attack on them is unbelievable. A young, unemployed single woman who moved into privately let unfurnished accommodation last summer, who was in receipt of supplementary benefit, had no savings and had previously lived with her parents, applied for a single payment for a cooker, bed and bedding. Her application was refused. Cookers, beds and bedding can still be claimed by those whom the Government consider deserving, but the young seem to be caught in the trap that the Government have set for them.

Another example brought to my attention concerns a woman confined to a wheelchair. She was a paraplegic, and she needed a new carpet. Wheelchairs wear out carpets very quickly. She was told that miscellaneous items such as curtains, floor coverings, tables and chairs must now be paid for out of the fixed £75 miscellaneous furniture grant, and that she therefore did not qualify. In 1988, when the regulations become law, we shall enter an era in which that will become more and more common.

The Minister talked about extra help for pensioners, but the reality is different. I have a note from the various groups who look after pensioners and the disabled. There is a list of seven groups: the Disablement Alliance, Mencap, the Spastics Society and other reputable voluntary organisations whose employees have devoted a lifetime to trying to improve conditions for the elderly and those with disabilities. The note says: It is clear that many disabled people who register after April 1988 will be trying to manage on less money than those in identical circumstances who are claiming before that date. This is mainly because of the abolition of the long-term supplementary benefit rate and the weekly additional requirements payments, many of which are related to ill health or disability. The next bit reminds me of what was said by my hon. Friend the Member for Livingston: Working on the expected assumption that 40 per cent. of pensioners are disabled, disability organisations calculate from the Government's own figures that at least 40 per cent. of newly disabled pensioners and at least 15 per cent. of newly disabled younger people will be worse off under the new system. The note then mentions a staggering figure: 236,000 newly disabled pensioners will lose up to £5 a week and 44 newly disabled pensioners will lose £5 a week or more. When I first read that, I thought that it could not be true, but those are the facts. That will be the result of what we are talking about tonight. That is the real world for hundreds of thousands of people who look to us in Parliament to do something for them.

The Minister talked about our sterile approach, and said that Labour Members were defending the status quo. I refute the former, but agree with the latter. The present benefit system is inadequate. Many millions of people have fallen into poverty, sometimes into dire poverty. Those who have served on local councils will have listened to the problems of many people with rent arrears. I once heard poverty described as being like standing up to one's neck in water: if a wave came, one drowned.

Anyone who hears a constituent blame his rent arrears on the need to travel to the other end of the country for a funeral will know that a rail fare can mean the difference between somebody coping and getting into debt. If Conservative Members came face to face with such cases and knew of the choices that people living on benefits have to make, they would have some understanding of their problems and would certainly join us in the Lobby tonight.

I took part in the consultation group for the Green Paper on the so-called reform of social security. Our council—a hung council—was persuaded that people should be alerted about what would be one of the most fundamental changes to the benefit system. Nobody whom we consulted thought that this so-called reform was a good idea, and, as the months and years have gone by, many more people have come to that conclusion.

Conservative Members have admonished the Minister for not uprating child benefit. It will be interesting to see whether they have cried crocodile tears or whether they will join us in the Lobby tonight. I am a great believer in people acting according to the beliefs that they have declared publicly. I may be cynical, coming from a hung council where I have had to listen to opposition parties who have always run my local council, at least for the past eight years, saying one thing in a public place and then voting the other way. It would be the height of hypocrisy if those Conservative Members who have spoken against these measures do not vote with us tonight. They have made their representations on behalf of many of their constituents who will be desperately worried because child benefit is not being uprated.

The Government's shameful treatment of young people has already been well outlined by my hon. Friend the Member for Bristol, South. The young are the precious seedcorn of Britain's future. They are the seedcorn upon which our very prosperity is based. What kind of values do we offer them, when we say that they are not even human beings in their own right but dependants? Young adults are being treated as dependants and that is shameful, as well as giving them a most undignified status.

I asked the Secretary of State for Social Services what information he had on the number of people who had died during the last year while an application for an attendance allowance was being considered or was in the process of appeal. I was told that that information was not recorded as a matter of course and could be extracted only at disproportionate cost. I suspect that that disproportionate cost has meant death to quite a few people in that queue.

On behalf of the millions of claimants in Britain, I pledge that the Labour Party will fight these proposals every inch of the way. We will fight them line by line and we will expose Conservative Members' hypocrisy every time they stand up and say that they are in favour of uprating child benefit if they do not vote with us.

8.45 pm
Mr. Stephen Day (Cheadle)

I congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on his eloquence. His sincerity was obvious. I found one part of his speech particularly interesting and I shall allude to it later.

The hon. Member for Halifax (Mrs. Mahon) is a caring individual. That was obvious from what she said. However, it is distressing to be told that the benefit system is inadequate. That allegation is always made from Opposition Benches. Whatever any Government do, it is always too little. I remind the hon. Lady that the system that the Government are trying to reform, with all its faults, is largely the system that previous Labour Governments have tolerated for years.

Mr. John Battle (Leeds, West)

Have not the recent Social Security Bill and some of the regulations now being presented been introduced precisely because the Government failed when they passed the Social Security Act 1986? Members of the other place advised the Government that if they did not amend that measure they would have to revise it again and again. Is that not the source of the present discontent?

Mr. Day

No, that is not the case. That is the hon. Gentleman's interpretation of events. I was referring to the long history of social services provision in Britain, the bulk of which, in many areas, is as it was under various Labour Governments.

The regulations and the reforms that the Government have in mind are long overdue. I hope that Opposition Members will at least be able to agree with me on that. We need a much simpler system for claimants. Many of us know from our surgeries of the difficulties of our constituents in understanding the system, and, when they have mastered that, the difficulties that arise from making claims. We must do our best to alleviate such problems. One of the aims of the new provisions is to try to improve that situation.

Mrs. Audrey Wise (Preston)

How will the hon. Gentleman answer his constituents who make claims on the social fund only to be told that, although their claims are justified, there is simply no money left? Many of us would be grateful for some advice, because we do not know how to answer such people.

Mr. Day

I should have thought that Labour Members would have no difficulty in answering such questions. They will undoubtedly exploit the situation to achieve the best possible advantage. When people come to see me and state such cases, I shall refer them to the local offices, which are extremely helpful about such matters.

I must add that one of the reasons why I wish the reforms to go through is that I have heard my right hon. Friend the Secretary of State describe the present system as intimidatory. That is one of its big problems. The system is difficult not only for people who wish to receive benefit but for those who work in the Department and deal with claimants on a day-to-day basis. They try to present to them their claims and benefits as they would wish them to be offered to them — as a civilised and humane service. The Bill and its reforms are important in that regard also.

Mrs. Wise

Will the hon. Gentleman give way?

Mr. Day

No. I am sorry, but I shall not give way again.

The new system will assist many people who are currently caught in the so-called poverty trap, which undoubtedly exists. It will remove the disincentives to working that result from that trap. I do not blame anybody who chooses not to take a job if he can gain more from benefits. We must be able to encourage people to take work if we can.

I have argued on many platforms, not least during the general election, that the benefit system should exist for those who need its services and not for the convenience of those who draft legislation and those who must work it. Too many of the present schemes that supposedly assist claimants have become almost sacred cows to many Opposition Members, sanctified not by their efficiency and effectiviness, but by the fact of their existence. Therefore, I welcome the Government's courage in setting about the reform of our benefit system in such a serious and, more important, practical manner.

It is an unavoidable consequence of any reform that some will gain but some will lose. The system has not yet been devised—it will never be devised—that provides extra benefits for everybody.

Mr. Battle

The hon. Gentleman has stated repeatedly that the system has not been revised, but his own Government make great play of the fact that they have given us the biggest review of the welfare state since Beveridge. These instruments simply implement the review. Either there has not been a review and we should start again or the hon. Gentleman is challenging his own Minister to say that the review was a failure, which is our point.

Mr. Day

If the hon. Gentleman has inferred from what I have said that there has not been a review, I must say that I cannot find anywhere in my address where I said that. That is a lax interpretation of what I have been saying.

As I have said, an unavoidable consequence of any review is that we cannot devise a system where everybody will gain. I am sure that, if anybody could have devised such a system, some politician somewhere would have thought of it. However, that is not the case.

When I consider the details of the reforms and the net beneficiaries, I am pleased to see that on the income support scheme nearly two thirds of claimants will gain or be materially unaffected by it; nearly one fifth—more than 750,000 people—will gain by more than £3 a week and nearly one tenth of claimants—500,000 people—will gain by £5 per week or more. That is important because the emphasis of the reforms is to see that the extra money goes to those who need it. I shall back that all the way. It is one reason why I shall support the Social Security Bill. It is right that the people who are most desperately in need should be the ones who receive the benefit. That is what the Bill is designed to do.

Although Opposition Members have said that 40 per cent. of pensioners will not be direct beneficiaries, 60 per cent. will gain or be unaffected. Despite what Opposition Members have said, I welcome that fact. More important, I welcome especially the proposal to increase from £3,000 to £6,000 the amount of savings that somebody is allowed to have and still receive benefit. That must be welcomed, because time and again people come to me who cannot receive benefits because they have been careful and prudent and saved for their retirement. One of the big problems that many pensioners face is that during the years of the previous Labour Government they found that their savings had reduced in value to almost nothing.

Mr. Eric S. Heifer (Liverpool, Walton)

You are joking.

Mr. Day

No, it is a fact. I am not joking at all. If Opposition Members are saying that they do not have many pensioners coming to see them to say that their savings have been destroyed, especially during the 1970s, pensioners must not be going to see them for some reason or another.

Mr. Frank Field

When pensioners come to our surgeries it will be useful for us to know the answer that the hon. Gentleman will give to those pensioners who have saved a capital sum but who find themselves now disqualified from housing benefit.

Mr. Day

Raising the amount will mean that many pensioners will be much better off. There are no two ways about that. I am not sure of the exact number who will be affected, but many pensioners will receive benefit who have not done so before because they were disqualified. That must be good, and I would support the change if only for that reason.

I welcome the fact that the Government have honoured and are honouring their pledge to maintain the value of the state pension. Conservative Governments have improved the state pension in real terms since coming to power in 1979. I am well aware of the criticism from Opposition Members—not least because they are concerned about pensioners — that we have not assisted pensioners. However, the facts speak for themselves. By and large, pensioners are almost 10 per cent. better off in real terms than they were when the Government came to power. 'That is taking inflation and everything else into account. Whatever criticism Opposition Members may have about that, the Government's record on state pensions stands the test against that of the previous Labour Government.

The Labour Government based their upratings of state pensions not on actual prices, but on the amount by which they expected prices to rise. As I have already mentioned, we all know what happened to prices under the previous Labour Government. Consequently, pensioners fell constantly behind. Indeed, it is tempting to reflect that the party that constantly accuses us of not caring has, in many areas of welfare, a worse record than ours. To say that one cares — I do not dispute for a moment that Labour Members care—is not enough. I believe that Labour Members should at least give us credit and agree that we also care although we may disagree about the ways in which to achieve the results that we should all like to see.

A Government who supposedly did not care would not have fulfilled their pledge to maintain the value of pensions or increase spending on benefits for the elderly in real terms by some 29 per cent. since coming to office. We may argue about the details, but it is an unchallengeable statement that the Government are spending 29 per cent more in real terms. I notice that Labour Members rarely allude to that side of the equation.

I applaud the regulations and the reforms, but there is one desirable provision that I feel has been omitted and I hope that my right hon. Friend the Secretary of State will give some thought to it. I trust that the Government will look at the specific needs of the long-term unemployed, especially those who are of an age when they desire to work—I believe that the hon. Member for Newcastle upon Tyne, Central alluded to this — and have the ability to work, but have only a slim chance of gaining work in anything except in a part-time job. However, in such a job they will lose the benefits available to them. In an age when we see a widening gap between the official retirement age, especially for men, and the effective retirement age, I hope that the Government will look at that problem in a favourable light.

9 pm

Mr. Nigel Griffiths (Edinburgh, South)

The Minister claims that the regulations will allow benefits to be targeted, especially for the disabled. I have studied the regulations and I have talked to disabled people—a teenager with spina bifida, a couple with two mentally handicapped children, a kidney dialysis patient, and pensioners with arthritis or bronchitis—who will lose. They are the very people at whom the Government seek to target benefits but all of them will lose if any claim is submitted after April.

On 27 October 1987 the Secretary of State made a statement to the House. When I claimed that disabled people claiming after April stood to lose substantial amounts, he said: disabled organisations—will have noticed that there is a substantial overall increase for the disabled from this restructuring."—[Official Report, 27 October 1987; Vol. 121, c. 194.] It is a pity that the Secretary of State is not here to confirm that he has received letters from such organisations repudiating his statement.

The Secretary of State claims that his proposals have the support of organisations representing the disabled, but not one organisation that has studied the regulations supports the Secretary of State, and the reasons are plain to see. From April, as a new claimant, an 18-year-old spina bifida sufferer in a wheelchair, currently eligible for help with heating, clothing, baths and laundry, will lose £5.90 a week from her personal allowance and £4.70 from the total package of incomes to which she is currently entitled. The Government call that caring.

Let us look at a pensioner couple. One has Parkinson's disease—there are quarter of a million sufferers—and the other has arthritis and bronchitis. Currently they can claim £113 a week, including paid help for a couple of hours a day. I have studied the Government schemes, and even at their most generous they will provide such a couple who claim after next April with £70.05. The Government are robbing them of £2,236 a year and call it targeting.

What are the Government going to do for the mentally handicapped? A couple with two mentally handicapped, hyperactive children, who are not disabled, can currently claim £110 in allowances. How much more will the Government give them under the income support entitlement? Will it be £5, £10 or £20? Sadly, no. That couple, claiming after April, will lose £15 for each child—£30 in all.

In effect, more than 1 million disabled people will lose. That is not my opinion, but that of the Royal National Institute for the Blind, Arthritis Care, Mencap, the British Deaf Association, the Renal Society and over 70 other organisations in the Disability Alliance.

On the day of the statement, the Secretary of State said that my points were reasonable. Perhaps he will now confirm that they are also true. In future years, new claimants will suffer considerable cuts. More than 360,000 people now receive laundry allowances. There will be a saving of £42 million if those are abolished. Sixty-nine thousand people receive allowances for baths; nearly £7 million will be saved by the Government cutting that. Sixty-three thousand people get help with clothing; more than £5.5 million will be saved. Six thousand people visit relatives in hospital, and £1.5 million will be saved on that. One hundred and sixty-four thousand disabled people receive heating help. That now costs the Government £49 million, and represents part of a £400 million cut. Two thousand eight hundred people on kidney dialysis receive help with their diets, and more than £1.5 million will be saved on that as part of an £18 million cut that is being forced on the disabled. Four thousand five hundred people and more will lose up to £48 a week for domestic assistance if the Government's cuts go through. Three thousand five hundred blind people will also lose.

None of this comes as a surprise to any of us. We know the origins of today's regulations. They are to be found in a book written in the 1970s—the bible of the blue rinses, the handbook of the hatchet men. It is called "Down with the Poor". Its author, the right hon. Member for Brent, North (Sir R. Boyson), received a knighthood for services to his cause. He is the architect of Tory social security policy today. His hon. Friends are giving a clear message to the handicapped: "We cannot afford the costs of your disability." To the kidney patients on dialysis they are saying: "Your diet and laundry allowances are too costly." To the frail pensioner they are saying: "This country cannot afford your heating or your baths."

We say to the Government that people who do not have work want support, not suffering, and that people who are disabled deserve a decent standard of living. The Government are not providing that, and they have no intention of doing so. It is not that they do not have the money. They have funds with which to give shareholders a shelf and they have cash to cut taxes for the wealthy. They have pounds to promote privatisation, but nothing for the poor, the sick, the disabled or the elderly. That is why we reject these spiteful, penny-pinching regulations —and so does the country.

9.3 pm

Mr. Neil Hamilton (Tatton)

I was interested by the reference made by the hon. Member for Edinburgh, South (Mr. Griffiths) to a splendid book that I remember from the days of my youth — "Down with the Poor". It appears that he did not get much further than reading the title, which was taken from something said by George Bernard Shaw, who looked forward to the abolition of poverty. So my right hon. Friend the Member for Brent, North (Sir R. Boyson) meant that he looked forward to the day when we could eliminate poverty altogether. That is the aim behind the scheme adumbrated in the book, and I believe that the Government's proposals go some way towards achieving it.

Mr. Nigel Griffiths

I am interested in the hon. Gentleman's interpretation of the title. Perhaps he would like to interpret the following statement : There is also encouragement for the lower paid with large families to become unemployed or to go sick".

Mr. Hamilton

Most people in this country would regard that as a commonplace truth. Even under the reformed regulations for social security, we still have what is called the poverty trap. There is a considerable disincentive to work at certain levels of income. It is still possible to be worse off in work than on benefit. It is a tribute to the vast majority of people in this country that so many of them continue to work when they might be better off on benefit. That is a great tribute to what we used to call the working classes.

I want to provide an even greater incentive for people not to be subject to what Mrs. Hermione Parker has called the "moral hazard" of being on benefits. What we are trying to do in the reforms that we have introduced, which I hope will go further, is to encourage greater independence and re-create what I believe to have been the great Victorian values of long ago, when people were able to look after themselves without being dependent on charity and could take decisions for themselves rather than receiving benefits in kind. The social security reforms that we have already produced go a long way towards achieving that.

Mrs. Beckett

The hon. Gentleman has said some things on which I might take issue as a matter of practice. If he feels, as I do, that it is wrong for people to be dependent on what is, in effect, charity and that they should rather have independence and rights, may I recommended that he reads the social fund manual?

Mr. Hamilton

I am sure that the hon. Lady's interpretation of the social fund manual would be slightly different from mine. We still have some way to go before we achieve the objectives that we have set ourselves. The problems with the welfare state is that we still adopt the blunderbuss approach rather than the more targeted approach. We have gone a great part of the way towards ensuring the efficiency of the welfare state by targeting benefits at those in greatest need.

We will never have a system of 100 per cent. perfection, but we have made significant improvements that will bring about a considerable rise in the standards of living of people on the lowest incomes. I welcome the income support regulations, because overall they will considerably benefit people on the lowest incomes. Nearly two thirds of them will either gain or be unaffected in real terms. As my hon. Friend the Member for Cheadle (Mr. Day) said, almost one fifth—that is nearly 900,000 people—will gain £3 or more in real terms and one tenth—almost 500,000 people—will gain £5 or more in real terms.

These regulations target the benefits more to the needs of families with children. From the comments by the Opposition, one would never dream that we were doing that. One or two of my hon. Friends have also made such comments and I propose to devote some attention to them. We are targeting benefits more on families with children. The effect of what we propose is that 86 per cent. of couples below pension age and with children and 67 per cent. of single parents will gain in real terms or will be unaffected. That is a considerable achievement and a tribute to my right hon. Friend the Secretary of State, whom I welcome back to the debate, and to my other hon. Friends in his Department.

The regulations will increase spending that would have taken place by more than £200 million. Therefore we are doing a great deal more than simply uprating the supplementary benefit weekly payments, and that will be of great assistance to people on the lowest incomes. In addition, we will provide another £200 million to cover the transitional period. The scheme of income support is greatly superior to the scheme that it replaces, because it provides a real incentive to people to become independent of state provision. There was very little incentive for that up to now. However, people who still depend on state provision will receive it in a way that is not a considerable disincentive to work.

The principal change is the one for the calculation of benefit on the basis of net earnings rather than gross earnings. I endorse what my hon. Friend the Member for Cheadle said about the change in the capital regulations. For years, one has heard complaints about inflation from people in surgeries and especially from people one meets when canvassing on doorsteps. These are people with relatively small nest eggs built up in times when a pound was a pound. As my hon. Friend the Member for Cheadle ably said, at one time a pound in one's pocket was worth a pound but we all know what happened to it in the 1960s and the 1970s, under Conservative as well as Labour Governments.

The hon. Member for Liverpool, Walton (Mr. Heffer) said that it was a joke to say that people's capital had been whittled away over the years. We know very well that today a pound is worth only a tiny fraction of what it was 40 years ago. Many pensioners have been able to save and accumulate a tidy nest egg in money terms, but its value has been whittled away almost to a valueless sum as a result of the inflationary policies of successive Governments — though, happily, not the present Government.

Mr. Heffer

The hon. Gentleman, like his hon. Friends, should take note of what hon. Members actually say. I said, "Is the hon. Gentleman joking?" I did not say that some people's money had been whittled down and that their savings had gone. Unfortunately, in the last few weeks some people who were kidded into buying shares have suddenly found that some of their money has gone. The people who will really suffer under these regulations are ordinary working people who by their labour and because of Britain's strength in the past have built up a nest egg. They have still ended up with no real finances. They are the people who will suffer because of the Government's policies.

Mr. Hamilton

I agree with the right hon. Gentleman. I am one of those whose net worth has declined in the past few weeks, having, with my usual efficiency, filled in my application for BP shares on the very day it arrived and posted it on the following Monday morning, before I turned on the midday news which announced the stock market collapse. I am now the proud owner of 2,000 BP shares which are worth less than when I applied for them. I therefore understand the force and vigour of the hon. Gentleman's remarks, and agree with him, on that if on nothing else.

The child benefit regulations have caused some disagreement among Conservative Members, as well as, among the Opposition. Today, we have seen an alliance of the baronetcy and the squirearchy, if I can put it in those terms. I am glad to see my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). He must have been attracted by my name on the annunciator.

In alliance with my hon. Friends the Members for Ealing, Acton (Sir G. Young) and for Hornchurch (Mr. Squire), my right hon. Friend the Member for Chesham and Amersham attacked the Government's decision not to increase the amounts payable in child benefit. I cannot understand why my right hon. and hon. Friends take such a view, because the enormous amount of money which is paid out in child benefit does very little to alleviate poverty. With the change in income support regulations and the introduction of family credit, it does even less today than it would have done formerly.

It cannot make sense for Conservative Members who give birth to children—my hon. Friend the Member for Chelmsford (Mr. Burns) became a father in the past week, although I believe he was expecting an autumn election when he took that decision, but at least that demonstrates the importance of correct targeting in areas other than the welfare state—to receive child benefit as well as those on the lowest incomes in Britain. The higher one's income, the greater benefit one receives. It must make sense that benefit should be targeted in a better way.

Mr. Barry Porter (Wirral, South)

Will my hon. Friend give way?

Mr. Hamilton

Time is pressing on, and I want to give the Minister a chance to reply.

I agree with my hon. Friends in one respect. I too believe that there is not a great deal of logic in freezing child benefit. We must make the decision one way or the other. We must either phase it out altogether and go back to a system of allowances—which is what I wish to see —or we should continue uprating it in order to preserve it. I propose that it should be retained as a cash benefit for those below the income tax threshold and phased out and converted into a tax allowance for those above that level. That would be a compromise which would attract support from both sides of the argument within the parliamentary Conservative party. It is only by targeting benefits more, and saving, in the case of child benefit, probably £3.5 billion, that we can contribute to lower taxes and higher tax thresholds, which would help many people put into poverty by the tax system, and to the greatest extent raise the living standards of those on the lowest incomes.

9.18 pm
Mr. Robert N. Wareing (Liverpool, West Derby)

There is no doubt that the right way to measure the Government's income support package is to judge it against the words that I uttered in the Chamber a few weeks ago, when I quoted the right hon. Member for Sutton Coldfield (Mr. Fowler), the former Secretary of State for Social Services, who, on 3 June 1985, said: We shall ensure that the structural changes 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.] That is the measure. By that measure this package fails, because we have the abolition, not only of long-term supplementary benefit, but of the weekly additional requirements payments.

Additional requirements payments might be messy administratively, but there can be no doubt that they are related directly to ill health or disabilities. The withdrawal of those payments will mean that 40 per cent. of newly disabled pensioners and 15 per cent. of newly disabled younger people will be worse off. In addition, 236,000 newly disabled pensioners will lose up to £5 a week, and 45,000 will lose over £5 a week. That is indisputable.

The Government claim that newly disabled people will not lose cash. Of course not; they will not get it in the first place. The Government are proceeding according to the adage that what one never has one does not miss. Whether people already receive disability benefits, or whether they will be newly disabled after April 1988, the costs of disability will not disappear.

In contradiction of the words of the former Secretary of State for Social Services, we have those of the present Minister for Social Security and the Disabled. On 2 November he said: 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. However, we are referring to very few people. The Spastics Society has informed me that this provision will affect thousands, not hundreds, of people. Anyone who received £6.50 or more in additional payment under the old system will fail to qualify for severe disability premium and will be worse off, yet we are told that the new proposals are targeted at the very poor.

The only time that the Government are successful in targeting is when they target benefits for the rich. They do not talk about targeting when they talk about moving from direct to indirect taxation, or when they manoeuvre the income tax to give the greatest margin of benefit to those who donate to the funds of the Tory party. We are being asked to approve regulations before we receive details about how the severely disabled will be protected.

The Minister for Social Security and the Disabled also said on 2 November: However, I am seeking ways in which it may be possible to address the particular circumstances of that small group of people."—[Official Report, 2 November 1987; Vol. 121, c. 743.] It is not a small group of people. The Minister should tell us tonight what he has planned for the severely disabled. The Government claim that most sick and disabled people will gain, but this rests upon their definition of disabled, which is those who are of working age who are incapable of work. That definition ignores pensioners, and 66 per cent. of the disabled are pensioners. Pensioners are not qualified to work, but they are not in the figure that the Government have bandied about.

The Government ignore children with disabilities, who are not capable of work, and disabled people who register as unemployed. It is not a few hundred, or even a few thousand, but half a million people who are likely to lose under the Government's arrangements. The Government have promised transitional protection for existing claimants, but the freezing of benefit levels until income support catches up will lead quickly to a drop in people's standards of living.

The Government claim that they spend more on the disabled. They claim that there has been an increase of £2.5 billion in real terms in aid to the disabled since 1979. I should like a breakdown of that figure. I suspect that most of that expenditure is the result of hard work through take-up campaigns such as the Merseyside welfare rights campaign and the work done by the metropolitan counties and Greater London council before the Government decided that they were being too successful in helping the poor, and abolished them.

The Minister said in reply to my hon. Friend the Member for Halifax (Mrs. Mahon) that there would be maximum publicity through leaflets and so on. I issue a challenge to the Government. They are good at advertising when it suits them. Not long ago they spent thousands advertising British Gas shares, and everybody, even the poorest pensioner, had heard of Sid. Let us have a comparable campaign, not to put more into the pockets of those who possess much, but to put some money into the pockets of those who are suffering.

Are the Government really suggesting that this package of measures on social security will improve things? Is it not the case that every Minister in the Government is an agent of the Chancellor of the Exchequer and the Prime Minister, and that the sole purpose of all the legislation is parsimony in public finance? I hope that the campaign that we are waging against these upratings, which are really downratings, will be carried on outside the House. The frontiers of poverty for the disabled are not from the Wash to the Bristol channel. There are plenty of poor people in the constituencies of Conservative Members. I hope that the voice of the Opposition will get through to those people and that they will realise what sort of Members they have elected.

9.27 pm
Mr. Frank Field (Birkenhead)

I am grateful for having been called to speak. My only regret is that the hon. Member for Tatton (Mr. Hamilton) is not here. I wish to present in two minutes the one lesson, that in life things do not always come as simply as one would like. Listening to the hon. Gentleman I was reminded of a statement made by, I think, Aneuran Bevan about Neville Chamberlain ; if he did not make it, I am sure he would have done had he thought of it. He said that listening to the Prime Minister was like a trip round Woolworths; everything was in place and nothing was priced over sixpence. As we know, in life things do not come simply in nice little packages.

In the welfare state we cannot choose just one objective and ignore the others. Although the hon. Gentleman was right in saying that child benefit does not target—by definition it cannot target because it is universal—it has othe advantages. In the period when the Government may be reviewing the future of child benefit, Conservative Members have to weigh up the disadvantages that they see about non-targeting against some of the advantages. Child benefit will remain an important benefit and Ministers will have to defend it from the Treasury. I remind the House, the hon. Member for Tatton in his absence and Ministers of the advantages of non-targeting.

Hon. Members who are serious about creating incentives to work — a point on which the Prime Minister has fought three elections—will support the maintenance and improvement of child benefit because, as child benefit increases, the greater becomes the income of people in work compared with that of those on the dole. Child benefit is maintained when a person is in work, but is deducted from social security payments.

Hon. Members, particularly Conservative Members, who attach importance to the strengthening of the family, should advocate maintaining and increasing the real value of child benefit. All hon. Members who want to see the increased independence of women in our society will also advocate child benefit because it is the only substantial benefit paid to women in their own right.

Those who are keen to eliminate child poverty, and not just talk about its elimination, know that this is the only safe way of doing so. We heard from the Government today that, even with the new super-benefit for poor families, four out of 10 will not claim.

Finally—this is the most important point that I can address to the hon. Member for Tatton and other Conservative Members—those who wish to maintain tax equity between those with children and those without know that the only way to increase the tax threshold for families with children is to increase child benefit. If we do not do that and come up instead with a measure which freezes child benefit and increases the premiums for single-parent families, an absurd situation will develop. A Tory party committed to normal families. as it calls them, would put families with only one parent at an advantage ever those with two. That makes nonsense of the principles for which Conservative and Opposition Members stand.

9.32 pm
Mrs. Margaret Beckett (Derby, South)

We have had an interesting and constructive debate. I want to say a little about the claims and payments regulations about which most hon. Members spoke. I do not wish to invite the Under-Secretary to dwell on these matters, but I wish to draw the attention of the House to the strictures of the Joint Committee on Statutory Instruments about the way in which the House and another place have been given insufficient time for the scrutiny of the regulations. The strictures refer to the whole package of regulations, including income support. That may account for some of the more peculiar comments from Conservative Members who do not understand what the Government are doing, and who might have understood better if, as the Joint Committee on Statutory Instruments suggests, they had had more time to study the matter.

I should like the Under-Secretary to elucidate a point touched on by the Minister who opened the debate. If I understood him correctly, he referred to the regulations put forward by the Social Security Advisory Committee and to the fact that the Government have accepted most of them in respect of the changes in the payment of benefits.

The SSAC recommended a series of proposed timetables for the handling of back claims. It does not appear to approve of the Government's proposal for some benefits to be paid a week in advance and others, including those to the most needy, to be paid a week in arrears. I am sure that the Minister did not intend to mislead the House and I may have misheard what he said, but I should like to hear confirmation from the Under-Secretary that, although the Government usually go for simplification, in this case they are happy with complexity. Do the Government expect to make savings through this change at the expense of the needy and, if so, to what extent will those savings be revealed?

I wish to deal now with the uprating regulations and to touch on one point raised only briefly in the debate— the lack of uprating for most of those people living in residential care or nursing homes. According to the uprating statement, only two groups of people have been given any increase — the very dependent elderly, although an additional £10 may not go very far, and people with a mental handicap. Many hon. Members who have expressed concern about the inadequacy of the payment that the Government are willing to allow to people in residential or nursing care will, when they have had a chance to scrutinise the effects of these upratings, much regret that the Government did not feel able to be more generous.

My hon. Friend the Member for Livingston (Mr. Cook) made several clear points about the way in which the Government have been — to put it mildly — less than generous to pensioners. It is not easy to work out the overall sums that the Government are saving by ceasing to uprate pensions in line with earnings, and that takes no account of the fact that they have broken the commitment that was clearly intended at least to make an uprating from time to time. I believe that the savings that the Government are making in that respect must be running at about £3,000 million a year.

It is worth reflecting for a moment on that figure. It casts into some relief the way in which Conservative Members, the Prime Minister and her ministerial colleagues congratulate themselves on their generosity in spending about £400 million on heating allowances— leaving aside the fact that the Government have just abolished those—when we consider the sum of £3,000 million a year in savings. Clearly the Government are making substantial savings at the expense of many pensioners.

Of late, it has been the practice of Ministers to draw attention to the results of the family expenditure survey data which show that the average pensioner household is now doing rather nicely. It has been the practice of the Opposition to draw the Government's attention to the steps that they have taken to weaken that position. A recent study has shown that, apart from that argument, it is especially misleading of the Government — and I cannot help thinking that Ministers are aware of this— to use the figures for average pensioner households when they try to show that there is no problem in not uprating pensions in line with earnings because pensioners are doing very nicely, thank you.

Although the average for all households shows that pensioner incomes have risen, the top 20 per cent. have more than twice as much income as the 20 per cent. immediately below them and more than three times as much as occupational pensioners. Through the excessive gains that those at the top have made, they manage to create the impression that average pensioner households are doing better. People in the bottom 20 per cent. and even those in the 20 per cent. above the bottom section —where a poverty trap is created by the way in which benefits clash with small additional occupational pensions —are doing just as badly as many of us had feared.

The overall effects of the massive increases given to the best-off pensioners are skewing the average so that it gives a misleading appearance of the wealth or poverty of pensioners as whole. It is useful to draw attention to that while we are talking about the Government's refusal to uprate pensions properly.

We have had a particularly interesting debate on child benefit. I welcome the remarks of a number of Conservative Members who have had the courage to tell the Government that they are getting it wrong. They have drawn attention to the fact that, although the Government make much of the compensation that will go to some families who draw family credit, even on Government figures—and there will be another debate in which we can draw attention to the inadequacy of those—at least 40 per cent. of the poorest families in work will lose from the decision not to uprate child benefit. It would be invidious to single out more than one Conservative Member who spoke in defence of child benefit, but I am confident that those hon. Members are more at ease with their consciences than are many of those who spoke in other respects.

Like my hon. Friend the Member for Birkenhead (Mr. Field), I must tell the hon. Member for Tatton (Mr. Hamilton)—who is still not present in the Chamber— that it is noteworthy that when Conservative Members such as he talk about the need to target benefits on the poorest, they are always very keen to see that switch coming from those who are slightly less poor. When it comes to asking them to vote for an increased family premium for which the resources might come from the wealthiest taxpayers, or when we ask them to vote for an additional premium for the unemployed, they have no interest. They always vote against such proposals and usually speak against them as well. Only when people on low incomes, and not people like Conservative Members, are going to pay are they in favour of targeting help and giving more to those in greatest need.

I want to consider briefly the cost of the simplification that the Government claim is one of the principal benefits for income support and also consider who is paying it. My hon. Friend the Member for Bristol, South (Ms. Primarolo) made one of the best maiden speeches that I have heard. It was equalled only by the contribution of my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins). They drew particular attention to the problems of the young.

It became clear throughout the debate that, when the age of majority has gone down to 18, there is no defence for the Government, in practice, through the system of income support, and, indeed, the concomitant benefits, raising the age of majority to 25.

There are particular problems for those in low-paid or part-time work. About 60,000 single parents—a group whom otherwise the Government seek to help, as my hon. Friend the Member for Birkenhead mentioned—in part-time work will lose substantially through the Government's decision not to allow them to take account of their work expenses before their benefit is calculated, as is the case at present. Such single parents are likely to lose around £19 or £20 a week. That is a substantial disincentive to remain in work. Indeed, for many, particularly young mothers, it is perhaps the loss of the last chance that they have to retain their contact with the labour market, their independence and their dignity, and to stay, as the Secretary of State would apparently wish, out of the benefit culture. The Government's action is forcing them into the benefit culture, instead of offering them the chance of independence which will take them out of it.

The decision to count the average hours of work that somebody puts in, rather than their average earnings, and the decision that someone with a partner in full-time work should not be able to claim benefit, no matter what their income is and no matter if the family income is well below the poverty line, are creating a further disincentive to work. Again, the Government are forcing people back on to benefits because the losses that are likely to be incurred in many cases are more than most families could sustain.

The problems of the disabled have been clearly highlighted by many of my hon. Friends and, indeed, by some Conservative Members, notably the right hon. Member for Chesham and Amersham (Sir I. Gilmour). Whatever the Government may say about the number of disabled people who are being assisted by their overall scheme of income support, there are many serious and heavy losses, and not only—not that it is defensible— among the most severely disabled. The Government seek to suggest that they hope to tackle the problem, but they have had nearly two years since the proposals were first put forward and it is a little weak, to put it mildly— although it is welcome as far as it goes — that they should now argue that they can take that step.

When we discuss the losses that disabled claimants are likely to incur, the Government's answer is always that there will be transitional protection. By definition, there is no transitional protection for new claimants. It is no answer to the point that many disabled charities make over and over again about the substantial fall in the standard of living that will be experienced by people who become disabled after the regulations and the Act to which they refer are on the statute book to say that it will be all right for those who are disabled now.

To say to someone who, perhaps, moves into a new flat in which there is an expensive heating system and who has a couple of other minor entitlements to additional allowances, which is the experience of many people who are not particularly disabled, that they will lose £4 or £5 a week from their benefit, and to add, "But those who are already drawing benefit are being protected," is just not an answer. It has no relationship to the problems that they face. Their standard of living is significantly below that of disabled people. The Government have never attempted to deny that. All that they do is talk about people whose standard of living will fall only steadily over several years rather than at once being substantially below present levels.

Any severely or otherwise disabled person, perhaps such as those on kidney dialysis—many societies which deal with such people have drawn our attention to the problems that they are likely to face—who finds himself with a more serious patch of illness, as is most likely to happen, and has to go into hospital for some weeks, so that his circumstances change, will lose his transitional protection at a stroke, to coin a phrase.

The Minister of State and the Secretary of State drew attention to the fact that they hope to avoid the worst losses for the most severely disabled by inflation-proofing the domestic assistance addition, which is the most significant single sum that can be added to such a person's benefit. We welcome that, but it was disgraceful that it was not proposed from the beginning. Inflation-proofing the domestic assistance addition will be of no value to people who have a break in the benefit that they are claiming because they are going to hospital or for some other reason. They will lose the increase that the Government claim will be protected.

The then right hon. Member for Cambridgeshire, South-East, Mr. Francis Pym, said that the Government had begun from the wrong point. Unlike Beveridge, they did not set out to study the market or to see how claimants' problems could be met. They started halfway through, with a system of review, and considered the system as it then stood. The hon. Member for Hornchurch (Mr. Squire) said, "Yes, we are looking for a simplified system and an improvement, but not at the expense of the most vulnerable members of our society." The Government have claimed that they are making the most important reforms since Beveridge, as they are, but to make them at the expense of the most vulnerable in society is a disgrace.

9.46 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo)

I congratulate the hon. Member for Bristol, South (Ms. Primarolo) on her maiden speech. She succeeded Michael Cocks, who will certainly be missed by Conservative Members. I was a little worried when the hon. Lady was elected, because she has a foreign surname that begins with a P and ends with an O. I could foresee confusion with the Post Office, but fortunately that has not occurred so far.

I congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on his maiden speech. His predecessor, Piers Merchant, will be missed, but we hope to welcome him back to the House shortly. While I am dishing out congratulations, I congratualte my hon. Friend the Minister on being able to claim another £7.25 a week, due to the arrival of a child.

The hon. Member for Livingston (Mr. Cook) spoke at length about retirement pensioners and the Labour party's record. We heard the usual claims that the only way to give pensioners a decent standard of living is to uplift the basic pension in line with earnings rather than by matching price rises—a point that was also made by my hon. Friend the Member for Daventry (Mr. Boswell). For pensioners, the state pension constitutes only one half of their net income. In 1985, on average, pensioners received incomes equivalent to about 60 per cent. of the incomes of those in full-time work. That proportion has increased significantly since 1979.

Pensioners' living standards have increased under this Government relative to the living standards of others. Under the last Labour Administration, with their policy of earnings-linked pension increases and poor control over the economy, pensioner living standards fell relative to those in work. That is a record of which the Labour party is proud.

Policies to assist elderly people that concentrate on the pension alone are doomed to failure. Between 1974 and 1979, the Labour Government increased pensions in real terms—a meagre 3 per cent. increae in total income after five years. Pensioners were particularly badly hit by rampant inflation under that Government, whereas under this Government inflation has been firmly under control. As a consequence, pensioners have done well.

Mr. Robin Cook

The hon. Gentleman will acknowledge that the tables in Economic Trends from which his figures are drawn show that the increase in occupational pensions is confined to the top quintile of pensioners and that the bottom 60 per cent. of pensioners derive 80 per cent. of their income from state pensions. It is the bottom 60 per cent. who have been cheated by this Government.

Mr. Portillo

I was clearly wrong to give way to the hon. Gentleman, as I was coming to exactly that point.

The hon. Member for Derby, South (Mrs. Beckett) thought she had discovered something. In fact, the figures show that the average annual increase in the incomes of the lowest quintile of pensioners was 2.8 per cent. in real terms between 1979 and 1985 against 2.9 per cent. for those in the highest quintile. That is the great point that the hon. Member for Livingston thinks he is on to—a 0.1 per cent. difference between the top and the bottom quintile. What really matters is the number of pensioners who now find themselves in the bottom quintile, and that has fallen from 38 per cent. in 1979 to 25 per cent. on the latest figures.

I sympathise with my hon. Friends the Members for Daventry and for Ealing, Acton (Sir G. Young) in the argument about the needs of older pensioners. However, I emphasise that those pensioners, too, have benefited from the improvement in their savings since inflation has been under control. My hon. Friends should not forget that the over-80s are getting the special over-80 premium under income support—probably the sort of measure that my hon. Friends seek.

Today's debate seems to have been about the abolition of child benefit, which is not a matter before the House and does not arise from the regulations. There was a good deal of tilting at windmills, although my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) and my hon. Friend the Member for Ealing, Acton made convincing hidalgos and the hon. Member for Southport (Mr. Fearn) made a fair Sancho Panza. My right hon. Friend the Member for Chesham and Amersham said that he took a historical view. That is fair enough, but I would like to get the history straight. It is not true, as my hon. Friend the Member for Northampton, North (Mr. Marlow) alleged, that child benefit is now less valuable than child tax allowance and family allowance 20 years ago. For a person on average earnings, the opposite is true. Child benefit is now more valuable to someone in that position.

We have heard a great deal about the apparent drawbacks of income-related benefits and the advantages of universal benefits such as child benefit. However, we should preserve a sense of scale. We are talking about 30p —the difference between what child benefit would be if the Government uprated it from April and the £7.25 that it will be. The effect on the numbers receiving income-related benefits has been alluded to. It is a small effect. Perhaps 10,000 families that would not otherwise have qualified will qualify for family credit and perhaps another 5,000 will qualify for housing benefit. Therefore, hon. Members have been arguing that, for the sake of 10,000 families on the one hand and 5,000 on the other, we should have committed £120 million of public money to uprating child benefit in line with inflation.

I understand the arguments of the hon. Member for Birkenhead (Mr. Field) about poverty traps, but I must say to him and to my right hon. Friend the Member for Chesham and Amersham that scale matters in all this. It is important to remember that we are talking about 4p per day per child on the one hand—that is what all the fuss is about—while on the other we are talking about the possibility of putting £200 million extra into family credits to help families that are particularly in need. I do not believe that those who have so passionately defended child benefit this evening are really concerned about that 30p. The truth is that they would like to have a very much higher level of child benefit and to use that increase as a way of floating people off income-related benefits.

That point of view is fair enough, but it needs to be examined. If child benefit were doubled next April, only about 80,000 families would be floated off income support, and some of those would still be receiving housing benefit. The net cost of achieving that would be £3.5 billion. I cannot agree that that would be the best use of £3.5 billion. I recognise the vital role that the state can play in helping families. The Labour party always makes the mistake of equating with cash the help that can be given to families. The help and support that the Conservative party gives to families is much more than cash support. We give vigorous moral support to the family ; that is what is lacking from the Labour party.

There has been a great deal of talk about the position of the disabled under income support. They have benefited significantly under this Government. By 1986, 52,000 people on supplementary benefit were receiving mobility allowance and 181,000 people on income maintenance were receiving attendance allowance. A great deal of the debate this evening was conducted as if those two benefits did not exist and as if there had not been a tremendous increase in their take-up.

The revised figures we have published for income support show a real-terms increase, on average, of £4.80 for the 270,000 claimants receiving the disability premium. That implies increased spending of over £60 million, which is the figure to which we have alluded several times. It is better than the £50 million we quoted at the time of the technical annex published in 1985. In addition, we will be providing—these figures are not in the technical annex —a severe disability premium of £24.75 to about 7,000 claimants. That compares with about 4,500 people who currently receive domestic assistance additions whose average is only £6.35 at present. That is the comparison that the Opposition so signally failed to make.

It is important to bear in mind, as I have already said, that the benefits about which we are talking come on top of the payment of attendance allowance and mobility allowance. Someone receiving an attendance allowance will receive support of £68.45 if they are on income support and over the age of 25. Someone receiving the servere disability premium will receive £93.20 and in addition they could receive a mobility allowance and perhaps maximum help with rent and rates.

I would like to answer specifically the points raised by my hon. Friend the Member for Chesham and Amersham. I hope that he will not dispute, now that he has heard the figures, that in general the disabled will be benefiting from the package of measures that we are debating. He said that 40 per cent. of disabled pensioners would be losing under the reforms. That figure is based on a false inference. The implication of what he was saying is that all pensioners are disabled. [Interruption.] That is the way the figures have been drawn.

Mrs. Beckett


Mr. Portillo

I will not give way, because I have only three minutes left.

The hon. Member for Bristol, South and several others mentioned the problems of the young. The hon. Member for Bristol, South rather surprised me. She said that she looked back to 1970 and wondered what opportunity young people under 16 and 17 had then. I can tell her the opportunity that they did not have. They did not have the opportunity of participating in the youth training scheme, which is a guarantee that this Government give to every 16 and 17-year-old. That is an important opportunity that she chose to ignore entirely.

The hon. Member for Livingston also chose to ignore the fact that 60 per cent. of young people under our new proposals will be gainers or will be unaffected in real terms by the changes we are making. He also ignored the fact that there are 200,000 young people who will be gaining £3 or more.

The Opposition have failed throughout the debate to say what they would do if they were in government. What they have done has been entirely negative, although the former Opposition spokesman for social services accepted that supplementary benefit was not a benefit that he wished to see continue. The attitude of the Opposition throughout the debate—has been confined to opposing the measures that we are bringing forward. We have had no coherent version of what the system should be. We are producing a better system, which is easier to understand and to operate. It will also be better explained to claimants, who will know what they qualify for.

I commend the changes to the House.

Question put and agreed to.

Resolved, That the draft Social Security Benefits Up-rating (No. 2) Order 1987, which was laid before this House on 3rd November, be approved.

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