HC Deb 26 April 1993 vol 223 cc713-4
4. Mr. Pickles

To ask the Secretary of State for Social Security what plans he has to carry out a review of the scope for the replacement of all universal benefits by selective benefits.

Mr. Lilley

We are reviewing all aspects of social security expenditure.

Mr. Pickles

Will my right hon. Friend confirm that it is appropriate for some benefits, such as pensions, to remain universal? Will he confirm that since 1979, spending on pensions now totals about £35 billion? Does he recognise that if we change the way in which pensions are funded, as Opposition Members are advocating, the cost would be so prohibitive as to hasten the day when means tests are placed on pensioners, as the Opposition have also advocated? Will my right hon. Friend confirm that we have no intention of means testing the basic state pension?

Mr. Lilley

I can reassure my hon. Friend that we made a clear pledge at the election that we intend to keep the basic pension as the keystone of our policy for retired people and we have no intention of deviating from that pledge. However, my hon. Friend is quite right. Any Government committed—as were the previous Labour Government and as is the hon. Member for Islington, North (Mr. Corbyn)—to uprating pensions in line with earnings would very soon find that they had no money to pump into increased benefits for the least well-off pensioners, as we have done, and they would be forced to means-test pensions as Labour implicitly recognised when it set up the Social Justice Com Miss ion and said that it was to examine means-testing all universal benefits.

Mr. Kirkwood

Does the Secretary of State agree that it is inadvisable to hold weekend ministerial reviews entirely in secret as they lead to comment, some of which is wrong and some of which is speculative? Would he be prepared to place in the Library of the House the working documents used at the weekend, if not the ministerial advice? Would he also help to ease some of the confusion and concern that have surrounded the weekend meeting by saying clearly that the purpose of any ministerial review would be to make savings—not savings that would be taken out of the social security budget and returned to the Treasury, but savings that could be redeployed and used within the social security system in other ways?

Mr. Lilley

The Liberal party may try to formulate its policies by inviting the press to sit in on the discussions, but I do not think that that would be a sensible way to proceed. More publicity should be given to some of the Liberal party's policies, not least its clear policy to impose value added tax on heating—either on top of a carbon tax or unilaterally if it cannot get a carbon tax. The Liberal policy document, which is interestingly called, "Costing the Earth"—a fairly apt description of Liberal policy—makes it equally clear that the additional costs of heating for elderly people must not be achieved through granting exemptions to particular target groups; everyone must face the same incentives to use less and cleaner energy.

Mr. Nicholas Winterton

Does my right hon. Friend accept that child benefit is a universal benefit, and perhaps the most popular universal benefit in this country? While it may well go to a number of people who are very comfortably off, does he accept that overall it goes to the mother who benefits immensely, as does her child? Even if we were prepared to tax that benefit, therefore, its universality should not be ended.

Mr. Lilley

Again, my hon. Friend will know that there is a pledge in our manifesto—I am glad to know that it is one that he supports—that we would maintain the payment of child benefit normally to the mother and uprate it in line with inflation. Again, we have no intention of reneging on our pledges and I am sure that he will welcome that.

Mr. Dewar

Does the Secretary of State accept that there has been a lot of press briefing about what happened at Chevening at the weekend and that it would be helpful if he said a little about that? Is it true, for example, that a decision has been taken in principle that people on middle incomes and above are to be asked to opt out of the basic retirement pension and, ultimately, from sickness and unemployment benefit? As the Government are committed to increasing national insurance contributions by 1 per cent. next year, is it not true that if the Treasury loses the contributions of people who opt out of the basic state retirement pension but still has the responsibility of paying pensions to those in retirement, that is a recipe for further increased taxation? If those policies are in contemplation —never mind the working papers—will the Secretary of State at least guarantee that he will make an early statement and produce a consultation document so that people know what is in store for them?

Mr. Lilley

We have given no press briefing, as the hon. Member suggests, on what was discussed at Chevening. He underestimates the media's imaginative capacities, as they are able to comment without such briefing, using their imagination. Such comments largely tell us what the people who make them are thinking. If the hon. Member is thinking such thoughts, I congratulate him on his courage and suggest that he should feed them to his Social Justice Com Miss ion. In the course of our long-term review, we shall consider all the options that will meet the objectives that I spelt out to the Select Committee on Social Security, one of which is to focus benefits increasingly on those in need. However, we also want to ensure that people have greater control over their resources and greater ability to tailor their provision to their needs, and that is alien to the whole Labour party tradition.

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