HC Deb 10 February 1993 vol 218 cc1079-85

Question again proposed.

10.1 pm

Mr. Bradley

Time is even shorter now and I will press on quickly. As I was saying, the Government are trying to find a way out of their economic mismanagement. While the benefit uprating announcement was welcome, it did no more than preserve the status quo for many groups of beneficiaries, as my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said; it did not address the issue of real improvements in benefits for many people, nor will it give help to the many groups who are denied entitlement to benefit. None of those benefits are being restored.

We should not rely on press speculation, but it is already clear that one early target for review by the Government will be invalidity benefit. The likelihood that taxation of that benefit is on the agenda means that many disabled people face further anxiety while they await the outcome of the review. If taxation of invalidity benefit is introduced, disabled people will lose because they are on low incomes.

The average invalidity beneifit in March 1991 was £67–90. Recent surveys by the Office of Population Censuses and Surveys show that disabled people are less likely to find work. Additionally, they incur extra costs because of their disability. They should not be further disadvantaged. My hon. Friend the Member for Garscadden referred to the opting-out process in the review, which has not been denied by the Secretary of State. The opportunity for private provision for disabled people is more limited, partly because of their individual risk assessment and the cost of premiums. We have to examine that carefully.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury)


Mr. Bradley

I think that the hon. Gentleman has just come into the Chamber; because of the time availabe, it would be inappropriate to give way.

Disabled people are just one group who will be worried about the results of the review. I hope that in his reply to the debate the Minister will be able to give assurances to such groups.

The uprating statement did not bring relief to our faces because many people did not get the good news that their benefits were being restored. We should not be fooled by the view that the basic increase in basic state retirement pension is so generous that elderly people will have an income which will enable them to live happily, with finance being no problem.

If we put the retirement pension into context, average pension income has risen in real terms, but it does not reflect a good picture of the overall distribution of income. About 9.6 million of our 10.6 million pensioners are currently receiving state pension, either through national insurance pension, income support, or a combination of the two. Of those, in 1990 72 per cent. were among the two fifths of households with the lowest disposable income. Among the one fifth of all households with the lowest disposable income in 1989, 51 per cent. were retired people.

In 1991–92 the Institute for Fiscal Studies estimated that 1,425,000 families were headed by pensioners in receipt of income support. Of those, 105,000 were entirely dependent on income support—but the income support levels are not generous. It is not surprising that pensioners feel that an actual increase of a mere £2 a week is derisory and is not a reflection of their real costs. One pensioner told me that the £2 increase merely covered the increase in the window cleaning bill. We should not be fooled into believing that the uprating is so generous that many pensioners will not continue to live in abject poverty.

We must recognise that a crucial group of people will not benefit from the uprating statement, and that is 16 and 17–year-olds who are denied the right to benefit. The Government's guarantee of a place on a training scheme has proved woefully inadequate. Thousands of young people have not had the opportunity of a place on a training scheme, yet they are still denied the right to benefit. Many organisations are now talking about the problems of poverty among 16 and 17–year-olds. For example, Youthaid estimates that 124,700 16 and 17–year-olds are unemployed and have no place on a training scheme, and 97,000 of those are not receiving any benefit or payment.

It is clear from the evidence that that places an additional burden on the families of that group of youngsters. The poverty of the 16 or 17–year-old is being transferred back into the poverty of the family. In many cases, that has led to the break-up of the family because it cannot afford the extra burden of a 16 or 17–year-old who is denied a proper training place or any benefit. I hope that the Government will reconsider the denial of benefit to that very vulnerable group of people.

I want quickly to deal with the position of disabled people and their carers, which was eloquently described by my hon. Friend the Member for Garscadden and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). I want to draw a particular point to the Minister's attention and I hope that he will be able to clarify the matter when he replies to the debate. As he knows, the administrative chaos in the introduction of the disabled living allowance has caused great anxiety and hardship for thousands of disabled people. That was compounded by the sudden ending of applications to the independent living fund. It is my understanding that unless disabled people were in receipt of DLA, they could not claim from the ILF. They were doubly disadvantaged because of the chaos in the administration of DLA.

In another place, in response to a question only yesterday by Baroness Hollis, Lord Henley said that individuals did not have to be in receipt of disability living allowance to receive an award from the independent living fund. Will the Minister confirm that, if people subsequently receive disability living allowance and had applied before the cut-off date to the independent living fund, they will still have the opportunity to obtain an award from the ILF? Lord Henley's statement did not make the position clear. Correspondence with the ILF states that people have to be in receipt of DLA, not simply to have applied for it. If that is the case, people should not have been denied the right to apply to the fund. Clearly, that needs to be rectified, and I hope that the Minister will respond.

I reinforce the comments of the hon. Member for Roxburgh and Berwickshire in relation to those who care for the disabled. A study by the Royal College of Nursing and the Spastics Society published today acknowledges yet again the valuable work done by carers. Studies estimate that the savings enjoyed by the state as a consequence of the work of informal carers is £24 billion per year. It is unacceptable that carers should be so poorly recompensed for the work that they do.

It is clear that the amount of money spent on care is infinitesimal. Financial support for carers currently accounts for 0.02 per cent. of the total social security budget, and invalid care allowance represents only 10.69 per cent. of national average earnings. That is scandalously low. Is it not time that the Government acknowledged the value of carers and their work and ensured that their efforts are recognised as a job of work and properly recompensed? There is no suggestion that carers demand to be recognised in that way—they work willingly—but we should accept that we owe a debt to those people for the savings that they make for the state.

Little has been said this evening of the problems with the social fund. The Department's own study, "Evaluating the Social Fund", highlights the fact that 60.5 per cent. of the survey sample had to cut back on food and living expenses, 46.6 per cent. cut back on clothing, and 20.6 per cent. on paying bills. Those on income support and at the lowest income level who have to apply to the social fund cannot afford such cutbacks. It is not good enough for the Government to say that they are considering the Department's report. They commissioned it, and they have had time enough to evaluate it, state their considered view, and say what they mean to do. The Government surely cannot be satisfied from that study that all is well.

In Committee this morning, debating a social security benefits statutory instrument on the preserved rights of individuals in residential care, the point was made that, despite uprating, there is overwhelming evidence that the care gap between income support levels and the fees charged for residential care is growing massively. Where people with so-called preserved income support rights are currently in residential care, the new community care legislation makes the local authority responsible for ensuring the future funding of that arrangement. That could lead to potential evictions from residential homes or, more probably, such homes going out of business. If that happens, those individuals will not enjoy the protection of preserved rights.

Will the Minister say how he views the future uprating of benefits against those costs? During the progress of the Community Care (Residential Accommodation) Bill, the hon. Member for Maidstone (Miss Widdecombe)—now the Under-Secretary of State—clearly recognised that problem and led an effective campaign which led to the acceptance of a new clause. Unfortunately, it did not end up in the Bill—but we will not go into the reasons for that. That problem has not gone away, and we must be sure that the Department recognises that and will bring forward proper provisions.

I believe that in recent years—whatever the uprating has been in terms of inflation—there has been a dramatic increase in the number of households and individuals facing debt problems. More than half a million households have serious multiple debts, and are in arrears to three or more creditors. That it because income levels for those on benefit are still too low. Many have had to turn to credit companies. I do not wish to be parochial, but a survey of Money Advice clients in Greater Manchester revealed that two of the main contributory factors to financial difficulties were unemployment and low incomes—both of which have increased under the present Government.

I hope that the Government will address those two important issues today. The only real way forward is to bring about a move back towards full employment, in the meantime recognising that a proper level of benefit is necessary to ensure that low-income families do not suffer the multiple debts that they are currently experiencing.

10.15 pm
The Minister for Social Security and Disabled People (Mr. Nicholas Scott)

This has been an important debate —partly because we are disposing of some £2–5 billion of taxpayers' money, and partly because social security legislation touches on those in the greatest need. We should debate closely and carefully the way in which the money is spent. Things may change now that I am on my feet, but so far this has been a high-quality, thoughtful debate: I feel that it deserves a large audience, and more participation by hon. Members, than it has achieved—but we are aware of the great attraction that social security matters hold for many of our colleagues.

In his opening remarks, the hon. Member for Glasgow, Garsgadden (Mr. Dewar) referred to the success of my right hon. Friend the Secretary of State for Social Security in the public expenditure survey which was concluded last year. Anyone who imagines that discussions between my right hon. Friend and myself and our dear and close friends in the Treasury are cosy fireside chats is very much mistaken; it was a tough public-expenditure round, and I do not think that my right hon. Friend has been sufficiently congratulated on the successful outcome that he achieved—a very full uprating of benefits across the board, and no increase in national insurance contributions. I consider that a remarkable achievement.

We are now faced with the issue of a long-term review of the pattern of social security. Given the size of the social security budget and its potential to increase, I do not think that anyone should be surprised if from time to time, instead of examining the pattern of expenditure year by year, we should take a more fundamental look at the way in which money is going, and decide whether the current pattern is appropriate for the next few years. I was delighted to hear the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)—and, indeed, the hon. Member for Croydon, North-west (Mr. Wicks)—welcome the news of a fundamental review.

I should like to say more about that, but I want to respond to a number of the points that have been raised. I shall not be able to cover all of them in the time available, but I shall consider them carefully tomorrow, when I have read Hansard.

I understand the anxieties that are felt about the important question of the independent living fund. The fund was originally introduced as a transitional measure, to operate until the introduction of the care in the community measures. Those measures are to be introduced at the beginning of April. During its short life, the fund has been a remarkable success. In the first year, expenditure ran to about £1 million; in the current year, it is approaching £100 million. In April, when the fund trust is ended and cases are handed over to a successor body, some 22,000 severely disabled people will constitute the case load.

Many hon. Members who follow these matters will be aware of the situation, but I should like to make it absolutely clear that we intend, in the very near future, to legislate to replace the independent living fund with two new trusts. One of these will take on the handling of the case load of 22,000 with freedom, if the care needs of individuals increase—as, sadly, they often do—to increase the level of payments in those cases. The other trust, which will operate in tandem with local authorities, will be in a position to top up with cash, where the services that local authorities provide cannot meet the full care costs of the more severely disabled people. Obviously, we shall have to see how this works in practice, but I believe that we have the right formula. That main responsibility for the provision of the community care packages that disabled and elderly people will need must lie with local authorities. In the case of the most severely disabled people, there is an argument for continuing an independent living fund that can operate in conjunction with the local authorities, and we shall so legislate.

The hon. Member for Manchester, Withington (Mr. Bradley) mentioned the interaction between the independent living fund and the delays in the payment of disability living allowance. I shall seek, in the course of my reply, to address that matter. It would have been open to the trustees of the independent living fund, before deciding to cease taking claims with a view to having an orderly hand-over of cases to the new trust in April, to deem someone who had applied for disability living allowance to have been in receipt of it, and therefore to be eligible for help through the independent living fund. In practice, that did not happen, but the option was available. The trustees were living within a budget. There were other constraints upon them. I hope that by April, when the two funds are operating, a number of people who might very well have applied if the fund had not been closed down for the purpose of achieving an orderly takeover will be able to apply for help from the new independent living fund.

It is not surprising that the social fund too has been mentioned, although it is surprising that it was referred to only in the opening and closing speeches by the Opposition. I understand the great interest in the whole operation of the social fund and its importance in addressing the exceptional circumstances and exceptional need at the fringes of the social security system. The amount involved is close to £80 billion a year. Since the invention of the pattern of social security, there has always been a need for some provision at the fringes that cannot be coped with in a regulated way. In these cases, discretion is absolutely essential. We have had the report by the social policy research unit of York university, the report of the Social Security Advisory Committee and the Government's own consideration of the pattern of the social fund.

It is obvious that very soon the Government will have to announce how they see the future of the fund. It was introduced just about the time that I came to the Department. Since then a number of things have struck me very clearly. One is the relative success of loans. The SPRU report drew particular attention to the way in which the concept of loans has gained acceptance, following a very hostile initial approach. There is now increasing acceptance, on the part of people who need help form the social fund, that loans are a sensible way of tackling many of their needs.

There have been about 1 million community care grants and about 5.5 million loans since the social fund started. The importance of loans lies in the fact that a given amount of money can be used successively to help a number of people. Thus, money can be put to much better use by being recycled.

Mr. Dewar

The Minister knows that there is a dispute about the cash-limiting effect of these provisions. On the specific point about loans, may I ask him if he is prepared to have a look at the question of repayment periods? Weekly deductions from benefit are often very high—or genuinely appear to the person concerned to be very high —and loans are sometimes refused on that ground.

Mr. Scott

I cannot go further than I have, but that is one of the matters that we shall consider when we make our announcements about the social fund.

A number of hon. Members asked about delays with the disability living allowance. I face an uncomfortable two hours tomorrow morning before the Select Committee on Social Security, which perhaps is the best forum to deal with that in detail. I want to pay tribute to the staff. I reiterate my regret about the distress that a number of claimants felt about the delay in the delivery of DLA, but the staff have done extremely well to deal with I million claims since DLA was introduced, and nearly I million claims have been cleared by staff. I see that the Chairman of the Select Committee has joined us now, and I shall look forward to expanding rather more on that topic tomorrow.

Dr. Godman

How long does it normally take for a commissioner's decision to be acted on by officers of the Department?

Mr. Scott

Assuming that the commissioner's decision is not appealed, it would operate very quickly. The hon. Gentleman raised a series of individual cases to which I cannot reply this evening, but I undertake to consider each one to see what lessons the Department can learn.

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) asked about invalidity benefit and where the projected savings of £240 million would come from. They will come from improving the medical controls over the delivery of invalidity benefit. People invited to medical examinations for invalidity benefit will be given more notice and will be asked for reasons if they feel that they cannot attend. They will be warned that failure to attend without giving proper notice may lead to their losing benefit and adjudication officers will have power to disqualify in those circumstances.

However, if there is a good cause for a further examination, we hope that they will be held more quickly —normally within six weeks—and we shall ask examining doctors to produce more comprehensive reports than hitherto. We believe that the savings that we have forecast will result from that. It is £240 million over the three years of the survey period, running at £50 million, £90 million, and £100 million over those three years.

The hon. Member for Roxburgh and Berwickshire asked about take-up. We are concerned to ensure maximum take-up of the benefits that we make available .We estimate that £9 of every £10 of income-related benefits is taken up, and four out of five people take up the benefits to which they are entitled.

The Government have an unparalleled record on carers. We have a very good record on the take up of invalid care allowance, on the carers' premium and on other support for carers. Caring is likely to move substantially up the political agenda in forthcoming years. We shall watch that with much care to see what we can do within the resources available. I pay tribute to the huge army of carers, who contribute to ensuring the quality of life of many elderly and disabled people in our society.

Mr. Frank Field

The Minister has highlighted the importance of carers, to whom both sides of the House attach similar importance. When the hon. Member for Havant (Mr. Willetts) was speaking for the Government this evening he said that the review will save money for taxpayers and redistribute resources. When there is a redistribution rather than tax cuts, where will carers stand in the pecking order for the largesse?

Mr. Scott

I am surprised that the hon. Gentleman, who well understands the complexity of the social security system and the shifting sands of demand within it, expects me to issue a batting order. I mentioned the increasing awareness of the role of carers which has been shown by the Government and other providers. We have recognised that role more than any previous Government, and I shall certainly not be drawn into issuing a batting order, despite my love of cricketing analogies.

In the past year, social security has been increasingly recognised as a vital factor in the lives of millions of our fellow citizens. We need to be fair to those who rely on benefits, but my right hon. Friend and I are also conscious of the fact that we have a responsibility to the taxpayers who provide the £80 billion a year that we spend on benefits.

I commend the orders to the House. We are considering five pieces of legislation which will ensure that the social security system will work effectively next year. We are setting benefit rates, providing increases to the guaranteed minimum pensions and making the normal adjustments to national insurance contributions.

Question put and agreed to.

Resolved, That the draft Social Security Benefits Up-rating Order 1993, which was laid before this House on 21st January, be approved.

Resolved, That the draft Social Security (Contributions) (Re-rating) Order 1993, which was laid before this House on 21st January, be approved.—[Mr. Andrew Mitchell.]

Resolved, That the draft Social Security (Contributions) Amendment Regulations 1993, which were laid before this House on 21st January, be approved.—[Mr. Andrew Mitchell.]

Resolved, That the draft Statutory Sick Pay (Rate of Payment) Order 1993, which was laid before this House on 21st January, be approved.—[Mr. Andrew Mitchell.]

Resolved, That the draft Guaranteed Minimum Pensions Increase Order 1992, which was laid before this House on 3rd December, be approved.—[Mr. Andrew Mitchell.]