Social Security Payments (Hansard, 5 July 1993)

§ 3. Mr. Fishburn
To ask the Secretary of State for Social Security what percentage of central Government spending will go in social security payments this year; and what the figure was in 1979.

§ Mr. Lilley
Expenditure on social security accounts for more than 30 per cent. of total Government expenditure. In 1978–79, the proportion was just 24 per cent.

§ Mr. Fishburn
Do not these figures show that, unless something is done about it, the growth in social security will overwhelm us all? Is not the main intellectual and political question for the Conservative party to seek to constrain that giant in the years ahead? Does my right hon. Friend agree that there is no better place to start than to set a date for the equalisation of the age at which men and women may retire?

§ Mr. Lilley
My hon. Friend is right; we have to start thinking now about these problems if we are to ensure that they are tackled sensibly and that we or a future Government are not forced into arbitrary cuts later. Every Government in the world face such a problem. Some, who perhaps have shown less foresight than us, have been forced into difficult and arbitrary decisions. Last week, the German Government had to announce nearly £10 billion of cuts, including real cuts of 3 per cent. in many benefits.
We are committed to introducing an equal pension age for men and women and we shall make an announcement on that in due course. It would not be sensible to make an announcement before we have heard the Coloroll decision from the European Court of Justice, which should clarify the position on the equalisation of private pensions. We are proceeding in an orderly and speedy fashion to that end.

§ Mr. Frank Field
Does the Secretary of State accept that he is panicking over his review of social security expenditure? Has he taken note of the Prime Minister's statement that 70 per cent. of the public sector borrowing requirement is due to cyclical—that is, unemployment—effects on the Government's budget? If that is so and the Secretary of State takes the Prime Minister's words to heart, should not he relax over the whole process?

§ Mr. Lilley
The hon. Gentleman forgets that we have set a new control total for public expenditure that deliberately excludes the cyclical rise in spending on the unemployed because we believed that it was right, morally and economically, to finance that rise as the economy went into recession. As we come out of recession, it is equally 5 right and proper to keep to the same total and ignore, therefore, the cyclical beneficial effects on unemployment. Otherwise, there would be a permanent ratchet effect—every time there was a down turn, the level of expenditure would be raised and it would never be allowed to recover. Even if one excludes unemployment, the underlying rate of growth of spending on social security spending has been 3 per cent. a year in real terms during the 1980s and is set to be 3.3 per cent. up to the end of the century. That is something which must be taken into account in any long-term review.

§ Mr. Forman
Is not the most disturbing consequence of the seemingly inexorable increase in social security over this long period the way in which it produces disincentives for people to take low-paid jobs? Is my right hon. Friend aware that one of my constituents, who saw me at my surgery on Friday, said that he has the possibility of taking a new job, largely on commission, selling insurance for £30 a week, plus any commission, whereas his existing income on income support is £300 a week? He complained that, when there is a disparity of that kind, where is the advantage of getting back into regular work?

§ Mr. Lilley
My hon. Friend points to a difficult problem that arises especially acutely in the case of those on income support who get help with their mortgage payments. I do not think that it is possible to resolve that problem simply by extending that help to people in work, except at the potential expense of several billion pounds, which clearly is not affordable in any foreseeable circumstances. Therefore, we have to look at other ways in which we can try to improve incentives in the system and, of course, we are doing so.

§ Mr. Dewar
Does the Secretary of State accept that many people are worried about the treatment of lone parents in future social security budgets following the speeches made by Ministers this weekend, some of which seemed to give the impression that lone parents were a feckless group of social outcasts? Is not it the case that 70 per cent. of lone parents are divorced, separated or widowed and that teenage unmarried mothers, so often represented as typical, are only a small minority of the total? Ministers preach family values, but does the Minister accept that their policies constantly undermine family stability?
Did the right hon. Gentleman notice—[Interruption.] Did the Secretary of State notice that statistics produced by his own Department in the past week showed that, in 1979, 19 per cent. of lone parents had a family income of less than half the national average? By 1991–92, that figure had grown to 60 per cent. Rather than simply criticising lone parents publicly, would not it be right for Ministers to concentrate on helping the vast majority who want to earn their keep, by improving affordable child care facilities, training opportunities and job opportunities?

§ Mr. Lilley
The hon. Gentleman is wrong on most points. The largest, fastest-growing group of lone parents —they cover a variety of different categories—is the "never married" category. The important thing is that we are not against any category of people and we are certainly not against lone parents. We are in favour of parents—both parents—accepting responsibility for their children and offering them love, affection and support. The state can and must sometimes step in with monetary help if 6 marriages break down and the parents are unable to support their children. However, we can never substitute for that love and commitment.
Everyone notices that Opposition spokesmen, with one or two notable exceptions, never say anything good about the family and they always seem to support alternatives to it. That is, I imagine, why one anonymous leading Labour figure is quoted in The Independent today as saying that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should stop trying to defend the indefensible. I agree with his colleague the hon. Member for Sheffield, Brightside (Mr. Blunkett) who, in a "carefully worded statement" according to The Independent, made it clear that Ministers were right to tackle the issue of single parents. He said We need … real action to reinforce personal responsibilities. That means acceptance by fathers of their obligation towards their children and … housing policies which do not encourage the belief that the only way to a home is having a baby. I agree with the hon. Gentleman.