§ The Minister for Social Security and Disabled People (Mr. Nicholas Scott)I beg to move amendment No. 1, in page 3, line 21, leave out "£42.70" and insert ""£43.45".
§ Madam Deputy SpeakerWith this it will be convenient to discuss Government amendments Nos. 2 to 8 and No. 14.
§ Mr. ScottThe amendments deal with the way in which the rates of incapacity benefit and statutory sick pay set out in the Bill will be revised to take account of the genuine increases in benefit rates—[Interruption.]
§ Madam Deputy SpeakerOrder. If hon. Members wish to chat, will they please do so outside the Chamber?
§ Mr. ScottThe amendments will ensure that the rates of benefit will be revised to take account of the general increases in benefited rates from this coming April and also in the April 1995 uprating. Amendments Nos.1 to 7 are straightforward; they simply replace rates of incapacity benefit set out in clause 2 to bring them into line with the new April 1994 rates of sickness and invalidity benefit.
Amendment No. 8 has two purposes. The first is that the amendment will provide for the middle rate of incapacity benefit to be increased, but only if the Secretary of State decides to uprate the higher rate of statutory sick pay before the commencement of the Act. Its second role is to provide for a further increase to the rates set out in clause 2 to take account of any increase in benefit rates that are required in accordance with the April 1995 uprating.
As hon. Members who followed the debates in Committee will be aware, from the introduction of incapacity benefit we are committed to increasing all the basic rates, age additions and dependency increases in line with the general uprating of benefits. That means that the middle rate of incapacity benefit will be uprated in the usual way from 1996 thereafter. I hope that the House will support the amendments.
§ Mr. IngramThe Minister gave a very brief outline of what the Government propose to do. I do not know whether he wanted to appear as Father Christmas; perhaps it would have been better if he had put on the guise of one of the Greeks with the Trojan horse. We are not going to have a brief debate because the matters underlying the Minister's announcement are at the heart of some of the Bill's worst aspects. The announcement involves not only uprating, but those affected by the rates.
Throughout our discussions of the Bill, both here and in Committee, we said that the uprating, about which we have just been advised, and which we debated in detail in Committee, would be no less than an assault on people with disabilities. The essence of the Bill—as revealed through the rates that have been increased to take account of the recent uprating statement—involves cutting the amount paid to those with disabilities who are unable to work after April 1995.
The amendments alter only slightly the extent of the cut that those disabled people will face from April 1995. The Government amendments remind us of the analysis of the cuts that was made on Second Reading and explored in detail in Committee.
The Bill extends the short-term incapacity period, as it is classed, from 28 weeks to 52 weeks. That will mean that benefit entitlement will be delayed for a full year, and will result in a lower level of payment than is currently available through invalidity benefit. Often, the needs of a newly disabled person are greatest in the early stages. We discussed that in great detail in Committee, but unfortunately we were unable to convince the Ministers of the merits of our argument. We hoped that the upratings contained in the Government amendments would be much more substantial and would recognise the strengths and merits of the arguments advanced in Committee.
There is a concession to those with a terminal illness or a deteriorating or long-term sickness, but it does not extend to the short-term incapacity period, which has been increased from 28 to 52 weeks. To make someone with a teminal illness or a major deteriorating or long-term sickness wait 52 weeks before receiving the full benefit is nothing short of a disgrace.
208 While the amendments redefine the short-term incapacity period as 52 weeks, the new all-work test remains applicable at 28 weeks. That means that people who pass the test at 28 weeks will be regarded as incapable of all work, but will not be entitled to full benefit for a further 24 weeks. That delay in the long-term entitlement from 28 to 52 weeks means that the basic rate of benefit will be awarded at two levels and will not be paid at the full rate. No allowance for children and no full allowance for a non-working partner can be paid. No allowance will be based on the claimant's age.
It is worth while dealing in detail with what the Minister briefly set out earlier and to consider how each new rate compares with existing invalidity benefit. We should consider the impact of the changes proposed in the Government amendments on current invalidity benefit claimants.
Rather than being entitled to long-term benefit at 28 weeks, as is the present position, claimants will be paid a higher rate component of short-term benefit for 29 to 52 weeks. That means that less money will be paid as a higher rate short-term benefit, and at a lower rate than the long-term benefit. Further costs are to be made by non-payment of age additions until after 52 weeks, and then only under restricted conditions.
I should like to go back to the preceding debate so that Conservative Members at a later stage—either in our deliberations of the Bill or after the Bill is enacted—cannot say that they did not know what the effects of the measures would be. If they approve the Government's uprating measures, they will be accepting the cuts. If the Government had tabled different amendments that took account of the merits of the arguments advanced in Committee, they would have obviated the need for me to give the following facts for the benefit of the House, especially Conservative Members.
I propose to deal with each category of person who will be affected by the new rates and to compare what they receive under the invalidity benefit system with what they will receive after uprating to consider the loss implications. The greatest loss will be in the 29 to 52 weeks period. The losses will be substantial if the Government amendments are accepted.
A single person who is under 40 years of age receives at present £69.75 in invalidity benefit. Under the new short-term higher rate incapacity benefit, which is payable after 28 weeks for 24 weeks, the same individual with the same illness will receive £52.50 a week. That is a loss of £17.25 a week. Over the 24-week period, the loss amounts to £414. A single person under 50 years of age receives at present £65.20 in invalidity benefit. Under the new benefit rates, that person will receive £52.50, a loss of £12.70 per week and, over the 24-week period, a total loss of £304.80. A single man under 60 years of age and a single woman under 55 receive £61.40 in invalidity benefit. Under the new benefit rates, they will receive £52.50—a loss of £8.90 per week and a total loss of £213.60 over the 24-week period.
The extent of the loss for those with families is even greater. A married person under 40 with two children receives £125.05 in invalidity benefit. Under the new benefit rates, that person will receive £79.40—a loss of £45.65 per week and a total loss of £1,095.60 over the 24-week period.
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A married person under 40 with no children would receive £104.25 per week under the present system and £52.50 per week under the new benefit—a loss per week of £51.75 and a total loss over the 24-week period of £1,242.
At present, a married person under 50 with two children would receive invalidity benefit of £120.50 per week and £79.40 under the new benefit rates-a loss per week of £41.10 and a total loss over the 24-week period of £986.40.
A married person under 50 with no children would receive invalidity benefit of £99.70 and £52.50 under the proposed benefit rates—a loss per week of £47.20 and a total loss over the 24-week period of £1,132.80.
A married man under 60 and a married woman under 55 with two children would receive £116.70 in invalidity benefit. Under the new incapacity benefit rates they would receive £79.40—a loss per week of £37.30 and a total loss over the 24-week period of £895.20.
A married man under 60 and a married woman under 55 with no children would receive invalidity benefit of £95.90 and £52.50 under the new rates—a loss per week of £43.40 and a total loss over the 24-week period of £1,041.60.
Those are substantial sums, but I am putting all this information on record—and there is more to follow—so that Conservative Members who are not present to listen to the information may pick it up in the Lobby and change their minds. They may decide that they do not want to support the proposed changes, but even if they continue to support them, they may put additional pressure on sympathetic Ministers responsible for the Bill and ask them to put more pressure on the Treasury to bring about a different approach to the whole ethos of the measure.
The figures I have given do not illustrate how families will be affected. Those with more than two children will lose an additional £11 a week for each additional child. Over the 24-week period that adds up to a loss of £264. Someone under 40 who is married with three children will face a total loss over the 24-week period of £1,362.60.
Those are substantial losses for people who are going through the difficult adjustment to what is now termed incapacity for work and are having to live off much-reduced benefits. Clearly, it affects families worse than others, because of the impact of a small sum going into the family home. It creates great difficulties for parents trying to sustain their children on a weekly basis on a much-reduced sum of money.
While the major losses will be sustained within the 29 to 52-week period, there will also be losses from 52 weeks onwards, but there are two surprises in the information I am about to give.
A single person under 35, receiving invalidity benefit of £69.75, will continue to receive £69.75, so the loss for that individual is zero. Surprise number one is that we have actually found someone who will not lose under the proposed measures. Unfortunately, the trend does not continue for long, because a single person under 40 who would at present receive invalidity benefit of £69.75, will receive £63.70 under the new rates—a loss per week of £6.05.
A single person under 45 who would receive invalidity benefit of £65.20, will receive £63.70 under the new rates —a loss per week of £1.50. A single person under 50 who would receive invalidity benefit of £65.20, will receive £57.60 under the new rates—a loss per week of £7.60. A 210 single man under 60 and a single woman under 55 who would receive invalidity benefit of £61.40, will receive £57.60 under the new rates—a loss of £3.80 per week.
Hon. Members will want to know when the next big surprise is coming. It is in the very next piece of information and relates to a married person under 35 with two children, who under invalidity benefit would receive £125.05. Under the new rates that person will receive the same amount, so again there will be a loss of zero. It is miraculous that out of all the categories I have listed only two sustain no loss whatsoever.
I do not imagine that there will be much rejoicing even in those households. They will be saying, "If everyone else is losing, for how long will I continue not to lose?". How long will it be before the man from the Treasury knocks on the door of the Secretary of State for Social Security asking to see his secret little list and asking him what other categories of people can bear a cut in benefit?
It is worth while putting on record the other categories and the rates that will apply to them. A married person under 35 with no children, who would receive invalidity benefit of £104.25, will receive £69.75 under the new rates—a loss per week of £34.50.
A married person under 40 with two children, who would receive invalidity benefit of £125.05 a week, will receive £119 under the new rates—a loss per week of £6.05. A married person under 40 with no children who would receive at present £104.25, will receive £63.70 under the new rates—a loss per week of £40.55.
A married person under 45 with two children, who would receive £120.50 at present, will receive £119 under the new rates—a loss per week of £1.50. A married person under 45 with no children, who would receive £99.70 at present, will receive £63.70 under the new rates—a loss per week of £36.
A married person under 50 with two children, who would receive at present £120.50, will receive £112.90 under the new rates—a loss per week of £7.60. A married person under 50 with no children, who would receive at present £99.70 will receive £57.60 under the new rates —a loss per week of £42.10.
A married person under 60 with two children, who would receive at present £116.70 per week, will receive £112.90 under the new rates—a loss per week of £3.80. A married person under 60 with no children, who would receive at present £95.90 will receive £57.60 under the new rates—a loss per week of £38.30.
Certain assumptions are built into those calculations, but it is a reasonable assumption that all spouses referred to in the categories are under 60.
A range of swingeing cuts is implicit in what the Minister has announced tonight. It may well be that the answer to the argument might be that some people receive other benefits as a consequence. However, the Government's own estimates show that only 40 per cent. of claimants will be eligible for income support, thereby falling into the safety net. So a significant number of people will lose substantially as a result of the figures that we are being asked to consider.
I have dealt with the categories of people that fall ill in the period 29 to 52 weeks, and those who are on longer-term benefits after 52 weeks. It is no surprise that there will be a loss for people who fall in the cateogry of up to 28 weeks. That area will have two rates of basic benefit. For people falling sick while in work, the statutory sick pay will be £52.50 a week at current rates. Others, 211 such as the self-employed, will receive the same rate of sickness benefit of £43.45. No dependant's allowance will be payable unless the dependant is looking after children or is under 60.
The current rate for dependants is £26.90 a week. The potential loss during the first 28 weeks for certain categories amounts to £753.20 for someone with a dependant who would be entitled to an increase of benefit under the old rates.
I am sure that you, Madam Deputy Speaker, did not have the benefit of listening to these arguments in Committee. I am sure that you are finding the information riveting. It is not the most declaratory speech imaginable, but none the less it is important to get this information across and on the record. It would have been useful if the Minister had given an indication of the type of cuts that are implicit within the uprated benefits. Ministers have never really accepted what they are doing here. They have argued fast and furiously against all the arguments advanced.
The point has been made time and again, in Committee, on Second Reading and tonight, that while Members in the House may be interested in this, most of the information —probably all of it—is coming from groups who represent those who will be affected by these measures.
These are not scare tactics. I am not trying to say something that will not happen. I am not using points for arguments sake. These are straightforward facts about the reality of this measure and what the amendments relate to.
On top of that, we must take our minds back to the additional pension. It was stated during Second Reading and came up again in Committee, but a commitment was given by the Minister some time back. He said:
All the rights built up in the years up to and including the 1990–91 tax year will be preserved, whenever the claim for invalidity pension is made, however far in the future that may be. Moreover, such additional pension will continue to be subject to revaluation uprating in exactly the same way as at present"— [Official Report, 3 April 1990; Vol. 170, c. 1115.]We are not very far in the future and the Government are not announcing anything tonight to ensure that that commitment will be adhered to. That adds up to a substantial loss for a particular category of claimants.Every category, group and individual who is affected by someone in the family or who is conditioned by a disability will lose out under the new incapacity benefit if they become incapable of work after April 1995. I am grateful that the Minister is nodding. I hope that at some stage during this part of consideration of the Bill he will stand up and admit the extent of the cuts.
We have talked extensively in previous debates about the global sums—savings of £550 million in the first year and gross savings of £1.4 billion. in year two. Those are great sums, but individuals and families will suffer as a consequence. They will not lose £1.4 billion, but they will lose a lot of important pound coins each week, which allow them to survive, keep them going, give them a bit of dignity and, if they have children, allow them to look after them with some measure of confidence. All that will go.
As I was considering the uprating figures, a particular phrase came to mind of my right hon. Friend the Member of Islwyn (Mr. Kinnock). It was an extensive speech, but I shall take just one small part of it. In 1983, he said that he warned the people of Britain not to become sick, disabled under this Government. Those were prophetic words, because what we are now considering in this measure and in rates that I listed show what he meant by that. Those words are coming home with a vengeance to 212 those people who will become incapacitated for work after April 1995. Indeed, in the longer term, it may mean the same for those receiving invalidity benefit.
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We have asked the Minister before whether he is prepared to say that those currently receiving invalidity benefit will continue to receive those amounts uprated for ever more. It is unlikely that he will say that, but throughout the Bill's Committee stage, the Minister and his hon. Friends kept asking Labour Members what commitments a future Labour Government would give. We are not in government at the moment. The Minister is part of the Government. What commitments can he give for people in receipt of invalidity benefits? Will they always receive the same rates? Are there no plans to bring them into line with those who will receive the new incapacity benefit rates after April 1995? I will listen carefully to what the Minister says about that.
Having set out the details of what the new rates mean, it is appropriate to set out how we will react to them. It would be nice to vote against the Government—it is populist in some parts of politics to vote constantly against the Government—but that would be doing a major disservice to those who will receive the new benefits. Although they will receive major cuts as a consequence of these benefits, none the less it would be wrong for the Opposition to vote against what is proposed. Any small amount is to be welcomed, but it is a small amount on a much reduced amount. That is the main thrust of the criticism that I put to the Minister tonight.
We will not be calling an official vote on these amendments, because it is important that we get a bit more than was previously written down in the original Bill. All of the facts and the information needs careful examination and consideration. Perhaps some of my hon. Friends will want to elaborate and add to what I have said. That will all be on record for the future. When Conservative Members consider the matter in future, they cannot complain that they did not know.
Mr. Ted Lowlands (Merthyr Tydfil and Rhymney)I draw the attention of the House to the potential problems that will arise in a community such as mine from the vivid and frightening account that my hon. Friend has just given of the potential and future cuts in invalidity benefit that will occur. I make no apology for returning to an aspect of the problem that I raised briefly on the money resolution after Second Reading—the impact that the changes that the Bill might foreshadow not only for individual families but collectively on the purchasing power of a community.
In that context, I draw the attention of the House and of Ministers in particular to the role that invalidity benefit has played in sustaining that purchasing power and to the impact that any future cuts of the kind envisaged and described so vividly by my hon. Friend will have on the future purchasing power of a community such as mine.
I draw the attention of Ministers to the context in which those changes can take place in a community such as Merthyr Tydfil and Rhymney. In 1981, 20,800 people were in employment in the borough of Merthyr Tydfil. Of those, 13,100 were men, 400 of whom were formerly part time. There were 7,700 women in work, of whom nearly 50 per cent.—3,200—were part-time. A decade later, in 1991, only 16,700 people, men and women, were working—
213 16,700 out of 60,000, in the area where the industrial revolution began. Of those 16,700, only 8,700 men were in work. Those figures take us back to the 1930s; indeed, in terms of the insured population, they are the equivalent of figures for the late 1930s. we should consider the cuts and changes introduced by the Bill in that context.
In communities such as mine, the employment base and the labour force have shrunk, and the number of people in work has not risen but fallen dramatically over the past decade. It is in that connection that we should consider the impact of any future changes in invalidity benefit on, for instance, Merthyr Tydfil, Cynon Valley and Rhymney.
Unfortunately, we cannot produce figures for the number of people receiving invalidity benefit on a borough or even a constituency basis. One must therefore make certain extrapolations. At present, 28,000 people in Merthyr Tydfil, Cynon Valley and Rhymney are receiving invalidity benefit. According to a letter from the chief executive of the Benefits Agency, the arrangements for the Merthyr Tydfil district are not coterminous with those relating to the Merthyr borough, where the number of claimants was 11,946. In Wales as a whole, more than 156,000 people are receiving invalidity benefit.
It is just possible that roughly as many people in the Merthyr borough now receive invalidity benefit as there are men in work. That is a frightening, horrific and wicked situation. Occasionally at Tory party conferences Ministers make speeches implying that we wallow in dependency —that we believe in the dependency culture revealed in the figures that I have quoted. That is nonsense. I do not want to depend on the state, and nor does Merthyr Tydfil. We know—and the Bill demonstrates—just how capricious Governments can be when it comes to sustaining and supporting people in need.
For a combination of reasons, we have been driven into a more dependent society in the past 10 or 15 years. As I have said, because so many people have fallen ill in work and had to stop working, the number of people receiving invalidity benefit is probably nearly as great as the number of men in employment. I am sure that the Government do not welcome that position any more than we do.
Nevertheless, the benefit has been vital. There is one major difference between the recessions of the 1980s and early 1990s and the recessions that hit our area in the 1930s. Up to a point, purchasing power has been sustained in communities such as ours; we have not experienced the absolute deprivation that was so characteristic of south Wales mining communities such as the one that I come from and now represent. The difference lies in the contributory benefits created by a post-war generation who experienced regular employment for the first time and who established a series of rights deriving from that experience, including sickness and invalidity benefits.
That has been an extremely important factor in sustaining the purchasing power of the community. While the number of people in employment has shrunk, invalidity and other contributory benefits have developed for the reasons that I have given. What will happen if we cannot rapidly reverse the decline in employment, and if the cuts described by my hon. Friend the Member for East Kilbride (Mr. Ingram) are introduced in the next year or two? What will happen to those who have accrued rights to invalidity benefit as a result of their employment over the past 10, 15 214 or 20 years and who, having fallen ill and requiring the prop of that benefit, receive a much reduced amount? The result must involve a potential reduction in the purchasing power of communities such as Merthyr Tydfil, Rhymney and Cynon Valley.
I ask the Minister, as I did when we discussed the money motion, to consider the ripple effect of the changes made by the Bill. On the money motion, I mentioned the number of people who would receive no benefit of any kind. As my hon. Friend has pointed out, future beneficiaries will receive much less than those who receive invalidity benefit now.
There is another aspect. Can hon. Members imagine the envies and jealousies that will grow up between neighbours in every street in close-knit communities of the kind that I represent? There will be two distinct classes of invalidity beneficiary: those receiving existing rates, and those who will receive the much lower rates. I do not know what kind of society the Minister represents, but people compare such rates in the club or on the doorstep. Word gets around. As I listened to my hon. Friend, I envisaged the pattern of my surgery work following April 1995. We have had the Child Support Agency this year; next year, it will be invalidity benefit. At least hon. Members will not be short of work, at least in our surgeries. The difference between beneficiaries will not be merely marginal.
As I said when I spoke on the money motion, the changes made by the Bill will affect not only the individuals and families of the future who may depend on invalidity benefit, but the purchasing power and therefore the economic health of societies such as ours in Merthyr Tydfil and Rhymney.
§ Mr. Jamie Cann (Ipswich)I, too, welcome the uprating—albeit small—in the amendment. I must add, however, that I see it in the context of what has passed before my wondering eyes during the past few weeks, in my first Standing Committee. What has happened to a scheme that will be very important to hundreds of thousands of people has been largely unreported by the press and, judging by the appearance of the Press Gallery, it will be largely unreported today.
Cut after cut has been made in the existing invalidity benefit scheme, and time periods have been extended to save money. When we ask for reasons, we are confronted by the smokescreen erected by the Prime Minister and the Secretary of State—but particularly by the Prime Minister. In June last year, he said that it beggared belief that the number of people receiving invalidity benefit could have increased from 700,000 to 1.5 million over, I think, five years. The implication was that many recipients of such benefit did not really deserve it.
There is no evidence to support that view, especially in the five reports commissioned by the Department of Social Security. According to the most authoritative report that I have seen—from the Policy Studies Institute—29 per cent. of the extra cases have been people of pensionable age, drawing the benefit instead of pension for tax reasons, 16 per cent. results from the increase in the number of women in the labour market, 13 per cent. result from the gradual increase in the number of disabled people in the relevant age groups—another demographic factor—and only 42 per cent. relate to a genuine growth in the rate of claims in a stable population of disabled people.
We must ask ourselves why. Is it because more people are receiving sick notes who should not be, or is it because 215 people on invalidity benefit are finding it increasingly difficult to get back into the job market? Everyone whom I have read on the subject has found that it is the latter, not the former.
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Why are we introducing the new medical test that will apply to new applicants? There is no logic to it, because it does not apply to previous applicants. The Government apparently believe that half of them are scroungers but they will continue to get invalidity benefit at the previous rate, whereas people who pass a new and more difficult test will receive less. What equity or fairness is there in that? It is nonsense and it is a smokescreen.
The truth is that the Bill is about reducing public expenditure to pay for the Government's mistakes. It will gross the Government £550 million in the next financial year starting in April 1995 and £1,450,000 in 1996–97. It is not only I who say that. Every voluntary organisation that deals with invalidity benefit and disabled people says that. It is best encapsulated in a brief quotation from Ann Robinson, the chief executive of the Spastics Society. She said:
The Government claims to be scrapping Invalidity Benefit on the basis that many people who can work are claiming it, but we've yet to see any evidence of this. This legislation is about reducing public expenditure, not ensuring the right benefits reach the right people. Once again, disabled people seem to be getting a rough deal as a result of Government cost-cutting. This new benefit will not meet the needs of disabled people who cannot work.I know it, the House knows it, the voluntary organisations know it and, very soon, the country will know it.
§ Mr. MudieIt is a pity that the Chamber, like the Standing Committee, is devoid of Government Back Benchers as they are the people who will enable the measure to be passed and put into effect. It is a shame that the Benches are empty now but at 10 pm the Lobbies will be full and the measure will be passed.
The devastating figures outlined by my hon. Friend the Member for East Kilbride (Mr. Ingram) show the effect of the measure on ordinary families in which the breadwinner has the misfortune to fall ill, have an accident or suffer from long-term sickness. The figures are also devastating to the Government's integrity.
Let us remember the origins of the Bill. They are similar to those of the Child Support Agency, which has been mentioned so often. That agency was formed on the basis of the then Prime Minister deciding in an off-the-cuff speech that we should chase errant fathers, thus pushing hard-working people into bankruptcy. The situation now—
§ Mr. Deputy Speaker (Mr. Michael Morris)Order. We are discussing Government amendment No. 1, which does not refer to the Child Support Agency.
§ Mr. MudieI had just finished with the Child Support Agency because I realised that you would quickly decide, Mr. Deputy Speaker, that the amendment did not relate to it. However, this measure is similar, especially as we are dealing with amendments to the uprating of benefits.
As my hon. Friend the Member for Ipswich (Mr. Cann) said, it was the present Prime Minister who said that it beggared belief that the number of those in receipt of invalidity benefit had jumped from 600,000 to 1.4 million in the space of 10 or 12 years. The Prime Minister's remarks gave the impression that a number of people in a 216 healthy nation—as the Prime Minister put it—were wrongly in receipt of the benefit. That may be so; if it is, it should be considered and legislated on. No one would complain about that.
However, in the first five paragraphs of his Second Reading speech, trying to sell this ugly, nasty and mean measure to his Back Benchers and to the House, the Secretary of State said that the review of the social security system was intended to
safeguard the position of the most vulnerable".That is important because it establishes the fact that the Secretary of State understands that those in receipt of long-term benefit are the most vulnerable. However, still within the first five paragraphs of his speech, he said that thesums devoted to sickness benefitsshould beproperly focused on those who are genuinely too unwell to work"."Focused" and "genuinely"—there will be no difference between the two sides of the House about the use of the words. Any money available should, in the Secretary of State's words, be focused on those who are genuinely vulnerable and genuinely unwell.I dare not ask, Mr. Deputy Speaker, because I know that you cannot participate in the debate, but I wonder what picture is forming in your mind. Someone listening, perhaps naively, to the Secretary of State would believe that some people were receiving money unfairly and not according to the rules so they were to be weeded out and benefit focused on genuine cases.
In the same part of his speech, the Secretary of State also said:
The Bill is not an attack on the sick and disabled; it is the very reverse. It is designed to protect their benefit against those who abuse it. As a result, it will make their benefits sustainable despite the other pressures on the social security system."—[Official Report, 24 January 1994; Vol. 236, c. 35.]If you will permit me, Mr. Deputy Speaker, I shall emphasise the key notion, which is that the available money should be devoted to, and focused on, the vulnerable and genuinely unwell, that their benefit should be protected so—this is most important in terms of the amendments—that their benefits are sustained. That presents a picture of weeding out those who wrongly receive benefit but protecting the genuine.I challenge the Minister not to acknowledge that a person who is long-term disabled and who will be eligible for incapacity benefit under the operation of this legislation in 1995 will not be worse off in benefit terms than a person receiving benefit before the operation of the legislation in 1995. In other words, there will be two types of disabled people.
We accepted a given level of benefit for some people before 1995. My hon. Friend the Member for East Kilbride spelt out the amounts but I am not sure whether you were in the Chamber at the time, Mr. Deputy Speaker—I believe that Madam Deputy Speaker was in the Chair. My hon. Friend said that a married man under 40 with two children in the last six months of his first year of benefit loses £1,095. Is that protecting and sustaining the most vulnerable?
I see that the Government Whip is raising his eyebrows, but I am quoting the Secretary of State. It was on that basis that the Bill was sold to the House. Does it sound as if the 217 Secretary of State is protecting and sustaining the most vulnerable? A married man of 50 with no children will lose £1,132 if he has been ill for more than six months—
§ Mr. Deputy SpeakerOrder. I am having a little difficulty in discovering to which amendment the hon. Gentleman's figures relate; perhaps he can advise me.
§ Mr. MudieWith permission, Mr. Deputy Speaker. I am nearing the end of my remarks so I hope that you will not be unduly worried. The fact is that my comments are in order. The amendments deal with the uprating of benefits. The figures were read out by my hon. Friend the Member for East Kilbride and were unchallenged by Madam Deputy Speaker because they were a comparison of invalidity benefit currently paid to an individual and what will happen when the Bill becomes an Act.
You will now see the relevance of my remarks, Mr. Deputy Speaker. Ministers may say that they will sustain the most vulnerable, but the figures expressed by my hon. Friend show that Ministers will do nothing of the sort. The Bill is not an attack on wasters or on abusers. It is a deliberate attack on the most vulnerable.
As we said in Committee, our treatment of those who have the misfortune to be off work due to illness for a long period of time is a mark of our society. That illness affects them physically and financially and it affects their family. My hon. Friend has done a service to those people. The only trouble is that Conservative Members, who are not in the Chamber, will troop through the Lobby and will vote for those rates of benefit.
As has been said, in a couple of years' time, when the disabled and the ill are in our surgeries, they will say that they do not know how the legislation was passed. They have no excuse not to know because the rates have been spelled out. The grand idea is that the Bill attacks abusers, but it has been shown for what it is—a nasty, mean measure that attacks the most vulnerable in our society.
§ Mr. ScottIn drawing this short debate to a conclusion, I acknowledge that it was right and fair of the hon. Member for East Kilbride (Mr. Ingram) to set out in detail the impact of the changes to provision for incapacity benefit which the Government are making through the Bill. I make no complaint about that. It put the Bill in an acutely personal light and it is right that we should all be aware of that impact. Obviously, those of us who were responsible for drawing up the new proposals were aware of that. The hon. Gentleman has brought it to a wider audience, and I cannot complain.
When we came to consider the scope and the role for incapacity benefit as opposed to invalidity benefit, which will be removed in 1995 except for the existing caseload, it was also right to consider the level of benefit, especially the add-on bits which formed parts of invalidity benefit over the years. In part at least we carry the sentiments of the hon. Member for Glasgow, Garscadden (Mr. Dewar) with us, because the main factor in the reduction in invalidity benefit for new entrants after April 1995 will be the absence of additional pension. The House will remember only too well the remarks of the hon. Member for Garscadden in that debate when he acknowledged, at least in passing—I do not suggest that it was a considered view on that benefit—that additional pension was perhaps an anomaly in the present-day social security system.
218 I believe that that is an anomaly because additional pension was introduced at a time when the ability of people to make other provision for their future was much less common than it is today. A substantial percentage of those in receipt of invalidity benefit today have other resources, in savings or in income from their previous employment. Additional pension in those circumstances had become an anomaly. Many others will have other resources available to them.
Although everybody who was in Committee is aware of the fact, it is worth emphasising that there will be no loss to the existing beneficiaries at the point of change for so long as they continue to qualify for the benefit. I have made it clear before, but I reiterate it if the hon. Member for East Kilbride would like me to, that it is the intention to continue to uprate that entitlement in the usual way in subsequent years.
8.15 pm
Let me turn to the basic principle of the Bill. The hon. Member for East Kilbride spoke only from the Front Bench and therefore it is not entirely unreasonable to make a point that I know was made frequently in Committee. I do not want of tease him too much about it, but, in criticising our efforts and intention to constrain the growth of the social security system, by constraining invalidity benefit in particular, by altering its scope, by introducing the objective medical test and by taking away some of the add-ons to the existing benefit, is he making a commitment to restore the present situation in future years if there should ever be again a Labour Government?
The Government believe that we have a clear duty to contain the growth in spending on sickness benefits and to introduce an affordable system which focuses benefits on those most in need. Our proposals for restructuring will provide a basic income for all those who cannot work and they will focus resources on the genuinely long-term sick. That is the right way to tackle the situation, as long as we ensure that no one suffers a reduction in benefit when the new proposals are introduced. The Government are determined to make provision affordable in that area.
Before I sit down, I wish to deal with a point made by the hon. Member for East Kilbride on the terminally ill. As he knows, the terminally and seriously ill will receive benefit for the first 52 weeks. Those receiving the lower rate of short-term benefit will receive a significant increase after 28 weeks; and incapacity benefit, as the hon. Gentleman knows, is not intended to meet the extra costs of the terminally ill or severely disabled. Disability living allowance is available to help with extra care need, and the hon. Gentleman will know that the care component is payable immediately to the terminally ill. We have set out what I think are satisfactory and well-regarded arrangements to ensure that applicants are put on a fast track.
I said in Committee that I would consider the arguments for bringing forward the longer-term rates of benefit. As my hon. Friend the Under-Secretary said earlier, we are considering the points that were made and we hope to reach conclusions on them in the near future. Obviously we shall ensure that everyone is informed as and when we reach those conclusions.
The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) reiterated, perhaps at slightly greater length, the points that he made in Committee. I understand the economic impact on his constituency. I make two points in response to his comments. In the first instance, all 219 the existing caseload will continue to be entitled to their existing benefit, uprated as usual, so that there should be no immediate impact on purchasing power in his constituency. It is perfectly proper for him, as a constituency Member of Parliament, to put forward the impact of any Government policy on his constituency's economic prospects, but it is not the purpose of invalidity or of future incapacity benefit to underwrite, as it were, the prosperity of all those living in that area.
I made it clear when I responded to the hon. Gentleman's questions on the money resolution that I understand the role that invalidity benefit played at a difficult time in Merthyr Tydfil, in other parts of Wales and elsewhere. However, I do not believe that, in the long run, that is the purpose of invalidity benefit.
§ Mr. RowlandsA little earlier, the right hon. Gentleman rested his case for the change on the ground that the benefits were created when people could not create occupational benefit rights. The point that I was trying to make, further to those on the money resolution, was that, as a result of the shrinking number of people in employment in our area, we shall not have a new generation creating those rights. At the same time, the available benefit will reduce for those who are entitled to it. It worries me that we are being driven backward into more of a dependency culture than ever before.
§ Mr. ScottI do not wish to stray too wide of the debate, but I am sure that the hon. Gentleman will take all sorts of opportunities to impress upon other parts of the Government the contribution that they can make to the economic health of his area. I must also emphasise the fact that, although existing beneficiaries may lose entitlement under what will in future be incapacity beneift—in essence, it will be the continuation of their invalidity benefit after 1995—if they come off benefit, they may be able to get back into work or they may qualify for other benefits. Nobody will be left with no resources whatever.
I understand what the hon. Gentleman said about the problems that can arise, especially in small, tight-knit communities, when people in similar circumstances are on two different rates of benefit. However, to avoid that, unless we were to leave the whole system intact for ever —that would not be realistic, sensible or prudent—we should have had to take their entitlement away from existing beneficiaries and reduce their benefit to the level of incapacity benefit that was being introduced. In recent years that has been virtually unheard of, because when there are changes in social security provision we have always endeavoured to ensure that people's existing entitlement is not reduced at the point of change, even though those who become entitled in future will have a lower entitlement.
The amendments provide an uprating for the range of benefits now and make provision for benefits to be upgraded again in April 1995. I understand that Opposition Members may feel that the benefits are inadequate, but I welcome their undertaking not to vote against the amendments.
§ Mr. IngramWe started out not knowing whether this would be a lengthy debate. The Minister said that it would be short, but I suspect that it has probably grown longer than he expected when he gave his one-minute introduction to the amendments.
220 The debate has been useful because it has drawn out much of the principle underlying the Bill, and we shall pick up the different messages that the Minister put out about that. He made a sterling defence of many aspects of the Bill, but some of us can read between the lines and see some of the other approaches that he might have liked to be used in defence of disabled people.
No one denies that it is the role of Government constantly to examine the way in which benefits are paid and the overall budget for social security provision. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) set out the Opposition's position on that clearly on Second Reading. The Minister tried to tease me a little by asking whether what we had said amounted to a commitment on my part to restore the benefit. He will not be surprised to hear that I do not intend to be teased in that way. That is no part of the purpose of the debate or of our approach to the Bill.
We have exposed the full effects of the measure. Indeed, the debate has brought them into sharp focus. The Minister recognised that it had served that purpose, and in doing so it has served the nation well, because now people will know what is coming next year and beyond.
The Minister gave me the assurance that I sought on the overall question of maintaining the uprating and the present level of invalidity benefit. I accept that assurance in the spirit in which it was given, but others may tell me that the Minister made the same commitment on additional pensions. I hope that in two or three years' time we shall not be back with the same criticism on invalidity benefit as we have had to make on additional pensions.
The Minister is right to say that it is not our intention to vote against the amendments, because they give a little more money than before, although still a lot less than current levels of invalidity benefit. For that reason, it would be wrong for us to vote against the amendments, and we accordingly accept them.
§ Amendment agreed to.
§ Amendments made: No. 2, in page 3, line 25, leave out '£56.10' and insert ' £57.60 '.
§ No. 3, in page 4, line 10, leave out '£26.40' and insert '£26.90'.
§ No. 4, in page 4, line 12, leave out '£10.95' and insert '£11.00'.
§ No. 5, in page 4, line 12, leave out '£32.30' and insert '£33.10'.
§ No. 6, in page 4, line 14, leave out '£10.95' and insert '£11.00'.
§ No. 7, in page 4, line 14, leave out '£33.70' and insert '£34.50'.
§
No. 8, in page 4, line 14, at end add—
'(7) Any order under section 150 of the Social Security Administration Act 1992 (up-rating orders) made by the Secretary of State before the commencement of this section shall include provision—