HC Deb 16 May 1994 vol 243 cc536-8
4. Mr. Pawsey

To ask the Secretary of State for Social Security by how much the main social security benefits have increased since their inception.

Mr. Lilley

All main social security benefits are now worth as much or more in real terms than at their inception.

Mr. Pawsey

May I thank my right hon. Friend for that helpful reply? Does he agree that the majority of benefits have, in fact, increased and quite substantially? Does he agree that that defies public perception? Will he therefore say how much money is now being spent by his Department on benefits and, to make the figure more realistic, will he break it down per taxpayer?

Mr. Lilley

My hon. Friend is absolutely right. The amount spent on social security benefits has increased by 75 per cent. in real terms under this Government and it now costs more than £80 billion a year of taxpayers' money. I cannot express the equivalent on a taxpayer basis, but I can express it per head of the working population. To finance social security, on average, every working person in the country has to pay £15 every working day.

Mr. Flynn

Has the Secretary of State seen the articles in the Financial Adviser this month and last month, which celebrate the fact that 10 million people will have to take out additional personal insurance from insurance companies because of the cuts in the welfare state? Is not it an outrage that the same people sold 3 million dodgy personal pension policies on the basis of 50 per cent. of the premiums being taken in administration charges and commissions? Now 10 million people have had benefit cut and have been taken out of the national insurance scheme, which is good value and takes only 5 per cent. in Administration? Why is he throwing 10 million of our people to the vultures of the personal pension markets?

Mr. Lilley

I have not seen the article to which the hon. Gentleman refers, but if it is as loosely based as his addendum to it, it certainly requires some re-writing. As he will know, the Securities and Investments Board is requiring that, where there has been mis-selling, remedies are available, which will mean that the people who were mis-sold pensions do not lose out. Surely, that is good news and means that we will wipe the slate clean of the past misdemeanours and ensure that, in future, people can have confidence in the whole system of occupational and personal pensions.

Mr. Burns

Does my right hon. Friend agree that it is strange that when social security spending to help the less well-off has increased in real terms year in year out, people who should know better are constantly trying to put across the impression that the opposite has happened and never point out that, whereas our social security has increased each year, a number of our European partners have cut their help to the less well-off?

Mr. Lilley

It is rather strange, but we have become used to a certain proportion of the chattering classes referring to any increase that is less than they want as a cut. There have been substantial improvements and increases in total social security spending over the years. We have made sensible reforms and, as a result, have avoided the abrupt, arbitrary and painful cuts that some other countries have had to make. That is to our credit and shows our good sense. Other countries wish that they had taken earlier the reforming measures that we have taken.

Mr. Sheerman

Does not the right hon. Gentleman's chatter disguise the fact that since 1979, when the Conservative Government took office, the incomes of disabled people have plummeted? There has been a widening gap—[Interruption.] I had my figures checked by the House of Commons Library only 10 minutes ago. While average income has risen by a factor of four, disabled persons' income has risen by only 2.6 per cent. That is a terrible reduction in income.

Mr. Lilley

On close inspection, it appears that the hon. Gentleman has decided that a 2.6 per cent. increase in the incomes of disabled people can be described as a cut. The truth is that we have more than trebled spending on disabled people—a record in which we take some pride.