HC Deb 20 February 1995 vol 255 cc7-9
7. Lady Olga Maitland

To ask the Secretary of State for Social Security what savings will result from the social security reforms announced so far.

Mr. Lilley

Our reforms will reduce projected expenditure by £4 billion a year, in today's prices, by the end of the century. Once the pensions reforms have worked through, in the next century, the total savings will be £14 billion a year as a result of the changes that we have made.

Lady Olga Maitland

I thank my right hon. Friend for his reply. Will he confirm that, with the reduction of unemployment and with the attack on waste and fraud, by the turn of the century the burden on the taxpayer will be down by £8 billion or 3p in the pound on the basic rate of income tax?

Mr. Lilley

My hon. Friend is absolutely right. The forecasts of social security spending by the end of the century are now £8 billion less than when we first made them in response to the Social Security Select Committee and before the long-term review of social security spending began. Four billion pounds is due to the direct savings of the changes in the structure of the social security system, which we have announced, and the other £4 billion is due to the improved economic and social outlook in this country as a result of the Government's policies.

Ms Lynne

Does the Secretary of State agree that savings to the Government mean cuts in benefit to the most disadvantaged? Does he accept that Government policies such as the jobseeker's allowance will do more to allow tax cuts before the next election, rather than do anything to get the unemployed back into work?

Mr. Lilley

The hon. Lady, as is typical of her party and indeed of all Opposition parties, thinks that money comes from the Government. It comes from taxpayers. At present, it costs every working person, on average, £15 every working day to finance the social security system in this country. The Liberal Democrats' aim is to increase that amount; ours is to prevent it from increasing.

Mr. Alan Howarth

I welcome among my right hon. Friend's objectives his desire to eliminate fraud, but will he confirm that the Benefits Agency has found that only 5 per cent. of benefit fraud involves deception about identity? Will he at all times be vigilant to safeguard civil liberties in the development and application of smartcard technology, under the auspices of his Department? Will he set his face absolutely against the introduction of a national identity card scheme, whether voluntary or compulsory?

Mr. Lilley

My hon. Friend is quite correct. Of the identified frauds and abuse in my Department only 5 per cent. involve abuse through misrepresentation of identity. The bulk of fraud and abuse is the misrepresentation of circumstances of people whose identity is not in doubt. We believe that we can reduce that incidence of fraud and abuse very substantially by the introduction of a payments card, which I agree with my hon. Friend is a very different kettle of fish from an identity card. People who wish to receive benefit through the post office will need such a card. People who choose to receive benefit through banks will have whatever form of identification the banks require. We are also introducing other measures that will substantially reduce misrepresentation of identity fraud, so the extra gains which might come from a compulsory identity card would probably be very small.

Mr. Bradley

Does the Secretary of State accept that savings should not in any way undermine public confidence and trust in the social security system? Will he therefore investigate claims made on BBC South-West that the Benefits Agency in Bristol has contracted out the opening of mail to a private firm? Such mail might include sensitive and confidential information on benefit claims, and staff might not be accountable to the Benefits Agency or, more important, to Parliament.

Mr. Lilley

I assure the hon. Gentleman that anybody who has any involvement with facts and information about claimants will be bound by a duty of confidentiality, whether they are employed by the civil service or by a contractor for the civil service. Sub-post offices, all of which involve private entrepreneurs and not employees of the state, have an obligation to claimants equal to that of any civil servant.