HC Deb 28 February 1995 vol 255 cc859-900 4.37 pm
The Secretary of State for Social Security (Mr. Peter Lilley)

I beg to move, That the draft Statutory Sick Pay Percentage Threshold Order 1995, which was laid before this House on 13th February, be approved.

Mr. Deputy Speaker (Mr. Michael Morris)

I understand that with this, it will be convenient to discuss the following motions: That the draft Guaranteed Minimum Pensions Increase Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security Benefits Up-rating Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security (Contributions) Amendment Regulations 1995, which were laid before this House on 13th February, be approved. That the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 (S.I., 1994, No. 1807), dated 7th July 1994, a copy of which was laid before this House on Ilth July, in the last session of Parliament, be revoked.

Mr. Lilley

This is an annual opportunity to examine the detailed orders before the House and to discuss, after some weeks of consideration, the social security statement that I made after the Budget. Some may consider this a rather routine occasion, but I believe that it is a profoundly important debate because it raises issues of immense significance socially, economically and politically.

Socially, the debate is about meeting our commitments to those in greatest need. The Government are fulfilling that obligation by uprating in full, maintaining the value of benefits, focusing help where it can do most good and improving incentives for people to help themselves out of dependency.

The debate is of profound economic importance because social security is central to the control of public spending, borrowing and taxation. Through its effect on incentives, social security influences the dynamism of our labour force.

Finally, the debate is of immense significance politically. The Government have spelt out clearly their long-term strategy for social security. Now is the opportunity for the Opposition to spell out an alternative strategy. Today will provide the crucial test of whether the Labour party is seriously interested in becoming an alternative Government or whether, as I suspect, it is still in its heart wedded to permanent opposition. Parties of government propose; parties of opposition merely oppose. The fact that the shadow spokesman, the hon. Member for Glasgow, Garscadden (Mr. Dewar), has ducked the debate suggests to me that Labour has nothing to propose.

The Government's strategy is crystal clear—to maintain benefits, to focus help on the neediest, to improve incentives and to encourage self-provision. We are advancing on all those fronts in today's orders. Again, we shall meet our pledges on the level of benefits. All the main social security benefits will be uprated fully in line with prices in four weeks' time. The retirement pension for a couple will increase by £2 a week, and even less well-off pensioner couples with no other means will receive more than £100 a week plus their housing costs. The total cost of the uprating will be about £1.5 billion; that is a measure of our commitment to protecting those most in need.

Last week the Labour party endorsed the Rowntree report, which advocates uprating benefits in line with earnings. That would cost £3.3 billion, so will today's Opposition spokesman, the hon. Member for Manchester, Withington (Mr. Bradley), come clean today? Is the Labour party committed to that extra spending, or was it simply trying to gull vulnerable people? I shall happily give way to the hon. Gentleman now if he wishes to set the record straight. I gather that he needs time to think about it.

When I published "The Growth of Social Security" in 1993 social security spending was expected to grow by 3.3 per cent. a year in real terms until the end of the century. Now we expect growth of only 1.3 per cent. a year in real terms over the next three years, and that is expected to be followed by underlying growth of 2.1 per cent. a year until the end of the century. As a result, social security spending at the end of the century is now expected to be about £8 billion lower than we forecast when my long-term review began.

A quarter of that fall is due to the reduction in unemployment that has already occurred. Nearly a quarter is due to other improvements in the outlook. More than half the reduction—about £4 billion a year—is due to savings from policy changes as our reforms take effect. The Labour party has opposed almost every reform that we have introduced, so it is incumbent on the Labour spokesmen today to tell the House where they would find £4 billion to replace the savings, or how they would finance the shortfall.

Those extra costs would be incurred before Labour even started to finance the £7 billion required for the main proposals of the Commission on Social Justice, let alone the untold billions of pounds that it would cost to implement all the proposals in the Rowntree report, which Labour praised last week.

At the start of our long-term review of social security we analysed systematically the main areas of prospective growth. First we identified sickness, invalidity and related benefits—hence the Social Security (Incapacity for Work) Act and the Statutory Sick Pay Act, both passed in 1994. From April this year, by means of a more objective test of incapacity, the new incapacity benefit will focus help on those genuinely incapable of work.

One of the orders will introduce an improvement flowing from the Statutory Sick Pay Act. From April a new scheme will give all employers help if a large proportion of their work force is off sick at any one time. That will be straightforward to operate, will protect cash flow and will continue to give small businesses the lion's share of the statutory sick pay reimbursement. The new scheme has been welcomed by the Confederation of British Industry, the Forum of Private Business, the Federation of Small Businesses and the Trades Union Congress.

The second major area of growth in spending that we identified was help with housing costs. The amount of support for housing costs through housing benefit has more than doubled in real terms since the benefit was introduced, and is now more than £10 billion a year. That is due not only to increases in rents but to the fact that there was a basic weakness in the system, which we have had to tackle—the open-ended commitment to pay 100 per cent. even of above-average rents.

Last November, therefore, I announced a major reform that will come into effect in October. It is a sensible reform designed to give tenants more interest in the level of rents, thus bringing pressure to bear on unreasonably high rents. We have already begun a process of informal consultation with interested parties.

Ms Glenda Jackson (Hampstead and Highgate)

If the Secretary of State believes that rents will be reduced by the exercise of pressure, why do the Government not exercise that pressure on landlords? Why does he leave it to tenants, who in many instances are vulnerable, frail and elderly, to attempt to reduce their rents?

Mr. Lilley

It is sensible that there should be a countervailing force so that people have an incentive to make a reasonable choice when faced with two properties, and to choose the less expensive of the two if one of them has a rent above the average for properties of that type in the area. We prefer to leave choice in the hands of individuals—unlike the Labour party, which prefers all choices to be made by bureaucrats and set down by law.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

Will the Secretary of State give way?

Mr. Lilley

Of course, I always give way to the hon. Gentleman.

Mr. Graham

Does the right hon. Gentleman realise that only this week a report was published about Glasgow, showing that over all the years of Conservative Government there has been an increase of 144 per cent. in the number of people who are ill and claiming benefit? Is he also aware that there are more than 30,000 homeless folk in Scotland who would desperately like to rent a home at a reasonable cost yet who, under the Conservative Government, have no chance of getting a home?

Mr. Lilley

On the contrary, we have taken great steps to increase opportunities for the homeless. The best way to make good use of taxpayers' money is to ensure that it is not spent unnecessarily on the most expensive properties, and on rents above those that the market should require to make sufficient properties available. That is what our reforms are designed to achieve.

We want to ensure that the details are properly discussed before being put into regulations, and my officials have already met representatives from the local authority associations, the Institute of Rent Officers and several other interested groups. Tomorrow we shall formally consult the Social Security Advisory Committee, which we envisage will then go out to wider public consultation.

It is important that the public's views are fed into the detail of the policy, including working up a system to give prospective tenants an idea of how much housing benefit will be payable before they sign up to a particular tenancy.

The costs of support for mortgage interest through income support have already increased rapidly from £31 million in 1978–79 to £1.1 billion last year. The system is manifestly unsatisfactory. It fails to provide comprehensive cover and protection for people who lose their jobs; two thirds of home owners would not qualify for income support to help with their mortgage interest if they became unemployed. Our proposals are self-evidently aimed to improve that position. They will give home owners more comprehensive protection when they have difficulty paying their mortgages.

The Social Security Advisory Committee's consultation document on mortgage interest and income support, issued on 10 February, invites comments from all interested parties. Clearly we shall be interested in the results of that consultation process. We are continuing our discussions with lenders and insurers to ensure that the interface between state and private provision works well.

I am determined wherever possible to make savings without any reduction in the levels of benefits for those most in need. The area of greatest scope for saving with no direct effects on benefit levels is obviously cutting the incidence of fraud. That is why I have made attacking fraud a priority.

Our efforts to detect and stop fraud are already increasingly successful. The Benefits Agency identified and stopped fraud worth £654 million in 1993–94—17 per cent. above its target—and I have no doubt that we shall exceed the target again this year. In April the agency will begin a five-year programme of investment to switch the emphasis away from detecting fraud towards deterring fraud and preventing it from happening in the first place.

Most fraud occurs through false declarations of earnings or circumstances. So the Benefits Agency will make more checks and more home visits, and will make better use of the information already held on our computer systems to help to spot fraud. Over the next three years that should deliver substantial savings of more than £2.5 billion over and above the existing level of fraud savings. We also expect a dramatic reduction in order book and girocheque frauds by automating benefit payments at post offices. But even more important than curbing spending is checking the growth in dependency on welfare. Before my reforms began, the debate was about how to help people who are on benefit. We still aim to do that. But now we have changed the whole focus of the debate towards how to help people come off benefit and into work.

The most effective way of raising the living standards and prospects of unemployed people is by helping them to return to work. The process continues with the package that I announced last November. New measures being introduced this year meet four major objectives.

First, we are continuing to improve benefits so that people have an even greater incentive to return to work. From July 1995, the £10 longer hours premium in family credit will make full-time work more attractive for those working 30 hours or more a week. Those on housing benefit or council tax benefit will receive in full that extra £10, which will not be offset against their housing benefit or council tax liability. We expect that more than 200,000 people will benefit in 1995–96, at a cost of £345 million. In April I shall make significant enhancements to disability working allowance to help more disabled people participate in work.

Secondly, to smooth the transition from benefit to work we shall speed up the payment of family credit from April, so that people in work will get that extra help more quickly. By April 1996 we expect almost all new claims for family credit to be arranged within five working days.

Thirdly, we want to encourage employers to provide more jobs, particularly for people with few skills or who have been unemployed for a long time. Another of the orders encourages employers to take on less skilled people by reducing employers' national insurance contributions for the second year running. This April, employers' contributions will be cut by 0.6 per cent. for all employees earning less than £205 a week. That will help the employers of 6.5 million people at a cost of £235 million.

Fourthly, I am examining ways to help low-paid people in work who do not qualify for family credit because they do not have children. I shall be publishing a consultation document in the spring for a substantial pilot study of an in-work benefit for people without children.

Overall, the measures will help almost 7 million people in the coming financial year at a cost of more than £440 million. That is a significant stage in a package that will build up to a total cost of some £600 million to the taxpayer in outgoings or revenue forgone.

I also take this opportunity to discuss the motion in the name of the Leader of the Opposition that the Income-related Benefit Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 be revoked. The House will recall that the regulations introduced a habitual residence test into income support, housing benefit and council tax benefit schemes from 1 August last year.

When I announced the habitual residence test, the Opposition's knee-jerk reaction was to oppose it, as they do almost all measures which we introduce to focus benefits on those who are genuinely needy and fully entitled to them. The Opposition said that benefit tourism was a non-problem, and that there were at most 5,000 continental claimants a year. They said that the residence test was anti-European. Today, they appear to be reaffirming their opposition to the regulations.

Experience since the test was introduced has demonstrated that its opponents were wrong on all counts. First, immediately after I announced the test, Time Out magazine—not exactly a friend of the Government—set out to debunk the idea of benefit tourism, but instead found vivid evidence of its existence. It described someone called Diego, 26, who came from Barcelona to learn drama, but quickly learnt how to use the system as well. He said: I shared a flat with four other Spaniards … all of them were on Income Support. I just followed their advice and did the same. Within a month, he, too, was on income support.

Then there was Frédéric, a 28-year-old Frenchman, described by Time Out as the stuff of which Peter Lilley's nightmares are made. I can assure Time Out that I do not have nightmares. He said: I came to Britain in July 1993 to learn English … I am on Income Support—£44 per week—and get my rent—£47.50 per week—paid by Housing Benefit. I also work on the side to earn enough to make a decent living. I know it is absolutely illegal. Not only that but I also get French unemployment and housing benefits. It takes a lot of concentration to dodge both systems at the same time. I am now a specialist and it is almost a full-time activity. I am well placed to compare both systems: the British system is far easier. It was, but it is not now.

Foreign magazines also began to publish accounts because they could scarcely believe that we had ever allowed this situation to exist. They demonstrated how easy it was for other EC nationals to abuse our system. A Spanish magazine called Tribuna describes a holiday in Britain on benefit as a brilliant way to travel. You arrive in London one fine day, sign up at an employment office and, suddenly, money and rebates fall at your feet on a regular basis. Young Spaniards did not invent the scam but they are well known as being the most adept at taking advantage of the benefits posing as European emigrants in London. Most EC countries were ahead of us in preventing such things from coming about. I would condemn any British citizen travelling abroad who tried to abuse any foreign benefits system just as much as I would as anyone who does it to our system. We were at fault in allowing the loophole to exist, and it was right that we closed it when we found that a minority were exploiting it.

The Opposition also stated that there very few people exploiting the system—at most, 5,000. As it has turned out, the number of continental claimants has turned out to be far larger than the Opposition's forecast. One might have expected the numbers to decline following the high-profile announcement that the door was being closed. Yet in the first six months that the test has been in operation, some 6,000 continental claimants of income support have been found to be not habitually resident here. There may be others who are claiming housing benefits.

As a result, total savings from the test are running at £30 million a year, ignoring any deterrent effect which the announcement may have had. We stopped the abuse in time. The Labour party seems to justify its opposition by synthetic concern for British citizens. They display a pseudo-nationalism that fits ill with their original complaints of discrimination. It says that it is all right to hit foreigners, but we must not in any way hit people who can claim British citizenship.

In fact, 88 per cent. of people from abroad who claim British citizenship pass the test, whereas 60 per cent. of continental claimants fail. Of those British citizens who failed, most had virtually no connection with this country. Most people would think it reasonable that they should not be entitled to benefit in this country until they have earned and paid taxes here.

I shall give examples from different parts of the country. An 18-year-old whose family emigrated to New Zealand when he was six came to this country on a return ticket paid by his father to visit his grandparents. He sought benefits, and I think it is right that he should have been refused them.

A 43-year-old who has lived her whole life with her mother in Italy has come to this country for two or three months every year for the past 10 years, and has claimed benefits in the UK. She has never worked in either country, and will no longer be entitled to benefit in this country. Do the Opposition wish to enable people like that to claim benefit?

A 20-year-old woman from the sub-continent who had never been to the United Kingdom until she arrived this year tried to claim benefit. She has never worked, knows no English and her husband lives in Saudi Arabia. Again, it is not obvious to me that we should give benefit to such people. In any case, under European Union rules we would not be entitled to discriminate on the basis of citizenship rather than residence and residence is, therefore, the basis of our test. It is similar to the basis that applies in almost all continental countries, which sensibly operate similar tests.

I challenge the Opposition to say whether they think that we should return to a position in which people coming for short stays have open-ended access to claim our benefits, when they have no commitment to this country and pay no taxes here. I believe that the British public back us to the hilt.

To return to my opening arguments, we have our priorities right. We put the interests of those in greatest need first by focusing help on them, maintaining the value of their benefits and enhancing their incentives. We put British taxpayers' interests next, by curbing excessive growth in the cost of social security, and we put their interests above those of foreign claimants, as I explained. Finally, we are putting the interests of honest claimants, who constitute the vast majority, above those of fraudsters who nonetheless cost the British taxpayer large sums of money.

Labour Members seem to oppose all those priorities. We are waiting to see whether they will come up with a coherent alternative strategy today for tackling the problems of social security. I doubt very much whether they will. That is the test that they have to pass. If they fail, the House should pass our measures with acclaim.

5.1 pm

Mr. Keith Bradley (Manchester, Withington)

I am pleased to respond on behalf of the Opposition social security team to the motions and to respond to the extraordinary performance of the Secretary of State, who seemed determined to talk about many issues that were not before the House, rather than those presented for debate. I assure you, Mr. Deputy Speaker, that I will stick to the issues before us and will not digress far from matters that are of such note today.

I was going to say in my opening remarks that the Secretary of State had clearly described the purpose of the orders and regulations. Unfortunately, he spent little time describing what we are here to debate. They deal with important matters, however. I shall spend some time on the uprating and re-rating orders, the draft Guaranteed Minimum Pensions Increase Order 1995 and the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994. The Secretary of State belatedly concentrated on the latter, which we have prayed against—it is more commonly known as the habitual residence test.

Clearly, the uprating of benefits is always welcome, but I must highlight several areas of concern. In particular, some benefits or benefit components will not be increased. As I am sure the Secretary of State is aware, those include: statutory sick pay; statutory maternity pay, which will again be frozen at £52.50; the maternity payment from the regulation-based social fund, which will again be frozen at £100; the capital limits, which will remain unchanged; and the earnings disregards, which will also remain unchanged. Perhaps the Minister could explain why those elements have not been considered for uprating.

Mr. Lilley

Is the hon. Gentleman saying that the Labour party would operate all those elements? If so, would he like to know the cost and would he commit the Labour party to financing that cost?

Mr. Bradley

As we enter the next election, the Labour party will see how far the Government have shifted on those elements and will find out what the real situation is. We will then develop our policies around the real situation. We will not do so two years before that point.

In relation to the compensatory recovery unit in Glasgow, perhaps the Minister will explain why the limit of £2,500—the cut-off point for recovery of benefit from people who have received a payment, for example, for personal injury—has also not been uprated. There is much disquiet in the House about that, especially about the fact that there is reclamation of benefit at that level. I would be grateful for any views that the Minister may have on the way in which that recovery unit is operating.

Mr. Gyles Brandreth (City of Chester)

I honestly do not feel that the hon. Gentleman can have it both ways. He seems to deplore the fact that certain benefits are not being uprated and he is being critical, which is fair enough if that is what he believes, but he does not want to do anything about it. Either he wants the uprating or he does not. If he does, will he be specific about his view of the cost and where that money would be found? I do not think that he can have it both ways, as he is trying to do.

Mr. Bradley

It is always interesting when the hon. Gentleman intervenes. We never get any clarity about the issues that he raises.

I stress that we believe that the limit of £2,500 placed on the compensation recovery unit should be increased. My purpose was to question the Minister on his views on the matter, but I will press on.

Another key concern, which the Secretary of State mentioned in his opening remarks, is the change in housing benefit. We are well aware of the more fundamental review that is taking place. I may have misheard what the Secretary of State said, but it is not the case that there is an open-ended commitment to housing benefit on rents. A mechanism is already in place by which a rent officer can intervene to ensure that a reasonable rent is charged.

More particularly at this stage, we are concerned that the Government have increased the non-dependant deduction. The rate for non-dependants with gross earnings of between £74 and £110.99 is increased from £9 to £10, while the highest deduction for gross earnings of £145 or more is increased from £25 to £30—a 20 per cent. increase. That change will clearly have a significant effect on the housing costs of those groups of people. It could be especially damaging and could affect their ability to retain accommodation.

While on the subject of housing costs, it is important to comment again on the fact that the Government intend to cut income support for mortgage interest payments for people who lose their jobs, as the Secretary of State said. We await that debate with some interest. I am sure that the right hon. Gentleman is well aware that there is already widespread opposition to such a measure, significantly among building societies and the Council of Mortgage Lenders. Perhaps even more significantly, many Conservative Back Benchers also oppose it. If the Social Security Advisory Committee also opposes the plans, will the Secretary of State drop them and instead take measures to protect people's homes, rather than to increase the likelihood of repossession?

Two further issues of concern regarding future plans should also be highlighted. First, on the proposed imposition of a ceiling of £875 for funeral expenses from the social fund, although we would support a proper assessment of the charges made for funerals, it is essential to ensure that the ceiling does not deny the poorest people a dignified funeral. We also want assurances that the ceiling will be uprated and will not be allowed to decline further and, in effect, to wither on the vine.

Finally, on this section, I must highlight the reduced rates of benefit that will be paid under the new incapacity benefit—something on which the Secretary of State commented. The amount of money that claimants who manage to pass the new, stricter test of incapacity receive—I stress that they must pass the test—will be substantially reduced compared with invalidity benefit. On top of that, the new benefit will he taxed, as we know.

I have raised that matter on many occasions on the Floor of the House and in Committee. I make no apology for that, and I shall continue to do so. When that benefit comes into effect, on 13 April 1995, I predict an outcry of similar proportions to that associated with the chaos surrounding the introduction of the Child Support Agency. Once again, I emphasise to Conservative Members that they have been warned about the implications of the new cuts in incapacity benefit as a result of the harsher medical test.

I shall briefly discuss the Guaranteed Minimum Pensions Increase Order 1995. Perhaps, for this part of the debate, we should call it the memorial debate on the guaranteed minimum pension, because I suspect that this is the last time that that order will he before us.

Although, obviously, we welcome the fact that the minimum pension is to be increased, the current arrangements will be abolished under the Pension Bill currently in another place, and new arrangements substituted. However, I understand that there will not be a similar guarantee of the pension under the new arrangements. Perhaps the Minister will confirm that to the House, because many pensioners wish to ensure that there will be a guarantee in the future arrangements for pensions.

On the new habitual residence test, I shall not fall into the trap of the populism in which the Secretary of State tried to indulge during his opening remarks but shall stick to the issues before us. The Secretary of State's speech was reminiscent of his speech to the Conservative party conference in 1993, when he first expressed his determination to root out benefit tourism.

I emphasise that Labour Members have no quarrel with rooting out benefit tourism, but we are not certain that the measures before us achieve that purpose. The Government's proposals may take a sledgehammer to crack a nut, and the original objective of the habitual residence test may have been achieved at the expense of the welfare of many British and other nationals who have come to or returned to the United Kingdom to settle.

'This is not the first attempt to introduce such a test. The right hon. Member for Sutton Coldfield (Sir N. Fowler) undertook a similar review of the benefits system in the mid-1980s, when he was Secretary of State for Social Security, and there was at that time a similar proposal to introduce a residence test for income support, but that was rejected by the then Minister of State for Social Security. That Minister said: we decided that a blanket test would be too rigid, too cumbersome, and perhaps too unfair … It could have excluded people such as … British citizens returning from abroad. United Kingdom citizens on work contracts returning home". He also foresaw: it could become an administrative nightmare … A costly administrative system would also have to be set up to deal with people who failed to qualify for benefit, yet who were in need that we would not, in practice, ignore."—[Official Report, Standing Committee B, 27 February 1986; c. 537.] The Minister at that time was the present Prime Minister, and many people would accept the wisdom of his opinion at that time. Some would argue whether it is a Euro-sceptic or a Euro-phobic opinion, but the Secretary of State, whichever way he plays it, should reflect on that opinion in determining his current policies.

More recently, the Social Security Advisory Committee rejected the current plans. It recommended that the Government should not proceed with the introduction of the habitual residence test, on the ground that, although it might provide a solution to the problem of benefit tourism, it would have adverse consequences for many other claimants.

In practice, the test is proving arbitrary, subjective, complex and unfair. As there is no definition of habitual residence, several imprecise and, arguably, inappropriate criteria are used to establish residence. That lack of precision has made the writing of guidance for, and training of, staff extremely difficult.

Many categories of people have been caught by the test. The Secretary of State has alluded to them, but not in the way in which we would present our evidence. Those categories of people include the children of British citizens who were taken abroad by their parents who now wish to return to this country to take up their rightful citizenship; British nationals whose marriages have broken down while living abroad who want to return to Britain; and British nationals who have returned to Britain as a result of economic or political change in the country in which they have been living. In our opinion, none of those categories could be described as "benefit tourism".

Mr. Malcolm Wicks (Croydon, North-West)

I bring to my hon. Friend's attention, and that of the House, the case of a constituent of mine, Lisa Capon of Thornton Heath. She is a British subject who, at the age of 16, went to Portugal with her parents and her husband. Six years later—a few weeks ago—she returned to this country, to my constituency, and failed the habitual residence test.

Lisa had a one-way ticket back from Portugal to this country. She is five months pregnant. She could not obtain any social security money; she failed the test. As she does not have a child, although she is pregnant, she could not obtain help from social services.

On Friday evening, on behalf of my constituent, a British citizen, I had to telephone social services' emergency number. After some arm-twisting, I was promised that a food parcel would be given—

Mr. Deputy Speaker

Order. Interventions are normally short and succinct. This is a very short debate and the hon. Gentleman has raised a question. I imagine that the spokesman for the Opposition will choose whether to reply to it.

Mr. Bradley

Thank you, Mr. Deputy Speaker. My hon. Friend presented an example that illustrates the complex situation in which many people find themselves. I argue that the way in which the rules are interpreted and the way in which the criteria are being established mean that many people fall into similar traps.

Also affected are those families spread across different continents who make long visits abroad. That is an especially common occurrence in the ethnic minority communities, many individual members of whom may have originally come to the UK as immigrants or whose parents settled here. In Bradford, for example, many welfare rights organisations report many problems arising as a result of the test. Similarly, the Commission for Racial Equality has mentioned many aspects of the administration of the test that cause unease.

Further, the Prime Minister, who was then Minister of State for Social Security, was right to predict the immense administrative problems. Advice agencies report that a great deal of extra work has been caused as a result of the test. The Benefits Agency needs to interview many claimants in circumstances where the habitual residence test is an issue affecting entitlement.

Thousands of cases are under appeal. The Secretary of State mentioned 6,000 cases that fail the habitual residence test. I should be grateful if he would say how many of those cases are currently under appeal.

Mr. David Lidington (Aylesbury)

In view of the critique that the hon. Gentleman advanced, does he wish the habitual residence test to be abolished?

Mr. Bradley

If the hon. Gentleman will remain calm for a moment, I am sure that, by the end of my contribution, he will know what our position is.

The extra burden on offices is illustrated by the figures for interviews in one district office alone in the month of September; 934 people were interviewed, of whom 638 were refused benefit. The delays for appeal hearings are also in part a reflection of the numbers affected. It is commonplace for claimants to be forced to wait as long as six months before their cases are heard. For example, in the north Surrey area, appeals tribunals are now hearing cases that were appealed in August and September 1994.

I pay tribute to the invaluable work of the Child Poverty Action Group and the National Association of Citizens Advice Bureaux. Those organisations inform me that they understand that approximately two thirds of decisions to refuse benefit that are taken at local offices are overturned on appeal. That suggests that staff have not been properly trained, the guidance is faulty or it is simply bad law. Will the Secretary of State, or the Under-Secretary in winding up, comment on the position regarding refusals and appeals?

At the same time, claimants must wait a long time before a hearing without financial support, as in the example given by my hon. Friend the Member for Croydon, North-West (Mr. Wicks), and may not be entitled even to urgent case payments because of their discretionary nature.

When rejecting a presence test in 1986, the then Minister of State for Social Security, the current Prime Minister, questioned whether such a scheme would produce net savings for the Treasury. It would be useful to know today precisely what the savings are, if any, taking account of the cost of the additional staff time spent on habitual resident test work. From my visits to local Benefits Agency offices, I know that an enormous amount of staff time is involved in that work at the expense of other essential work that Benefits Agency staff undertake.

There is not time this afternoon to go into all the legal complexities of the test. Suffice it to say that I understand that the validity of the legislation is being challenged under domestic and European law. We await the outcome of those considerations with interest. Nor is there time to go into the many case studies which have been presented to us, representing a range of problems that have been presented at hon. Members' advice bureaux.

Mr. Patrick Nicholls (Teignbridge)

Is there time to tell us whether the hon. Gentleman would repeal the rule?

Mr. Bradley

I have been in the House long enough to have learnt not to give way to the hon. Gentleman, as he always makes rather limited interventions.

A range of complex cases that have been brought before us need careful consideration. However, it is clear from parliamentary answers that there is great uncertainty about who is being refused and for what reason, what the current situation on appeals is and precisely how much money is saved by that measure. We also know that great hardship is caused. In a reply dated 23 January 1995 to a letter from my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), the Secretary of State said: The Department is monitoring the effect of the habitual residents test on British Citizens. However, because habitual residence is assessed on the basis of a variety of factors, it is not possible to be categorical about the reasons for being turned down". We share that view. The test should be thoroughly reviewed in the light of—

Mr. Oliver Heald (Hertfordshire, North)

Will the hon. Gentleman give way?

Mr. Bradley

No, I shall not give way. The hon. Gentleman can make his own speech.

Mr. Heald

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I hope that it is a point of order for the Chair.

Mr. Heald

It is, Mr. Deputy Speaker. Motion No. 6 on the Order Paper says: That the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 … be revoked. Is it therefore in order for the hon. Gentleman, far from asking for the regulations to be revoked, simply to say that they should be reviewed?

Mr. Deputy Speaker

It is entirely in order for hon. Members to take any viewpoint that they choose. It depends on their view at the time. It is certainly not a matter for the Chair, and the hon. Gentleman knows that full well.

Mr. Heald

Further to that point of order, Mr. Deputy Speaker. In the case of Pepper v. Hart in the House of Lords—

Mr. Deputy Speaker

Order. I am not terribly interested in what took place in the House of Lords this afternoon. We have a debate before us and I should be grateful if the hon. Gentleman would resume his seat.

Mr. Bradley

The whole system should be thoroughly reviewed. The Government should take it away from the House and come back with a sensible system that does not involve all the contradictions and complexities that I have highlighted. That is why we shall vote against the orders.

5.23 pm
Sir Nicholas Scott (Chelsea)

I stand before the House as an unreformed addict, having spent seven years hooked entirely on social security. I have had a bare seven months off the habit and feel constrained to come back today to congratulate my right hon. Friend the Secretary of State and his colleagues on the orders and regulations which he has placed before the House and which we are discussing. They enshrine a proper disciplined and constructive approach and a caring package for the future of social security for the coming years.

Social security is never an easy issue. Anyone who must come to grips with the conflicting measures within the social security system knows how difficult it is to reconcile those differing positions and pressures. It may be an easy matter for those who sit on the Opposition Benches, and I hope that Labour Members will continue to sit on them for a long time to come. I genuinely congratulate my right hon. Friend and his team on their work. I see that the hon. Member for Manchester, Withington (Mr. Bradley) is quitting the scene. I do not wish to detain him unnecessarily. I understand the dilemma that his team must face. I am sure that he and his hon. Friends have all sorts of genuine concerns that they would like to express and grievances that they want to redress, but the Leader of the Opposition and the shadow Chancellor will not allow them to say anything positive, or enter into a commitment, in terms of future social security expenditure.

Opposition Members can meet the devoted and hardworking group of people from the lobby outside the House, who have all sorts of genuine concerns in which they believe and who can come and discuss their concerns with Opposition Members. But Opposition Members can give them no commitments because the shadow Chancellor and Leader of the Opposition will not allow them to do so. They come before the House and laud and praise the work of the Commission for Social Justice, but cannot commit themselves to any of the ideas that it has put forward because the shadow Chancellor and Leader of the Opposition will not let them.

Mr. Donald Dewar (Glasgow, Garscadden)

It is a pleasure to have the right hon. Gentleman in the Chamber agreeing with the Government, when he so manifestly did not agree with them for so long when he was in office. He properly points to the dilemmas that face any Opposition, and no doubt any Government over whom the Treasury looms so large. He mentioned unhappiness; is he entirely happy about the changes represented by the new incapacity benefit?

Sir Nicholas Scott

I shall deal with many of those matters, including incapacity benefit, in a moment or two.

I should have thought that, having been so long on that side of the House, the Opposition would by now have found some device whereby they could commit themselves to something when they discuss those matters, even though they are under the constraints that I mentioned. At present, however, the House and the country as a whole have no idea of the social security policies that Labour Members would pursue, were they by any mischance to find themselves in government. Nor have we any idea of the costs of pursuing the policies that they have in mind. In essence, they are hiding behind some sort of political yashmak, denying that the public, despite their entreaties and desires, would like to see what goods are hidden behind it. It is about time that they begin to reveal what is on offer to people before they spend much more time criticising the constructive way in which my right hon. Friend and his team have been tackling social security problems.

Let us imagine for a moment that the hon. Member for Garscadden were given his dream and were holding the reins of power over social security. Let us enjoy the fantasy for a moment and imagine what would happen if he took over responsibility for the largest policy centre in Government. Could he cast aside his party's opposition to our sustained and responsible policy of cost containment and affordability, thus dashing the hopes and expectations of many of those in the lobby outside whom, with a nod and a whisper, a wink here and a gesture there, he has been able to persuade how different life would be under a Labour Government? If the hon. Member for Garscadden were to bow to the articulate, intelligent, persuasive, highly motivated and genuine lobby outside—who would expect him to find extra money to spend on social security—we would end up with runaway expenditure and high rates of inflation. We would be broke and subject once more to the whims and the mercies of the International Monetary Fund.

The hon. Gentleman has a real problem. He is a Scotsman and perhaps his problem is set out more clearly in what I suppose we might refer to, even in this theatre, as the Scottish play. Macbeth is challenged by his wife who says:

  • "Art Thou afeared
  • To be the same in thine own act and valour
  • As thou art in desire? Wouldst thou have that
  • Which thou esteem'st the ornament of life,"—
the hon. Gentleman can tell us what that might be—
  • "And live a coward in thine own esteem,
  • Letting 'I dare not' wait upon 'I would'.
  • Like the poor cat i' the adage?"
No one would accuse the hon. Gentleman or his team of cowardice, but I think that they should show the House and the country a little more nerve and candour in order to enable the electorate better to judge their intentions.

I congratulate my right hon. Friend the Secretary of State and his colleagues on their notable achievement this year in sustaining the Government's commitment to uprate all the main benefits in line with inflation; yet the growth in expenditure on social security has been reduced substantially this year, and that trend will continue for the next three years.

I think that we all understand the two main reasons for that reduction. The first concerns the Government's achievements in producing low inflation and lower unemployment. Inflation is now at an historically low level that we have not seen since the early 1960s. I believe that the Government deserve immense credit for that achievement. Unemployment has been reduced by 555,000 since its peak in 1992 and it is still decreasing. Those two factors, in themselves, are good for people and for the health of society, but they also provide a background against which we can examine our social security needs.

Secondly, I believe that my right hon. Friend would acknowledge that he has built on the foundation which was laid by his predecessor, who adopted a sensible, sustained and rigorous approach to social security expenditure. I remember that when I arrived back from Northern Ireland I was told by a senior officer of the then Department of Health and Social Security that I had a privilege unique in Government except for Treasury Ministers: I could introduce a Bill every single year. I must admit that that blessing was somewhat mixed in its application.

Over the years, billions of pounds of taxpayers' money has been saved while the Government have retained a defensible, compassionate and caring social security system. Nothing stands still in social security: if social security changes, society adapts and changes also, and the social security system must then adapt to meet those changed habits and needs. We can never say that we have the answer to meet the plethora of needs that exist in any advanced industrialised society.

As a Minister with responsibilities in the social security area, I witnessed the growth in certain aspects of social security, such as housing benefit and invalidity benefit, for quite inexplicable reasons which could not be justified by any real change in people's circumstances. It simply became fashionable to apply for certain benefits and, inevitably, it became necessary for Government to draw back and tighten the criteria of eligibility for entitlement to those benefits. That is a never-ending challenge for those who are responsible for social security in this country. We must keep provision up to date: we must meet new needs while ensuring that we continue to meet the needs of those who are in genuine distress.

I am disappointed at the low take-up of the disability working allowance. It was introduced at the same time as the disability living allowance, which has been a conspicuous success. I believe that DWA has failed to be successful in part because many disabled people who would like to work and who wish to give work a chance believe that, if they try it and fail, they will not be able to go back on to their pre-existing benefits.

My right hon. Friend the Secretary of State and the Under-Secretary of State, my hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot), know that that is not so. However, if we could present a cast-iron, copper-bottomed guarantee that people will be able to return to their pre-existing benefits, we might be able to encourage them to take up the opportunities that are proffered by the disability working allowance.

My right hon. Friend addressed the issue of pensions very carefully in his Mais lecture. He pointed out that half the benefit expenditure is spent on the elderly in our community and that in the next century the imbalance will become even greater. As the population balance alters, there will be problems not only with the public provision of state pensions but with private provision of pensions.

We must look at other ways of encouraging the growth of personal pensions. Their growth to date has been welcome and has proved useful. We should not make a rush judgment, but it would be sensible to consider the possibility of compulsory private pension provision in the future. That may sound like a strange concept, but I believe that many people who have made proper provision for their own retirement are resentful that they must pay, through their taxation, for those who have made no such provision. That resentment will grow among the elderly and those of working age as the pressures on the cost of retirement income increase as we move into the next century. We must consider that dilemma and begin to address it.

The price of success and responsibility in social security in any advanced country is eternal vigilance. Without it, demand can become unsustainable. A number of advanced countries have been faced with unsustainable demand and, panic stricken, have had to resile from the commitments into which they entered. It is correct for my right hon. Friend and his team to look ahead and plan for the future of social security in the next century. As I have said, society is not static; it is dynamic and volatile.

It is very easy for particular areas of expenditure to escalate out of control, and we must ensure that that does not occur. The old special payments scheme was replaced by the social fund, which proved to be a much better controlled system of meeting exceptional need. The housing benefit and invalidity benefit have had many problems. Although the new incapacity benefit will have the teething problems that are associated with any change to the system, I believe that it is a much more sensible and responsible way of tackling the needs of incapacity in our society. Mortgage interest must be examined also.

Those of us who are in charge of events should continue to proceed one step at a time. We must continue to seek a more affordable, sustainable and a better social security system than we have even now. Today's orders and regulations represent a very important step in that direction.

5.39 pm
Ms Glenda Jackson (Hampstead and Highgate)

There is a strong theatrical tradition that it is desperately unlucky to quote from the Scottish play in any theatre where that play is not actually being performed. However, the right hon. Member for Chelsea (Sir N. Scott) is in a better position than I am to know what is really going on in the Cabinet, so perhaps, in his case, lightening will not strike twice.

Let me return the Secretary of State briefly to housing benefit. He was most courteous in allowing my intervention and I took on board his point about providing citizens with choice, but many of my more elderly constituents are being denied the only choice—indeed, right—that they value, and that is the certainty that they will be allowed to live out their days in what has been their home for a considerable number of years. They are consistently concerned about year-on-year rent increases and they are in no position to look for an alternative place to live. They have no possibility of arguing the rent down with their landlords and it causes them real distress.

Mr. Lilley

Let me make it clear to the hon. Lady—I hope that it will be reassurance for her obvious concerns for her constituents—that there is no intention of applying the measure retrospectively to people already established and claiming housing benefit. It applies to new claims for housing benefit. It is obviously much easier for someone newly claiming housing benefit and having to choose where to live to decide between different premises. Those who are already retired and on housing benefit will not suddenly be deprived of a portion of their housing benefit and be required to move elsewhere.

Ms Jackson

Will the Secretary of State clarify that a little further? Does he mean that if the landlord of those who are, and have been, in receipt of housing benefit for a number of years chooses to raise their rent year-on-year, their housing benefit will still be met in full?

Mr. Lilley

Subject to the rent not being in excess of a reasonable market rent, yes, it will.

Ms Jackson

With respect to the Secretary of State, that is absolutely the nub of the problem and precisely the reason why so many of my constituents are justifiably afraid.

There has been an increase in the number of people who buy up properties and wish their sitting tenants to leave. They want to turn them out. They wish perhaps to modernise the properties that they have bought arid they believe that there will be a higher return on their investment if they can reduce the number of flats in a house of comparatively multiple occupation. Therefore, an increasing number of my constituents who are elderly and who have lived in the same properties for a considerable number of years are undoubtedly being pressured by their landlords. In many instances, a landlord can evict tenants who have lived in a property for many years only when they can no longer pay the rent.

Will the Secretary of State discuss with the Secretary of State for the Environment the possibility of reintroducing some fair rents scheme? I understand that there has been no positive response to the idea, but the problem is causing real hardship and I believe that it will affect an even larger number of people.

At the moment, people are having to choose between taking a job or losing their homes and I cannot believe that the Government actually wish that to happen. In the light of the year-on-year increases in rent over the past few years, the issue really should be examined again and I would be grateful if the Secretary of State could do that.

I am grateful to have been called in the debate and I am even more grateful that the habitual residence test is part of our deliberations tonight, not least on the level of obtaining some information, as I hope that we shall. Whenever I have tabled a written question to the Department of Social Security—for example, on the number of British citizens who are awaiting the results of their appeals under the test, the number of citizens of former Commonwealth countries who have applied for the test, the number of British families who are affected by the habitual residence test, the ages of children within those families and the ages of individuals who have been asked to undertake the test—the reply that I have consistently received is that no such figures are kept centrally and the cost of providing them would be prohibitive.

I find that an absolutely extraordinary response, given that, when the Secretary of State introduced what I believe to be genuinely nasty legislation in what I would also argue was an singularly nasty little speech, we were told that the habitual residence test was being introduced to close a loophole against benefits tourists attempting to perpetrate fraud against British taxpayers. However, a detailed letter that the Secretary of State sent in response to an inquiry from my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), contained the following sentence: Although immigration status has always been relevant to Income Support entitlement, the nationality of claimants from European Economic Area (EEA) states is not recorded, hence the absence of hard data. In the speech that introduced the habitual residence test, which the Secretary of State delivered at the Conservative party conference in 1993, he depicted a crooks' tour, and the nationals whom he proceeded to insult were the citizens of Germany, France and Italy, yet it would seem that there is actually no hard evidence to support what I regard as an extremely damaging piece of legislation.

Setting aside the issues of European Union nationals who are being caught by the habitual residence tests and looking instead at benefit tourism, which was my understanding of why the test was introduced in the first place, I would be grateful to know, as I am sure would every right hon. and hon. Member, how a young British citizen, who, regrettably, at the age of 19 moved from education to the dole queue was denied any claim upon the benefits system because she was deemed to have to undergo the habitual residence test. To regard a move from education to unemployment as a tour or a journey seems absurd in the extreme.

Another example is one of my constituents, a woman in her late 40s who is a freelance journalist. She found it impossible to obtain employment in Britain, the country of her birth, so at the age of 30 she moved to Greece, where for 13 years she was successful in obtaining employment as a freelance journalist. Due to her own ill health and that of an elderly relative, she found it necessary to return to Britain. In the interim, her elderly relative died. She had already sold such property as she had in Greece—it was very small in quantity—and she arrived in Britain with no living relatives, admittedly not having lived here for 13 years, and had to undergo the habitual residence test. She was left with absolutely no means of support, given that it is taking the Benefits Agency offices in my part of north London anything up to three months to process an application and an appeal. In one absolutely shocking case involving a young pregnant woman, it took five months before any answer came.

We are denying British citizens any rights whatsoever. It is not simply the right to obtain sustenance from the benefits system; it is a denial of the most basic civil rights and liberties that people can be born British citizens, attempt—as the Government are always urging our citizens to do—to maintain themselves by employment, find that employment abroad and yet, when they return to Britain, be denied their rightful places as British citizens.

I shall deal briefly with another case in my constituency involving a citizen of the European Union who has lived and worked in this country for at least five years. Because of a downturn in his employment, he applied to the Benefits Agency. Not only did the agency insist that he undergo the habitual residence test but it asked him to produce his passport. That seems to be a gross abuse of the agency's responsibilities, and I urge the Secretary of State to re-examine what the test is supposedly doing for the citizens of this country.

I should be grateful to see the hard evidence that proves that the taxpayer is being saved money and equally grateful to see that which proves that the particular group of people that the test is seemingly targeting are exercising gross fraud on the citizens of this country.

I realise that time is short so I shall conclude by giving details of two further cases in my constituency, both involving young women. Indeed, the test impacts especially harshly on women, and that is certainly so in the two instances that I shall outline now. Both cases involve women who, for a variety of reasons, which are no business of the House and into which we have no right to inquire, ended up abroad but in failing marriages. In one case, the woman, who is a British citizen and has a small child, had to return to this country because of the severe domestic violence that she was suffering at the hands of her now estranged husband. The other woman had to return because of a breakdown of relations between her in-laws.

In both instances, the women returned to their own country: one returned with a very small child and one was five months pregnant. They both had to undergo the habitual residence test and were denied any support for a considerable time. It was only the generosity and kindliness of friends that sustained them until the appeals found for them.

I do not know whether it was at the same Conservative party conference that the Secretary of State delivered the speech to which I referred, but I distinctly remember the Prime Minister speaking of his desire for people to be able to hand on what was their own to their own. I believe that he was referring to property rather than to citizens' rights but I think that British parents would find it deeply shocking—I know I do—if, via this nasty little test, the great gift of British citizenship and all that it entails were to be denied to their children and grandchildren.

5.52 pm
Mr. Peter Luff (Worcester)

I begin by apologising to you, Mr. Deputy Speaker, and the House for the fact that I shall not be able to stay long after I have made my speech as I have a long-standing engagement elsewhere. I pay tribute to the speech of my right hon. Friend the Member for Chelsea (Sir N. Scott) which he made with the elegance and compassion that are characteristic of his whole political career.

Let me put my remarks in context. The House is aware that it is estimated that the social security system will cost some £84 billion for the current year which, I am told, works out at about £15 per working person per day. That is a huge sum of money. Even after the reforms that my right hon. Friend the Secretary of State has put in place, it is planned that in real terms the social security budget should grow by some 2.1 per cent. a year in future. That is a huge rate of growth on a huge sum of money, and it is important that we bear that in mind as we consider all the many difficult choices that Ministers have to make.

The central question is whether it is right that the bulk of social security benefits should be uplifted only by price inflation, not linked to earnings, as the recent report of the Joseph Rowntree Foundation sought to suggest. It might help the House if I quoted the JRF summary. It states: More people became dependent on benefits like Income Support as a result of both higher unemployment and demographic factors. I think that we can accept that. It continued: The income gap widened between those dependent on benefits and those with earnings. We can also accept that as a factual statement. It then went on to state: Since the early 1980s, benefit levels have generally been linked to prices, so that the incomes of those dependent on benefits have fallen behind the working population. It now becomes more tendentious by stating: Those remaining dependent on price-linked benefits have little or no stake in the prosperity of the country, since rising real incomes in general have no effect on their own standard of living. Here, I believe, the foundation is straying into dangerous territory. It concludes: While the priority has to be to ensure that, where possible, people do not remain dependent on benefits, there will remain groups who do so. In such cases, indefinite price indexation is not adequate, and their benefits should increase by more than inflation at times when living standards in general are rising. Superficially, that seems a plausible analysis, but the foundation's inquiry has missed one crucial point, which is that the incomes of the poorest members of our society depend not only on cash benefits from the state but on a range of benefits in kind that they receive from the state. In this respect, the poorest members of society do disproportionately well.

What are these benefits in kind, these social transfers funded by the taxpayer? I am thinking of things such as the national health service, education, housing and public transport subsidies, welfare milk and free school meals. All these must be taken into account when working out the real net incomes of every member of society. There have been huge increases in benefits in kind during the lifetime of this Government. When judging whether price indexation is the appropriate measure for setting social security benefits, we must take them all into account.

I am glad that the Social Market Foundation has studied the matter in detail. A recent report by Andrew Cooper and Roderick Nye sheds a great deal of light on the subject. They conclude that in 1993 the poorest fifth of UK households gained an estimated £3,610 from state benefits in kind, £1,530 more than the wealthiest fifth … By ignoring benefits in kind the Inquiry"— the JRF study— paints an incomplete picture about the way Britain's poorest are faring. By confining itself to cash benefits and income the Report's conclusion is little more than a function of the linkage of benefits to prices instead of earnings, a change offset by the increase in real spending of public services represented by benefits in kind. They state that the inquiry's failure to include this in its calculations can only be sustained by ignoring what is currently 48.3 per cent. of the final income of Britain's poorest households. Nearly half their income is from benefits in kind. They continue: the Inquiry is borne out of a consensus which regards maintaining and increasing expenditure on public services like education and the NHS as vital to preserving living standards, yet when the most comprehensive study of its kind into Income and Wealth is conducted these figures are excluded. By excluding such important considerations, the central finding of the JRF inquiry—that benefits should be linked to earnings rather than prices—has been invalidated.

Health expenditure has risen from 4.7 per cent. of gross domestic product when the Conservatives came to power to 6 per cent. of GDP now. That is a huge increase which disproportionately benefits the poorest members of society. Education expenditure, which is at present the subject of much controversy, has risen by 50 per cent. per pupil in real terms since the Government took office. These factors must be weighed in the balance when we consider the Social Security Benefits Up-rating Order 1995.

I accept that there are problems with poverty, as the JRF report said. They are often heavily localised and, I believe, best addressed by local regeneration measures. The work of English Partnerships, for example, is crucial in this respect. I accept that inequality in our society has increased, but, unlike the JRF inquiry, I do not accept that that is automatically a bad thing. Some measure of inequality is essential as an engine of economic growth and enterprise.

I believe that, theoretically, indexation to prices alone might have an adverse impact on the incomes of the poorest, but, looking at the broader picture, that is clearly not the case. The problem of growing inequality in our society and the problems of the poorest 10 per cent. about which the pessimistic talk a great deal are in reality nothing like as great as has been suggested, which is why I believe that it is absolutely right for the Government to stick to the principle of price indexation for the vast range of social security benefits.

I should like to reinforce the points made by my right hon. Friend the Member for Chelsea about the impact of targeting, particularly on the thrifty elderly. It sounds very good and reassuring, as my right hon. Friend the Secretary of State said in his opening remarks, that we must focus help on the most needy, and I agree that we do, but we must recognise that the practical effect of focusing that help can all too often be to remove from benefit entitlement those who are only marginally better off than people in receipt of benefit. That leads to very real resentment, particularly among elderly people in my constituency who are not in receipt of benefits, who have made some modest provision for their old age, but who find that the couple next door, who have made no such provision, are the beneficiaries of all these state benefits. We cannot duck that issue for much longer and it is one to which I hope that my right hon. Friend will give greater attention.

On housing benefit, I believe that it is wrong to subsidise both bricks and mortar and people. If we subsidise people alone and allow rents for all forms of housing tenure to rise to something nearer market levels, it lets the market work. It will bring about the revival of the private rented sector, and that is happening thanks to the assured tenancy scheme, which all Conservative Members wish to see continue.

Housing benefit has trebled since 1979 to some £10 billion today, so it is fully understandable why the Treasury should be so concerned. I welcome the reforms that are part of the packages recently announced by my right hon. Friend. That we should have some limit on what rents in a particular area should be eligible for housing benefit seems entirely reasonable to me, as does the idea that in a household in which people are working the person in receipt of housing benefit should have a corresponding reduction in that benefit. If we cut the subsidy to the Housing Corporations and, more generally, housing benefit—which we are not currently doing—the result could be a loss of confidence in the financial institutions that go into partnership with the housing associations to fund housing, that money will be there in future to fund social housing for rent. I urge my right hon. Friend to look carefully at pressure from the Treasury for a more broad-based reduction in housing benefit if at the same time there are reductions in the subsidy to housing corporations, because that could have an unfortunate impact on the housing association movement in this country.

The broad issues being discussed by the House today are right and proper. The Government are right to insist on linkage only to prices, not earnings, and I commend the orders to the House.

6.1 pm

Ms Liz Lynne (Rochdale)

There is a great deal for us to debate this evening. I feel that this is an awkward way to debate the orders. As my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) said at the same time last year, it is an inconvenient mix and match of orders. It is difficult to give proper consideration to them all, but it is even worse today, because there are six orders before us. The Government might be quite happy to stifle debate, particularly on the sensitive issue of the habitual residence test, and avoid debate when the order was laid before the House and became law, but we are here today to debate whether we should revoke that order. I believe that we should, as I shall explain later.

The order dealing with habitual residence tests has been tacked on to the end of five other orders, and we must get through all of them by 7 o'clock tonight. I shall deal with one order in particular—the reduction of class 2 national insurance contributions for share fishermen. That is welcome, of course, but it will not compensate for all the problems that British fishermen currently have, not least with the Spanish fishermen being allowed to fish in the Irish box.

It is right that we should debate the rise in benefits in line with inflation, but I believe that the debate should be widened. We should be talking about a fundamental review of the whole benefits system. We should be talking about trying to protect people from poverty and getting people back into work. The Government, under the reforms banner—I believe that it is a banner—are hacking away at benefit expenditure, which is storing up problems for us in the long term. All these measures should be looked at in the light of that fact.

In the Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order, for instance, the amount paid into that fund in 1995–96 must not exceed 10 per cent. of the benefits expenditure. That is a reduction of £2 billion on what the Treasury was able to spend last year to top up national insurance contributions. That is partly due to the rise in national insurance contributions and the fact that benefit payments have decreased. I would welcome that if it was for the real reason of getting more people back into employment, but that is not the main issue here. The Government are trying to save money by cutting benefits. I believe that they excel in short-term planning—looking towards the next election and no further. What they are trying to do, as in all other departments, is cut benefit expenditure so that they can buy votes with tax cuts at the next election. I do not believe that the British electorate will be bought at the expense of the most vulnerable in society.

We must look at the report from the Joseph Rowntree Foundation about the gap between the rich and poor. Poverty damages people's health. It will increase the bill to the taxpayer; the more ill people are, the more the taxpayer must pay. The creation of an underclass costs money, through an increase in crime. I believe that the Secretary of State for Social Security acknowledged that fact when he spoke in Northern Ireland a few months ago. He talked about the gap between the rich and poor and about the unemployed. He linked it to a rise in crime. It will have a knock-on effect for the taxpayer—through higher prices not only for the police and the prison service but for insurance premiums, as crime rates go up.

The most recent report from the Joseph Rowntree Foundation said that the tax and benefits system does not bolster the married state. The Government talk about the family all the time. I firmly believe, as I am sure do hon. Members on both sides of the House, that a stable family—and I mean a stable family—is the best way to bring up children, but the Government are letting the family down. One has only to look at that report to know that that is true. There will be a tremendous knock-on effect for the stability of the country in the future.

Mr. Nicholls

Will the hon. Lady tell us in which way the decision of the Liberal party conference to provide for the prescription of contraceptives to under-age children bolsters the family?

Ms Lynne

I really wish that I had not given way to such a stupid remark. We are talking about social security uprating. Perhaps if the hon. Gentleman is called, he can make his points in his own way.

The Secretary of State should be addressing all aspects of benefits and should not just talk about benefit tourists, scroungers and fraud, although I want to get rid of fraud as much as he probably does. He must examine the more difficult arguments as well. It is all very fine for him to get a standing ovation at the Conservative party conference when he talks about wiping out fraud. I would like to see him get a standing ovation at that conference by talking about investment in people. I doubt very much whether he would get one, or indeed whether he would even talk about it.

I welcome the chance that the orders have given us to debate benefits. We must use the benefits system to lift people out of poverty. They are usually there through no fault of their own. We must ensure that they can make a worthwhile contribution to society in future. But that requires bold planning. We need to bring in some bold measures. I would like to see a proper, full benefit transfer scheme to get people back into work. I would like to see a low-income benefit. I make no apology for mentioning it again, but I would like to merge income support and family credit so that people are always better off in work and do not lose benefits pound for pound. I would like to see a top-up element to the basic state pension—it has gone down in real terms since the Government came into power—in line with income support, and for that top-up element to be linked to earnings.

Mr. Heald

The hon. Lady—like the Rowntree report—seems to advocate raising the level of benefits above that of price inflation. Will she cost that? What is the Liberal policy, and by what amount should the benefits be uprated?

Ms Lynne

If the hon. Gentleman had been listening, he would know that I was proposing the restructuring of the benefits system and the introduction of a benefit transfer scheme. I was proposing the merging of benefits. I cannot talk about the possibility of uprating income support and family credit, for instance, given that we want to merge the two schemes into a single low-income benefit. That is the way in which we can return people to work.

The debate gives us a great opportunity to examine the Government's strategy. In fact, I do not believe that they have a strategy to improve the benefits system. Although I welcome the introduction of a measure on statutory sick pay to remove the burden from small businesses, its effect is very small in comparison with the impact of the Statutory Sick Pay Act 1994 on small businesses throughout the country. I doubt whether many small businesses are currently congratulating the Government.

The Government are trying to pretend that they are giving more than they are. Similarly, they stated that under the Act small employers would be given a rebate if an employee was off sick for more than four weeks; they failed to add that the majority of employees return to work before the four weeks are up. Nevertheless, the order that we are discussing will help small businesses if, for instance, a large number of employees are off work with flu. I welcome that, but it should have been in the Act.

Employees have suffered discrimination under the current statutory sick pay arrangements. Now that firms must pay 100 per cent. of the bill, employers are looking for people with better sickness records. That is understandable, but it is not acceptable. Employers have dismissed staff who have worked for them for under two years because of their sickness records; citizens' advice bureaux have a list of problems connected with the Statutory Sick Pay Act, but the order contains no proposals to help the people concerned.

As I have said, I welcome the small amount of help that has been given, but I feel that we should consider wider issues. I was sad to note that maternity benefit and the funeral grant have been left out of the uprating of the social fund; I was particularly sad about the funeral grant.

In 1986, the right hon. Member for Huntingdon (Mr. Major)—who has already been quoted—said that the habitual residence test would be an administrative nightmare. I entirely agree: indeed, it is already beginning to be an administrative nightmare. The Secretary of State mentioned benefits to tourists in his speech at the Conservative party conference, and that is why the order was laid. The right hon. Gentleman even acted against the advice of the Social Security Advisory Committee.

The problem with the test is that it does not define habitual residence for the purpose of the order, and there will therefore be appeals in many cases. Many such cases are being won, but in the mean time the people involved are denied benefit because the Government say that they will appeal again. I very much doubt that they will pay interest if the next appeal is won.

I have encountered several such cases in my constituency. One of my constituents has worked in this country for some time, but when his father became very ill in Pakistan he went off to look after him. It took just over a year for the father to die. The son returned to this country, began to work again and paid his national insurance and tax contributions. Then his mother was taken ill. As there were no other relatives to look after her, he had to return to Pakistan to nurse her and take care of all her affairs. She subsequently died.

The man has just returned to this country. He came to my surgery last week in a terrible state, because he was receiving no money. He has nothing to live on. This is a man who was working in this country, and paying tax and national insurance. Now he is living off friends: he is desperate. I am sure that, if the Secretary of State or the Minister had seen him in my surgery, they would have realised that he was a genuine case. He is a British citizen, and has worked in this country.

In the speech to which I referred earlier, the right hon. Member for Huntingdon said that people should be able to obtain money from the social fund if they were turned down for income support, housing benefit or a rebate for poll tax—which has now become council tax—or if they failed the habitual residence test. My constituent could not obtain money from the social fund; he has no money at all.

The right hon. Member for Huntingdon—who, of course, is now the Prime Minister—went on to say: What is clear from all our habits and history is that when people are in desperate need it has never been the fashion in this country—nor would it be the wish of my hon. Friends—not to provide assistance that is sorely needed."—[Official Report, Standing Committee B, 27 February 1986; c. 537.] Things may have changed; things may have moved on. But that is still an excellent argument against the test.

The main problems have been experienced by British nationals, although the order was designed to catch foreigners. I do not want people to come here and claim benefit to which they are not entitled, but the legislation is affecting British citizens who, having gone abroad to work on contract for perhaps a couple of years, return to find that they cannot claim anything.

Another example is the person who lives abroad with a spouse who subsequently dies. It is usually the wife who returns to be near the family; that wife is not allowed to claim benefit. She is refused under the habitual residence test. A constituent of mine is in that position. Her husband is dead, she has two children and she cannot claim any support.

In the first three months of the operation of the test, 2,086 British nationals were denied benefit. We are not talking about foreigners; we are talking about British nationals. The money is means tested, so the revocation of the order would not benefit those with considerable resources. It is those with nothing—those experiencing real hardship—who would benefit.

The Child Poverty Action Group has drawn attention to the case of a British woman who went to Spain. It was the usual story: she married, and then went to Spain to live with her husband. He left her, and she came back to this country with two children aged seven and 10. Her husband had left her with no money, and she had nowhere to live in Spain, so she returned to this country. She could not obtain income support, because she could not prove that she was habitually resident here. She, too, has no money. How on earth is she supposed to support her two children?

I do not see how the Government can fail to accept that a number of people have suffered acute hardship. That number does not run into many thousands now, but if we do not revoke the order it could increase dramatically. I only wish that the nice words of the right hon. Member for Huntingdon meant something today. Surely, now that he is Prime Minister, he should have more influence; he should read again what he said in his speech about the habitual residence test. The Secretary of State and the Minister should also take note of what the Prime Minister said then.

What savings will the Government make? I do not think that the savings could compare with the misery that the Government are creating for some British families. I hope that they will revoke the order, because it is targeting the wrong people. It must be scrapped because, otherwise, people will live in abject poverty. We must also consider restructuring the whole benefit system, otherwise we will have not only a two-tier health service, but a two-tier wealth service, which will tear the country apart.

6.19 pm
Mr. Patrick Nicholls (Teignbridge)

This—and any—debate on public spending must start from the basic proposition: what can the country afford? After all, every penny that is paid in benefit ultimately comes out of the taxpayer's pocket. We have been able to uprate these benefits fully against inflation because the economy is being run properly. A large amount of money—£.1.5 billion—is involved. In no shape or form is that a small or trifling sum; yet as the economy is being run properly, by the end of this century about £8.5 billion less than had been anticipated will be spent. That is the effect of the recovery which has resulted from the Government's policy.

As my hon. Friend the Member for Worcester (Mr. Luff) said, the sums involved are so huge that one can hardly get a grip on them until one bears in mind that they represent £15 for every working person for every working day. The fact that the country can afford largesse on that scale, paid for by the taxpayer, is a remarkable achievement and it is due in no small measure to the Government's actions. Some people look across the channel—although I do not—harking to the European model and thinking that things might be better over there. It is significant that in the past two years Germany has had to restrict the uprating of benefits to 2 per cent. No pretension exists there that it would be possible to link benefits to the inflation level.

The Government's record speaks for itself. These uprating orders speak for themselves and they are a remarkable achievement. In a sense, the debate need go no further than that. One might honestly have wondered why the orders could not simply have gone through on the nod, perhaps with just a short speech or two to compliment the Government on their achievement. That would have been a waste of an opportunity. After about 14 years in the House, I still retain a complete lack of cynicism. I thought that we knew where the Government stood on this, but that it would be a useful and fair opportunity to hear what the Labour party would do to improve the position. The debate would even give it the opportunity to say, "Thank you and sorry". I thought that we could come along and hear what Labour's alternatives are.

It may be the passing of the years and defects in hearing, which can affect us all, but I did not hear anything from the hon. Member for Manchester, Withington (Mr. Bradley), the Labour Front-Bench spokesman, to give me the merest hint of what we might expect from a Labour Government. One must go back into history to the last Labour Government to get any clue about what might be in store. Let us consider what might be in store in terms of public expenditure and on the basis of the model of the last Labour Government. It was not a question of coming to the House in a calm and moderate way and saying, "These are the things that we can afford. We can afford uprating in accordance with the level of inflation". Oh no, there was a telephone call from the International Monetary Fund calling the Chancellor of the Exchequer back from an airport. That is the way things were done in the old days.

Anyone who doubts that can refresh their memory by reading the Rowntree report which, as we heard again from my hon. Friend the Member for Worcester, is not particularly perfect but which reminds us that the wages of the lowest-paid men fell between 1975 and 1978 and that it was only under a Conservative Government that in due course their wages increased. That fall did not occur because of a defect of compassion among Labour members or because they were insouciant. They were simply incompetent: they could not run an economy capable of generating the tax revenue which turns compassion into something realistic and tangible.

The Labour party's policy on benefit is a bit like its policy on interest rates. That is the nearest that one can get to a definition of it. Whatever interest rates are at any given time, the Labour party says that they should be 2 per cent. lower. On benefits it says, "We are not quite sure what our policy is, but whatever it is it will be better than that of the Conservative party."

When the right hon. Member for Sedgefield (Mr. Blair) was given the opportunity to talk about this, he said in the New Statesman and Society of 15 July 1994: I do not think it is sensible for Labour to write tax and spending policies now. Really? It might not be sensible to give them in detail, but perhaps just a little hint, a taster or an indication of what might be on offer should be given. The only indication that I have been able to find is an apparent commitment that the upper rate of tax might go up to 50 per cent. So far so good. Is that an aspect of compassion? Not really. The figures have been quoted time and again.

The figures were revealed first by the hon. Member for Birkenhead (Mr. Field), who does know something about social security matters. In 1986, he was the first to table a parliamentary question which revealed that when tax rates are reduced the total amount of tax paid to the Exchequer by the richest people in the land increases. So if one is in the business of generating more tax income to spend on people who should benefit, one achieves that by lower and not higher tax rates. The one piece of policy that I have been able to glean from the Labour party—that the upper rate of tax might go up to 50 per cent.—will satisfy the neo-Stalinist tendency in the Labour party, but it will not produce any more money. An opportunity has been lost today to find out the Labour party's attitude to that.

What are people looking for in the orders? First, they are looking for a sense of fairness. The point about the habitual residence qualification has been referred to on a number of occasions. I listened carefully to the hon. Member for Withington and responded to him in the most charming way. I asked whether he would revoke the order. When I saw that he was running out of time, I thought that I had to help him and that he should not run of time without answering that question. In my usual kind-hearted way, I stood up and reminded the hon. Gentleman that time was running short and that he would have to answer that question—but he did not do so. In the end, the closest he could get to an answer was to say that he was very unhappy about the definition of the order, but he was not quite sure whether he would revoke it or not.

For a legislator to complain about a lack of definition to get out of answering a straight question is intellectually dishonest. We can always change the definitions in the House. We needed to hear from the Labour party today whether it had a contribution to make to changing the definition, which preserves the principle of a habitual residence qualification.

I know the vice at which the order is being aimed, and so do my constituents. I find it bizarre to hear Opposition Members say that the present definition is so unfair. I will tell hon. Members some of the criteria that are brought into play in deciding whether a person has a habitual residence qualification. I will cite just three. The criteria include showing a genuine commitment to living and working in the United Kingdom, a previous record of work or contributions to the UK, and answering questions such as why they came to the UK, whether they have a home elsewhere, and what their intentions are as to residence.

There does not seem to be anything too draconian in those criteria. There is ample opportunity to say, "I was born in this country and I was working here. Then I went abroad, but I had a family crisis over there and the job fell through, so here I am back in this country."

Ms Lynne

Will the hon. Gentleman give way?

Mr. Nicholls

If the hon. Lady will allow me, I will not give way because time is short.

The possibility exists within those definitions to produce a sense of fairness. If something else is necessary in the light of experience of Conservative and perhaps Labour members, let the definition be considered again. But the concerns of my constituents about benefit tourism will not be answered by the Labour party turning around and saying either, "We simply do not agree with the concept" or, "We cannot quite bring ourselves to do that, so we shall carp endlessly about the definition without saying whether we intend to revoke the order or not."

Any system of benefits and the acceptance of these orders rely on the support of and acceptance by the taxpayer that the Government are properly disbursing the money that the taxpayer contributes. It is directly relevant to consider cases such as the one mentioned in the House some two weeks ago involving the famous Watters family with five children and receiving the equivalent in benefits of £25,000 in pre-tax income. That has done incredible damage to acceptance of the social security system. It is difficult to exaggerate the effect that that has on traditional family views. People in the neighbourhood say to themselves, "I could not begin to earn half that amount, but if I was on benefit I could." That causes outrage among the public and must be dealt with.

If any Members are in doubt about the way in which the benefits system is sometimes seen by ordinary members of the public, they could do no better than consider a letter that I have received today from a pensioner in Plympton, which is not in my constituency—[Interruption.] Interestingly, the person concerned wrote to me with this debate in mind. I shall not quote the whole letter, although it would certainly bear quotation. It says: It is very disturbing that whilst extra charges and taxes can be imposed on us so easily, there is no … correction made to the reckless and unjustifiable distribution of taxpayers' money. The various agencies are given more and more, flout the principles of the guidelines under which they are supposed to work, take more and more for their own benefit and look for bizarre ways of spending—such as six 'helpers' taking one offender on holiday, sending criminals on safari trips—again with an adequate number of minders. Every day one can read in the papers about the squandering of money on legal aid. Politicians agree it is wrong, taxpayers are appalled but nothing is done to stop it." [Interruption.]

Madam Deputy Speaker (Dame Janet Fookes)

Order. There are too many seated interventions. If the hon. Member for Islington, North (Mr. Corbyn) is hoping to catch my eye later, I hope that he will bear in mind my dislike of such interventions.

Mr. Nicholls

We must address the fact that people in this country feel that those are considerations which sometimes influence our debate a great deal more than they should. In the end, whether we like it or not, the benefits of which the House disposes are paid for by people who overwhelmingly are basic rate taxpayers. The money has to come from their pockets. If the benefits system is to be credible, the middle classes must believe that it is running properly and that it is looking after those who cannot look after themselves.

We can compare the contributions that we have heard today from Opposition Members with the measured way in which my right hon. Friend the Secretary of State was able to introduce these upratings. If the middle classes want to know that they have a Government capable of working out what the country can afford and focusing funds on those on whom they should be focused, there is no doubt that they should hope for the continuation of a Conservative regime and not what has been represented from the Opposition Benches.

6.31 pm
Mr. Jeremy Corbyn (Islington, North)

There is an air of unreality about the debate. The hon. Member for Teignbridge (Mr. Nicholls) was carrying on as though those living on benefits were living the life of Riley. He totally ignored the fact that he has been loyally. if not slavishly, supporting a Government who for the past 15 years have presided over an increase in the wealth of the richest 10 per cent. by about 62 per cent., a decrease in the living standards of the poorest 10 per cent. by at least 17 per cent., an increase in homelessness, an increase in the number living on below average earnings from 5 million to 14 million, an increase in the number of children living in poverty households from 1.4 million to more than 4 million while at the same time the Government have been selling off all our publicly owned utilities at knock-down prices—giving them away—encouraging shareholders to make a great deal of money out of them initially and allowing chief executives to have take-home pay of hundreds of thousands of pounds per year. The Government have created the misery, divisions and horrors that exist in our society today.

These orders simply confirm the trend that has gone on for the past 15 years. The Government talk as if they are handing out gifts to the poorest people in our society. In fact, they have presided over a reduction in wage levels for the poorest and an increase in salaries for the very richest. They talk as though pensions were the greatest burden on our society. They should take a look around and meet those struggling to survive on the state pension and any other state benefits to which they are entitled, particularly older women pensioners who have no access to an occupational pension scheme, no access to any savings and who rely on the pension, income support and housing benefit to get by.

The hon. Member for Worcester (Mr. Luff) has, gladly, left us. He said that we should take into account all the other benefits to which people are entitled, such as the public transport subsidy. The very poorest cannot even afford the subsidised bus fares that are on offer. Before Conservative Members start to talk, as they do, about the use of the national health service and other things, they should study the reports and see who gains the most from the NHS and who gains the most from the state education system. It tends to be the most articulate middle classes in our community rather than the very poorest who do best out of those services. Those issues need to be addressed.

Conservative Members talk about the need to curtail and control housing benefit expenditure. I can provide a simple answer as to why housing benefit expenditure has increased. There are two reasons: first, unemployment has increased, so eligibility for housing benefit has gone up; secondly, rents have gone sky high, encouraged by a Government hell bent on deregulation. The housing benefit helps not the individual but the landlord, whether it be a private landlord, a housing association or a local authority.

The Government say that there is the option of private rented accommodation. Last week I was talking to an unemployed man of no fixed abode. He moves from friend to friend and relative to relative, getting a night's kip here and a night's kip there. He cannot get a council house because he is a single person with no dependants. He asked me for advice. I asked him what he had tried and he told me that he had tried everywhere. I said, "What about private rented accommodation? You will get housing benefit to pay for a bedsit or a small flat." He said, "That may be so, but find me a landlord who will let me move in without putting down a deposit of at least a month's rent, if not three month's rent, and who will give me the money for that?" That is the reality of the housing benefit rules.

Conservative Members decry anyone who looks seriously into the issues of poverty in our society. They decry the Rowntree report and anyone who talks about poverty.

Mr. Heald

Will the hon. Gentleman give way?

Mr. Corbyn

No, there is not enough time.

The Government decry anyone who tries seriously to examine poverty in Britain. The Government have presided over a massive growth in poverty. They are encouraging and creating poverty in our society. Then they claim that unemployment is falling and that everyone is better off. It is true that the unemployment figures indicate that it is falling, but it is also true that the number of people denied benefit is increasing and the number of people living with no real support is increasing very rapidly.

The debate should be much longer because this is an important and serious subject. The central thrust of the Government's intentions is to reduce the overall cost of social security. They are trying to do it by privatisation and by decreasing the level of the state pension so that people in middle age are forced to take out a portable private pension scheme, however insecure that might be, so as to provide something for themselves when they reach retirement age. To create that false market for the private pension scheme—the Secretary of State admitted it to the Select Committee—they are subsidising the national insurance fund. The Government are prepared to back up private investment and to create this false market while doing nothing about the serious problems of the waste of human resources, human life and human expectations as a result of the increase in poverty in Britain.

We need an attack on poverty in Britain. We need a real welfare state. Our welfare state is not safe in the hands of the ideological monsters on the Government Benches who are hell bent on destroying it.

6.36 pm
Mr. David Lidington (Aylesbury)

I take up a point raised by the hon. Member for Islington, North (Mr. Corbyn). Nobody would wish to quarrel with the objective of seeking policies that are designed to tackle problems of poverty. The important difference between us is that Conservatives believe that such policies need to be based on a thorough analysis of where those problems derive from, how they can be tackled effectively and at what cost and from whom such costs should be met.

I want to raise a point of detail as well as some more general points of principle. That point is the cash limit placed on funeral expenses, which was referred to by the hon. Member for Manchester, Withington (Mr. Bradley). I understand and support the reasons behind the change in the Government's policy, but I bring to the attention of my right hon. and hon. Friends the concern of some funeral directors that increased church fees for ecclesiastical funerals may, in some circumstances, make it difficult for them to meet the cap imposed by the Department of Social Security. There are always difficulties in deciding whether a system should be discretionary or based on a formula, but I hope that my right hon. and hon. Friends will bear that point in mind.

My right hon. Friend the Member for Chelsea (Sir N. Scott) and my hon. Friend the Member for Worcester (Mr. Luff) talked in some detail about the demographic and social changes that will shape the debate about social security over the next couple of decades. My hon. Friend the Member for Worcester alluded to the continuing cost of social security. We are talking about a system where expenditure has increased sevenfold since the initiation of the welfare state in the late 1940s and early 1950s. If one tracks through recent Treasury Red Books the underlying pattern of non-cyclical social security expenditure, one sees a continuing upward pattern—£49 billion in 1989–90, just over £70 billion in the current financial year and an estimate of £79.5 billion in 1997–98.

I welcome the news from my right hon. Friend the Secretary of State that the projected growth in non-cyclical underlying spending is to be reduced, but, as my hon. Friend the Member for Worcester pointed out, underlying growth of 2.1 per cent. year on year rests on the ability of our economy to generate the wealth which is needed to pay for that increase. It is in that context that we have to take account of the demographic changes—the growing number of elderly people relative to a shrinking population at working age and the changes in family structure—which affect levels of income support, family credit, housing benefit and council tax benefit.

Obviously, the most important way in which to cut social security spending is to encourage employment. I am less cynical than the hon. Member for Islington, North about progress in that direction. I particularly welcome the elements in my right hon. Friend's package of measures which are designed to encourage people to go back to work, such as the back-to-work bonus, cuts in employers' national insurance contributions and changes to the regulations which make it easier for an unemployed person to try a new form of employment without necessarily putting at risk his future entitlement to benefit if that trial employment does not work out. I welcome those measures and would like such efforts to continue.

The relationship between family policy and the social security system is worth several days' debate in its own right. All I would say is that it is not a problem that we alone confront. The Germans, for example, require adult children to contribute towards the upkeep of very elderly relatives who require residential care. The Government cannot be indifferent to the costs which broken relationships and broken families force on the benefit system. In their differing ways, the most recent report of the Rowntree trust, the Institute of Economic Affairs and the Archbishop of York have all said that we must look carefully at the impact of tax and the benefit system on family life. As a country, we must get the balance right between family responsibility and state responsibility. That objective admirably suits the political approach of my right hon. Friend the Secretary of State.

6.42 pm
Mr. Thomas Graham (Renfrew, West and Inverclyde)

I am once again appalled that further poverty is being inflicted on our folk, although I welcome the meagre increases that the Minister has announced. Those increases do not, however, go far enough and do not deal with the tragic poverty and suffering in Britain. I was amazed that the Minister capped the funeral benefit at £875, when the professionals are clearly telling him that £1,200 is needed for a poverty funeral. Let us be honest. We will be talking about bin-bag burials in Britain if the Government continue their policy. They are not listening to the people who perform the burials. What a tragic situation we have in Britain when people in poverty cannot bury their folk with dignity. A wee bit of support from the Government should be encouraged. Yes, Minister, I believe that you are creating a bin-bag burial policy—

Madam Deputy Speaker

Order. The hon. Gentleman has again forgotten that he needs to address me rather than the Minister directly.

Mr. Graham

I apologise, Madam Deputy Speaker. I am trying to make a fast speech.

The hon. Member for Worcester (Mr. Luff) mentioned housing benefit. Yes, it has trebled—but why? It has trebled because rents have increased in Britain and in Scotland, especially under the quango Scottish Homes run by this Government, which has constantly increased its rent every year by 10 per cent. or four times the rate of inflation. Indeed, it has increased its rent by three times the rate of inflation this year. Housing benefit has gone through the roof because the Government do not have a decent housing policy that gives folk with low incomes the right to a reasonable living standard, a home and a roof. Housing benefit has tripled because of the Government's bad housing policy.

If the Minister goes about Britain, he will see car boot sales and thank God for them because they provide many goods at low cost which the Government's policies do not allow folk to purchase in the shops. Car boot sales provide one of the best social benefits that this country has seen for many years. Who would have believed that? That is the economy that the Government are forcing on the people of Great Britain.

An article in the Evening Times describes Britain as A land fit for Dinkies". When I was a kid, dinkies were motor cars but, in this case, they are people who survive only if they have a double income and no kids. The article also says that even Spain is no longer taking people from Britain who have a basic pension because they are too poor.

The article points out the social benefit protection per head in Luxembourg, Germany, Netherlands, Denmark, France, Belgium, Italy, the United Kingdom, Ireland, Spain, Portugal and Greece. Does the Minister know where we come on that list? We come seventh. It is unbelievable that the great, wealthy nation of Great Britain has lowered its people to a basic income that is seven times lower than that in many other countries. Let us take the highest figure. Benefits in Luxembourg are £5,000 per head. What does Britain provide? Its figure is £3,163.

The Government are pathetic. In no way are they looking after the needs of the people whom they have made poor. They have done nothing to help the low-paid climb to the upper echelons of living standards—a rightly deserved move. They have allowed themselves to be driven by a low-wage economy. It is time that the Government supported the social chapter in Europe. That is the way forward to ensure that our folk have a decent, basic, minimum wage, with which they can hold their heads up high and pay for their purchases, as we are all entitled to do. Once again, the Minister has got it wrong. He is well-known as the Minister of misery.

6.47 pm
Mr. Bradley

It has been a thoughtful and, at times, fiery debate, if all too short. I shall be brief because I spoke for a considerable time when I opened the debate and I want to give as much time as possible to the Minister so that he may respond to the many questions raised.

I commend one or two speeches, especially the thoughtful—as always—speech made by the right hon. Member for Chelsea (Sir N. Scott). I was disappointed with his conclusion on the introduction of incapacity benefit. In Committee, I thought that he was moving the Social Security (Incapacity for Work) Bill through the House with a heavy heart. Clearly, I misinterpreted that—the right hon. Gentleman is now fully signed up to its implications. I shall watch with interest when those implications come to fruition.

I hope that the Minister will consider in some detail the many cases of genuine concern that hon. Members have brought to the attention of the House, which cannot be described as benefit tourism, to ensure that, as there is no definition of the habitual residence test, the interpretation of the criteria does not in any way undermine claimants.

The hon. Member for Teignbridge (Mr. Nicholls) made his usual interesting speech. I thought that it was a bit rich for him to commend the Government on efficiency when, in one day, they spent more than £7 billion on the debacle of the exchange rate mechanism. The Labour party will clearly be voting to revoke the habitual residence test

Will the Minister specifically consider the issues that I raised on uprating, especially the compensation recovery unit, and the concerns that have been expressed by hon. Members from all parties about the social fund and funeral costs? Most importantly, I hope that the Minister will give us all the details that we are seeking about how the habitual residence test is operating in practice. How many people have been refused? How many of those who have been refused have appealed? How many appeals have been successful? What has been the administration cost of the habitual residence test? What has been the net saving through the denial of income support as compared with the cost of administration of the habitual residence test?

Until we have those assurances, that information and the information that we seek consistently through parliamentary questions, so as to discover what is happening in the real world, from which in many ways the Secretary of State's contribution today seemed remote, we shall continue to vote against the orders on the habitual residence test.

6.50 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. James Arbuthnot)

I am afraid that several questions will remain unanswered this evening because I do not have much time to respond to the debate. I shall try to write to hon. Members in respect of any questions that remain outstanding.

It is the custom to say that a debate has been interesting. In this case, that is perfectly true. We have been sitting on the edges of our seats waiting to hear what the Labour party would propose instead of the uprating orders. Sadly, we were deafened by silence.

In that regard, my hon. Friend the Member for Teignbridge (Mr. Nicholls) made a telling point. My right hon. Friend the Member for Chelsea (Sir N. Scott), in a deeply considered and compassionate analysis of the problems that we face, also made the point in a way that left the Labour party more silent than it normally is. Would Labour reverse our mortgage interest provisions? The answer was silence. Would Labour reverse our changes to housing benefit? The answer was more silence.

For such a talkative Opposition, they have very little to say when it really matters. The hon. Member for Manchester, Withington (Mr. Bradley) asked me about uprating, and referred to statutory maternity pay. He was right to say that it is not being uprated in April; that is because it was uprated last October by 7.5 per cent. However, he was silent about what he would do about it. He was asked whether, if he were in power, he would have uprated those payments. We shall never know the answer.

The hon. Member for Withington made several other points, one of which was about non-dependant deductions. He suggested that they were too high. It is reasonable to expect the highest earning adult non-dependants to make a significant contribution towards their housing costs. Even so, the highest non-dependant deduction of £30 is a lot less than the average market rent and the council tax that he or she could expect to pay if living as a tenant elsewhere.

There were other interesting contributions to the debate. The hon. Member for Rochdale (Ms Lynne) made several points. She said that pensions had not kept pace with inflation. They have. She said that there should not be a reduction in the Treasury top-up to the national insurance fund. However, the point is that national insurance contributions are not going up this year, contrary to what the hon. Lady said. Employers' contributions are going down and the economy is improving. That is why more people are in work and earning more. That means more income to the fund from national insurance contributions.

We are here today to ratify the orders which will give effect to another full benefits uprating. Our approach is to use the taxpayers' money in the most effective way. That means targeting on the people who need most help; for example, the extra £1.2 billion a year since 1988 to poorer pensioners. That gave rise to the very important point raised by my right hon. Friend the Member for Chelsea and by my hon. Friend the Member for Worcester (Mr. Luff)—that targeting can be resented by those who have just missed being in the target group. That problem is inherent in any benefit system unless we pay benefits to everyone. The key point is to improve pensioners' income overall, and that is happening dramatically under this Government.

My hon. Friend the Member for Aylesbury (Mr. Lidington) made a very good point about the size of social security spending which takes up one eighth of gross domestic product. As a result of our reforms, we expect that to reduce over the longer term and that is being achieved in large part by the reduction that we have already seen through tighter control of abuse in the benefits system, by bearing down on fraud in respect of incapacity and sickness benefits.

I want now to deal with the Opposition motion to revoke the habitual residence test. Britain's reputation among young Europeans is one of a good place to spend a summer holiday. How right they are. We welcome each and every one of them, but we ask that they pay their way. The Department's postbag from the British public was sending a very strong message indeed. The public are simply not prepared to support people who have no connection with, or commitment to, this country.

In that regard, I am thinking of the 36-year-old German woman who, in her first visit to this country, arrived in the United Kingdom on 16 January to look for work. She says that she was told in Germany that she should be able to claim benefits. Opposition Members have made great play of the plight of British citizens denied benefit because they could not fulfil the conditions of the test. The reality is rather different. In reality, they are strangers to the United Kingdom and certainly strangers to pay-as-you-earn.

Take, for example, the 28-year-old woman, who has lived in Nigeria for the past 20 years and had a job there until leaving for the United Kingdom. She has an eight-month-old child. She has left her husband who remains in Nigeria. Or one can take the 22-year-old Canadian-born woman, of British parentage, visiting Edinburgh with the intention of then backpacking around Europe—

Mr. Bradley

Will the Minister give way?

Mr. Arbuthnot

No, I do not have time.

They are very welcome, but not at our expense. The hon. Members for Withington and for Rochdale made play of the fact that a different test was rejected by the Prime Minister in 1986. That test applied after only 12 months and it was a test which would have been in breach of European Community law.

Mr. Bradley

Will the Minister give way now?

Mr. Arbuthnot

No, the hon. Gentleman has had two goes. I am trying to fit everything into the 10 minutes left to me.

The test rejected by the Prime Minister in 1986 was rightly rejected for those reasons. Our test limits benefits to those people with a definite commitment to living and working in this country. In that respect, we have come into line with other European countries.

Mr. Bradley

Give way.

Mr. Arbuthnot

I have made it plain that I am not going to give way.

We have removed a burden from the British taxpayer. Taxpayers will not have to subsidise people who have no close ties with the United Kingdom and who have not made a recent financial contribution to the United Kingdom—[Interruption.] The hon. Member for Withington is trying to ask me questions from a sedentary position. However, as my hon. Friend the Member for Teignbridge pointed out, his position on that measure was nothing short of extraordinary. In one and the same breath he seemed to support it, to want to review it and to want to revoke it.

In the face of our well thought out and positive measures, let us consider what is on offer from the Labour party. Those who voted for Labour at the last election will be sadly disappointed by what they have heard today. The Labour party manifesto promised that Labour would uprate the pension in line with prices, but we heard not a squeak about that today. How timid the Labour party has become.

In a television interview a few days ago, the hon. Member for Glasgow, Garscadden (Mr. Dewar) tried to be brave. He said: I think that the present level of income support is inadequate. When my right hon. Friend the Secretary of State asked whether, if Labour were in power, the hon. Member for Garscadden would raise it, the hon. Gentleman did a three-point turn. He said, "No, no, no." That was quicker than Labour's U-turn on education policies because at least Labour's education policies lasted a full day; this one hardly lasted full minute. We know why the Labour party refuses to produce any policies; it is because Labour policies always cost vast amounts of other people's money. Labour spokesmen are aware that if they say anything at all their words will be costed, so they have spent the entire debate saying nothing, at great length.

The Labour party set up a Commission on Social Justice, but it is scared to accept the £7 billion price tag. Now Labour Members will have to make a decision. It will be hard for them but they must have a go. They will have to decide whether to vote in favour of more money for pensioners. Many people might think that that. would be an easy decision, but history tells us otherwise. This time last year, Labour Members of Parliament made the historic decision to vote against the pension increase. Will they do that again this year? I would not put anything past them; but I must be fair—not all Labour Members voted against.

Mr. Bradley

indicated assent.

Mr. Arbuthnot

The hon. Gentleman confirms that. The Labour Front-Bench spokesmen did not vote against the pension increase—because they did not vote at all.

It being Seven o'clock, MADAM DEPUTY SPEAKER put the Question, pursuant to Order [24 February].

Question agreed to.

Resolved, That the draft Statutory Sick Pay Percentage Threshold Order 1995, which was laid before this House on 13th February, be approved.

MADAM DEPUTY SPEAKER then put the remaining Questions required to be put at that hour.

Resolved, That the draft Guaranteed Minimum Pensions Increase Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security Benefits Up-rating Order 1995, which was laid before this House on 13th February, be approved. That the draft Social Security (Contributions) Amendment Regulations 1995, which were laid before this House on 13th February, be approved.—[Mr. Willetts]

Motion made, and Question put, That the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 (S.I., 1994, No. 1807), dated 7th July 1994, a copy of which was laid before this House on 11th July, in the last session of Parliament, be revoked.—[Mr. Bradley.]

The House divided: Ayes 246, Noes 287.

Division No. 89] [7.00 pm
Adams, Mrs Irene Caborn, Richard
Ainger, Nick Callaghan, Jim
Ainsworth, Robert (Cov'try NE) Campbell, Mrs Anne (C'bridge)
Allen, Graham Campbell, Menzies (Fife NE)
Anderson, Ms Janet (Ros'dale) Campbell, Ronnie (Blyth V)
Armstrong, Hilary Campbell-Savours, D N
Ashton, Joe Cann, Jamie
Austin-Walker, John Carlile, Alexander (Montgomery)
Battle, John Chidgey, David
Bayley, Hugh Chisholm, Malcolm
Beckett, Rt: Hon Margaret Church, Judith
Berth, Rt Hon A J Clapham, Michael
Bennett, Andrew F Clark, Dr David (South Shields)
Bermingham, Gerald Clarke, Eric (Midlothian)
Berry, Roger Clarke, Tom (Monklands W)
Betts, Clive Clelland, David
Blunkett, David Clwyd, Mrs Ann
Boateng, Paul Coffey, Ann
Boyes, Roland Cohen, Harry
Bradley, Keith Connarty, Michael
Bray, Dr Jeremy Cook, Frank (Stockton N)
Brown, N (N'c'tle upon Tyne E) Corbett, Robin
Bruce, Malcolm (Gordon) Corbyn, Jeremy
Burden, Richard Corston, Jean
Byers, Stephen Cousins, Jim
Cox, Tom Jones, Barry (Alyn and D'side)
Cummings, John Jones, Ieuan Wyn (Ynys Mon)
Cunliffe, Lawrence Jones, Jon Owen (Cardiff C)
Cunningham, Jim (Covy SE) Jones, Lynne (B'ham S O)
Cunningham, Rt Hon Dr John Jones, Martyn (Clwyd, SW)
Dafis, Cynog Jones, Nigel (Cheltenham)
Dalyell, Tam Jowell, Tessa
Darling, Alistair Keen, Alan
Davidson, Ian Kennedy, Charles (Ross.C&S)
Davies, Bryan (Oldham C'tral) Kennedy, Jane (Lpool Brdgn)
Davies, Rt Hon Denzil (Llanelli) Khabra, Piara S
Davies, Ron (Caerphilly) Kilfoyle, Peter
Davis, Terry (B'ham, H'dge H'I) Wrkwood, Archy
Denham, John Lestor, Joan (Eccles)
Dewar, Donald Lewis, Terry
Dixon, Don Liddell, Mrs Helen
Dobson, Frank Litheriand, Robert
Donohoe, Brian H Livingstone, Ken
Dowd, Jim Lloyd, Tony (Stretford)
Dunnachie, Jimmy Llwyd, Elfyn
Dunwoody, Mrs Gwyneth Lynne, Ms Liz
Eagle, Ms Angela Macdonald, Calum
Eastham, Ken Mackinlay, Andrew
Etherington, Bill Maclennan, Robert
Evans, John (St Helens N) MacShane, Denis
Fatchett, Derek Maddock, Diana
Field, Frank (Birkenhead) Mahon, Alice
Flynn, Paul Mandelson, Peter
Foster, Rt Hon Derek Marek,DrJohn
Foster, Don (Bath) Marshall, David (Shettleston)
Foulkes, George Martin, Michael J (Springburn)
Fraser, John Martlew, Eric
Fyfe, Maria Maxton, John
Galbraith, Sam McAllion, John
Galloway, George McCartney, Ian
Gapes, Mike McFall, John
George, Bruce McKelvey, William
Gerrard, Neil McMaster, Gordon
Gilbert, Rt Hon Dr John McNamara, Kevin
Godman, Dr Norman A McWilliam, John
Golding, Mrs Llin Meacher, Michael
Gordon, Mildred Meale, Alan
Graham, Thomas Michael, Alun
Grant, Bernie (Tottenham) Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S) Michie, Mrs Ray (Argyll & Bute)
Griffiths, Win (Bridgend) Milburn, Alan
Grocott, Bruce Miller, Andrew
Gunnel, John Mitchell, Austin (Gt Grimsby)
Hain, Peter Moonie, Dr Lewis
Hall, Mike Morgan, Rhodri
Hanson, David Mortey, Elliot
Hardy, Peter Morris, Estelle (B'ham Yardley)
Harvey, Nick Morris, Rt Hon Alfred (Wy'nshawe)
Henderson, Doug Morris, Rt Hon John (Aberavon)
Heppell, John Mudie, George
Hill, Keith (Streatham) Mullin, Chris
Hinchliffe, David Murphy, Paul
Hodge, Margaret O'Brien, William (Normanton)
Hoey, Kate O'Hara, Edward
Hogg, Norman (Cumbernauld) O'Neill, Martin
Home Robertson, John Oakes, Rt Hon Gordon
Hoon, Geoffrey Olner, Bill
Howarth, George (Knowsley North) Orme, Rt Hon Stanley
Howells, Dr. Kim (Pontypridd) Patchett, Terry
Hoyle, Doug Pearson, Ian
Hughes, Kevin (DoncasterN) Pendry, Tom
Hughes, Robert (Aberdeen N) Pike, Peter L
Hughes, Roy (Newport E) Pope, Greg
Hutton,John Powell, Ray (Ogmore)
Illsley, Eric Prentice, Bridget (Lew'm E)
Ingram, Adam Prentice, Gordon (Pendle)
Jackson, Glenda (H'stead) Prescott, Rt Hon John
Jackson, Helen (Shefld, H) Primarolo, Dawn
Jamieson, David Purchase, Ken
Janner, Greville Raynsford, Nick
Johnston, Sir Russell Reid, DrJohn
Rendel, David Taylor, Mrs Ann (Dewsbury)
Robertson, George (Hamilton) Thompson, Jack (Wansbeok)
Robinson, Geoffrey (Co'try NW) Timms, Stephen
Rogers, Allan Tipping, Paddy
Rooker, Jeff Turner, Dennis
Rooney, Terry Tyler, Paul
Ross, Ernie (Dundee W) Walker, Rt Hon Sir Harold
Ruddock, Joan Wallace, James
Short, Clare Wardel, Gareth (Gower)
Skinner, Dennis Watson, Mike
Smith, Andrew (Oxford E) Welsh, Andrew
Smith, Chris (Isl'ton S & F'sbury) Wicks, Malcolm
Wigley, Dafydd
Smith, Llew (Blaenau Gwent) Williams, Alan W (Carmarthen)
Smyth, The Reverend Martin Williams, Rt Hon Alan (Sw'n W)
Soley, Ciive Wilson, Brian
Spearing, Nigel Wise, Audrey
Spellar.John Worthington, Tony
Squire, Rachel (Dunfermline W) Wray, Jimmy
Steinberg, Gerry Wright, Dr Tony
Stevenson, George
Strang, Dr. Gavin Tellers for the Ayes:
Sutcliffe, Gerry Mr. Joe Benton and
Taylor, Matthew (Truro) Mrs. Barbara Roche.
Ainsworlh, Peter (East Surrey) Coe, Sebastian
Aitken, Rt Hon Jonathan Colvin, Michael
Alexander, Richard Congdon, David
Alison, Rt Hon Michael (Selby) Conway, Derek
Amess, David Coombs, Anthony (Wyre For'st)
Ancram, Michael Coombs, Simon (Swindon)
Arbutnnot, James Cope, Rt Hon Sir John
Arnold, Jacques (Gravesham) Cormack, Sir Patrick
Atkins, Robert Couchman, James
Atkinson, David (Bour'mouth E) Cran, James
Atkinson, Peter (Hexham) Currie, Mrs Edwina (S D'by'ire)
Baker, Rt Hon Kenneth (Mole V) Curry, David (Skipton & Ripon)
Baker, Nicholas (North Dorset) Davis, David (Boothferry)
Banks, Matthew (Southport) Day, Stephen
Banks, Robert (Harrogate) Deva, Nirj Joseph
Bates, Michael Devlin, Tim
Batiste, Spencer Douglas-Hamilton, Lord James
Bellingharn, Henry Dover, Den
Bendall, Vivian Duncan, Alan
Beresford, Sir Paul Duncan-Smith, Iain
Bonsor, Sir Nicholas Dunn, Bob
Booth, Hartley Durant, Sir Anthony
Boswell, Tim Elletson, Harold
Bottomley, Peter (Eltham) Emery, Rt Hon Sir Peter
Bottomley, Rt Hon Virginia Evans, David (Welwyn Hatfield)
Bowden, Sir Andrew Evans, Jonathan (Brecon)
Bowis, John Evans, Nigel (Ribble Valley)
Boyson, Rt Hon Sir Rhodes Evans, Roger (Monmouth)
Brandreth, Gyles Evennett, David
Brazier, Julian Faber, David
Bright, Sir Graham Fabricant, Michael
Brooke, Rt Hon Peter Fenner, Dame Peggy
Brown, M (Brigg & Cl'thorpes) Field, Barry (Isle of Wight)
Browning, Mrs Angela Fishbum, Dudley
Burns, Simon Forman, Nigel
Burt, Alistair Forsyth, Rt Hon Michael (Stirling)
Butcher, John Forth, Eric
Butler, Peter Fox, Dr Liam (Woodspring)
Butterfill, John Fox, Sir Marcus (Shipley)
Carlisle, John (Luton North) Freeman, Fit Hon Roger
Carlisle, Sir Kenneth (Lincoln) French, Douglas
Carrington, Matthew Fry, Sir Peter
Carttiss, Michael Gale, Roger
Cash, William Gallie, Phil
Channon, Rt Hon Paul Gardiner, Sir George
Churchill, Mr Garel-Jones, Rt Hon Tristan
Clappison, James Garnier, Edward
Clark, Dr Michael (Rochfoid) Gillan, Cheryl
Clarke, Rt Hon Kenneth (Ru'clif) Goodlad, Rt Hon Alastair
Clifton-Brown, Geoffrey Goodson-Wickes, Dr Charles
Gorst, Sir John Martin, David (Portsmouth S)
Grant Sir A (SW Cambs) Mates, Michael
Greenway, Harry (Ealing N) Mawhinney, Rt Hon Dr Brian
Greenway, John (Ryedale) Mellor, Rt Hon David
Griffiths, Peter (Portsmouth, N) Merchant Piers
Grylls, Sir Michael Mills, Iain
Gummer, Rt Hon John Selwyn Mitchell, Andrew (Gedling)
Hague, William Mitchell, Sir David (NW Hants)
Hamilton, Rt Hon Sir Archibald Moate, Sir Roger
Hamilton, Neil (Tatton) Monro, Sir Hector
Hampson, Dr Keith Needham, Rt Hon Richard
Hanley, Rt Hon Jeremy Nelson, Anthony
Hannam, Sir John Neubert, Sir Michael
Hargreaves, Andrew Newton, Rt Hon Tony
Harris, David Nicholls, Patrick
Haselhurst, Alan Nicholson, David (Taunton)
Hawkins, Nick Nicholson, Emma (Devon West)
Hawksley, Warren Norris, Steve
Hayes, Jerry Onslow, Rt Hon Sir Cranley
Heald, Oliver Oppenheim, Phillip
Heathcoat-Amory, David Ottaway, Richard
Hendry, Charles Page, Richard
Hggins, Rt Hon Sir Terence Paice, James
Hill, James (Southampton Test) Patnick, Sir Irvine
Hogg, Rt Hon Douglas (G'tham) Pawsey, James
Horam, John Peacock, Mrs Elizabeth
Hordern, Rt Hon Sir Peter Pickles, Eric
Howard, Rt Hon Michael Porter, Barry (Wirral S)
Howarth, Alan (Strat'rd-on-A) Porter, David (Waveney)
Howell, Rt Hon David (G'dford) Portillo, Rt Hon Michael
Howell, Sir Ralph (N Norfolk) Powell, William (Corby)
Hughes, Robert G (Harrow W) Rathbone, Tim
Hunt, Sir John (Ravensbourne) Redwood, Rt Hon John
Hunter, Andrew Renton, Rt Hon Tim
Jack, Michael Richards, Rod
Jackson, Robert (Wantage) Riddick, Graham
Jenkin, Bernard Rifkind, Rt Hon Malcolm
Jessel, Toby Robathan, Andrew
Johnson Smith, Sir Geoffrey Roberts, Rt Hon Sir Wyn
Jones, Gwilym (Cardiff N) Robertson,Raymond (Ab'd'n S)
Jones, Robert B (W Hertfdshr) Robinson, Mark (Somerton)
Kellett-Bowman, Dame Elaine Roe, Mrs Marion (Broxbourne)
Key, Robert Rowe, Andrew (Mid Kent)
Kilfedder, Sir James Ryder, Rt Hon Richard
King, Rt Hon Tom Sackville, Tom
Kirkhope, Timothy Sainsbury, Rt Hon Sir Timothy
Knapman, Roger Scott, Rt Hon Sir Nicholas
Knight, Mrs Angela (Erewash) Shaw, David (Dover)
Knight, Greg (Derby N) Shaw, Sir Giles (Pudsey)
Knight, Dame Jill (Bir'm E'st'n) Shephard, Rt Hon Gillian
Knox, Sir David Shepherd, Colin (Hereford)
Kynoch, George (Kincardine) Shepherd, Richard (Aldridge)
Lait, Mrs Jacqui Shersby, Michael
Lamont, Rt Hon Norman Sims, Roger
Lang, Rt Hon Ian Skeet Sir Trevor
Lawrence, Sir Ivan Smith, Sir Dudley (Warwick)
Leigh, Edward Smith, Tim (Beaconsfield)
Lennox-Boyd, Sir Mark Soames, Nicholas
Lester, Jim (Broxtowe) Speed, Sir Keith
Lidington, David Spencer, Sir Derek
Lightbown, David Spicer, Sir James (W Dorset)
Lilley, Rt Hon Peter Spicer, Michael (S Worcs)
Lloyd, Rt Hon Sir Peter (Fareham) Spink, Dr Robert
Lord, Michael Spring, Richard
Luff, Peter Sproat, Iain
Lyell, Rt Hon Sir Nicholas Squire, Robin (Hornchurch)
MacKay, Andrew Stanley, Rt Hon Sir John
Maclean, David Steen, Anthony
Madel, Sir David Stephen, Michael
Maitland, Lady Olga Stern, Michael
Malone, Gerald Stewart, Allan
Mans, Keith Streeter, Gary
Marland, Paul Sumberg, David
Martow, Tony Sweeney, Walter
Marshall, John (Hendon S) Sykes, John
Marshall, Sir Michael (Arundel) Taylor, John M (Solihull)
Taylor, Sir Teddy (Southend, E) Wardle, Charles (Bexhill)
Temple-Morris, Peter Waterson, Nigel
Thomason, Roy Watts, John
Thompson, Sir Donald (C'er V) Wheeler, Rt Hon Sir John
Thompson, Patrick (Norwich N) Whitney, Ray
Thornton, Sir Malcolm Whittingdale, John
Thurnham, Peter Widdecombe, Ann
Townend, John (Bridlington) Wiggin, Sir Jerry
Townsend, Cyril D (Bexl'yh'th) Wilkinson, John
Willetts, David
Tracey, Richard Wilshire, David
Tredinnick, David Winterton, Mrs Ann (Congleton)
Trend, Michael Winterton, Nicholas (Macc'fld)
Twinn, Dr Ian Wolfson, Mark
Vaughan, Sir Gerard Wood, Timothy
Viggers, Peter Young, Rt Hon Sir George
Walden, George
Walker, Bill (N Tayside) Tellers for the Noes:
Waller, Gary Mr. Sydney Chapman and
Ward, John Mr. Bowen Wells.

Question accordingly negatived.

Madam Deputy Speaker

Before we move on to motion Nos. 7 and 8, I must tell the House that Madam Speaker has decided that there should be a limit of 10 minutes on Back-Bench Members' speeches. Although that limit does not apply to the speeches of Front-Bench Members, I hope that they will be distinguished more for their quality than for their quantity.