HC Deb 17 July 1995 vol 263 cc1298-9
6. Mr. Flynn

To ask the Secretary of State for Social Security what proposals he has to uprate those benefits that have not been uprated since they were introduced. [32768]

Mr. Lilley

The next uprating is due to take effect in April 1996. I shall be announcing my proposals at the appropriate time.

Mr. Flynn

Why are the widow's payment and 23 other important benefits still frozen? That payment replaced a benefit—the widow's allowance—which was increased by the rate of inflation every year. The Government have refused to increase it. If they had increased it by the level of earnings, it would now be worth not £1,000, which was the amount when it was first announced, but £1,881. To fund an election bribe to 5,000 of the richest people in Britain, the Government are cheating the widows, the sick, the elderly and the recently bereaved. Is that not mean and despicable?

Mr. Lilley

No, it is absolute nonsense. We keep all benefits, including the widow's benefit, under review. There is an increasing proportion of people with life insurance and other provision to protect their widows in the event of their early demise. Uprating all the benefits to which the hon. Gentleman referred would have cost more than £1 billion a year. He should ask his right hon. Friend the Leader of the Opposition, who gaily declares that a radical. reform from a socialist perspective will somehow save money, where he will get the money to meet the promises that the hon. Gentleman is willing to throw out.

Mr. Jenkin

Does my right hon. Friend agree that we have been able to uprate benefits in the social security system because we have developed a dynamic enterprise economy? Would not a less punitive regime of capital gains tax improve the dynamism of the economy and make us more able to uprate social security benefits?

Mr. Lilley

My hon. Friend is right. The best counterpart to a good welfare state system is a dynamic and vibrant free enterprise economy generating the wealth to pay for it, which is what we have, and creating opportunities for people to work and to make provision for their own retirement. Lower taxes of all kinds help that; that is why the Labour party's approach of raising taxes across the board would hit the growth of our economy on the head and ultimately undermine our ability to help those most in need.