HC Deb 06 November 1995 vol 265 cc579-80
1. Dr. Spink

To ask the Secretary of State for Social Security what incentives to work will be included in his reforms of unemployment benefits. [39682]

The Secretary of State for Social Security (Mr. Peter Lilley)

A key theme of my reforms has been helping people to move back into work. I recently introduced an extra £10 per week in family credit for those working 30 hours or more and I have announced the jobseeker's allowance, the back-to-work bonus and the pilot earnings top-up scheme to make work more worth while for unemployed people without dependent children and with limited earning power. The eight areas in which we plan the pilot are published today and the draft rules of the scheme have been placed in the Vote Office.

Dr. Spink

I welcome my right hon. Friend's announcement of the areas in which he intends to pilot the earnings top-up scheme. Will he use pilot schemes whenever possible, as they represent an excellent way to introduce new schemes? Will he contrast the Government's excellent and very measured reforms in social security with those of Labour and with Labour's announcement this week that it will consider reforms at any cost? Will he reflect on what that cost might be?

Mr. Lilley

I am grateful to my hon. Friend for his welcome for the earnings top-up pilot and for the principle of piloting. He is right to say that we have been reforming the welfare state systematically, spelling out our principles and our policies, testing them in practice and inviting public debate. That is in clear contrast with the Labour party, which if today's news reports are to be believed—we await confirmation from the Opposition Front Bench—has torn up its entire stance on social security for the third time—a triple U-turn on the part of the Leader of the Labour party.

Mr. Frank Field

Does the Secretary of State accept that he is now the main recruiting sergeant to the dependency culture against which the Government so often rail? Does he appreciate that, by limiting the jobseeker's allowance to six months, he is providing an incentive for the wives of the unemployed to join the dole queue as well? And does he agree that the most important way of helping people back into work and ensuring a more equal household income level in Britain would be to reverse that reform which so penalises working wives that they find it profitable to give up work and join their husbands on the dole?

Mr. Lilley

No, I do not accept the hon. Member's point, if only because we are extending from 16 to 24 the hours that partners of unemployed people can work so as to give them added incentive to stay in work. Family credit often acts as a bridge when one partner is out of work. All the studies show that many people leave family credit because they are unable to stay in work during that period. The spouse then returns to work, so both partners are working.

Mr. Jenkin

Does my hon. Friend agree that the introduction of incentives to help people off benefit is among the most important tasks of his Department? Will he also reflect on the fact that, unless those reforms reduce the overall cost of social security, we shall still be moving in the wrong direction, and that the Labour party's determination to tear up the report of the Commission on Social Justice and go further can mean only that Labour is determined to spend more money than ever?

Mr. Lilley

We are awaiting clarification from the Labour party. The Commission on Social Justice proposed £7 billion additional spending financed by an equivalent amount of extra income tax raised through the abolition of allowances. We are now told that that was not radical enough, but we are not sure in what direction. My hon. Friend is right to say that helping people back to work is a key part of what we are doing and one of the Government's great success stories.