§ 4. Mr. Whittingdale
To ask the Secretary of State for Social Security what annual savings will result from his reforms by the end of the century; and what estimate he has made of savings by 2020. 
§ Mr. Lilley
The major reforms I have announced to date are expected to reduce public spending by £5 billion a year in today's prices by the turn of the century. The level of savings will increase to £11 billion a year by 2020, and to £15 billion in the longer term.
§ Mr. Whittingdale
I congratulate my right hon. Friend on those extremely impressive figures, but will he confirm 183 that when he seeks to find further savings in his budget, he will only consider reforms in child benefit that would result in leaving more money in the hands of families by reducing their taxes? Will he confirm that he will not adopt any policies that would simply result in the money saved being spent on other public expenditure programmes, as is proposed by the hon. Member for Dunfermline, East (Mr. Brown)?
§ Mr. Lilley
I can certainly give my hon. Friend that assurance. Our policies, unlike those of the Opposition which are based on attacking and trying to curb areas of growth, leave money in the pockets of the taxpayers where it can fructify, reward them for work and enable them to look after themselves. The Labour party puts forward proposals only to finance higher spending by Labour Governments. It bases those policies on false facts.
I reiterate that the recent proposals by the hon. Member for Dunfermline, East (Mr. Brown) were based on his claim that only 20 per cent. of the children of unskilled parents stayed on at school. That figure is over 20 years out of date. It relates to the period 1974–78 when there was a Labour Government and when it was true that only 20 per cent. of such children stayed on at school. Now, substantially more than half such children stay on. The Labour party's proposals would cast us back to the dark ages by penalising to the tune of £560 parents who let their children stay on at school. The Labour party does not like it but I challenge the Opposition spokesman to withdraw the false figures given by his colleague.
§ Mr. Ashton
The Secretary of State complained about figures being 20 years out of date. What sort of figures can they possibly be for the year 2020? He is using figures that could be said to be more than 20 years out of date. When he produced those estimates, what figures did he include for women having to work beyond 60 before receiving the old age pension? That is where many of the savings come from.
§ Mr. Lilley
The hon. Gentleman may find it difficult to distinguish between the future and the past, but most of us do not. He is quite right that if we equalised the state pension age at 60, which is effectively what the Labour Front-Bench team proposes, instead of 65, which is what we propose, the difference in cost would be £13 billion a year. If he wants up-to-date figures, I should tell him that the other extraordinary mistake made by the hon. Member for Dunfermline, East was to say that 25 per cent. of 17-year-olds staying on at school were in private education. He said:child support is a subsidy for the school fees of the wealthy rather than an incentive to assist the education of the very poor.That is nonsense. If child benefit were taken away from school leavers, there would be every likelihood that the proportion of less well-off children staying on at school would be greatly enhanced. Will the hon. Member for Islington, South and Finsbury (Mr. Smith) repudiate the bogus figures given by his hon. Friend the Member for Dunfermline, East?
§ Sir Norman Fowler
Is my right hon. Friend aware that, when I was Secretary of State for Social Services, I was told by a long succession of Labour spokesmen how wrong and evil it would be to change, alter or abolish any 184 part of child benefit? In view of the Labour party's change of policy, is it not therefore right for those spokesmen to consider their positions?
§ Mr. Lilley
I entirely agree with my right hon. Friend. For once I entirely agree with the hon. Members for Hackney, North and Stoke Newington (Ms Abbott) and for Brent, North (Mr. Livingstone), who point out in The Guardian today the fallacy of the hon. Member for Dunfermline, East's figures, and agree with us that we should be encouraging people to stay on at school to get the qualifications that will enable them to support themselves and get good jobs, rather than discouraging them from doing so and costing the taxpayer more in the long run by being on the dole.
§ Mr. Wigley
Will the Secretary of State acknowledge that his reform of the invalidity benefit system and the introduction of incapacity benefit has so far cost £55 million in bureaucracy? In order to recoup that, 85,000 disabled people who would otherwise have been eligible for invalidity benefit have already lost out. Disabled people are paying the price for the changes. Will he also acknowledge that the introduction of the form for the all-work test and the requirement to return it within six weeks has led to 6,000 people losing the benefit to which they are entitled because they are unable to deal with it? Is that not totally disgraceful?
§ Mr. Lilley
I have great respect for the hon. Gentleman, who has had a long-standing concern for issues that affect disabled people, but he must recognise that it is right that we try to focus the immense amount of help that we give in incapacity benefit, the cost of which exceeds the entire amount spent on further and higher education, on those who are genuinely unable to work due to their medical condition. That is the test's objective. We want to help back to work those who are fit enough through the back-to-work benefits. I cannot see how the Gentleman can disagree with that principle.
Mr. Robert G. Hughes
While my right hon. Friend searches for benefits to target in order to ensure that we pay social security to people who really need it, does he agree that it is an absolute disgrace that the Labour party wants to target the less well-off and to rob 16-year-olds who want to stay on in education of more than £500 a year? Is it not notable that the Labour Front-Bench team will not stand up to defend that today?
§ Mr. Lilley
My hon. Friend is right. It is very significant that Labour Back-Benchers will not stand up to defend the proposal either. They look extremely embarrassed. Some of them have already voiced publicly their opposition to it. It is a major blunder by the Labour Front-Bench team because it is saying that if parents encourage their children to stay on at school, just one child will cost them £560 a year, and two children in that age bracket will take £1,000 out of their net income. That is a huge penalty for bettering oneself, but it is what the Labour party stands for.
§ Mr. Chris Smith
Will the Secretary of State accept that his figures are bogus? In citing figures for young people who stay on in full-time education, he is conflating unskilled families and semi-skilled families. He should 185 get his figures right before he starts swinging insults across the Dispatch Box. Does he also accept that my hon. Friend the Member for Dunfermline, East (Mr. Brown) is interested in ensuring that more people, rather than fewer, from families with low-income backgrounds can stay on in full-time education?
In the so-called savings that the Secretary of State is trying to make, will he tell us whether the freeline service that provides advice to claimants will be axed? Will that not be utterly counter-productive, like so many of his other measures? There will be greater difficulty and distress for claimants, and less accurate applications will cause greater difficulty and expense for the Department.
We know from last week that the Secretary of State believes that poverty exists only in the third world and not here in Britain. The Opposition know how wrong he is. Is it not the case that by closing the advice line, the right hon. Gentleman is not only again ignoring the needs of the poor, but trying to ignore their very existence?
§ Mr. Lilley
Oh dear. The hon. Gentleman does need help with the facts. Afterwards I shall be happy to give him a copy of the table from which I obtained my information, and one of the table from which the hon. Member for Dunfermline, East obtained his information. He will see that the Opposition figure relates to children who left school between 1974 and 1978, whereas mine comes from the youth cohort study of children dated 1994, which shows that a significant majority of children over 16 whose parents were unskilled manual workers were staying on at school. Things have improved dramatically since the Labour Government were in power.
As for the helpline, I shall give the hon. Gentleman a copy of the questionnaire that we are sending to individual branches as we examine whether changes should be made in our helpline arrangements. We study such matters and examine them; we get the facts and then we make our policy. I shall not tell the hon. Gentleman what the policy outcome will be until we have assembled the facts.
If the hon. Gentleman is concerned about poverty, and believes that the basic safety net provided by income support is inadequate, will he tell the House, either now or before the general election, by how much he intends to increase it?