HC Deb 10 December 1997 vol 302 cc1130-48

Amendments made: No. 19, in page 52, line 8, leave out 'sections 50,' and insert '(a) sections'.

No. 33, in page 52, line 8, leave out '77' and insert '79'.

No. 20, in page 52, line 8, after 'this section,' insert 'and (b) section 50 so far as relating to a sum which is chargeable to tax by virtue of section 313 of the Income and Corporation Taxes Act 1988,'.ߞ[Mr. Keith Bradley.]

Order for Third Reading read.

10.58 pm
Ms Harman

I beg to move, That the Bill be now read the Third time.

The Bill is an important step towards our aim of building a modern, fair and efficient welfare service that commands the support of everyone in society. It lays the foundations for transforming the future delivery of welfare and for eradicating the failures of the past.

The Bill has received rigorous and constructive scrutiny, both in Committee and in today's debates. I am grateful to all the Committee members for their work and, in particular, to the Chairmen, my hon. Friend the Member for Knowsley, South (Mr. O'Hara) and the hon. Member for North Thanet (Mr. Gale). I also thank my ministerial team—the Under-Secretaries of State for Social Security, my hon. Friends the Members for Manchester, Withington (Mr. Bradley) and for Southampton, Itchen (Mr. Denham)—for the tremendous amount of hard work that they have put into the Bill, taking it through the House thus far.

Today, we have had extensive and wide-ranging debates that have focused on just two clauses: on backdating and lone parents. Perhaps the House will allow me to mention briefly the other 79 clauses in the Bill. Those clauses pave the way for us to modernise the system that we inherited from the last Administration—a confusing system of incomprehensible rules, laborious form filling and complex processes that trap millions of people on benefit who want to work. That system is both unacceptable and unsustainable.

This Government believe that welfare should focus on investing in people's opportunities and success, which means providing an integrated service—a service that concentrates on meeting the needs of those whom it is intended to help, and is not constrained by artificial organisational boundaries. That is better government. It means recognising that individuals' lives do not easily fit into departmental boxes, and working throughout Government making use of new information technology to deliver a complete modern service to the citizen.

Service delivery is central to our approach to welfare reform. Our services must actively help people to move from welfare into work, where they can be much better off than they would ever be on benefits. Our services must be focused on what clients need; they must ensure that help goes to those who need it, not to the fraudsters who would rip off the system; they must be efficient, and offer the best possible deal to clients, taxpayers and our staff. That is what we mean by an active, modern service.

The Bill lays the foundations for the provision of such a service. It paves the way for a modern, integrated service, enabling people to give us information just once in a way that is convenient for them. We shall then be able to advise them how that affects all their dealings with the Department. The Bill will create a much simpler decision-making process, reducing the number of types of decision maker from six to one—who will act on my behalf—and enabling decisions to be presented quickly, correctly and in a way that is easy to understand. It will enable us to provide a streamlined, straightforward system for claimants to appeal against decisions to an independent tribunal, cutting out unnecessary duplications and frustrating delays.

Not only will my proposals streamline the current process; I will assume responsibility for the administration of the appeals system through a new Department of Social Security executive agency established for the purpose of improving the administration of appeals. The Bill will also reinforce people's responsibilities in relation to the welfare system by imposing tougher penalties on those who try to evade their responsibility to make national insurance contributions. It will close loopholes exploited by those who seek to save money by doing their employees out of the contributions that are essential to their future pension entitlements. It will also make it easier for employers to pay their fair share by aligning the ways in which certain benefits and expenses are dealt with in the tax and national insurance systems.

The Bill, introduced in our first three months of government, is an important step towards meeting the commitments that we made to the British people in our manifesto. They gave us a strong mandate to reform welfare—to tackle poverty and welfare dependency and to tackle them wisely, extending opportunities to all. We will transform welfare delivery into an active, modern service that meets people's needs and helps them to fulfil their aspirations. The Bill puts in place the building blocks to do just that, and I commend it to the House.

11.3 pm

Mr. Iain Duncan Smith (Chingford and Woodford Green)

It has been a long evening, and I do not intend to detain the House for longer than necessary. Labour Members will be pleased about that. It has certainly been a long evening for the Secretary of State, but I am intrigued to see that not a single other member of the Cabinet is present to support her after what has clearly been a difficult time for her. When her right hon. Friend the Prime Minister spoke of tough decisions, I did not think that he meant this sort of decision.

On Second Reading, I dubbed the Bill the Peter Lilley memorial Bill. I am glad that my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) is sitting beside me to re-emphasise that. I am also glad to see that Labour Members are pleased that they are driving through a measure that they opposed throughout their time in opposition.

The Bill clearly reflects the last Government's desire to streamline the benefit system and make it more efficient. That is why, when we were in government, we launched the change programme. Despite that, the Opposition have never offered the Government unconditional support for the Bill. We said that it contained elements that we had not introduced when in government. I shall shortly mention some of those.

Clause 2 provides for some decisions to be made by computer. In Committee, my hon. Friend the Member for West Dorset (Mr. Letwin) spoke about that. The Secretary of State and her team should think carefully about that issue and, as the Bill goes through the other place, they might consider how some of those decisions will be made. In Committee, my hon. Friend the Member for West Dorset said that clause 2, while apparently innocuous in many ways, would begin to drive a wedge between the concepts of decision and responsibility. He said that while a computer could in an extended sense make a decision, it could not be held responsible in any ordinary or important philosophical or legal sense. The Law Society has also expressed concern. The clause has not been amended, but the Government should think carefully about the words of my hon. Friend and Labour Members should think about how some decisions will be made under the Bill.

Clause 1 proposes the abolition of the independent tribunal service which makes decisions, and we are concerned about that. However, two topics have detained hon. Members, and one of them is the backdating of new benefits, in relation to which we moved a new schedule. Labour Back Benchers did not seem to be especially concerned or pay much attention when we debated that. The Government have said that they are a caring Government, but this measure will adversely affect many vulnerable people. That is made obvious by such groups as Age Concern, the National Council for One Parent Families and the National Association of Citizens Advice Bureaux.

Before the election the Labour party said that it would make a difference and would form a caring Government, but that same Government have added the backdating measure to the Bill that we left behind. It is a mean addition that we did not think was necessary. Our amendment would have helped to change that, but the Government rejected it. Despite what the Secretary of State said about our new schedule and about the amendment tabled by the Liberal Democrats, I urge her to think again. Before the general election, many Labour Members prided themselves on speaking up for widows and war widows. Many such people will be directly affected by the reduction to one month of the time for backdating claims. We should like to have an amendment to the Bill in another place to remove that provision.

The most controversial debate was on new clause 1 and amendment No.1, which sought to correct the breaking by the Secretary of State of every pledge during her time in opposition. When we were in government the Labour Opposition said that they did not believe in what we were doing, that they would not do it, and that it was a principle not worth having. Labour Members told pressure groups and single parents all over the country that they would champion their cause when in government. All that needed to be done was to get Labour into government and it would certainly not impose such legislation. Labour said that if such legislation were already imposed, it would strike it out.

Over the past six or seven months the Government have had many opportunities to stand by the Secretary of State's pre-election pledges, but they have not done so. Even now they do not offer the excuse of principle. They do not say that they believe in the legislation as a means of levelling married couples and lone parents. They say that somehow they were left with a budget problem, but we know that the Prime Minister made it clear just before the election that the existing budgets would have allowed them to drop the legislation and still survive the two-year constraint. They could still do that, but they have decided not to. The fiscal excuse is absolute nonsense, rubbish. [Interruption.] The Secretary of State goes on about it, but, on her principles, she had every reason to drop the proposals and chose not to do so. That is why she has had a Back-Bench rebellion that is sizeable enough to remind her of the pledges and commitments that she made before the election.

I do not want to dwell too much on family problems, but I suspect that tonight's rebellion is just the beginning. Questions will be asked about why a Government who came to power on a set of promises, turned round and broke every single one of them.

The Parliamentary Under-Secretary of State for Education and Employment (Dr. Kim Howells)

Dream on.

Mr. Duncan Smith

It is Labour Members who should dream on, for they will have many nightmares in the next few weeks and months. Even today's editorial in The Times said—[Interruption.] Isn't it wonderful? In opposition and government Labour courts Mr. Murdoch and his friends, but when it is accused of being inconsistent, it does not like it. The Times said: The trouble comes because Ms Harman's arguments are often either opaque or inconsistent. Unlike the Tories, she is reluctant to make the case that the benefit system should not be loaded in favour of single parenthood".

The Government promised great welfare reforms, but so far they have delivered absolutely nothing. The lauded Green Paper and the important welfare proposals have been non-existent. On Monday, we heard from the Treasury through a planted leak in The Times that it was to make a series of cuts. Treasury-driven cuts: that is the Government's big welfare reform. The Minister of State is completely ruled out and the Secretary of State does not even have any comment to make. No one from the Treasury or from the Cabinet is present tonight.

In conclusion—[HON. MEMBERS: "Hooray."] I know that pain hurts, so I shall not prolong it too long. [HON. MEMBERS: "More."] I do not want to detain Labour Members for too long, because they are in serious pain, and it is better for them to receive medication quickly. The Government have reneged not just on this promise, but on a number of pledges that they made. What we have seen tonight is some of the Labour party waking up to the fact that whatever it promised, whatever it said and whatever it pretended en route to government, it has a bad habit of biting back when it gets into government. This is not a fit Government; it is not even fit to man the Treasury Bench, and I hope that very shortly the public will realise that.

11.11 pm
Mr. McNamara

I shall not speak for long, because I had a good opportunity to express my views earlier.

Some of my hon. Friends cheered when they heard the size of the vote for the amendment. I did not cheer, because it is sad that so many of my colleagues felt it necessary to vote against the Government. It is never a happy experience to vote against one's party, particularly when it is in government. I have done so in the past, but it is never an easy decision. We had put so much faith and hope in our Government, but, despite all the splendid measures that have been introduced, we felt let down on this issue. Contrary to all our traditions, we have hit the poorest of the poor. It was not a happy occasion.

Earlier this year, my hon. Friend the Member for Erith and Thamesmead (Mr. Austin) tabled an early-day motion to celebrate the 30th anniversary of the Abortion Act 1967. I tabled an amendment to it, which said that I expected Governments, of whatever party, to ensure that women who become pregnant do not feel that the only solution is to have an abortion. I believe that these cuts will put pressure on women, especially women who already have children, to have an abortion. I regret that, because it is appalling. I could have abstained, but I am glad that I voted against this proposal.

I had other reasons for voting against the cut. When I listened to my right hon. Friend the Secretary of State—she was then the Opposition Front-Bench spokesperson—attacking the then Government on the issue, she convinced me of her case. During the general election campaign, I went round and told my constituents, "I am convinced that we will not implement such a cut, and, regardless of whether the Tories win, I will not vote for it. Whatever happens, I will not vote for it. I will vote against it." Today, I have kept my word to my constituents.

Labour Members have been told that we have an inheritance of cash limits from the Tory party. We did not discuss the limits but were told that we have inherited them. It was not an inheritance, though, because the body was not dead when we seized the limits and said that we would implement them. I believed then, as I believe now, that we would come to rue that decision. We are ruing it today. If ever there were a hostage to fortune, which has caused our problems in this debate, it was our decision that we could out-Tory the Tories.

The decision was not a matter of financial prudence. There is scope within the social fund, by making the necessary adjustments, to obtain the money. Further surplus money has been raised in taxation, because unemployment has been falling—but we could have found the money regardless.

Mr. Cash

Will the hon. Gentleman give way?

Mr. McNamara

No. I will not give way to the hon. Gentleman because, unlike so many of my hon. Friends, he has not been in the Chamber since 3 pm today hoping to make his point.

We have made ourselves prisoners to undertakings that we will rue, as we have rued the strange decision on income tax. For the life of me, in the past week, I have not been able to believe not only the enormous, atrocious and obscene bonuses given in the City, and that we are not prepared to tax them, but that we are to cut benefits for single mothers. If they go to work, take advantage of all those wonderful schemes and lose their job, they will receive less benefit.

If my constituents come to me, I will tell them, "Weigh very carefully what is involved. I want you to go to work. I want you to be protected. I want you to be independent and to have your pride, but I want you to ensure that your children have food on the table and clothes on their backs."

Some people may say that £5 or £11 is not terribly important. I tell them to go round the charity shops, and to the supermarkets late at night, when bread is sold off cheap. Then they can ask whether that money is really important to single-parent families.

11.17 pm
Mr. Kirkwood

We have had a very interesting and dramatic debate, which is what the House is for. I should also like very squarely to tell the Government that if Labour Members have raised dissentient voices, they should be allowed to do so without any type of sanction. To do otherwise would be to deny freedom of speech in the House, to deny hon. Members the right to represent their constituents and to negate the process of parliamentary democracy. Any sanctions taken against any Labour Member in the coming hours or days would be a disgrace, and negate the whole ethos of the House.

The provisions in the latter half of the Bill deal with cuts in benefits and are extremely contentious. I want, however, to deal with the earlier provisions on the modernisation of social security procedures because they are also important and some of them may come back to haunt us.

It was, of course, right to modernise aspects of the system, but some of the new provisions are draconian. The Bill blurs the distinction between the initial decision-making procedure and appellate rights. It also reduces the independent element in the decision-making process. Reducing the powers of the independent appellate bodies is a serious mistake which we make at our peril. The changes may bring about some savings. I suspect, however, that they will be modest and will be achieved at the expense of the poorest in our society.

Why, for example, is it necessary to abolish the chief adjudication officer? The only explanation the Government have given is that he has no resources with which to ensure that his annual reports are enforced. We all know that his annual reports often highlight terrible anomalies in the law and that they can lead to improvements in the standard of decision making.

The Bill, fundamentally, passes all decision-making powers to the Secretary State. Why? The Secretary of State is a Member of the House of Commons. The Benefits Agency officials have taken independent appeal decisions in the past acting as civil servants in an independent system. In future, the Secretary of State will act in her own right. She will not be able to claim independence from the tribunal service. She will be directly held to account in the House of Commons for tribunal decisions taken in her name and we shall not be slow to take up the challenge. We have here a fundamental change to the way in which we do things at the level of appeal tribunals.

The attempts the Secretary of State is making to change the decision-making process will significantly reduce the accountability of independent tribunals and will send a negative message to the poorest and most disadvantaged in our society. There will be inadequate checks on initial decision making which will not be in the interests of those people who appeal. The point has already been made about decisions being made by computer. That is another serious change in social security procedures which I deeply suspect as well.

We are told that agency chief executives will in future have quality control systems in place. I shall believe that when I see it because I do not believe that there will be adequate resources to allow that to happen.

During the passage of the Bill, we have been made aware that the right to an oral appeal hearing has been gradually eroded. That may not be mentioned directly in the Bill, but under Tory regulations that have not yet been repudiated by the Government, claimants now have to opt for an oral hearing. We all know that many claimants do not turn up for their hearings; the reasons for that are varied and complex. I believe that social security law is so complicated that claimants often give up when they are faced by a mass of Department of Social Security papers. The Bill will mean that claimants will be forced to resort to judicial reviews to protect their own interests.

My final point—[HON. MEMBERS: "Hear, hear."] These may be technical but they are important points. The Bill will be likely to fall foul of European law and the European convention on human rights. It is only a matter of time before clauses 26 and 27 are found to be legally wanting. The system that we are establishing in the Bill is essentially flawed. I believe that we shall be forced to return to the provisions in due course in a way that may well further embarrass the Government. They may have to change many of the provisions all over again to get back to the independent system of adjudication appeal that we have enjoyed heretofore.

11.24 pm
Mr. Tony Benn (Chesterfield)

I do not know whether there will be a vote on Third Reading, but if there is I shall vote against the Bill. I should like to tell the House why.

I was elected to the House and took my seat 47 years ago last week. I joined a Parliament that had taken over a Britain that was battered, bombed and bankrupt. That Parliament's first action was to treble the widow's pension from 10 shillings a week to 26 shillings a week. That bankrupt nation introduced a free health service, put me through college without any charge—I had been a wartime airman—and did not have much of a problem with the welfare bill when unemployment was so low because we were building houses and hospitals and recruiting teachers and nurses.

I was a Minister in subsequent Labour Governments that brought pensions into line with earnings. I am very proud of that. As Secretary of State for Energy, I also introduced a scheme to ensure that everyone on benefit had a 25 per cent. cut in their winter fuel bills, regardless of the temperature. All that is dismissed as old Labour, but I am very proud of it. The arguments for the Bill, which have been well rehearsed, run counter to the beliefs that I have and that the Labour party had—the beliefs that brought me into Parliament and led me to join the Labour party on my 17th birthday in 1942.

I must say, very respectfully, that the Government have not taken a hard decision; they have taken the easiest decision possible, hammering the poorest people who have no bargaining power. They have ring-fenced the richest people, promising them that there will be no increase in income tax. Anyone who has had experience of single parents—up to a couple of thousand have been to my surgeries over the years—knows that the children of split families are affected by their circumstances. They want their mother or father close to them when the other partner leaves. We are going back to the Victorian concept of the deserving poor, who want work, and the undeserving poor, who prefer to look after their children.

I am opposed to the philosophy of the Bill. Every argument that I have heard from the Front Bench has convinced me more and more that this is a bad measure.

I do not want to detain the House for too long. Another reason why I shall vote against the Bill on Third Reading if there is a Division is that I have also read about the next items on the agenda—tuition fees, the possibility that disability benefit may be targeted or that the pensioners' link with earnings may not be restored.

I have found today's debate fascinating, because politics has come back to the Chamber of the House of Commons. Some of us, including me—I make nothing of that—want hon. Members to say the same in opposition and in government. We want some attempt to be made to assess the rights and wrongs of matters, rather than decisions being taken on the basis of an economic analysis founded on some requirement to be competitive and productive. The cuts that the Cabinet made 21 years ago cost us the 1979 election. Denis Healey, who is an honest man, has admitted that those cuts were unnecessary.

I do not ask anyone else who has not had my experiences to follow me into the Lobby if there is a vote, but I shall vote against the Bill, because this is what Parliament is about. If we separate this place from the concerns outside, there will be a price not just for the party of which I am proud to be a member, but for the reputation of the parliamentary process, as people become more and more despairing because their concerns are not being listened to.

11.28 pm
Mr. Salmond

I had not intended to say anything on Third Reading—today's events speak for themselves—until the hon. Member for Hull, North (Mr. McNamara) said that he would have to advise a constituent carefully on whether to move into employment under the circumstances set out by the Government. I watched the Secretary of State for Social Security say, "Shame." If there is any shame in today's proceedings, it lies not on the Back Benches, but on the Front Benches.

The point is crystal clear. If someone loses a job or takes seasonal employment, he or she will return to benefit at a lower rate than that on which he or she started. How can any Member of this place, given the salaries that we earn, do other than advise a constituent in such circumstances to think extremely carefully about moving into employment? We would not be doing our duty if we did anything other than give such advice. If there is any shame in our proceedings this evening, it lies not with the hon. Member for Hull, North but with the Secretary of State.

As an observer of the Labour party's problems on this issue, I do not understand why the Prime Minister and the Chancellor of the Exchequer—those who are pulling the strings—have made a stand. I am told that the stand has been taken so that the Government can appear macho to the City. Apparently it is important to show the fiscal rectitude of the new Labour Government. If it is important to show fiscal rectitude and strength, why not pick on someone who is strong rather than on someone who is weak? There is no strength to be demonstrated in picking on single parents, who are one of the poorest sections of the community. Perhaps the Prime Minister and the Chancellor of the Exchequer should remember the words of Zsa Zsa Gabor, who said, "Macho men ain't mucho." Those words apply to the Government's campaign against single parents.

In 1992 the Conservative party came to office with a considerable majority. Within a few months, however, it ran into a series of economic circumstances that were largely of its own making. The result was called black Wednesday, and that destroyed the economic credibility of the Conservative party, a blow from which it never recovered. I wonder, when we look back on today's proceedings, whether they might not be seen as new Labour's black Wednesday, which destroyed the social credibility of the new Labour Government. When all is said and done, it will be a pyrrhic victory for the Prime Minister and the Chancellor of the Exchequer.

11.31 pm
Mr. Alan Simpson

The Bill, which continues to include cuts in lone parent benefit entitlement, is shabby, vindictive, unprincipled and unsupportable. I know that that is right because those are the words that we used when the issue was first raised by the motley crew of the Conservative Government when they mooted the cuts in lone parent benefit entitlement.

If the House has any doubts about that, it had a timely reminder from the Opposition Front Bench spokesman when he repeated the taunts that we heard in Committee. For the Conservatives, this is the Peter Lilley Memorial Bill. The Government should have taken heed of the final warning when the Tories joined Labour in the Lobby in support of a Tory-designed measure designed only to make the poor poorer.

I will take up the four shabby myths that we on the Labour Benches tried to persuade ourselves represented the pretext on which the Bill should be supported. It was argued that somehow we had a mandate or an obligation to make the cuts. It was said that we had to make hard choices, including the cuts. It was said also that lone parents would not be affected by the cuts and, indeed, that they would be better off as a result of the introduction of welfare to work.

Labour has never had a mandate to make the poor poorer. It has never had a mandate to make the poorest of the poor, children in lone-parent households, poorer still. Labour fought the last election by attacking the Tory record, which was that one in three children lived in a poverty-stricken household. We knew that that was the legacy that we would inherit. We also knew that we did not have a mandate to perpetuate it. We certainly never had a mandate to make it worse.

That is not a hard choice. It is not a hard choice to pick on the weakest in the playground and kick buckets out of them. It is not a hard choice to pick on the most vulnerable and insecure. Hard choices are made when we are prepared to take on people bigger and tougher than we are who are doing despicable things. Those are the hard choices that people have to make in Parliament.

I want to put the whole thing into context. We are told that the saving is a £60 million necessity, perhaps rising to £400 million over four years. But in the week leading up to the debate we have made other choices, too—presumably still within the spending limits that we inherited.

We made a choice to sign a cheque for £1 billion to bail out those lone mothers the Korean bankers and speculators who were playing fast and loose on the streets of the casino economies in south-east Asia.

We have also given a substantial handout to another group of welfare dependants. I am grateful to the Paymaster General for spelling that out in the Financial Times on Saturday, when he wrote: the corporation tax changes from 1999 that Gordon Brown, the chancellor, announced in his pre-Budget report have a net present value to companies which totals more than £9 billion".

Those, too, are welfare matters. They are part of another dependency culture, and we should question whether we have an obligation to foster, nurture and support that culture. It is highly questionable whether it is the role of a Labour Government to encourage that sort of welfare dependency.

Furthermore, we are putting through the £60 million of "necessary cuts" at a time when huge unexpected receipts are flowing into the Treasury. No sense of economic compulsion drives us to make this decision.

The key point in this debate was made in an intervention when my hon. Friend the Member for Leicester, West (Ms Hewitt) asked my hon. Friend the Member for Brent, East (Mr. Livingstone) why, if he felt so strongly about the cut, he had not voted against it on 22 July. I caution other hon. Members tonight: when subsequent cuts are suggested, whether in housing benefit, disability benefits, the taxing of child benefit or industrial injury benefits, and they choose to say, "There is a principle that I want to make a stand on," the same question will be asked of them. Members will be asked, "How did you vote on 10 December? What point of principle have you discovered now that you could not find then?"

The reason why it has become so important for the Government to make a stand on a trivial amount of money is to break the spirit of principled opposition to the idea of Labour Members hitting the poor. Members on our side of the House will have to reflect carefully on that thought for a long time to come.

It is untrue to say that lone parents will not be affected by this cut. We have been trying to run with contradictory arguments. We say that welfare to work will be their salvation and encourage them to find work. Yet, as many hon. Members have pointed out, those who go through the new deal programme to find work will discover that there are more people chasing jobs than there are jobs.

My hon. Friend the Member for Cynon Valley (Ann Clwyd) asked a telling question earlier: what will happen to women who believe us and go through the new deal programme only to find when they come out at the end that the "new deal" is no deal and there are no jobs for them? Will they go back to the same benefit level as they had before? The answer is no.

Even if people find jobs, what will happen when they are ill? When someone goes back, what will happen to the mortgage interest protection that she had before? It disappears. Who will then explain the repossessions that will follow when people have to go back onto benefits worse off than they were when they started?

Welfare to work will work only if we can deliver permanent, secure, well paid jobs. The question that we are refusing to answer, but which almost all our constituents are asking, is this: if this is to be a real opportunity to change people's lives and to make the difference between a cruel Tory Government and a Labour Government who will help people out of poverty, where is the work? Employment Service agencies will talk a lot about employability but not a lot about employment. Yet that is how we shall be judged.

The figure of lone parents being £50 a week better off in work which was produced by the Secretary of State was Arthur Daley off-the-back-of-a-lorry statistics. Many Members have already gone into detail on this, but in any statistical appraisal one cannot include all women to define an average. The example that I would offer is Nicola Horlick. If she happened to be between her million-pound-a-year jobs, saw the new deal as a great opportunity and wanted to be at the front of the queue for six months of canal dredging to improve her employability, I suspect that at the end of it she would not be looking for outwork or piecework at 10p or 20p an hour of the kind that women in our communities still face. To include the economically powerful in an average is dishonest to the economically powerless, yet these are the vast majority of the women whom we shall be seeking to draw into the new deal proposals.

We also cannot assume that there are minimal child care costs, or ignore the loss of passported benefits. We cannot bank on pay levels that are non-existent for most of the women who will be affected by this measure. I was grateful to receive a copy of a letter from the managing director of a firm in Nottingham to my right hon. Friend the Chancellor. The director wanted to re-employ a woman who had worked for him some years before. He said: I am keen to re-employ a former employee … Her child has just started school and she has approached me to offer employment of 20 hours per week … This I am happy to do at £4.32 per hour. He then went on to work through the financial consequences of employing her, and said that what horrified him was that she would be worse off by £17.57 and what is most alarming to me, potentially even more worse off if she was off work to look after her child". This is someone who wants to take a lone parent back into work but in doing so could only make her poorer.

I did some work with a group called Home-start which works with and supports lone-parent families in Nottingham. It calculated the break-even point for women moving from benefits to work. The figures in terms of replacement costs ranged from an average of £114 a week for a woman on benefits to a need to earn £239.50 when they are not. That was to break even—£6 an hour after tax. I would dearly love to see the offers of jobs that they might receive. When I asked the women what prospects they thought they had of receiving that amount, they laughed—they thought it was like Alice in Wonderland.

One woman said to me that if anyone there said they were receiving that money, they would know what work they were doing and what the game was—they would be on the game. The reality is that, for many women, a job providing a wage on which they could survive is not one that they could do legitimately. [Interruption.] Those who say that that is despicable should look at the path to "Wisconsin welfare" and ask how easy it has been for Wisconsin to drive women off the benefits system, where they could draw benefits after 12 weeks.

The one statistic that people involved in Wisconsin do not want to acknowledge is the 20 per cent. increase in arrests on charges of prostitution. The House may not like it, but there are people on both sides of the Chamber who, if that happened here, would be screaming blue murder about the quality of parenting.

This is the issue which has fallen off the agenda in this debate. Where does parenting fit in? Where do the rights of children fit into the sense of a civilised society, in which child welfare is part of the process of nurturing and valuing the generations yet to follow us into adulthood?

I am told that we live in an age in which politics is also the personal, and I want to make a personal statement. I am the eldest of seven children. I felt privileged in my childhood, because although we did not have much money we had a lot of love and support from a large extended family. At different times of our lives, however four of the seven children have been lone parents, whether as a result of death, divorce or the breakdown of a relationship. In each of those circumstances, the most important consideration was this—how do you minimise the damage to the children. That was all that mattered. All the rallying round was to try to put the children first.

Now we are faced with a set of proposals which suggest that the only way to confer dignity on parents is to send the lone parent out to work, forgetting the trauma and disorientation and everything else that their children have to work through. The House is saying that this will be the parents' salvation, but in years to come children will not thank us for this measure—they will brutally condemn us for the cynicism and cowardice that underpins it.

During the last week the press have been going around asking what the numbers will be. They saw a rebellion in the offing and a conspiracy in progress. Members have not been able to answer, because it has not unfolded in that way: people have been driven not by conspiracy but by conscience.

We are told that this is a great time for naming and shaming. Those of us who have voted against the cut in lone-parent benefits will have our names recorded in Hansard, but the reasons behind this will not be registered. For the record, I was driven to vote against the cuts because I am ashamed that a Labour Government should invite us to go down a path that was always cruel, mean-minded, vindictive and utterly unnecessary.

This Bill, the Peter Lilley Memorial Bill, should have been put in the dustbin when it was first mooted by the Tories. It should have been consigned to the dustbin of history tonight when the Tories trailed their poisoned prejudices into the Lobby to support the Government. That, more than anything else, should have told us that we were wrong. Even at that stage we should have had the courage not to betray our children and our consciences but to get out of the Lobby that the Tories had gone into.

11.47 pm
Mrs. Fyfe

I do not want to let tonight go by without congratulating my hon. Friend the Member for Preston (Audrey Wise). She spoke for real Labour, and party members and supporters throughout the country will be grateful for that and derive hope from it.

Scottish Members who were here before the general election may recall, as I do, a time when the then Secretary of State, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), came to Scotland to address a meeting of the Scottish Grand Committee on benefits and he was roasted; he was white and shaking after the ferocity of the attack on him by nationalist, Liberal Democrat and Labour Members, who all got stuck in.

Well pardon me, but I assumed that that was a guarantee that we would not continue with the same policy and implement these cuts. Some hon. Members have said that none of this was in the manifesto. I remember that the manifesto said that we would cut the benefits bill, but I assumed that that meant that the bill would reduce as we got people back into work. I never thought for one moment that it meant that we would cut the bill by reducing the payments to lone parents. I am opposing the measure in the Lobby tonight because, in my innocence, I relayed my assumptions to my constituents and urged them to vote accordingly.

I would also complain that, while we are expected to have expertise in literary analysis to divine the innermost meanings of any words in the statements, there is a lack of numeracy in all this. The Government say that people will be £50 better off on average. That obviously means—this has not yet been pointed out in the debate so far—that some people will be far less than £50 better off if £50 is the average.

Like my hon. Friend the Member for Hull, North (Mr. McNamara), I am sad that it has come to a vote against my own party tonight. I am proud of a great deal that the Government have done since the general election. I am glad to be a member of the Labour party, but I cheered tonight because I was glad that many Labour Members had refused to be won over by simple promises of a review. Ever since July, when we were first alerted to the issue, there have been opportunities to have a proper look at it, but they were not taken. The party conference wanted to discuss the issue and was not allowed to do so.

So I end simply with this appeal. The Bill has gone through tonight and the cut will be made, but at least the Government claim that they will review it. I hope that it will be an honest and thoroughgoing effort and not just warm words that mean nothing. I am sure that there are plenty of us here who will ensure that the review means something. We will not allow ourselves to be put off. The party agreed in October to have a new system of making decisions. So far, that has not come into effect—but tonight a lot of us have become determined that it will.

11.51 pm
Mr. Neil Gerrard (Walthamstow)

I know that many colleagues want to go home, so I shall be brief, but I want to say something about my position. As a result of the debate, I have taken decisions which will result in my losing my job as a parliamentary private secretary. I want to make it clear why I have done that. It is something that I very much regret having to do. I cannot in all conscience support one of the clauses of the Bill—the clause that cuts single-parent benefits, which my right hon. Friend the Secretary of State said had been the main issue of debate today. I hope that the Government will look at what happened and how this problem arose.

The problem did not arise tonight. Much of the debate tonight has focused on some cuts that are not in the Bill. It has focused on cuts in income support and housing benefit which were contained in regulations that were never debated on the Floor of the House. I remind the House that the regulations were laid before the House on 30 July—the day before the summer recess. It was the last day on which there was any real business in the House. That is an old trick which we saw from the Tory Government many times in the past few years. They often laid regulations on the last day of business. The result is that consultation and discussion within the parliamentary Labour party never took place in a genuine way on the regulations or the Bill. That is one of the reasons why anger has built up towards tonight. I hope that the Government will remember and learn from that when they seek to make changes in the future.

The defenders of the main changes in the Bill, and the one change that has been the great focus, have talked about work. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who led for the Opposition on Third Reading, talked about that. I will accept no lectures from him or any other Conservative Member about Governments sticking to their promises. We have seen enough broken promises in the past 18 years to last us a lifetime. When Labour made promises and we all went out for the election on 1 May and talked about welfare to work, getting people back into work and the need to deliver child care, we meant what we said—every one of us meant it. Those are promises that we need to keep and I believe that we will keep them. The difficulty is that those are promises to put in place things that are not currently in place and will not be in place in April or June next year when the benefit reforms take effect.

I accept the need for reforms of the benefits system—we all know about the poverty trap—but we do not need this reform. What is going to happen to those who are trying to get work? We all want people to get work, but no one could believe that every lone parent who wants to get work, either now or on 1 April or 1 June next year, will be able to do that. It is simply inconceivable that the jobs will be there at the time, so what will happen to the people who do not manage to get work?

We have been told that only new claimants will be affected, although some people's status will change and they will become new claimants. I have one simple question and I cannot understand why I have not yet heard an answer to it: what will be so different about someone who is a new claimant on 5 April, compared with someone who is a new claimant on 6 April next year, when the income support regulations change? What will be the difference between a new claimant the day before the Bill comes into force and one the day after? Apparently, the answer is that one of those two people claiming on consecutive days will have to live on a few pounds less than the other. That is what Ministers are saying in making these changes.

Admittedly, in the beginning, new claimants will have a slight advantage in terms of the new deal and welfare to work, but by October next year every lone parent—including current claimants—will be in the same position. Are we saying that current claimants get too much? If not, how can we possibly say that a new claimant in exactly the same position next year will be able to manage on less? I have heard no explanation of that whatsoever, because no one could possibly pretend that there will not be new claimants next year who will be affected by the provisions in the Bill and by the new regulations made earlier this year. There are bound to be. I do not have a problem with welfare to work in terms of its aims, but I do have a problem in terms of the timing. Although I believe that we can achieve the child care, training and jobs that we want to be in place, that will not happen overnight and they will not be in place by the time the changes take effect.

We have been presented with a false choice in the debate; that choice states that people can have either welfare to work or benefits—that is all that is available. Earlier today, at Prime Minister's Question Time, the Prime Minister talked about the changes that we have already made to Tory priorities. We are not bound and we never have been bound by Tory priorities—we did not inherit anything that is binding. I hope that in a few months' time the Secretary of State will not be having to explain to people who have reluctantly supported her today that there was money in the system, but that that money was not spent.

I perfectly understand that hard decisions have to be made by Governments and I accept that some of those decisions might result in some people being hurt and losing financially. That is the nature of hard decisions, but I cannot accept that the casualties of those decisions—even if they turn out to be few in number, as some believe—will be some of the poorest people in society. People outside will not understand that. Earlier this evening, hon. Members said that we should remember the big picture, but I am afraid that decisions such as the one before us tonight will start to cause cracks in that picture. Once that happens, if we are not careful, the big picture could fall apart.

I greatly regret the position in which I and many of my colleagues in the parliamentary Labour party find ourselves tonight.

11.58 pm
Mr. Simon Hughes

I will detain the House for two minutes.

First, I pay tribute to the former Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North and Leith (Mr. Chisholm), to the parliamentary private secretaries, and to those Labour Members who have been willing to vote according to their consciences and their beliefs. [Interruption.] Secondly, I represent the same borough as the Secretary of State for Social Security; my constituency is adjacent to hers.

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. The House must come to order. There are far too many private conversations going on in the Chamber. [Interruption.] Order.

Mr. Hughes

As I said, I represent the same borough as the right hon. Lady. It is one of the two local authorities in England with the highest number of lone-parent families—four out of 10 families in our borough are single-parent families. I just do not believe, and nor will they, that in a borough which is also among the 20 boroughs with the highest unemployment rates in Britain, those parents will have a chance to go back to work in the future. To take from them what they have, against the promise of something that they may never have, is not a fair deal for them.

Thirdly, it would have been far more honourable had the Government been honest and, rather than claiming that what they said before the election and what they are saying now is the same, had admitted that they had changed their plans. People just do not accept that the words of opposition are consistent with the words of government. That undermines government and undermines this place.

When it comes to the big choices in politics, we must choose whether to defend middle England, middle Wales, middle Scotland, or middle Northern Ireland, the advantaged or the disadvantaged. The hard choice in politics is always to defend the disadvantaged and to fight for them, thereby risking the wrath of the advantaged when they sometimes have to pay the price for that decision.

Mr. Quentin Davies (Grantham and Stamford)

On a point of order, Mr, Deputy Speaker. Is it not a long-standing parliamentary convention that when a Minister is defending a particularly unpopular Government policy and is embattled on a major matter, the Prime Minister—and, if there are financial aspects, the Chancellor of the Exchequer—come to support that Minister on the Front Bench? Is it not a sad departure from that convention that the Secretary of State for Social Security has been left so friendless on the Front Bench tonight?

Mr. Deputy Speaker

The hon. Gentleman knows that that is not a matter for the Chair.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 295, Noes 58.

Division No. 116] [12.1 am
Adams, Mrs Irene (Paisley N) Campbell-Savours, Dale
Ainger, Nick Cann, Jamie
Ainsworth, Robert (Cov'try NE) Caplin, Ivor
Alexander, Douglas Casale, Roger
Allen, Graham Chapman, Ben (Wirral S)
Anderson, Janet (Rossendale) Church, Ms Judith
Armstrong, Ms Hilary Clark, Rt Hon Dr David (S Shields)
Atkins, Charlotte Clark, Dr Lynda (Edinburgh Pentlands)
Banks, Tony
Barron Kevin Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Battle, John Clarke, Rt Hon Tom (Coatbridge)
Bayley, Hugh Clarke, Tony (Northampton S)
Beard, Nigel Clelland, David
Beckett, Rt Hon Mrs Margaret Coaker, Vernon
Begg, Miss Anne Coffey, Ms Ann
Bell Stuart (Middlesbrough) Colman, Tony
Connarty, Michael
Benton, Joe Cooper, Yvette
Bermingham, Gerald Corbett, Robin
Betts, Clive Corston, Ms Jean
Blackman, Liz Cranston, Ross
Blears, Ms Hazel Crausby, David
Blizzard, Bob Cummings, John
Cunningham, Rt Hon Dr John (Copeland)
Boateng, Paul
Borrow, David Dalyell, Tarn
Bradley, Keith (Withington) Darling, Rt Hon Alistair
Bradley, Peter (The Wrekin) Darvill, Keith
Bradshaw, Ben Davidson, Ian
Davies, Geraint (Croydon C)
Brinton, Mrs Helen Davies, Rt Hon Ron (Caerphilly)
Brown, Rt Hon Gordon Denham, John
(Dunfermline E) Dismore, Andrew
Brown, Rt Hon Nick (Newcastle E) Doran, Frank
Brown, Russell (Dumfries) Drew, David
Eagle, Angela (Wallasey)
Browne, Desmond Eagle, Maria (L'pool Garston)
Buck, Ms Karen Edwards, Huw
Burden, Richard Ellman, Mrs Louise
Burgon, Colin Ennis, Jeff
Butler, Mrs Christine Fatchett, Derek
Byers, Stephen Field, Rt Hon Frank
Fisher, Mark
Caborn, Richard Fitzpatrick, Jim
Campbell, Alan (Tynemouth) Fitzsimons, Lorna
Campbell, Mrs Anne (C'bridge) Flint, Caroline
Follett, Barbara Laxton, Bob
Foster, Michael Jabez (Hastings) Lepper, David
Foster, Michael J (Worcester) Leslie, Christopher
Foulkes, George Levitt, Tom
Gapes, Mike Lewis, Ivan (Bury S)
Gardiner, Barry Liddell, Mrs Helen
George, Bruce (Walsall S) Linton, Martin
Gibson, Dr lan Lloyd, Tony (Manchester C)
Gilroy, Mrs Linda Lock, David
Goggins, Paul Love, Andrew
Golding, Mrs Llin McAvoy, Thomas
Griffiths, Jane (Reading E) McCabe, Steve
Griffiths, Nigel (Edinburgh S) McCartney, lan (Makerfield)
Griffiths, Win (Bridgend) McDonagh, Siobhain
Grocott, Bruce Macdonald, Calum
Grogan, John McFall, John
Gunnell, John McGuire, Mrs Anne
Hain, Peter Mclsaac, Shona
Hall, Mike (Weaver Vale) McKenna, Mrs Rosemary
Hall, Patrick (Bedford) McNulty, Tony
Hamilton, Fabian (Leeds NE) MacShane, Denis
Hanson, David Mactaggart, Fiona
Harman, Rt Hon Ms Harriet McWalter, Tony
Heal, Mrs Sylvia McWilliam, John
Healey, John Mallaber, Judy
Henderson, Doug (Newcastle N) Mandelson, Peter
Henderson, Ivan (Harwich) Marek, Dr John
Hepburn, Stephen Marsden, Gordon (Blackpool S)
Heppell, John Marsden, Paul (Shrewsbury)
Hesford, Stephen Marshall, David (Shettleston)
Hewitt, Ms Patricia Marshall, Jim (Leicester S)
Hill, Keith Martlew, Eric
Hodge, Ms Margaret Maxton, John
Hoey, Kate Meale, Alan
Home Robertson, John Merron, Gillian
Hood, Jimmy Michael, Alun
Hoon, Geoffrey Milbum, Alan
Hope, Phil Miller, Andrew
Howarth, Alan (Newport E) Moffatt, Laura
Howarth, George (Knowsley N) Moonie, Dr Lewis
Howells, Dr Kim Moran, Ms Margaret
Hoyle, Lindsay Morley, Elliot
Hughes, Ms Beverley (Stretford) Morris, Ms Estelle (B'ham Yardley)
Hughes, Kevin (Doncaster N) Morris, Rt Hon John (Aberavon)
Humble, Mrs Joan Mudie, George
Hurst, Alan Murphy, Denis (Wansbeck)
Hutton, John Murphy, Jim (Eastwood)
lllsley, Eric Murphy, Paul (Torfaen)
lngram, Adam Norris, Dan
Jackson, Ms Glenda (Hampstead) O'Brien, Bill (Normanton)
Jackson, Helen (Hillsborough) O'Brien, Mike (N Warks)
Jenkins, Brian Olner, Bill
Johnson, Alan (Hull W& Hessle) O'Neill, Martin
Johnson, Miss Melanie Osborne, Ms Sandra
(Welwyn Hatfield) Palmer, Dr Nick
Jones, Barry (Alyn & Deeside) Pearson, Ian
Jones, Mrs Fiona (Newark) Pendry, Tom
Jones, Helen (Warrington N) Pickthall, Colin
Jones, Ms Jenny Pike, Peter L
(Wolverh'ton SW) Plaskitt, James
Jones, Jon Owen (Cardiff C) Pond, Chris
Jones, Martyn (Clwyd S) Pope, Greg
Jowell, Ms Tessa Pound, Stephen
Kaufman, Rt Hon Gerald Powell, Sir Raymond
Keeble, Ms Sally Prentice, Ms Bridget (Lewisham E)
Keen, Alan (Feltham & Heston) Primarolo, Dawn
Kelly, Ms Ruth Purchase, Ken
Kemp, Fraser Quin, Ms Joyce
Kennedy, Jane (Wavertree) Quinn, Lawrie
Khabra, Piara S Radice, Giles
Kidney, David Rapson, Syd
Kilfoyle, Peter Raynsford, Nick
King, Andy (Rugby & Kenilworth) Reid, Dr John (Hamilton N)
Kumar, Dr Ashok Robinson, Geoffrey (Cov'try NW)
Ladyman, Dr Stephen Roche, Mrs Barbara
Lawrence, Ms Jackie Rooker, Jeff
Rooney, Terry Stuart, Ms Gisela
Ross, Ernie (Dundee W) Sutcliffe, Gerry
Roy, Frank Taylor, Rt Hon Mrs Ann (Dewsbury)
Ruane, Chris
Ruddock, Ms Joan Taylor, Ms Dari (Stockton S)
Russell, Ms Christine (Chester) Temple-Morris, Peter
Ryan, Ms Joan Thomas, Gareth (Clwyd W)
Savidge, Malcolm Thomas, Gareth R (Harrow W)
Sawford, Phil Timms, Stephen
Sheerman, Barry Tipping, Paddy
Shipley, Ms Debra Touhig, Don
Singh, Marsha Trickett, Jon
Smith, Rt Hon Andrew (Oxford E) Truswell, Paul
Smith, Angela (Basildon) Turner, Dennis (Wolverh'ton SE)
Smith, Rt Hon Chris (lslington S) Turner, Dr George (NW Norfolk)
Smith, Miss Geraldine Twigg, Derek (Halton)
(Morecambe & Lunesdale) Twigg, Stephen (Enfield)
Smith, Jacqui (Redditch) vaz, Keith
Vis, Dr Rudi
Smith, John (Glamorgan) Watts, David
Snape, Peter White,Brian
Soley, Clive Whitehead, Dr Alan
Southworth, Ms Helen Wicks, Malcolm
Spellar, John Wills, Michael
Squire, Ms Rachel Wilson, Brian
Starkey, Dr Phyllis Winterton, Ms Rosie (Doncaster C)
Stevenson, George Woolas, Phil
Stewart, David (Inverness E) Worthington, Tony
Stinchcombe, Paul Wright, Dr Tony (Cannock)
Stoate, Dr Howard
Stott, Roger Tellers for the Ayes:
Strang, Rt Hon Dr Gavin Mr. Jim Dowd and
Stringer, Graham Mr. David Jamieson.
Ashdown, Rt Hon Paddy Kirkwood, Archy
Baker, Norman Livsey, Richard
Ballard, Mrs Jackie Llwyd, Elfyn
Beggs, Roy McDonnell, John
Berth, Rt Hon A J Maclennan, Rt Hon Robert
Benn, Rt Hon Tony Michie, Mrs Ray (Argyll & Bute)
Brake, Tom Moore, Michael
Brand, Dr Peter Morgan, Alasdair (Galloway)
Bruce, Malcolm (Gordon) Oaten, Mark
Burnett, John Öpik, Lembit
Burstow, Paul Paisley, Rev Ian
Chidgey, David Rendel, David
Corbyn, Jeremy Ross, William (E Lond'y)
Cotter, Brian Russell, Bob (Colchester)
Cunningham, Ms Roseanna (Perth) Salmond, Alex
Skinner, Dennis
Smith, Sir Robert (W Ab'd'ns)
Davey, Edward (Kingston) Smyth, Rev Martin (Belfast S)
Stunell, Andrew
Ewing, Mrs Margaret Swinney, John
Feam, Ronnie Taylor, Matthew (Truro)
Foster, Don (Bath) Thompson, William
George, Andrew (St Ives) Tonge, Dr Jenny
Gorrie, Donald Wallace, James
Grant, Bemie Webb, Steve
Harris, Dr Evan Welsh, Andrew
Heath, David (Somerton & Frome) Wigley, Rt Hon Dafydd
Hughes, Simon (Southwark N) Willis, Phil
Jones, leuan Wyn (Ynys Môn)
Jones, Nigel (Cheltenham) Tellers for the Noes:
Keetch, Paul Mr. Paul Tyler and
Kennedy, Charles (Ross Skye) Mr. Adrian Sanders.

Question accordingly agreed to.

Bill read the Third time, and passed.