§ Order for Second Reading read.
§ Mr. Deputy Speaker (Sir Alan Haselhurst)
I should announce that the amendment in the name of the right hon. Member for Yeovil (Mr. Ashdown) has been selected for debate.
§ The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman)
I beg to move, That the Bill be now read a Second time.
Reforming the welfare state to meet the needs of the 21st century is one of the biggest challenges facing the Government, but after fewer than three months we have already made significant progress. The Bill is another important step forward.
One of the key challenges that we face in reforming welfare is to build a modern, fair and efficient welfare service that commands the support of everyone in our society. The way in which social security is delivered at the moment is resented by the public who pay for it, the clients who use it, and the staff who run it. The Bill lays the foundations for transforming the future delivery of welfare and eradicating the failures of the past.
The Government are committed to the creation of a modern welfare state to help rebuild a strong and cohesive society—a society in which opportunities and responsibilities are common to all, a society in which everyone has a stake and no one is excluded. We are redefining welfare as an active hand-up, not just a passive hand-out of benefit. We are creating a modern welfare system, which will encourage financial independence while simultaneously promoting social cohesion and well-being; which actively supports work, saving and honesty; and which helps to tackle unjustifiable social and economic inequalities.
For too long, the welfare system has excluded people from the rest of society, writing them off to a life on benefit, and ignoring both their aspirations and responsibilities. Now we are changing the system, so that it actively helps people to meet their responsibilities to themselves and their families.
We have already made a start. We said that we would offer a new deal to help the young and long-term unemployed to get off benefits and into work. We are providing a new deal for the young and long-term unemployed. We are doing more. Lone mothers have previously been excluded from those opportunities, as have those with ill health or disabilities. We are extending opportunities to them, too—I launched the first phase of our new deal for lone mothers only yesterday. We said that we would develop a national child care strategy to help parents, especially women, to balance family and working life. We are implementing a radical programme of measures that make child care an integral part of not only our social policy but our economic policy.
We said that we would create a new framework to enable everyone—including those who are caring for people at home, perhaps an elderly or disabled relative, and those on low or intermittent incomes—to enjoy a 784 dignified retirement. We are conducting a wide-ranging review to achieve a consensus for change, to ensure that everyone has the opportunity to enjoy a decent and secure retirement.
We also said that we would crack down on dishonesty in the benefit system. We are taking further action to identify the true level of fraud and pressing ahead with tough measures to tackle it.
The steps that we have taken signal a radical new approach to welfare, but for too many people, the system by which social security is delivered is fragmented, reactive, inflexible and totally confusing. People are irritated when they have to provide the same information time and again to different parts of the Department of Social Security. They are frustrated that nobody seems able to bring together all the help, information and advice that they need in one place. They are bewildered by the complexity involved in claiming benefit and sorting out child maintenance, with the cumbersome forms, different types of decision at different stages, and letters and explanations that are legalistic and hard to understand. They are exasperated by the length of time that they have to wait for bureaucratic reviews and appeals.
It is not just the public who are irritated, frustrated and exasperated with the social security system. The staff are, too. They find it difficult to deliver the help that people need because the system does not let them. I am determined to overhaul the system that we have inherited. I want to develop a modern, integrated system that is simpler, streamlined and more efficient, and which strikes the right balance between people's rights and their responsibilities. However, the current legal structure ties us into the current problems and that is why the Bill is necessary. It lays the foundations for modernising that service.
The Bill will pave the way for a modern, integrated service to claimants. At the moment, people are often asked to provide the same information or report the same change in circumstances several times over to different parts of the social security system. If they have told one part of the Department and not others, they risk being overpaid and having to pay back hundreds of pounds months later. That wastes the time of the public and the Department, it wastes taxpayers' money and it delivers bills that people cannot afford to pay.
People have the responsibility to provide us with accurate and up-to-date information. We want each person to be able to give us that information just once, in a way that is convenient for them, and for us to be able to advise them how that affects all their dealings with the different parts of the Department. The Bill enables us to develop modern business processes and to maximise the benefits of modern information technology in order to do that.
The Bill also creates a much simpler process for deciding claims. At the moment, the system is incredibly complex. Currently, 13 different types of decision are taken by six different types of decision maker. There are adjudication officers, child support officers, social fund officers, adjudicating medical practitioners, specially qualified adjudicating medical practitioners and officers acting on behalf of the Secretary of State. Sometimes, a number of people wearing those different hats will be involved in a decision relating to the benefits of one person. Sometimes, one person can be wearing a number of different hats depending on what they are doing in the 785 Benefits Agency on that day. That is not acceptable. Often, mistakes cannot be put right quickly, even if they are the result of a simple error, without going through a lengthy appeal process. Once a decision is made, everyone is locked into it. Let me give an example.
Take the case of Enid, an elderly lady who made a claim to meet the cost of her late husband's funeral. Her claim was refused because of the savings that she had. When she appealed against the decision not to award her any money at all, the adjudication officer realised immediately that a mistake had been made and that she was entitled to some, but not all of the money that she had claimed. However, even though the adjudication officer and Enid both then knew that she was entitled to some money, she could not get it just because she was not entitled to the full amount that she had claimed in the first place. The only way that she could get the money was either to drop her appeal and start again or to go through the lengthy process of appealing further to a tribunal. The result was that she had to wait for more than three months before she could get the money to which everyone knew she was entitled, which created frustration all round.
We want decisions on people's claims to be provided quickly, correctly and in a way that is easy to understand. The Bill will reduce the number of different types of decision maker from six to just one, who will act on behalf of the Secretary of State.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
All hon. Members will support the right hon. Lady's attempt to increase expedition and dispatch, but does she acknowledge that there is an independence to the current system, and, shot through with anomalies though the system may be, some people are worried that the Bill will erode that independence? Will she address that point?
§ Ms Harman
The hon. Gentleman raises an important issue. People applying for benefits want accountability for decisions made when they first make the claim and, if their claim is not accepted, they want an independent appeals process. The Bill seeks to guarantee both—an initial system for making a decision that is accountable, focused, clear and uncomplicated, and then the opportunity for everyone who wants to challenge that decision, which will be made on behalf of the Secretary of State rather than by a plethora of different people wearing different hats or by the same person wearing different hats, to appeal by means of a system that they can understand and which is genuinely independent. Therefore, we hope to deal with both those points.
§ Mr. Iain Duncan Smith (Chingford and Woodford Green)
While the right hon. Lady is on the case of Enid and her problems, will she deal with clause 70, under which someone in Enid's position, who may not be able to discern exactly when her husband died, will have her entitlement to benefit for a past period curtailed from three months to one month, which will directly hurt and affect that person? Will the right hon. Lady explain how that will work?
§ Ms Harman
It is not that Enid did not know when her husband died. She knew when her husband died, but she 786 claimed the full amount when she was entitled to only part of it. Her claim for the full amount was refused and she appealed, when she should simply have been allowed to claim a partial amount.
§ Mr. Simon Burns (West Chelmsford)
Returning to clause 70 and the reduction from three months to one month for a backdated claim, when a person is bereaved, particularly having been married for many years, shock and unhappiness may mean that she does not make a claim in time. In those circumstances, particularly for elderly people who have lost a loved one after many years of marriage, may one month not be enough time? Should not there be more flexibility rather than the draconian measure in clause 70?
§ Ms Harman
We do not want a system that does not help a bereaved person to make a claim at the right time, but which allows a claim made 12 months late to be backdated. We want people to have the right information at the right time. In that respect, bereavement counselling is important. Data need to be shared, so that when someone dies, the DSS can ensure that the right benefits are received there and then, rather than that the system should go wrong, resulting in claims having to be backdated.
The Bill will reduce the number of decision makers from six to just one, who will act on behalf of the Secretary of State. It will allow decisions to be processed automatically, leading to the quicker receipt of the accurate amount of benefit, and it will enable staff to take an early second look at disputed decisions and to correct any errors there and then, without affecting the claimant's right to have an appeal heard by a tribunal if he or she is still not satisfied.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)
Will my right hon. Friend comment on clause 2? I am concerned in case inaccurate information is fed into the computer and claimants do not realise that they have an opportunity to dispute a decision. The resolution of such disputes may take some time. What processes would be in train to cope with such a problem?
§ Ms Harman
It is important at all times to ensure that the receipt of information is correctly recorded and that it is correctly acted on, because people should have to give the information only once. The Bill provides the legal framework to allow data sharing between different parts of the Department. My hon. Friend is absolutely right: further work needs to be done to improve the process of checking information and the quality of decision making. That is one part of the jigsaw puzzle. Ensuring that the information given is correctly recorded and that the right decision is made is very important.
§ Audrey Wise (Preston)
I understand and accept the need to use advanced technology, but the terminology used in the Bill suggests that the decision will be made by the computer. That causes me considerable anxiety. I do not believe that we should use computers as a substitute for civil servants. The Bill does not say that decisions will be made by civil servants aided by the computer: it refers to decisions made by the computer.
§ Ms Harman
That is a legal technicality to allow computer printouts to be used in court proceedings. 787 I assure my hon. Friend that we are trying to harness new technology to provide a better service for people who use the social security system and for the staff who work in it.
I was in the benefits office in Brighton the other week, where I saw a piece of carbon paper. There was new technology on the desk of the person assessing the claims; she was writing letters using carbon paper. I do not lead a sheltered life, but it is a long time since I have seen a piece of carbon paper used in what is supposed to be a modern, up-to-date, efficient service. I said to her, "Is that a piece of carbon paper?" and she said, "Yes. I'm very lucky, aren't I, it's a new piece of carbon paper and everyone else in the office is trying to get it off me."
We cannot run a modern, efficient service by old-fashioned work methods, because that undermines the quality of people's work. We must have a sound legal framework to ensure that we improve the quality of service. The thrust of the Bill is to provide that legal framework and to give people who claim benefits a better service, so that instead of resenting the system, they support it. That is not the present position.
We want to enable staff to take an early second look at disputed decisions, and to correct any errors there and then rather than wait for the appeal process. At the moment, decision making on applications for budgeting loans from the social fund is unnecessarily complex. When the social fund was introduced, the idea was that it should be a simple, discretionary application of common sense, but it has not turned out like that. The current system is confusing for customers and time-consuming for staff.
I shall give an example of a family on benefit, whose washing machine breaks down and who cannot afford to get it fixed. They apply for a budgeting loan of £80 for the repair. It is a simple matter, but they must complete a 20-page application form. They have to answer questions that may have nothing to do with their application, because by statute the form must cover both loans and grants, each of which has different requirements for an award. Staff are required by statute to consider which member of the family the washing machine is for, why and how badly it is needed. Staff are also required by statute to use their discretion to judge whether the requirements for a grant rather than for a loan have been satisfied, even though the applicant has not applied for a grant. Only when they have decided that the requirements for a grant have not been satisfied can they use their discretion to judge whether the original loan application is of high enough priority to receive an award.
The Bill will enable the current confusing system to be replaced with a modern fact-based approach. That will enable staff to reach quicker decisions, which are easier for customers to understand.
The Bill will enable us to provide a streamlined and straightforward system for claimants who appeal against decisions to an independent tribunal. I know that many hon. Members are concerned about the independent appeal tribunal system. At the moment, the system is slow, complex and cumbersome. Appeals take on average six months to be resolved: many take more than a year, and some take two and a half years.
The week before last, I sat in on a number of tribunals. The first person whom I sat next to in the waiting room was a woman with severe rheumatoid arthritis. She had waited two and a half years for her appeal against the 788 decision on her benefit to be heard by the appeal tribunal. She had no idea why it had taken so long. She was suddenly called in at short notice. Appeals take far too long.
Each year, 20,000 people appeal against a decision on their claim for income support, even though they have no chance of success, possibly because they already receive the full amount and no further award can be made. Those 20,000 hopeless appeals proceed through the system and delay other cases, at a cost of £5 million a year. They go to a three-person tribunal, only to be told that they never had a chance because the law had been clearly applied to the undisputed facts of their case.
There is no independent right of appeal on national insurance decisions, except to the High Court on a point of law, which is inaccessible to most people. We want people to have access to a quick, straightforward process for appealing disputed decisions. The Bill will rationalise and clarify the appeals procedure and significantly reduce waiting times. If any hon. Members are not convinced of the need to reduce waiting times, I suggest that they talk to anyone in an appeal tribunal waiting room and discover the problem for themselves.
The Bill will replace the five separate tribunal jurisdictions. We do not need five: we need only one, but we have the social security appeal tribunal, the child support appeal tribunal, the medical appeal tribunal, the disability appeal tribunal and the vaccine damage tribunal. They are held in the same rooms in the same building, but they wear different hats. We want to replace those five separate tribunal jurisdictions with a single independent body.
We want to remove the rigid requirement for all cases to be heard by three-person tribunals, and instead enable the president of the appeal tribunal to draw additional members from a panel of experts if and when the need arises. We want to allow tribunals to be able to correct their own mistakes, and thus cut out the time wasted when cases go to commissioners unnecessarily. If the tribunal and the appellant realise that something has gone wrong and that it can be sorted out, why require cases to go to the commissioners? Mistakes should be put right there and then. We want to introduce a new right of appeal against decisions in respect of national insurance contributions. That is important, because it is quite wrong that there is no appeal except to the High Court.
The proposals in the Bill will also enable those 20,000 hopeless appeals each year to be sifted out and dealt with quickly, as they are in all other jurisdictions, such as the county court and industrial tribunals. We do not want those appeals to delay cases that have a genuine ground for appeal. In future, any hopeless cases will be identified early, and the people concerned will be given a full explanation of the decision at first instance and why it was taken. If they are dissatisfied with that explanation, their appeal can go forward, but the president of the independent appeals tribunal service will be able to choose to constitute a one-person tribunal to decide the appeal if he or she thinks that that is appropriate.
The flexibility of choosing between a three-person, two-person or one-person tribunal is necessary. We do not want to take away people's right to appeal: we want to guarantee their right, but if there are no disputed facts and the law is clear—for example, they have received the maximum amount of benefit—we want to ensure that 789 the appeal is heard by one person who can sort out the problem. That will enable such cases to be dealt with more speedily in future. There is no point people going through the whole appeals procedure, perhaps waiting more than two years for an appeal in front of three people, when there is no dispute over the facts and their claim has clearly been decided correctly.
When people are told by tribunals that their appeals have failed and that they never had a chance of success in the first place, they sometimes say, "I wish that someone had told me. If they had, I would not have wasted two years waiting, and taking the bus to the tribunal." It is unacceptable that people are routinely being kept waiting up to two years for their appeals to be heard, and I am determined to improve the system to ensure that, in future, they receive the fair and swift service that they have a right to expect.
Not only will my proposals streamline the current process; I shall assume personal responsibility for the administration of the appeals system. I shall set demanding targets to shorten the time that it takes for appeals to be heard, and for appellants to be told the outcome. When we have set up the new tribunal service and the new administrative system that will underpin it, I shall publish those targets and report on the results. People must know that there is a time limit within which appeals will be heard, and we must ensure that that limit is stuck to. At present, there is no time limit.
The essential independence of the current system will, however, be reinforced. The Lord Chancellor, as head of the judiciary, will appoint not only the president of the appeal tribunals but all the members of the panel. Currently, the Lord Chancellor appoints the president, who then appoints the panel members. All the measures that I have described will help us to rationalise our dealings with claimants, providing them with a simpler, more streamlined service and cutting out unnecessary duplication and frustrating delays.
Let me now refer to the second major strand of the Bill, which focuses on reinforcing people's responsibilities in relation to the welfare system. The national insurance scheme is based on rights and responsibilities: it provides people with rights to contributory benefits and, in return, expects individuals and employers to meet their responsibility to make contributions in order to fund those benefits. We expect everyone to meet their responsibilities, and we want to help them to do so. At present, however, a minority of employers are deliberately shirking their responsibilities. Those employers are not playing fair with their employees, who lose out on their benefit rights, and they are not playing fair with the large majority of employers who pay their fair share.
The Bill will make those employers pay up. It will make national insurance contributions payable on non-cash payments given to employees through restrictive covenants, which have become an increasingly common method of avoiding contributions. It will replace the current outdated and virtually unused criminal offence of non-compliance with cash fines similar to those imposed by the Inland Revenue for tax evasion. We are aligning the two systems. The Bill will provide for new, tougher criminal penalties in serious cases of deliberate evasion and fraud. We need to distinguish between those who are simply not paying and would be encouraged to do so by 790 the introduction of fines, and those who are involved in heavy fraud. We shall also allow the Contributions Agency to take distraint action to recover debts. That, too, aligns the contributions recovery process with the Inland Revenue's tax recovery process.
Those measures will make people who would otherwise try to avoid meeting their responsibilities think twice. In return, we are making 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, removing the need for separate record keeping and accounting for national insurance purposes.
Three further changes in the national insurance scheme that are not currently included in the Bill will be introduced in the form of Government amendments. The first will prevent funded unapproved retirement benefit schemes, which are little more than deferred cash bonuses, from being used for the avoidance of national insurance contributions. The second will make it easier for national insurance contributions to be charged on the provision of vouchers by employers who pay their employees by means of such vouchers rather than cash. I call that the Great Yarmouth amendment, because it was in Great Yarmouth that it was brought to my attention by two hon. Members—one was my hon. Friend the Member for Great Yarmouth (Mr. Wright)—that the owners of a residential care home for the elderly were paying their staff £60 a week in cash, an amount just below the national insurance contribution limit, and £70 a week in Asda vouchers. The intention was clearly to avoid national insurance contributions.
Under the current rules, payment in Asda vouchers rather than cash enables people such as the owners of that home to avoid their national insurance liability, thanks to the previous Government's abolition of the Truck Acts. Moreover, that method of payment means that the employees have no contribution records for the period of their employment, which jeopardises their rights to national insurance benefits. They will not have contributed to the contribution-based jobseeker's allowance, to incapacity benefit, to maternity allowance, to widows' benefit or to their basic state pension. The Bill will wipe out that practice. Child care vouchers, however, will remain exempt from national insurance contributions for the time being, because we are looking at their use in the context of our work on developing national child care strategy.
The third new amendment relating to national insurance contributions will align tax and national insurance rules with regard to company share options.
Given the relatively short time that has elapsed since the general election, we have not been able to work through the details of those measures in time for them to be introduced, but we shall be tabling amendments in time to allow full discussion in Committee and with outside organisations.
The Bill also provides for some changes that were announced in the Budget, and for a number of other minor changes. They include the setting of a new common time limit of one month for backdating benefit claims—
§ Ms Roseanna Cunningham (Perth)
I am glad that the Secretary of State has finally got round to dealing with that. The previous Government proposed to reduce the limit to three months; but, unlike the previous 791 Government, the present Government—they are called new Labour, but perhaps they ought to be called new Tory—will include the backdating of council tax benefits and housing benefits in their proposal, a step that the previous Government would not take. I assume that they knew, as everyone else knows, that the limit for rent arrears and council tax arrears would not be cut to a month. How on earth will the Secretary of State explain to people who are caught in that trap how the Government can claim to be caring for them, when in fact they are stealing from them?
§ Ms Harman
We want to ensure that the system is not run on the basis of getting things wrong and then backdating to sort them out. We want to ensure that the system gets it right first time, and that there is a common backdating procedure for all claims. I am sure that the hon. Lady welcomes the fact that we did not proceed with the extension of housing benefit restrictions relating to single-room rent to those aged between 25 and 59. We have said that we shall keep within the Department's spending totals for the next two years. The proposal to which I referred is one of the measures that contributed to our being able not to extend those restrictions.
§ Ms Cunningham
The point is that, by refusing the backdating, the Government will put people whose rent or council tax arrears have built up into an appalling position. With respect, nothing has been said about how that will be dealt with in practice when it happens—as it will.
§ Ms Harman
The change will not come into force for some time. When it does, we shall be working to ensure that we get it right, and that we do not run the system on the basis of backdating.
We shall also complete the alignment of child benefit rates for lone parents with those for two-parent families, remove the unequal treatment of women who receive statutory maternity pay and those who receive maternity allowance when they subsequently claim benefit because of illness, and tidy up the national insurance rules in a number of areas.
§ Audrey Wise
Perhaps my right hon. Friend would care to explain more fully the reasoning behind clause 68, which I imagine is encompassed by her statement, which aligns child benefit payments for one-parent and two-parent families. Will she forgive me if I think that that is more in the nature of a cut for lone parents than anything else?
§ Ms Harman
The manifesto on which my hon. Friend and I were both elected was clear. It said that our approach would be to ensure opportunities for lone parents to work, and to ensure that they would be much better off than they and their children could ever be on benefit. In our first Budget, we have backed that manifesto commitment with a £200 million programme of opportunities for lone mothers. The research shows that, on average, lone mothers and their children are likely to be £50 a week better off in work than they are on benefit. Therefore, we have said that the way in which we shall proceed is through welfare to work and that we shall invest to provide lone mothers with opportunities, to ensure that they can do what they want to do.
792 It is important that we listen to what is being said by Gingerbread and the National Council for One Parent Families. Before the election and since our Budget and all these announcements, lone mothers have said that they want to move off benefits and into work, and that they want the opportunities that they have been denied for so long. They welcome our approach, which is to invest in opportunities and in child care, so that they do not have to struggle with living on benefit, but can have the same opportunities as everyone else.
§ Mr. Alasdair Morgan (Galloway and Upper Nithsdale)
Does the right hon. Lady agree that her proposition is based on the premise that everything in the garden will be perfect? If the system does not get it wrong, it does not matter that people can claim only up to one month after a mistake, or that we are reducing benefits for single parents, because they are all going to have jobs. Does the Minister not realise that everything in the garden will not be fine, even after five or 10 years of new Labour, and that we need to cater for the situation where the Government or the system get it wrong?
§ Ms Harman
We are making the choices based on what people are saying to us about how they want the system to work. Lone mothers want to be in work, with in-work benefits. They do not want to depend fully on income support. Therefore, they support our choice of investment. They understand that we have said that we shall keep within the departmental spending totals for the next two years. They know that we are making choices and that the choice we have made is to invest in opportunities for lone mothers to go out to work, just as married women do. They back that approach. That is what lone mothers say to me in my constituency—they want to be better off than they can ever be on benefit and they want to support themselves and their children.
Therefore, we are taking a particular approach towards changing the system, which is not about distributing small amounts of money to an ever-growing number of people—the one in five households that have no one in work and are therefore supported by the other four households, living on low income and benefits, with a sense of hopelessness and despair. We have made a choice. We have set about the problem in our first Budget. Choices have had to be made, but we are investing to provide opportunities, and that is what those people—who, unlike us, are trapped on benefits—want. They want us to invest public money, to provide them with opportunities.
§ Ms Harman
I have given way to the hon. Lady and the hon. Gentleman, so I will conclude my comments. Perhaps they can catch Mr. Deputy Speaker's eye as the debate proceeds.
The Bill is a further important step in the radical reform of the welfare state. It lays the foundations for transforming the delivery of welfare. It marks the beginning of the end of the old system, which excluded people from the rest of society, writing them off to a life on benefit and ignoring their aspirations and responsibilities. It is the beginning of a modern service, 793 which will actively help people to meet their responsibilities to themselves and to their families; a service that will command the support of social security staff, claimants and the public.
§ Mr. Iain Duncan Smith (Chingford and Woodford Green)
This Bill is of great interest to the whole House, but perhaps its antecedents should be spoken about a little today. In welcoming the speech of the Secretary of State for Social Security and Minister for Women, I want to pick up on two or three points that she made.
§ The Minister for Welfare Reform (Mr. Frank Field)
The Conservatives are not opposed to the Bill, then?
§ Mr. Duncan Smith
That is correct.
The Secretary of State talked about steps being taken to demonstrate a radical new approach to welfare. I agree, except on the point as to who actually raised the matter. The point about the streamlining and speeding up of appeals is well taken and well made. I do not think that any hon. Member would want to differ with it—[Interruption.] The Scottish nationalists can speak for themselves. I speak for the Conservative party. Again, her comments on administration changes were well made and well taken, but I refer her to the Green Paper. Its foreword, written by her predecessor, states:My aim is to modernise social security administration … This involves simplifying rules, changing traditional practices and making best use of new technology. It also means providing incentives for those who use our services to help us get things right. A key factor is the legal framework for decisions and appeal.I believe that it is possible to improve significantly administration of our decisions and appeals arrangements.Listening to the opening remarks of the Secretary of State, it seemed that, in some cases, it was almost as though they were plucked directly from that foreword—there were some embellishments, but they were essentially the same words.
When I examined the Bill when it first came out a week and a half or so ago, I thought for a moment, looking at the size of it and the number of clauses, that the Minister for Welfare Reform had sat with a wet towel around his head since the election, working out his great welfare reforms—that is what we were told that his great role was going to be. However, when I got into the Bill, it was a case of déjà vu. I began to see more and more things that we had already discussed before the election.
When I examined the 1997 Green Paper to which I have referred and re-read the Bill. I realised that this debate would be about the ground work and the pre-legislation work of my predecessor, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). In many ways, the Bill should be touted as the "Peter Lilley memorial Bill" because, in essence, that is what it is all about. The Secretary of State is remembering her predecessor in a most generous way. She is rather like the man who started shaving with an electric razor and liked it so much that he bought the company. She has had the great idea of swallowing hook, line and sinker a Bill that is sitting ready to go and then assuming ownership of it.
794 This reform package raises a number of issues. The key issue that underscores the whole Bill is the change programme. The big question is not just who owns the Bill, but whether the Secretary of State and the Government now fully support the change programme announced by my right hon. Friend, her predecessor, when he set in train the Green Paper and all the other aspects of change, many of which seem to flow through the Bill, although many others are still outstanding. Perhaps I could give the Secretary of State the opportunity to say that she agrees with the change programme as announced. If she wants to make that announcement now, perhaps she will do so. No? She does not want to intervene to make that clear.
Perhaps it is not surprising that the Secretary of State does not want to say that that is the case. After all, the change programme was designed to get 25 per cent. efficiency savings from the annual budget and my right hon. Friend the Member for Hitchin and Harpenden made it clear thatsignificant further running cost savings cannot be achieved just by more pruning or working harderand that
we should aim to absorb both inflationary increases in pay and costs and increasing workloads over the next three years. That means aiming to increase productivity by 25 per cent.I assume, as the Secretary of State has produced this Bill today, that she will want to tell us—which she does not—that she agrees with that statement and that it is, therefore, now a driving force in the Department. I am sure that the Minister for Welfare Reform agrees with it. I hope that she will make it clear that she agrees with the basic principle and with the 25 per cent. efficiency savings target.
Perhaps I can put it another way. If the Secretary of State is not prepared to say that she agrees with that statement, and I am keen that she should make a statement about this, does she perhaps agree with her predecessor, the right hon. Member for Islington, South and Finsbury (Mr. Smith), who declared, when my right hon. Friend the Member for Hitchin and Harpenden made his announcement, that such measures would ensure that the benefit systemis pushed past breaking point",withfewer people, longer delays, more mistakes and a worse service"?That was his direct response to the Green Paper proposals in February 1996. Does the right hon. Lady agree with her predecessor? It is important to know the Government's starting point for their changes to the social security budget and welfare generally. It is reasonable to ask the right hon. Lady whether she agrees with my right hon. Friend the Member for Hitchin and Harpenden or with her shadow predecessor, who clearly challenged many of the measures that she now proposes to implement.
The trouble is that, when Labour Members were in opposition, they publicly opposed such changes. We later discovered that, in private, there was some dispute on the matter. Perhaps I can put the question another way. One of the Secretary of State's colleagues, who was shadow Chief Secretary to the Treasury, wrote to her shadow predecessor, who is now the Secretary of State for Culture, Media and Sport, stating that, far from agreeing with him, such measures were likely to lead to problems with costs. However, it turned out that the Treasury team thought that the savings could and should be made. That was concluded 795 privately, behind closed doors, and was not made known to the public. Where does the Secretary of State stand on that and with whom does she agree?
§ Mr. Duncan Smith
We may have read about it in the papers. We seem to learn most of what goes on in Government circles in the papers rather than in the House. Hon. Members must be careful because I understand that Madam Speaker has made it clear that perhaps a little more should be done in the House rather than through the papers.
§ Mr. Duncan Smith
I hope that we are talking about history. It bodes ill for the future if such matters are not raised in the House.
The Government's approach is cynical. The Bill implements many of the changes that were proposed by my right hon. Friend the Member for Hitchin and Harpenden and were totally disowned by Labour Members when they were in opposition. In opposition, their public face said no to the proposals but, in government, they absorb, accept and even claim ownership of those proposals. It is important to see such measures being accepted, and we shall not oppose the changes because most of them are ours. I want to know exactly where the Government intend to go and how they propose to achieve the objectives that were set by my right hon. Friend.
We have some reservations about the Bill's detail and we shall raise those in Committee. However, I should like to flag up one or two matters to reserve our position in Committee and on Report. The Bill's detail contains some significant changes and we are concerned about those because the detail was not set out by my right hon. Friend the Member for Hitchin and Harpenden. Many of the Bill's key clauses and changes leave a large amount of the detail to be decided by regulation, and we are worried about that. When I was on the Government Benches, I was concerned about the amount of legislation that our Bills left to regulation. I spoke about that several times and I raise it again with the Secretary of State and ask her to look carefully at the matter.
The regulation process stops Parliament properly scrutinising changes that subsequently lead to problems. Much of the social security budget has always been plagued by the constant need for change because so much was wrong at the start. I ask the right hon. Lady to undertake to look at those areas which can be changed by regulation to see whether they can be changed only by legislation.
Tribunals currently consist of three people with a legally qualified chairman. The Secretary of State has spoken about that. The Bill intends that future panels will consist of one, two or three people to replace the legally qualified chairman. The analysis of responses by Roy Sainsbury in the Green Paper to which I have referred, states:In general, the decision making processes of the three-person tribunal were considered superior to decision making by a single person. And there was little support for the proposal to reserve legal expertise for appropriate cases.The analysis also found thatLegally-qualified decision makers had the advantage of training and experience in judicial methods, of considering and weighing the evidence, establishing facts, identifying the relevant law to be applied in the case, and making a decision based fully and only on the facts and the law.796 I hope that that will be addressed by Ministers with responsibility for such matters and that they will weigh up those concerns and reservations.
I shall deal now with the key clauses relating to the extension of power and authority of the Secretary of State. No doubt Secretaries of State, and I suspect that the right hon. Lady is no exception, are pleased to have extra responsibilities. However, that raises serious questions, which need to be examined in detail. Clause 1 aims to transfer the functions of the adjudication officers, social fund officers and child support officers to the Secretary of State. Most benefit claims are decided by adjudication officers, who are legally independent of Ministers and departmental managers when they make decisions, although they are employed and managed by the agencies.
The Green Paper proposed that, in future, the law should not prescribe the status of the decision maker for different types of decision, and that has been reflected in the Bill. I am reasonably pleased to note that. However, concerns about the independence of first-tier decision makers do not seem to have been reflected in the Bill. I hope that that will be addressed. There are genuine concerns about independence. To maintain a high degree of public confidence, monitoring and reporting on the standard of decision making should continue to be carried out by a body that is independent of the social security agencies. I hope that the Government will address the concerns about that because they are felt not just by Opposition Members. I am sure that there will be representations from others about it.
There are also concerns about clause 10, which aims to simplify the mechanism for decisions to be reviewed and allows the Secretary of State to revise decisions. However, the Secretary of State's new remit, which includes the circumstances and the period within which a decision can be revised, is set to be determined by regulations. We shall examine the clauses to ensure that the shift to single-tier decision making enhances the system rather than causing chaos. Proper independence and accountability must remain.
I have mentioned the key clauses that we shall look at, but I am especially concerned about some other controversial clauses. I shall deal now with political elements, some of which the Secretary of State did not mention. The Conservative legislation which I have mentioned, and which started with the Green Paper and other documents as part of the programme for change, was vehemently attacked by Labour Members when they were in opposition. However, they are now driving through much of that proposed legislation. That is fine, but let us deal with some of the clauses that seem to be of greatest interest. I wonder how many of the Secretary of State's Back Benchers know about the degree to which Labour opposed such clauses before it came into government.
Clause 23 allows regulations to be made to permit benefit to be withheld temporarily where claimants have not provided the necessary information. Little has been said about that. The measure is designed to shift responsibility to the individual to prove a benefit claim and to suspend benefit, and it was condemned by Labour Members, including the Secretary of State. I gather that she argued that requiring more evidence to substantiate a benefit claim 797 was a hindrance, not a help, to receiving the appropriate benefit entitlement. She said:putting more responsibility on claimants for the correct completion of the form, and … requiring more evidence to support claims … will deter thousands more pensioners from claiming the money to which they are entitled."—[Official Report, 19 February 1997; Vol. 290, c. 947.]My question for the right hon. Lady is, why the sudden change of heart? What happened between opposition and government to persuade her that what she said in February was fundamentally wrong? Why has she implemented what we said was right?
Clause 24 will allow regulations to enable the Secretary of State for Social Security to suspend benefits if people refuse to submit to a medical examination in prescribed circumstances. In opposition, Labour Members attacked the introduction of incapacity benefit. The new entitlement, which included a new medical test, was designed to ensure that it was received only by genuine applicants. We know about the problems and failures of much of that so far, especially in the appeals process. When the Under-Secretary of State for Social Security, the hon. Member for Manchester, Withington (Mr. Bradley) was in opposition, he said:The Government's sole motive is to save money … I assure the Secretary of State that, whatever he believes, the Labour party will oppose the Bill line by line vigorously in Parliament and throughout the country."—[Official Report, 24 January 1994; Vol. 236, c. 112–13.]I shall deal in a moment with the issue of who saves money and the Bill's purpose. The right hon. Lady's respected colleague, the Secretary of State for Scotland, when he was shadow Secretary of State for Social Security, also criticised the nature of the Bill. I shall not go into the details of what the right hon. Gentleman said, but it is interesting to note Labour's position at that time.
Surely the Government's key aim in clause 24 is to save money. If so, what makes the present measure so different, so much less reprehensible than the attempt to save money in the other programme? I am intrigued about what the Minister will say when he sums up, and how he will square his present position against his previous position. Apparently, when he is not in government, saving money is not a good thing, but now that he is in government, it is a good thing. It is wonderful to see somebody turn round so easily, and we welcome any convert. In opposition, the Government were convinced, as ever, that such measures were wrong. Now they are in government, they have changed.
Clause 35 allows regulations to be made that will permit a local authority to suspend payment of housing benefit and council tax benefit in prescribed circumstances, especially where entitlement is in doubt pending resolution of a query or appeal. The principle of the suspension of benefit was regularly attacked by those now in government when they were in opposition. When the present Secretary of State for Culture, Media and Sport was shadow Secretary of State for Social Security, he attacked the suspension of benefit for immigrants appealing against rejected claims for asylum. That is much the same principle. We put the asylum proposal forward, then this other, and we did not manage to enact the second. However, the Secretary of State is now taking it through.
798 As I said earlier, we shall not oppose the measures because we originated them, before our departure from government on 1 May. None the less, they were endlessly and constantly opposed by the right hon. and hon. Members who are now in government. [Interruption.] I do not necessarily draw the Minister for Welfare Reform into all my comments. I may come to that later. The Secretary of State and many of her right hon. and hon. Friends on the Treasury Bench have to—[Interruption.] The Minister should quit while he thinks that he is ahead, because he ain't. I have more to say.
We need a lot of answers. That applies in particular, I suspect, to the Secretary of State's hon. Friends on the Back Benches. They should be looking at the Bill and asking themselves how, if the Labour party opposed those ideas so strongly in opposition, it can suddenly love them so much now that it is in government.
There was some confusion about clauses 70 and 68—
§ Ms Gisela Stuart (Birmingham, Edgbaston)
As one of those new Members that you are so terribly concerned about, may I assure you that there is a difference between saving money for the sake of it and saving money in a system that is inherently inefficient? You left us with an inefficient system that needs modernising. You were simply cutting—
§ Ms Stuart
I am sorry, Mr. Deputy Speaker. The right hon. and hon. Members who are now, rightly, on the Opposition Benches, were cutting without looking at what was happening to the whole system. I suggest that there is a difference between what the previous Government proposed and what we propose today.
§ Mr. Duncan Smith
My hon. Friend may have a point. I must tell the hon. Lady that the only real difference is the fact that Labour Members are now on the Government Benches and we are on the Opposition Benches. If the Bill had been constructed and written by the present Government since they came to power, if they had thought of it and initiated it—even if that had been done by the Minister for Welfare Reform—she might have a point. She does not, because we proposed the same measures before our departure. I simply tell her that, even if she was so opposed to those measures before, she has quickly learnt how to swallow her words.
Clause 70 is especially important because it was not part of our proposals. I am interested in it, and we shall tease out in Committee more detail about how it will work. Some concerns have been raised about it. As we know, the clause introduces a new time restriction on backdating social security benefit claims. The limit will be reduced from three months to one month. Clearly, that is a cost-cutting measure; the clause is designed to save money. The explanatory and financial memorandum estimates that it will save about £57 million annually, so there is no questioning it. The Government are not trying to hide the saving, because that, essentially, is what the clause is for.
The question is why the clause was added to the Bill, although it was not originally suggested. We initiated the idea of levelling the time at three months, so the new 799 arrangement goes deeper than we planned. The hon. Member for Birmingham, Edgbaston (Ms Stuart) should examine that difference carefully.
The measure was added because, as the Secretary of State admitted, the Labour Government do not intend to implement some of our proposed changes to housing benefit. The measure is designed in part to fund that reversal. It will affect the people whom hon. Members have said that it will, because of the decision not to change the housing benefit regulations. [Interruption.] We shall see who will be on the streets and who will not be able to afford to make a claim as a result.
One of the concerns raised was about the problems for widows who are confused about exactly when and where claims were made. Their claims will be levelled back to one month, like everyone else's. I hope that the Government will reconsider that, because it is a hard part of the clause, which we shall examine in Committee.
Members of the Government, when in opposition, made strong statements on the subject. On 16 July 1993, as is recorded at column 1260 of Hansard, the Minister who is to sum up said that a high take-up was essential to ensure that the poorest in our society received the meagre income to which they were entitled through the benefits system. How does he square that with the present change? I shall be interested to hear his answer when he sums up.
The Secretary of State probably breathed a sigh of relief when I went straight to clause 70, because I had not dealt with clause 68. However, we shall come back to clause 68 now. I left it until last because it represents the biggest single change and the biggest single money-saving measure in the Bill.
The change is not purely administrative; it is a serious change to the way in which child benefit is paid to single parents, as compared with those who are not single parents. We definitely advanced the idea, and I have often asked the Secretary of State whether she would implement it.
The right hon. Lady knows that, in the past, she consistently opposed that idea. Many, probably most, of her right hon. and hon. Friends probably opposed it too. As I said a couple of weeks ago during the Budget debate, the right hon. Lady can be extensively quoted on the subject, especially in an interview with Polly Toynbee in The Independent, in which she said that she would not implement the measure. The Prime Minister, when he was Leader of the Opposition, backed the right hon. Lady up by saying that Labour certainly would not implement it.
In view of those assurances, given before the Labour party entered government, I want to know why Labour Members publicly told all the people whom they assumed would vote for them, that Labour would not take that action—indeed, that there was no chance of that happening—when, after two and a half months in government, they have implemented the scheme that we proposed. That is the very scheme that the present Secretary of State attacked, both at the time of the Budget in which we proposed it, and subsequently.
What changed the right hon. Lady's view? It appears to me that the saving of money was probably the greatest driving force. We shall want to find out more about why she, supported by the Prime Minister, turned round and changed her mind in government.
800 I am intrigued, because the right hon. Lady has such a long track record on the subject. In 1990 she wrote a pamphlet called "The Family Way", which made it clear that she would never countenance such a thing were she in government. She wrote:
a more efficient means for raising the living standard of parents and children on welfare is a substantial increase in the lone parents' premium to child benefit and/or child benefit itself".I hate to drag things up from the past, because they do not always fit easily with the way people are at the moment. I simply say that such matters are important. The country and the House have a right to know what happened on the road to Damascus to persuade the right hon. Lady that what she had said should all be swept aside, and she should implement the change. It is fair enough that she should implement that change, which was our proposal, but my question is important. The one group that she has endlessly championed will, rightly, want to know the answer. Let us hear it, perhaps when the Under-Secretary of State sums up—or if the Secretary of State wants to tell us now, I shall give way to her. She does not. Okay, fair enough.
The Chancellor has broken his bond of trust in the Budget, and now more bonds of trust are being thrown away on the route to implementation of the Bill. As I have said, the Bill contains many things that we suggested. We still want to hear answers from the Secretary of State about the change programme, and we still need to know—the House needs to know—exactly why the Government have decided to implement our proposals. I welcome the fact that that is what they intend to do, but they must give their reasons.
The right hon. Lady talked about having secured £200 million from the Treasury through the windfall tax. It is important to note that, in clause 68 alone, the saving will dwarf what she gets from the Treasury. The sum will not be £240 million alone; she knows that new entrants are affected, so there will be a build-up to a cumulative total.
The estimates are that, in the lifetime of this Parliament, in the four years that the arrangement is likely to run while the Labour party is in power, the saving is likely to be from £300 million to £500 million. The right hon. Lady is offering up a much bigger saving than she is getting back for the welfare-to-work proposal. She should get her civil servants to inform her about that.
My right hon. Friend the Member for Hitchin and Harpenden, the right hon. Lady's predecessor as Secretary of State, was told that, at its peak, the measure would deliver £1.5 billion in savings back to the Treasury from the Department. It is worth examining that figure, because it represents serious savings. It alone dwarfs everything else. I welcome the major cost saving implied by the volte-face but I wonder how many Labour Back Benchers would do so.
We intend to reserve our position in Committee, on Report and on Third Reading, until we get answers about some of the changes. I am especially concerned about clause 70, because that seems to have come out of the blue to get the Government off the hook about not implementing the housing benefit changes. I want to hear in detail in Committee the Government's estimate of who will be most affected. How do the Government intend to alleviate the hardship that will fall where they had perhaps not thought that it would?
801 Our position generally is logical, because it is clear that the Bill derives from the Green Paper and from other proposals by my right hon. Friend the previous Secretary of State. We would have implemented many of the proposals in the Bill had we been in government, and we have not changed our position publicly or privately.
I also see the logic of the Liberal Democrats tabling a reasoned amendment, because they made it clear on several occasions that they were opposed to some of the changes, but I suspect that they may need to watch out a bit more, because the great coalitions that are being built may be thrown into jeopardy as a result of their strange opposition, which has emerged at the 11th hour, and the Chancellor and the Prime Minister may reconsider their great scheme of including the Liberal Democrats.
The most illogical position is the Government's. Having vehemently opposed and attacked every single measure in the Bill, and especially those in clause 68, they are now implementing them all. They have an awful lot of explaining to do. The very people who so publicly opposed those programmes are lined up on the Treasury Bench proposing them. I accept that there may be one or more exceptions, but the majority of the Ministers concerned were absolutely opposed to the measures.
To change one's opinion because of the power of the argument is one thing, but to do a policy U-turn and not offer a single explanation in one's opening speech is another; it is extremely strange, and appears to be more about misleading than about accountability. Surely we are in the realms of hypocrisy. This is the politics of convenience, because the Labour party in government is clawing around for money savings and going for the very proposals that we made and it attacked.
The Bill marks who is finally in complete charge of the welfare reform package. I would have said that anyway, but we see from today's newspapers that the Chancellor has re-re-re-announced welfare reform as the big agenda, saying that he will drive it and that it is his great scheme. I leave the Secretary of State and her departmental colleagues to discuss with him privately who is in charge of the Department, but I could not have conceived of my right hon. Friend the previous Secretary of State being forced to have such a tussle with the previous Chancellor over who was running the reforms. I hope that the programme gets taken back into the Department pretty quickly, as there are far too many heads running around commanding it. The Chancellor is pulling not only the purse strings but the Department's strings as well.
Two months into power, the Government have done at least two major U-turns: the first was taxing pensioners and increasing tax in the Budget and the second is implementing in the Bill all the measures that they previously opposed. It is clear that they would have said or done anything to gain power, and that they will now say or do anything to stay in power. It is wonderful how government and power change people so absolutely.
§ 6.3 pm
§ Mr. Steve Webb (Northavon)
I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
this House declines to give a Second Reading to a Bill which, while including measures which will reduce delays in, and increase the fairness of, the appeals process in social security and related areas, 802 or which will reduce unnecessary public expenditure, will result in a slower appeals process, with more appeals being the subject of judicial review, will make the appeals process less fair, and will discourage lone parents from working and thereby increase public expenditure on benefits.I want to take hon. Members back to near the beginning of May. The new Cabinet has just been announced, and the new Department of Social Security ministerial team arrives at Richmond house fresh from the general election triumph, full of bright new ideas to make a break from the past 18 years. The Ministers settle into their offices and start drawing up plans to move the welfare state into the 21st century. Then they see it—something mouldering in the corner. It already has a few cobwebs on it. Cautiously, they pick it up and read the title on the folder: "The Next Social Security Bill". A Post-it note attached to the front cover says, "We'll leave this one for you."
That, I am afraid, is the nature of the Bill: it is a leftover, a hand-me-down, something that must be got out of the way before the new Government can get on with their own priorities. I find it hard to believe that the new Labour Social Security Ministers, for whom I have a good deal of respect, would have chosen as their first Bill such a ragbag of measures.
Let us consider the Bill's main features. It introduces sweeping changes in the process of appeals in social security and child support. That process was the subject of a Green Paper and a so-called consultation exercise last summer and autumn. The previous Government had already implemented some of the Green Paper's proposals within two days of the end of the consultation; the Bill implements many more.
I hope that the Liberal Democrats will not be misunderstood: we welcome any measures that would streamline social security appeals and make them fairer, but we are far from convinced that the Bill will achieve that objective. We have fundamental reservations on the three grounds of fairness, speed and independence.
On fairness, several of the proposals seem to offend against the principles of natural justice. The first is the possibility that appeal panels may be headed by only a single decision maker, possibly without formal legal expertise. Given that even legal experts find the benefits system bewildering, that is a worrying development. Furthermore, what safeguards are in place to ensure that any prejudices of a single decision maker are not given free rein?
Unfairness may also result from the provision that requires appeal panels not to consider matters other than the specific subject of the appeal. That will mean that even when obvious errors or misjudgments are discovered during an appeal, as happens at present, the panel will have no right to amend them. That cannot be the mark of a fair system.
What about speed? Clearly, we would all welcome a swifter appeals process, and a few of the Bill's provisions could help with that, but for some claimants the Bill could slow the process down. Consider, for example, the Secretary of State's new power to delay the award of benefit to a successful claimant if a relevant test case is pending. How does that speed up the process of assessment?
Consider the possibility that the new appeals process may no longer be seen to be objective, fair and independent, especially as the chief adjudication officer's 803 position is to be abolished. According to the Law Society, a body that would presumably not normally object to such measures, the Bill could lead to an increase in the number of cases referred to judicial review. That is surely not a recipe for quick decision making.
We have grave misgivings about many of the proposed reforms of the appeals process.
§ Mr. Desmond Browne (Kilmarnock and Loudoun)
The hon. Gentleman refers to a provision in the Bill that he describes as requiring appeal panels not to consider any issue not raised in the appeal. I take it that he is referring to clause 13(7). In fact, that subsection does nothing of the kind that he suggests, although we have all been sent documents trying to persuade us that it does. The wording makes no such requirement.
§ Mr. Browne
Does the hon. Gentleman accept that my intervention arose from his observation that there was a requirement? My reference was designed to point out that no such requirement existed. Does he accept that no such requirement exists?
§ Mr. Webb
If the hon. Gentleman's interpretation of clause 13 is correct, I am happy to accept his point.
We have a range of objections to the principles of the Bill in relation to the appeals process, but our greatest reservations concern the provisions on backdating and benefit levels. On backdating, it is extraordinary that people with good cause for making a late claim will be entitled to backdate their claims by only one month, compared with the present 12 months for housing benefit and three months for many other benefits. The fact that someone has got by without benefit for more than a month is no proof that that person did not need the money.
In the case of housing benefit, a coping strategy may be to build up rent arrears until benefit comes through. Until the benefit system is perfect, that will continue to happen. If backdating of no more than one month is allowed, any longer-term arrears will go uncleared and claimants will run the risk of losing their homes. That could lead to increased, not reduced, costs to the public purse.
Most of all, we object to the provision to allow the Secretary of State to scrap the lone-parent addition to child benefit, a policy inherited from the previous Government. That flies in the face of statements by many Labour Members in opposition and of the direction of Government policy. For example, the Under-Secretary, the hon. Member for Manchester, Withington (Mr. Bradley), told the House:one-parent benefit—because it is not means-tested—helps lone parents out of the poverty trap and into work.Now he proposes to abolish it. In the same debate, the right hon. Member for Islington, South and Finsbury 804 (Mr. Smith), who then spoke for Labour on social security, said:One-parent benefit in particular is a key part of any benefit-to-work strategy because it is carried through when a lone parent takes work".Similarly, the hon. Member for Newport, East (Mr. Howarth), who is now responsible for welfare-to-work policy, said:
That policy of freezing one-parent benefit runs against any rational welfare-to-work strategy and will compound other labour market difficulties faced by lone parents."—[Official Report, 20 February 1996; Vol. 272, c. 205–58.]Many other Labour Members said things in opposition that they would not wish to disown now that they are in government. It is clear that they understand only too well that the lone-parent addition to child benefit, which the Government propose to abolish, is a benefit only to working lone parents. For those on income support, it is deducted pound for pound and, for that reason, many parents on income support do not even bother to claim it. That weekly sum gives lone parents who have got themselves off welfare and into work, which is surely the Government's objective, a little more spending power to ensure that they are better off in work and have a little more cash to spend on child care or other costs of working.
I recognise that the Government, as the Secretary of State said, have taken other measures to improve the child care options open to lone parents. They are welcome, but their total cost of about £200 million is significantly less than expenditure on the one-parent benefit that the Government plan to abolish. Taking money out of the pockets of working lone parents to pay for child care subsidies is an odd strategy for a Government committed to welfare to work.
Do Labour Members really want their first foray into welfare reform to be an unsatisfactory ragbag of second-hand Tory measures that make the appeals system less fair and take money out of the pockets of working lone parents? If they do not, I ask them to vote for our amendment and to replace the Bill with a forward-looking measure of which their party and the House could be proud.
§ Mr. Colin Burgon (Elmet)
I am grateful to be able to make my maiden speech on so important an issue as welfare reform, which is a key priority of the new Labour Government. Both Government and Opposition Members recognise that such reform is long overdue. All of us who are in touch with the public know that the social security system is regarded as complex, inefficient and unfair. We have all been involved with constituents who cannot make sense of decision making and appeals or who are frustrated with the repetitious and bureaucratic information-gathering process, and with staff who despair at translating the rules into reality for the people with whom they deal.
The Secretary of State is therefore to be congratulated on bringing forward measures that will make the social security system modern, efficient and fair: modern in the sense that, through better use of information technology, each claimant will have to give information only once; efficient in that the way in which decisions will be made will be simplified and the appeals system streamlined; and fair because loopholes will be closed to limit avoidance of the payment of national insurance contributions.
805 I especially welcome new criminal penalties for serious cases of deliberate evasion and fraud. I hope that all hon. Members recognise that we need to win public support for the new social security system. Without it, any welfare scheme is bound to fail. Every pound lost through fraud is a pound less for people in real need. The billions of pounds lost through fraud short-change the taxpayer, take resources from the most needy in our society and undermine confidence in and support for our welfare system. Labour Members believe that the welfare state should act as a springboard, not a safety net.
The Labour Government realise that social security should mean more than a system of benefits. We also believe that we must provide true security through employment, growth and better education. The Bill recognises those aims and should be regarded as an essential interlocking element in the raft of reforms that will help us to build a fairer, more dynamic and more cohesive society. That is why the Bill will be welcomed in my constituency of Elmet.
I must pause at that point because I have found since entering the House that I am always asked two questions: where is Elmet, and how did it get its name? It is not what you put on your 'ead. If there was cash for answers, I would be a wealthy man. I can tell interested parties that Elmet takes its name from the last Celtic kingdom in England. The constituency falls entirely within the boundaries of the great city of Leeds, in which I am proud to have been born. It lies on the eastern edge of Leeds and is, by any standards, a diverse constituency.
Created in 1983 by the boundary commission, which seemed determined to weld together what might appear to be disparate parts, the seat was, until May 1997, represented by one party and one hon. Member. Spencer Batiste, the Conservative Member for 14 years, had a special interest in science and technology, and was well respected in that sphere. Although he never held major office, he was a loyal supporter of his Government. With his legal background, he prided himself on his debating skills. I am sorry that we did not meet very often in that arena. He was a courteous opponent, given the nature of politics in Yorkshire, and I wish him good health and success in any activity that he undertakes outside the political sphere.
I have a confession to make. Mr. Batiste may have become tired of seeing and hearing my name over the years, for I fought the seat three times before being successful. Indeed, given my advancing years, some might say that May 1997 represented my last chance to enter the House. I am grateful to the voters of Elmet for combating agism and for finally recognising my worth before it was too late.
In all those difficult years, I had the good fortune to be sustained by true and trusty friends in Elmet Labour party, whom I thank for their support. To help people locate my constituency, I should like to thank the Members for the neighbouring constituencies, Geoff Lofthouse, and my hon. Friend the Member for Leeds, East (Mr. Mudie), who, along with their supporters, gave me so much help.
Some hon. Members use their maiden speeches to boost the tourism prospects of their constituencies. I advise a walk along the Leeds country way, which criss-crosses my constituency; people would soon realise how pleasant Elmet is.
806 Visitors to the northern part of my constituency will find the market town of Wetherby, through which the River Wharfe flows. Surrounding the town are some affluent villages, but this relative economic affluence causes one of the major problems in the area—the lack of affordable housing for young people who were born in the area but who can no longer afford to live there.
In the centre of the constituency is the Whinmoor ward—once represented by Denis Healey—which consists predominately of council houses built in the 1960s and 1970s surrounded by substantial private development. The core area of the ward has seen better times and, I hope, will experience those times anew under the Labour Government. The quality of housing and youth unemployment are the most important problems that the Labour Government will have to address, confront and remedy.
The southern end of the constituency is dominated by the town of Garforth, the largest centre of population in Elmet. It is a former mining village whose character has changed over the years as it has expanded, but it has not lost its work ethic in the process. The surrounding settlements of Micklefield, Kippax, Swillington, Methley and Allerton Bywater are villages that prospered and grew as a result of the coal industry and are now undergoing change. At the end of this week, I shall meet residents of Allerton Bywater to discuss the possible development of the colliery site, the last to close in the constituency. I am anxious that change should take place in the interests of local people, whose values and wishes must be respected. In a complex and changing world, we should all value a sense of identity and place and I hope that many in the House share that view.
The old coalfield area at the southern end of Elmet is the area from which I draw historical, political and sporting inspiration. I mention sport because my area is rugby league territory, and loyalties are split between Leeds and Castleford. It may interest the House to learn that, last week, I made my debut in what my hon. Friend the Member for Wakefield (Mr. Hinchliffe) calls "the people's game". The occasion was a match between the House of Commons and the under-16 Yorkshire rugby league team, held to publicise the fact that the team was anxious to raise money to enable it to visit South Africa to act as ambassadors for the sport. [HON. MEMBERS: "Who won?"] I ignore the result at this stage. If the game had gone on for half an hour more, we would have won. One of the lads in the team was from Kippax in my constituency, so I was prevailed upon—I use the term advisedly—to play in the game.
One thing became clear during the game: I should stick to football, which I must admit is my first love. I therefore add with some pride that Elmet contains the training ground of Leeds United, the team I have supported since I was a boy. I wish my team well—as I am sure all hon. Members do—in the coming season and I hope that we can somehow rediscover our ability to put the ball in the opposition's net, thus giving Bryn Law, my favourite Radio Leeds sports commentator, something to shout about.
I mentioned history and politics, and the coalfield area is rich in both. I hope that, in the coming years, we will see in my constituency some of the lovely blue plaques that mark the birthplaces or homes of famous people. I make two nominations for such an award. The first is Ben Pickard, who was born in Kippax and became the 807 president of the Miners Federation of Great Britain. He also became the Liberal Member of Parliament for the Normanton constituency in the days before the tide of Labour swept the Liberals away.
§ Mr. Burgon
The tide has gone out, I think.
Just up the road in the Great Preston workhouse is the birthplace of Herbert Smith, an interesting character. He rose to become general secretary of the National Union of Mineworkers, and with its president—the mercurial A. J. Cook—led the miners through the stormy 1920s. I had to smile when I learned of Herbert Smith's negotiating technique, which could be commended to any Europhobes on the Opposition Benches. Smith used to listen to his opponents, take out his false teeth, give them a good wipe, put them back and say in his Yorkshire accent, "Nowt doing." Such an approach would take Brussels by storm.
In drawing my remarks to a conclusion, I should like to say that the people whom I am especially proud to represent share my view—a simple view—that it is better to have a nation at work than on benefit. They also believe that in society one has rights, but also responsibilities. The Bill works towards achieving both aims. It will be welcome by the people of Elmet and of this country, and we should commend it.
§ Mr. Piers Merchant (Beckenham)
I am pleased to follow the maiden speech of the hon. Member fmor Elmet (Mr. Burgon), who spoke ably and with good humour. I look forward to hearing many of his speeches in future to this House. He was generous in the tribute he paid to his predecessor, Spencer Batiste, with whom I served for many years on the Government Benches. It is a shame that he is not here now, but the hon. Gentleman will no doubt prove to be an able successor.
The hon. Member spared us a tourist's guide to his constituency, but expressed his interest and his constituency's history in sport. Were Ito have any ability in that area—which I do not—I would be attracted to his constituency. I am sure that others will be.
The hon. Member for Elmet made it clear that his constituency was not pronounced with an "H". I thought that that was appropriate in this debate because of the Secretary of State's apparent obsession with hats in her speech, when she seemed to be justifying the need for a change in the appeals process by referring to the number of hats she claimed were worn by various appeal tribunals sitting in one building. I searched the Bill in vain to find any reference to hats. Nevertheless, I welcome many of the Bill's proposals.
This is an impressive Bill, and I pay tribute the Secretary of State. The Bill contains many proposals and principles which I will find it easy to support. I did not think that she had it in her—and nor did she, in view of her previous remarks about many of the proposals contained in the Bill. I welcome her late conversion to the principles in the Bill, which I shall support as it progresses through the House.
The Bill has a strange and remarkable familiarity, which I put down to the fact that most of its proposals were made by the previous Government, and would no 808 doubt have become law in the fulness of time. One could be forgiven for imagining that the Secretary of State had reached up to a shelf in her Department, found a Tory Bill, dusted it down, altered a few clauses, and brought it to the House as one of her own.
My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) suggested that the Bill might be termed the "Peter Lilley memorial Bill", and there is a good argument for doing so. But he also referred to the man who liked the razor so much, he bought the company—Victor Kiam. Perhaps the Bill should be termed the "Victor Kiam memorial Bill", because the thinking behind it is similar. The Secretary of State has taken a Tory measure and dressed it up in new Labour rhetoric. I thought that she did so without much success, although she appears to have convinced many Government Back Benchers.
Perhaps I am being uncharitable towards the Secretary of State. I welcome her conversion, and hope that there will be more as she proceeds with her new responsibilities. She will find that the realities of her job increasingly draw her towards the same interpretations and policies adopted by the previous Government. If she continues in that direction, I for one will welcome her if, in the fulness of time, she crosses the Floor to join us.
This is a surprisingly tough Bill. Its purpose is to save money and to crack down on fraud, abuse and inefficiency. It will do so through a series of measures, including the institution of new fraud offences and penalties; the withdrawal and suspension of benefits in certain circumstances; compulsory medicals; the reduction from three months to one month for backdated claims; the introduction of computer decision making; cross-referencing and the transfer of information from one Department to another; and, last but by no means least, reductions in payments to single parents.
The streamlining of the appeals process is also welcome and it too is designed to save money and to make the system work more efficiently. According to the explanatory and financial memorandum, total savings will be £200 million a year, but if one includes the build-up of savings in subsequent years, as well as greater uptake, I suspect that those savings will be considerably higher, and could possibly approach £500 million a year.
The Bill is designed to save money and to cut the social security bill. It builds on the foundations laid by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) when he was Secretary of State for Social Security. He laid great emphasis on the need to reform the system and to save money—a task that he performed with great ability. In the past three years, the money saved by anti-fraud and related measures has grown considerably, from £889 million to £1.4 billion, and in the last financial year a saving of £1.8 billion was recorded.
Those savings were achieved as a result of measures designed to combat fraud and to achieve greater efficiency. My right hon. Friend made great virtue of the right argument that every pound wasted in inefficiency or paid out to a fraudulent claimant was a pound lost to a deserving case. That is why the Conservative Government laid great stress on the need to be tough on fraud and to cut it out. Our associated policy was designed to ensure 809 that those who rightfully applied to receive benefit could have their identities checked so that payments could be accurately made.
§ Kali Mountford (Colne Valley)
No one in the House would want to see fraudulent claims for benefit, but does the hon. Gentleman also agree that, if employers do not pay appropriate contributions on behalf of their employees, the cost to the state and to the individual who makes a claim are exceedingly grave? I represented people who thought that they were entitled to benefits but who were not eligible because of such non-payments. Does the hon. Gentleman agree that that is a new avenue of fraud which should be dealt with?
§ Mr. Merchant
It is not a new avenue, because the previous Government were also concerned when national insurance contributions were not properly paid. Because the then system enabled employers to make use of avoidance measures, my right hon. Friend the then Secretary of State and my right hon. and learned Friend the then Chancellor introduced a number of measures to combat them. I greatly welcome the fact that their subsequent related proposals have been included in the Bill. Such anti-avoidance measures are part of the formula, which must be drawn up correctly so that the system can work with the greatest efficiency.
I congratulate the hon. Member for Colne Valley (Kali Mountford) on making progress, in the sense that she accepts that fraudulent claims have been made in the past. It may seem strange to her that I should say that, but when I sat on the Government Benches I remember how the then Opposition used to suggest that there was no fraud in the system. Just a few years ago, when the the Conservative Government introduced proposals to root it out, the Opposition used to argue that there was no problem, and that there was no need to take action.
I am glad that the majority of those in the Labour Government now accept that fraud exists in the system and that it is necessary to exert continuous pressure on the administrative processes and to check up on claimants to ensure that they are rightfully entitled. If we do not remove fraud from the system, a huge black hole will remain, down which large sums of money will be lost—money which cannot be directed to those entitled to it.
It is pleasing to see a new consensus emerging on welfare policy—a consensus that recognises that fraud exists and needs to be stopped; that inefficiencies in the system need to be rooted out and processes improved; and that welfare should exist as a hand-up rather than a hand-out. The Secretary of State used that phrase, which is identical to that used by my right hon. Friend the Member for Hitchin and Harpenden when he was Secretary of State.
§ Ms Stuart
Does the hon. Gentleman accept that there is a difference between fraudulent claimants and fraud committed by employers? We particularly objected to the practice of employers who defrauded their employees by failing to make the appropriate national insurance contributions. I would appreciate it if he could recognise that difference.
§ Mr. Merchant
Fraud is fraud however it is carried out. I condemn it equally in either circumstance that the 810 hon. Lady described. I do not suggest that the fraud is of lesser significance if it is carried out by an employer or an employee. We should join together to say that, when the rules and regulations are not adhered to, or when the system works to allow fraud to creep in, steps need to be taken to prevent it.
The previous Government did a great deal in their drive against fraud—witness the huge savings in the last financial year of £1.8 billion. The fact that the new Government have agreed to go further down the same road and to take on board the policies that were rightly applied by the previous Government is greatly welcome. That is why I support the Bill and the principles behind it, even though in some circumstances it will be necessary to look closely at the details.
I am concerned, for example, about the reduction from three months to one month for backdated claims. I thought that the Secretary of State's justification for that was somewhat glib, and she avoided answering the detailed questions to which she was subjected. I suspect that there will be individual cases of potential great hardship that could be caused by a rigid interpretation of clause 70. When we have an opportunity to consider it in more detail, I hope we can assured that sufficient checks and balances will exist to prevent undue hardship. I will strongly support any measure to prevent wrongful claims, but I would be wary should the Bill act against those who, through no fault of their own, may find themselves in difficult circumstances.
The streamlining of the appeals process will speed up the system, make it more efficient and benefit the would-be claimant and the taxpayer. I welcome that, but I would be concerned were the system to become so rigid, bureaucratic and swift in its decision taking that it prevented a person from making a genuine and persuasive appeal against a wrong decision in the first place. I support other aspects of the suggested reforms in principle, but it will be necessary to consider them in detail to prevent any injustice.
Finally, I turn to one other element of the Bill that I would not include in the general efficiency and anti-fraud section; it has been tacked on. It is clause 68, which refers to lone parents. It is an extraordinary clause, not because it is unjustified—it is not—but because it is being proposed by the Labour Government. The Secretary of State is on record as being opposed to precisely what she is now proposing. She has undergone a dramatic conversion—perhaps the most dramatic of all—and very quickly.
The right hon. Lady is taking her right hon. Friend the Prime Minister with her. As early as January, he spelled out, in crystal-clear language, that a future Labour Government would not adopt the proposal, which was then a Conservative proposal. The crystal-clear language he used consisted of one word—"No." He said he would not introduce the measure, yet now it is being introduced.
I welcome the proposal, because it equalises the position of married and single parents, and that equalisation is good in theory and practice. However, after all the opposition generated by Labour Members, I am surprised that they are now proposing it as one of their policies. That is another conversion—a welcome one, and a surprising one.
The Labour party has learnt that Conservative policy in this area was correct, and that Labour's original policy was wrong. I do not want to rub the Government's noses 811 in their conversion, but it should be drawn to the attention of the House and of their Back Benchers, who, only a few months ago, followed their cheerleaders in condemning the Conservative Government's proposals.
For all those reasons, I give the Bill a mark of about eight out of 10. I look forward to watching, and perhaps even participating in, its progress through the House. I also look forward to future social security measures, and to seeing whether they score as highly in my estimation as this one.
I am surprised by some of the measures that are not in the Bill, in view of the noise made by the Labour party when various policies were introduced by the previous Government. In particular, when the jobseeker's allowance was introduced, the Labour party gave every impression that, as soon as it had an opportunity, it would seek to abolish it. As soon as the Bill was published, I looked for a reference to that, but all we are met with is silence. I wonder whether that silence will continue.
When the Minister winds up the debate, I should be interested in what he has to say about what has been left out of the Bill, as well as what has been included. I shall also listen with interest to his comments on the future of Operation Spotlight and the change programme, both of which were important elements in the previous Government's policy. It is not yet clear whether the Labour Government will continue them—if they do, I will welcome that. I wish the Government well in their continued application of Conservative social security policy.
§ Mr. Terry Rooney (Bradford, North)
I, too, pay tribute to the maiden speech by my poor relation from Leeds, the hon. Member for Elmet (Mr. Burgon). I suggest that he familiarise himself with social security, especially the jobseeker's allowance, because if his football team perform next year as they did last year there will be an awful lot of them on the dole.
The Bill is extremely wide ranging, with 77 clauses and 7 schedules. The House will be pleased to know that I do not intend to speak on all of them, but will confine my remarks to just a few. Before coming to the House, I spent 10 years as a welfare rights adviser. As a result, I have had to serve on 13 Bills dealing with social security, many of them with the Under—Secretary of State for Social Security, my hon. Friend the Member for Manchester, Withington (Mr. Bradley). I can vouch for many of the remarks attributed to him today, but we will not go into that. I am not sure whether serving on all those Bills was a reward or a penance; nevertheless. I recognise many of the concerns expressed in the representations that we have all received and I have no doubt that they will be suitably ironed out during the passage of the Bill.
First, I will address the proposals for the appeals system. Anyone who has suffered the social security appeals system, whether as a claimant, a member of staff or a representative of a claimant, cannot in any way accept the current system—it is simply abominable. I have no problem at all with the abolition of the five separate tribunals and their being brought into one. Let us consider two types of appeal. For a client of the Child Support Agency living in west Yorkshire, the administration of the case is dealt with in Belfast; if the person decides to make an appeal, the file is then sent to Falkirk for preparation.
812 When it is finished with there, which can take anything up to a year if the person is lucky and even longer if they are unlucky, it is, for some reason, sent to Salford. People in Salford then endeavour to contact all relevant parties and to arrange a suitable time for the appeal to be heard in Leeds.
In the case of a claimant for disability living allowance, the administration of the case is dealt with in Blackpool, but if the person decides to lodge an appeal, the file and all the papers are sent to Nottingham for preparation. The appeal papers are then dispatched to Leeds for the clerk there to make the necessary arrangements for the appeal to be heard. Irrespective of any other delays in the system, and even if the file does not get lost—and the claimant is very lucky if it does not—that process of shuffling papers around the country can take three or four months. Nobody benefits from that and we should not tolerate or accept such a system.
As a representative, one of the most frustrating things that happened to me was turning up at a tribunal and finding that only two members were present—sometimes only one member was present. I had waited months, done all the preparation, got my client ready and turned up on the day on time, only to find that the tribunal was incomplete. I then had to decide whether to go ahead with an incomplete tribunal, or to seek an adjournment and come back at some time in the future. I should mention at this point that my hon. Friend the new Member for Keighley (Mrs. Cryer) served for many years on social security appeal tribunals in Bradford and was an excellent, diligent and devoted member—would that everyone who sits on tribunals showed the same commitment.
That time delay, the lack of people turning up and the frequent inability of tribunal members to understand the case that they are hearing is tremendously frustrating and leads to bad decisions being made. Those are often contested and taken to the social security and child support commissioners, which leads to further delay and anger and upset among claimants, which is the last thing they need. The system needs massively simplifying and putting into order to bring back speed and justice.
Why is the number of appeals increasing? Part of the answer is undoubtedly the increase in recent years in the number of claimants. Another major development was the change from the old yellow book, which we all thought was quite complicated, to the new blue book, which is even more complicated and about 20 times as long—I see knowing looks on the faces of hon. Members who remember these things. The main contributing factor, however, is undoubtedly poor decision making. No improvements in the appeals system can replace getting the decision right in the first place.
Why are poor decisions made? Why is morale among Benefits Agency staff as low as it is? For years, they have been abused and reviled by successive Secretaries of State; the work that they do has been undervalued; their status has been devalued; their jobs have been threatened; and the conditions in which they have to work are appalling. Some 61,000 people currently work for the Benefits Agency, of whom more than 5,000 are on temporary contracts and 13,000 have worked at the agency for less than five years. The tremendous staff turnover leads to much of the bad decision making. That issue therefore needs tackling in the longer term.
813 Throughout the country, social security premises are abysmal. Within a mile of this building, there are three social security offices that would be closed down if they were being used as dog kennels; yet we expect people to work in those places and we expect claimants to attend there. That is a major contributory factor leading to low morale of staff and lack of accuracy in decision making.
We must reduce the complexity and number of forms that people are expected to complete. Anyone who has battled with what I believe is still called the B1—the claim form for income support—knows that it would defy an expert on completing income tax forms. Form A1, which is used by pensioners claiming income support, includes a question asking whether the claimant is pregnant. I know that science is advancing and that a mad doctor in Italy is doing all sorts of things, but by and large it is reasonable to assume that a pensioner, especially a male pensioner, will not be pregnant. Such anomalies appear in forms that have been prepared over the years—forms that appear to any lay person to be designed to prevent people from making a claim and pursuing it. That needs to be sorted out.
Separate forms must be submitted for jobseeker's allowance—contributory and non-contributory—for income support, and for housing benefit. So many of the questions on those forms overlap. I hope that the contents of the Bill will make inroads into the complexity, not only for claimants, but for the staff who process the documents. Frequently, the same information is processed three or four times when once should be enough.
Some years ago, my local authority—and, I believe, subsequently the one in Manchester—devised a standard form that could be completed to claim any benefit administered by the local authority, be it free school meals, educational maintenance allowance, housing benefit or council tax benefit. After completing one form, the person was informed which benefits they were entitled to. That innovation has saved tens of thousands of pounds and speeded up the process. Nowadays if a claim is not determined within 21 days there is almost a major inquiry, because the system has become so efficient. Similar progress needs to be made in the social security system. I believe that the information sharing provided for in the Bill will go a long way towards that.
Earlier this year, the Social Security Administration (Fraud) Act 1997 was passed. Information sharing between the agencies and the Inland Revenue and so on was a major feature of that Act. Ironically and nonsensically, however, it was only in respect of fraud—not to help people to claim what was genuinely theirs. That highlights the difference between the approach of the previous Administration and that of the present Administration. Claimants have a right to be paid their due. Certainly fraud is wrong and should be stamped out, but identical standards of service need to apply to both sections of the service. We know of far too many people who have walked away from the system, fed up with its bureaucracy; that must not continue to happen.
There are three separate forms that people can complete and send off to Glasgow—or perhaps it is Newcastle—to claim assistance with dental charges, travel costs and medical aids, depending on whether they are on income support, on low income, or retired. Three separate types 814 of form are sent to one address. Why cannot those matters be dealt with at the local office? That would be easy and it would save massive administration costs.
There are provisions in the Bill for tackling employer abuse of national insurance contributions. I have had several cases over the years of people who, on losing their jobs, have made their claim at the Employment Service only to be told, two to four weeks later, that their claim was disallowed because their contribution record was incomplete. Fortunately, all those cases could be resolved because they were diligent people who had kept their P60s and could prove that the deductions had been made and that their employer had been at fault.
Those were just the few people who had bothered to meet their Member of Parliament. For all we know, for every one of those people there are 20 or 30 others in a similar position. That is fine in the case of unemployment benefit, because usually it is possible to get that sorted out, but what would happen if those people had changed jobs, gone to different employers and been lucky enough never to be out of work? What will happen if, on reaching retirement age, people suddenly find that they have an incomplete record? They will not be able to look back 30 or 40 years and say, "There is the proof that I paid the contributions, but the employer did not hand the money over, so I want my full pension." It will be too late then.
An awful lot of such abuse by employers is going on. It is increasingly common, and it happens because of the lack of supervision of national insurance payments by employers. Anything that tightens up on that, and on payments by dodgy methods, is welcome, because people must believe that the money that is taken from them is credited to their contribution record.
The system of decision making in the DSS defies belief and lacks credibility. I know of no one involved in the social security system who accepts that adjudication officers are independent. I know of no claimant who sees a difference between a decision taken by an adjudication officer and one taken by a Secretary of State. To them, the person behind the counter has taken the decision and legal technicalities mean nothing. An adjudication officer works in the same office as the other staff, on the same payroll, under the same management and even the same Minister. To the general public, they are simply people who work in the DSS, and we need to get rid of such crazy differentials.
Unfortunately, the system has developed to the stage where it no longer serves staff, claimants, representatives or the taxpayer. It is inefficient and bureaucratic and needs altering.
§ Mr. Webb
I have listened with interest and respect to what the hon. Gentleman has said. He made telling points about the appeals aspects of the Bill. I apologise if I pre-empt what he was about to say about lone-parent benefit, but just in case he was not going to mention it, may I ask him, as someone who is expert in welfare rights, what he believes will be the effect of scrapping lone-parent benefit on people such as those he used to advise?
§ Mr. Rooney
The hon. Gentleman needs to be aware that the vast majority of people who are paid single-parent benefit receive no advantage from it because it is deducted, pound for pound, if they are on income support.
815 Those on family credit lose about 72 per cent. So the number who actually receive any benefit is small. In an ideal world, it would not be done away with, but I think that the hon. Gentleman would accept, especially if he has kept awake during the past 18 years, that this Administration have not inherited an ideal world. I hope that he will see at the end of five years that the position of lone parents is vastly improved on what it was on 1 May 1997.
§ Mr. Rooney
I will not take any more interventions as I have nearly finished.
Staff morale is extremely low. The three programmes—change, adapt and prime—are continuing. The hon. Member for Beckenham (Mr. Merchant) mentioned change, but the other two programmes are very destructive to staff morale. Claimants suffer from lack of faith in the Department, from unintelligible decisions, confusing bureaucracy and the unresponsiveness of the system.
People who come into contact with the Department of Social Security have, almost by definition, suffered a traumatic experience, such as a death in the family or loss of employment. That is why they need to make contact in the first place. They should be met by a system that will deal with them compassionately, speedily and efficiently.
I hope that the Bill will be the first step to achieving the ideals that I have outlined. I hope for further legislation in the months and years to come. This Bill can only be the starting point. Nevertheless, it is a big Bill which takes on a great many issues and I hope that it will receive the support of the House today.
§ Ms Roseanna Cunningham (Perth)
I did not come into the Chamber with the intention of speaking in the debate, but I became so incensed by the remarks of Ministers, particularly in respect of clauses 68 and 70, that I felt that I had to say something. The impromptu nature of my decision, however, means that my remarks will of necessity be short.
I add my welcome to the hon. Member for Elmet (Mr. Burgon). It is many years since I was in Leeds, so I cannot say with any certainty that I have been to his constituency—although from his description it would seem unlikely that anyone visiting Leeds would avoid it. I was in Leeds to indulge a sporting interest, although I hasten to add that it had nothing to do with rugby, under either set of rules. I therefore bow to the hon. Gentleman's knowledge of that game.
I shall not, however, bow to the hon. Gentleman's—or the Government's—attitude to social security. I wish to deal mainly with clauses 68 and 70, which I notice that Labour Back Benchers have assiduously avoided this evening. I suspect that that is because they are deeply embarrassed about, and thoroughly ashamed of, those aspects of the Bill. I am under no such inhibition, and I intend to say what I suspect that many Labour Members in their hearts would wish to say if they were honest with themselves.
I have listened with care and interest to what is being suggested in regard to the removal of lone-parent benefit. I listened with astonishment to the remarks of the 816 Secretary of State, who appeared to suggest that there was a clamour from lone-parent organisations desperate for the Government to cut their benefits. I seem to have missed those briefing documents and demands—perhaps some selective lobbying is going on. While I do not doubt for one moment that all lone parents would like to be able to work and would much prefer earning to receiving benefits, the fact remains that many of them rely heavily on benefits and that those who find work are often on low pay. In such circumstances every pound is immensely important and I should dearly love to see or hear any evidence of a demand from lone parents that their benefits be cut, but I suspect that not one Labour Member could point to any such demand.
This move will hurt the very people about whom I have long understood that the Labour party claims to care. Now that Labour is in government, however, the very opposite would seem to apply and hypocrisy is the order of the day. That hypocrisy is exemplified by some of the remarks made by Labour Members when they were in opposition.
Like the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who made some play of comments made in the past, I should like to allude to a few myself. Someone who was described as the spokesman for the shadow Secretary of State for Social Security as recently as November 1996 referred to the then Government's proposal to cut lone-parent support as "short-sighted". Presumably that person spoke with the full authority of the current Secretary of State. It was said of the proposals then that they would make matters worse and that any cut would enlarge the poverty trap.
What has changed between November 1996 and July 1997 to cause such a material change in the Government's attitude? Why has a proposal that would "enlarge the poverty trap" suddenly become the most wonderful thing since sliced bread? Such a U-turn in such a short space of time is astonishing—the more so when we recall that it will affect vulnerable people.
A pattern seems to be developing here. Clause 70 deals with restrictions on reasons for backdating benefit. In this case, Labour is not just taking up what the previous Government wanted to do—it is showing every intention of trying to out-Tory the Tories in almost every respect. Earlier this afternoon there was a mischievous point of order inquiring whether the Liberal Democrats, in the light of today's events, would not be more comfortable sitting on the Labour Benches. After last night's debate, and having heard this evening's debate, I wonder whether Conservative Members might not just as well mingle with Members on the Labour Back Benches as there is precious little difference between them—except that the new Government are going even further than the former Administration were prepared to go.
There must be people sitting on the Government side of the House who, deep down, are sick and sorry about the impact that the proposals will have on ordinary people. The Secretary of State failed to tackle the new inclusion of housing benefit and council tax benefit in the backdating restrictions. Not even the previous Government were prepared to restrict the 12-month backdating rule to three months and one month, respectively—and for good reason. Arrears can mount up if these benefits are not paid. I do not know whether my mailbag is completely different from that of other hon. Members, but I would be surprised if they did not have to 817 deal with these problems in their constituencies. Neither a private nor a public landlord will write off arrears of rent just because ordinary people have lost money in this way, and local authorities will not write off council tax arrears that people cannot pay if their claims are not backdated.
It is indeed astonishing that the Government should take this line, although their continual use of the phrase "keeping spending down" gives the game away. I remind the Government that the Social Security Advisory Committee criticised the changes brought in by the previous Government as payinginsufficient regard to the reasons why claims are submitted late and/or without the necessary substantiating evidence".The committee recommended that the rules should not be changed. The then Government rejected its main recommendations, but the new Government intend to go much further. The backdating period—now set at one month, unless otherwise stated by regulation—may keep spending down: it will certainly keep down the spending of claimants because they will have precious little left to purchase anything. The decision is iniquitous, and especially harsh with respect to housing and council tax benefits. It is astonishing that the Government intend to proceed down such a road.
The removal of lone-parent benefit and the decision on backdated payments, taken together, will cause direct hardship.
§ Ms Cunningham
No, I am about to wind up my remarks. I said that I would keep my speech short. I am sure that the hon. Gentleman will speak later.
The Government are taking money away from some of the poorest and most vulnerable people. Anyone who votes for the Bill ought to be thoroughly ashamed of themselves, and I think highly enough of some Labour Members to imagine that they will be.
§ Mr. Desmond Browne (Kilmarnock and Loudoun)
I am grateful for the opportunity to contribute to the debate. Before coming to the remarks that I have prepared, I want to deal with Opposition Members' somewhat contrive interpretation of clause 70.
It would appear that hon. Members who read clause 70 as allowing backdating for only one month have failed to read the whole clause. It is obvious, especially from subsection (2)(b), that there is an opportunity to deal with the very circumstances that Opposition Members anticipate might cause difficulty and hardship. It might have been more helpful to the debate if those who have experience in the area and who have received correspondence on the matter had been able to give Labour Members—especially my right hon. Friend the Secretary of State and her team—more details of the circumstances in which such arrears could build up and difficulties could be engendered. The Under-Secretary of State for Social Security, my hon. Friend the Member for Manchester, Withington (Mr. Bradley), will no doubt be able to address the specific difficulties and see whether the provision that I have pointed out would enable circumstances to be prescribed to deal with such difficulties.
818 We have heard thus far a generalised complaint from more than one source, that the backdating provisions can operate in only one way. That is a restricted interpretation of the clause, which I commend to the House. There are opportunities to deal with difficulties in the very situations to which the hon. Member for Perth (Ms Cunningham), in particular, alluded. If her mailbag is so crammed full, would it not have been helpful to have articulated some of the circumstances in which such injustices could come about, so that a proper response could be made to them?
The importance of the welfare system cannot be underestimated. My right hon. Friend the Secretary of State put the system into a national perspective. When one considers, as I often do, that £93 billion—almost a third of public spending—is eaten up by the welfare budget, the national perspective is clear. Conservative Members ought to be very clear about it, because their policies created the circumstances that have caused the need for such spending to be devoted to providing a sometimes well-holed safety net for many of the most unfortunate people in our society.
On a more local level, the problems, complaints and trauma of my constituents, who regularly attend my surgeries clutching bundles of papers—mostly incomprehensible correspondence from the Department of Social Security or other benefit agencies—have brought home to me the personal difficulties generated by the present welfare system. I suspect that my constituents will join me in welcoming the Government's commitment to the reform of the welfare state.
It is a measure of the need for reform that almost no one who is involved in the system expresses any confidence in it or public support for it—despite the fact that we are spending such a vast part of the nation's wealth on it. The task of rebuilding that lost confidence is gargantuan and the measures in the Bill are to some degree the beginnings of that long process. The customers of the service—claimants or those who are entitled to benefits—deserve a better deal. The Bill is a significant step towards providing that better deal, in three important ways.
First, in clause 1, there is a provision that will rationalise the initial decision-making process. That objective is supported by all who have made representations to me on the Bill—many unsolicited—including representations from citizens advice bureaux and the Child Poverty Action Group. Further, the objective was supported almost universally by all respondents to the previous Government's Green Paper.
It is my experience—it is obviously one that I share with some of my hon. Friends—that the roots of many of the later problems that are addressed in the Bill are to be found in the initial decision-making process. Among the customers of the Benefits Agency, the Child Support Agency and the Employment Service, there is a significant lack of confidence in initial decisions being correct—even when they are. That public perception is supported by the findings reported in consecutive annual reports of the chief adjudication officer. There appear to be two important reasons for it.
819 The first reason, which is highlighted by the chief adjudication officer in his latest report, relates to the adequacy of the evidence on which initial decisions are made. Reporting on his monitors' responses, he commented that there weretoo many comments casting doubt on the adequacy of evidence. Whether the evidence was ever to hand, was missed under general pressures or the processes were just too complex is often far from clear.Despite significant efforts to improve the performance of adjudication officers, the chief adjudication officer was able to reportonly on a year of mixed achievement".The report said that he
saw no dramatic general improvement in standards.It is against that background that I welcome the rationalisation of the decision-making process and the abolition of the distinction between decisions made by adjudication officers and those made by the Secretary of State. The Government cannot be expected to address the complexities of the process—the other half of the perceived problem—after only two and a half months in power. That work will be addressed over the years to come.
The second reason arises from the first. It is clear from my constituents' experiences that one of the direct effects of the poor quality of initial decision making is an overloading of the system at both review and appeal stages. The instinct of claimants, many of whom are imbued with a cultural distrust of agencies, is not to accept the initial decision. Those who are worldly wise or who have previous experience of the benefit system—there are many such people in my constituency—are motivated to appeal simply because they have no confidence in the process. Those who consult advisers, welfare rights officers or citizens advice bureaux are often advised to appeal, if for no other reason than to keep their options open or simply so that they can go on the lengthening waiting lists for appeals.
The analysis of the monitoring statistics prepared by the central adjudication services and published in an annex to the chief adjudication officer's annual report justifies such an approach to the appeals system. The statistics not only give ground for concern because of the large proportion of cases in which, when monitored, the accuracy of the payment of benefits was either in doubt or just plainly incorrect, but show that, for certain benefits, a small proportion of decisions was found to be incorrect. There must be a better way of making decisions, so that claimants can have confidence that the decisions on their claims are just, fair and accurate.
My experience as a constituency Member of Parliament, short though it is, and my constituents' experiences, which are much longer, are supported by the findings recorded by the central adjudication services monitoring process, as reported by the chief adjudication officer. That is the convincing case for change. It is no answer to the Government's proposals—at the very least, it is an inadequate answer—to say that, if the Secretary of State takes on the role as proposed in clause 1, those making first-tier decisions will lose their independence. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who is no longer in the Chamber, made that point earlier by way of intervention.
820 It may be a legal nicety that adjudication officers are independent in law, but it cuts no ice with the claimants for whom they are making decisions. Legal independence and the attention that has been paid to improving the process have failed to deliver. Claimants demand the delivery of an efficient, reliable and accurate service within a reasonable time. That can be achieved only by reforming the existing mixture of different decision makers into one.
It is accepted that that change alone will not deliver the objectives, and that it must be supported by other changes if we are to improve the decision-making process. The chief executives of various agencies should be responsible for ensuring that staff decisions are as accurate, simple and clear as possible. Training, advice and guidance must be improved, and that will become the responsibility of the chief executives when the Bill passes into law. It is a step in the right direction.
Concerns have been expressed in lobbying papers that I have received about the monitoring of decision making, which is at present carried out by the chief adjudication officer. I am content that the responsibility should lie with the chief executive of the relevant department. The monitoring process is now well recognised and understood, so it is important that it should continue. However, chief executives must report the results of monitoring to the Secretary of State to whom they are accountable. Although that process of accountability is important, the results of monitoring exercises must be reported publicly. Accordingly, before moving to my second reason for supporting the legislation, I invite my hon. Friend the Minister to confirm whether the Department intends to require the publication of chief executives' reports.
I come now to my second reason for supporting the legislation. As has been explained on more than one occasion, it is a nonsense that claimants are often required to provide the same information in different forms when claiming different benefits to which they are, or may be, entitled. The sharing of information between and among agencies and between agency departments is a logical and a necessary step toward improving efficiency. Clause 3 will allow that to happen: it should greatly reduce the frustration experienced by many claimants and lead to increased efficiency and accuracy in the decision-making process.
The use of technology is not limited to sharing information, however, and may be brought into play not merely as an aid to the decision-making process, but as the process itself. At present, a number of decisions are made by computers, although the hard copy—the decision—is checked and signed by an adjudication officer. To the extent that clause 2 permits a decision to be made by a computer as opposed to an individual, it is but recognition of a growing reality. I believe that it is an appropriate extension of the value of new technology to better service delivery.
§ Mr. Letwin
If a computer makes an error, will it be held accountable in law? Will it be punished? Does the hon. Gentleman believe that a computer is a responsible agent? How does he justify inserting into English law the general principle of computers' making decisions?
§ Mr. Browne
It is difficult to take that intervention seriously, but I shall endeavour to do so. At the risk of 821 walking a well-trodden path, the Bill does not introduce the provision into English law—I assume that the hon. Gentleman's concerns go beyond the boundaries of the country that is uppermost in his mind. The concept of computerised information and the reality of its being accepted in law already exist. Many provisions throughout many areas of law—both north and south of the border—recognise that we live in this part of the 20th century and that, as a matter of fact, computers make decisions and hold information that is valuable to the judicial process.
Apart from acknowledging that we live in this part of the 20th century, the hon. Gentleman and others must get used to reality in regard to the benefit system. If we are to introduce into that system the accuracy that the number of complaints necessitates, it is almost imperative that we recognise the worth and use of technology. It is a fiction to imagine that decisions made by computers, which are becoming increasingly more reliable, are being made by persons who simply append their signatures to the hard copy. By spelling it out clearly, the provision recognises the reality regarding many such decisions that are made at present and prepares the ground for taking many other decisions in the same way, using good computer technology. Although I suspect that the hon. Gentleman was not being entirely serious, I hope that my answer has dealt with his concerns.
§ Mr. Browne
I am sorry, but I must proceed.
My third reason relates to the complexity of the current system, which is compounded at each level. In addition to six different initial decision makers and 13 types of decisions, there are about 20 different appeal routes and five different tribunal systems. Rationalisation and modernisation of the review and appeals procedure are long overdue.
The Bill's provisions for informal review are welcome—indeed, they were generally welcomed by those who responded to the previous Government's Green Paper. The advantages identified by the respondents included the early rectification of mistakes, better explanation of decisions and the early weeding out of cases that would be hopeless appeals. Whether a claimant can avail himself of the significantly improved review process set out in the Bill may depend, ironically, on the clarity of the initial decision. That takes me back to my first point, so I move on.
I look forward to seeing the regulations that will prescribe the procedure for the revision or review of decisions. It would be helpful if those regulations included a time limit for completing the informal revision, to be imposed not only on the applicant, but on the agency. I am pleased to see that clause 10, in response to submissions made to the Green Paper, includes provisions that protect claimants' rights as to the effective date of review decisions and appeal time limits.
As to reviews, it is mere common sense that, where an appeal is current, it should generally lapse if the decision is revised before the appeal is determined. In such circumstances, the operative decision for all practical purposes will be the revised or reviewed decision. It makes a nonsense of any attempt to improve the review procedure to allow the possibility of a reviewed decision and an appeal running at the same time.
822 In respect of reviews and appeals, concern has been expressed about the provision that does not require consideration of issues not raised by the original application or raised specifically by the appeal. I return to an issue that I raised earlier by way of intervention. As I understand the basis of the criticism, it is alleged that the provision—which, in respect of appeals, is to be found in clause 13(7)—will curtail the powers of tribunals and turn them into adversarial forums; operate to the detriment of claimants, who are perceived to be the weaker parties in appeals; and restrict the investigatory functions of tribunals. That seems to be stretching the Bill's words beyond breaking point.
I submit that the provision does nothing of the sort. It does not prevent the Secretary of State from exercising a revisory or review function, or tribunals, in exercising their quasi-judicial functions, from acting on their respective initiatives to consider relevant factors, although they were not raised in the review application or in the appeal. I trust that the provisions, in law, will not be used to disqualify relevant arguments or considerations, but will be reserved for the purpose for which they are clearly intended: to prevent the introduction of irrelevant considerations in appeals or reviews.
I believe that the provisions of the Bill that have generated the strongest criticism are those that relate to the appeals process. The introduction of flexible arrangements for handling appeals found little support in the responses to the Green Paper. Those who responded in that vein—that is, those who did not find the arrangements favourable—no doubt have repeated, and will repeat, their criticisms in their response to the Bill. Although I respect their opinions, which I understand—and I understand the arguments that have been made in support of them—it is significant that there were only 10 recorded responses in the consultation process. I am far from satisfied that the responses that sought to argue for the status quo were representative of the experience of individual claimants.
It is a daunting prospect for an individual, whether he is represented or not, to face the prospect of a social security appeal or an appeal against a decision in respect of child support. The documentation is often couched in terms that make it impossible to understand. The delay involved in the appeals process is indefensible, and the personal anxiety and trauma generated by it often compound the ill health of many people, some of whom are the weakest in our society.
There is no need for five separate tribunal jurisdictions, when one single independent body would do. The delay in dealing with cases is caused substantially by the need to convene a tribunal of three persons, composed of the right experts and, since 1984, chaired by a lawyer.
I have constituents who have waited for nine months for an appeal, only to be advised at the door of the tribunal that the tribunal personnel were inappropriate and that the case would have to return to the waiting list. I have other constituents who have waited up to two years for a tribunal hearing, despite early correspondence from the independent tribunal service advising them that they could expect their case to be heard within nine months of the appeal.
823 The culture of delay has created an atmosphere of lethargy in the appeals system. Time limits are often ignored, particularly by adjudication officers, who fail to submit the documentation in support of their decisions timeously, which merely compounds the problem.
The rigid requirements for the hearing of appeals are calling out for greater flexibility. It should not be necessary for hopeless cases that are destined to fail for obvious reasons to wait in the queue, clogging up the system and delaying cases that have greater merit. It is not important that all appeals be chaired by lawyers. What is important is that there is flexibility in the appeals system, which allows an appropriate tribunal to be convened to deal with the issues raised in an individual case.
The provisions of the Bill give such flexibility. They preserve the independence of the appeal body. They preserve the rights of appeal from the appeal body to the commissioner and, ultimately, to the appropriate court. They will operate in conjunction with the changes brought into law last October by the previous Government, which introduced a presumption that appeals would be disposed of on the papers and that a claimant would be required to opt for an oral hearing. As a package, they represent a partial modernisation of the social security system which, when operating properly, will streamline the appeals process, quicken appeals, weed out of the system hopeless appeals and in the end help to deliver what the claimant wants—a fair, just, understandable and correct decision on his claim.
What would those who argue against the reform have the Government do? It has taken almost a century from the introduction of means-tested benefits to get the whole system into its present complex state. There is no prospect of a quick fix for the present mess. The voices of those who call out for a simpler, more easily understood, more transparent and more customer-friendly system of benefits will find an echo on the Government Benches. It will take time and significant legislation to unravel the present labyrinthine system. Until then, we must tackle the problems that can be resolved.
The imperative is that the decision-making and appeals process is improved. Such improvements are heralded in the Bill—improvements that will not only deliver administrative cost reductions, and they will, but deliver benefit entitlement more quickly. For those reasons, I commend the Bill to the House.
§ Mr. Oliver Letwin (West Dorset)
My main purpose in speaking this evening is to discuss the wider implications of clause 68, but before I do so, I wish to continue a point that I raised earlier, which was genuinely intended in an entirely constructive and non-controversial spirit.
I referred specifically to English law, because that is what I have had the time to research. I have not been able to find a single instance in English law—statutory or otherwise—where decision-making power has been attributed to a computer. The hon. Member for Preston (Audrey Wise) raised this point first, thereby showing that it is an entirely cross-party matter. It is a matter of some significance to the development of the corpus of our law whether computers are attributed with decision-making power. This should not be lightly dismissed. It is not, 824 perhaps, a matter for the Second Reading debate, but I give notice that it should be discussed in some detail in Committee, because we might find quite unexpected consequences if the measure is passed in its present form.
I shall now deal with the much more immediate and serious matter of clause 68. Various Opposition Members, including, notably, my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), the shadow Secretary of State, spoke eloquently about clause 68. By contrast, the Secretary of State said very little about it. Indeed, it was evident from her response to interventions—or attempted interventions—that she was in a state of some confusion and dismay, so much so that she apparently thought that she had allowed me to make an intervention and had responded to me, when I had made no such intervention and she had not responded to one. That would reveal a state of mind based on a certain embarrassment. The cause of her embarrassment is, of course, clear. She is on record, as are many of her right hon. and hon. Friends, as opposing the very measure that she now brings before the House.
The hon. Member for Perth (Ms Cunningham), who is not in her place, made the observation that, increasingly, there is little difference between Opposition Members and Government Members in respect of measures such as this. I submit that there is a very major difference: Opposition Members approve of the change that clause 68 makes in bringing into balance the benefit for lone parents and married couples; Government Members are introducing this measure, but do not approve of it. Opposition Members believe in it, but Government Members do not.
That is a fundamental difference. To introduce changes in which one believes, which are tough and much resented by some of the population and which will have wide-ranging social effects over a prolonged period is one thing, but to introduce such changes on the basis of a lack of belief is quite another. It betokens an attitude to government that will fundamentally undermine such remaining respect for government as there is in this country, or as will remain following the constitutional and other changes that the Government are introducing.
Clause 68 is important because it illustrates that the attitudes that the present Government brought from opposition, attitudes that consist of being willing to say things quite divorced from real belief, have been carried into government and are being applied to an important element of our social policy. Opposition Members believe in this measure because we believe that, for too long, there has been discrimination in various parts of our tax and social security arrangements against married couples, against the family. We believe that clause 68 reintroduces a certain equilibrium.
Hon. Members on the Government Benches—not just on the Front Bench but on the Back Benches—are notable for their absence in defending this proposition on any similar social grounds, yet it is a measure that will, over time, have a profound effect on the social composition of this country. That is a remarkable and dangerous phenomenon in government.
Clause 68—a relatively slight clause in drafting terms—has a further implication. As my hon. Friend the Member for Chingford and Woodford Green mentioned, the clause illustrates clearly—as shown by the fact that it is not believed in by the Government, even though they are introducing it—that the Government's attitude to 825 social security is now entirely driven from another part of the Government, the Treasury. In this particular instance, we on the Opposition Benches regard the intervention of the Treasury as by mistake benign. It has brought about a transformation in the ostensible attitude of the Department responsible for this legislation which we welcome. If it becomes a general principle of the Government's actions in social security that, without regard to social effects, whatever policies improve the Exchequer's position will automatically be adopted and enacted, we have much to fear from the forthcoming wide-ranging reviews which we are promised.
Pity the position of the Minister for Welfare Reform when he comes to address the great issues of pension reform which Conservative Members so earnestly wish to see and in which we wish him the best. Pity him if, having been saddled with the retention of the state earnings-related pension scheme in a recent statement in the House, and having been saddled with a Treasury-led attack on the private pension funds to the tune of £5 billion a year, he is now saddled with a general principle that, whatever changes he makes, no regard whatever should be paid to their long-term social effects, but should instead be based entirely on considerations of cost saving. It is unthinkable that, under such constraints, even one so profoundly versed in these matters and so noble in his intentions as the right hon. Gentleman, could conceivably produce a well-founded reform of pensions that will withstand the test of the coming decades in Britain.
That is a sad thing for Britain because we need much reform in social security, much that is in the Bill, and much that will no doubt be or would have been in the reform of pensions had this Treasury straitjacket not been applied and had there not been such a will on the part of the Government to abandon every thought of long-term social policy and to be guided only by considerations of cost.
In clause 68 alone, we see a demonstration of two attitudes to government that Conservative Members lament and, in due course, the British people will lament, attitudes that forgo any consideration of social policy and allow the Treasury to rule.
§ Mr. Browne
Will the hon. Gentleman explain where the increased child care disregard provisions, which my right hon. Friend the Secretary of State mentioned, and the new deal for lone parents, which was piloted from yesterday—in Scotland it was piloted from today and I would have been there to see it but for this debate—fit in with the concept of a Treasury-constructed straitjacket? How are those measures Treasury driven?
§ Mr. Letwin
That is a remarkable intervention because, in a most remarkable way, it allows me to illustrate the very point that I am trying to raise. It is perfectly true that certain cosmetic measures have been implemented. [Interruption.] It is interesting that Labour Members should laugh, because the hon. Member whom I should like to quote in that regard is that well-known proponent of harsh Tory policies and that well-known inhabitant of the Conservative Benches, the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who gave a passionate, well-informed and devastating analysis of the 826 other changes that have been proposed in respect of lone parents, pointing out that they will be virtually without effect. By contrast, it has been stated on the record repeatedly, not only by the Secretary of State but by the Prime Minister and others, that this change is dangerous because it creates a considerable diminution in the immediate income of lone parents.
As I say, Conservative Members have no objection to that change because we believe that it creates an equilibrium, but the fact is that the costs saved by this measure are out of all proportion to the costs incurred by the other measures and the costs imposed on the lone parent are out of all proportion to the costs saved by the lone parent through the other measures.
§ Mr. Browne
Will the hon. Gentleman please explain for my guidance, if for that of no other hon. Member, whether his calculations are based on the calculations of his hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) or on the calculations available to us all in Library research document No. 93 of 1997, which appears to have different and substantially lower figures than those quoted by his hon. Friend? Most important, figures that have been independently calculated and have been provided by the Library suggest that there is parity between one of the provisions about which I asked the hon. Gentleman and the total savings from this measure.
§ Mr. Letwin
The contrast is between the effect of clause 68 in its first year and its cumulative effect over many years. The cumulative effect over many years will be substantial because increasing numbers of people who would have entered benefit in a particular mode will have entered it in another. Over the years, it is Conservative Members' firm belief, and, we understand, it was the firm belief of Ministers and officials in the previous Government, including those officials who were no doubt responsible for drafting the Bill, that the measure's cumulative effect will far outweigh the sums that it is claimed will be saved by the other measures to which the hon. Gentleman referred.
§ Mr. Browne
With respect, will the hon. Gentleman deal with the simple point? Is he making the point based on the figures that the hon. Member for Chingford and Woodford Green used, or is he using the apparently independent figures that are available from the Library?
§ Mr. Letwin
This may be becoming tedious to other hon. Members, but I shall reply finally to the point. Yes, I am basing my remarks on the cumulative effect as mentioned by my hon. Friend the Member for Chingford and Woodford Green and by others, including my hon. Friend the Member for Beckenham (Mr. Merchant) who, for a long time, was parliamentary private secretary to the previous Secretary of State for Social Security and has great expertise in the matter. There is no doubt that this change will have a large cumulative effect and I have no doubt that the matter will be further amplified when the Under-Secretary replies to the debate.
Clause 68 contains—I do not think that there is any doubt about this—a measure which is opposed on social grounds by the Department that is putting it forward in the Bill and which is proposed by its Treasury paymasters. It is a principle of government that will put at risk 827 Britain's entire social development over many years if it is carried forward into the wide-ranging reviews that are now promised.
§ Mr. Phil Hope (Corby)
I congratulate my hon. Friends on making some well-informed and constructive contributions to and interventions in the debate. That is in stark contrast to Conservative Members, many of whom are no longer in the Chamber, who seemed to display their profound ignorance of the social security system. They still seem to be living with a world view based on 18 years of economic and social failure rather than seeing this as an opportunity for moving forward.
I have no doubt that the postbag and surgery case load of every hon. Member are dominated by the concerns of hundreds of individuals and their families who rely on the social security system for their financial survival and security. I am sure that each and every one of us can tell some horrific tales of individuals who feel and who have been let down by a system that is supposed to provide them with the financial support that they so often desperately need, yet all too often fail to get.
It is a system that touches the lives of millions of people. In Northamptonshire alone, where my constituency of Corby is situated, it has been estimated that 100,000 people are dependent on means-tested benefit. If all those who were eligible were to claim their benefits, that figure would rise to nearly 124,000 people. That is one in five of the Northamptonshire population. Therefore, 20 per cent. of the people of Northamptonshire are on incomes so low that they qualify for means-tested benefits to prevent them from living below the official poverty line. A significant proportion of the population are failing to claim the benefits to which they are entitled. That is the reality of 18 years of Conservative government and the legacy that the Labour Government have inherited. It is, therefore, no surprise that the Government's key priority is to introduce a Bill to reform the welfare state.
We must pledge ourselves to providing a better service for people who claim or who want to claim benefits. Rebuilding public support for that system is just as vital. Nationally, we spend £93 billion on the social security system through its five main agencies, yet, in direct contrast to public attitudes to the national health service, instead of celebrating that as evidence of a caring community in which no individual is left to live in poverty, the system that was put in place to meet people's needs is now viewed by claimants, staff and other agencies affected by it as over-complex, inefficient and manifestly unfair.
It is nonsense that people who use the social security system have to provide the same information about themselves several times over to different parts of the same organisation. Those of us who have a lot to do with social security departments know that much of the information technology used to administer benefits is outdated and clearly needs replacing. That repetition of information using outdated technology is a terrible waste of time and effort for service users and departments, and for taxpayers, as it wastes significant amounts of money.
Without doubt, there is a consensus that the task of modernising the welfare state and rebuilding public support for it requires a programme of reform to make the 828 system modern, efficient and fair. If we change public attitudes so that people respect and value the social security system, we will remove the undeserved stigma that is all too readily attached to people who rely on that system, and we will help to rebuild the morale and enthusiasm of the staff who work in it.
I hope and believe that the Social Security Bill will be the first step in a programme of reform to rebuild the public's faith and confidence in the system. We can take it as read that the system is over-complex and unduly bureaucratic. We spend almost £4 billion just to administer it. The process of decision making and appeals is difficult to understand not only for those receiving benefits but for the staff who administer the benefits and many of the organisations that give advice.
We have heard already that there are six different types of decision-making officers at the first tier, and that the variable quality of decision making by those officers is all too evident. The chief adjudication officer's statistics show that 68 per cent. of benefit decisions, such as those about family credit, involve possible payment errors.
There are five separate tribunal jurisdictions for appeals, including the social security appeal tribunals, the medical appeal tribunals, the disability appeal tribunals and the child support appeal tribunals. The result of this complex and unwieldy system is that people who appeal against a decision must wait an average of six months, and sometimes up to two years, before their appeal is heard.
Those problems are widely recognised in Government studies and by independent observers. They contribute directly to the underclaiming of benefits by people who are entitled to them. Northamptonshire county council's policy unit said:The complexity of the system makes it difficult to understand and difficult to access which leads to a significant proportion of benefits going unclaimed every year.For every person who does not claim benefit, there is another who is possibly living below the poverty line and below the standards that we expect as we move into the 21st century.
It is appropriate for me to take this opportunity to recognise the excellent work of welfare rights centres and citizens advice bureaux, which play a vital role in assisting individuals and families to make use of the existing, albeit inefficient, social security system. Last week, I attended the annual general meeting of the welfare rights advisory service in Corby. I am looking forward to speaking at the open day of the Corby citizens advice bureau in September. Those services are vital to people in my constituency on low incomes, who struggle to grapple with the complexities of the current social security system.
In one year in Northamptonshire alone, the welfare rights centres and citizens advice bureaux dealt with 52,000 inquiries about benefits. Local research has shown that advice provision is one of the most effective ways of increasing benefit take-up rates, and consequently is an important way of tackling poverty and maintaining incomes for those on low incomes who are entitled to social security support. The Corby and Northampton welfare rights offices, which dealt with 27,000 of those inquiries, last year generated more than £5.3 million of annual income for local people. On behalf of the people who have directly benefited from their help and advice, I pay a heartfelt tribute to those agencies for that tremendous achievement.
829 We all want a system that does not require people to seek advice from welfare rights centres or citizens advice bureaux about obtaining the benefits to which they are rightly entitled, or to plough their way through the forms and the maze of the appeals system. I believe that the significant measures in the Bill will reduce the complexity, inefficiency and unfairness in the present system. I hope that the Bill will ensure that people receive the benefits to which they are entitled, at the right level and with minimum bureaucracy and delay.
The Bill will helpfully pave the way for reforming the system around the needs of claimants, so that people need give information about themselves only once. We should also make better use of information technology so that the system is efficient. The Bill will simplify the way in which decisions are made, and will streamline the appeals procedure. That will give a better service to those on benefit and to those wishing to claim, and will crucially cut waiting times. It will reduce the number of decision makers at the first tier from six to one. It will replace the many different tribunal jurisdictions with a single independent body. It will remove the rigid requirement for all cases to be heard by a three-person tribunal, and will enable the president to have the right expert for different appeals and for different claimants. It will allow tribunals to correct their own mistakes quickly and readily, rather than using the unwieldy system above the tribunal procedure. Those measures will substantially cut the waiting times that people currently have to endure. More important, the Bill will enable the public to be assured that the system of appeals is independent and impartial.
I have focused primarily on measures in the Bill that affect procedures within the social security system, but I should like to draw attention to its impact on national insurance contributions, about which we have had only a small discussion. The Conservative Administration failed completely to ensure that there was an effective system for compliance with national insurance contributions. A minority of employers do not fulfil their responsibilities on national insurance contributions. That is unfair to employees, who lose out on their rights to benefits, and it is unfair to other employers, such as those in my constituency who pay their fair share.
I am pleased that the Bill includes a number of measures on national insurance contributions to make the system fairer. It closes loopholes to limit avoidance, by allowing national insurance contributions to be charged on vouchers used by employers to pay their employees.
The Bill will increase compliance by introducing a new system of cash fines for minor non-compliance, and, I hope, new criminal penalties for serious cases of deliberate evasion and fraud. It will also cut red tape. The Conservative party promised that, but never delivered it; we promised it, and, like so many of our other promises, that promise has been implemented. It will be easier for employers to keep their fair share.
As others have pointed out, even when the Bill has been enacted more will need to be done to ensure that the welfare system works well and has the fullest possible public support. I am, however, confident that many measures in it will mean that users of our social security system will be better served, that staff will find it a better 830 system in which to work and that the public will have more confidence and faith in it. I think that it will become a system of which we can all be proud.
§ 8 pm
§ Mr. Howard Flight (Arundel and South Downs)
The Secretary of State's presentation of the Bill struck me as disingenuous. The Bill is, fundamentally, about saving money—as has been pointed out, it is the "Peter Lilley memorial Bill"—and I think that it would have been better had the Secretary of State made that clear. As my hon. Friends have said, we do not oppose the Bill as such, although I have reservations about it, but I would have liked it to constitute the beginning of a radical reform of social security expenditure. That is what Conservative Members, and the nation as a whole, expect from the Minister responsible for welfare reform.
Many hon. Members have mentioned the figure of £93 billion social security expenditure. Before we know it, it will be £100 billion per annum. The issue is that some 30 million people who pay into the system also derive benefit from it, which leads to substantial administrative costs in the middle. Our welfare system should focus much more on those who are in real need. There are many areas in which the private sector could deal with requirements just as well as the public sector, and many respects in which the national insurance scheme should return to its early principles and become an insurance system again. Because it is not, our citizens do not understand it.
As many hon. Members have pointed out, the Bill aims to block national insurance contribution avoidance. While we all welcome that, there is an obvious corollary: will it adequately investigate areas in which fraud still exists in the claiming of benefits? I think that we have all experienced that in our constituencies. The simplification and improvement of decision making and procedures for appeals must of course be welcome, for the many reasons that Labour Members have given. I am, however, concerned about clause 70, which I believe is designed to save some £50 million a year in expenditure. It has been argued that its impact may not be as bad as it appears on the surface, but the number of cases that I have encountered of need arising from the break-up of families, and from death, suggests that the restriction of the back-payment period from three months to one would involve a good deal of injustice. I also question whether the cost savings that are being sought will be achieved.
Clause 23 also seems somewhat hopeful, although it may be necessary in that the simplifications entailed in the Bill are not so great that many applicants will not still need help in completing their forms, and the penalty for inadequate applications is likely to produce a vicious circle and still require the attention of social security staff. As my hon. Friends have pointed out, clause 68 constitutes a remarkable U-turn on the part of the Secretary of State. I am sure that, if she had been asked six months ago whether she expected to present a Bill to take away lone-parent families' premium child support, she would have sworn that that would not happen. As recently as January, the Prime Minister effectively pledged that the Labour party would not take such action.
Let me make a practical point. To the extent that the Bill is the price for the more generous "minder" allowances, it seems to me that, if anything, it benefits the 831 better-off lone parents at the expense of the less well-off. I do not think that the two measures contained in the Budget and in the Bill do much to advance the cause of those who are really in need. My main point, however, is that the whole matter of lone-parent families needs a massive review. Legislation is needed to deal with a wide range of problems.
In virtually every constituency case with which I have dealt, one or other parent has walked away from his or her family responsibilities in the knowledge that the state will pick up the bill. That means a terrible crisis for the parent who is left to bring up the children. What such people need above all is organisational help with, for instance, accommodation and employment. Our welfare system does not cope with such crises very well at the time when they occur.
We need a stick-and-carrot approach. There are many families on ordinary incomes with children to bring up. I receive numerous letters from such people who resent the fact that others enjoy a better standard of living than theirs, and are entitled to benefits to which they are not entitled. The Government have merely tinkered with the position of lone parents in order to save money. I looked forward to radical Government proposals to reform lone-parent social security arrangements, and to deal with the circumstances in which society meets lone parents' needs. While I do not oppose the Bill, I feel that the Government are being disingenuous in terms of what they are doing, and in terms of what they have implicitly promised the nation—radical reform of social welfare.
§ 8.6 pm
§ Mr. Chris Pond (Gravesham)
I am sure that we can offer the hon. Member for Arundel and South Downs (Mr. Flight) some radical reform in the months and years ahead. I hope that the Bill constitutes a first and important step in that direction.
The hon. Member for Perth (Ms Cunningham)—who is no longer in the Chamber—suggested earlier that Labour Members who planned to vote in favour of the Bill should be ashamed of themselves. She will be able to read in the Official Report that I shall support the Bill, and that I shall not be ashamed of doing so. Having spent 18 years working for an organisation called the Low Pay Unit—I took over the job from my right hon. Friend the Member for Birkenhead (Mr. Field), who is now the Minister for Welfare Reform—I, along with other Labour Members, require no lessons on the need to create a fair and efficient social security system. As we all know, the current system is neither fair nor efficient. It stigmatises those who must turn to it when they are at their most vulnerable. It is unjust, and it deprives people of their dignity and self-respect. I hope that the Bill will contribute to the creation of a social security system that will give people back their self-respect.
I want to take a slightly broader brush to the issue—not a paint roller, I promise—and to examine the Bill in a wider context. Travelling to a conference on social security last week, I was amused to read in The Daily Telegraph that young ladies in a certain social stratum were nowadays being accosted by young men inquiring about the size of their grouse moors. There does not seem to have been much of a change since the Edwardian days when gardening manuals advised people that, no matter how small their gardens were, they should always allocate at least three acres to woodland.
832 We need to recognise that we are discussing the Bill in the context of a deeply divided society, in which the divisions have become still deeper in recent years. The inequalities have increased faster in this country than in any other in the industrialised world. Therefore, while some people make decisions about the size of their grouse moors, others have to make difficult decisions about whether they feed themselves or the kids, normally choosing the latter option, and whether they pay the gas bill or buy their child a new pair of shoes for school. The way in which the social security system operates at present adds insult to the injury of those people, who are literally on the edge.
With impeccable timing—I shall not give it a large plug—today saw the publication of an important report called "Breadline Britain in the 1990s". It took a representative sample of the British population and asked them what they considered poverty really meant. In recent years, so much of the debate has been about whether poverty means not having a video recorder or a new pair of shoes.
The report then took the generally accepted definition of poverty and considered how many people were in that position. The results are a shaming indictment of a nation that likes to consider itself one of the richest in the world. They show that, in the early 1990s, 11 million of our citizens were living in poverty, 3.5 million more than in 1983. A fifth of the total population were in poverty, measured by those generally accepted standards: 10 million of our citizens lived in inadequate housing as the living areas of their homes were damp, unheated or overcrowded; 7 million people were without essential clothing, such as a warm waterproof overcoat; 2.5 million children were forced to go without at least one of the things that they needed, such as three meals a day, toys or out-of-school activities; 5 million were not properly fed by today's standards; and 6.5 million people could not afford essential household goods such as a fridge, a telephone or carpets for living areas.
Most shameful of all perhaps is the fact that, on the basis of the Department of Social Security figures, the number of children in poverty has increased from one in 10 in 1979 to one in three in the mid-1990s. We need to listen to some of the comments from Conservative Members with those figures in mind. That is the challenge that this new Government face, a challenge of enormous dimensions in terms of the scale of poverty. The Bill will make a small but important contribution towards ensuring that, as part of an overall package of reform, that problem can be addressed.
We have often heard Conservative Members say that the United Kingdom is the "success story of Europe". We should bear it in mind that we account for one quarter of the poor throughout the European Union, and that was true even before the opt-out from the European social chapter.
§ Mr. Pond
I shall do. I have long advocated and will advocate again this evening the principle of universal 833 benefits. One of the difficulties that we face in the social security system, and one of the reasons why our system does not deliver to the people most in need and stigmatises those who have to turn to it, is that it now so heavily depends on means-tested benefits. That not only creates dependency among people claiming those benefits, but traps us as a society in a situation where the expenditure escalates—the cost of economic failure. As the hon. Member for Northavon (Mr. Webb) well knows, I have also advocated an improvement in the level of benefits.
In recent years, there has been an attempt to widen those divisions between the poorest, whom we are discussing tonight, and the rest of society. That was justified, apparently, on the ground that it would generate prosperity, but Britain has slipped down the prosperity league. Only Greece, Portugal and Spain have a lower national income per head than Britain. That is because inequality is not only socially divisive and politically dangerous, but economically wasteful.
I do not think that any hon. Member believes that the Bill of itself is going to eradicate that poverty or that inequality, but we owe it to people who depend on social security benefits to ensure that the system delivers in the most effective and efficient way possible. That is one of the Bill's objectives and it is an important one. We need to ensure that the system uses the most modern technology available to deliver to claimants. We owe it to those on social security to ensure that they are treated with dignity and respect, and to the poorest families to ensure that, wherever possible, they are given every opportunity to lift themselves off social security and into work which provides them with a decent standard of living.
As my right hon. Friend the Secretary of State has explained, the Bill does not stand alone. It is part of a wider strategy of welfare to work. She referred to the fact that one in five non-pensioner households have no one in employment. That is almost the highest proportion in the EU. The creation of jobs and quality training places through the new deal will do far more to alleviate poverty than anything we might do in terms of social security benefit, so I argue that people who depend on social security should be treated with dignity and should be provided with a level of income that allows them to meet the needs of themselves and their families with self-respect. I also believe that it is important that, wherever possible, we allow people an escape route from dependency on benefits.
As we know, many families are consigned to poverty because the parents have no opportunity to work. That is why the measures that were described earlier—the new deal for lone parents and the extra £200 million—are so important in providing real choices. As we know, most of those single parents, if they had the choice, would prefer to work. Perhaps most important, we must remember that the single largest group in poverty—the working poor—is little touched by the Bill.
I have mentioned that I used to work for the Low Pay Unit. Its case load illustrates that, in current circumstances, for many people, paid employment is no escape from poverty. One young woman is employed as a typesetter and works 47.5 hours a week, just below the working-time directive limit, for a wage of £57.69 a week. If my sums are right, that is equivalent to £1.21 an hour.
834 Another is employed as an administrative supervisor in London for a wage of £1.55 an hour. Such pitiful rates of pay allow those people no escape from dependency on social security, however harsh that system is, and mean that they are consigned to relying on benefits.
Those people are among the poorest, but they are not necessarily on social security. That is why it is so important that the national minimum wage is part of this package of measures—to provide people with earnings so that they can provide themselves with a living that is worthy of human dignity. The position of that group will also be greatly enhanced by the Bill's measures on national insurance contributions. Too often, people, especially those in low-paid and insecure jobs, are the victims of cowboy employers who swindle not only the national insurance fund out of revenue, but their employees out of entitlement to benefit. They not only consign those individuals to poverty while in work but help to ensure that, when they are not in work, they will not have sufficient entitlement to benefits to lift themselves out of poverty at those stages of the life cycle. The growth of means testing has meant that millions are entangled in what used to be described as a safety net but which is that no longer. We should make sure that, when people turn to the social security system for support, they can do so with dignity and can expect fairness. We should also make sure that as few people as possible have to turn to the system for help.
The Bill is part of a process of modernising the welfare state in terms not just of new technology but of helping people to become active citizens instead of passive recipients of benefits. It is also about returning to people dignity and self-respect. That is why I am happy to support the Bill, which is an important element of a package of overall welfare reform.
§ Ms Gisela Stuart (Birmingham, Edgbaston)
I am grateful for the opportunity to follow my hon. Friend the hon. Member for Gravesham (Mr. Pond) as I should like to take up some of his points. Before doing so, I will deal with the issue of computer evidence, which seemed to exercise the minds of some hon. Members.
In a previous incarnation I taught criminal and civil evidence to students. I remind Conservative Members of the poll tax. The issue arose of whether computer printout was admissible as court evidence. The Bill's provisions simply allow computer appeal decisions to be admissible as evidence in subsequent proceedings. That is not so much an innovation in English law as pre-empting a loophole in terms of whether computer printouts are admissible in courts and tribunals.
I am not afraid to acknowledge the Bill's antecedents as being part of the Department of Social Security programme for change. Its aim was to cut costs by 25 per cent. I have no problem about such objectives because we support efficiency and effectiveness. However, I have a severe problem over the absence of joined-up thinking among Conservative Members. The Conservative Government looked only for savings in the system but did not look at the effects on claimants. Did they deliver a fair, modern and efficient social security system? They did not.
My hon. Friend the Member for Gravesham made it clear that we have taken parts of the Conservative Government's initiatives as a starting point. However, the 835 philosophy of our approach to social security is very different. We want to take as many people as possible out of the system and put them back into work rather than consign large sections of the population to a claimant culture and think that we can ignore them, which is what the Conservatives did. [Interruption.] Hon. Members are at liberty to disagree.
The Bill is simply the first step on the way to introducing a modern, efficient and fair system. Perhaps I may add an extra dimension to the speech by my hon. Friend the Member for Gravesham. We tend to forget the scope of the social security system. We have been reminded that a third of Government spending is on social security. The number of claimants is horrendous. There are more than 1 million claimants for attendance allowance; 7 million for child benefit; more than 5 million for council tax benefit; and 1.7 million for incapacity benefit.
The social security system employs just under 100,000 people, but somehow we have achieved a system that is universally hated. Those who use it dislike it intensely and those who pay into it feel that it is not achieving anything. It is a classic worst-compromise scenario. No one is happy with it, and Conservative Members have never addressed that. Apart from the amount that we spend on claimants, I remind the House that 42 per cent. of beneficiaries are elderly and 24 per cent. of them are sick or disabled. They are the people least able to speak up for themselves. We have ended up with a system that is too complicated. It was designed to exclude people and to make it difficult for people to work out their entitlements rather than to be genuinely supportive.
The northern edge of my constituency has a little area called Fiveways which houses many civil servants, some of whom run a brilliant helpline. People could ring an 0800 number and receive universal advice on benefits. I should have thought that it was in the interests of any responsible Administration to ensure that those who need to claim can do so effectively and fairly. However, the Conservative Administration saw fit to do away with that helpline. At the same time, the social security offices in Birmingham went ex-directory, making it doubly difficult to get in touch with anyone.
The Law Society was one of the bodies that made submissions on the Bill, and I should like to refer to its submissions even if it did get some of them wrong. It gave the initiative an overall welcome because it thought that it would increase accuracy, speed and general effectiveness of first-tier decision making for social security benefits. We approve of that, but for Conservatives to conclude that we have swallowed their approach to social security hook, line and sinker means that they think that Labour Back Benchers do not have two brain cells to rub together and cannot think for themselves. That is wrong.
For many years the system has not delivered what was needed for our people. We recognised that it required long-term renewal and we are starting by examining some of the procedures for first-tier decision making, but that is merely the beginning. Some hon. Members who sought a more radical approach to social security felt rather let down. I urge them to hold on and wait. [Interruption.] We may have a better track record than Conservative Members and the electorate did not trust them.
836 I particularly welcome the provisions in part II of the Bill, starting with clause 68, which deals with national insurance contribution measures. It is about closing loopholes to eliminate avoidance. If I have the wrong clause number, I am sure that Conservative Members will correct me.
§ Ms Stuart
I apologise—I meant clause 48, which deals with national insurance.
I have always been struck by the unfairness of employers avoiding making the proper contributions for employees who are then excluded from the system. The Conservative Administration unfairly assumed that fraud was limited to individual claimants and tended to ignore what went on in companies. Part II of the Bill improves compliance and cuts red tape, which will be a great help.
I welcome the Secretary of State's announcement that Government amendments will be tabled to deal with the absurd system of payment by means of Asda vouchers and the like, and with pensions, and the alignment of tax and national insurance in relation to share options.
I support the Bill simply because, like the rest of my party, I believe that the social security system needs revising and modernising. It is not delivering a fair deal; it is not delivering to the people of this country what a social security system is supposed to deliver.
The previous Administration were content to leave people in benefit dependency [Interruption.] I am simply making the point that the Bill is part of a much larger structure. The fact that we agree with some aspects of previous plans does not mean that we agree with the whole system. I shall vote for the Bill because I know that it forms part of the Government's larger structures and developments—and I can support it whole-heartedly.
§ Mr. David Rendel (Newbury)
I am delighted to have the chance to take part in the debate, despite the fact that my hon. Friend the Member for Northavon (Mr. Webb) and I have been sitting here on the Opposition Front Bench saying to each other that what is going on is becoming more and more bizarre. In my experience over the past four years in the House, it is almost unprecedented for the Liberal Democrats to have their reasoned amendment to a Government Bill selected by Madam Speaker.
That is good news for us, but unusual because in the previous Parliament when the then Government produced a Bill to which the Opposition objected, both Opposition parties would table an amendment and invariably the one tabled by the main Opposition party was called. Now we 837 see a bizarre situation in which the Government appear to have taken over, almost lock, stock and barrel, what was previously a Conservative Government Bill. We are therefore the only people left to point out why the Bill has serious flaws.
This morning's announcement has already been mentioned by one or two Members, so it is especially interesting that on this day of all days we find ourselves the main opponents of the Government on an important Government Bill, while the Tory party supports them.
§ Mr. Browne
In view of the hon. Gentleman's pleasure at finding himself speaking to a Liberal Democrat reasoned amendment, perhaps he would care to look at its terms and say whether he agrees with the part which says that the Bill includesmeasures which will reduce delays in, and increase the fairness of, the appeals process in social security and related areas, or which will reduce unnecessary public expenditure".
§ Mr. Rendel
Of course I agree with the full wording of our reasoned amendment, only a small part of which the hon. Gentleman has quoted. It says many other things, and I shall comment on all of them. If the hon. Gentleman had not intervened at the very start of my speech he might have had the chance to hear more of the detail of what I intend to say about the amendment.
I was pleased to hear that the Scottish nationalists intend to support our reasoned amendment and to vote on our side this evening. It has also been welcome, in a way, to have had some signs of support, albeit a little half-hearted, from some Conservative Members. It was especially interesting to hear the hon. Member for Beckenham (Mr. Merchant), who unfortunately is no longer in his place, say that there might be occasions on which speed was not verything—indeed, that speed could sometimes lead to injustice. I will say more about that in a moment.
Ironically, most of the support that we have had from Conservative Members has been along the lines that Labour has now gone well beyond what the Tories originally proposed in the Bill that they intended to bring before the House. The hon. Members for Arundel and South Downs (Mr. Flight) and for Chingford and Woodford Green (Mr. Duncan Smith) both said that they were concerned about the measures affecting the backdating of benefits because the Bill went beyond the original Conservative proposal.
I shall now pick up more or less where my hon. Friend the Member for Northavon (Mr. Webb) left off. Towards the end of his speech, he said that parts of the Bill were acceptable and helpful. That is relevant to the recent intervention by the hon. Member for Kilmarnock and Loudoun (Mr. Browne). However, my hon. Friend also pointed out that the Bill as a whole was deeply flawed. If the hon. Member for Kilmarnock and Loudoun cares to read the rest of our reasoned amendment he will see that that is our view. As has been said by other hon. Members, in the previous Parliament the Labour party would have supported that view.
§ Mr. Browne
Will the hon. Gentleman do what the hon. Member for Northavon (Mr. Webb) failed to do and read 838 the second half of the reasoned amendment rather than quoting the "flawed" document from the Law Society? Will he spell out clearly for hon. Members interested in the legislation, who may have to follow it through its course, why he thinks that it will result in more appeals going to judicial review?
§ Mr. Rendel
I shall comment on that point in a moment. I knew that it was a mistake to allow the hon. Gentleman to intervene again. He keeps asking for comments that I intend to make later anyway. Moreover, to be fair to my hon. Friend the Member for Northavon, I believe that my hon. Friend also commented on that matter to some extent, so it is unfair to criticise him for having failed to do so.
The overhaul of the system that the Secretary of State mentioned in her opening speech is welcome to us, as it will be welcome to the country. There is indeed a lot wrong with the social security system and the way in which it works at present, and it needs a full overhaul.
Of course we welcome measures to counter both fraud in the national insurance system and avoidance of national insurance contributions by companies. Of course we welcome the idea that there should be quicker decision making wherever that is possible. Clearly, justice depends to some extent not only on the right result but on that result being produced as quickly as possible. Where there can be greater efficiency through computerisation of the systems, we certainly want to support that.
However, the real question that the House has to answer is: does the Bill achieve the aims that it sets out to achieve? The aims are clearly supportable, but if the Bill does not achieve them it should not be supported.
I now come back to what was said by the hon. Member for Beckenham. There will always be the danger of some sort of pay-off between speed and fairness. Sometimes a decision taken more quickly—in haste, as it were—may have a cost in terms of fairness. A decision that is wrong cannot be "better", however quickly it is taken. It is also true that a decision taken quickly in the first instance may take longer in the end, because it may in itself be flawed. A decision may be taken by a single individual who may, as my hon. Friend said, be biased. That could cause it to be taken to a judicial review, which would delay the eventual result. If we find that as a result of the Bill the processes of judicial review are being used more frequently, that will justify what Liberal Democrats have said about it today.
Clause 13 (7) has been the subject of controversy before, as a result of the flawed Law Society briefing. To those who read the clause carefully it is clear that although it may not make unfairness obligatory, in that a tribunal is not bound to ignore aspects outside the basis of the appeal which might be relevant, it certainly makes unfairness possible.
I remember a case in my constituency in which a claimant was appealing against what he thought was a wrong decision on benefits. The tribunal to which he appealed decided that the case was correct and that the claimant should get the money. The tribunal also spotted something that neither the gentleman nor his legal advisers had spotted: he had made an earlier appeal and the decision in that case had also been flawed. As a result, he was able not only to get the benefits from that point onwards, but to have them backdated for a period of about 10 years. That resulted in a considerable lump sum payment which has made a huge difference to an individual who had been suffering great difficulties.
839 If the Bill becomes law, the intricacies of the law that enabled that man to get his money could be disregarded by a tribunal which saw its job as being more to deliver justice quickly than to deliver full justice.
§ Ms Stuart
The English system is largely adversarial, not inquisitorial, and it is not in the tradition of the English court or appeals system to consider matters that are not part of the appeal. Thatan appeal tribunal need not consider any issue that is not raised by the appealis standard practice in tribunal and court proceedings. I fail to see the deep flaw in the clause.
§ Mr. Rendel
I am sorry that the hon. Lady cannot see the flaw. Standard practice or not, I should have thought that if the system can lead to injustice she, like me, would want to oppose it.
§ Mr. Rendel
No, the hon. Gentleman has intervened plenty of times already.
I want to respond to the comments of the hon. Member for Bradford, North (Mr. Rooney) on clause 68. In answer to an intervention by my hon. Friend the Member for Northavon, he said that in an ideal world the higher rate of single-parent child benefit would not be abolished. He said that it was okay to abolish it because the amounts involved were small and would not be helping many single parents. He appeared to forget that those single parents who are not in work are not helped by the current system—only those in work get the benefit—so the abolition of the benefit will damage only those who are in work.
It does not seem very new Labour to help only those who are out of work. I thought that part of the ethos of the new Government was to try to encourage people to work. Is that not what welfare to work means? Yet clause 68 seems to do precisely the opposite. It is a silly clause from the point of view of new Labour's ethos on work and goes directly against the Government's aims. It may, as some Conservative Members said, equalise benefits for married and unmarried parents, but it does not equalise the costs incurred by different people, and especially those who are working, so it is reasonable that their benefits should not be equal.
The Secretary of State said that in future clause 70, the backdating clause, would not really matter because the Government would ensure that everyone knew about the benefits available and everyone would always claim in time. There is an illogicality in that, because if it is true that all claims will be made in time, there is no point in withdrawing backdating as it will not save any money. Indeed, it would not matter if backdating were extended, perhaps back to where it was before the previous Government began to withdraw it.
We welcome the principle that all claims should be made on time, but we are living in a fools' paradise if we assume that that will always happen. There will always be cases in which, for perfectly good reasons, people fail to make their claims in time. Sadly, many of those who slip through the net will be the recipients who most desperately need the backdating, not least because they may have fallen into debt during the period in which they 840 did not claim the benefits that were due to them. That is rough justice indeed for those for whom we should have the greatest care.
The reasoned amendment refers to slower appeals, especially where judicial reviews are involved. It refers to appeals being less fair. Quicker justice does not always mean better justice; justice depends on quick decisions, but there is no justice if the decision is wrong. It talks about discouraging lone parents from working.
Nothing that I have heard this evening has in any way dented the case that we have made. Many arguments have concentrated on the good parts of the Bill that we accept and support, but there has been little that has in any way dented our arguments about those parts that we oppose. Our arguments are supported by the Law Society, Age Concern, the Child Poverty Action Group and the National Association of Citizens Advice Bureaux. They should also be supported by the House.
§ Mr. Paul Goggins (Wythenshawe and Sale, East)
As some hon. Members may recall, 1996 was the United Nations International Year for the Eradication of Poverty. During the year, I had the privilege of chairing the newly formed United Kingdom Coalition Against Poverty, which is a 140-strong association of some well-known agencies such as Save the Children Fund and Oxfam, as well as local authorities, grass-roots organisations and pressure groups such as the Child Poverty Action Group, the Low Pay Unit and Church Action on Poverty.
I wrote to the then Secretary of State for Social Security, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), to ask whether the then Government intended to introduce a plan for reducing inequality and poverty. He replied that they had no such plans, and added:such plans are not needed in a well-developed industrialised nation such as the UK, which already has the social protection system to prevent poverty and maintain living standards".From the position that he then held, he might have thought that we had a system that prevented poverty and maintained living standards, but the reality is very different for people living at the sharp end of poverty in Britain.
Poverty trebled in the 18 years of the previous Administration. If it is not too controversial, I should like to pay tribute to the work of the hon. Member for Northavon (Mr. Webb) in tracking some of the developments in income inequality over the past few years. One in five people in Britain claim income support, and many others should claim it but are not aware or have not made their claim. In some parts of constituencies such as mine, every other household is in receipt of some form of means-tested benefit.
The experience of those who claim benefit is frequently appalling, with long and complex claim forms, lengthy delays in appeals, and inaccurate calculations. It is a bureaucratic nightmare that compounds the sense of rejection and exclusion that many claimants feel. That is where the new Government must begin their reforms—not in the never-never land of the previous Government's imagination, or under the illusion that perfection is but 841 a grasp away, but in the reality of a system that is failing the taxpayer, and, most importantly, failing those who rely on it for their income.
§ Ms Margaret Moran (Luton, South)
I am sorry that only one Conservative Member is present, because my hon. Friend was making a point about the legacy of the past 18 years. The remains of the Conservative party have made great play of saying that the Bill is inherited from them. I listened to that argument with growing irritation, because the previous Government failed over 18 years to implement any of the things that they now claim as their initiative. For example, they singularly failed to introduce the new technologies that would have increased efficiency and allowed users of the benefit system to gain their fair entitlements.
§ Mr. Deputy Speaker (Mr. Michael J. Martin)
Order. The hon. Lady must keep her interventions brief. She cannot give a speech on top of a speech.
§ Mr. Goggins
I agree with everything that my hon. Friend said.
The priority of part I is to improve the system of decision making and appeals. Several hon. Members have mentioned a number of comments made by the chief adjudication officer. The figures for adjudication decisions on most benefits have remained the same or worsened in recent years. In almost half of income support cases, there are errors of fact, law or payment. For family credit claims, the failure rate is more than one third. We cannot go on tolerating a system in which only three out of 10 disability working allowance claims and only one in five social fund funeral payments are correct.
In which other areas of life would consumers tolerate such appalling inefficiency? How long would people go on paying a garage to repair their car if there was a two in three chance that it would not work when they got on to the road? How long would people go on buying goods from a shop where there was a 50–50 chance of being sold faulty goods? But that is the reality that social security claimants face every day.
The appeals situation is dire. My hon. Friend the Member for Bradford, North (Mr. Rooney) testified to that. An adviser at Wythenshawe law centre in my constituency recently told me of a claimant she had been helping. The claimant had appealed against a decision taken in August 1995 to end her claim for incapacity benefit. The appeal, which the claimant won, was not heard until January 1997, 17 months later.
The adviser also told me that, in her experience, the average wait for appeals in income support cases was around nine months, and that nothing gets through in less than six months. Most child support cases take at least a year. The adviser also told me of a claimant who had been refused incapacity benefit because she had not made sufficient national insurance contributions. She put in a claim for severe disablement allowance, which she was eventually awarded, but it took almost 12 months to reach a determination. Those are not isolated cases: they happen in every constituency, day in, day out.
842 Not only do claimants have to 'survive on reduced incomes while their appeals are being heard, but the process adds to the considerable personal pressure that many of them are under. That leaves them with a perception of the system as unfair and arbitrary.
Concern has been expressed tonight about both the creation of a single-status decision maker and the move to single-member appeal bodies. I accept that some of those concerns were expressed out of a desire for justice and fairness in the system. However, what is fair about a system of appeals in which people who turn up with an adviser have a two in three chance of winning, people who turn up alone have a one in two chance, and people who do not turn up at all have a one in four chance? Such figures are more of a testament to human nature than to objectivity and equity.
The Secretary of State made a strong argument for flexibility on the size of appeal bodies. I agree that it is not the structure of decisions and appeals that is paramount, but their quality. Of course, staff will need training. I was pleased that my right hon. Friend said that she would set ambitious standards and performance targets, and that they would have to be met by the staff involved.
No one seems to have any problems, least of all me, with part II, which seeks to close loopholes in the national insurance system to stop people avoiding the payments that they should make and need to make to ensure that the social security system works.
I am happy to turn to the two controversial aspects of part III: the proposals to stop the addition to child benefit for lone parents and to limit the backdating of claims to one month. I agree that, taken in isolation, such proposals might be regarded by some as punitive and unfair. That is why, as several Labour Members argued, we must consider them in the wider context.
The prime purpose of the new Government, unlike the previous Administration, is not to trap people in poverty and reduce or abolish their benefits. As has been said repeatedly, our purpose is to get people off benefits and into jobs. It has been made clear that the best way to reduce pressure on the social security budget is to enable claimants to swap their dole cheques for pay cheques. That, after all, is what most unemployed claimants want.
It is also clear that the Secretary of State has been prepared to act where the reforms of the previous Government would have created the deepest misery. That is why she decided to remove the single-room rent restriction on single people over 25 who are claiming housing benefit. Many hon. Members, including me, were relieved when she made that announcement. Most lone parents want to work. That is why, with the limited finance available, the Government's priority has been to improve child care provision and enhance the support and guidance offered to lone parents who are looking for jobs.
It is worth emphasising that the best way to reduce the need to backdate is to create a more efficient, transparent and informative social security system that makes it easier for people to claim and deals with them accurately and quickly. We should not have a system that enshrines backdating as normal procedure. We also need to balance the new restriction against the earlier awards of benefits that will result from a more sophisticated and streamlined procedure.
§ Mr. Webb
Before entering the House, the hon. Gentleman long had a proud reputation, to which I pay 843 tribute, for fighting on behalf of the poor. He knows that the Bill takes money from working lone parents. I understand that there is a corresponding plan by the Government to take money from non-working lone parents through phasing out the additional lone-parent premium. Presumably the poverty figures he cited will be worsened by that. Does he support the phasing out of lone-parent premium as well?
§ Mr. Goggins
The package of measures that the Government are rapidly introducing into public policy will reduce the numbers of people living in poverty. We cannot look at policies in isolation—we must look at the overall package. We must be honest and say openly that politics is about determining priorities and the ability to balance what is desirable with what is achievable. As my hon. Friend the Member for Gravesham (Mr. Pond) said, we are not uncomfortable, as Opposition Members wanted us to be. We are not embarrassed, ashamed, sick or sorry, as the hon. Member for Perth (Ms Cunningham) maintained.
Labour fought and won an election in which we promised to adhere strictly to departmental spending limits. We told people that, although we were determined to root out waste and install new values in public policy, all our problems could not be resolved overnight. We have inherited a system groaning under the burden of bureaucracy and inefficiency, and we are determined to get people off benefit and into work. We are also committed to a far-reaching reform of the welfare state.
I believe that the British people are squarely behind us in this. Conservative Members have been saying, "This is our Bill." It is not—it is our Bill, because we won the general election. The difference between the Bill and other social security measures in the past 18 years is that it has been proposed by a Government who are determined not only to stay within budget but to improve provision. This Bill makes a start on a difficult road, but a road which will help to restore public confidence in a system which should be creating hope and security, rather than fear and poverty.
§ Kali Mountford (Colne Valley)
Any legislation must be seen in its context, and the Bill can be seen in two contexts. The first is the Government's plans to reform social security and other measures to deliver a fair and just society. The second is the experience of our constituents. I want to deal with both.
My hon. Friend the Member for Wythenshawe and Sale, East (Mr. Goggins) said that we must look at the total package, as the Bill does not exist in isolation. For example, a person who has been unemployed for more than two years will have great experience of the benefits system. He will be practised in dealing with benefits, but not in getting back to work. It is appropriate, fair and right that any Government—especially this Government, who promised as much at the general election—should deal with the problems of unemployed people. It is also right that the first priority is to deal with young people before they become practised in claiming benefit and become the sort of people who have no hope of employment.
We must also look at lifelong learning and retraining schemes, so that older people have an opportunity to get back to work, and we must deal with the economy as 844 a whole to create the conditions in which that can happen. It is also right to listen to the experiences of lone parents, the vast majority of whom tell us that what benefits them is to go back to work.
§ Mr. Letwin
How many lone parents has the hon. Lady encountered in her constituency who, as well as admirably moving off benefits into work, would like to lose £6 a week?
§ Kali Mountford
That remark demonstrates that the hon. Gentleman has no experience of the lone-parent benefit. If he had, he would know that the amount of extra child benefit given to a lone parent is taken account of in their benefit and therefore has no material effect on their life.
§ Kali Mountford
I am sorry, but I have not developed the point at all. The hon. Gentleman referred to a person going back into work having been on benefit, and taking care of children in difficult circumstances. That £6 is of no great benefit to them while they are out of work, because it is taken into account in their benefit. It is also of no great benefit to a person receiving in-work benefits. What is of benefit to a lone parent is the experience of work and the capacity to get work. The Government propose to help lone parents by providing child support, so that they can pay for child minders whom they currently cannot afford. That precludes them from entering the labour market.
§ Mr. Letwin
Perhaps I can develop the hon. Lady's point thus. I understand that the aim of the policy is that a lone parent who was previously out of work and on benefit will move back to work because of her Government's magnificent policies. That lone parent will lose the premium—a direct effect on their income. Is she aware of any lone parent in her constituency or elsewhere who would welcome that loss?
§ Kali Mountford
Not one of my constituents has ever said to me. "Develop a policy that precludes parents from going to work," but that is what the hon. Gentleman is suggesting.
The legislation is designed to simplify the process, so that people can get their benefits faster, according to a more simplified, easier format, and have better access to the benefits that they need while they are not in work, incapacitated or in some other need.
I should like to relate to the House the experience of some of my constituents. A person came to my surgery having recently made a claim for benefit on the advice of someone—the claim was later disallowed—because his son was suffering from multiple sclerosis. At the end of a lengthy process, he discovered that his family were not entitled to benefit and at that point he was given a leaflet. Once he had read it, he said, "Had I seen the leaflet in the first place, I would never have made a claim, because it would have been clear from the start that our family were not entitled to the carers benefit." He was quite happy with the decision reached, because it was clear to him that his family had never been entitled to claim. When considering the overall reform of the benefits system, 845 we need to target it precisely, to ensure that the system is more accessible, and so that people are given appropriate advice in the first place.
If any of my constituents are, unhappily, bereaved, they are given immediate advice on the benefits available to them on the day they register the death of their loved one. That welcome system of advice was introduced by the previous Government in 1995. Unfortunately, its introduction was not compulsory, but at the discretion of local social services management. I am glad that my local management took up that opportunity, which means that bereaved people get immediate access to information so that they can make appropriate claims from day one, without any delay. It also means that no inappropriate claims are made. Such measures should be considered when reviewing the benefits system, to ensure that the legislation is targeted appropriately.
Another of my constituents who is gravely ill recently had his benefits stopped after a medical examination. That person is obviously unhappy about that decision and has rightly appealed. He has already had to wait two months and it is likely that he will have to wait many more before a decision is reached. That wait and delay demonstrate to me that it is absolutely necessary to change the appeals process, and to do so quickly. We cannot wait for the overall review of the benefits system to help that person, who has already lost his car—his only means of getting about.
That person is judged 90 per cent. disabled, has 40 per cent. lung capacity and is hardly able to breathe. It is surprising that he is required to appeal to have his benefits restored. The delay in reaching a decision on his appeal has already meant that he has lost his car. According to the average time it takes to process an appeal, he will probably be deprived of benefits for a further four months, but given his particular benefit, he is likely to wait eight months before his appeal is settled. That is not good enough for any of our constituents because of the pressure that it puts on them and the families they are trying to care for, and that which it exerts on their marriages, overall income and their necessary requirements.
The complexity of the overall system has also been revealed by the treatment of another of my constituents, who is gravely ill with mesothelioma—I hope that I have pronounced that correctly.
§ Kali Mountford
I know that hon. Members will recognise the seriousness of my constituent's illness. He has already spoken to representatives of eight different social services departments. The gravity of his illness means that time is of the essence. In order to get justice, he is trying to contact thoughtful and receptive people in each department, not necessarily the most appropriate, who will at least listen to his problems. Trying to appeal within the system is a minefield. My client has gone from one hospital to another and had to try to cross-reference the information from doctors with information from the benefits service. My hon. Friend the Member for Bradford, North (Mr. Rooney) was talking about claims being sent to Blackpool, Doncaster, Wakefield and 846 goodness knows where else. My constituent has had the same experience: he has found someone in Blackpool who is being terribly helpful, but when I investigated his case, it seemed to me that he was talking to the wrong department altogether. That is the complexity that faces people.
Information has to be gone through time and again because there is no data sharing. Some Opposition Members take a somewhat Luddite approach—perhaps they would prefer clerks to use a quill. In 1975, I joined the benefits service as a young and inexperienced clerk and one of my early responsibilities was to calculate the amount of benefit due to claimants. We did it in our head, because we were not allowed to use calculators, and vast volumes were required to make the calculations, which we made as accurately as we could. Then a computer system was introduced. We all detested it because we thought that it would take away our jobs and because we were more human and more caring; but I have to admit that quickly, after initial problems—it was not the most sophisticated of computers and a ticker-tape type of computer has since been developed—the information technology meant that the system speeded up, people got decisions more quickly and the decisions were more accurate.
Since then, the computer system has been developed further. Given that the computer system introduced into the unemployment benefits service was originally designed for the social security system and was supposed to be introduced by the Conservative Government, I am somewhat surprised by some hon. Members' resistance to our using information technology to speed up the process. I am also surprised by the confusion about whether information and decisions from the computers would be acceptable. Such output has been acceptable in England for some time: the unemployment benefits system has been using computer systems and computerised decision making for many years, and the output from those computers has been used in tribunal cases. There is nothing new there then, although they do say that there is nothing new under the sun, so we should not be too surprised.
I now refer to national insurance contributions fraud. In my time in the benefits system, I have seen people whose benefit was denied, not because of anything that they had done, but because their former employer never paid over their contributions. The effect of that on people's lives is extraordinary, because of the shock of discovering that they are not entitled to the benefit that they always thought was their support and security in times of need and because of the gross fraud committed against the state. Opposition Members made great play of the fact that Labour Members have supposedly always supported the fraudster, but that has never been the case. What has, however, been wrong with the system until now is the emphasis on one type of fraud—claimant fraud. I welcome the fact that that inequality is addressed in the Bill, and I commend it to the House.
§ Mr. Stephen Hesford (Wirral, West)
I should like to address one narrow aspect of the Bill: clause 23 and its potential effect on a large number of my constituents who are pensioners—a section of the community that has not yet been mentioned in the debate.
847 Before I discuss that, however, let me say that I will take no lessons from Conservative Members as to the ownership of the Bill, because my constituents well recognise that Conservative Members' cards were marked at the general election. They were rejected—as was their approach to the Bill—at the general election, and my constituents are very pleased that these measures—[Interruption.] Conservative Members may laugh, but my constituents are very pleased indeed that these measures are now in the hands of a Labour Government.
Not for the first time in my short time in the House, the Liberal Democrats reveal schizophrenia in their approach. They welcome our welfare-to-work programme, and they have been repeatedly told tonight that the Bill is part of that programme. Do they accept the Bill, do they accept the welfare-to-work programme and do they accept that the Bill is a key part of that measure? I shall sit down if the hon. Member for Northavon (Mr. Webb) wants to intervene.
§ Mr. Webb
I am grateful to the hon. Gentleman for the invitation to intervene. If he heard my remarks earlier, quoting the Under-Secretary of State for Education and Employment, the hon. Member for Newport, East (Mr. Howarth), who is in charge of part of the Government's welfare-to-work policy, he will recall that the hon. Gentleman described the abolition of one-parent benefit as irrational as part of a welfare-to-work strategy. Therefore, although, naturally, we want people to come off welfare and into work, I am sure that the hon. Gentleman will not expect us to accept every element of the package, especially the parts that have been described by Labour Members as irrational and perverse.
§ Mr. Hesford
I return to my original point. In this country there are more than 10 million pensioners, more than half of whom are on state benefit—the ordinary state pension. Many of those pensioners rely on income support. The Bill will be key for them. There are 10,000 pensioners in that position in my constituency; only two constituencies have an electorate with a larger proportion of pensioners. Those pensioners would not thank me if I did not ask Ministers to consider clause 23 and to give an assurance about it.
I broadly support the Bill; I want to ask only one question. Subsection (1) reads:The powers conferred by this section are exercisable in relation to persons who fail to comply with information requirements.Subsection (2) reads:Regulations may provide for—
and indeed stopped.
- (a) suspending payments of a relevant benefit, in whole or in part;
- (b) the subsequent making in prescribed circumstances of any or all of the payments so suspended"—
I know from my mailbag and surgery that the most vulnerable claimants of that type of benefit are pensioners, and it would be a worry to pensioners in my constituency if they believed that they might fall foul of that part of the Bill, through no fault of their own. Many of them attend offices with friends because they cannot cope with the system.
I seek an assurance from Ministers, therefore, that when the regulations are drafted, a sympathetic view will be taken of vulnerable members of society, so that they will 848 not be—as I am sure they are not meant to be—purposely caught by the regulations. I hope that sympathy will be shown to people such as the pensioners in my constituency.
§ Mr. Simon Burns (West Chelmsford)
I warmly congratulate the hon. Member for Elmet (Mr. Burgon) on his maiden speech. Every hon. Member has to go through the torturous, nerve-racking experience of making a maiden speech, and the hon. Gentleman's speech was impressive for its fluency, wit and confidence. I am sure that the House looks forward to further contributions by the hon. Gentleman in debates not only on social security but on issues throughout the political spectrum.
This has been a fascinating debate to which to listen, for a variety of reasons. Perhaps the most ironic of those reasons, as my hon. Friends the Members for Chingford and Woodford Green (Mr. Duncan Smith) and for Beckenham (Mr. Merchant) so ably said, is that, although the Bill has been presented by the Secretary of State, supported by all her senior Cabinet colleagues, it is mainly the Bill of my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). Plagiarism is the highest form of flattery, and the right hon. Lady has certainly paid my right hon. Friend the greatest of compliments by lifting his Bill, almost lock, stock and barrel, and introducing it to the House.
I want to be conciliatory. I am not sure whether to congratulate the Secretary of State on her nerve, gall and barefaced cheek, given that, in opposition, she was on record as being totally opposed to most of the contents of the Bill. On the other hand, perhaps I should offer her my condolences: she has lost her battle for her beliefs in the past; now she has lost control of the policy-making decisions in her remit in government, and has had the views of others foisted on her.
The introduction of the Bill prompts the question: who is really in charge of social security policy? It appears that the country has a Secretary of State who is in office but not in charge. That must be a difficult—even humiliating—position for the right hon. Lady, but she is of course used to being the human shield for others. Who persuaded or coerced her to accept this Bill? In the past, she has publicly declared much of it to be anathema to her beliefs.
The answer lies partly in what has been done to the Department. The Labour party proudly told us that it was going to think the unthinkable on welfare and end welfare as we know it. It was going to design and deliver a system that would ensure a hand-up, not a hand-out. Well, the right hon. Lady has certainly had a hand-up to the Cabinet table, but she has not received any hand-outs in terms of responsibilities or decision making.
Between them, as the Bill shows, the Prime Minister and the Chancellor have ensured that the right hon. Lady is in charge of nothing. Welfare reform is split between two junior Ministers. Overshadowing her, like Banquo's ghost at the banquet, is the right hon. Member for Birkenhead (Mr. Field), who is responsible for the reform of the welfare state. He has been strangely silent, kept under wraps. On the instructions of the Minister without Portfolio, I understand, he is not allowed to lunch with journalists or speak with them in case he lets any cats out of the bag. Interestingly, after a brief interlude spent listening to the Secretary of 849 State's speech, the right hon. Gentleman scuttled out of the Chamber, never to be seen again—indeed, he is still not here. As was said of a former Conservative Prime Minister just before the war, the right hon. Gentleman is an air-raid shelter for the Government's policies.
Meanwhile, reform of the pension system resides with the junior Under-Secretary. Perhaps most galling of all to the right hon. Lady, reform of the tax and benefit systems has been awarded not to a Minister but to a friend of the Chancellor, the business man, Martin Taylor. On welfare to work, the Chancellor has also stepped in and appointed another crony of his, Sir Peter Davis, to head the new task force—including the scheme for lone mothers so eagerly talked about by the right hon. Lady at the time of the Budget.
Sadly for the Secretary of State, the truth is that she can talk about these policies and initiatives as much as she likes, but she cannot take charge of them—
§ Mr. Burns
I assure the right hon. Lady that it is not because she is a woman: it is because of her brain power. Isolated and humiliated, she swallows her pride while the policy-formulating and decision-making processes are taken out of her hands and Bills such as this one are foisted on her—despite a litany of quotations in which she expressed her opposition to many of the proposals in it.
Despite the Secretary of State's previous misgivings, the Bill follows a new, well-established pattern from new Labour: say one thing, do another. It is becoming a well-established, cynical performance. We have seen it over pensions, we have seen it over taxes, with 17 tax rises in the Budget earlier in this month, and we have seen it over asylum seekers. Now, we are seeing it over the Social Security Bill.
The Bill's overall aim is to improve efficiency in the delivery of services by simplifying decision making and appeals and to save taxpayers' money through a variety of measures. My right hon. Friend the Member for Hitchin and Harpenden envisaged that the Bill would contribute towards cutting the Department's administrative costs by at least 25 per cent. when he foreshadowed it at the beginning of last year.
The then Opposition, who were motivated by a cynical and ruthless policy of attacking everything that the then Government did, were seriously caught out in attacking the proposals when a letter from the Minister for Employment, Welfare to Work and Disability Rights, the then shadow Chief Secretary to the Treasury, to the Secretary of State for Culture, Media and Sport, the then shadow Secretary of State for Social Security, was leaked, suggesting that, despite the public rhetoric of the Labour party, privately it believed that not only were the savings achievable and feasible but that it was actually proposing to pursue a similar policy.
§ Mr. Burns
As the right hon. Gentleman says, that is right.
850 As The Daily Telegraph said, which I am grateful the right hon. Gentleman has confirmed:An Opposition attack on Government cuts in welfare backfired yesterday with the disclosure that Labour was contemplating similar efficiency savings".The Times was probably even more explicit when it reported:Labour was accused of breathtaking hypocrisy yesterday after a shadow Treasury Minister privately suggested that the proposed £1 billion cuts in social security spending were 'perfectly feasible'.The cynicism of Labour's position has been confirmed by the Bill, which is part of the cost-saving exercise.
That is not the only example of Labour's cynical disregard of the facts. Let us take clause 35, for example. The clause allows regulations to be made that will permit a local authority to suspend payment of housing benefit and council tax in prescribed circumstances, particularly where entitlement is in doubt, pending resolution of a query or appeal. The official Opposition do not oppose that, because we were going to do it if we won the election. What does stick in our throats, however, is the fact that the principle of suspension of benefit was attacked by the Labour party when in opposition.
In opposition, only a year ago, the Secretary of State's predecessor, now the Secretary of State for Culture, Media and Sport, attacked the suspension of benefits when he said that themeasures affect the genuine and the non-genuine alike".—[Official Report, 24 June 1996; Vol. 280, c. 39.]
For good measure, he added that the principle was "inhumane and unjust".
Possibly the Secretary of State's greatest problem and the greatest swallowing of humble pie comes with clause 68, which is probably better known as the clause that dare not speak its name. In the right hon. Lady's "Dear Colleague" briefing note for Members of Parliament of 10 July, she mysteriously made no mention of the clause. In true news management style, no doubt under the guiding hand of the Minister without Portfolio, the letter extolled the virtues of the Bill, but nowhere in it was clause 68 mentioned—no doubt because, despite the public comments of the hon. Members for Brent, East (Mr. Livingstone) and for Birmingham, Selly Oak (Dr. Jones), the Government wanted to try to hide in a 78-clause, seven-schedule Bill the proposal which is such anathema to true Labour.
Clause 68 proposes to set out the framework for implementing the previous Government's policy to reduce the rate of child benefit for lone parents to the level for couples. It is a move towards an even-handed treatment of one and two-parent families by reducing the additional child benefit of just over £6 to the same level as that paid to a couple with a child.
When this was announced in the Budget in November 1996, the right hon. Member for Camberwell and Peckham (Ms Harman), not one to miss a flight of hyperbole, told the House that the cut in benefit to lone mothersis not fair to the families of women who bring up children on their own. They will be worse off. If that is what he thinks is a family policy, he does not understand how families work."—[Official Report, 28 November 1996; Vol. 286, c. 501.]In January this year, when pressed on that issue by Polly Toynbee of The Independent, the redoubtable right hon. Lady said—
§ Dr. Gibson
I thank the hon. Gentleman for allowing me to interrupt his diatribe. Which party allowed people 851 to be paid in Archie Norman-Asda vouchers? Which party introduced legislation that allowed people to be denied benefit? The hon. Gentleman talks of our cynicism, but we throw it back at him: the Conservatives are the cynics, not us.
§ Mr. Burns
I find that intervention extraordinary. If the hon. Gentleman were to waste time studying the legislation, I suspect that he would not find any measures of that nature. Such things happen all too often, regardless of the Government of the day. I suspect that some sharp cookie looked for a way of avoiding national insurance or tax, and his attempt was discovered. To her credit, the right hon. Lady has announced that she will amend the legislation and mop it up. In the circumstances, that is probably the right way to proceed. [Interruption.]
The Minister for Welfare Reform is trying to cause trouble and mischief. The allegation was not that Asda had come up with this wheeze, but that some bright person had bought Asda tokens to get around the tax and national insurance regimes. We cannot blame Asda for that—just as we could not blame the national book token scheme if people were to abuse it. The right hon. Gentleman should shut up and listen to the speech because, despite his knowledge, he might learn something.
As I said before I was interrupted, the right hon. Lady was interviewed by Polly Toynbee in January this year. In that article, Ms Toynbee writes:So, will she or won't she"—the right hon. Lady—introduce Tory legislation to cut single parents' benefits? 'No, of course not', she says when asked.So spoke the champion of lone mothers, the right hon. Member for Camberwell and Peckham. What did she say this month? In a recent press release, her mouth awash with humble pie, she declared:
Withdrawal of entitlement to lone parent family premiums in income support for new claimants will take effect in April 1998. Withdrawal of the lone parent premium rate of child benefit is subject to necessary legislation and is now expected to come into effect from June 1998.The right hon. Lady can huff and puff as much as she likes, but she is hoist on her own petard by her previous statements. No amount of bluster and waffle can disguise the fact that she has been totally overruled, and, with no shame or pride, she is happy to implement her master's instructions.
§ Mr. Burns
The right hon. Lady's right hon. Friend the Prime Minister, who has protected her so often in the past. As she knows better than most, he has been particularly good to her in the past 18 months or so and rescued her from several scrapes. I suspect that the right hon. Lady owes him one, and will do whatever he bids.
§ Mr. Deputy Speaker
Order. The hon. Gentleman is ranging wide in his remarks. While I am on my feet, I must say that some hon. Members on the Back Bench have been extremely noisy during the debate. I ask them to be silent.
§ Mr. Burns
On clause 68, it is no wonder that colleagues of the right hon. Lady, for example, the hon. Members for 852 Brent, East and for Selly Oak, are seething and prepared to take a principled stand for what they believe in—not only on the primary legislation but on the secondary legislation which will emanate from it.
The changes to child benefit will require secondary legislation. I suspect that old, true Labour will stick by its principles and make its views known when it has an opportunity to demonstrate on the Floor of the House its commitment to what it believes in.
I shall be grateful if the Under-Secretary who is winding up will tell the House when he expects regulations to cut the child benefit element of income support to be laid before the House.
I do not want to add to the Secretary of State's woes, but I should like, as it has come up once or twice during the debate, to raise the issue of clause 70, about which my hon. Friend the Member for West Dorset (Mr. Letwin) spoke so eloquently. It is a nasty, vindictive little clause which was not proposed by my right hon. Friend the Member for Hitchin and Harpenden.
Clause 70 introduces a new time restriction for backdating benefit claims from the current three months to one month. It was not—as one would expect—in the right hon. Lady's "Dear Colleague" letter of 10 July, for the simple reason that it attacks pensioners and the most frail and vulnerable in society. Although I accept that a three-month time scale for claiming benefits is not unreasonable, restricting it to one month will devastate tens of thousands of vulnerable people. As the National Association of Citizens Advice Bureaux has pointed out, it will mean, for example, that widows suffering the shock of bereavement could have only a month to make a claim for widow's benefit. How can the Government justify imposing such an intrusive requirement on widows in their grief?
I must confess that I am surprised that clause 70 is in the Bill, because the hon. Member for Manchester, Withington (Mr. Bradley), who is now an Under—Secretary of State for Social Security, has in the past criticised the previous Government for not ensuring that there is a high take-up of benefits, and this measure will reduce benefit entitlement and save £57 million from the most needy in our society. In the light of clause 70, previous comments by the hon. Gentleman are particularly hollow. He said:
A high take-up is essential to ensure that the poorest in our society receive the meagre income to which they are entitled through the benefits system."—[Official Report, 16 July 1993; Vol. 228, c. 1258.]As I said at the beginning, the Bill is primarily that of my right hon. Friend the Member for Hitchin and Harpenden. For that reason we will not oppose it tonight, but we reserve our position on a number of issues in Committee, not least clause 70, and we will want to study the fine print carefully.
The Bill is not the Secretary of State's finest hour. In her heart of hearts, she knows that her past rhetoric in opposing many fundamental parts of the Bill shows her today to be a pawn of her right hon. Friend the Prime Minister. Her abandonment of her so-called beliefs, and her inability to fight for her beliefs, will in the coming months haunt her in the eyes of her civil servants, the public and her colleagues. The Bill has highlighted her political impotence.
§ The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley)
This has been a lively and, generally, well-informed debate on an important Bill. It has shown that many hon. Members agree that welfare reform should be—and is—high on the national agenda.
Creating a modern, active welfare state is at the heart of the Government's commitment to tackle poverty and dependency, and to strengthen community and family life. For far too long the welfare system has given claimants a hand-out rather than a hand-up. It has ignored their aspirations and responsibilities. It has paid the growing costs of failure, rather than investing in success.
We aim to extend opportunities to all so that no one is excluded and everyone plays a part; to help people to take responsibility for themselves and their families; to rebuild a strong and cohesive society. We are already offering a new deal for the young and long-term unemployed and giving practical help to lone mothers who want to work. We are developing a national child care strategy and conducting a wide-ranging review of provision for retirement.
There are many challenges ahead as we set about reshaping the welfare state for the 21st century. The Bill lays firm foundations for the future. It will help to create an active, secure and integrated system of welfare delivery. It tackles the outdated, cumbersome procedures which prevent customers from obtaining the service that they deserve. It will ensure that all employers meet their responsibilities to pay national insurance contributions and makes it easier for them to do so. It shows that we are committed to doing all that while living within budget, even if that means being prepared to take tough decisions.
I congratulate my hon. Friend the Member for Elmet (Mr. Burgon) on his maiden speech, its context and humour. I also congratulate him on supporting the Bill tonight, so ensuring that his constituents have a modern, fair and efficient social security system. I welcome his support for the enhanced use of information technology in achieving that end. He paid a generous tribute to his predecessor which was clearly welcome in the House. However, he was on rather weaker ground when he was discussing the fortunes of Leeds United football club. As a Manchester Member of Parliament, I have every confidence that the championship will return to its rightful and spiritual home in 1998.
I am pleased that the hon. Member for Northavon (Mr. Webb) readily accepted the flaw in the reasoned amendment in the name of the Liberal Democrats. We welcome that. I listened carefully to the hon. Member for Newbury (Mr. Rendel). The amendment says that the Billwill"—I emphasise that—will result in a slower appeals process, with more appeals being the subject of judicial review".The hon. Member for Newbury used the word "could" rather than "will". We need to be clear what the Liberal Democrats are saying. Are they saying what will happen as a matter of certainty or are they merely speculating? It is our strong contention that the issues that they have raised are addressed in the Bill.
First, the reasoned amendment says that the Bill will result in a slower appeals process and more judicial reviews. We dispute that. We are retaining an independent 854 appeals system and current rights will be protected. There is no reason to suppose that more people will have cause to seek judicial review. My right hon. Friend the Secretary of State is introducing a new right of appeal on contribution questions. Her proposals will make appeals quicker, not slower. Better explanations, the ability to correct decisions and the fast-tracking of hopeless appeals will result in the freeing-up of the tribunals' time, enabling them to deal with cases with genuine grounds for appeal in a quicker and, more importantly, more considered way. The separation of judicial and administrative functions will result in better organisation and control, which will also reduce waiting times, without affecting judicial independence.
The amendment says that the appeals process will be less fair. We dispute that. My right hon. Friend the Secretary of State has maintained the right of appeal to an independent tribunal and tribunals will have the right expertise to deal with the type of cases before them. A legally qualified chairman is not necessary if no legal point is at issue. We want to ensure efficiency and fairness in the system.
The amendment goes on to say that the Bill will discourage lone parents from working. My right hon. Friend the Secretary of State made it clear that our priority is to help lone parents into work and many hon. Members today have reinforced our commitment to ensure that that happens. We shall invest in practical measures to get them back to work, to help them with job shares, to help them to find child care, to build their confidence and motivation and to develop the appropriate skills to find work.
The new deal for lone parents was launched yesterday. I launched it in the Halesowen office in the north Worcestershire area, and I was amazed at the enthusiasm, commitment and overwhelming desire of the staff and public to ensure that the new deal works for lone parents. Many lone parents have contacted that office: they want an interview as soon as possible so that they can have a personal adviser to help them get work. That is our priority, and that is what we are committed to achieving through these measures.
§ Mr. Rendel
I fully accept the hon. Gentleman's enthusiasm for the new deal for lone parents, but that has nothing to do with the Bill. Does he accept that the measures in the Bill are a discouragement to work?
§ Mr. Bradley
The Bill has everything to do with the issues that I am raising, because we are determined to ensure that lone parents in work are £50 a week better off. The family credit measures will ensure that appropriate child care facilities are available to them.
Reference has been made to sharing information and to the use of computers. We are talking not about big brother, but about a sensible approach to ensuring that information technology is used in the future to give customers a better service. My hon. Friends the Members for Birmingham, Edgbaston (Ms Stuart) and for Colne Valley (Kali Mountford) made excellent points about the use of technology. I stress that the Secretary of State is accountable for every decision, whether it is made by staff or computers. What is important is not machines and processes, but responsibility and accountability for the outcomes of those processes.
Hon. Members have suggested that transferring all decision making to the Secretary of State will mean a loss of independence. I assure the House that decision makers 855 will still be impartial, and will decide cases according to the facts and the law. The law as it stands makes deciding customers' claims complicated and time consuming. The Bill will create a simple, transparent system, which will be better for the staff who run it and certainly better for the customers who use it.
My hon. Friend the Member for Kilmarnock and Loudoun (Mr. Browne) referred to the chief executive's report. The chief executive will produce a report and provide comprehensive monitoring of the system. The report will take account of the views of the public and will meet the criteria laid down by Ministers. We want the new appeals system to be monitored effectively. Monitoring reports will be submitted to Ministers and the public. The National Audit Office will continue to have a role in monitoring and reporting to Parliament on the agency's performance. In addition, the president of the tribunal service will report on the standard of decision making in cases that go to appeal. We are seeking comprehensive ways of monitoring the system in the future to ensure that it is accountable to Parliament.
Many hon. Members have raised the issue of backdating. That has been dealt with in the debate, particularly in the speeches of my hon. Friends the Members for Wythenshawe and Sale, East (Mr. Goggins) and for Colne Valley. I do not retract one word of what I said about ensuring that claimants receive their entitlement through a proper take-up of benefits. That is totally different from backdating. As my hon. Friend the Member for Kilmarnock and Loudoun rightly pointed out, clause 70(2)(b) contains hardship provisions, and we shall explore that further in Committee in due course.
§ Mr. Webb
The hon. Member for Birmingham, Edgbaston (Ms Stuart) spoke warmly about the benefits helpline, which the previous Government abolished. Given that the Government are now penalising people who are ignorant of the benefits system, will the hon. Gentleman reinstate that helpline as a quid pro quo?
§ Mr. Bradley
As the hon. Gentleman will know, we are working within departmental budgets, but we want to ensure the creation of a fast, efficient and effective system—which we believe that the Bill will deliver—and we shall consider all the ways in which that can operate in practice.
The provisions relating to national insurance contributions may not have been given enough prominence in the debate, although they were raised by my hon. Friends the Members for Corby (Mr. Hope) and for Edgbaston. The measures in the Bill, and the further changes announced today by my right hon. Friend the Secretary of State, close loopholes in the law that have allowed some employers to avoid paying their share. Those moves will ensure that contributions are paid on non-cash payments under restricted covenants, and on payments in vouchers. That last provision will be known in future as the Asda amendment.
To deal with minor non-compliance, the Bill will replace the current outdated criminal offence with a modern and effective cash penalty regime, aligning the system with the Inland Revenue's penalty regime and giving the Contributions Agency similar powers to take distraint action to recover debts.
National insurance fraud is a serious offence. The Bill introduces tough new criminal penalties for fraudulent evasion, but it will also actively help businesses by 856 ensuring that certain taxes on benefits and expenses are dealt with in the same way by the tax and national insurance systems. I hope that hon. Members in all parties will welcome those measures. As many hon. Members have pointed out in the debate, the House cannot condone fraud, wherever it may occur. We are determined to root it out, and to use all the measures in the Bill—particularly those relating to information sharing—to ensure that it can be weeded out at the earliest opportunity.
Throughout the debate, Back Benchers have made excellent speeches. I especially commend the speeches of my hon. Friends the Members for Bradford, North (Mr. Rooney), for Kilmarnock and Loudoun and for Corby, as well as the wide-ranging speech of my hon. Friend the Member for Gravesham (Mr. Pond) and the speech of my hon. Friend the Member for Edgbaston. All those hon. Members can bring a wealth of experience to debates on the Bill. I also commend my hon. Friend the Member for Wythenshawe and Sale, East—whose constituency is next to mine—for the expertise that he has gained from his work with Church Action on Poverty. He spoke with understanding and insight about what happens in the real world—about people trying to claim benefits and becoming bogged down in a mass of regulations, appeals and decisions that they do not understand. That, I think, is what the Bill is all about.
My hon. Friends the Members for Colne Valley and for Wirral, West (Mr. Hesford) emphasised the fact that the aim of the Bill was to provide a better service and an understandable system, and to ensure that people received their rights and entitlements at the point at which they needed them. We want to make it unnecessary for those people to go through the appeals system and a labyrinth of decision making. I am sure that many Labour Members who have spoken will prove to be very good members of the Standing Committee, and that we shall have excellent debates in Committee on all the matters that have been raised.
My hon. Friend the Member for Wirral, West referred to clause 23. We shall consider the clause in Committee, and I am sure that we shall be able to allay his fears then.
The Bill tackles fundamental problems in welfare delivery and national insurance security to set us on the road to a modern, open and efficient social security system. We have to put the whole Bill in the context of our general welfare reform programme. It would be wrong for the House to believe that the Bill is the beginning and the end of that process. It is a building block along that path and we are determined, in the months and years to come, to use it.
Tonight, we are setting out a framework for transforming the delivery of welfare. The Bill radically overhauls complex legal arrangements that have grown up piecemeal over the years. It will enable the Department to develop modern business processes and to make better use of modern information technology, making significant strides towards a streamlined and integrated service. It will secure the national insurance system by reinforcing employers' responsibility to make fair contributions. It will help all employers by cutting red tape, while cracking down on serious cases of fraud. It will protect the integrity of the system by closing loopholes used for avoidance and improve consistency by aligning certain tax and national insurance rules.
857 In our manifesto, we made a commitment to live within spending limits. The Bill makes provision for changes announced in the Budget that enable us to deliver on that. Our spending priorities reflect our commitment to use limited resources where they are most effective and to provide active help to people on benefit. Our decision not to extend the single-room rent to people aged over 25 was clearly a step in that direction and a change from the policy of the previous Government. However, in taking that decision, we had to take other tough decisions. Many hon. Members on both sides of the House have welcomed the decision, so they have to accept, within the spending limits, the consequences of that action.
With the Bill, we shall continue to pursue our new active approach to social security. We want to build a modern welfare state that supports work, savings and honesty and that helps people to meet their responsibilities. To achieve that, we need a system that is straightforward, efficient, open, simpler for the staff who run it and clearer for the customers who use it. I commend the Bill to the House.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 47, Noes 304.860
|Division No. 64]||[9.57 pm|
|Allan, Richard (Shef'ld Hallam)||Jones, Nigel (Cheltenham)|
|Ashdown, Rt Hon Paddy||Keetch, Paul|
|Baker, Norman||Kennedy, Charles (Ross Skye)|
|Ballard, Mrs Jackie||Kirkwood, Archy|
|Berth, Rt Hon A J||Maclennan, Robert|
|Bell, Martin (Tatton)||Michie, Mrs Ray (Argyll & Bute)|
|Brand, Dr Peter||Moore, Michael|
|Breed, Colin||Morgan, Alasdair (Galloway)|
|Bruce, Malcolm (Gordon)||Norris, Dan|
|Burnett, John||Oaten, Mark|
|Campbell, Menzies (NE Fife)||Öpik, Lembit|
|Chidgey, David||Rendel, David|
|Cotter, Brian||Russell, Bob (Colchester)|
|Cunningham, Ms Roseanna (Perth)||Sanders, Adrian|
|Smith, Sir Robert (W Ab'd'ns)|
|Davey, Edward (Kingston)||Taylor, Matthew (Truro)|
|Ewing, Mrs Margaret||Tonge, Dr Jenny|
|Fearn, Ronnie||Wallace, James|
|Foster, Don (Bath)||Webb, Professor Steve|
|George, Andrew (St Ives)||Welsh, Andrew|
|Gorrie, Donald||Wigley, Dafydd|
|Hancock, Mike||Willis, Phil|
|Harris, Dr Evan|
|Harvey, Nick||Tellers for the Ayes:|
|Heath, David (Somerton & Frome)||Mr. Paul Tyler and|
|Hughes, Simon (Southwark N)||Mr. Andrew Stunell.|
|Abbott, Ms Diane||Beard, Nigel|
|Adams, Mrs Irene (Paisley N)||Beckett, Rt Hon Mrs Margaret|
|Ainsworth, Robert (Cov'try NE)||Begg, Miss Anne (Aberd'n S)|
|Allen, Graham (Nottingham N)||Beggs, Roy (E Antrim)|
|Anderson, Janet (Rossendale)||Benn, Rt Hon Tony|
|Ashton, Joe||Bennett, Andrew F|
|Atherton, Ms Candy||Benton, Joe|
|Atkins, Charlotte||Berry, Roger|
|Austin, John||Blackman, Liz|
|Banks, Tony||Blears, Ms Hazel|
|Barnes, Harry||Blizzard, Bob|
|Barron, Kevin||Blunkett, Rt Hon David|
|Battle, John||Boateng, Paul|
|Bayley, Hugh||Borrow, David|
|Bradley, Keith (Withington)||Foster, Michael Jabez (Hastings)|
|Bradley, Peter (The Wrekin)||Foster, Michael John (Worcester)|
|Brown, Rt Hon Nick (Newcastle E)||Foulkes, George|
|Brown, Russell (Dumfries)||Galbraith, Sam|
|Browne, Desmond (Kilmarnock)||Gardiner, Barry|
|Buck, Ms Karen||George, Bruce (Walsall S)|
|Burden, Richard||Gerrard, Neil|
|Burgon, Colin||Gibson, Dr Ian|
|Byers, Stephen||Godman, Dr Norman A|
|Caborn, Richard||Goggins, Paul|
|Campbell, Alan (Tynemouth)||Golding, Mrs Llin|
|Campbell, Mrs Anne (C'bridge)||Gordon, Mrs Eileen|
|Campbell—Savours, Dale||Graham, Thomas|
|Canavan, Dennis||Griffiths, Nigel (Edinburgh S)|
|Cann, Jamie||Grocott, Bruce|
|Casale, Roger||Grogan, John|
|Caton, Martin||Gunnell, John|
|Cawsey, Ian||Hall, Mike (Weaver Vale)|
|Chapman, Ben (Wirral S)||Hall, Patrick (Bedford)|
|Chaytor, David||Hamilton, Fabian (Leeds NE)|
|Chisholm, Malcolm||Hanson, David|
|Church, Ms Judith||Harman, Rt Hon Ms Harriet|
|Clapham, Michael||Heal, Mrs Sylvia|
|Clark, Rt Hon Dr David (S Shields)||Healey, John|
|Clarke, Charles (Norwich S)||Hepburn, Stephen|
|Clarke, Eric (Midlothian)||Heppell, John|
|Clarke, Rt Hon Tom (Coatbridge)||Hesford, Stephen|
|Clarke, Tony (Northampton S)||Hill, Keith|
|Clelland, David||Hinchliffe, David|
|Coffey, Ms Ann||Hoey, Kate|
|Cohen, Harry||Home Robertson, John|
|Coleman, Iain (Hammersmith)||Hood, Jimmy|
|Colman, Tony (Putney)||Hoon, Geoffrey|
|Connarty, Michael||Hope, Phil|
|Cook, Frank (Stockton N)||Hopkins, Kelvin|
|Cooper, Yvette||Howarth, George (Knowsley N)|
|Corbett, Robin||Howells, Dr Kim|
|Corston, Ms Jean||Hoyle, Lindsay|
|Cousins, Jim||Hughes, Ms Beverley (Stretford)|
|Cox, Tom||Hughes, Kevin (Doncaster N)|
|Cranston, Ross||Humble, Mrs Joan|
|Crausby, David||Hutton, John|
|Cryer, Mrs Ann (Keighley)||Iddon, Dr Brian|
|Cummings, John||Illsley, Eric|
|Cunningham, Jim (Cov'try S)||Jackson, Ms Glenda (Hampstead)|
|Dalyell, Tam||Jackson, Helen (Hillsborough)|
|Darling, Rt Hon Alistair||Jenkins, Brian (Tamworth)|
|Darvill, Keith||Johnson, Alan (Hull W & Hessle)|
|Davey, Valerie (Bristol W)||Johnson, Miss Melanie (Welwyn Hatfield)|
|Davies, Rt Hon Denzil (Llanelli)||Jones, Barry (Alyn & Deeside)|
|Davies, Geraint (Croydon C)||Jones, Ms Fiona (Newark)|
|Davis, Terry (B'ham Hodge H)||Jones, Helen (Warrington N)|
|Dawson, Hilton||Jones, Ms Jenny (Wolverh'ton SW)|
|Dean, Mrs Janet|
|Denham, John||Jowell, Ms Tessa|
|Dewar, Rt Hon Donald||Kaufman, Rt Hon Gerald|
|Dobbin, Jim||Keeble, Ms Sally|
|Doran, Frank||Keen, Alan (Feltham & Heston)|
|Dowd, Jim||Keen, Mrs Ann (Brentford)|
|Drew, David||Kennedy, Jane (Wavertree)|
|Drown, Ms Julia||Kilfoyle, Peter|
|Eagle, Angela (Wallasey)||King, Andy (Rugby & Kenilworth)|
|Eagle, Maria (L'pool Garston)||Kumar, Dr Ashok|
|Edwards, Huw||Laxton, Bob|
|Ellman, Ms Louise||Lepper, David|
|Ennis, Jeff||Leslie, Christopher|
|Etherington, Bill||Levitt, Tom|
|Field, Rt Hon Frank||Liddell, Mrs Helen|
|Fisher, Mark||Livingstone, Ken|
|Fitzpatrick, Jim||Lock, David|
|Fitzsimons, Lorna||Love, Andrew|
|Flint, Caroline||McAllion, John|
|Flynn, Paul||McAvoy, Thomas|
|Forsythe, Clifford||McCartney, Ian (Makerfield)|
|Foster, Rt Hon Derek||Macdonald, Calum|
|McDonnell, John||Raynsford, Nick|
|McFall, John||Reed, Andrew (Loughborough)|
|McGuire, Mrs Anne||Reid, Dr John (Hamilton N)|
|McKenna, Ms Rosemary||Robertson, Rt Hon George (Hamilton S)|
|McNulty, Tony||Robinson, Geoffrey (Cov'try NW)|
|MacShane, Denis||Roche, Mrs Barbara|
|Mactaggart, Fiona||Rogers, Allan|
|McWalter, Tony||Rooker, Jeff|
|McWilliam, John||Rooney, Terry|
|Mahon, Mrs Alice||Rowlands, Ted|
|Mallaber, Judy||Roy, Frank|
|Mandelson, Peter||Ruddock, Ms Joan|
|Marek, Dr John||Russell, Ms Christine (Chester)|
|Marsden, Gordon (Blackpool S)||Ryan, Ms Joan|
|Marsden, Paul (Shrewsbury)||Salter, Martin|
|Marshall, David (Shettleston)||Savidge, Malcolm|
|Marshall, Jim (Leicester S)||Sawford, Phil|
|Martlew, Eric||Sedgemore, Brian|
|Maxton, John||Shaw, Jonathan|
|Meacher, Rt Hon Michael||Sheldon, Rt Hon Robert|
|Meale, Alan||Shipley, Ms Debra|
|Michael, Alun||Short, Rt Hon Clare|
|Michie, Bill (Shef'ld Heeley)||Singh, Marsha|
|Milburn, Alan||Skinner, Dennis|
|Miller, Andrew||Smith, Rt Hon Andrew (Oxford E)|
|Mitchell, Austin||Smith, Angela (Basildon)|
|Moffatt, Laura||Smith, Rt Hon Chris (Islington S)|
|Moonie, Dr Lewis||Smith, John (Glamorgan)|
|Moran, Ms Margaret||Smyth, Rev Martin (Belfast S)|
|Morley, Elliot||Soley, Clive|
|Morris, Ms Estelle (B'ham Yardley)||Spellar, John|
|Mountford, Kali||Squire, Ms Rachel|
|Mudie, George||Steinberg, Gerry|
|Mullin, Chris||Stevenson, George|
|Murphy, Denis (Wansbeck)||Stewart, David (Inverness E)|
|Murphy, Jim (Eastwood)||Stinchcombe, Paul|
|Naysmith, Dr Doug||Stott, Roger|
|O'Brien, Bill (Normanton)||Strang, Rt Hon Dr Gavin|
|O'Brien, Mike (N Warks)||Straw, Rt Hon Jack|
|Olner, Bill||Stringer, Graham|
|O'Neill, Martin||Stuart, Ms Gisela (Edgbaston)|
|Osborne, Mrs Sandra||Sutcliffe, Gerry|
|Perham, Ms Linda||Taylor, Ms Dari (Stockton S)|
|Pickthall, Colin||Taylor, David (NW Leics)|
|Pike, Peter L||Tipping, Paddy|
|Pollard, Kerry||Todd, Mark|
|Pond, Chris||Touhig, Don|
|Pope, Greg||Trickett, Jon|
|Powell, Sir Raymond||Turner, Dennis (Wolverh'ton SE)|
|Prentice, Ms Bridget (Lewisham E)||Turner, Desmond (Kemptown)|
|Prentice, Gordon (Pendle)||Turner, Dr George (NW Norfolk)|
|Prescott, Rt Hon John||Twigg, Derek (Halton)|
|Primarolo, Dawn||Vis, Dr Rudi|
|Prosser, Gwyn||Ward, Ms Claire|
|Purchase, Ken||Watts, David|
|Quin, Ms Joyce||Whitehead, Dr Alan|
|Quinn, Lawrie (Scarborough)||Williams, Rt Hon Alan (Swansea W)|
|Williams, Alan W (E Carmarthen)||Wray, James|
|Wills, Michael||Wright, Dr Tony (Cannock)|
|Winnick, David||Wright, Tony D (Gt Yarmouth)|
|Winterton, Ms Rosie (Doncaster C)|
|Wise, Audrey||Tellers for the Noes:|
|Wood, Mike||Mr. Clive Betts and|
|Worthington, Tony||Mr. David Jamieson.|
§ Question accordingly negatived.
§ Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading), and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee.