Engagements (Hansard, 14 January 1998)

§ Q1. Mr. Sanders
If he will list his official engagements for Wednesday 14 January.

§ The Prime Minister (Mr. Tony Blair)
This morning, I had meetings with ministerial colleagues and others. Later today I shall have further such meetings.

§ Mr. Sanders
On the occasion of the first Prime Minister's Question Time after the recess, I wish the Prime Minister a very happy new year.
The Secretary of State for Education and Employment recently said that means-testing creates disincentives to work, savings and honesty. Does the Prime Minister agree?

§ The Prime Minister
My right hon. Friend said quite rightly that we must make sure that any reforms that we introduce help those who are genuinely in need. I can 342 assure the hon. Gentleman that that is precisely what we intend to do. I believe that there is widespread support, indeed in his own political party as well, for the idea that it is time to modernise and update the welfare state for the 21st century.

§ Mr. Grant
Does my right hon. Friend agree that the Federal Government of the United States of America took a very big step when they decided that the Oklahoma city bombers could not be tried in Oklahoma city because they may not get justice there? If so, will he ask his friend, Bill Clinton, whether he would apply the same principle to the Lockerbie bombers, so that they can be tried in a neutral country?

§ The Prime Minister
I entirely understand why people want to make sure that a trial of the alleged Lockerbie bombers takes place. We want to ensure that that happens and I understand and, in particular, sympathise with the desire of the families of the victims of the Lockerbie bombing to see justice done, but nothing must be done that casts any doubt or aspersions on the validity of Scottish courts and Scottish justice. In the end, the ball is firmly in the Libyan court. Everybody knows that those two people should be brought to trial and what stands in the way of that is not the Americans or the British, but the Libyan Government.

§ Mr. Hague
The Prime Minister has already mentioned the welfare state. Does he believe that means tests penalise work, tax savings, and place a penalty on honesty"?

§ The Prime Minister
That is actually the question that I have just answered, but I say again that I think that what is important is to ensure that any reform of the welfare state helps those people who are genuinely in need. We need that reform of welfare; we need it because, at the moment, spending is going up but poverty is going up. That is plainly an unacceptable situation and one which we want to change. We will look at the issues of means testing, insurance benefits and categorical benefits within that context.

§ Mr. Hague
The Prime Minister will often be asked that question if he does not answer it. It was his Minister for Welfare Reform who said that
means tests penalise work, tax savings, and place a penalty on honesty". This week, we have heard the Secretary of State for Social Security saying that she plans more means testing. Which of those approaches represents the policy of the Government? Who is now in charge of policy at the Department of Social Security?

§ The Prime Minister
First, my right hon. Friend did not say that. Secondly, what is important in relation to means testing benefits or anything else is that we try to make sure that we design the right system for the future. It is not sensible to speculate on the outcome of the review of that system until it is complete. When it is complete, people will have ample opportunity to discuss the proposals that we have made. The plain fact is that the welfare system is not working at present. It is the 343 system that we inherited from the right hon. Gentleman's Government—his Government failed, and I want my Government to succeed.

§ Mr. Hague
The Secretary of State for Social Security did talk about the extension of means testing. Two Ministers are engaged in warfare over welfare and everybody knows it—everybody in Whitehall knows it and everybody in Westminster knows it. It is as good a well-kept secret as a grudge borne by the Chancellor—[Interruption.]—in fact, the Prime Minister could ask the Chief Whip to report on it and then it could be properly opened up to everybody. Has he seen the extraordinary explanation by DSS officials of what the Secretary of State said? They said that she had used a spurious example, saying: It's a spurious figure, but it's one she uses to make her point. Like a lot of figures we give, it doesn't reflect real life. Does not the Prime Minister agree that the idea that those two Ministers in the Department of Social Security are working successfully together does not reflect real life? Which of their approaches represents the Government's philosophy? Who is in charge at the DSS?

§ The Prime Minister
What is absolutely clear is that the right hon. Gentleman has nothing whatever of substance to say on the issue of the welfare state—[Interruption.] He does not. Just last week, we launched the biggest welfare-to-work programme this country has seen—a £3.5 billion programme opposed by his party. Those are the real issues—getting people off benefit and into work—that the public expect answers on and they are getting those answers from the Government. The Opposition have nothing to say about them at all.

§ Mr. Hague
The Prime Minister will get the support of the Opposition for the reform of the welfare state if his plans are based on sound principles. What we are trying to discover this afternoon is whether they will be based on any principles at all. He wants to talk about substance, but he has the Minister for Welfare Reform who wants less means testing and a Secretary of State who wants more; the Minister wants expensive reforms and the Chancellor wants cheap ones; the Minister wants to increase national insurance contributions, which the Prime Minister has already ruled out; and the Minister wants to abolish the state earnings-related pension scheme while other Ministers have already said that they would not do it. Will the Prime Minister now—[Interruption.] It is no wonder he had to send the Minister without Portfolio to Disney World to ask Mickey Mouse. Will the Prime Minister now back up the Minister he appointed to reform the welfare system, or has he already abandoned that Minister?

§ The Prime Minister
No is the answer to that. The right hon. Gentleman can make as many debating points as he likes, but frankly they do not add up to a serious strategy for reform. His social security spokesman, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), has today said that he wants to work with the Government and I welcome that, but there are two things that flow from that. The first, is the Conservatives' admission that they have failed in Government over 20 years—had they succeeded, we would not be discussing welfare reform.
344 Secondly, there will come a point where there is a simple test as to whether or not the Conservatives are serious about supporting us on welfare reform. The first part of the test is on student finance. Will the right hon. Member for Richmond, Yorks (Mr. Hague) support us on that, given that our proposals are based on the report that his Government commissioned or will he continue to play about and make debating points?

§ Mr. Hague
I shall give the Prime Minister a serious proposition. We shall support the Prime Minister in reforming welfare if his reforms are based on the principles of ending the dependency culture, strengthening families, encouraging alternative provision and looking after the worst-off and disabled people. Let him say whether he will base his plans for welfare reform on those principles, even if he and I have to fight together for them against some Labour Back Benchers.

§ The Prime Minister
The principles that the right hon. Gentleman has just outlined are the very principles that we have already outlined as the basis of our proposals. If that is the case and the right hon. Gentleman supports those principles, why does he oppose the welfare-to-work programme which implements them? Never mind the debating points, there is a specific programme of £3.5 billion to help young people and the long-term unemployed off benefit and into work, from dependence to independence. If the right hon. Gentleman supports our proposals if they are based on those principles, and they are, he should support that programme, but does he? No.

§ Mr. Pound
In the first week of July this year, we shall celebrate the 50th anniversary of the birth of the national health service—and, coincidentally, my 50th birthday. There has been half a century of distinguished service to the nation in both cases. What plans does my right hon. Friend the Prime Minister have to mark the slightly more significant of those two anniversaries, bearing in mind the fact that in my case a modest card will be more than sufficient?

§ The Prime Minister
First, I offer my personal congratulations to my hon. Friend on his 50th birthday. The very best way to celebrate the anniversary of the national health service is to make the commitment to investment and reform that this Government have made. Over this period, an extra £1.5 billion over and above the Conservatives' spending plans is to go into the national health service and there is to be reform to make the NHS work again on the basis of co-operation and partnership, rather than being run by the Conservative's internal market, which did so much damage. That is the national health service that the Labour party created when it was in government after the war and that is the NHS which we shall now renew.

§ Mr. Ashdown
Listening to the Prime Minister and the right hon. Member for Richmond, Yorks (Mr. Hague) talking about co-operating on welfare reform is rather like watching a lost edition of "Call My Bluff'. Is not the truth about welfare reform simply that all three parties want to see welfare reformed and there have been two attempts to do so? Both those attempts have been Treasury driven, both have been piecemeal, both have been political and 345 both have ended up in trouble. Yet Beveridge's welfare system that we wish to reform was created by a non-party committee, whose work enjoyed cross-party support. If it is really true that the Conservatives have joined us in believing that that is the best way to approach the subject, the Prime Minister has a real opportunity. Will he now take it?

§ The Prime Minister
I do not know how sincere the protestations of support from the Conservatives were. If what we have just witnessed is their support, I should not like to see their opposition. If people can join forces in order to reform the welfare state sensibly, that is a good idea. No change will be proposed without consultation and the changes will be based on the principles that I have set out. Those principles are to help those who are genuinely in need, to say that work is the best answer for the welfare of those who can work, to ensure that we root out fraud and abuse from within the system and to give as many people as possible the chance to move from dependence on welfare to independence. Those are good, sound principles, but the difficulty will be in seeing them through. We must try to do so in the most effective and humane way, and we shall do that.

§ Mr. Ashdown
But that is not creating a consensus for cross-party support; that is saying, "I will put forward the proposals and you support me."
Let me make a concrete proposition to the Prime Minister: that he could create an independent commission, that it would carry representation from all the parties and experts in the field, that he could write the remit, that it would report in a year and that, if it did so, he might then genuinely have cross-party support and he might also have a situation where his Government made proposals that were right rather than wrong.

§ The Prime Minister
In the end, we must take these decisions ourselves. I mean by "ourselves" not simply the Government but the politicians in general who are in the House. Of course we should be informed by independent research, and we will be.
As we embark on this process, it is important for us to realise that we must change a welfare system in which spending is increasing ever more and ever more, but poverty is increasing, too. We have 3.5 million households that are workless even though the people in them are not of pensionable age. Three million children grow up in households where no one is working. One million of the poorest pensioners are entitled to income support, but do not get it.
We must change that, but we cannot load it on to an independent commission and say, "Go away and do the thinking for us"; we must do the thinking ourselves. Nevertheless, any changes that are proposed will be changes that are subject to proper consultation.

§ Gillian Merron
In anticipation of marking the 50th anniversary of the national health service, will my right hon. Friend join me in paying tribute to those whose work forms the backbone of our national health service: not only the doctors and nurses but those who cook, clean or care for us, whose work often goes unseen and is undervalued?

§ The Prime Minister
My hon. Friend is correct in pointing out that the national health service depends on 346 the work and dedication of a number of people who often give up their time without any payment and without any concern other than the well-being of patients. The national health service is still generally regarded by people abroad as one of the great institutions of the world. Our task is to take it, keep it true to its principles and renew it for a new age.

§ Q2. Dr. Cable
Does the Prime Minister believe in the contributory principle for state pensions? If, as was reported during the recess, he has an open mind on the subject, will he indicate at what approximate income people can be considered to be too affluent to qualify? Would it be more or less than the income of Members of the House?

§ The Prime Minister
There is really no point in conducting a review and inquiry and then giving out possibly speculative proposals before they are properly considered. It has to be done in a proper and serious way. Once it is done, there will be a chance for people to have a debate on the proposals. What is interesting about this discussion and the debate in the House is that there is now widespread acceptance of the need for reform, and of the fact that the past 20 years saw us fail on the welfare state and now we must change and succeed. I welcome that and I think that it is a good start to the debate.

§ Q3. Dan Norris
Last night the House of Lords voted to frustrate the introduction of democracy in London. Back in the 1980s, it used its power to obliterate a whole tier of local government. Does the Prime Minister agree that if the House of Lords can use the power of privilege to obliterate democracy, the House of Commons should use the power of democracy to obliterate privilege—and may we start, please, with hereditary peers?

§ The Prime Minister
Of course, last night what happened was not merely that the hereditary peers pushed through an amendment that has the effect of depriving Londoners of the chance on 8 May to vote on their authority, but that they did so with the full support of the Conservative Opposition. [HON. MEMBERS: "Shame."] They are prepared to use hereditary peers to stop people getting the chance to vote for something that was in the Labour party manifesto, that people voted for in London and that people want in London. We shall ensure, not merely that people get the chance to vote on 8 May as we promised, but that we put an end to hereditary privilege in the House of Lords.