HC Deb 26 March 1998 vol 309 cc681-98 3.31 pm
The Minister for Welfare Reform (Mr. Frank Field)

With your permission, Madam Speaker, I should like to make a statement on the Government's Green Paper, "New Ambitions for our Country: A New Contract for Welfare".

The Green Paper sets out the principles of reform, based on the twin pillars of work and security: work for those who can; security for those who cannot.

Today, we set before the House a comprehensive review of the welfare system, an argument about why it has to change, the eight principles on which change will be based, the success measurements against which progress should be judged over the next 10 to 20 years, and the areas where legislation will be required in the short, medium and long term.

The Green Paper offers the prospect for pensioners of a decent income in retirement. It offers a fresh start to disabled people—civil rights, help getting into work for those who want to, and a better system for making sure money goes to those in need.

To all those of working age, the Green Paper offers greater help into work. It promises children and families greater support. It does that within a system radically reformed to make it more efficient, clearer, fairer and dedicated to rooting out fraud and abuse.

The Green Paper considers how social advance in this country is best achieved and how, at the same time, we can also lift people from poverty and dependence to dignity and independence.

For me, today's statement marks a milestone in a journey that has so far lasted 30 years. The Green Paper draws on my experience with the Low Pay Unit and the Child Poverty Action Group, and on the Social Security Select Committee, but, above all, it draws on what I have learnt from listening to my constituents in Birkenhead about the need for welfare reform. Those who rely on benefits for their everyday existence are the real experts here.

It is a particular honour, then, to play a part in translating ideas into practice. I have, however, learnt a few home truths over the past few decades. The first is that changes to the benefit system affect the lives of people in ways that many of us can only half imagine. The second is that the need for change is overwhelming. The system as it stands promotes fraud and deception, not honesty and hard work. It has led to growing poverty and dependence, not independence. It has fuelled social division and exclusion, not helped in the creation of a decent society.

The economy and society of today are profoundly different from the era when William Beveridge laid the foundation stones of today's welfare state. The world of work, the shape of families, the chances of a long life, and people's attitude to government have all altered in fundamental ways. At the heart of the Green Paper is a new welfare contract between Government and citizen. Together, we must break the cycle of dependency and insecurity, and empower all our citizens to lead a dignified and fulfilling life.

These changes are driven by the need for reform. What is more, the money that we spend must be spent in the best and fairest way possible. For a system to be durable and fair, it must have costs that are manageable and under control. We want to spend more in some areas, such as health and education, and on help for severely disabled people with the greatest needs, but we want to spend less in others, to get the bills for social and economic failure down by cutting unemployment, tackling low pay, raising skills, rooting out fraud and abuse, and encouraging greater self-provision where appropriate.

Our reforms are driven by principle. I now wish to deal with the eight principles in the Green Paper—the key clauses of the new contract. First, the new welfare state should help and encourage people of working age to work where they are capable of doing so. Work offers the best escape route from poverty and dependence, a platform on which to save, and a sense of individual purpose.

We already have the new deals, which are the biggest attack on structural unemployment for decades; a Budget which will make work pay; and a minimum wage to end poverty pay. In addition, the Green Paper shows how the Government will extend the new deal to partners of the unemployed under the age of 25, based on the principle that responsibilities and rights go together, and to all lone parents with school-age children, giving them the opportunity for an interview and help with job search and child care. We also propose to end the 16-hour limit on the amount of unpaid work disabled people on benefit can do; extend the period from eight weeks to a year during which disabled people can have a job and come back on to benefit at the old rate if their health fails; increase the number of personal advisers available to claimants providing individually tailored help; and introduce a single work-focused gateway into the benefits system for people of working age, sweeping away the duplication, waste and bureaucracy of today.

We shall modernise government to achieve closer collaboration between the Benefits Agency and the Employment Service, making it clear that the system's first objective is to get people back into work.

I shall now deal with pensions. The second principle is that the public and private sectors should work in partnership to ensure that, wherever possible, people are insured against foreseeable risks and make provision for their retirement.

In our manifesto, we said that the basic state pension will remain the foundation of pensions provision, and will be uprated at least in line with prices. That commitment remains. We do, however, need to get greater help to the poorest pensioners. The Green Paper shows how that will be done.

However, with an aging population, over time, more will need to be saved for pensions, but the share borne by taxpayers cannot go up, or the costs of the system will become unsustainable. We want everyone to benefit from a second pension, on top of the state pension. That is what our proposals for stakeholder pensions are all about. It is clear that, unless there is more saving towards retirement, we will continue to see into the next century far too many of our pensioners retiring on incomes that do not properly reflect the rising prosperity of the nation.

The Government have launched a review of pensions. We have received many submissions, as part of the review, that recommend an extension of compulsory second pensions to those who are currently not covered and an increase in the minimum compulsory saving rate. We are considering those proposals seriously. Later in the

year, we shall publish the Green Paper on pensions. I can say today that the Government plan to bring forward legislation later in this Parliament.

An additional change is proposed in the Green Paper. Today, people can lose benefit if they have taken out insurance to pay off loans on their car or credit card, and then lose their job. We want more people to help themselves, so that is simply absurd. We will change the benefit rules to ensure that people who insure themselves will no longer be penalised for it.

The third principle is that the new welfare state should provide public services of high quality to the whole community, as well as cash benefits. We have already set out in detail our proposals for education reform, for changing the national health service and for improving the housing stock. I do not need to repeat them. However, in addition, we are proposing a major reform and expansion of the current system of child care in this country, on the basis that help with looking after children can be as important as any cash benefit.

From next month, we shall start the expansion of our network of child care clubs, providing a further 20,000 places across the country and laying the foundation for Britain's first national child care strategy. Our comprehensive programme will be set out in a Green Paper that we shall publish after Easter.

The fourth principle is that disabled people should get the support that they need to lead a fulfilling life with dignity. In our country, everyone has a contribution to make—and that includes, of course, disabled people. Today, I want to announce a substantial programme of reform in that area, based on the following key changes. First, we want better rights for disabled people. We shall bring forward legislation, at the earliest possible time, to establish a disability rights commission to protect, enforce and promote the rights of disabled people.

Secondly, more help will be given to those who can and want to work. It is estimated that hundreds of thousands of disabled people want the chance to work. Thirdly, extra help will be given for those severely disabled people with the greatest need. Fourthly, we pledge that those benefits covering the additional costs faced by disabled people—disability living allowance and attendance allowance—will remain universal, national benefits.

At the same time, we shall be looking at ways to ensure that help goes to the right people. The recent report of the disability living allowance advisory board presented worrying information. It found that in two thirds of cases there was not enough evidence to support the claim, and that one third of awards made for life were made to people whose condition might have been expected to improve. Meanwhile, evidence from the forthcoming disability survey suggests that only around half of those eligible may be taking up their DLA entitlement. The current gateways clearly are not working and need reform. We propose, after consultation with disabled people and groups representing them, to legislate for new gateways that are clearer, fairer and easier for people to use

We all know that the previous Government used incapacity benefit to disguise the real level of unemployment. Since 1979, the number of people on incapacity benefit has trebled, pushing the cost of the benefit up to almost £8 billion, which is more than we spend on the whole police force in England and Wales.

We accept that people currently on incapacity benefit have built a standard of living around it, but, for future claimants, we must fundamentally reform the benefit.

The all-work test for entry on to the benefit writes off far too many people. We want to move from the current focus simply on what people cannot do, to focus on what, with the right help, they can do; so we need reform. In place of the current test, we are looking instead to assess the scale of people's employability, and then give them the opportunity to get the help they need to return to work. Taken together with changes already made, the proposal will reduce significantly the numbers who come on to the benefit in the future, and will thereby produce increasing savings over time.

That will be a major reform. Savings will be found, which will allow us to give more help to severely disabled people with the greatest needs. I emphasise that, as with all these proposals, at every stage we shall consult disabled people and organisations that represent them. As a result of our reforms, disabled people will get a better deal with proper rights, opportunities to work and a benefits system that better reflects their needs.

The fifth principle is that the system should support families and children, as well as tackling the scourge of child poverty. It is unacceptable that nearly 3 million children grow up in households without a wage earner. Child poverty shames our nation. The Green Paper outlines a comprehensive package of help for families with children. That will build on our existing measures to help children: a child care tax credit, covering up to 70 per cent. of eligible child care costs; an extra £2.50 on child benefit and on the rates for younger children of families on income-related benefits; and parental leave.

In an ideal world, families would always stay together, but in real life some parents split up, and the children suffer in more ways than one. The Child Support Agency was intended to help children, but, as proper maintenance is secured in only a third of cases, it is clearly failing. We spend £200 million a year simply to run the CSA, and we secure only £500 million maintenance as a result. I can announce today that we will be bringing forward proposals for fundamental reform of the agency to make it administratively more simple, and fairer, and to get rid of a situation in which it is often the parents who keep in closest touch with their children who get hit the hardest.

The sixth principle is that there should be specific action to attack social exclusion and help those in poverty. Our attack on social exclusion will include a new deal for communities, offering targeted help to areas worst hit by economic change. For areas with multiple problems—crime, drugs, poor housing and educational underperformance—there will be an integrated programme of support and renewal. Action zones for education, health and employment will pioneer the innovation and co-ordination necessary to tackle what is a national problem.

In addition, in the next few weeks the social exclusion unit will present its first plans to tackle two of the root causes of social exclusion: truancy and exclusion from school, and sleeping rough on the streets.

The seventh principle is that the system should encourage openness and honesty, and the gateways to benefit should be clear and enforceable.

I have spent a good part of my parliamentary life urging concerted action to tackle benefit fraud, which erodes the whole basis of the welfare contract. Every £1 in the pocket of a fraudster is £1 less in the pocket of someone in need, so it gives me great pleasure to announce the Government's crackdown on fraud.

Today's report from the Public Accounts Committee shows the scale of the problem we face in just one area—housing benefit fraud. Almost £1 billion is lost in fraud, with suspected fraudsters having a 99 per cent. chance of getting off scot-free. That underlines the importance of the action we are now taking to tackle housing benefit fraud.

We have radically altered the focus of the benefit fraud inspectorate to inspect our own agencies as well as local authorities and ensure that they work together to crack down on fraud. We are strengthening the link between the Benefits Agency and local authorities to make sure that information on possible fraudulent claimants gets passed across quickly. There will be a new framework of guidance for local authorities to check claims for housing benefit properly, to prevent and root out fraud. The Government will use new powers to set targets for local authorities for improvements in tackling fraud and penalise them if they fail to take sufficient action. We are giving local authorities new powers to stop housing benefit getting paid directly to landlords who have committed fraud. Some of those measures may seem draconian, but I have no doubt that they are right.

The measures we are taking to root out housing benefit fraud are part of the comprehensive strategy set out in the Green Paper, based on earlier prevention, more effective deterrence and better detection. Our measures include improving the effectiveness of gateways on to benefit to make them less vulnerable to fraud, a thorough validation of the entire system of national insurance numbers to stop people using false or falsely acquired national insurance numbers to claim benefit and improved sanctions, including, for the first time, powers for the Department of Social Security to fine those defrauding the system.

The eighth principle is that the system of delivering modern welfare should be flexible, efficient and easy for people to use. Our aim is to revolutionise the delivery of front-line services with the creation of an active modern service that is built around the customer, makes best use of information technology and fits new services to new need and demands.

In a world of 24-hour shopping, free helplines and computer banking, people are entitled to a far better service than many of our public services are providing. As a result of our drive to ensure that the Employment Service and Benefits Agency work more closely together, we aim to provide a seamless service with personal advisers for everyone who is trying to return to work. The modern office should include touch screens with information on benefits, jobs, training and child care, as well as telephone information lines for claimants, and claim forms that are tailored to the individual.

At the same time, for those who are not able to work or the retired, we need an efficient and friendly service that is easy for everyone to understand and to use and provides benefits accurately, promptly and with the minimum hassle. Our aim must be to ensure that the services that we provide match the standards of the best companies in the country.

In all, the application of the principles in the Green Paper will break the traditional welfare mould in three crucial respects. There will be a move, first, from a focus on simply paying benefits to enabling people to move into work; secondly, from dispensing cash to also providing services; thirdly, from merely alleviating poverty to ensuring that each and every one of us has opportunities to develop our talents to the full.

Behind our principles and core values lies the idea of The Good Society, which has not only motivated British radicals for centuries, but drawn support from all sections of society. The Government, through an open and inclusive approach to reform, will strive not merely to sustain but to strengthen the appeal to create a better world to hand on to future generations. I invite everyone, wherever they are seated, to join constructively in that debate.

The Green Paper also sets out a vision of welfare in 2020, restructured around the new contract between the Government and individuals and families. The new contract is essentially about duty; duties of the Government are matched by duties for the individual. For example, it is the duty of the Government to provide a proactive, work-focused service, ensuring the easiest possible return to the labour market. It is similarly the duty of all individuals to seek work or training when they are able to do so. It is the duty of the Government to help parents to meet the costs of raising their children; it is the duty of individuals to support their children, and other family members, financially and emotionally. It is the duty of the Government to relieve poverty in old age and regulate pension provision; it is the duty of individuals to save where possible for old age.

There are two no-go areas for the Government. Our commitment to the vulnerable is not negotiable. Likewise, our commitment to reform is not negotiable. What is negotiable is how we can achieve our aims.

There are some people on the right of politics who want to dismantle the welfare state altogether; there are others who baulk at any change. The Green Paper represents a third way—not the end of the welfare state, or a defence of the status quo, but a welfare state to meet modern needs, which supports a decent and fair society founded on social justice.

The Green Paper sets a clear framework for a principled programme of reform. We all have a stake in the debate, but I pledge to the House and the country that we will not depart from the principles that I have outlined, and that, in the years to come, as the new welfare contract is established, we will have a new welfare state that is fit for a modern nation in the new millennium.

I apologise for the length of the statement, and I apologise for the fact that Opposition spokesmen did not receive a copy of it earlier, but, without reservation, I commend the Green Paper to the House.

Mr. Iain Duncan Smith (Chingford and Woodford Green)

Today's statement is a significant milestone for the Government, as much as for the House, and it deserves some scrutiny. I welcome the fact that the Minister for Welfare Reform has made the statement. He knows that I and all my colleagues have been asking for a statement on the Green Paper for a considerable time. Without being churlish, we welcome its existence and the fact that it has been announced.

The Green Paper has been a long time coming and, therefore, it raises a series of questions. [Interruption.] It is remarkable that it has taken 10 months to arrive and that the Government say they have been consulting for 10 months. The real question is what have they been doing for 18 years. Have they had no consultation over that time? The reality is that the Green Paper represents not just the sum total of thinking over 10 months, but the Labour party's consultations and thinking over the past 18 years. That is the key point. Regardless of the delay, I welcome the announcement.

At the beginning of the year, we were increasingly worried that, despite all the rhetoric, there was an absence of structure about welfare reform. The reality is that it is important—and it was important—for us to be able to help the Government to create the right structure and to provide the right opportunity for debate. We wanted to be constructive. In January, we offered the Government the opportunity for a constructive dialogue and we laid out our criteria for reform. That was never done for the previous Government, but we did not look back on that with regret. We simply offered the Government the right to have the debate, and we do not shy from that.

We must ask how the Green Paper measures up to the main elements that we set for the Government. The first of the principles is that reform must strengthen the institution of the family. Secondly, it must strengthen personal responsibility and break the dependency culture. Thirdly, reform must strengthen alternative provision of welfare and break the state monopoly of provision, helping to focus welfare on those most in need. Underscoring all that is what the Minister said, which is that it must not depart from those most in need.

As the Minister knows, the late delivery of the Green Paper meant that we could look at it, but not to the extent that we would have liked. However, as I looked at the paper, I began to ask a series of questions about what we had been led to believe was likely to be in it.

First, let us deal with housing benefit. We were led to believe that the Green Paper would set a series of criteria by which benefit fraud, particularly housing benefit fraud, would be dealt with. In fact, there is nothing new in the paper that will suggest to anybody outside or in the House how the Minister intends to take the position forward. There is no specific position.

After so much coat trailing over housing benefit, why is there so little in the document that deals with it? Is it anything to do with the clash with the Chancellor's office after the right hon. Gentleman's article on Sunday? Was it lifted out because of that? Where are all the new proposals that the right hon. Gentleman said would deal specifically with how he intends to reform housing benefit? That underscores the whole change to welfare and the ability to cut costs.

Our second area of concern is disability benefits. We have had a series of scare stories, deliberate leaks and kite flying on disability benefits over the past six months. The Government should show shame, because they set out deliberately to scare a whole group of people without proposing anything at all. They simply set out to make them worried in the absence of any proposals. We asked for the Green Paper because that was happening, but the Government came up with nothing. However, what we have received today is a rehash of earlier announcements on incapacity benefit and other proposals.

As we understand it, the right hon. Gentleman said that the Government will rule out means testing of disability living allowance. I welcome that. However, why has it taken all these months to make that decision? Why could the Government not have ruled out means testing earlier, and made the position absolutely clear—rather than scaring people, at the Chancellor's bidding? I should like the Minister for Welfare Reform to tell us also whether he has ruled out taxing disability living allowance and other disability benefits.

Why raise the scare stories? Why worry everyone? The Government's welfare reform has been a series of missed opportunities. As today's newspapers have said, the debate on disabilities has to progress gradually and should not be subject to knee-jerk reactions and scare stories. Today, the Minister had the opportunity—he has had the opportunity—to make serious proposals for structural change in disability benefit, but there was little in his statement that had not already been rehashed in the Budget.

When the Government came to power, they acted swiftly on pensions. In their first Budget, they damaged prospects for pensions and pensioners. They raided pension funds, and created real problems for pension reform. Almost immediately, the pension brief was taken away from the Minister for Welfare Reform and handed to the Under—Secretary of State for Social Security, the hon. Member for Southampton, Itchen (Mr. Denham), who was to conduct a separate pensions review. A major part of the welfare reform process was therefore excluded from the welfare Green Paper.

The right hon. Gentleman's comments on pensions failed absolutely to deal with the changes to pensions that have occurred in the past 11 months. Why did he not take this opportunity to mention the dramatic changes—the decline in pension values—since the Government's first Budget?

The Government said, when they came to power, that they valued occupational pensions. However, since then—in the Budget hit—they have damaged occupational pensions, so that occupational pensions may be frozen and moved to group personal pensions. The Government endlessly attacked personal pensions, going on about personal pension mis-selling—yet they try to move occupational pensions to personal pensions. As the right hon. Gentleman and the Government support occupational pensions, what will they do to rectify that problem? They have missed today's opportunity.

The right hon. Gentleman said that he valued family structures, and realised that the family is important as the basic structure in building a stable society. We share that belief, and I welcome that statement. However, the Budget contained the seed of a serious problem for marriage structures raising children and looking after elderly relatives. In ending the married couple's allowance, the Labour party has sent a seriously damaging message to those who wish to raise children and look after elderly relatives. Taking money from them has very little to do with supporting those structures.

Why did the right hon. Gentleman, given all his previous views and commitments, not take the opportunity to deal with that problem, and send a serious message to those who look after elderly relatives—who now, after last week's Budget, wonder how they will make ends meet?

The right hon. Gentleman made some proposals on the Child Support Agency, and I welcome his comments about the agency. As he has said on many occasions CSA reform is a matter on which both sides of the House should agree. We look forward to hearing detailed proposals. Will he explain his specific proposals to deal with the problems in the CSA? We will take every opportunity to support those proposals.

I was intrigued by the right hon. Gentleman's comments on social exclusion. I should like him to explain how, after all his thinking on the matter—for which the Minister without Portfolio, who is on the Treasury Bench, is supposed to be responsible—the Government's sum total of knowledge and determination is in the phrase there should be specific action to attack social exclusion and help those in poverty. Is that it? After 10 months, is that all that the Government have to say about social exclusion? Is that the sum of the thinking that is driving us forward? They have targeted tackling social exclusion as a means of combating poverty and that is all that they have to say about it.

What about means testing? Year after year, in papers and books, the right hon. Gentleman has said that he was opposed to means testing. He has said nothing today about how he intends to wind back that process or about the taxation of benefits. Where in the Green Paper or the statement is there a personal commitment from the right hon. Gentleman? Nowhere.

The Green Paper gives a series of benchmarks. The Government said in advance that they would set targets. The Green Paper gives only a series of general statements. They say that they want to be measured against certain criteria. The Prime Minister is fond of saying that the Government will be measured against their performance, but they do not want to be measured until after at least another two general elections. The Green Paper gives a target of 2020. The Government want to go to the next election saying, "Don't worry; trust us. We'll get this right not in this Parliament, but perhaps the next—or perhaps not even that but the Parliament after." That is the Government's target for measurement. They are telling the public that the issue does not matter and that they do not want to be measured seriously against their targets. Why does the right hon. Gentleman not tell us how he intends to be measured at the next general election?

The Prime Minister has said that the cost of benefit will be reduced. We have a right to expect that that commitment will be measured at the next election. I hope that the Prime Minister will lean over to his right hon. Friend the Minister for Welfare Reform to tell him that he has the authorisation to tell us that the Government will be judged on that at the next election.

The Green Paper represents a series of missed opportunities after 10 months of promises. Behind the scenes, there has been a battle between the Minister for Welfare Reform and the Chancellor of the Exchequer. Given the vacuousness and avoidance of detail of the Green Paper, the Chancellor won. The Green Paper should have been published more than six months ago, but the Budget had to come first. For the first time in history, we have a Green Paper published after a White Paper—the Chancellor's White Paper. The Chancellor is running the show. The Minister has been taken prisoner.

The Prime Minister appointed the Minister on his reputation, to bolster the Government, but he has imprisoned the man.

Mr. Field

May I thank the Opposition for approaching the issue so constructively? [Laughter.] I would not want to be on the receiving end if they were being destructive. I shall try to reply to the points that the hon. Gentleman has raised. Some of them are not well founded.

The hon. Gentleman said that there was the odd line about social exclusion; I have made three new announcements today. The lack of concrete proposals about the Child Support Agency says something about how we intend to conduct the process of reform.

We told the House that there would be a specific Green Paper on—

Mr. Duncan Smith

Another one?

Mr. Field

Yes, another Green Paper. The hon. Gentleman has an extraordinary viewpoint. He reminds me of Aneurin Bevan's comment on Neville Chamberlain as Prime Minister. He said that listening to him was like a walk round Woolworth: everything is in place and nothing is priced over sixpence. The hon. Gentleman clearly thinks that every detail in a programme of reform that he acknowledges will take 10 or more years should be in a single Green Paper. That is an absurd view.

There will be a Green Paper on the Child Support Agency. We are anxious that, this time round, the pace of reform and the extent of negotiation should be such that we get it much more right than we did last time. It is easy to be bullish at the Dispatch Box, but if we fail, we screw up people's lives. We do not intend to do that.

The hon. Gentleman asked where was the support for the family. When he has had the chance to read the Green Paper carefully, he will see the careful declarations that we have made in favour of the family as the most secure building block for creating a secure future. [HON. MEMBERS: "Where are the policies?"] Some policies were in the Budget and others are still to come.

The hon. Gentleman said that the pensions portfolio had been taken away from me, but my hon. Friend the Member for Southampton, Itchen (Mr. Denham) had that portfolio from day one. Pension funds are more buoyant now than they were, thanks to what is happening to the economy.

The hon. Gentleman asked what was new in housing benefit. I mentioned the Public Accounts Committee report that was published today. It showed that 99 per cent. or more of those who commit housing benefit fraud get off scot-free. We are empowering the Benefits Agency and giving it the ability to fine. The Conservatives did not decide to do that when they were in government.

I want to mention two other matters that centre on the whole process of reform. I know that it is sometimes important for politicians to win the support of those behind them, but when the hon. Gentleman reflects on how he responded to our announcements on disability reform, he will realise that he has played a part not in damping down disquiet but in whipping it up. We made the clearest declaration that could be made, and all he wanted to do was to try to fan disquiet among disabled people.

The hon. Gentleman has misunderstood the nature of reform. We announced changes and reforms that will need legislation in this Parliament, and we have done something else that is equally important: for the first time, a Government have set out their principles of reform and a series of measurements so that they can lock on to those principles each part of their reform programme as it comes along, so that it can be judged. We want to be judged on that by the House and by the electorate. I guess that the Opposition will be similarly judged.

Mr. Terry Rooney (Bradford, North)

I thank my right hon. Friend for his statement and for the challenging document that has been published. He will know that staff morale in the Benefits Agency is at rock bottom. He has inherited staff who are underpaid, undervalued and under-resourced, but they will be needed to deliver the programme that he has set out. How will he proceed with staff development and training?

Mr. Field

I am grateful for my hon. Friend's question. There are two aspects to mention. I have written today to the heads of each agency, emphasising the importance that we give to the modern, active service that I underscored in today's announcement. Staff and others will see in the Green Paper that we regard our staff as one of our most valuable assets and that the 18 years of denigration of people who work in the public service, who have been made to feel that they are somehow a drain on public resources, are at an end. We wish to build up their skills, but, above all, we wish to use their expertise in taking the reform programme forward.

Mr. David Rendel (Newbury)

My party and I welcome a great deal of the statement, as far as it goes. Does the Minister accept that, particularly given that the Prime Minister said welfare reform is such a fundamental part of his Government's programme, the statement and the Green Paper will be a great disappointment to many because there is not much either new or radical and there are very few specific proposals? Does he also accept that his statement that Our commitment to the vulnerable is not negotiable will seem a rather sour sentence to those who become lone parents this year, who will find that their benefits are lower than last year and that they will not gain for some time from the benefits that the Chancellor has promised them?

Does the Minister accept that, although he has talked about targets and has just mentioned measurement, in practice, the measures of success listed in the Green Paper are entirely unquantified? They are simply a question of a little more of this or a little less of that. Therefore, the targets at which the Government will aim are very feeble.

Does the Minister accept that much of the statement, particularly the eight principles, is simply a matter of motherhood and apple pie, which all three parties could easily have accepted a long time ago? Although he has tried to work out where the Government are aiming—we accept that many of the objectives that he has set are the right ones—he still appears from the Green Paper to have very little idea of how he will get there.

Mr. Field

If the charge is that our targets are mere motherhood and apple pie, I would have thought that we would get a warmer response from the Liberal Democrats. One of the tasks that we hope the Select Committee on Social Security will undertake is to look most carefully at the targets, realising that they are for general information and that we will need to move to a stage where they become technical targets that can be exactly measured. I look forward to meeting the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on that very task.

When the hon. Member for Newbury (Mr. Rendel) asked what hope there is for lone parents, I thought that it might have been within him to have said that, in the recent Budget, there was the biggest-ever increase in child benefit and a substantial increase in what are called the applicable amounts for the younger children of those on income-related benefits. It is a pity that he did not find time to commend the Government on that

Several hon. Members


Madam Speaker

Order. Now that the official Opposition spokesmen have made their contributions, I want specific questions from Back Benchers.

Mr. Clive Soley (Ealing, Acton and Shepherd's Bush)

I congratulate the Minister on at long last putting the reform of the welfare state into the context of a changing economy and a changing family structure. That is what has been missed. The Conservative party introduced the Child Support Agency, bringing that area into disrepute; it introduced housing benefit, when it was warned that such benefit would spiral out of control—

Madam Speaker

Order. I asked for questions. The hon. Gentleman saw how many hon. Members rose to speak. There is no way that I can call them all and safeguard today's business. I want specific questions. Mr. Soley, will you come to your question?

Mr. Soley

The specific question was just this: will my right hon. Friend, unlike the Conservative party, consult everyone outside the House to ensure that we do not make such mistakes again?

Mr. Field


Mr. Nicholas Winterton (Macclesfield)

Knowing the right hon. Gentleman well, I suspect that his statement was as much personal as it was Government led. I congratulate him on that. In respect of self-provision for pensions, which he stressed was so important, will he ensure fiscal encouragement on an on-going basis to enable people to make private provision for their retirement?

Mr. Field


Mr. Malcolm Wicks (Croydon, North)

May I congratulate my right hon. Friend on a serious and significant statement? Given that our poorest citizens are often the very young, including one in three newborn babies, and the very old, including many people in their 80s, what are the key parts of the document that offer hope that, in the future, the young will not be born poor and the old will not be left in the cold?

Mr. Field

I thank my hon. Friend for that question. The document contains proposals on how we intend to cut the supply route to poverty in old age. Those proposals will be fleshed out in great detail in the pension reforms Green Paper of my hon. Friend the Member for Itchen. Much of what I said in reply to the first question and in my statement shows that we are trying to move welfare from a system that merely pays doles to one that cuts the supply routes to poverty in the first place and massively to extend the opportunities that those who are poor have to leave benefit. On both counts, over time, the Government will make progress on the two priorities that my hon. Friend has highlighted.

Sir Raymond Whitney (Wycombe)

Given that we have had a statement without specifics, I am happy to ask a specific question. The Minister suggested strongly that the £8 billion currently spent on incapacity benefit would be reduced and, in a menacing phrase, that people would be helped back to work. By how much will the incapacity benefit budget be reduced?

Mr. Field

I am sorry that I did not put the statement more clearly so that the hon. Gentleman could follow it. What we have said is that those on incapacity benefit now are protected. The benefit is not working in the way in which the House wishes. The key to incapacity benefit is the all-work test. We wish to replace that with an employability test. We wish to accompany that with help for people who wish to work. It is possible to dress up that proposal in the worst possible light, or it is possible to receive it in the way in which I wish it to be received—as one of extending opportunities as well as protecting the vulnerable.

Ms Diane Abbott (Hackney, North and Stoke Newington)

Does the Minister agree that if we are to oblige people to make private provision for old age, unemployment or other contingencies, we have to examine the way in which the financial services and private pensions industry works? It cannot be right to oblige low-paid and middle-income families to put money into a private pensions industry that has a history of overblown commissions, overheads and general fraudulent and ramshackle practices.

Mr. Field

I am aware of my hon. Friend's interest and expertise on this matter. When she has a chance to consult the Green Paper, she will see that what she says is one of our targets.

Mr. David Davis (Haltemprice and Howden)

The Minister had a well-deserved high reputation as Chairman of the Social Security Select Committee for his robust attitude to fraud and waste. I thank him for his recognition of the Public Accounts Committee's report today. He knows that the total fraud and waste in the system is £4 billion or £5 billion of taxpayers' money a year. Does he recognise that that needs not simply to be managed but to be designed out of all benefits? Can he give the House an undertaking today that all new benefits, including those announced in the Budget, will be designed in such a way as to eradicate the opportunity for fraud and theft?

Mr. Field

I thank the right hon. Gentleman, both for his question and for the role that he plays in the House.

I can give without reservation the commitment that he asks for. I underscore the point that he makes. Even on his estimate, fraud costs every family £500 a year.

Mrs. Alice Mahon (Halifax)

When my right hon. Friend talks about targeting those who are socially excluded, will he make a special case for children leaving care? They feature most heavily in truancy, exclusion, probation service and other figures. It is a disgrace to a modern society.

Mr. Field

I can happily give my hon. Friend that undertaking. When we are talking about social exclusion, we are anxious that, as our programmes evolve, people living in the area are main players in the programme.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Will the Minister accept that one of the most difficult challenges is to try to get the balance right between disabled people who have access to the world of work, and those who, because of severe physical and mental disability, have no access to the world of work? He proposes to look again at important matters such as the all-work test. Will he make sure that disabled people are not subject to the same disgraceful lack of consultation as they were afforded when the benefit integrity project was put together?

Mr. Field

I am grateful for the hon. Gentleman's question. Given the size of our reform programme—which was not recognised by the official Opposition—the Social Security Committee may have to sit in continuous session to help us. We will be publishing proposals on this matter, and we are anxious to go before the Select Committee and other bodies to put forward our views, to listen to their views and to try to improve our original ideas.

Mr. Dennis Skinner (Bolsover)

When the dust has settled on the Green Paper, my right hon. Friend and others will have to get down to the hard work of ensuring that where there is no work, work has to be found. Consistent with the Green Paper, will he ensure that he and his colleagues make it clear that in those large areas of Britain where shipbuilding has ended, where the coalfields are finished and where the textile mills have closed, and in many of the inner cities—where no work is available—all those who went on other benefits because they were pushed off by the Tories and others will not be left in the dark as a result of their failure to find work where they live?

Mr. Field

Indeed. When the key section of the Green Paper to which my hon. Friend referred was being written, I had him in mind.

Mr. Dafydd Wigley (Caernarfon)

Does the Minister accept that his statement has confirmed many of the worst fears of disabled people? Will he confirm that where there are two disabled people of identical condition, it may be that one will receive incapacity benefit and another will not? Will he be paying for better provision for those who are severely disabled by taking money off those who are moderately disabled?

Mr. Field

I respect the right hon. Gentleman, who plays an important part in the House on most topics, but particularly this one. I am concerned that he should have so misconstrued what I said to make that comment. I look forward to discussing those ideas further in exchanges across the Floor and elsewhere.

Mr. Alan Simpson (Nottingham, South)

When the Minister deliberates following the statement, will he give the House the following assurances: in relation to the Child Support Agency, he will consider the option of scrapping the agency as unworkable, and replacing it with a family court system in line with the Scottish model; in relation to housing benefit fraud, he will consider the approach of the Minister he quoted so generously, Aneurin Bevan, and propose a return to rent subsidies, as a system less open to fraud; and, in relation to pensions, he will consider the option of raising the state pension and reconnecting it with earnings, which many in the House and the country would willingly pay for and vote for?

Mr. Field

On my hon. Friend's first question, he perhaps mistakes our approach to reform. We do not come to the reform process with a shopping list of ideas that we are intent on pushing through. Our aim is to have an effective agency to support children whose parents have split up. That is our starting point. The second stage is to consider the proposals and how they meet our objective. My hon. Friend's proposal will be considered along with others before we publish the Green Paper.

Mr. Edward Leigh (Gainsborough)

May I congratulate the Minister on the language in which his statement is couched? No doubt the Select Committee will enjoy looking at the devils which inevitably lurk below such visionary language. Given the length of time any pension reform will require, how open and inclusive will he be with the Opposition in the Select Committee? Will he consult them on all occasions? Will he ensure that our successful private provision has as much a place in future welfare provision for a second pension as does state or mutual and friendly society provision?

Mr. Field

I happily give the hon. Gentleman that assurance. We are beginning the process of starting to reform in a different way, by publishing a draft Bill on pension sharing and divorce. No doubt the Select Committee will wish to consider that, with many other proposals that we have. My worry is not that we shall not talk to the Select Committee, but that the Select Committee may get fed up talking to the Government.

Mr. Jeremy Corbyn (Islington, North)

Will the Minister recognise that the state pension is cheap to administer and efficient in its delivery; that relinking it with earnings would guarantee many pensioners an escape from the poverty in which they live at present; and that revaluation and promotion of SERPS would provide a very good support system for those who do not enjoy an occupational pension? Has he estimated the cost to individuals and to the state of the huge promotion of individual private pensions through the private pension industry compared to the efficiency of the state system?

Mr. Field

If it is possible to get together the data that would allow a proper answer to the second question, I shall happily bring them together and write to my hon. Friend. However, on his first question about relinking the state pension to earnings, it is important to realise that, this year, as a result of the issuing of the fuel bonus, which went to all pensioners, but was weighted in favour of poorer pensioners, poorer pensioners have had a bigger increase in their income than they would have had if we had returned to the earnings link.

Mr. Steve Webb (Northavon)

While I welcome the Green Paper, which looks forward to 2020 which is both necessary and welcome, will the Minister accept that virtually none of today's pensioners will still be around in 2020, and will he accept, therefore, that there is—on a cursory glance, at least—nothing new for today's pensioners in that paper?

Mr. Field

Let us consider what the Government have already done for pensioners. We have reduced VAT on fuel and, by now, we have paid every pensioner their winter fuel bonus. The previous Government did nothing in 18 years to find those pensioners who were eligible to, but did not claim, supplementary benefit—now income support—but such a programme is now under way. All that has been achieved in 10 months. I believe that that shows something about the priority that we attach to pensioners.

Ms Rosie Winterton (Doncaster, Central)

I very much welcome my right hon. Friend's statement, but I am sure that he will acknowledge that the prospect of welfare reform raises many genuine concerns. Can he tell the House how he intends to ensure that consultation is wide ranging and inclusive of people outside Parliament in addition to those inside?

Mr. Field

I thank my hon. Friend for that question. The aim of the Green Paper is to set the beginnings of a major reform programme. We hope that, in 10 years or so, people will look back and say, "That was the decisive moment when things began to change in this country, and it was managed in such a way that we all felt safe." That is the aim. It is, of course, crucial that we make our programme of consultation as inclusive as possible, not only to reassure people, but to improve the reform process and make the measures more effective, so I very happily give my hon. Friend the pledge that she seeks.

Mrs. Ann Winterton (Congleton)

Will the right hon. Gentleman rule out taxing disability living allowance?

Mr. Field

Given that the Green Paper not only sketches the immediate programme and says what legislation we shall introduce, but looks 20 years ahead, and does not mention that, I think that the hon. Lady should be satisfied.

Mrs. Anne Campbell (Cambridge)

May I congratulate my right hon. Friend on a set of principles that is both radical and workable? I also welcome his support for information systems, such as the one launched by the Secretary of State in Cambridgeshire last July. Will he assure us that he will not go for the expensive infrastructure option, and will he take it from me that cheaper options are available, through the internet, which will give him a workable system very quickly?

Mr. Field

I am grateful to my hon. Friend not merely for that question but for the pioneering role that she has played in this area. Her points are well noted and, as the debate unfolds, I think that she will see her influence.

Mr. Andrew Rowe (Faversham and Mid-Kent)

The Minister knows—because he was kind enough to meet a delegation—of my concern about seasonal workers. Such workers are indispensable to many industries, but particularly the soft fruit industry. Will the right hon. Gentleman give an assurance that the difficulties that those workers experience fitting into the benefit system will be a priority in his review?

Mr. Field

I must disappoint the hon. Gentleman. I cannot say, with all that we must consider, that it is a key priority. However, he is making plans for me to visit his constituency—he has presumably asked the question in order to put it on the record—where I shall see the problem at first hand. When I have that experience—I shall not pick the fruit, but I shall watch others do it—I shall take my ideas back to the Department and then inform the hon. Gentleman of what we can do.

Mr. Ian Pearson (Dudley, South)

Given that the Child Support Agency is wrecking the lives of many thousands of people, can the Minister assist those people by informing the House of his rough timetable for change?

Mr. Field

We shall certainly publish the Green Paper as soon as possible. It is important that the departmental team works up and discusses a whole range of ideas before we issue that paper. All hon. Members have families in their constituencies who are on the receiving end of the CSA which is not working, so we know the urgency of that task.

Mr. Simon Burns (West Chelmsford)

The Minister will clearly remember that the Government have always said that their aim is to reduce the share of national income that is allocated to welfare. Is the right hon. Gentleman aware that every concrete proposal in his statement will increase the social security budget? How will he seek to redeem that pledge, as my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) asked? When will the share of national income spent on welfare begin to be reduced? Will that occur during the lifetime of this Parliament?

Mr. Field

The position is clear: our aim is to reduce expenditure on economic and social failure and move it to creating opportunities. The hon. Gentleman clearly accepts that position as he, quite rightly, opened a new deal project in his constituency.

Several hon. Members


Madam Speaker

Order. Thank you, Mr. Field. We shall now have the business statement.