HC Deb 19 October 1998 vol 317 cc950-2
15. Mr. James Gray (North Wiltshire)

What estimates his Department has made of the increase in social security spending for each percentage point which the September retail prices index exceeds the target set by the Chancellor of the Exchequer. [53488]

The Secretary of State for Social Security (Mr. Alistair Darling)

Uprating of social security benefits based on the September retail prices index will not add to our prudent spending plans. I am currently reviewing the rates of social security benefits and I will announce the uprating of social security benefits shortly.

Mr. Gray

That is all very well, but is not the right hon. Gentleman—who, in his previous incarnation as Chief Secretary to the Treasury, so signally failed to achieve any savings in the benefits budget—ashamed of the fact that his budget will increase by £37 billion during the next three years, and that there is no likelihood that there will be savings of any kind anywhere in his budget?

Mr. Darling

The hon. Gentleman's difficulty results from the fact that he tabled his question before the summer recess; now that it is October, he has got things badly wrong. However, he might like to bear in mind the fact that, under the previous Government—whom, no doubt, he supported—social security spending was increasing at a rate of about 4 per cent. a year. Under the present Government, it is increasing by about 2 per cent. a year.

Mr. Iain Duncan Smith (Chingford and Woodford Green)

I welcome the right hon. Gentleman to his place, but is not the fact that he is now in place and that his predecessor has gone an admission by the Government that they have completely failed on that agenda? My hon. Friend the Member for North Wiltshire (Mr. Gray) asked a specific question about the Government's failure to cut any costs. By their own figures, everything that they have done has raised the cost of social security. Does the right hon. Gentleman now accept that Library figures show that they inherited a budget that was falling—[HON. MEMBERS: "No, it was not."] Yes, it was. Do not those figures also show that the Government have turned the budget around, and are increasing it? What will he do seriously to reduce a budget that is rising, and costs taxpayers money?

Mr. Darling

For the past hour, I have watched the hon. Gentleman pawing like a bull desperate to enter a china shop, and now here he is. He must face the facts that, under the previous Government, social security spending was rising at about 4 per cent. a year, and that inequality and exclusion increased nevertheless.

The question that we must ask ourselves is twofold. First, what can we do to ensure that the money that we spend is spent to best effect—to provide security for those who most need it? Secondly, we must ensure that, in the proposals that we shall shortly bring forward, we implement principled reform of the welfare state, not for the next two to three years, but for the next two to three decades. I respectfully refer the hon. Gentleman to the speech that I delivered this morning—which he will, no doubt, have available to him shortly—which sets out the approach that the Government will take.

Mr. Duncan Smith

Yet again, the right hon. Gentleman has adopted his predecessor's habits; he avoids the real question. Although, at the time of the general election, Labour pledged to cut the costs, every single thing that the Government have done has increased those costs. Moreover, as growth is now falling to 1 per cent., the budget will increase by nearly £1 billion in addition to their previous increases. I therefore make the right hon. Gentleman an offer.

Mr. Dennis Skinner (Bolsover)

What would they do?

Mr. Duncan Smith

The hon. Member for Bolsover is tossing his right hon. Friend a question, asking what the Conservatives would do. We would cut the working families tax credit, thereby increasing the budget dramatically. Why does he not do that now—saving us all money—and stop wasting our time?

Mr. Darling

Now we at least have a policy from the Opposition, and it is to take away money that is being spent to ensure that work pays for hundreds of thousands of people for whom it has not paid in the past. This Government, unlike the previous Government, are determined to take measures that reduce the number of people who are out of work, including measures to make work pay. Therefore, we are reforming the tax and benefit system and have introduced the working families tax credit. Those are examples of methods by which the Government are helping people get into work in a way that did not happen in the past.

We are determined to ensure that the social security system and the welfare state are modernised to fit the country's needs, not only in the next two to three years, but in the decades ahead. If the hon. Gentleman is serious about reform, we shall look forward to receiving his support when we propose measures to do just that.