HC Deb 28 October 1998 vol 318 cc339-56 3.31 pm
The Secretary of State for Social Security (Mr. Alistair Darling)

With permission Madam Speaker, I should like to set out the next phase of the Government's plans to reform the welfare state and to deal with the annual uprating of benefits.

When we came to power, we faced two huge challenges—to raise standards in education and to reform the welfare state. Today, we rise to the challenge of welfare reform. Today, we put words into action.

Welfare reform is essential because many people are poorer than they need be, many are dependent on benefits when they need not be, and others are neglected when they should not be. Our central objective is to provide work for those who can and security for those who cannot. Our plans will be based on our belief in fairness, will give greater help to those with the greatest needs, and will ensure that benefits go only to those who are entitled to them. All reforms will be undertaken after consultation.

The vast majority of people who responded to the principles and success measures that we set out in the Green Paper earlier this year endorsed them, and I am happy to reaffirm them today. I have placed in the Library a copy of the list of respondents. What I announce today will be the first of a series of announcements that will form the basis of legislation during this Parliament, beginning early next year. Legislation will take effect over a number of years, but all existing claimants who are eligible for their benefits when the changes are introduced will be protected.

Today, we are publishing three documents to show how we are putting the principles that we set out into practice. The first is a document that shows what we have done so far on welfare reform—the new deal, child care, the working families tax credit—the principles that guide our reforms and the new measures that we are planning.

The second document sets out our plans for a single gateway, a something-for-something deal for those out of work that will change the culture of the welfare state. The third is a consultation document on our plans to reform disability benefits to give more help to those in greatest need and to tackle the abuses in the current system.

On the benefits uprating, I can announce today the largest ever increase in child benefit. As a result of the uprating, child benefit will rise from next April by £2.95 to £14.40 a week. That represents real security for our children provided by the Government. I can also announce new help for the poorest pensioners in the introduction of a minimum income guarantee. The poorest pensioners will receive a minimum of £75 a week and pensioner couples will receive £116.60. Again, that represents real security provided by the Government for today's pensioners.

Most national insurance benefits will increase in line with the retail prices index—3.2 per cent. Means-tested benefits will generally increase by 2.1 per cent. in the normal way. I have placed in the Vote Office the details of the uprating of benefits.

We have plans for a single gateway to the benefit system for people of working age. When I looked at the way in which the Department of Social Security handed out money, I was amazed to see that people of working age could receive benefits without even having to turn up for an interview and without being given any help in finding work. That will change.

Through the £195 million for the new deal for disabled people, the £190 million for national introduction of the new deal for lone parents and the first ever national child care strategy, we have created new opportunities for people to work. We are ensuring, through the new minimum wage and the working families tax credit, that work pays.

We believe that, in return, it is reasonable that people of working age—lone parents, the unemployed and people claiming incapacity benefits—should be required to attend an interview to discuss their options for work. There will, of course, be people—such as the terminally ill—for whom an interview would clearly be inappropriate and for whom the rule would not apply.

We are not forcing people into work, but the interviews will give real opportunities to people who have been written off by the system. Our plans will create a fundamental change in culture. People will no longer ask of the system, "What can you do for me?" They will ask, "What can I do to help myself?" We will improve the quality of advice that we give as we learn from the new deal. We will proceed carefully, starting with pilots. The full scheme will be in place in April 2000.

Similarly, in disability benefits, we aim to provide work for those who can, and security for those who cannot. When the severely disabled are not receiving the help that they need, when 1 million disabled people say that they want to work but are not being given the chance, when a quarter of men over 60 are on incapacity benefit because the previous Government used it as a way in which to hide the unemployment figures, we know that the system has to change.

We promised in the Green Paper that disabled people should receive the support that they need to lead a fulfilling life with dignity; we shall keep that promise. The foundation for all that we do is an unshakeable commitment to comprehensive civil rights for disabled people to ensure that those people are respected not only in the workplace but in all areas of life.

We need to do more. Today, I can announce a £30 million programme, extra to the new deal, of new help for disabled people seeking work. We also want to improve disability benefits. Disabled people with the greatest needs are not receiving the support that they need, whereas others are receiving support that they should not. People disabled young in life with no hope of work receive so little through the severe disablement allowance that 70 per cent. of them have to claim income support. Disabled people on low incomes who need day and night care do not receive enough help to meet their extra needs, and young children with little mobility receive no recognition from the system. Meanwhile, claims to disability living allowance are not always supported by medical evidence. Some people have been awarded benefit for life even though they have conditions that are expected to improve.

Today, we set out for consultation proposals to provide more help for the most severely disabled people in greatest need and action to ensure that disability benefits go to the right people. First, we propose, for new claimants, to change the system of support to congenitally disabled people and others disabled young in life so that they receive greater help. People aged 20 and over can already qualify for incapacity benefit, if they have worked, or for income support. Severe disablement allowance will no longer be available for them.

However, many young people disabled before they were 20 have little hope of work. Today, I can announce that we will give them the biggest ever rise in support, with an extra £25 a week in benefit.

We propose a fundamental reform to incapacity benefit for future claimants only. The benefit is meant to be for people who are unable to work, yet the number of claimants has risen threefold over the past 20 years, at a time when the nation's health has been improving. We are concerned that the benefit is being abused as an enhanced early retirement subsidy.

For future claimants, we will discourage the use of incapacity benefit as an early retirement subsidy. People who have a private pension or health insurance payment of more than £50 will receive less support. Every pound of private income that they have in excess of the £50 limit will reduce their benefit by 50p. We will restore the benefit to its original purpose as an insurance benefit for people who have worked. Too often, it has been abused as a more generous form of support for the long-term unemployed.

We will strengthen the link between work and benefit, and only people who have worked and paid recent contributions before the claim will be eligible for the benefit. We will reform the all work test, so that those who claim benefits have to give evidence of their work prospects. For the first time, we will have information on the work that disabled people can do

We want to improve the provision for disabled people with the greatest needs. We will provide real security for the poorest disabled people with the highest care costs. Today, I can announce a disability income guarantee that will give £129 a week to a single person and £169 to a couple. The guarantee will be extended to three and four-year-olds so that a couple with one child on income support and disability living allowance with the highest care needs will get at least £199 a week. For the first time, we will also extend the higher rate of disability living allowance mobility component, worth an extra £35 a week to all three and four-year-old severely disabled children.

The benefit integrity project, which we inherited from the previous Government, has failed. It caused a lot of anxiety to disabled people, so we will cancel it, and in its place we will introduce a new system for reviewing claims to disability living allowance and attendance allowance that is both fairer and more sensitive. It will work in the interests of disabled people.

The changes will generate £ ¾ billion in long-term savings; but even with the changes, real-terms spending on disabled people will continue to rise in the long run. The reforms do not affect the comprehensive spending review plans announced by my right hon. Friend Chancellor in July. It is quite right that, as our society gets wealthier, the amount that we spend on the most vulnerable should increase; but benefits must go to those for whom they were intended. We must give the most help to those in the greatest need, and the system must be affordable.

The structural changes that I have announced today will deliver significant savings over the longer run, but they will do so by ensuring that the greatest help goes to those in the greatest need and that benefits go only to those for whom they were intended. We want to provide work for those who can, and security for those who cannot.

Today, for the first time, we will provide real security, with record levels of child benefit. The changes are good news for those out of work, who will be given better advice and opportunities to work, but bad news for those who abuse the system or try to claim benefits to which they are not entitled.

Today, we are showing our determination to modernise the welfare state and reshape it for today's world, so that it provides opportunities for all those who want to work, and delivers security to all those who need it. I commend the proposals to the House.

Mr. Iain Duncan Smith (Chingford and Woodford Green)

I thank the Secretary of State for his courtesy in letting me see his statement earlier, albeit only a little earlier. I would probably have learnt more by simply reading the Evening Standard, which carried a full, almost blow-by-blow account of the statement before he stood up to make it. That is yet another example of how the Government want to manipulate the House and use it to their own ends.

The Secretary of State said that he would rise to the challenge. I seem to recall that, with the previous big Green Paper on welfare reform, we had exactly the same rising to the challenge. There seems to be an awful lot of rising to the challenge but far too few challenges are really being met en route.

The Secretary of State was very long on a series of issues that seem, in many senses, to be relaunched, reissued and rehashed. Minimum income for pensioners has already been stated at least twice, and perhaps even three times, and the same applies to the uprating of child benefit.

Do the Government have plans to tax child benefit, as endless leaks in the newspapers suggest? Perhaps he would like to answer that question once and for all.

There have also been further leaks to the press about taking away child benefit from parents of 16 to 18-year-olds and giving it directly to those in higher education. Will he perhaps answer that once and for all?

There are, of course, important points on the disabled and on the gateway to benefit, which I will come to, but the reality is that, as usual, little has changed. There has been a lot of relaunching of clichés and a reannouncement of stuff from the past.

I turn to the main announcements that the Secretary of State has made today in his documents. On "The Gateway to Work", clearly, the Government have now decided that everyone should be eligible for work at least at the interview stage. The Opposition are not, in principle, opposed to that concept. [Interruption.]

The Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), should be very careful because it was she who said: There is an authoritarian behavioural requirement for jobseekers". She said that the jobseeker's allowance was illiberal in what is meant to be a democratic state."—[Official Report, 10 January 1995; Vol. 252, c. 109.] Either she has changed her mind about jobseeker's allowance or become illiberal, authoritarian and anti-democratic.

When we introduced jobseeker's allowance, we were attacked by the then Opposition, who are now the Government. I assume that they now accept the great success of jobseeker's allowance and intend to apply it further, but serious questions remain with regard to the concept of the gateway. I should be grateful if the Secretary of State would answer some of them.

Paragraph 10, page 10 of "Principles into Practice" mentions that certain categories of people, such as the recently bereaved, single parents with very young children and others, will not be required to take part in immediate interviews for work. What does "immediate" mean? Exactly how long a gap does the Secretary of State envisage there being? Who will adjudicate as to who fits into those categories? The statements are very vague. He must have some idea in his own mind of exactly what that means. [Interruption.] Labour Members laugh because they like the general, but do not like the particular.

The Secretary of State made a bold statement on dependency and wishing to reduce it, but the more the Government move towards means testing, the greater dependency there will be. For example, in paragraph 21, page 16 of "Principles into Practice", there is a clear signal that the Government will apply a means test on occupational and personal pensions; for example, incapacity benefit is reduced for new claimants. Exactly how does that fit in with the right hon. Gentleman's reduction of dependency?

Does not the Government's statement about reducing dependency ring hollow given the working families tax credit that they are to introduce, which will massively, by their own statement, increase dependency? Does the Secretary of State not agree that, on the Treasury's statement, even someone on £38,000 a year will be moved into dependency directly as a result of that programme, so will the Government now admit that that they are beginning to attack the contributory principle and that what they intend to do—[Interruption.] As the Chancellor of the Exchequer has just said, they intend ultimately to abolish it—those were his words just now on the Bench. He intends to get rid of it, so will the Government now admit that that is what they are engaged in.

The Government refer in the document to the need to pilot some of the programmes. Does the Secretary of State admit that his lone-parent pilot programme was a clear disaster? The Government included no control pilots in it. Will he now accept that, unless he includes control groups in pilot projects, those, too, will be a disaster, just like his nationwide launch of the lone-parent pilot?

Serious questions need to be addressed. Will the Secretary of State specify what fall-out rate from the return to work is acceptable in these programmes and what the targets are for benefit savings? Will he also specify what the target is for the number that the Government intend to get back into work?

Finally, in "Principles into Practice", the Government state: at the point of change, no one loses from the reforms we are making. What does that mean? Clearly, there will be losers. What does the Secretary of State actually mean? [Interruption.] Labour Members laugh again—the particular and the general, the same old rule. Nice clear statements are what are required. Surely, if the right hon. Gentleman cannot answer those questions and many others, it will become apparent over the next few weeks and months that he has missed another opportunity.

For the most part, the announcement is a rehashing of what has been and gone, a statement of the general, and of yet more consultation documents. There has not been much decision making and serious decisions have yet to be made—yet again, a missed opportunity.

Mr. Darling

The only missed opportunity is the hon. Gentleman's. I listened carefully to him, but I still do not know whether he is for or against anything that we have proposed. In the five minutes at his disposal, he raised several points of detail, but on the points of principle—our reform of incapacity benefit and our proposals to get people into work, to encourage more people to take opportunities available to them and to help those who are most severely disabled—he had not a single word to say.

Let me deal with the points that the hon. Gentleman did make, such as they were. As I understand it, the Conservative party is now committed to getting rid of the working families tax credit.

Mr. Duncan Smith

Not true.

Mr. Darling

The hon. Gentleman says, "Not true." He said so at the last Question Time. That is the single policy that the Opposition have set out. The working families tax credit ensures that work will pay. For many people who are trapped on benefits, one of the problems of the past was that work did not pay. The working families tax credit will get more help to people and will encourage them to get off benefit and into work.

The hon. Gentleman mentioned the new deal for lone parents, complaining that we should have done more piloting or had more control groups. That is a bit rich coming from a party that is against the whole thing. The Conservatives believe that the new deal is wrong, and they would leave people confined to benefits. I strongly believe that the new deal is a success. Nine out of 10 lone parents who have been interviewed have joined the new deal, which shows how much they wanted to take the opportunities available.

The hon. Gentleman asked about a couple of points of detail. First, we have made it clear that we must be sensitive when we introduce interviews that will be conditional on someone receiving benefit. It would be inappropriate to hold them immediately after a bereavement, and I am glad to have the opportunity to say so. I will happily discuss with the hon. Gentleman the length of time that he might think reasonable. However, we are rightly saying that we will be sensitive about how we handle these matters. Our objectives are to help people and to give them opportunities denied for years by the Conservatives.

Secondly, the hon. Gentleman asked what we meant when we said that existing beneficiaries would not be affected. We mean just that. Our radical proposals are for reform in the future. We are ensuring that we can meet the needs of the welfare state not for two or three years but for two or three decades. We are reforming the welfare state: the Conservative party did absolutely nothing about it for 18 years.

Mr. Terry Rooney (Bradford, North)

I thank my right hon. Friend for his statement, and particularly for his proposals about the single gateway, which will be a great improvement. Will he say more on his proposals for the abysmal failure that is the all work test, which clearly divided people between those picked to work or not to work, with nothing in between? That has imperilled many people. Can my right hon. Friend say how it might develop in the coming months?

Mr. Darling

I am grateful for my hon. Friend's support. The all work test has not been successful. It tends to consign people who pass it to complete inactivity. Everyone knows that people who have an incapacity may be capable of doing some work. I am anxious to assess clearly whether someone is eligible for incapacity benefit because of a medical condition, but I am anxious, too, to assess people using a new employability test that will ask what they can do and concentrate on their capacity rather than their incapacity. In the past, far too many people have been simply written off. Many people on incapacity benefit could work, and they want to work.

Mr. Mark Oaten (Winchester)

The Liberal Democrats welcome several of the measures, notably the decision—for which we have long argued—to abolish the failed benefit integrity project. It is regrettable that that abolition has taken 18 months, but it is none the less welcome. Can the Secretary of State confirm that, from tomorrow, no tests will be associated with the project, and that no one else will lose benefits because of it? Can he tell us what penalties he is considering for those who fail to turn up for compulsory interviews? Will any benefits be lost? On means testing of incapacity benefit for those who have pensions, would the right hon. Gentleman not have been wiser to wait until the Government had resolved the issue of second pensions, as his measures clearly set a possible disincentive to saving? Does his package means more or less money for disabled people?

Mr. Darling

I shall deal with the hon. Gentleman's points in reverse order. Yes, the package clearly means more money for disabled people. The minimum guarantee, extending mobility allowance to three and four-year-olds and the new allowance for those disabled congenitally or when they were under 20 clearly represent additional help that was not otherwise available. On pensions, the important point is that, 50 years ago, very few people had insurance or occupational pension cover. Incapacity benefit was designed when such cover was not available. If we were starting from scratch—it is essential to take that approach in considering fundamental reform—we would ask whether it was sensible to pay money to some people who might have good occupational pension cover without taking that cover into account. With the £50 disregard, the first £50 is ignored, and after that there is a 50 per cent. taper, so people with an occupational pension or insurance cover will always be better off.

I do not agree that it might have better to wait for a further announcement. Part of the problem with welfare reform is that it is tempting to wait for the next announcement because one thus avoids taking all sorts of difficult decisions. At some stage, one must press on with firm proposals.

The hon. Gentleman asked about interviews. He knows that, to receive benefit, people have to sign up to a host of conditions. An important one will be that someone has to agree to come to an interview. I stress that there is a world of difference between that and telling people that they must take a job. We say that in the new deal for the young unemployed but not for lone parents. Nine out of 10 lone parents who came for interview liked what they saw and joined the new deal.

On the benefit integrity project, I cannot give a commitment that everything will change tomorrow morning. We have already made changes to remove some of its worst excesses which caused difficulties in the summer last year. I want to ensure that we have a system that gets benefits right from the start. Almost one third of disability living allowance claimants did not have apparent evidence to justify the award. That situation cannot continue. Equally, the trouble with the benefit integrity project is that it has removed people from benefit who, on any objective view, should not have been put in that unhappy position. That is why I want to move ahead with reform to carry on improving things and remove the difficulties. All my proposals will be subject to consultation. Assuming that the consultation agrees with what we propose, we will press ahead with legislation and make the necessary changes at the earliest opportunity.

Mr. Frank Field (Birkenhead)

I welcome the Secretary of State's announcement, particularly those aspects which will increase help to the most disabled people, and the extension of help to younger children. I hope that I will be able to welcome the changes on the single gateway when I read more fully the proposals in his consultation document. On the consultation on changes to disability benefits, what will happen to the Government's proposals if most of the people and organisations consulted are against them? Of those people who will suffer cuts in their benefit as a result of the changes made today, will he say what proportion—[Interruption.] Well, cuts compared with what they would have gained had the current benefits remained in place. Of that group, what proportion does the Secretary of State expect to be successful in getting jobs?

Mr. Darling

I thank my right hon. Friend for his general support and acknowledge his work in the Department earlier this year, particularly in preparing the Green Paper, on whose principles and success measures we are building. The point of consultation is to listen and find out what people have to say about our proposals. Over the next few weeks, I expect that there will be points on which people will agree and others with which they disagree or on which they have better suggestions. That is the nature of consultation.

The right hon. Gentleman mentioned people who are no longer entitled to benefit as a result of the changes we have made. Those are changes intended to return incapacity benefit to its original intention in relation to contributions and which relate to our proposals for a better share between individual contributions and those from the Government. I believe that the changes are absolutely right in principle, but I repeat that no one receiving benefit under the present system will be affected. It would be wrong to disturb arrangements that have been made and which have been proceeded with in good faith. These are all changes based on the future.

The right hon. Gentleman asked about work. I believe strongly that everything the Government are doing is essential in the modern labour market, where people will have several jobs between starting out and retiring. We must ask ourselves at every stage what the Government can do to keep people in touch with the labour market, which is a fundamental part of the new deal.

Mr. Andrew Rowe (Faversham and Mid-Kent)

I listened carefully to the Secretary of State but even though he said that he is keen to keep people in touch with the labour market, I heard nothing about the growing number of people who are occupied in or seeking part-time work. One of the biggest industries in my constituency is fruit growing, which depends heavily on people who are prepared to pick as part-time workers. If the reforms are to mean anything, the transition from part-time to full-time work—or making available part-time work on terms that make it attractive—must be recognised as an indispensable part of a labour market that is increasingly dependent on people working part time.

Mr. Darling

Inasmuch as I understood the hon. Gentleman' s point, part-time work is a matter of choice for some, but I fully accept that for many people it is the only option. What we have to do and what we are doing at every stage of the labour market reform is to make it more likely that someone can be kept in touch with the labour market to find full-time or part-time work as they think appropriate.

Ms Gisela Stuart (Birmingham, Edgbaston)

I was delighted to hear the Secretary of State announce the cancellation of the benefit integrity project. When the Social Security Committee considered that issue in the summer we nearly recommended cancellation, but then decided not to. We felt that there was a difficulty with the claims that had been assessed and that a significant number of claims were outstanding based on inadequate information. Can the Secretary of State can tell me how many such cases are outstanding and what the transitional provisions are for that group and for the new arrangements that will be put in place?

Mr. Darling

My hon. Friend has raised a point that was raised by the Liberal Democrats. I shall make the position clear. The proposals I have announced this afternoon, including that in relation to the benefit integrity project, are the subject of a consultation paper that is available in the Vote Office now. Assuming the consultation succeeds and that people generally agree with what we are doing, we will proceed with the necessary changes either legislatively or, if possible, administratively.

The benefit integrity project is continuing now, but, as I explained earlier, we have removed some of the worst excesses. Cases in the pipeline will still be looked at because it is important to ascertain two things. First, we must ensure that we are getting the right benefit to those who are entitled to it and, secondly, where there is no evidence to justify it, we must do something about it. That process will continue.

I want to ensure that, not just in this area but across the benefits system, the DSS and the Benefits Agency spend more time getting decisions right in the first place rather than making a wrong decision and having to disturb an award that has been made, which is obviously difficult for the person receiving it. No one should be in any doubt that the process we have started by examining the benefit integrity project and disability living allowance and attendance allowance claims will continue. We will remove the aspects causing the most problems, but we will not return to the situation that existed before April 1997 when absolutely nothing was being done about the fact that far too many people were getting the wrong benefit.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The Secretary of State may recall that, as the hon. Member for Birmingham, Edgbaston (Ms Stuart) said, in May, the Social Security Committee recommended that the benefit integrity project should be put on probation for six months. I am sure that it is a matter of delight for the House that the Secretary of State has put it to death this afternoon. That is welcome. The right hon. Gentleman rightly made great play of the fact that existing benefits and payments would be protected and that changes to benefit levels would only come in the future. Does that apply to disability living allowance claimants who currently hold life awards?

Mr. Darling

The hon. Gentleman raises an important point. He will know, as many hon. Members do, that the concept of a life award within the DSS is misleading. Although we have called them life awards, they are not life awards. We have always had the right to review someone's entitlement to an award. I want to change that situation so that people know whether they will receive a benefit for a long period. It is also important that we constantly review people's entitlement so that, if their condition gets worse, we take account of that and perhaps pay them more, and if it gets better, we take account of that as well.

In the minority of cases in which the condition will not improve, it is important that we get away from a situation in which we give awards and then abandon the person, who may well be receiving the wrong amount of help.

Mr. Dennis Skinner (Bolsover)

When he refers to keeping in touch with the labour market, is my right hon. Friend aware that in some areas in Britain, especially the coalfields, where all the pits were closed in the miserable years of the Tory Government, there is not much of a labour market? Will the people who do the interviewing be sensitive to the fact that there are not many jobs available?

Will my right hon. Friend bear it in mind that many disabled people work in Remploy factories, which are running into serious trouble in respect of orders, principally from the Ministry of Defence and so on? If my right hon. Friend wants those disabled people to continue in work, it would be helpful—and it would be symbolic for him as he carries through this reform—to ensure that disabled people do not lose their jobs in Remploy factories. Some steps will have to be taken in that regard. It would not be a bad idea if my right hon. Friend doubled the number of Remploy factories for the increasing number of disabled people who want to work.

Mr. Darling

My right hon. Friend the Secretary of State for Education and Employment and my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities have announced today extra help to enable disabled people to get into work. That will be welcome.

My hon. Friend makes an important point about the coalfields. The Government's objective is to create the right economic conditions to ensure sustainable economic growth everywhere, including the coalfields. The difference between what happens under this Government and what happened under the previous Government is that as a result of the new deal, rather than abandoning people once they are unemployed, we do everything that we can to put them back in touch with the labour market. I fully accept the point that my hon. Friend makes; that in large parts of South Yorkshire, for example, which were devastated in the late 1980s, we need to do more to help right across the board. We need to ensure not only that someone has the right skills and training but that opportunities exist. That is why the Government's approach to welfare reform and economic reform is that the two go very much hand in hand.

Miss Julie Kirkbride (Bromsgrove)

Can the Secretary of State be a little more clear about what he has in mind with regard to the single gateway and his changes to incapacity benefit? Does he envisage one level of benefit for people who are on incapacity benefit now and people claiming income support or unemployment benefit? Will there be one level of benefit for different types of claimant, as there is in other countries that have introduced similar arrangements to those which the right hon. Gentleman proposes?

With regard to the all work test, are we to assume that that test will apply to those people at present on incapacity benefit? Even though they may have problems with mobility, they can nevertheless be deemed able to do a desk job and required to do some such work. Although they have a disability, they can still be part of the work force.

Mr. Darling

The hon. Lady is right. There are many people on incapacity benefit who could do some work. It may be different from what they have done in the past, and the object of a new employability test is to assess what they can do. There is nothing in the all work test that forces anyone to do anything. It is designed to provide help to enable people to work if they are able to do that.

The hon. Lady asked about the single gateway and a single benefit. There is nothing in what I said this afternoon that suggests a single benefit. We have a number of benefits, as the hon. Lady will know. The whole point about the single gateway is that, for the first time, people will be treated as individuals, rather than as part of a category. We want to ensure that all those of working age who enter the benefits system are asked what we can do to help them get back into work, such as improve their training, rather than simply being handed a benefit cheque.

Mr. Tom Clarke (Coatbridge and Chryston)

I warmly welcome my right hon. Friend's announcement about benefits for people with disabilities, especially because of the number of young people who will now be involved. However, some of my constituents are concerned about the merit of some of the medical examinations: they feel that they are very short and not of a particularly high quality. Can that be tested? Secondly, on the question of appeals, which I know are not a matter for my right hon. Friend and which must, of necessity, be independent, some of my constituents are disappointed that they have to wait for 12 to 14 months, which is a very long time. Is there some general action that my right hon. Friend could take, without intervening in individual cases?

Mr. Darling

I am grateful to my right hon. Friend for raising two points with which I want to deal, the first of which involves the all work test and the nature of that test. He is right to say that a number of people have expressed concern about the nature of the test. One of the things that we have done since coming to power is to impose much higher standards on the people carrying out the tests, so that we can be satisfied that they are being conducted properly. Since being appointed, I have noticed a number of areas in which we can take further action to improve the standard of the tests.

My right hon. Friend also raised an extremely important point about appeals. To be frank, the current delay in dealing with appeals is unacceptable. However, there is good news on that front: we have set up a new appeals agency to take over from the independent tribunal service. Under the Social Security Act 1998, I acquired powers, not to make decisions—that would be quite wrong—but to lay down standards and, in particular, time limits within which appeals should be heard. I intend to pursue that vigorously.

Mr. Edward Leigh (Gainsborough)

The Secretary of State mentioned uprating child benefit, but I am sure that he would be the first to accept that middle England, which he values so highly, would thoroughly resent any uprating of child benefit being wiped out by taxation, once joint income had reached higher tax thresholds. Will the right hon. Gentleman answer this simple question: does he accept that it is important to retain the principle of independent taxation when considering how and whether to tax child benefit?

Mr. Darling

Matters of taxation, independent or otherwise, are for my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman highlights yet again the problem of Opposition Members, which is that half of them call for more spending and half for less.

On the subject of child benefit, I forgot to answer a point raised by the Opposition spokesman, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), when he accused us of hiding our tax intentions. We did not hide them. My right hon. Friend the Chancellor, standing at the Dispatch Box last year, made it quite clear when we introduced the increase in child benefit that he would consider whether or not there was a case for taxing child benefit—at least in respect of higher-rate taxpayers. That remains our position and nothing has changed. I am glad that the Opposition are now at least welcoming the fact that we have given the biggest ever increase in child benefit, which will be of major help to every single child in this country.

Mrs. Alice Mahon (Halifax)

My right hon. Friend has said that all those in receipt of benefit, including lone parents, will be required to attend an interview. Will that interview be compulsory? If they do not attend, will there be any penalties imposed?

Mr. Darling

Let me explain. The conditions in respect of the new deal—that lone parents can attend—remain exactly the same; in other words, there is no compulsion. Lone parents will receive a letter inviting them to come in for an interview, once their child passes the age of five.

We are proposing a slightly different system—a new single gateway to the benefits system. It will be piloted for the first two years before being fully implemented, so that we can see how it works in practice and improve on it. We are saying to lone parents, who are not compelled to take work, that there is a world of difference between that and asking them to come in for an interview to discover what help might be available to them. Because nine out of 10 lone parents who come in for interview under the present scheme have joined the new deal, the matter is worth pursuing.

On my hon. Friend's last point, assuming that we pass the pilot stage and obtain the legislative power to do so, it is right to say to everybody that, as a condition of receiving benefit, coming along for an interview to do no more than find out what options might be available is not exactly unreasonable.

Mr. Alex Salmond (Banff and Buchan)

The Secretary of State said that the benefit integrity project is wrong, unfair, insensitive and should be scrapped. I do not think that there is one hon. Member with a constituency case load who could possibly disagree with that judgment. Nevertheless, if the project is to be continued for the time being, will not some people continue to lose their benefit unfairly? Will they be able to apply under the new criteria? If they are successful in doing so, will their lost benefit be restored to them?

Mr. Darling

If someone's benefit is restored on appeal, they will get their benefit back. The hon. Gentleman has to accept that, currently, the problem is that some people are receiving the wrong amount of disability living allowance. Some people are receiving DLA when the medical evidence for granting it is not immediately obvious, which—in any system—is clearly unsatisfactory. People need to have confidence in the system. Moreover, if we ensure that we are paying benefit to the right people, we could do more to help them. Other people are not receiving the right amount—they are not receiving enough—because their condition has worsened or was wrongly assessed initially.

I have made it clear that the benefit integrity project has to go because too many of its aspects are flawed. We have already taken a series of measures to remove some of the worst effects, and we have removed many of the problems—particularly those that occurred last year—of which hon. Members will be well aware. I want to replace the project with a system that ensures that we get the benefit right the first time. I want to ensure also that, when we review benefits, we review them to the benefit of disabled people, so that we can tell them, "If your condition has worsened, we can take account of that. If your condition has improved, we have to take account of that, too."

We want to get the system right the first time. We have inherited a situation in which, across the board, far too many decisions taken by the Benefits Agency have not been right the first time. That situation has to change.

Audrey Wise (Preston)

May I welcome the extension of mobility help to three and four-year-old children, which I believe is overdue? May I also, however, express my concern about compulsory interviews for lone parents? If the interviews are intended to be helpful, why is it necessary to make them compulsory? Will my right hon. Friend confirm, quite categorically, that a compulsory interview is not the precursor of compelling lone parents either to seek or to accept employment, but that they will continue to be able to decide for themselves what is best for their children?

Mr. Darling

On the last point, nothing has changed from the situation today. I assure my hon. Friend that we have always made it clear that we are not compelling lone parents to go to work because of their particular circumstances. That position remains in future exactly the same as it is today.

My hon. Friend asked about pilots and why it is reasonable to ask people, right across the board, to come in. Let me give her one reason. On Monday, when I launched the lone parents' new deal nationally, I spoke to one lone parent who told me that she had ignored the first couple of letters she received because she thought that it was just another scheme. She turned up after receiving the third letter, was pleasantly surprised and is now about to complete training and go into work.

My point is that more people need to know what the Government are doing to help. There is a world of difference between coming in for an interview and being told what is on offer, and compelling someone to take a job—which, in the case of lone parents, we are not going to do.

Rev. Martin Smyth (Belfast, South)

I share the welcome for some aspects of the statement, which other hon. Members have already mentioned. Will some of the forms be revised so that people can more simply find their way through them? Although it has been stated that the all work test should not be a snapshot at a specific time, people are regularly refused benefit because they are experiencing a degree of remission at a specific time. I know of one case, for example, in which a medical examiner not only rejected a person's claim for benefit but said that he was unfit to take a job as a civil servant. There is a need to fine-tune the system both upwards and downwards.

Mr. Darling

I am grateful to the hon. Gentleman for his support. I made it clear in reply to an earlier question that I do think that the all work test needs to be refined. I certainly agree that the test would not be a success if a snapshot were taken on a particular day when a person's condition might be much worse or better than usual. It is important to get the whole picture.

The hon. Gentleman makes an exceptionally good point about the forms. I am pleased to be able to tell him that we are already on the case, doing what we can to simplify them. We are already running some pilot projects which will make it much easier to claim benefit. We are using modern technology and simplified forms, and bringing forms together so that people do not have to fill in three or four to apply for benefit. The hon. Gentleman makes a perfectly good case, and I hope to be able to come back to the House in the not too distant future with some good news on that issue.

Mr. Roger Berry (Kingswood)

I warmly welcome most of my right hon. Friend's statement. Does he acknowledge that, over the past three years, the number of people claiming incapacity benefit has declined significantly, not least because of the restrictions on eligibility introduced by the previous Government? Will he reassure the House that he has no plans to extend the qualifying period for incapacity benefit?

Mr. Darling

My hon. Friend asks about incapacity benefit and the qualifying period. I said that we are restoring incapacity benefit to its original purpose so that there is a more recent link between work and receiving that benefit. He also asked whether we want to make any further changes. I am not sure whether he has the consultation document yet, but the changes are fully set out in it. I think that I can reassure him on that point.

Mr. Steve Webb (Northavon)

I am sure that the Secretary of State would not have wanted to give a misleading impression, so will he confirm that when he said that pensioners would be guaranteed an income of £75 a week, he was unaware of the 500,000 pensioners with savings who will have to live on less than £75 a week?

Mr. Darling

It is perfectly true that there are pensioners with savings—some have modest savings, while some have a great deal. I wish that the hon. Gentleman would stop carping about the minimum income guarantee. For the first time, we are giving more help to the poorest pensioners—more than they would ever have got under the previous Government. The Liberal Democrats should welcome that, not carp about it.

Mr. Malcolm Wicks (Croydon, North)

In view of the need to ingrain in our social security practice some sense of balance between rights and responsibilities, most people would think it perfectly fair and reasonable that when people exercise their right to claim benefit, they should attend an interview to talk about their duty to seek work. Given the emphasis on improving the interface between social security and employment, is the logic that one day at local level we shall have integrated employment and benefit offices? Are the Government considering that for people of working age?

Mr. Darling

My hon. Friend may be aware that that is something in which the Government are extremely interested and which we intend to pursue more fully. The new deal attempts to do just that—to bring together the Employment Service and the social security system. The single gateway is an acceptance of the fact that the public, quite rightly, do not distinguish between the different Departments of Government. They expect the Government to provide help. As my hon. Friend rightly says, if the Government are to provide help, it is the responsibility of those seeking benefit or other support at least to find out what options are available. I for one will be happy to defend that proposal because it is entirely right and based on the correct principle.

Mrs. Jacqui Lait (Beckenham)

Will the Secretary of State please clarify whether people who are currently receiving incapacity benefit will be called for an employability test, or will it be only new claimants? Also, will pensioners who have a minimum income guarantee continue to have access to housing benefit, council tax benefit and income support?

Mr. Darling

As I made clear, the single gateway system will be piloted, but we want to ensure that people who are not in full-time work and who are receiving benefits attend an interview. Where that is inappropriate, perhaps because of care responsibilities, we need to be sensitive. I do not for one moment belittle the hon. Lady's point. There are many details on which we want to consult, but I believe that the principle that someone should attend an interview to find out what help might be available at an appropriate time remains the right one.

Mr. Chris Pond (Gravesham)

I welcome my right hon. Friend's statement. Is he aware that, in my constituency—as in many others—we have been carrying out a consultation process with disabled people about the way in which the current system operates? I assure him that those groups to which I have spoken will welcome his statement—especially the announcement about the abolition of the benefit integrity project. However, can he confirm that although, in two thirds of disability living allowance cases, there is no information to justify the amount of the award being paid, that is an indication, not of fraud, or even of overpayment, but simply of the non-availability of that information? Will he reassure people on DLA that there is no intention—as there was under the BIP—perhaps to hound them for potential fraud?

Mr. Darling

It is very important to distinguish between those people who defraud the social security system—which we all know happens—and those people who, through no fault of their own, have ended up with the wrong benefit. Since the week when I arrived in the Department in July, I have been worried that the systems that we have inherited are far from satisfactory. They need to be reformed to ensure that we get benefits right. It is far better that we ensure that a person receives the right benefit from the start, because otherwise, by the time the system catches up, they have proceeded so far down the road that it causes all sorts of difficulties when we try to put matters right. We are determined, therefore, to place far more emphasis than there has ever been on getting decisions right first time.

Mr. Quentin Davies (Grantham and Stamford)

The Secretary of State studiously—many people will think, disingenuously—avoided the phrases "means test" or "benefit reduction". Does the right hon. Gentleman agree, however, that, if incapacity benefit above £50 is means tested in future, first, a lot of future claimants will lose incapacity benefit to which they were entitled, and for which they believe they have paid through their national insurance contributions; and, secondly, the Government will once again have delivered a major blow to the principle of the national insurance system? We get a blow to the system about once a month. Why do not the Government come clean and say that their real agenda is to erode the contributory principle and the national insurance system and, ultimately, to destroy it altogether?

Mr. Darling

Although, to be fair, I believe that for much of the past 18 years the hon. Gentleman was in opposition to the Conservative Front-Bench team, he might want to reflect on the fact that the national insurance system and entitlement to contributory benefits were changed on the odd occasion during those 18 years. I believe that people realise that national insurance funds the system on a pay-as-you-go basis. It is not a fully funded system, so it is rather different from, let us say, an insurance scheme.

On the incapacity benefit changes, I believe that, in this day and age, when far more people have cover—sometimes substantial—it is entirely right that the risk should be shared fairly. The Conservatives may have pledged themselves to oppose that—which is curious given that, although they are always saying that they want to reform the welfare state, they have absolutely nothing to say on the particulars.

I believe that the change is entirely fair, and I have made it absolutely clear that the proposals are for future beneficiaries only. People on existing incapacity benefit will not be affected. The hon. Gentleman is therefore wrong on both counts. I am only sorry that at no time in the last hour have we heard a word from Conservative Members as to what they would do to reform and improve the benefit system.

Several hon. Members


Madam Speaker

Order. That concludes the statement. We must move on.