HL Deb 02 April 1984 vol 450 cc495-504

4.15 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)

My Lords, with the leave of the House, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Social Services. The Statement is as follows:

"With permission, Mr. Speaker, I will make a Statement on my plans for taking forward a series of reviews on the social security system. As the House will know, I have already set in hand a thorough review of the largest single element of social security provision through the inquiry which I am chairing into provision for retirement. We have made good progress on that inquiry. I have received no less than 1,700 submissions from interested organisations and members of the public on the subject of portable pensions alone. We have now completed our public sessions on that subject but I intend to hold further public sessions on the wider issues of pensions policy in the coming months.

"I also announced in February that I intended to establish a review of the housing benefit scheme. That scheme, which now accounts for some £4 billion of expenditure a year and is paid to one household in three throughout the country, has increased rapidly in scale. The announcement of a review was widely welcomed and I am glad to be able to report that the review will be chaired by Mr. Jeremy Rowe, Chairman of the Peterborough Development Corporation, Deputy Chairman of the Abbey National Building Society and Chairman of the London Brick Company. His experience makes him well suited to this important task and I am grateful to him for agreeing to take it on. He will be commencing the review when his involvement with the London Brick Company ends later this month and I expect then to announce the two other independent members of his review team.

"Mr. Speaker, although these reviews represent a substantial undertaking. I believe the time is right to look at the other major parts of the social security system as well. Spending on the social security budget now totals over £35 billion and accounts for almost 30 per cent. of all public expenditure. Payments—including national insurance pensions —go to well over 20 million beneficiaries and the whole system requires the employment of almost 80,000 staff in my department to administer the various schemes. Given the importance of social security, no responsible Government can avoid the duty to look carefully at the way the system works. I am therefore establishing two further reviews. The first will be concerned with the supplementary benefit scheme. The scheme now deals with well over 4 million claimants, of whom over 1½ million are pensioners. Over 7 million people live in households in receipt of supplementary benefit and total expenditure on the benefits is over £5½ billion. Following the review undertaken by the last Government, a number of major changes in the scheme were introduced in 1980 to make the scheme subject to a much greater extent to specific parliamentary regulations. The aim was to consolidate legal entitlement to benefit and to reduce the dependence of the system on the discretion of staff.

"The changes have not resolved some central problems. In particular, the system is complex to administer and difficult to understand. The result is that it is still necessary for some 35,000 staff in my department to be employed wholly on the administration of supplementary benefit; and the procedures and rules under which the scheme is administered remain extremely complicated both for staff and for claimants.

"I believe it is essential that we should look again at supplementary benefit and I have asked my honourable friend the Parliamentary Under-secretary of State for Social Security to lead a small team which will review the structure of the scheme and consider the scope for easing its administration.

"The second major area in which we have decided that a review is required is that of benefits for children and young people. At present we pay out very large sums of money through a particularly complex pattern of social security benefits. For instance, a working family may get help for children through child benefit alone, or with housing benefit, family income supplement, one-parent benefit, or a combination of them. As for young people generally, the amount of social security support depends not just on personal or family circumstances, but on whether they are in employment, education or training. All these benefits have a sensible purpose but we need to be sure that this is the best way of providing support. I have therefore asked my honourable friend the Minister for Social Security to lead a team in reviewing the present social security arrangements for giving financial help to families with children, and to young people above school-leaving age.

"The largest remaining area within the social security programme is that of providing disablement benefits. Here I propose a somewhat different approach. With the ending of the invalidity trap, the introduction of war pensioners' mobility supplement and our proposals for a severe disablement allowance, we are making useful progress towards our declared objective of a more coherent system. We shall continue to look for further practical steps in this direction.

"But it is clear that in the longer term the development of our policy would be helped by more reliable information about the numbers of disabled people, their circumstances and their needs. There has been no comprehensive study of the extent of disablement in the population for 15 years, and even that excluded some important groups. I therefore intend to take steps to fill this gap in our knowledge by undertaking a full-scale survey. A feasibility study on this is already under way.

"As to the arrangements for each review, they will all involve independent figures from outside Government. The reviews will also follow the lead of the inquiry into provision for retirement by seeking public evidence. Each of the reviews will aim to identify the needs which should be provided for and consider how, within the resource constraints we face, those needs can be most sensibly met. I have asked the leaders of each of the reviews to report their conclusions to me later this year. Taken together, the various reviews and studies I have set in hand consitute the most substantial examination of the social security system since the Beveridge report 40 years ago."

4.21 p.m.

Baroness Jeger

My Lords, I thank the noble Lord the Minister for repeating the Statement. I realise there is a temptation to turn discussion on a Statement into a debate, especially when it is so important and wide-ranging. But I shall absent myself awhile from that felicity and hope that through the usual channels a debate may be arranged soon, because this is a very wide-ranging and important Statement.

Perhaps I may ask the noble Lord a few questions. First, what consultations have the Government had with the Social Security Advisory Committee, which we understood was set up in order to deal with some of these complicated questions and which is not referred to in the Statement? Secondly, in view of the impending study, would it not be sensible for the Government to announce a moratorium on any further changes in housing benefit? It seems to many of us unfair that the proposed reductions—some in April and some in November—should take place while the Government are supposed to be enabling this committee to look into the problems.

I must ask the noble Lord whether this review of the housing benefit scheme will include the question of tax relief on mortgages. Is it also a fact that the Government are proposing to allow increases in private rents and to force councils to increase their rents? I mention these other facts because it seems to many of us that we in this country need—and I am not at all speaking in a party political sense—a more integrated housing policy which will take all these facts on board.

I must also ask the noble Lord, when he refers to the increase in expenditure on housing benefit, what increases are being incurred in the administration? I read in The Times this morning that the proposed administrative costs had increased from £16.7 million to a projected £55.7 million. This is not money which is going to beneficiaries. This is money which is going to administration and which all of us who are in touch with local councils and with these affairs know is in a tremendous muddle at the present time. For the Government to be proposing cuts for the beneficiaries but increases in administration seems to me a total waste of money.

On the social security budget, I have to ask the noble Lord whether the Government are aware that they are loading onto the social security budget men and women who ought to be at work. We should be building houses, not paying people to sit at home and get housing benefit for doing nothing. Surely there can be nothing more inflationary than paying people to do nothing. One of the reasons why I hope that the Government will look at the real causes of the increase in the social security budget is that they are ignoring the fact that this country is desperately in need of capital expenditure on mending sewers, on building improvements, on reconstruction and on improvements in road and rail transport. Instead of attending to that, the Government are putting this inordinate number of people onto the social security budget, and they then come to the House and say, "We must set up a committee to see what we can do about all these people who are claiming social security". This is very important.

I ask the noble Lord to appreciate the fact that a very big element in the increase in the supplementary benefit scheme is the long-term unemployed and the young unemployed who, not being qualified for unemployment benefit, are therefore dependent on supplementary benefit. I very much hope that the Government will take a longer look at this problem. If we have more people at work, the noble Lord will not have to complain about the number of staff in his department because he can then reduce his staff.

I must remind the Government that Beveridge meant the supplementary benefit scheme to be a safety net. If we had increased pensions and increased employment, we would not need to have so much supplementary benefit. It is a failure of the Government's policies that the supplementary benefits bill has increased at such an enormous rate and it is a sign of social sickness. I am glad that the Government are looking again at benefits for children and young people. The noble Lord referred to a team being set up. I wonder whether he can tell us who will be in that team? Will it include representatives of voluntary organisations—for example, the One Parent Families Association, the Low Pay Unit, the Child Poverty Action Group and people like that—who have great experience in the facts of life in this connection?

I was rather surprised at the paragraph on disablement, because I understood that there are at least two relevant Bills going through this House and that one of them asks for a review of the extent of disablement. I hope that all these things can be brought together, so that the feasibility study which the Minister proposes is not disconnected from other activities which are going on.

My last point is that there is no reference in the Statement to the death grant, which is causing immense distress to many people. I asked a Question not long ago and I was told that the Government were still considering that matter. We seem to have nothing here but a list of what the Government are going to consider. I hope that these considerations will be dealt with as speedily as possible, and that before long we can have a debate in which we can take many of these important matters further.

4.28 p.m.

Lord Banks

My Lords, I should like to join in thanking the noble Lord for repeating the Statement made in another place. In general, and with one reservation, we welcome the intention to review sectors of the social security systems so long as that is not a cover for further cutting back benefits. With regard to the review of provision for retirement, I should like to ask the noble Lord whether it is possible to come to final conclusions on portable pensions independently of the conclusions reached in the review of the wider issues of pension policy. Are the two not so interrelated as to make that impossible? Can the noble Lord say when the findings with regard to pensions are likely to be available? It is certainly appropriate to review the housing benefit scheme, which had such a confused start and the scope of which has already been reduced. As to two further reviews—the one on supplementary benefit and the other on benefits for children and young persons —these are both exceedingly important sectors, and we welcome the fact that they are to be reviewed.

With regard to disablement, I should like to ask the noble Lord whether research will be carried out into the additional expense which disabled people incur as a result of their disablement. That is something which the Government have in the past declined to authorise. And will the position of carers—those who look after the disabled—be carefully reviewed as well?

Finally, and this is my reservation, is not the Government's approach rather piecemeal? For example, will the possibility of introducing a tax credit scheme, or something of that kind, be considered? This would involve looking at the social security system as a whole and considering also the interaction on it of the taxation system. Are the Government prepared to do that?

Lord Glenarthur

My Lords, I am grateful for the general welcome given to the Statement by the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks. I shall try to answer some of the questions they have raised. As to the noble Baroness's question relating to the holding of a debate, this, as she will realise, is a matter for the usual channels. I understand the noble Baroness's feelings over the involvement of the Social Security Advisory Committee. However, we believe that it is probably more appropriate for these fairly wide-ranging reviews to take into account outside views. That is why in this case it has been decided to carry it out in this particular way.

The noble Baroness asked in particular questions about the housing benefit review. The object of the housing benefit review is to examine the structure of the scheme in order to ascertain whether it can be simplified so as to concentrate help on those most in need and improve its administration by local authorities. The reasons for the review are the large growth in benefit expenditure in recent years, the relatively high levels of income at which benefit can be paid and the administrative difficulties which have been experienced by local authorities in establishing the scheme as it is. In this case, therefore, it may in the end be possible to run the scheme more economically. But the housing benefit scheme as it stands must go ahead as planned; public expenditure requirements do not go away just because we are looking at the scheme overall. As to tax relief on mortgages, to which the noble Baroness referred, that is a matter for my right honourable friend the Chancellor of the Exchequer. As the noble Baroness will appreciate, the housing benefit review relates to social security benefits and not to any others.

The noble Baroness asked a number of other questions. She spoke about unemployment on a much more general scale, but unemployment accounts for only 17 per cent. of the social security budget. The elderly, for example, account for 50 per cent. of it. The noble Baroness will understand that to some extent unemployment is reflected in those who claim supplementary benefit. But of course my honourable friend the Parliamentary Under-Secretary of State for Social Security will consider the interaction between unemployment benefit and social security benefit when he undertakes the review.

Turning to Beveridge, there is no question of trying to overturn what Beveridge succeeded in doing, but it is sensible to examine whether all the concepts that he considered still apply and also to examine what gaps there are in it. Some of the principles that Beveridge recommended did not, in the end, come to pass, but many of the principles remain: co-operation between the state and individuals and encouragement of voluntary action by each individual. As to children, there will be outside representatives on the review to which the noble Baroness referred, but my honourable friend the Minister for Social Security has not yet decided whom to appoint. I shall ensure that the noble Baroness's point about voluntary membership is passed to him.

The noble Lord, Lord Banks, asked in particular whether or not this Statement is disguised in any way—whether this is what I suppose he considers to be another cost-cutting exercise. No, the aim of these reviews is to make the best possible use of all the available resources and to channel them to those areas where the need is most urgent. In this connection, I ought to refer to the question asked by the noble Baroness about the death grant. As I believe the noble Baroness will expect me to say. the death grant is still being reviewed. Again, however, I am sure that this is a grant which ought to go to those who most need it.

If I may continue with the questions asked by the noble Lord, Lord Banks, if the aim is to try to make the best use of the available resources, we have to examine whether the money can be spent more effectively. We are under no illusion that, despite the welfare state, there is a poverty problem. If anything, that underlines the need for the kind of inquiries which my right honourable friend has set up. We have to realise that we live in the real world and that there are resource constraints. The object of these reviews is to try to see how best to adjust the system in the light of those resource constraints.

I hope I have covered most of the points raised by the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks. As to disablement, the noble Lord, Lord Banks, asked about the additional expense which the disabled face. I do not have to hand the answer to the noble Lord's question. Perhaps I can find out and let him know. What I can say, however, is that, as the survey takes place, we shall certainly ensure that the views of the main disability organisations are sought. We shall of course keep the Social Security Advisory Committee informed. In their last report the committee were strongly in favour of a survey, and I am glad that we have been able to respond positively to their views in this way. The noble Lord suggested that perhaps we were adopting a piecemeal approach to the problem and that we might adopt a tax credits system. That is something of an instant answer which does not necessarily find favour everywhere. Some will argue that simplification can be secured only by tax credits, and this argument has been considered by Ministers, but there are other unresolved problems—for instance, whether such a system would give sufficient help to the poorest people.

I hope I have answered most of the questions which have been raised. If any have been left unanswered, I shall write to the noble Baroness, Lady Jeger, and to the noble Lord, Lord Banks.

Lord Kilmarnock

My Lords, can the noble Lord tell us whether the Secretary of State will publish the reports of these important inquiries before implementing any recommendations which may-come out of them, and whether the Social Security Advisory Committee will be given the opportunity to comment on these reports and to respond to them? To conclude, in the inquiry on disablement benefits will the special needs of the blind finally be taken into consideration?

4.40 p.m.

Lord Glenarthur

My Lords, as regards publishing the reports, the Government will announce their proposals, and that would be to publish separate results. Clearly there will be a need to bring together the separate work of the reviews. Essentially it is a matter for my right honourable friend to decide, but I am certain that the conclusions, even if not the whole of the reports,will be published in due course.

As regards the response to the reports by the Social Security Advisory Committee, that is a matter which will have to be considered by my right honourable friend, and I am sure he will bear that in mind. So far as the blind are concerned, I am quite certain that the survey will include the blind but, again, that is something which will be considered while the study goes ahead.

Lord Stallard

My Lords, will the noble Lord accept—and I am sure he will—the difficulty in digesting such a long and important Statement, particularly for those on the Back Benches who have not seen a copy of it beforehand? I hope the noble Lord will bear with me if I ask one or two questions which I have jotted down. He has already touched on what I believe he called the substantial or comprehensive review of the Beveridge Report. In view of the fact that this substantial inquiry into Beveridge seems to be taking the form of five separate inquiries, each one of which, as far as I can see, would merit some kind of input from theTreasury, can the noble Lord say how that input will be put into the five separate inquiries, and how they will be brought together to make some sensible, comprehensive review of the Beveridge Report, which we would all welcome?

Secondly, can the noble Lord confirm that the terms of reference of these separate inquiries will not include what until now has been a normal term of reference in the Government's approach to social security—a "no cost" requirement? Can we be assured that there will not be a "no cost" restraint contained in the terms of reference?

My third point—of which the noble Lord will be aware because of my interest in the Bill on disablement which is before this House again tomorrow evening—is that in the Bill on disablement there are adequate provisions for a survey of the type he mentions in relation to the disabled, but the Government have turned their backs on that element of the Bill. Is the noble Lord now able to say that the Government will have another look at the provisions of that Bill to see whether the survey can be of use in the inquiry?

My noble friend who asked the original question mentioned the death grant. This is the second anniver-sary of the inquiry that took place into the death grant. Would it not have given some credibility to all of these inquiries if the Government could say today: "Finalise the inquiry into the death grant of two years ago and make some provisions"? Finally, can the noble Lord give some idea of the timescale for these inquiries? When will they report, and what form will the reports take?

Lord Houghton of Sowerby

My Lords, may I ask the noble Lord—

Noble Lords

Order!

Lord Houghton of Sowerby

My Lords, I am about to supplement the question asked by my noble friend—

Noble Lords

Order!

Lord Houghton of Sowerby

My Lords, if the Minister likes to answer every question in turn, that is all right. I will then ask my own question in a moment or two.

Lord Glenarthur

My Lords, I think that the usual procedure is that the questions put after the two Front Benches have spoken should be answered individually. Perhaps I may answer the noble Lord, Lord Stallard, first.

As regards Treasury input, I do not know, but I imagine that there will be an input. Perhaps I can find out the exact nature of the Treasury input and advise the noble Lord. As I said a moment ago to the noble Lord. Lord Banks, the idea is that the reviews should cover the social security scheme in a nil cost way, with a view to not increasing the amount of money beyond the normal upratings which the scheme involves.

The noble Lord asked about the death grant. I cannot add to what I have said to the noble Baroness, Lady Jeger, that this is still being considered and I am afraid I do not have an answer now. However, I can tell the noble Lord, as I said when I repeated the Statement, that the timescale is that the reports—that is to say, the two reports being chaired by Ministers —should be completed by the end of this year. The last report, that on the disabled, is one that will take rather longer. So far as the survey is concerned and its relationship to the Bills now before your Lordships, it is not possible to adopt the procedures recommended in those Bills for reasons that the noble Lord will know.

As to the question of the assessment of disablement to be used, this aspect requires further study. One approach is that disablement should be assessed as for industrial injuries. The researchers are well aware of the World Health Organisation's international classification of impairments, disabilities and handicaps, but I gather that this has not yet been tested and developed.

Lord Houghton of Sowerby

My Lords, is the noble Lord aware that this is a task of enormous complexity? It is far in excess of any problems set to Beveridge in 1942. Can he give some more impressive evidence of the competence of this system of reviews to produce the results which are being sought? As my noble friend said a moment or two ago, we have a battery of committees reviewing different aspects of the comprehensive scheme. How are they all to be brought together? How are they to be presented? What hope is there of accomplishing the task within months from now? Something more impressive must be sought to ensure that this tremendous review can be accomplished and concrete results brought about.

I do not ask for a long reply now. I merely ask whether it is possible, if a Question is put down, that information can be given about the various inquiries in progress; who is looking after them; who is undertaking the work; what are the terms of reference, and what is their target date for reporting? If that information were available we would be able to see rather better than we can from this oral Statement just how practical this review will be.

Lord Glenarthur

My Lords, I certainly share the noble Lord's concern about the complexity of the issues which these reviews are to examine. As to the question of evidence on the competence of those who are to carry them out, the party of which the noble Lord is a member started its own inquiry in September 1976, which reported in September 1978, and which tried to do much of what we are now trying to do ourselves. That particular report was carried out by officials and this report will have Ministers actively involved in it. The reports will be brought together by my right honourable friend the Secretary of State. I note the noble Lord's other points.

Baroness Ewart-Biggs

My Lords, does the Minister agree that one of the present problems is the low take-up of certain benefits, the benefits that appear to be most needed, such as the one-parent benefits? Therefore, does he think that this review might help a little with that particular problem?

The noble Lord talked about "other available resources". What exactly does he mean? He is not thinking of getting resources from any other source such as married man's tax relief, I understand. Therefore, is a redistribution of resources within these benefits what he was talking about, because I could not quite understand what he meant by "other available resources".

Lord Glenarthur

My Lords, low take-up is certainly something that will be considered. As to the other point raised by the noble Baroness, I think I will need to refer myself back to the Statement I made. Perhaps I can let her know.