Social Security Spending (Hansard, 1 February 1990)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)
My Lords, spending on social security has increased from £16.4 billion in 1978–79 to £52.6 billion in 1989–90, a real terms increase of 36 per cent. The estimated expenditure for 1990–91 is £55.6 billion.

§ Baroness Elliot of Harwood
My Lords, I thank my noble friend the Minister for that admirable reply. However, can he indicate by how much expenditure on social security benefit is estimated to rise over the next three years?

§ Lord Henley
My Lords, expenditure is estimated to rise by an average of 4 per cent. in real terms over the next three years. Moreover, by 1992–93 the expenditure will be over £63 billion.

§ Lord Stallard
My Lords, can the noble Lord tell the House what proportion of that increase in spending results from an increase in the number of claimants, and what proportion results from an actual increase in benefits, taking into account the rate of inflation?

§ Lord Henley
My Lords, I cannot give the noble Lord such figures without notice. Obviously I would accept that a great deal of the increase is the result of an increase in the number of claimants. However, that is not necessarily a bad thing. It indicates that we are reaching a great many people who were not reached before. Perhaps I may give an example. Invalid care allowance over the 10 years has gone up by some 2,000 per cent. That is because we have extended the benefit to married women —something the noble Lord's party did not do.

§ Lord Carter
My Lords, perhaps it may help the Minister to know that 90 per cent. of the increase is due to an increase in the number of claimants and 10 per cent. is due to an increase in the real level of benefit. However, in view of the figures which he has given, can he comment on the Church of England report Living Faith in the City,issued this week, which concludes that changes in taxation and social security have greatly widened the gap between the rich and the poor, leaving at least some people materially worse off and thereby increasingly dependent upon private charity? According to the 412 report a considerable number of poor people now actually have less in their pockets to spend than they had in 1985. Do the Government agree with the conclusions of the report?

§ Lord Henley
No, my Lords; I do not intend to comment upon the Church of England report. However, returning to the noble Lord's first point that 90 per cent. is attributable to an increase in the number of claimants, that may be true in respect of some benefits. I do not accept that it is so globally. Moreover, as I said to the noble Lord, Lord Stallard, it is no bad thing if we are reaching more claimants. Indeed, I have already had this conversation with the noble Lord on the issue of the long-term sick and disabled. I repeat: it is a good thing if we are reaching more people than the noble Lord's party did.

§ Lord Stoddart of Swindon
My Lords, is the noble Lord aware that during the decade in question the relationship between the state retirement pension and average earnings has consistently worsened and that it is now at the lowest level it has ever been? When do the Government intend to restore the relationship to what it was in 1979?

§ Lord Henley
My Lords, as we have already said, we shall continue to increase the retirement pension in line with the retail prices index. However, we shall also look at the average total income of pensioners which has increased by some 23 per cent. in real terms over the past 10 years. In addition to that —and I am talking now purely about government spending, not total average income—spending on the elderly as a group has increased by some 24 per cent.

§ Lord Mottistone
My Lords, my noble friend the Minister told the House that there has been a marked increase in real terms. However, is not the difference referred to by the noble Lord, Lord Stallard, due to the fact that the average wage has increased because the country has become so much more prosperous over the past 10 years?

§ Lord Henley
Yes, my Lords. My noble friend is absolutely correct. As I said, we intend to continue to increase state pensions in line with the retail prices index.

§ Lord Gisborough
My Lords, is my noble friend aware that the 23 per cent. increase in pensions means that the increase is appoximately five times that which occurred during the time of the Labour Government?

§ Lord Henley
My Lords, my noble friend is absolutely correct.

§ Baroness Ewart-Biggs
My Lords, as regards what the Minister said about targeting those people who are worse off, can he tell the House what is the take-up of family credit at present?

§ Lord Henley
My Lords, I may have the figure for take-up of family credit somewhere in my brief, but I am unable to look for it at the moment. I think, in 413 the circumstances, that I had better write to the noble Baroness. However, as she will know, we launched an extensive campaign to increase the take-up of family credit and I can confirm that it is now ahead of that of its predecessor.

§ Lord Carter
My Lords, I can tell the noble Lord that I believe the relevant figure is 63 per cent. compared with 76 per cent. for the old supplementary benefit. However, was the Minister's unwillingness to answer the question I put to him about the Church of England report due to the fact that the Government do not agree with the conclusions, or because they do not like them?

§ Lord Henley
My Lords, I myself have not read the report, but no doubt we shall comment on it at some point.

§ Baroness Carnegy of Lour
My Lords, will the noble Lord accept from me that part of the report pays great tribute to what the Government have done? The noble Lord, Lord Carter, has used figures selectively out of the report. If my noble friend has time to read it, I think he will be encouraged on the Government's behalf to continue along the line which the Government are taking.

§ Lord Henley
My Lords, I thank my noble friend. I shall take time to read the report.

§ Baroness Fisher of Rednal
My Lords, is it not the case that the number of people now living on income support has increased by 50 per cent. in the last decade? That amounts to 9 million people now living on income support. How does the Government's increase in spending which the Minister has outlined today tie up with a 50 per cent. increase in need?

§ Lord Henley
No, my Lords, I said that we had increased spending overall on social security by some 36 per cent. in real terms. The increased spending on income support over spending on the previous supplementary benefit and housing benefit amounts to about 120 per cent.

§ Lord Leatherland
My Lords, have the Government any plan in mind to increase old age pensions to people over 90?

§ Lord Henley
My Lords, we have no immediate plans for that.