HL Deb 15 February 1993 vol 542 cc949-61

6.4 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley) rose to move, That the draft orders and regulation laid before the House on 21st January [18th Report from the Joint Committee] and the draft order laid before the House on 3rd December 1992 [14th Report from the Joint Committee] be approved.

The noble Lord said: My Lords, I beg to move.

These are five draft orders concerning the rates of social security benefits, national insurance contributions and occupational pensions from April of this year. They implement decisions announced by my right honourable friend the Secretary of State for Social Security following the Chancellor's Autumn Statement at the end of the public expenditure round last year. They clearly demonstrate our commitment to those people most in need. We have maintained support for those hit by recession; we have focused additional support on the most needy; and we have kept our pledges to families and to the elderly. We will be increasing all major benefits in line with prices—and more than that, concentrating resources on those most in need.

The benefits uprating will be achieved without increasing the main rates of national insurance contributions in April of this year. The national insurance instruments (that is, the second and third on the Order Paper) before the House today provide for the minimum changes to certain earnings limits and to the flat rate contributions in accordance with the usual practice each year. With the permission of the House, I do not propose to dwell upon the detail of those two orders.

I turn now to the benefit uprating which is contained in the principle order (the fourth on the Order Paper). When my right honourable friend announced that all the main benefits would be uprated in line with prices he was warned that by retrospective indexing he would be, leaving pensioners' living standards vulnerable to rising inflation in the coming year". Similar points were made in this House. But the retail prices index showed a 3.6 per cent. rise in September. It now shows a rise of just 1.7 per cent. It is though that September year-on-year figure of 3.6 per cent. that will be used (and not any later or lower figure) in April this year.

It may be helpful if I now indicate how the benefit uprating helps different groups of people: first of all, pensioners. Our pensions policy has three main strands. The first is to maintain the real value of the basic retirement pension, so we are increasing the basic pension next April from £54.15 to £56.10 for a single person and by £3.10 to £89.80 a week for a couple.

The second strand is to focus extra help on those who most need it. The House will remember that we increased the income support pensioner premiums in October last year by £2 for a single person and £3 for a couple. From April, less well off pensioners will benefit not just from the uprating but also from a real increase in their disposable income when they no longer have to pay any portion of council tax. Together these two measures will take the annual extra help made available to pensioners through income-related benefits to £0.5 billion in six months and £1 billion since 1988.

The third strand is to encourage people to make additional pension provision in line with their earnings. The Guaranteed Minimum Pensions Increase Order protects members of occupational pension schemes by uprating by 3 per cent. post award guaranteed minimum pensions earned from April 1988 onwards.

The success of our policies to encourage more choice in pensions can be seen by the number of people who have chosen to contract out of the state system. Since the pension reforms of the 1980s, 5 million people have become personal pension holders, some 500,000 additional people have joined occupational schemes and the number of schemes has increased by 31,000.

I turn to families. Once again for families we have honoured our manifesto pledge by fully uprating child benefit which will rise to £10 per week for the first child and £8.10 for other children in the family. Family credit will be uprated in full. It now goes to more people with family responsibilities than ever before. Some 450,000 families are being helped to maintain themselves in work by an average payment of £42 a week. Maternity allowance and the lower rate of statutory maternity pay will go up in full to £43.75 and £47.95 respectively.

I now turn to the sick and disabled. We propose to uprate invalidity benefit fully in line with inflation for people unable to work because of sickness.

The House will also note that we intend to make a full increase in line with the retail prices index for sickness benefit and for the lower rate of statutory sick pay. We do not, however, propose to increase the higher rate, which goes to employees earning £195 or more a week. Most employees who qualify for the higher rate have their statutory sick pay topped up by occupational sick pay schemes. It would, therefore, be an inappropriate use of scarce resources to increase that rate.

For people with disabilities we will in particular continue the support provided by the two new benefits introduced last year—disability working allowance and disability living allowance. This will be the first uprating for these new benefits. Since the introduction of disability living allowance in April last year 370,000 awards have been made, including over 200,000 less severely disabled people who have benefited from this new benefit. This increases to nearly 2 million the number of people receiving help with the extra costs of disability.

We also plan to increase the amount that carers may earn before their benefit entitlement is affected. Carers entitled to the carer premium in income support, housing benefit or council tax benefit who presently qualify for a lower earnings disregard will be able to earn up to £15 a week without losing any of their income related benefit. The ceiling for earnings for those receiving invalid care allowance will increase by £10 from £40 to £50 per week.

While not forming part of the orders before your Lordships, I mention these measures now as they will affect the disposable incomes of some carers from April. Both those measures will help many carers who wish to keep in touch with the world of work, as well as giving them valuable additional cash.

Other provisions—largely for the elderly, but for all those who need additional care—are the payments made for residential care and nursing homes. From April the department's limits set out in the uprating order will apply to income support claimants who have preserved rights to the special higher levels of income support. Those are mainly people who are resident in residential care or nursing homes on 31st March.

Most of the limits will be increased by £10—that is, more than inflation in most cases. But there will be no increases for the terminal illness limit. Those have not proved to be very effective in providing additional help to hospices since many do not make a charge and there is, therefore, no basis on which their residents can claim the special levels of income support. We have therefore decided that a better use of resources is to increase the grant to hospices, and we will be making an extra grant of £1 million in 1993–94. That is in addition to the £1 million for each of the Public Expenditure Survey years that was announced in 1991.

Our debate today covers a wide range of measures designed to make sure that expenditure is deployed wisely and effectively. The Government are getting on with the job of keeping our promises, of protecting all those most in need and of encouraging responsibility by giving people more control over their own money. I commend the orders to the House.

Moved, That the draft orders and regulation laid before the House on 21st January [18th Report from the Joint Committee] and the draft order laid before the House on 3rd December 1992 [14th Report from the Joint Committee] be approved.—(Lord Henley).

6.15 p.m.

Baroness Hollis of Heigham

My Lords, we thank the Minister for his introduction. On this side of the House we welcome an uprating which inflation-proofs benefits and which, as has rightly been said, as inflation is falling may even represent a modest improvement in real terms to most beneficiaries. We are happy to acknowledge that. However, it is worth pointing out that if the retail prices index is 3.6 per cent., the average rise in male earnings is 4.7 per cent. Therefore, recipients of benefits will still see themselves slipping even further behind the rising prosperity of those in work.

I give an example. Unemployment benefit for a couple with two children under the age of 11 has hardly increased in real terms since April 1979. It has risen from £69.53 to £69.70 per week at April 1992 prices. However, in the same period, as a percentage of gross average male earnings, that benefit has fallen from 27 per cent. to just over 20 per cent. —the cost of decoupling the link of benefits to earnings and coupling it instead to prices. Nevertheless, we are pleased that we are not arguing this evening to prevent a cut in benefits in real terms, which given the fears of last autumn seemed all too possible.

I should like to raise some particular problems, most of which have been previously flagged from the Opposition Benches, as well as some wider anxieties. The first cluster of problems are those affecting people on very low benefits. We are talking about the poverty of non-working single parent mothers with young children, the continuing poverty of elderly pensioners who have neither SERPS nor a private pension and carers whose invalidity care allowance represents barely 10 per cent. of average earnings.

None of those groups can reasonably enter the labour market. They are dependent upon benefits, usually because other people—small children, the frail or the elderly—are dependent upon them. Their benefits are totally inadequate to provide enough for their daily needs. As all the research carried out by the CABs and other charitable organisations indicates, those people fall into debt or they go short. Needless to say, they are almost all women.

Therefore, will the Minister look at the home responsibility contribution, especially for carers, in the context of the debate about the equalisation of pension ages? My figures may not be correct because 1 am trying to decipher them from the department's statistics. But will the Minister confirm that only 25 per cent. of working women at the age of 60 enjoy a full old age pension in their own right on their own contribution?

Many such women are forced to turn to the Social Fund, whose workings, cash limits, replacement of grants by loans and failure to help the neediest have been demonstrated by research finding after research finding. The Government's own social security advisory consortium has urged them to restructure the Social Fund. Their own sponsored research undertaken by York University has urged them to restructure the Social Fund. In the light of that research, will the Minister indicate when we can expect to see that reform? Will he indicate also how much new money, as opposed to recycled loans, has gone into the Social Fund in the past 12 months?

I suggest that there is a cluster of problems for those who remain on very low benefits and who cannot reasonably be expected to enter the labour market because of those dependent upon them. We must continue to address that problem.

Secondly, there are a cluster of problems affecting those receiving no benefit at all. First, I am thinking of the problem of 16 to 17 year-olds who are not in education, not in work and, despite government promises, not in training. They are without income.

The national figures suggest, although the Minister may have more up-to-date information, that there are something like 125,000 unemployed young people, of whom 97,000 in that category are without income. Certainly the latest figures from Norfolk are that 450 school-leavers are unemployed, awaiting a training place and without income. For them the Government's promise of a training place is a miasma. We know what happens to them. They turn to begging on the streets. Will the Minister tell us what financial arrangements are being made for those young people for whom the promise of a training place has so far failed to materialise?

Secondly, still as regards those claiming no benefit —it may be that the Minister will give us a more positive response on this—perhaps I may point out a problem of which I am sure he is aware; namely, that those who undertake more than 21 hours education per week—those training to acquire skills which the country so desperately needs—are perversely punished by losing benefit. Those who work for 24 hours per week in the voluntary sector, perhaps even as local authority councillors, effectively retain their labour skills and at the same time offer a community service. However, they are also perversely punished by losing their right to benefit. We hope to see a speedy review of those arrangements.

Thirdly, can the Minister reconsider the position of those people who are denied benefit while benefit officers explore whether they are available for and are actively seeking work, as a result of which very poor people are denied their entire income on the basis of an officer's doubt rather than on the basis of an adjudicated offence? Can the Minister tell us the review mechanisms that are in place that were promised by his honourable friend Mr. Burt to the Statutory Instruments Committee? I was present when that promise was made. Can the Minister tell us what shape the review mechanism will take and whether he will be reporting to the House on its efficacy?

The last group is made up of those who are waiting for their DLA claim to be processed, who lost access to the Independent Living Fund and therefore to an increase in their income of £70 to £120 a week. That is a severe price to pay for government delays.

In that context, I should like to put on record that every word of the assertions in my question to the Minister on this subject a week ago was correct, as letters from the Independent Living Fund have subsequently confirmed. The Minister was wrong to state that I was wrong and I regret that he has not seen fit to withdraw his remarks to that effect.

Thirdly, I should like to turn to those people who are on benefit but who should not be. I am talking about the unemployed. It is clear that social security expenditure is unemployment led, because the unemployed draw not just unemployment benefit or invalidity benefit and, in time, income support, but also receive housing benefit or mortgage help, poll and council tax benefits, etc.

Without entering into the wider debates that have been promised by reviews from both parties, I should like to emphasise that the Government, having destroyed our manufacturing base, are now seeking to finger the benefit system which picks up the pieces. If our manufacturing economy were rebuilt, no government would need to face the prospects of devastating our social security system in the name of fundamental review. Social security is carrying a load for which it was never intended. The fault lies not in the fecklessness of our people nor in fashionable theories of dependency culture, but in the absolute insufficiency of jobs. The evidence is around us. Every time Sainsbury's advertise for a packer of shelves there are 200 applications. The abolition of wages councils would push more women who are sole earners on to family credit, and, rather like the Speenhamland system of old, the state and the tax payers will be subsidising the employer to pay low wages.

I have tried to indicate the main problems of those on very low benefits, those on no benefits and those who are drawing benefit who would prefer to be in work. The Minister and his honourable friend in another place have been making much about the issue of fraud. The Minister will have our full support in stamping out fraud whenever it exists. However, there is quite a lot of research evidence to support the fact that mismanagement and consequent error, if benefit staff and of claimants is an infinitely larger problem. We urge the Minister, for all our sakes, to keep separate statistics on what is fraud and what is error so that we may have agreed information.

I should like to point out the continuing cost of the shadow welfare state in our society arising from such matters as mortgage tax relief and relief on private pensions. The information from the National Audit Office is that we are currently paying £9 billion to save £4 billion in SERPS by privileging private pensions.

One problem that will be of wider concern in the future is the interface of social security and local authority benefits, particularly the problem of housing where one is eligible for mortgage help if one is on income support but not on family credit. That is a perverse incentive to become unemployed.

The issues that remain concern housing repossession. We do not need what is offered by the Housing Bill, which is a rents to mortgages scheme, but a mortgages to rent scheme, thus looping people into the social security system, enabling them to retain their homes.

Can we hope that the Minister will continue to keep in mind in his review the wider issue of the poverty trap, the sharp taper of benefits which underpins that poverty trap, thus producing a perverse incentive not to work, and, finally and above all, the widening gap between those on benefits and those in work? If a social security system is to have any rootedness in justice, it must seek to narrow and not to widen that gap. I await the Minister's response.

Baroness Seear

My Lords, the noble Lord will notice that I am a stand-in for his noble kinsman. That may or may not be a matter of relief to him.

We are glad that the appalling rumours about what was going to happen to benefits have not proved to have substance, and that many of the important benefits are being increased. That does not mean to say that we are satisfied with the package that we are being offered, and the noble Lord would hardly expect that to be the position.

We are pleased that child benefit is being updated. However, we should like confirmation that never again—though perhaps that is a request that is unlikely to be responded to, so I will ask rather for confirmation that there is no further intention of freezing child benefit as it has been frozen in the past. It would be an acceptable position if a proposal that child benefit will be updated in line with the retail prices index, if nothing else, were to be incorporated in legislation. We continue to regard child benefit as one of the most important benefits. It affects families with responsibilities for children, which is undoubtedly one of the heaviest burdens that people in poverty have to bear. Therefore, we should like confirmation that there is no further intention of tinkering with child benefit.

I should like to agree with the noble Baroness, Lady Hollis, by stating that we continue to regard the Social Fund as a singularly ill-designed instrument for dealing with special problems of poverty. It is quite ridiculous to make loans to people who are already living at the lowest possible level. The loans are certain to increase their indebtedness, which is already one of their major problems. Can the Government reconsider the nature of the Social Fund and whether it is not time that they abandoned the idea of making loans? The government, while deploring debt on the one hand, encourage people to get into it on the other. There are loans to students and loans to the most impoverished people. It is not desirable that either of those groups, in their already straitened circumstances, should be landed with a burden of debt which in many cases they will not be able to clear for many years, if at all.

We welcome the increase in the invalid care allowance. However, I should like to draw the Minister's attention to the fact that people who start caring when they are over the age of 65 are not eligible for the invalid care allowance, small though it is. I assume that it is considered that the invalid care allowance is a substitution for the pay that people lose, and that if they are over retirement age they are not losing pay. That is a misinterpretation of what the care allowance ought to be about. Invalid care allowance should be paid in recognition of the work that is being done by carers of all ages, over or under 65, who are keeping people in their own homes who would otherwise be very expensively looked after in institutions. As a result, the distinction between those people above and those people under the age of 65 is a false one.

The introduction in April of the community care system will place a very heavy burden on those people. The burden of caring is difficult enough but, if it is enhanced by considerable poverty, then their plight will be serious. That will be the situation for many people, especially if they are going to have the care of relations who are coming out of institutions, who, by definition, are those most difficult to care for. In the light of the changes that will take place in April, will the Minister not consider making the invalid care allowance available to people of all ages, if it is demonstrated that they are doing a very heavy job of caring?

I wish to join in urging the Minister to look again at the 21-hour rule for study which applies to the unemployed. It is crystal clear that the biggest burden to this country is the extent to which people are insufficiently trained, or not trained at all. That situation will continue even when we move out of recession. If during periods of unemployment people are prepared to receive training, and to spend 21 hours a week in an organisation which will provide that training and equip them for a more demanding labour market, that should be encouraged. They should also be encouraged to undertake that training for a full week rather than for merely 21 hours.

Without giving greater assistance for training we shall find ourselves with a serious problem because even when we are out of recession there will not be jobs for people without skills and knowledge. The time during which people are unemployed can he used to ensure that they acquire skills and knowledge. By handicapping the unemployed to a maximum of 21 hours a week is a false economy and a short-sighted view of what is needed. I hope that the Government will look at that issue and at the 24 hours allowed for voluntary work. Such activities should be encouraged and extended so that when people have the opportunity of employment they are properly equipped to take it. They are not equipped at present.

6.30 p.m.

Lord Henley

My Lords, the noble Baroness, Lady Seear, spoke of the appalling rumours that were circulating in the autumn. They did not emanate from this side of the House but were more along the lines of scaremongering from the Opposition. As the noble Baroness, Lady Hollis, reminded the House, we have kept our pledges, in particular, our manifesto pledges to uprate child benefit and retirement pension. We shall continue to maintain them. We have uprated all the main benefits in full and by prices.

It is all very well for the noble Baroness, Lady Hollis, to say that there is a growing gap between benefits, such as unemployment benefit and retirement benefit, and earnings. I presume that her hidden agenda was to return to what her party did; that was to uprate either by prices or earnings, whichever was the highest—

Lord Ennals

Hear, hear!

Lord Henley

My Lords, I note the "hear, hear" of the noble Lord, Lord Ennals. But how would one pay for an ever-greater burden on the working population? We are committed to uprating pensions, for example, in line with prices and at the same time to encouraging the growth of pensioners' incomes from other sources. That is why since we have been in government we have seen pensioners' average net income from all sources, and not only from the state retirement pension, grow by approximately 3 per cent. per annum. However, during the entire five years when the noble Lord, Lord Ennals, was Secretary of State for Social Services the pension grew by only 3 per cent. in real terms over and above inflation. Income for pensioners from saving during that time fell. If we are to start uprating by earnings and prices, whichever is the highest. I must remind the House who will have to pay. If one takes pensions alone one will find there will be an extra contribution bill to employer and employee of some £11.20 per week. That is a considerable sum of money.

The noble Baroness, Lady Hollis, spoke about the adequacy of benefits for three target groups in particular. I accept the single parents and the older pensioners. She pointed out those above the age of 80 who are less likely to benefit from occupational pensions because of their working career. She also mentioned carers. As regards the generality of adequacy of all our benefits I have yet to see any genuine evidence of people being unable to manage on existing levels of benefit. To answer that more money at a high level of benefit will reduce, say, malnutrition, when there might be other causes such as ignorance is simplistic. We have increased the income support rates over and above inflation, in particular if the noble Baroness is prepared to take into account the fact that in future those in receipt of income support will not have to pay 20 per cent. of the council tax.

I must also point out that income support is paid for out of general taxation. Many of those taxpayers are low earners. As I have pointed out, we have during the years increased income support over and above RPI. We have increased the premiums for the elderly in income support by far more. In my opening remarks I mentioned the fact that we have added some £1 billion per year to the amount of support in income support paid to pensioners. For the first time the income support level for a couple above the age of 80 is more than £100.

I shall deal later with some of the points made by the noble Baroness, Lady Seear, about carers. I now turn to the point made by the noble Baroness, Lady Hollis, about HRP and the statistic which I cannot yet confirm; that at the age of 60 only 25 per cent. of women are in receipt of a full pension in their own right. I shall write to the noble Baroness on that point. She made a valid point about HRP and asked the Government to see whether it can be extended. I can assure the noble Baroness that the matter is worth looking at in our entire review of the state pension age, bearing in mind the different conditions under which most women work and the fact that many women take considerable time away from the labour market. There is already a degree of protection in HRP but it might be worth looking at the matter further during our considerations of the issue.

I turn to the lack of automatic entitlement to income support of 16 and 17 year-olds. I assure the noble Baroness —as I have on previous occasions but not to any great effect—that there remains the guarantee of a place on youth training if they want one. Only those who are vulnerable and unable to take advantage of that opportunity can receive income support automatically.

Baroness Hollis of Heigham

My Lords, my point was that there are youngsters who are waiting for a place which fails to materialise because insufficient places are being offered by employers to TECs. While they wait for a promise that does not materialise they are without income. That was the point I raised and I hope that the Minister will go on to address it.

Lord Henley

My Lords, I was about to say that there is a course of action which deals with their problem. They can apply for income support under the severe hardship provision if there is a likelihood of hardship and if they have no other means of support. However, we see no particular need to provide them with automatic entitlement to income support when, for example, they are living at home supported by their family and where there is no element of hardship. We have eased the means by which they can claim severe hardship and we ensure that they receive careful counselling. However, we see no reason whatever why a 16 or 17 year-old should have automatic entitlement to income support whether they need it or not.

I turn to the social fund and the report of the Social Policy Research Unit at York. I acknowledge that both the noble Baronesses, Lady Seear and Lady Hollis, are not as keen on the social fund as I am. We are considering the results of the research which we commissioned into the Social Fund together with all other recent reports on the scheme. We shall respond to those in due course. However, I must say we have seen nothing to justify altering the basic principles of the Social Fund, which is a much better scheme than any of its predecessors; in particular, its predecessor of single payments, when costs rose out of control.

Noble Lords asked about ICA and the position of carers. The noble Baroness, Lady Seear, believed that the allowance should be paid to those above the age of 60. I note what she said but, as always, standing at the Dispatch Box I must remind her of the considerable cost implications of her suggestion. I am sure that the noble Baroness will argue, as she knows her noble kinsman always manages to do, that in the event we will save money in the long term. All I can say to the noble Baroness is that we have increased by a considerable amount the sum of money that carers can earn without it affecting their particular level of benefit.

I will certainly undertake to look at the point that both noble Baronesses made about the number of hours' training allowed for those on unemployment benefit or in receipt of income support when out of work, and similarly the work rule, in particular for members of councils, that has been a problem in the past.

Baroness Seear

My Lords, in dealing with carers I am not sure that the Minister has taken on board that I was talking about those over pension age. It is not the amount of earnings that they can get but the fact that they cannot get any at all if they start above a certain age. They may then be very poor.

Lord Henley

My Lords, I was quite aware of what the noble Baroness was saying. The point I was trying to make was that there were what might be called some goodies for carers generally. I accept the point made by the noble Baroness that there is nothing for those over 60. Obviously, that is something we will bear in mind but I point out to the noble Baroness that it has considerable cost implications. I will undertake to look at the points made by both noble Baronesses about the permissible number of hours' training or voluntary work for those on unemployment benefit or in receipt of income support. I thought we had resolved the particular problem of councillors. I have seen a number of councillors on the issue recently. Obviously, the noble Baroness is not yet satisfied.

I turn to the question of DLA and the particular problems about its introduction. I also deal with the question about the ILF raised by the noble Baroness, Lady Hollis. We have accepted that there have been problems with DLA and its administration. A number of delays have affected a number of people. When a new benefit like that is introduced to a very large number of people there are always quite likely to be problems. When the Labour Party was in government and introduced mobility allowance it took a different approach; it introduced it in a phased manner. As a result, there were 5,000 payments in the first year, 30,000 in the second year, 65,000 in the third year and 95,000 in the fourth year. That may or may not be a satisfactory way to deal with it. I have to say that personally if I were entitled to one or the other I would prefer to wait a mere three months—as the delays over DLA seem to have been this year —rather than up to four years for some classes of people back in the early seventies when mobility allowance was claimed.

I also refer to the point that the noble Baroness makes about our exchange of words at the Dispatch Box on ILF the other day. As the noble Baroness has acknowledged, I have already apologised. She considered my manner abrupt. I am, I believe, quite right in saying that the ILF—the Independent Living Fund—had a discretion that it could operate. It simply chose not to exercise that discretion. For that reason I do not believe there is any need for me to make the apology for which the noble Baroness asks.

The noble Baroness asks whether we can have separate statistics on what is fraud and what is error. I note what she says, but I suspect that there will be considerable practical difficulties in defining all the different levels of fraud and error.

Baroness Hollis of Heigham

My Lords, I believe that to be a helpful response. However, as I understand it, the separation of information was made before 1988. I stand to be corrected, but I believe that it stopped from 1988 onwards. Therefore, if we were able to disaggregate the statistics in the past it would be extremely helpful if we could continue to do so in future. Then we would have an agreed basis of information as to what was a problem of error—and the Sunday Times report on the DLA suggested there were considerable problems of error—and what was a problem of fraud, which we would all wish to stamp out.

Lord Henley

My Lords, I presume that the noble Baroness would like to stamp out both error and fraud. I will certainly look at what she says without making any commitment. I cannot repeat myself often enough in saying that I do not accept what the noble Baroness says about the cost of the personal pensions initiative and the cost of the changes that we made to SERPS in the early eighties. Those changes and the changes that we made by the abolition of the uprating by prices or earnings were the two biggest steps in giving us an affordable pensions structure for the 21st century—a structure that my children and grandchildren would be able to afford. There was no point in making wild promises, as the party opposite did, in the mere hope that something would turn up.

I turn to the poverty trap and the high level of the taper to which the noble Baroness objects. I accept that there are some people with very high marginal deduction rates. The first thing I point out is that the number of those with high marginal deduction rates over 90 per cent. dropped dramatically from 130,000 to 75,000 between 1985 and 1992–93. The second point I make is one of cost. It is worth pointing out to the noble Baroness that the cost of reducing the housing benefit taper to, say, 50 per cent. would be £340 million. I am afraid that that is simply not on. To reduce it by a mere 5 per cent. to 60 per cent. will cost some £100 million with about 1.5 million gainers of about £1.30 per week.

The noble Baroness asked about the fundamental review of social security and sought an assurance that it was not just about cutting costs. I suppose I could ask the same question about the privatisation by the noble Baroness's party of its policy-making by handing it over to the commission on social justice. I am full of admiration at its conversion to the virtues of privatisation. It has taken it so far as to privatise its policy-making. The purpose of our fundamental review of social security is not to cut the level of benefits to the sick, the unemployed or the elderly as the noble Baroness claimed. The purpose of the review is to look at ways in which we can make the system more effective in the long term and provide better value for money to our customers; Existing manifesto pledges will he unaffected. We will honour our pledges to uprate fully in line with prices both retirement pensions and child benefit. That is what we have done, along with the other benefits in this particular debate. I commend the five orders to the House.

On Question, Motion agreed to.