Public Expenditure (Hansard, 14 July 1994)

§ The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)
My Lords, general government spending in 1993–94 as published in the statistical supplement for the PSBR on education, health and social security is estimated to be £33.7 billion, £36.2 billion and £87.1 billion respectively. Those figures represent real increases in spending since 1979–80 of 30 per cent. on education, 58 per cent. on health and 76 per cent. on social security.

§ Lord Orr-Ewing
My Lords, I thank my noble friend the Minister for those most startling figures in real terms. Is it not a fact that if he were to commission an opinion poll around the country —and we have seen the satisfactory results from the Opposition's point of view in that respect—it would show that most people believe, and constantly say in every newspaper and on every channel, that there have been cuts and 1967 underfunding in almost all those areas? Can we get the true story across to the country so that people know that this Government have provided benefits in all those areas?

§ Lord Henley
My Lords, I am most grateful to my noble friend for providing us with the opportunity today to reassure the House and the country that we have been able to increase funding in those vital areas for both the vulnerable and for investing in the future by the amounts that I have been able to announce. However, it is right to draw my noble friend's attention to the need to control Government expenditure. We are committed to that and we shall continue to do so. But, as I said earlier, we shall continue to ensure that the appropriate investment is made for those who are vulnerable and for those on whom we depend for the future.

§ Lord Marsh
My Lords, does the Minister accept that the increase in social security expenditure and the rate of increase on all the estimates will continue to grow over the next 10 years or so? In those circumstances, is it not now clear that there is a case for a serious inquiry as to whether any government can support future levels of social expenditure on the present basis?

§ Lord Henley
My Lords, the noble Lord is right to draw attention to the rate of increase in social security; indeed, it has increased by something in the order of 3.75 per cent. annually in real terms since 1979. I believe that we need to take steps to control the rate of that growth and, at the same time, create a modern system which is effective in meeting genuine need while encouraging independence through greater work incentives. I can assure the noble Lord that we have taken the first steps in that regard with the reform of invalidity benefit and with the introduction of the jobseekers' allowance. Obviously there is more to be done and we shall certainly keep a fundamental review of social security spending to ensure that that continues.

§ Lord Merlyn-Rees
My Lords, in view of the figures given by the Minister, can he say what has gone wrong in society both before 1979 and since that time? There has been a 76 per cent. increase in social security expenditure. What is the cause of it? What has happened?

§ Lord Henley
My Lords, the figure has risen for a large number of reasons, many of which are demographic; for example, there is an increased number of elderly people relying on pensions. In addition, spending on the long-term sick and disabled has increased by about 225 per cent. over the years. I can assure the noble Lord that the increase in social security expenditure has not come about as a result of the increase in unemployment. It has grown by some 3 per cent. a year, even if one excludes unemployment.

§ Lord Dean of Beswick
My Lords, among the figures that he announced the Minister indicated a very substantial increase in spending on the National Health Service. Can the Minister tell us why very prestigious and non-political bodies such as the BMA—and, lately, 1968 the health service ombudsman—are very severe in their criticisms of the NHS under the present Secretary of State? In the interests of people who rely on the NHS, is it not to be hoped that she will be one of the first casualties of the reshuffle?

§ Lord Henley
My Lords, I am tempted to say, "Well, they would wouldn't they?" However, I can assure the noble Lord that expenditure on the health service increased in terms of a percentage of GDP from 4.5 per cent. to 5.7 per cent. At the same time, over 52 per cent. more patients were treated in 1992 than in 1979. The average in-patient waiting time is down from nine months to five months since the waiting times initiative began in 1987. Indeed, I could continue and give the noble Lord many more statistics, but I shall simply tell him that we are spending more on the health service and we are spending it much more effectively.

§ Lord Skelmersdale
My Lords, if the perception of the National Health Service is as low as has been alleged, can my noble friend the Minister explain why it is extremely rare to have more than 10 people at a statutory annual general meeting of a trust hospital?

§ Lord Henley
My Lords, I am afraid that I cannot answer my noble friend's question. I believe that the point my noble friend Lord Orr-Ewing was trying to make is that a certain amount of disinformation has been circulated over the years about levels of government spending on such vital services. We are trying to make it quite clear to the party opposite, and to the whole country, that spending on health and on social security will be maintained at an appropriate level.

§ Earl Russell
My Lords, I listened with interest to the figures given in real terms. However, is the Minister aware that the 1980 public expenditure White Paper changed the definition of the word "reality"? For example, is he aware that expenditure on books is now quoted in relation to the RPI and not the price of books? The Minister quoted a figure for the increase in social security spending. Can he give the House the comparable percentage figure for increases in the number of people on income support?

§ Lord Henley
My Lords, if the noble Lord is suggesting that we have fiddled the figures I utterly reject that allegation. As I made quite clear in my initial Answer, we have increased spending in those three areas; for example, on education by some 30 per cent. on health by 58 per cent. and on social security by 76 per cent.

§ Lord Stoddart of Swindon
My Lords, does the Minister agree that it is not just a question of how much money is spent but whether or not we are getting value for money? The general perception by people is that the services that were mentioned are now worse than they were in 1979. Therefore, is it not a fact that a great deal of the additional expenditure to which the Minister referred has been wasted due to sheer incompetence and the ridiculous reorganisations that have taken place under this Government?

§ Lord Henley
My Lords, perhaps I may give the House the figures from the three departments concerned to refute what the noble Lord says. First, I shall repeat what I said about the health service. Some 52 per cent. more patients are now being treated on the NHS. As regards education, we have now seen the staying-on rate for 16 year-olds grow from about 42 per cent. in 1979–80 to 72 per cent. in 1992–93 and the figure is still rising; indeed, it is now possibly 73 per cent. As regards social security, I return to the increases in spending on the long-term sick and disabled where we have seen increases in real terms of some 225 per cent.

§ Lord Ewing of Kirkford
My Lords, how can the Minister say that the Government are determined to maintain payments to the long-term sick and disabled when legislation passing through your Lordships' House not many weeks ago was designed to change the entitlement to payments for those people from a six-month qualification period to a 12-month qualifica-tion period. Is that not an action designed to reduce expenditure rather than to maintain it?

§ Lord Henley
My Lords, the incapacity Bill which has just passed through your Lordships' House was not designed as a cost-cutting measure; it was designed to ensure that the benefit went to the appropriate people. I believe that the noble Lord would be the first to agree that invalidity benefit should go to those who are incapable of work and not to those who should, quite properly, be seeking work or on unemployment benefit.

§ Lord Clark of Kempston
My Lords, does my noble friend the Minister agree that the reason that public expenditure has increased in those areas is partly because of the long-term success of the economic policy of the Government since 1979? Further, so far as concerns social security benefits is not my right honourable friend the Minister of State right to insist that those people who are taking benefits incorrectly and illegally should be rooted out? Should not every party support the Government in that regard?

§ Lord Henley
My Lords, my noble friend is absolutely correct. I understand that a possible leader of the party opposite has been making noises to exactly the same effect; namely, that benefits should go to those who are entitled to them. For that reason, we sought reforms to invalidity benefit to ensure that it went to exactly those people who needed it and not to those, as I said earlier, who are capable of work.

§ Lord Eatwell
My Lords, will the noble Lord confirm to his noble friend Lord Clark that in the period we are discussing the economy has grown by 24 per cent. which is the lowest rate in real terms in any comparable period since the war? Will he also confirm that in this period social security expenditure has increased by 76 per cent. not because individual benefits have increased in real terms but because the number of benefit recipients—the number of people forced to live on benefit—has increased over this period? Is it not clear that this Government have created a dependency culture defined by the denial of opportunity to so many of the British people and perpetuated by a Government 1970 who use their own economic failures as an excuse to cut those programmes which would give people the skills and employment opportunities to enable them to help themselves?

§ Lord Henley
My Lords, as I made quite clear earlier, if the noble Lord had been listening to me, the vast majority of the growth in the social security budget has been as a result of demographic changes and of greater spending on the long-term sick and disabled. A very, very small proportion is as a result of increased unemployment. As I said, the social security programme has grown successively by some 3¾ per cent. in real terms. If you exclude unemployment from that, it has still grown by 3 per cent. per annum in real terms.

§ Baroness Nicol
My Lords, I wonder whether the Minister can help me. Is it correct that the figures he quoted for patients treated in the National Health Service contain, in some cases, patients who have gone to hospital for a number of small complaints and, having gone from department to department, have been counted as a separate case by each department? Is that the case?

§ Lord Henley
My Lords, I cannot answer the noble Baroness precisely but what I can say is that the number of individual patients who have been treated—that is the vital thing—has increased quite dramatically in the years we have been in office when we have increased funding on the health service.