§ 3.48 p.m.
§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, with the leave of the House, I shall now repeat a Statement given in another place by my right honourable friend the Secretary of State for Social Security. The Statement reads as follows:
§ "With your permission, Madam Speaker, I would like to set out the next phase of the Government's plans to reform the welfare state and the annual uprating of benefits. We came to power with 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 greatest help to those with the greatest needs and will make sure that benefits only go to those who are entitled to them.
§ "All reforms will be undertaken after consultation. The vast majority supported the principles and success measures set out in the Green Paper. I am happy to reaffirm them today. 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. All existing claimants who are eligible for their benefits when the changes are introduced will be protected.
§ "Today we are publishing three documents showing how we are putting principles into practice. The first is a document that shows what we have done so far on welfare reform—the New Deal, childcare, the working families tax credit—the principles that guide that reform 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.1927
§ "First, the benefits uprating. Today I can announce the largest ever increase in child benefit. As a result of the uprating from next April child benefit will rise by £2.95 to £14.40 a week. That represents real security for our children provided by this Government.
§ "Today I can announce, too, new help for the poorest pensioners with the introduction of a minimum income guarantee. The poorest pensioners will get a minimum of £75 a week. Pensioner couples will receive £116.60. Again, that means real security for today's pensioners from this Government.
§ "Most national insurance benefits will rise by 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 the details of the uprating of benefits in the Vote Office.
§ "I turn to our plans for a single gateway to the benefit system for everyone of working age. When I looked at the current way the DSS hands out money I was amazed to learn that people can claim benefits without even having to turn up for an interview, without being given any help finding work. That will all change. We have created new opportunities for people to work: £195 million for the New Deal for disabled people; £190 million for national introduction of the New Deal for Lone Parents; and the first ever national childcare strategy. We are making sure work pays through the new minimum wage and the working families tax credit.
§ "We believe that in return it is only 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 the rule will not apply.
§ "We are not forcing people to work. The interview will give real opportunities to people written off by the system. It will create a fundamental change in culture. People will no longer ask of the system, 'What can you do for me?' but, 'What can I do to help myself?'
§ "We will improve the quality of advice 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.
§ "Now we turn to disability benefits. Here, too, we aim to provide work for those who can and security for those who cannot. When the severely disabled are not getting the help they need, when one million disabled people say that they want to work but are not given the chance and when one quarter of men over 60 are on incapacity benefit because the last government used it as a way of hiding the unemployment figures, we know that the system needs change.
§ "We promised in the Green Paper that disabled people should get the support they need to lead a fulfilling life with dignity. That is what we will do. First, the foundation for all that we do is an unshakeable commitment to comprehensive civil 1928 rights for disabled people to ensure that they are respected not just in the work place but in all areas of life.
§ "We are doing more. Today I can announce a £30 million programme of new help for disabled people seeking work, extra to the New Deal. But we also want to improve disability benefits. Disabled people with the greatest needs are not getting the support they need; others are receiving support that they should not. People disabled young in life with no hope of work get so little help through their severe disablement allowance that 70 per cent. of them have to claim income support. Disabled people on low incomes needing day and night care do not get enough help to meet their extra needs.
§ "Young children with little mobility receive no recognition from the system. At the same time, many of the 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 which are expected to improve.
§ "Today we set out for consultation proposals to provide more help to the most severely disabled people in greatest need and action to make sure 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 get greater help. Those aged over 20 can already qualify for incapacity benefit if they have worked or, alternatively, for income support. In the future, severe disablement allowance (SDA) will no longer be available to them. However, many young people disabled before they were 20 have little hope of work. Today I can announce that we will therefore 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, a time when the nation's health has been improving. But we are concerned that the benefit is becoming abused as an enhanced early retirement subsidy.
§ "For future claimants we will discourage the use of IB 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 they have in excess of the £50 limit will reduce their benefit by 50p. Also, for future claimants we will restore IB 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 by the long term unemployed.
§ "We will strengthen the link between the work and benefit. Only people who have worked and paid recent contributions before the claim will be eligible for benefit. We will reform the all work test so that those who claim benefits have to give evidence of their work prospects. This will give information of the work disabled people can do.1929
§ "In addition 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 which will give £129 a week to a single person and £169 to a couple. This 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.
§ "We will also extend the higher rate of DLA 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 last government failed. It caused a lot of anxiety to disabled people. We will cancel the project. In its place we will put in a new system for reviewing claims to DLA and AA that is both fairer and more sensitive. It will work in the interests of disabled people. These changes will generate three-quarters of a billion pounds in long-term savings. But even with these changes, real terms spending on disabled people will continue to rise in the long run. These reforms do not affect the CSR plans announced by the Chancellor of the Exchequer in July.
§ "It is quite right that as our society gets wealthier the amount we spend on the most vulnerable should increase. But benefits must go to those for whom they were intended—to give most help to those in the greatest need—and must be affordable.
§ "The structural changes announced today will deliver significant savings over the longer run. But they do so by ensuring that greatest help goes to those in greatest need, and that benefits go to those for whom they were intended—work for those who can; security for those who cannot.
§ "Today, for the first time this Government will provide real security and record levels of child benefit. That is 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, and bad news for those who try to claim benefits they are not entitled to be on.
§ "Today this Government show a 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.".
§ My Lords, I commend this Statement to the House.
§ 4 p.m.
§ Lord Higgins
My Lords, the House will be grateful to the noble Baroness for repeating the Statement in your Lordships' House. In the Department of Social Security, Secretaries of State come and go, Ministers of State come and go, but the noble Baroness remains. For that we must be grateful because the complexity of these matters is immense. The expertise which the noble Baroness brings to the Front Bench is therefore greatly to be welcomed. I think all of us appreciate that. It is 1930 rather regrettable that the Statement has been made in the other place and in this House but appeared in large measure on page 2 of the Evening Standard ahead of that. That is typical of the way in which the department seems to leak badly. That is to be regretted.
I shall try to put this Statement in context. A crucial feature of the Government's whole plan is to reduce the amount spent on social security and to spend that money on health and education. When I raised this matter last week with the noble Lord, Lord McIntosh of Haringey, he said that the Government proposed to decrease the proportion of public expenditure spent on welfare rather than to decrease the absolute amount. I find it difficult to discover any statement to that effect. The statements made by the present Prime Minister before the election clearly implied there would be a cut in the absolute amount. Indeed the Labour Party manifesto gave the same impression. What is the overall effect of what is now proposed? Is it still the Government's intention that the social security budget as a whole should be cut both in absolute terms and as a proportion of national income? We are to have a lower rate of economic growth which may affect that issue. We should be given a clear answer to that point to put this Statement in context.
The present Secretary of State for Social Security carried out the comprehensive spending review when he was Chief Secretary. We were told that the plans for the next three years were set in concrete, whereas the present Government say they have planned ahead for three years but there is a degree of flexibility. If that is so, it is not now at all clear how the Secretary of State for Social Security will change the budgets that he said were set in concrete. The Statement is remarkable in that it states the reforms will not affect the comprehensive spending review plans announced by the Chancellor. The Government cannot have it both ways. Either there are changes in public expenditure, or there are not. They must presumably affect the comprehensive spending review plans.
Having said that, we of course welcome the general uprating as regards specific improvements in disability benefits and so on. Nonetheless, we shall need to consider carefully the structural changes which are proposed. We are told that there will be pilot schemes to test the changes and if it is felt that the pilots have been successful, the changes will be adopted nationally. However, the pilot scheme to test the lone parent proposal was extremely disappointing. Yet the Government are still going ahead with it. That casts some doubt as to whether pilot schemes are being operated in the way they should be operated.
The proposal for a single gateway is something which your Lordships will need to consider further. However, I cannot but remark that that builds on the basic jobseekers approach which the previous government introduced, and which at the time was heavily criticised by the then opposition. Nonetheless we shall need to consider carefully the single gateway proposal. We have not had an opportunity to examine the relevant document in any detail.
The noble Baroness lays much stress on protecting the position of existing claimants but not on protecting the position of existing contributors. Ever since the time of Beveridge we have had for many years a system where you contribute and in return for those contributions you receive benefits. However, since they came into power, the Government have increasingly undermined that contributory principle. They have undermined the idea that you pay contributions and then receive certain benefits as of right. A new contract for welfare: Support for Disabled People states, strangely, at paragraph 20,
At present, people who have been unemployed and getting credits can qualify for Incapacity Benefit on the basis of contributions paid many years ago. We propose to change this so that entitlement to Incapacity Benefit requires contributions to have been paid more recently".
Will the noble Baroness tell us why the earlier contributions are now, apparently, to be regarded as worthless, because those who paid them presumably expected to obtain reasonable benefits in return?
Paragraph 21 relates to incapacity benefit. It is headed,
introducing a fairer balance between public and private provision".
This afternoon the noble Baroness has told us that some of those who receive incapacity benefit are paid it in addition to what is described as a "reasonable pension". This is the pension paid to those who are in an occupational pension scheme. This group is suffering badly, particularly as regards schemes which have a defined contribution. Those people who are about to retire now are being hit heavily both by the decline in the stock market value of their assets, which determines the total fund, and more particularly by the decline in annuity rates. But we are now told that these people who have suffered from the effects of the Government's policy are now to have that pension reduced, if they receive incapacity benefit, on a basis of 50p for every pound over £50. That cannot encourage prudence. These people have made provision for their old age. Suddenly, out of the blue, with no warning or consultation, their just entitlement will be apparently reduced. That is a quite extraordinary provision to introduce.
§ Generally speaking, the whole contribution principle has been undermined. The noble Baroness and I have debated this previously in relation to the previous Budget. As regards the minimum guarantee for pensions, some people will receive the pension who have not contributed. We shall need to study the documents carefully in the light of the Statement. Perhaps the noble Baroness can tell us whether it is the case that incapacity benefit is being reduced for new claimants, as that is my understanding? I hope she can clarify that point.
§ These are extremely complex matters. It is difficult to examine them across the Floor of the House on the basis of a Statement that has only just become available. I hope therefore that ahead of the legislation, which as the noble Baroness said, will not be before next year, we can hold a debate in this House and go into these matters in great depth.1932
§ 4.10 p.m.
§ Lord Goodhart
My Lords, perhaps I may follow the noble Lord, Lord Higgins, in paying personal tribute to the noble Baroness, Lady Hollis, for her work in the Department of Social Security. On these Benches we welcome much of the content of the Statement and the three documents published today. However, I have a number of criticisms and questions.
We welcome the increase in child benefit. It is a particularly valuable benefit, both because of its very high rate of take-up and because of the flexibility that it offers to parents, especially to mothers, who are given either the option of using it to pay for child care while remaining in work or to replace their previous income from work if they wish to stay at home to look after their children. We also welcome the minimum guarantee. However, we should like to know what the difference is between the proposed minimum income guarantee and the present right of poor pensioners to income support. Does that involve something more than a simple re-badging of income support to those of pensionable age?
Turning to the single gateway proposal, one was pleased to note the remarkable generosity of the Government in saying that those who are terminally ill need not apply for an interview! But there are a number of other categories. What about those, for instance, who are within one or two years of reaching retirement age? Do they have to attend an interview with a view to obtaining further jobs—which they are extremely likely at that age to get! What about lone parents with pre-school age children? Let us take the case of a woman deserted by her husband or partner, or whose husband or partner has died, leaving her with three children under five, one of them a baby. I accept that such people will not immediately be required to seek work, but is there any point in even requiring them to attend an interview when the prospect of work will not arise for them for several years? Will there be an opportunity for claimants to ask for a home visit where appropriate—as it will be in the case of the disabled or those people who suffer from agoraphobia or other problems which may make it difficult for them to leave home? Will there be appropriate arrangements for those who have difficulty in speaking English?
What are the sanctions for non-attendance at interviews? They are not spelt out in the Statement; however, I understand from the supporting documents that it is intended that benefits can be withdrawn as a sanction from those who do not attend. I can see that it may be an acceptable sanction for those who are free to work and have no reason to refuse, but what about the position of the single parent? Will such parents be at risk of having benefits withdrawn if they fail to attend an interview, with the consequences that that will have for their children?
Turning to disability benefits, again there is much in the Statement that we welcome. We accept that there have been abuses of incapacity benefit and the increase in the number of those drawing incapacity benefit over the past few years is wholly inexplicable in terms of the health of the nation. We welcome the proposal to 1933 improve help to congenitally disabled people and people who become disabled early in life. However, there are some oddities. The remark in the Statement that the benefit is meant to be for people who will never work is not exactly true. As I understand it, it is meant to be a benefit for people who are unable to work for a significant period of time as a result of disability and therefore applies to people who, let us say, suffer from a long-term disease but one which may well improve in the course of time.
I echo the remark of the noble Lord, Lord Higgins, that the proposal that people with a private pension or health insurance will lose incapacity support is a dangerous one. It will discourage savings. Furthermore, those who have to take early retirement will—quite apart from what we hope are short-term problems and falls in the stock market—because they are retiring at an early age, have had less opportunity to make contributions, will have fewer years of service and will as a result receive a lower pension than if they had stayed in work until normal retirement age. Therefore, if incapacity benefit is withdrawn they will suffer a double loss.
A cause for great concern is the statement that only those who have worked and paid contributions before making a claim will be eligible for benefit. Looking at the background document, that statement is incomplete. The intention is that incapacity benefit will be available only on the same terms as jobseeker's benefit; namely, to those who have paid at least one year's contributions within the past two years, and for that purpose the contribution credits payable on behalf of the unemployed will not be available. I can understand that approach in relation to jobseeker's benefit, but it seems absolutely wrong that, for instance, someone who has lost his job as a miner, is unemployed for more than a year and then becomes disabled will lose the right to incapacity benefit.
There also seems to be a loophole as regards students. If they are disabled at the age of 20 or more they will not qualify for the severe disablement allowance, since that is limited to those under 20; however, they will not qualify for incapacity benefit because they have no record of contributions.
So while we welcome much of the content of the Statement and will support the Government on many of the proposals, there are many matters that require investigation; indeed, in some cases they do not at present appear acceptable.
§ 4.18 p.m.
§ Baroness Hollis of Heigham
My Lords, first, perhaps I may thank both noble Lords for the generosity of their personal comments. I take them as a generous tribute. I hope that I shall repay them in spades by being as tough-minded, argumentative and forensic as I can manage to be. I am sure that your Lordships would hope for nothing less.
The noble Lord, Lord Higgins, asked how we were balancing our expenditure plans with the CSR figures and so on. With his superb Treasury expertise, the noble 1934 Lord will know that average growth in the social security budget over the last Parliament of the previous administration was 4.1 per cent. a year. It is a matter of whether or not family credit is included, but I am taking like for like. Average growth in the social security budget under this Government will be 2.2 per cent. over the lifetime of this Parliament. That is the figure in the CSR; the Chancellor has repeated it; and we confirm it today. That is our expectation and it has not changed. It means that while social security expenditure will continue to grow it will be much less than it would have been under the previous administration. And much of that growth is demographically driven, for good reason: there are more pensioners, they are living longer, and they are entitled to benefit. As a result of the increased expenditure some £13 billion will go to pensioners; £3 billion on child benefit; £2 billion cumulatively to the unemployed and single parents; and something like £10 billion cumulatively over the lifetime of this Parliament to disabled people.
So the difference between us is that we have, so to speak, capped the growth; nonetheless, it will continue in real terms. As I hope the noble Lord will accept, within this package we are also seeking to focus our expenditure on the poorest and those who have the greatest needs, including disabled people.
The noble Lord said that the new deal for lone parents was disappointing. The pilots have so far shown that about 5,000 lone parents have, as a result of this scheme, gone into work or may have had their hours of work increased. Should the same ratio of jobs to interviews continue, about 100,000 lone parents will have the advantage of either an interview, moving into work or working additional hours, which they might not otherwise have done. That must be a worthwhile enterprise. No one on either the Government or the Opposition Benches has told the Government of any other way to help to encourage lone parents to go into work when they feel that the time is right.
The point about the gateway interview is that at the moment too often lone parents do not know what they do not know. There is a real problem for them of not knowing what opportunities for childcare we can offer or what training and education facilities we can offer. In the pilots for the single gateway we seek to ensure that every new claimant will, at the point at which the single parent claims income support for the first time, have an interview at which the income support claims and possibilities in future of a new deal, the right to child maintenance and the like, will all be discussed with them. I do not believe that that would be unreasonably intrusive. Thereafter, the lone parent should be able to make the choice as to what she sees fit for her life, whether she is ready to go back to work now or later. It is for her to choose. We wish to empower her with the information she may not yet have as to what choices, options and opportunities are available for her. I hope that this will be regarded as a real and positive achievement for lone parents.
A further point that the noble Lord made was that we may be protecting claimants but we are undermining the contributory principle. That issue was raised by the noble Lord, Lord Goodhart, in particular in relation to 1935 unemployed people who have been out of work for a considerable time, who then become disabled and who would not in the future be eligible for incapacity benefit. At the moment, someone could work for five years, be unemployed for 20 and in the 21st year of unemployment receive incapacity benefit. I know that this is reductio ad absurdum, but someone could earn £400 per week for four weeks and then have a right to contributory benefit for the rest of their lives. That cannot be sensible because the incapacity benefit was designed to replace the earnings of someone in work who is forced out of work because of sickness. That was the intent of IB and that is the intent that we are restoring. We are saying that within two years they should be within the labour market: "For two years you may have been out of work, but if you have been out for longer than that it is not reasonable to treat you as though you had been forced out of work recently by sickness or disability". That is the point of the change.
§ Lord Goodhart
My Lords, I am grateful to the Minister. Is it not a period of one year? In order to claim the benefit, you must have a complete contributions record for one of the past two years. So, effectively, it is only a one-year period.
§ Baroness Hollis of Heigham
My Lords, you must have made contributions within the past two years. However, we will follow up the precise details with the noble Lord. We seek to restore the connection between being in the labour market, being in work and paying national insurance and, when the contingency of sickness or disability unfortunately hits someone, having access to insurance-based benefit. Contrary to what the noble Lord said, what we are doing is reasserting the worth of the connection with the contributory principle rather than undermining it. In my view, over the past that has become far too diluted.
Both noble Lords raised questions as to whether our proposals for the pensions take-up for incapacity benefit were reasonable. We are not reducing people's occupational pensions. We are saying that incapacity benefit was designed as an earnings replacement benefit, not an early retirement benefit. I suggest that, partly as a result of the policies of the previous administration, we all know that many people have left work and gone on to IB as a form of more generous retirement pension. Also, under the previous administration, it was a way of massaging the unemployment figures. That is why one-quarter of all men between the ages of 60 and 64 are on incapacity benefit. That is not what the benefit was originally intended for and the nature of the contributory principle for sickness and disability was not intended to insure against that.
For example, back in 1953 only 28 per cent. of men in full-time work had an occupational pension. Now, something like 85 per cent. of men in full-time work, about 70 per cent. of women in full-time work and a proportion of those in part-time work have access to occupational pensions. The world has changed and it seems not unreasonable to work in partnership with the pension provision that people have so that we are not contributing twice over for the same contingency. If 1936 people receive a generous income from their occupational pension—as has been the case over the past decade—it seems reasonable to ask that it should be taken into account. For example, one-third of all people on IB have an occupational pension worth on average £85, but the top one-third of those with an occupational pension have an occupational pension on average of £181 a week. It seems to me not unreasonable to ask whether such people need the full incapacity benefit, when other people on income support never had a chance to build up that contribution record and therefore would have a much lower incapacity benefit and lower income. That is why we are making these changes.
The noble Lord asked whether incapacity benefit was being reduced for new claimants. No, we are not changing the rates of incapacity benefit, merely the contribution conditions, plus the occupational pensions taper.
The noble Lord, Lord Goodhart, asked what was the difference between that and the pensions income guarantee. We are giving an extra £5.75 to a single person and about £8 to a couple where they are on income support and receiving the highest rate of DLA and are on disability premium. In other words, we are targeting additional monies worth on average £5 or £8 to those who have severe physical or mental health disabilities and who have severe financial need. That is the group we seek to help.
§ Lord Goodhart
My Lords, I am grateful to the noble Baroness for giving way again. Is that inclusive of or on top of the uprating of 3.2 per cent. for the national insurance benefits?
§ Baroness Hollis of Heigham
My Lords, as of next April, it will include the uprating. If I have any information different from that, I will write to the noble Lord. He pressed me about interviews and who will be exempt. It is the kind of thing that will come up in discussions as a result of consultation with organisations and groups. For example, someone would not be expected to come to the interview who was terminally ill or who had been recently widowed, or was in poor health or had recently come out of hospital. That includes someone who may be of working age but is nevertheless elderly. That example will be discussed on its merits. Of course, we offer home visits where it is inappropriate for someone to come into the office.
With the interviews, we do not seek to dragoon into work people who are clearly unable to work or who, because of other responsibilities, choose not to work. We are trying to ensure that people know about the opportunities and support available in the system which they are not aware of now. We know that social security remains for so many people territory which baffles them by the degree of its complexity, forms and bureaucracy. By having a face-to-face interview in the office or at 1937 home, we hope to overcome the hurdles people face in understanding the information on the opportunities they want.
§ Lord Higgins
My Lords, what is the sanction if someone outside the exemptions mentioned fails to turn up?
§ Baroness Hollis of Heigham
This is a single gateway which is being piloted only for new claimants. Therefore, for new claimants to receive their benefits they will have to have an interview. So, for them, the issue of sanctions almost does not arise. The only claimants for whom it might arise are, for example, the widowed or terminally ill, and we shall respond on a person-to-person, case-by-case basis in the pilots proposed, at the point at which new claimants seek to sign on for the benefit they will have an interview. It may be that the interviewer will suggest that the person comes back at a later stage for further information and so on. But that is the proposal in the gateway. One is talking about 18 months to two years down the road if it is thought sensible to extend these pilots nationwide.
I accept that the Statement and the supporting documents are detailed and complex. I have tried to answer the points raised today by noble Lords as best I can. If I have missed any I shall write to noble Lords.
§ 4.30 p.m.
§ Baroness Carnegy of Lour
My Lords, as a point of order, I know that technically there is no time limit on questions put by Front Bench spokesmen. We are not debating the documents but the Statement. That debate has already taken 30 minutes, and 20 minutes is to be allowed for Back-Benchers. Is it not time that we moved on to Back-Benchers?
§ Baroness Hollis of Heigham
My Lords, we are about to do so. However, as this is a major Statement that affects many millions of our fellow citizens I do not believe that it is unreasonable for the House to devote a little time to its implications.
§ Lord Morris of Manchester
My Lords, naturally I am glad the Government do not plan to attack the living standards of disabled people by cutting benefit levels. I welcome also their decisions to scrap the benefit integrity project and to give more help to disabled children and young people, more especially by extending mobility allowance to children aged three to five. That my noble friend shared the concerns felt by many of us in this House about the inhumanities of the benefit integrity project was never in doubt. Is she aware how grateful we are to her today for its demise? Does my noble friend agree that if we are to turn the movement of disabled people from welfare to work from a trickle to a flood urgent action must be taken to make public transport more accessible to them? Does she also agree that it is not tenable to condemn employers for discriminating against disabled jobseekers when, notwithstanding the Disability Discrimination Act, 92.5 per cent. of them are to be allowed to go on 1938 discriminating? Finally, can my noble friend confirm that no disabled person will be forced into work as a condition of receiving benefits and that the changes to severe disablement allowance mean that young people disabled early in their lives will now, for the first time, be floated off means-tested income support?
§ Baroness Hollis of Heigham
My Lords, my noble friend, who has done so much for disabled people, is absolutely right to draw our attention to the issues of public transport and employment discrimination. That is precisely why we need strong civil rights and to extend the remit of the existing DDA. My noble friend will be aware of some of the discussions that are taking place on that matter.
My noble friend's second question was whether I could confirm that no disabled person would be forced into work. Yes, my Lords: no disabled person will be forced into work. Thirdly, my noble friend asked me to confirm whether someone who was disabled before the age of 20 would for the first time be floated off income-related (means-tested) benefit and would instead after a year go on to the higher rate of incapacity benefit. I can confirm that for those young people who have never had a chance to enter the labour market and build up contributions, and therefore have had no opportunity to provide for themselves, we shall ensure that after a year they will have the higher rate of benefit, which will give many of them an extra £25 a week and float them off the need ever to claim income support.
§ Baroness Ludford
My Lords, can the Minister clarify one aspect of the practical impact of the single gateway system? I entirely agree with her comment that many people are baffled by the complexity of the forms and bureaucracy of the social security system. The gateway document begins by deploring the confusing array of agencies with which people have to deal, including the Benefits Agency and local authorities. But I am not clear whether it provides any more of a one-stop shop in terms of filling out forms and the exchange of information than the present arrangements. I note that claimants will gain access to information and help about a range of local authority services, including housing benefit, but will they still have to fill out a separate form to be sent back to the local authority, for example, for council tax benefit or housing benefit or will the Benefits agency, if that is the first agency with which they deal, pass on that information? I know that many people fall at this point. They get income support but have not filled out another complex form and returned it for the local authority benefits. That gives rise to all kinds of problems.
§ Baroness Hollis of Heigham
My Lords, I know that the issue that concerns the noble Baroness is the interface between social security benefits and local authority benefits. She will also know that housing benefit is under review at the moment. It may be that specific proposals will be made to make that interface more easily understood or managed. Our hope and expectation is to have a one-stop shop. If and as long as housing benefit remains the responsibility of local 1939 authorities—the noble Baroness should not read anything into that—clearly there needs to be a set of information exchanges based on the IT spine. We need to ensure that we have the computer system in place before we can develop effectively a single spine of information and, as a result, access to the full array of benefits. Like the noble Baroness, as far as possible I want a one-stop shop and one body of information that goes into the system which then triggers the entitlement to an array of benefits. She is absolutely right to say that that is the only way to ensure that people get the benefits to which they are entitled.
§ Lord Rix
My Lords, I echo the tributes that have been paid to the noble Baroness. I apologise for the quality of my voice. To adopt an old pantomime gag, I must have been drinking out of a damp glass. I congratulate the noble Baroness on the extension of the old-fashioned mobility allowance to three and four year-olds. That is marvellous news. I also congratulate her on the passport to higher incapacity benefit for the under 20s, although I am rather disturbed that it will not take place until 2001. Like the noble Lord, Lord Morris of Manchester, MENCAP is delighted about the cancellation of the benefits integrity project. Can the Minister guarantee that those younger disabled people, including learning disabled who stay on at college beyond the age of 20, will not lose out on the transfer to incapacity benefit?
§ Baroness Hollis of Heigham
My Lords, I am very grateful for the noble Lord's comments and his welcome for the extension of mobility allowance for the first time to small children aged three and four who may be going to nursery school, playgroups or whatever and have real mobility needs. I am delighted that the Government are able to announce today the proposal to introduce that change. Like the noble Lord, Lord Rix, I am also delighted that those who have been born with a severe learning impairment or who have become severely disabled before the age of 20 and can therefore never seek to support themselves will get a more generous and decent level of benefit. The noble Lord asked about a young person, particularly someone with a learning impairment, who might otherwise remain in education for longer and therefore whether the cut-off point at the age of 20 would debar that individual from benefit. This is a real issue. What we seek to do is to ensure that those who cannot enter into the labour market have access to IB. Clearly, if by virtue of a learning impairment a person takes longer to complete his or her full-time education it is difficult to say that that individual should not have access to the benefit. But we need to discuss this matter and consult to see how best to deal with it. It will take time before this emerges in the form of regulations. We shall see what we can do to address the very real issue that has been raised by the noble Lord.
§ Lord Skelmersdale
My Lords, there will be a good number of people on state benefits up and down the country who are absolutely delighted by what the noble Baroness has been able to repeat this afternoon. But does she believe that leopards blush? She has been rightly praised several times this afternoon for her 1940 knowledge of this very intricate subject, but at least in one respect she appears to have changed her views quite dramatically. The Statement praises the Government for being able to make the biggest single increase ever in child benefit. The figure is £2.95, if I have written it down correctly. The noble Baroness will recall—certainly I well remember it—fulminating about the unfairness of child benefit. What has changed? The noble Baroness appears to be confused.
§ Baroness Hollis of Heigham
My Lords, I hope that the noble Lord will forgive me; I am sure it is my stupidity. I do not understand the point about fulminating against the unfairness of child benefit.
§ Lord Skelmersdale
My Lords, I shall explain because it will be useful to have an answer. In the past, the noble Baroness has made the point—I agree with her—that child benefit goes to those who need it and are deserving of it and equally to those richer people who are not deserving of it. I précised that remark by talking about the unfairness of child benefit. I repeat my question. What has changed in the Government's thinking?
In response to the noble Lord, Lord Goodhart, the noble Baroness said she believed that over the lifetime of this Parliament the social security budget would rise by 2.2 per cent. a year. That must be an average over the lifetime of the Parliament. Without having read the papers, or having been able to add up even vaguely the figures announced in the Statement, it seems to me that it is an expensive Statement. Is the Minister saying that there will be an increase of 2.2 per cent. this year on the social security budget or that the 2.2 per cent. will be averaged out per year over the lifetime of the Parliament?
§ Baroness Hollis of Heigham
My Lords, I am not sure whether we are at cross purposes. It may help if I reflect on what the noble Lord says.
I sought to say that under this Government, as has been made clear in the CSR, our expected intent—we have no reason to think that we would depart from it—and our forecast therefore, is that social security expenditure will rise on average 2.2 per cent. Whether the figure is 1.3 per cent. or 2.2 per cent. depends on how one counts in the working families tax credit. That is the difference. I said that, within that, the growth is mainly demographically driven; that is, by the growing number of pensioners who, I am glad to say, are living longer. We are therefore cutting the expenditure in which the previous administration was engaged—expenditure on social and economic failure. I refer to the paying of benefits to people who would have liked to work but were unable to do so. That is the main difference in our policies.
The Statement today is not a cuts-led Statement. It would produce savings of only about £25 million a year by the end of this Parliament on a budget of £2,500 million. It is a principle-led one of work for those who can, security for those who cannot; and work relates to new deals, civil rights, minimum wage, and so 1941 on. It is security in terms of the benefits for those who have no access to the labour market and therefore need a decent and proper standard of living.
§ Lord Skelmersdale
My Lords, before the Minister concludes that point, can she tell us in absolute terms how much money the Statement adds to the social security budget?
§ Baroness Pitkeathley
My Lords, like other noble Lords, I very much welcome the Statement, in particular the cancellation of the benefits integrity project which, as the Minister knows, has caused so much distress.
The extension of the mobility allowance to three and four year-olds will be greatly welcomed by parent carers. It is a huge step forward. However, the issue of carers benefits is absent from the Statement. As the noble Baroness knows only too well, the issue of carers' income and benefits is closely related to the issue of disability income. Can she assure me that the question of carers' income will be addressed through the national strategy for carers currently under consideration?
§ Baroness Hollis of Heigham
My Lords, I thank my noble friend for that remark. As noble Lords know, my noble friend will shortly leave her responsibilities with the NCA. I am sure the whole House will join me in paying tribute to the work she has done for carers who for so many years have been a neglected body. I am delighted to take this opportunity to pay that tribute.
As a result in part of the campaigning work my noble friend undertook, the Prime Minister set up the national carers strategy in which we seek to integrate the work being done within the Department of Health, the DSS and the DfEE. Carers benefits are part of that consideration. However, the strategy has been only recently set up and conclusions are far from being reached.