HL Deb 17 June 1999 vol 602 cc414-6

3.26 p.m.

Lord Rotherwick asked Her Majesty's Government:

Whether, in the light of current proposals to cut support for disabled people, they will consider switching resources from the national changeover plan to spending on disabled people.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)

My Lords, the Government have made absolutely clear our commitment to improving the opportunities and support for disabled people. We are spending now over £24 billion on disability benefits and over this Parliament we expect to spend £2 billion more. Small targeted investment on changeover planning is essential to give the UK a real practical choice to join the single currency should that be in the national interest.

Lord Rotherwick

My Lords, I thank the noble Baroness for answering the Question, although not for the Answer. Is the Minister aware that in another place today the Government are pressing Clause 121 of the Finance Bill, which gives the Inland Revenue, Customs and Excise and other government agencies the right to spend tens of millions of pounds before a referendum on the national changeover plan for the euro? Bearing that in mind, can the Minister explain why the social security department uses disciplines of budgets which have resulted in the loss of benefits to some people and the abolition of the severe disability allowance to others while the Treasury appears not to use those disciplines when throwing tens of millions of pounds at the national changeover plan?

Baroness Hollis of Heigham

My Lords, I do not accept either part of the noble Lord's question. What the Prime Minister said, repeated in a Statement by my noble friend Lady Jay on 23rd February, was that, if we wish to have the option of joining, we must prepare. If we do not prepare, the British people do not have a choice. As to the implication for DSS budgets, because the DSS accounts for one-third of the Government's expenditure one would expect some proportion of those national changeover plan moneys to fall on the DSS. In the current year—1999–2000—the DSS is expecting to spend £1.5 million out of its budget of £100 billion.

Lord Ashley of Stoke

My Lords, is my noble friend aware that, despite our differences on some aspects of the welfare reform Bill, the Government deserve great credit for the many constructive and positive actions they are taking to help millions of disabled people? Is she aware also that there is genuine misunderstanding about some of the figures involved in the gains and the losses for those who are disabled? For example, the Secretary of State said on 23rd February this year that we are spending £1 billion more on disability benefits this Parliament. Yet on 20th May he said that this year we have spent £25 billion on benefits for the sick and disabled and that the sum will increase by £2 billion in this Parliament.

I am sure that there are good reasons for the discrepancy. However, can the Government draw up a balance sheet which would help the House enormously to understand the gains and losses to disabled people?

Baroness Hollis of Heigham

My Lords, I should be delighted to provide any statistics or information that my noble friend Lord Ashley or, indeed, any noble Lord wishes to have on disability issues. It is clear that the Government's budget for disability is going up from £24 billion to £26 billion in the course of this Parliament. That is because, first, we are increasing the opportunities for disabled people to return to work, and secondly, giving extra help to children and young people, for example, through proposals for disability living allowance and mobility allowance for young children and through extra money from working families' tax credit to young children. Thirdly, we are spending money on the poorest disabled people, such as those with low incomes, by ensuring a minimum income of £75 a week—an additional £60 million of expenditure. So we are spending more money on disabled people over and beyond some of the demographic pressures that come, fortunately, with older people living longer and many of them drawing on disability benefits in their old age. As I said, I shall be delighted to share with my noble friend any information that he wishes to have.

Lord Higgins

My Lords, do not recent events, especially the result of the European elections and the resignation of various charitable bodies from the Social Security Advisory Committee, suggest that the Government have got their priorities wrong in both these areas? As far as concerns the national changeover plan, given the way in which things are developing, should we not at least also have a plan in anticipation of the fact that we may not join the euro? Further, as far as concerns the overall position on social security, although the Government have failed in their commitment to cut the total social security budget, they now appear to be reducing it by hitting particular groups of disabled people through the Bill now before the House which has been unanimously objected to in all parts of both Houses.

Baroness Hollis of Heigham

My Lords, I do not accept any of the noble Lord's points. First, the fact that we are not in the euro, and may not be. is the current situation. Therefore, in that sense, there is always the option of no change. But, equally, there will be no option of change unless we start preparing now. We want the people of this country to decide and not to have their choice inhibited by the fact that we cannot deliver because we have not invested in the work, computers, leaflets, staff training, and so on, to make such a move possible and smooth were we to go down that path.

Secondly, the noble Lord says that we have failed on a manifesto commitment to cut social security spending. What we said—and what we have delivered—is that we would cut the rate of growth. Under the previous administration the rate of growth of the social security budget was 4 per cent over the previous Parliament. Under this Administration the rate of growth is 2 per cent. The reason for that growth is primarily, and fortunately, because of the number of elderly people living longer. We have cut expenditure on the issues where the previous administration failed; namely, we have brought people back into work, unemployment figures are at their lowest ever, and more people are now in work than ever before. As a result, that frees resources to help those who cannot work and who need our support.