I understand that with this it will be convenient to take the following motions:
That the draft Supplementary Benefit Up-rating Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Child Benefit (Up-Rating) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Family Income Supplements (Computation) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Housing Benefits (Increse of Needs Allowances) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Pensioners' Lump Sum Payments Order 1983, which were laid before this House on 7th July, be approved.
That an humble Address be presented to Her Majesty, praying that the Social Security (General Benefit) Amendment Regulations 1983 (S.I., 1983, No. 981), dated 4th July 1983, a copy of which was laid before this House on 14th July, be annulled.
That the draft Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations 1983, which were laid before this House on 8th July, be approved.
The order is accompanied by a report on its financial effects by the Government Actuary, and there is a separate statement which covers the uprating of mobility allowance.
As you have indicated, Mr. Speaker, it will, I think, be for the convenience of the House to consider with the order the four other affirmative motions on the Order Paper which relate to the November uprating of benefits, together with the order providing for the payment of this year's Christmas bonus, and the supplementary benefit regulations to which I shall return later.
The main uprating instruments put into effect the Government's proposals which were set out in the statement that my right hon. Friend the Secretary of State made to the House on 23 June. I shall not take up the time of the House by repeating the details that were given them. Suffice to say that we have now changed to the "historic" method of uprating, and the increases in most benefits are based upon the actual movement in the general level of prices in the year to May. That is the latest figure we can use if we are to ensure that the uprating increase are paid on time.
I make no apologies for the fact that the annual inflation rates for May—3·7 per cent.—and June are the lowest for 15 years. That is good news for pensioners and it is good news for the economy and for everybody in Britain.
It remains possible that by November inflation might rise to 6 per cent. If so, over the five-year period since November 1978 pensions will have gone up by 74·6 per cent. and prices will have risen by a little under 71 per cent. over the same period. Thus an increasing share of purchasing power has passed to our senior citizens. That is despite a severe worldwide recession, a rise of 600,000 in the number of pensioners as compared with 1979, and the build-up of pension rights for those newly retiring under the new earnings-related pension scheme.
If this year's uprating had been based on the old forecast method—the one brought in by the Labour Government in 1976—it would have started with a forecast increase in prices of 6 per cent. Full adjustment for last year's over-estimate of 2·7 per cent. would have resulted in a rise of 3·3 per cent. in pensions, compared with the actual rise of 3·7 per cent. under the new method. [Interruption.] I remind Labour Members that in 1976, when the Labour Government changed from the historic method, the offer to the pensioners in that year was 6 per cent. less than the historic method would have given and they lost £500 million—the equivalent at present prices of £1 billion.
The Labour party brought in a system of making a forecast and then adjusting it, and as I have said, the original 6 per cent. was a loss. I know that some Labour Members are sore about our proposal, and some of them may not even know about it, but perhaps it will do them good to know about it. I must put it on the record that the pensioners lost £1 billion in purchasing power under the previous system.
We have protected not only pensions against inflation. Our record on the unpledged benefits is also a good one. Both child benefit and one-parent benefit are rising 11 per cent. this year, well ahead of inflation. That brings both these benefits to their highest ever value in real terms. By restoring the 5 per cent. abatement of unemployment benefit made in 1980 we are also ensuring that the rates of unemployment benefit will have been fully protected against inflation since 1978. Family income supplement and mobility allowance have been substantially improved in real terms since 1978, and the value of those improvements will be maintained with this year's increase. Similarly, the supplementary benefit safety net has also been fully maintained.
Last year it was decided that supplementary benefit scale rates should be increased in line with the movement of the general index of retail prices, excluding housing costs. This was because the housing needs of people receiving supplementary' benefit are met separately from the scale rates. This year the revised basis of calculation leads to an increase of 4·3 per cent. in the supplementary benefit scale rates, which is 0·6 per cent. higher than the increase in the full RPI. The supplementary benefit heating additions go up in line with the actual 8·6 per cent. rise in fuel prices in the 12-month review period. We have again substantially improved the supplementary benefit capital cut-off limit. That means that people can come within the supplementary benefit limit if they have capital up to £3,000. Last year the figure was £2,500 and the previous year it was £2,000, so there has been an increase of 50 per cent.
I do not know what the hon. Gentleman's mathematics is like, but that is a 50 per cent. increase in two years. If Labour Members are pleased with this increase, and are encouraging us to help people to build up capital, there will be rejoicing among those of us who believe in a capitalist society.
The hon. Gentleman's question is rather like asking, "When did you stop beating your wife?" If we do not increase the limit we are attacked, and if we do we are still attacked and asked what we are doing about other people. I know that the country's public spirit is such that a cheer will go up for this uprating, not only among those who will benefit this year, but among others who know how important it is. I am glad that the hon. Member has drawn attention to it.
Perhaps not here, but around the country, who knows?
The proposed increases in benefits involve a full year cost of about £1·5 billion and bring the total estimated expenditure on social security for 1983–84 up to £35 billion. They not only fulfil our pledges to pensioners and linked long-term beneficiaries, but also protect all the main benefits against inflation and give additional help on top to those on lowest incomes and to families with children. I am delighted to commend the proposals to the House.
The Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations have been considered by the social security advisory committee, and its reports are to be found in Cmnd. 8978. A number of changes were made to the draft regulations in the light of representations made to the committee and as a result of the committee's observations. The Government are grateful to the committee for the consideration it bas given to these proposals.
The regulations contain a wide range of changes to the supplementary benefit scheme, the majority of which are minor or technical. I think it may assist the House if I concentrate on two particular changes that have attracted some publicity. These concern the rules for meeting board and lodging charges and the rules whereby a deduction is made from a claimant's benefit if he is voluntarily unemployed. My hon. Friend will be glad to deal in his winding-up speech with any points of detail on individual regulations which hon. Members may wish to raise.
I now turn to the changes in the rules for meeting board and lodging charges. Currently, charges are met up to a level — the local limit — assessed locally as being reasonable for the area. It is impossible, however, to arrive at a single figure that caters adequately for ordinary board and lodging charges as well as for residential homes and nursing homes. The new regulations therefore provide for three separate local limits according to the type of accommodation occupied — private nursing homes, residential care homes and ordinary board and lodging. At the same time, the discretionary provision that allows certain charges to be met in full, even if they exceed the local limit, will be removed.
This discretionary provision was intended to be used only exceptionally where the personal circumstances of the claimant and local conditions were such that it was unreasonable to expect the claimant to move. The decision on whether it is reasonable to expect the claimant to move to cheaper accommodation is in the hands of the local benefit officer and places a heavy burden on him. It has also been used in ways that were not intended when the current regulations were made. For example, it has been used to meet in full the charges for claimants in hostels for the rehabilitation of alcohol and drug misusers, though the rehabilitation element of the charge is properly the responsibility of health and local authorities.
An extension of up to £15·35 to the local limit will be provided for certain defined groups of people such as retirement pensioners, those with physical or mental disability or in hostels for drug or alcohol misusers, who may have to pay higher charges than the young and fit.
Overall, we consider that the provisions represent a considerable improvement and simplification of the existing arrangements. The SSAC shares this view, but we agree with it that the system will work as we intend only if the local limits are properly set and kept up to date. We shall therefore be monitoring the effect of the new arrangements on claimants and the accommodation provided for them. We are also setting up a survey to identify claimants whose charges will no longer be met in full.
Recently, there has been much press coverage of, and much concern on both sides of the Chamber about, the changes in voluntary unemployment deductions. These are made where a person has left his job without good cause, where he has been dismissed for misconduct or where he has unreasonably refused an offer of suitable employment. Under the regulations, he is then disqualified from receiving unemployment benefit for a maximum of six weeks, and for this period, supplementary benefit is also reduced. I shall explain what happened under previous Governments, including Labour Governments, as this has not been mentioned in the press, which has said enough about certain points of this Government's conduct on this matter.
Before 1971 the amount of the reduction was left to the discretion of local office staff, though the National Assistance Board, and its successor, the Supplementary Benefits Commission, issued guidance. The Social Security Act 1971 removed that discretionary approach and required instead that the deduction should be 40 per cent. of the personal scale rate of the claimant, with a maximum of 40 per cent. of the single householder's rate. Discretion was left with the local staff to make a smaller reduction if, in its opinion, the 40 per cent. cut would cause hardship. Again, the Supplementary Benefits Commission issued guidance, indicating such cases where staff should be particularly watchful for hardship, and telling staff that the reduction should never be less than £1.
The hon. Gentleman has quoted the advice given by the commission. Was that guidance followed or, as I suspect, was it not followed in about 99 per cent. of cases?
The reference to 99 per cent. is a hyperbole. We have found that guidance has not been carried out in all cases, and I cannot guarantee that it was carried out in every case. I am merely telling the House what the regulations were. It is difficult to know what happened 15 or 20 years ago. We are now dealing with current affairs, not history.
In 1980, the 40 per cent. deduction was continued unchanged when the system was changed to a regulation-based scheme, but the modified rate was set at 20 per cent., instead of being left to the discretion of local staff. The intention was that the lower deduction should be used where there was a risk of hardship, and the regulations laid down specific cases where it should apply. They were broadly the same as those listed in the earlier guidance of the commission, but the important difference was that the smaller deduction had to be made in all those cases. In the commission's day, they had been no more than cases where staff should be on the lookout for signs of hardship. That is the answer to the previous question of the hon. Member for Denton and Reddish.
Before the 1980 changes—in the time of the previous Labour Government—the lower rate deduction applied in no more than 2 per cent. of the cases with voluntary unemployment deductions. By the first month of the new scheme under a Conservative Government, that figure had leapt to 26 per cent. and had risen to 34 per cent. a year later.
Meanwhile, we heard frequent comments from local office staff that they were having to make the lower rate deduction when they considered that there was no risk of hardship. Therefore, the social security policy inspectorate was asked to look at the deductions, and especially at the lower rate and whether it was meeting its objective of avoiding hardship.
The inspectorate examined 579 cases in 17 local offices, visited 280 of the claimants concerned and interviewed 110 staff. It found no hardship in any of the cases that it examined and considered that none of the claimants with the lower rate deduction would have suffered hardship if the higher rate had been applied.
I am sure that the hon. Gentleman has read the report of the inspectorate on voluntary unemployment deductions. I thought that the question would be asked and I have written the definition in my own fair hand. The inspectorate said:
We would have said there was hardship had there been serious risk of the claimant or his family going without essential food or services. In no case was this so.
More than half the sample checked by the inspectorate were non-householders, almost all of whom lived at home with their parents. Only 25 per cent. were married and only 21 per cent. had children. About 80 per cent. were aged under 30, nearly half were under 21 and only 2 per
cent. were over 50. It would be interesting to hon. Members to read why some of those people went into voluntary unemployment.
In the light of the statistics, the comments from staff in the field and the inspectorate's report, the Government decided that they had to make changes. I hope that it is accepted on both sides of the House—if it is not, the Labour party must be even more out of touch with the people than I think it is—that there should be a benefit penalty for a person who is voluntarily unemployed. Let us not forget that that means that he is unemployed without good cause when a job is available.
The inspectorate report says that 40 per cent. of such cases referred to an insurance officer had their benefit allowed. There is a right of appeal to a tribunal for those dissatisfied with the insurance officer's decision. That shows that the rules are being applied fairly.
We believe that there should be a penalty for the small minority of voluntarily unemployed claimants and that it should be mitigated only where there is a real risk of hardship. I should be surprised if anyone outside the House disagreed with that view.
Therefore, we were faced with two choices — to increase discretion or to change the rules. We thought it right to change the rules, so that the lower deduction should apply only where there is pregnancy or serious illness in the household. The inspectorate recognised that additional expense could often be caused in such cases.
I have met a number of staff in the DHSS. Those dealing directly with claimants have told me that when rules were laid down and they could refer to the rule book, instead of having to use discretion, that was a great help to them. That is why we took the decision that we did. That is an important general point to make.
To put the issue in perspective, I should point out that voluntary unemployment deductions are made in only 190,000 cases a year — about 2·7 million successful claims are made by the unemployed — and that the deduction applies for the average of only four weeks. The difference between the 40 per cent. and the 20 per cent. rates will be a maximum of £5·35 a week for the uprating. The deduction is made only from the allowance of the person concerned—not from any allowance for a wife or children or from any other allowances. The £700,000 that we hope to save from the change will be used to give a package of benefits in other spheres. A list has been published.
No doubt we will be reminded that the SSAC advised us against accepting and acting on the advice of the inspectorate's report on tightening up on the number of cases. However, while we respect, as always, the advice from the SSAC, we accept the inspectorate's report. We shall carefully check to ensure that the changes work and reports will be made to us.
The deduction has always been made immediately a person leaves his employment. A rectifying payment is made when it is found that a person did not become voluntarily unemployed.
The inspectorate looked at all aspects of the procedure, and one finding caused much concern to Ministers. In too many cases, arrears of benefits were not paid where the deduction had been made pending the insurance officer's decision which turned out to be favourable to the claimant. We have already announced that all "live" claims will be examined during the current uprating exercise. Any arrears found to be due will be paid. It is as wrong not to pay claimants money that they are due as it is not to penalise someone for becoming voluntarily unemployed. We have to be fair to the individual and to the society in which he lives. There is a double responsibiliy.
Anyone who believes that benefit may have been wrongly withheld in the past may ask for his claim to be reviewed. We are arranging publicity to make that widely known. We welcome suggestions that have been received on this issue and we are taking action.
A strong reminder has been sent to local oflices—I have the circular here, and if any hon. Members wish to see it, we shall be pleased to let them do so—about the proper application of procedures in future, and we are examining those procedures to see whether they can be improved. The average arrears owed to those claimants whose cases were seen by the inspectorate were £18 for the full period. That was in 21 cases out of the 579 that it examined. It shows that there may have been about 15,000 claimants who were underpaid in 1982.
I want to mention a matter that has been raised by various people who are concerned. I realise that it is not easy to go back, but will the Department encourage its officers in the regions where there are known cases to tell the people involved that the money will be paid back to them, instead of depending on those people coming to them?
Yes. We are taking the initiative, and we shall go through the records and call the people in and pay them back. If we owe them money, we shall pay it back to them. Publicity on the matter will be given, and leaflets are being printed. I am delighted to give my hon. Friend that assurance.
Before we have a holier-than-thou attitude from parts of the Labour party on this matter, let me record that there is every presumption that the non-repayment of unfairly levied voluntary unemployment deductions went on under a Labour Government, just as it has under a Conservative Government, and it is a Conservative Government who are doing something to clear it up. Similarly, I remind the Opposition that while under the Labour Government only about 2 per cent. of those suffering voluntary unemployment deductions had deductions less than the full rate, under the last and this Conservative Government some 40 per cent. received substantial rebates for hardship.
Let me add a further comment. I am grateful that the inspectorate, as a helpful, efficient and concerned body of public servants—I pay tribute to all the staff that I have met during the four or five weeks that I have been privileged to be in this Department — brought to my attention an injustice on some 25 per cent. of those who unjustly suffered unemployment deductions. Clearly, we had to act on that matter. I am also grateful that the inspectorate brought to our attention the fact that the rest of the community, including the mass of tax and insurance payers, was paying a price for the reduced deductions for many of those who were voluntarily unemployed and who, in the view of the inspectorate, would have suffered no hardship by the full deductions. There are two aspects to the inspectorate's findings and I imagine that the Labour party, in its usual way, will accept one and not the other. We in the Conservative party, in our usual balanced way, have accepted the lot, on the advice that we have received.
Equity demands that we are fair both to the individual and to society. People should get back what is their due, but society has a right and a duty to inflict a penalty on those who would apparently prefer to live on the backs of other people for some time than to hold down a job. There is no doubt that in this even-handed approach, we shall have the backing of the vast majority of people in our country who have a highly developed sense of justice.
I conclude by stating plainly that I consider that the record of our Government on social security throughout is fair and honourable. At a time of severe recession in the Western world, when we are trying to rebuild our economy from the ravages of Socialism and Labour Governments, we have given as much as we can to those least advantaged in our society. It is easy for an Opposition who believe in the alchemist's stone or funding from outer space to clamour for more and more money to be spent — to come, I remind them, from the working population—but we have followed a realistic and compassionate approach, and neither I nor my hon. and right hon. Friends will bow to the Labour party as if it had a monopoly of goodness and compassion. The electorate of Britain, probably the most sophisticated electorate in the world, showed on 9 June that it certainly did not share that view, and it considered that its future, at whatever level of society, was more likely to be fair and prosperous under the continuance of a Conservative Government. The electorate showed that it had no intention of handing our country over to a Labour party that is rent by dissension and wholly out of touch with both economic reality and the changing aspirations of our people.
We are discussing a long series of instruments and it is not merely for the convenience of the House to take them in the way we have done, but it saves much parliamentary time. It does not promise well for the future, if, when such an arrangement has been reached, a cut in debate of the magnitude that we have had this afternoon is arranged by the Government business managers without the courtesy of informing the official Opposition spokesmen in the usual way. If that is how business is to be conducted in the House the Government will suffer, because one and a half hours for each order would represent a considerable effort. It would certainly fragment the debate, and the House would be delayed for many more hours.
On a point of order, Mr. Deputy Speaker. This matter has been raised before. I ask for your guidance. How does the House prevent itself from being deceived? The hon. Gentleman says that time has been wasted on statements, although at least two of those statements were made at the request of the Opposition.
It shows how wise a parliamentarian I was not to give way to the hon. Gentleman in the first place.
Secondly, I extend a welcome to the Minister of State, who has made his maiden speech in his new capacity. I must tell him frankly that when he started his speech he was viewed with deep suspicion by Members on these Benches, and when he finished his speech those deep suspicions were fully confirmed. The suspicious asked why the hon. Gentleman was given office. The millions who depend on these instruments need be in no doubt about his attitude towards them. In an essay that he wrote in a book in 1971, he described the recipients of social security benefits as
the idle, the failures and the feckless
who are bleeding
the energetic, successful and thrifty".
His other view of the welfare state is this:
Not only is the present welfare state inefficient and destructive of personal liberty, individual responsibility and moral growth, but it saps the collective moral fibre of our people as a nation.
Those are the hands into which the care of the welfare state has been placed by the Government. The hon. Gentleman will have to forget a lot, as well as learn a lot, if he is not to go down in history as the DHSS Bourbon of this Government.
By contrast — I know that it will discomfort the Secretary of State—I thank the right hon. Gentleman for the press releases, or leaks, of recent weeks. Some newspapers say that he should stand firm against the punitive raids by the Chancellor of the Exchequer for a further £5 million, but to do that he will have to show greater resolution than he has done in the past. The present Chancellor is like Atilla the Hun without his charm. I am glad to see the hon. Member for Eltham (Mr. Bottomley) in his place because the Secretary of State will have to put up a real fight, not what I would describe as an Eltham rebellion. An Eltham rebellion consists of endless warning shots to the Government about what will happen next time they try something such as this—never in the present. To adopt a naval metaphor, the hon. Gentleman is the only example of a ship that fires warning shots at the same time that it strikes its colours. If the Secretary of State is sincere in what he is reported to have said, he can count on our support in a fight.
The report already casts a long shadow over the debate. The Secretary of State would be wise to recognise that it would be an act of savagery to allow the poorest to suffer more than they have already. For example, there are rumours of cuts in unemployment benefit and short-term supplementary benefits which will cause them to fall behind the cost of living. Nor are the Government pledged to price-protect long-term supplementary allowances—the allowances received by the long-term sick and disabled, single parents and those who care for disabled parents.
I say to those Conservative Members who still regard themselves as wets that the time to speak out about those projected cuts is now. It may be a crime to confess that they are wets openly, so perhaps they will commune among themselves and decide whether they still regard themselves in that category. If they value their reputations, they will also need to do something which they never did in the previous Parliament, and that is to act upon their good wishes as well as to speak about them. If they fail to do so, they will be stained by the dishonour of these further cuts as much as if they were the most evangelical of monetarists.
Does my hon. Friend agree that it is most unlikely that the Secretary of State will do anything in the Cabinet to help the poor and resist the cuts, because previous critics in the Cabinet have been sacked? As the right hon. Gentleman is far more concerned with his job than in protecting the interests of the pensioners and the poor, we cannot expect any help from him.
I always believe in the doctrine of human perfectibility. A bland record of opposition in the past does not mean that he cannot change and be a far more doughty fighter in the future than he has been in the past. I have said only that it will be a real fight.
I was addressing myself to those few wets who meet in the privacy of their homes and are able to reassure themselves that their hearts are still in the right place. If they speak on this issue, they will have public opinion on their side. They may not have the Minister of State on their side, but that may be an added advantage. A Marplan poll which was published this week showed that 73 per cent. of those questioned disagreed with the proposal mooted by the Government to allow unemployment benefit to fall behind the cost of living and only 20 per cent. were in favour of it.
I give the Secretary of State, or perhaps even the Minister of State, mild applause, perhaps a cheer and a half, for his belated and partial recognition of the scandal — that is not too strong a word — of the wrongful deduction of money from unemployed people for so-called voluntary unemployment. That was recognised by the Government and for that I give them thanks, but it was not unconnected with certain pressures and the Minister should not be too sanctimonious in claiming all the credit for the decision to remove the injustice. That will be a valuable step for those people who are sill on state benefit, and it is also a valuable corrective for the Minister of State who, in that fertile essay, which will go down as well as the noble Lord Barnett's book in the previous Parliament, said that rules were bent by the staff of the DHSS because of the fear of complaints made to newspapers and MPs. In this case, rules were broken, not merely bent, to the disadvantage of claimants and that is why I ask the Minister to reconsider, if he is not already beyond that stage.
We are glad of what has been promised but I want to press the Minister a little further on what he said this afternoon. There were two great weaknesses in what he said. The first is that the reason for the errors was, in almost every case, the fact that inadequate numbers of staff were having to cope with an explosion of people claiming unemployment benefit. No proposals have been made this afternoon or at all by the Government to rectify that. Without an increase in the staff dealing with unemployment, there is likely to be a weekly repetition of the mistakes that were made in this case and they are likely to recur constantly.
Secondly, like the Minister of State, we are concerned with those not now on benefit and who are therefore not covered in the uprating review. Many are unaware that any deduction was made. The inspectors found that 50 per cent. of the decisions sent to them were illegible so that they could not read the reasons that were given for the denial of benefit. After a year, I understand that their papers are destroyed.
The hon. Gentleman is talking about the future, and for that I am glad, but I am taking about those who have already suffered wrongful deductions who are no longer in receipt of benefit. Therefore, I want a pledge from him that the Government will monitor whether the publicity that they now intend to mount will bring to life the dead cases and claims which may not otherwise be activated. If not, I hope that other more effective steps will be taken to put the matter right. For example, where an injustice of this magnitude has been perpetrated the Government should consider using television time to acquaint people with the fact that they may have suffered wrongful deductions. That would be worth a gross of the pamphlets which lie unwanted and yellowing on the shelves and counters of the DHSS and post offices. The use of the media to get through to the people who might be affected ought to be seriously considered.
As the Minister said, that last point is connected with the Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations, which are item No. 8 on the Order Paper. I accept that those regulations have some good points such as the abolition of the invalidity trap, the capital disregard of life assurance policies and improved benefit for the single homeless and we welcome all those. Nevertheless, two major features will compel us to vote against them tonight. The first is the tightening of the rules regarding voluntary unemployment. The Minister rightly said that there was a 40 per cent. reduction which could be reduced to 20 per cent. if there was evidence of hardship. There were five criteria of hardship—serious illness or pregnancy, a child under five, housing requirements not fully met, the last job having been held for less than six weeks, and earnings from the last job being less than supplementary benefit requirements. Those criteria have now been reduced to one — serious illness or pregnancy. The other four have been wiped out and are no longer to be taken into account.
The Minister said that when the regulations were formalised rather than discretionary there was a vast leap in the number of cases that suffered lower deduction, and that is true. The reason for that was that the Supplementary Benefits Commission's guidance on this subject was being ignored in the offices and it was the formalisation of the regulations which brought it to the attention of the staff.
I intend to advise the House to reject the regulations for a number of reasons. First, the social security advisory committee has advised against proceeding with the regulations in their present form. The social security inspectorate, in which the Minister has great faith, has redefined hardship until it amounts to destitution. The person must be without food or essential services. The SSAC thought that to be a too restrictive definition.
The inspectors, who examined 208 cases, reached the conclusion that each one of them could have suffered a 40 per cent. deduction from his unemployment or supplementary benefit without hardship. Therefore, if the Minister relies on the inspectorate, there is no need for a 20 per cent. rate—everyone should have the full 40 per cent. The inspectorate is quite wrong to put such a harsh definition on hardship and to follow that definition with such insensitivity.
The second reason for voting against the regulations is the past maladministration in the current more liberal scheme. We all hope that the Minister's intervention will end that. But until we are convinced that there is no possibility of a repetition of that maladministration, we should not change the rules to make them harsher.
The third reason is that there is no provision for additional staff, which is the only way to avoid past errors. Further staff cuts will make the administration of any scheme much more difficult.
The Minister thought that the need to make a deduction for voluntary unemployment was self-evident. Having looked at the SSAC and inspectorate reports, I am not sure why the regulations exist. I know that they are hallowed by history, but that does not prevent us from examining them. The Speenhamland system was once hallowed by history, but it did not prevent the Poor Bill from being passed.
Are the regulations being used as a deterrent to people giving up their jobs voluntarily? An SSAC survey shows that more than 75 per cent. of those who had given up their jobs voluntarily did not know that a penalty was involved. Even when they were told about the penalty, the majority said that they would not have changed their decision.
Are the regulations being used as retribution —revenge upon those who have given up their jobs and, more importantly, revenge on their families? It is an example of punishing the children for the sins of the father. Such a doctrine presupposes that the New Testament was never written. The regulations are obnoxious.
Another blot on the regulations is the charge for board and lodging, and especially the abolition of the discretion to meet high charges when it is unreasonable for a person to move. To justify that, the Government said that certain organisations were abusing the provisions, especially those involved in the rehabilitation of alcoholics and drug addicts. The Government have named only one organisation, Turning Point. Are there others, and if so what are their names? Could not the abusers of the system be punished without also punishing the innocent? How many people will lose benefit because of the change in the regulations? The Minister was careful to skirt that point.
The regulations are defective because the local limits on which they so crucially depend are wholly inadequate. They force homeless people to be dependent upon poor quality accommodation. That leads to the sort of problems that occurred in Oxford which resulted in Operation Major.
The Secretary of State has promised a positive response to the SSAC's suggestion that guidelines should be laid down. Before we support any changes, we want an assurance that the guidelines will be strictly enforced. It is no use laying down guidelines that will be widely ignored. All those entitled to long-term rates of benefit are excluded from the regulations. The largest category of those dependent on the long-term rates are single parents. We all know that accommodation willing to accept children is usually very expensive. People do not like the hassle, noise and inconvenience of children.
The SSAC has voiced a suspicion held by many of us that unscrupulous landlords are exploiting both the misery of the homeless and the DHSS. Given the scale of departmental involvement with men, money and time in the problems that arose in Oxford, I was dismayed to read the Secretary of State's response to the SSAC report which was dismissive and wholly unconcerned about unscrupulous landlords.
The main purpose of today's debate is the uprating of benefits in November. We shall not vote against the uprating regulations; that would be neither right nor reasonable. However, let no one imagine that because we shall not vote we think them adequate. They are wholly inadequate to meet the needs of pensioners, the unemployed, the sick and the disabled. In most cases the increase will be 3·7 per cent. The historic method has been applied and May was chosen as the base month. I shall not argue about the theoretical justification of the historic method. I have never been interested in theory; my interest is in the practical effect of changing the regulations. The Government have a duty to ensure that changes do not hurt the recipients especially when the uprating is decided before the rate of inflation is known.
I wish to deal with the Government's argument that any shortfall will be made good in the November uprating next year. It will not and it cannot. The 1984 uprating is designed to provide for those in receipt of benefit between 1984 and 1985. It is not designed for those in receipt of benefit between 1983 and 1984, and it is not backdated to accommodate them. It cannot make good the benefit lost in 1983–84, even for those still on benefit in November 1984. It most certainly cannot make good the loss for those no longer receiving benefit in November 1984, or for those who have died in the meantime.
The loss suffered by the shortfall below the rate of inflation will be permanent. For example, a single retired invalid will receive 75p a week less than he would have received had the increase been in line with the likely rate of inflation. A married couple will have £1·25 less; for the unemployed it will be retrospectively 55p and 85p; for those on ordinary supplementary benefit it will be 60p and 95p; and for those on long-term supplementary benefit it will be 75p and £1·20.
There are ways in which that loss could have been made good and people protected against the loss this year. For example, two weeks' benefit could have been paid to them, or a general Christmas bonus could have been given to all in those categories. Instead, the Government have chosen to do nothing about it. We criticise the Government not just for the change of method but for their indifference to the harm that their choice will cause.
That is not the whole story, because for millions on supplementary benefit, being a means-tested benefit, their income is reduced if they have another source of income, provided that it is not disregarded. There are many income disregards for people on supplementary benefit. Unless the real value of those disregards is maintained, their real income is being reduced year after year because the disregard is less in real terms each year.
Consider, for example, war pensioners. They had their income disregard fixed at £4 a week in 1975. It is still £4 a week and there is no proposal in these uprating benefits to change that. Today's equivalent of that £4 is £9·50. Consider a disregard which should be dear to the Minister's heart, the education maintenance allowance. That disregard was fixed in September 1979 at £7·50. To have maintained its real value, it should now be £11, but it has not been and will not be uprated. I have received letters from local education authorities pointing out the dilemma in that any increase in that allowance, beyond the disregard of £7·50 a week, will not benefit those families who are in receipt of supplementary benefit. That is a great weakness in the uprating system. The Government should do something about it because it means a steady erosion of the standard of living of those receiving these benefits and other benefits to which I have not referred.
What about the 5 per cent. abatement of invalidity benefit, sickness benefit and maternity allowance? That was fixed at the same time as unemployment benefit in lieu of a scheme of taxation, yet it is still in operation and there is no sign of the Government devising a scheme to tax those benefits. I repeat what I have said on previous occasions: it is time that the Government either came forward with a scheme to tax those benefits or otherwise restored the 5 per cent. abatement. At present the system is penalising people who would not pay any tax. It is doing so in a blanket way and therefore in a cruel manner.
To summarise, even before the £5 billion in further cuts which are now mooted, the inadequacy of the increases for those in receipt of social security benefit means that the year ahead will be harder for them. Any additional cuts will add to their misery. We have been the recipients of many ringing declarations by the Secretary of State of his eternal devotion to the welfare state. It is to be hoped that the Minister of State does not get too close to him, and particularly that he does not give away the few remaining copies of the document to which reference has been made, most of which will have been burnt by sensible people anyway. The name of the document is appropriate — "Down with the Poor". Nothing epitomises the Minister's attitude more than that title.
What we want from the Secretary of State is not so much eternal devotion to the welfare state as eternal vigilance because the latest cuts, like the previous ones, will diminish the quality of the service for millions of recipients and devalue it in the eyes of millions more. The Secretary of State must fight his war against the press-leaked £5 billion, but nothing he does about that will remedy the lower standards that have resulted from Conservative policies in the past four and a half years, the heightened misery and the widening needs of millions of our fellow citizens. Unless the Government face that weakening of the welfare state, they will destroy it, and it will be death not in one fell swoop but from a thousand blows. I believe that the Minister of State has been placed in the Department to be the blowmaster-in-chief.
Having listened intently to the Front Bench speeches, I am grateful for this opportunity to make my first speech in this Chamber. As I represent a constituency in which there are now more men and women without a lasting job than there are people employed in manufacturing industries, and as one in seven of my constituents is dependent on means-tested benefit, it is appropriate that I should make my maiden speech in a debate on social security.
I am conscious of the debt that I owe to my two colleagues and predecessors, my hon. Friends the Members for Fife, Central (Mr. Hamilton) and Dunfermline, West (Mr. Douglas), who have shared and so dutifully discharged to the people of Dunfermline, East the responsibilities that it is now my privilege to undertake. Relatively few new hon. Members can enjoy the company and support of their predecessor, especially on the Labour side. To few indeed is it given to enjoy the company and support of two, and especially two who share my view — the view of the Labour party — that the greatest threat to the ideals of individual freedom and personal responsibility that the present Government so stridently espouse, the grossest affront to human dignity and the gravest assault, on any view of social justice, is mass unemployment and its inevitable consequence, mass poverty.
The people of Dunfermline, East know about unemployment and poverty. They live in a constituency which was once at the heart of the mining industry: 30,000 miners were employed in 66 pits in the county of Fife in 1913; 20,000 miners were employed in 33 pits even in 1947; yet today there is not one pit in my constituency, and only six in the county of Fife.
However, the people of Dunfermline, East know also that, as the older industries have declined, the newer industries—petrochemicals, electronics and computers—have not yielded the jobs that were promised or expected, so much so that the official figure for unemployment in my constituency is now no fewer than 4,000 people, a figure which obscures a larger truth, as hon. Members are well aware; there are nearly 6,000 men, women and teenagers without a lasting job worthy of the name.
Dunfermline, East is a constituency of small communities, villages and towns, the largest of which has a population of no more than 12,000. Community by community, village by village and town by town we can see how the mass casualties of the Conservatives' economic war of attrition translate into human disappointment and suffering: nearly 400 out of work in the one small village of Kelty; 530 out of work in Cardenden, Kinglassie Bowhill and Dundonald, villages in my constituency; 800 out of work in Cowdenbeath and Lumphinans; and 1,000 out of work in Lochgelly, Ballingry and Lochore. Even in the more prosperous communities of Aberdour, Dalgetty Bay, Rosyth with its dockyard, and Inverkeithing, in my constituency, there are now more than 1,000 people officially registered as unemployed.
These local figures—a new arithmetic of depression and despair—came to me almost by accident. They are available only on request from the Manpower Services Commission; they are not routinely published or made public. Until such time as the Government recognise that unemployment is the disease and not the cure for the disease, until they accept the blame for continuously rising unemployment as freely as they solicit the credit for inflation's temporary fall, I shall ask the Secretary of State for Scotland, month by month, village by village, community by community, to publish these tragic tolls of the unemployed so that the total numbers become, for each village, visible and specific for all to see.
It was almost by accident that I discovered the true but unpublished figures of the number of claimants of supplementary benefit in my constituency. Last month there were 3,300 claims in Cowdenbeath and 4,500 in the Dunfermline area. That means that no fewer than 15,000 men, women and children in the Cowdenbeath and Dunfermline areas depend on means-tested benefits for their livelihoods. In five years the numbers of those claiming benefits as a result of unemployment have doubled.
The statistics for Scotland as a whole reflect this trend. In 1979, 405,000 people were dependent on supplementary benefit. There are now 750,000 men, women and children depending entirely on means-tested benefits—one in seven of the population of Scotland. Even these figures underestimate the extent of poverty in Scotland. If we include the low-paid and their families and those who could but do not claim, including an estimated 3,000 pensioners in my constituency, the number of people living at or below the Government's poverty line in Scotland is more than 1 million—one in five of the population.
I do not know how Conservative Members can tell pensioners in their constituencies or in mine that they can purchase, even after the November uprating, sufficient basic necessities on incomes of less than £5 a day. I shall have to return to Fife to tell my constituents that the £1·20 that pensioner couples were expecting has been withdrawn, because the Government have cynically chosen to change the basis of the uprating precisely at a time, when, as prices start to rise, pensioners will be most penalised.
I will also have to tell the unemployed with families of four that they are expected to live on incomes of £59·20 a week. This is all because the Government's philosophy is that the rich must get richer by way of tax cuts and that the poor must become poorer to ensure true prosperity. Perhaps Conservative Members are not aware that supplementary benefit for the unemployed, when set against average earnings, is now at a lower level than the national assistance board rates of 1948. Perhaps they are not aware also that the level is now dwindling to the poor law rates of the 1930s. If we are to believe the statements made by the Chancellor of the Exchequer in recent weeks, it is his intention to push these rates down even further.
I ask the Minister for Social Security whether he is prepared to accept that if the supplementary benefit budget were to rise only in line with inflation, if pensioners were to be protected against inflation and if, as the Government accept, unemployment were to rise to 3·4 million by April next year, the cuts in the level of supplementary benefit rates for the unemployed that would be necessary to balance his budget would be about 6 per cent. by 1985, a cut of about £1·65 a week in today's terms.
If the budgets for supplementary benefit and for social security are to be cut in real terms by 4 per cent., as is hinted in some newspaper articles, if pensioners are to be allowed an increase in line with inflation while the unemployed are not, and if unemployment, as some of us fear and as some economic commentators suggest, is to rise to 4 million by 1985 or 1986, the cuts in supplementary benefits for the unemployed needed to balance the budget will be about 25 per cent., a loss of about £6·25 a week at today's prices.
I expect detailed answers to these questions. It is my intention to pursue them until the consequences to the unemployed of the proposed spending cuts are made clear.
It appears that the Government are saying that the problem, as they see it, is no longer unemployment but the unemployed. They seem to be suggesting that benefits as low as £26 a week are deterring the unemployed from seeking jobs. They are implying that in future benefits should be set at a level that will not even permit a minimum of dignity and comfort. They are apparently suggesting that they should be lowered to a level that will be only a fraction or proportion of the lowest wages in the market place, irrespective of whether such wages can offer or guarantee subsistence.
What is the case for the so-called incentive approach to unemployment? What is the economic case that is now being advanced by the Chancellor of the Exchequer that benefits should fall? According to the Institute of Fiscal Studies, which is not renowned for its support of the Labour party, there is no case to answer. It states in its most recent study that only one in 40 receive more in benefits than they would have received in work. According to the erstwhile supporter of the Government, Mr. Samuel Brittan, there is no case to answer. He tells us that there is "a logical as well as an ethical flaw" in the case for cutting benefits. There is no case to answer if we are to believe the Secretary of State for Social Services. When addressing the Sub-Committee that was considering these matters in July 1982, he said that there was no evidence that existing levels of benefit deterred the unemployed from seeking work.
There is no case for cuts if we are to believe what the Minister told the House on 11 July in answer to a question. He said that he expected to find in a new survey of the unemployed that there would be lower proportions of unemployed people better off on the dole than even the minimal 6 to 9 per cent. as shown in the 1978 survey. The Government's evidence is in sharp contradiction to what is being said by Professors Minford and Walters, and even to what the Chancellor of the Exchequer is saying. It is up to DHSS Ministers to point this out to the Chancellor.
The debate about the so-called unemployed trap, and the so-called incentives that it is claimed will be needed to get the unemployed back to work, is designed to obscure what everyone knows. If there are no jobs, no amount of poverty and no degree of destitution will create jobs where none exist.
The chance of a labourer getting a job in my constituency is 150 to one against. There is only one vacancy in the local careers office for nearly 500 teenagers who have recently left school and who are seeking jobs. Against that background I must ask where we are to find the so-called jobs about which the Chancellor talks. He says that they could easily be found, but they are not in the private sector, according to the National Economic Development Council, which says that employment in manufacturing industry will not rise until 1990. The jobs are not in the public sector either if we are to accept the CBI's idea, with which the Prime Minister agrees, that we could lock hundreds of thousands of jobs away from the public services.
Where are the jobs that the Chancellor, a member of a Government who say that incentives are needed to get people back to work, is talking about? When pressed on this matter in the 1930s, one new Tory Member representing a Scottish constituency told the unemployed miners in the upper wards of Lanarkshire that there were plenty of jobs for them in London as domestic servants. Perhaps the Minister for Social Security has an answer to the conundrum. Does he still believe what he wrote in
"Centre Forward" in 1978? Does he still believe that there are plenty of jobs around for the unemployed as window cleaners? He wrote:
I shall believe that there is a shortage of jobs when two window cleaners call for my custom in one week, one month or one year.
Perhaps the Government's answer to mass unemployment is for Britain to become a nation of window cleaners. In the same book, "Centre Forward", the Minister wrote that, to become a window cleaner,
little equipment is needed—a bucket, a leather or two and a ladder.
When the Prime Minister talked regularly during the election about ladders of opportunity, I had not realised that the next Conservative Government would have something quite so specific in mind. Perhaps the Minister is to do for ladders what the Secretary of State for Employment has done for bikes. Perhaps the exhortation "Up your ladder" will become as intellectually compelling as a solution to unemployment to Conservatives as "On your bike" was in the previous Parliament. The truth is that if no real jobs are to be found, to cut unemployment benefit is not, as the Chancellor was trying to imply, a necessary act of economic policy. It is an act of vindictiveness to the poorest in our community.
I direct the attention of the House to the regulations and the report governing voluntary unemployment deductions. Whether or not the Government will admit it, they are proposing and enshrining in the regulations a new definition of the national minimum, a new poverty line and a new safety net. They are saying that normally when someone voluntarily leaves his job, he will receive no more than about £15 a week for six weeks. The Government say that that involves no hardship because he will not starve or be destitute. I remind the House that four years ago the Conservative Under-Secretary of State for Health and Social Security said:
It is not sufficient to assess poverty by absolute standards.
Poverty must be judged on relative criteria, by comparison with the standard of living of other groups in the community.
Beneficiaries must have an income that enables them to participate in the life of the community.
She rightly observed that it is not enough not to starve; people should be properly fed. It is not enough to avoid destitution; it is necessary that all have tolerable accommodation. It is not enough to avoid dying from hypothermia; it is necessary that all have adequate heating. It is not enough to become a prisoner, by virtue of poverty, in one's own home; it is necessary that people have the resources to travel and to visit friends and relatives.
What the Government are doing today, in these regulations on voluntary unemployment deductions, is introducing a new definition of the national minimum. Anything short of starvation and anything above destitution is acceptable. When talking about an income of £15 a week the report states that it does not matter that debts cannot be repaid or accumulate, nor that hire purchase payments cannot be met; all that seems to matter is that people do not starve or find themselves destitute. In other words, the national minimum is to be equated with absolute destitution.
The Secretary of State for Social Services and the Minister for Social Security will say that the voluntarily unemployed are a special case, that they deserve nothing better than an income that provides a few calories above the starvation level. I remind the Minister that the 1942 Beveridge report, in less affluent conditions, recommended that the voluntarily unemployed should enjoy the same level of national assistance as other unemployed and should not be penalised and put on hardship incomes, such as those that are being regulated for today.
This evening, we are seeing nothing less than regulations for the creation of poverty and for protection against nothing but absolute destitution. Perhaps there are Conservative Members who believe in that sort of poor law regulation. In his new post will the Minister still subscribe to the views that he has expressed in his books "From 1985", "Centre Forward" and "Down with the Poor", that the welfare state should come under the surgeon's knife, that the only proper recipients of welfare aid are the destitute and the deranged, that the remainder of social services—health, education and social work—should be bought and sold on the open market? Worse than that, he has recommended that a basic work test should be imposed on the unemployed. They should be put to work on roads, municipal parks, clearing waste land and even the beaches.
I remind the Government that the Prime Minister's earliest and most esteemed mentor, Sir Winston Churchill, was appalled by what he saw as the manifestation of Victorian values—values that the Minister represents—and was impressed by what he saw as the connection between
the harsh excess of accumulated capital
the gaping sorrows of the left-out millions.
He was so concerned that when the state intervened it was not injuring rights, but righting wrongs, that he sponsored and never recanted from the minimum wage and the school meals legislation, the labour exchanges and the social insurance schemes that are now under threat from this Government. Sir Winston Churchill said:
The state must increasingly and earnestly concern itself with the care of the sick, the aged and the young. The state must increasingly assume the position of the reserve employer of labour.
Opposition Members are entitled to ask what has happened to the Conservative party when the Minister for Social Security can talk about himself as being the "Centre Forward" and when the spirit of Sir Winston Churchill is relegated to "outside left".
The House was told in 1948 that the welfare state was created to take the shame out of need. Is that principle to be overthrown by an ever increasing set of Government assaults on the poor that are devoid of all logic, bereft of all morality and vindictive even beyond monetarism?
I am happy to start by complimenting the hon. Member for Dunfermline, East (Mr. Brown) on his maiden speech. He will have impressed the House with his force and fluency and the wit he introduced into a powerful political speech. He has shown that he will be at least the equal of his predecessors in representing his constituents' interests. We look forward to hearing him again and having the opportunity to debate with him. He will undoubtedly be a worthy opponent.
I am interested in the Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations 1983. I am a member of the council of management of Turning Point, which has already had a mention, if not a glorious one, and I have a special interest in the care of alcoholics and drug addicts. The wider question which arises in a debate on these amendment regulations relates to how we should support those unfortunate people who, through an excess of drugs or alcohol, need therapeutic treatment or some personal care.
I understand the argument advanced that support might more properly be the role of local authorities and that supplementary benefit ought not necessarily to play a major part. However, we should be less than honest if we did not acknowledge that this group of people falls between two stools. Although in theory local authorities should be providing support, in practice most of them are not. That has nothing to do with the authorities' political persuasion. A great many authorities are supportive, whether they are Labour, Conservative or otherwise controlled. Alas, many more either do not recognise it as a problem or do not believe that they can afford to support it. They may not wish to acknowledge that they have these social problems.
I am worried — this worry was expressed by the social security advisory committee in its report—that proper attention will not be paid to alcoholics and drug addicts if the amendment regulations are approved and we are left with the supposed support of local authorities whose expenditure is already under great pressure.
The amendments effectively abolish regulation 9(5). No one knows what the effect of that will be. The Department has said that few people should be adversely affected. If that is so, one wonders why it was necessary so hastily to close the door which it was felt had been opened to an excess number of claims or to excessive claims.
I am sorry that the hon. Member for Pontypridd (Mr. John) referred to Turning Point as a guilty organisation. I have not been told that by the DHSS. I thought that the charges in the various institutions run by Turning Point, which average £100 a week, were well below the levels that it might have been possible to claim under regulation 9(5).
The effect of abolition is unknown. It is not clear that a large sum is involved. If the Department believes that few people would be adversely affected, one is tempted to akd why such extensive changes should be made. The social security advisory committee recommended further discretionary underpinning—a sort of safety net—so that anyone who, by some mischance, loses as a result of the changes in the regulations can be caught. That has not been accepted by my hon. Friends. Perhaps they prefer to proceed by making a survey. If that is so, I ask them to make sure that it is done with all speed. The danger is that if people who have suffered are identified they will have suffered in the meantime and it may be difficult for them to catch up and be provided with the benefits that they deserve.
I should like to ask my hon. Friend in which category among those listed in amended regulation 2(7) institutions and hostels run by organisations such as Turning Point will be found. Will the three categories listed be a sufficiently comprehensive range of categories? Should there be a separate category for institutions that are attempting to provide therapeutic treatment and personal care for alcoholics and drug addicts? I am not sure whether, even if Turning Point's institutions were placed in the most favourable of the three categories for the determining of local needs, that would be the right category. Perhaps it should be put in a special category of its own. I hope that great attention will be paid to and that there will be close monitoring of the determination of the local limits so that the people who are resident in those institutions will not suffer.
I should like to press my hon. Friend about the special needs allowance, which is included in the amendment regulations. The figure mentioned is £15·35, which is an extension of the limits. However, it applies across the board. In all, eight categories are covered. I maintain that special circumstances for alcoholics and drug addicts might merit a special category of extra special need. The £15·35 is not necessarily the right amount. The figure for drug addicts and alcoholics should be specifically tailored.
One further specific point, which is perhaps less important in some respects, is the transitional provisions in regulation 5. I cannot see any obvious or logical reason why hostels for drug addicts and alcoholics are specifically excluded. One might be forgiven for supposing that that appeared slightly vindictive. If the Department's argument is that very few people will be adversely affected, why not guard against even that possibility by allowing the transitional arrangements to apply to those who are in hostels for drug addicts and alcoholics? That is a reasonable point. I hope that my hon. Friend will help on that matter even if he can meet me on nothing else.
In short, we are dealing with a group of citizens who deserve proper attention. The scale of the problem is not sufficiently recognised throughout the country, certainly not by the local authorities upon which the Government would like to pin the major responsibility for support. We are failing in our duty if we do not attempt to recognise the problem and meet it in a proper manner.
The social security advisory committee stated in paragraph 17 of its report:
We can therefore only urge the Department, whose wider responsibilities do indeed include the formulation of policy on drug and alcohol misusers, to try to ensure that the financing of provision for these vulnerable people does not slip between the competing expenditure priorities of local authorities and other funding bodies.
That is put powerfully and persuasively. I hope that those words will impress themselves upon my hon. Friends before they finally take their attention away from this matter.
I too pay tribute to my hon. Friend the Member for Dunfermline, East (Mr. Brown), who made an excellent maiden speech. I am sure that the whole House listened with great pleasure to him, although he reminded us that in essence the regulations deal with the poverty of his constituents and all our constituents. I congratulate him on choosing this debate in which to make his maiden speech. It is sad that, although many hon. Members are concerned about poverty, they are frightened off by the apparent complexity of the regulations and are reluctant to speak in the House. I congratulate my hon. Friend on his speech and look forward to hearing him again soon on the same issues.
I wish that I could congratulate the Minister on introducing the instruments, but I was disappointed at the way in which he presented them. Some people in education gibed that the only contribution that the Conservative party made to education in the 1970s was to move the Minister from being headmaster at Highbury Grove. They now follow that with the gibe that its only contribution in the 1980s was to move him from the Department of Education and Science. That is unfair. At least in the Department of Education and Science the hon. Gentleman was one of the few Ministers who could say that he had been to the chalk face and had some practical experience of education.
I should have liked the Minister to tell us today that he had some practical knowledge of what poverty is about. A Minister with his responsibility should have said to us that many people are living in poverty, and added that he was sorry that the Government could not afford to do any more for them. If the Minister had done so, we would have had a little sympathy for him, but he missed the opportunity to put across the message from his Department and from the Government that there is large-scale poverty. If the Minister is not prepared to put across that message, what chance does he have of fighting the Department's corner in the Cabinet and saying that benefits should not be cut further?
It may be 10 years since the Minister ceased to be a headmaster, but he will remember the pupils whom he taught who lived in poverty. In his constituency he would see many people struggling to get by on benefits. School holidays are a frightening prospect for many one-parent families and the unemployed. There is no chance of their taking their children away for a holiday. They would be lucky if they had a one-day trip somewhere. A continual problem for them is how to give the children enough to eat. Unfortunately, partly as a result of the Minister's previous activities in education, the provision for school meals during the summer holidays has been dismantled in most local authorities. For people on benefits free school meals are a big help, but they stop during the school holidays. There is a problem of making ends meet so that there is enough for the one basic meal a day that the children usually get at school. There is also the dread of the ice cream van that comes round with its chimes ringing. Naturally, the kids are pushing for an ice, cream. When a person is in receipt of benefits, more often than not he has to say no rather than dig into his pocket to buy the ice cream.
All the kids are keen to see "Superman III", but parents living on benefits week in and week out have difficulty in forking out money for that. Many parents who are in work take for granted visits to the baths or to the bowling green or putting green in the park. Money for such activities is difficult to find if the household is living on benefits on a long-term basis. The Minister would have done a service to the House, the Government and the country if he had referred to those problems.
An instance of poverty in my constituency was shown when a pensioner visited me at my most recent advice bureau. She was worried. She needed a little extra money. She illustrated the oppression of getting by on a pension and a small amount of supplementary benefit. She had decided, because of the nice weather, to make the short trip from Denton in my constituency to Oldham using the concessionary bus fare. It was rather hot on the bus and when she got to Oldham she felt overcome by the heat and went into a café to buy a pot of tea. That put a strain on her income. She then visited the market, looked at the shops but did not buy very much. As she was returning to the bus stop she met an old friend with whom she had worked for 20 years. Naturally, they wished to talk, so they went back into the cafe and had another pot of tea. She made it clear to me that those pots of tea put a strain on her budget.
I could give many more similar examples. People who live on benefits face such problems. Very few hon. Members or people in work have to decide whether they can afford another ice cream for the kids or another pot of tea. They take such things for granted.
The Minister did not try very hard to justify the way in which benefits have been cut. He said that the Labour Government did the same in 1976. We have heard that argument from the Dispatch Box time and again. What was done then was wrong, and cutting benefits again is equally wrong. Two wrongs do not make a right. If the Government believe that what happened in 1976 was wrong, why did they not restore the money immediately they came to power in 1979? They did nothing, so they are now a party to the 1976 cut. They must accept that they cannot cover up for their cut in benefits of between 2 and 3 per cent. this year by referring back to 1976. We need justice for people on benefits, not a "yah-boo" justification that the Labour Government did it so it is all right for the Tories to do it. We must remember that people have great difficulty living on benefits and they need more money.
The Opposition will vote against the measure dealing with voluntary unemployment. It represents one of the worst areas of incompetence and inefficiency in the benefits system. I receive more complaints from constituents about the arbitrariness of decisions by unemployment benefit officers on whether someone left his job with or without justification than about any other aspect of the system. I am appalled at the time taken to obtain the basic information to make a decision, and the claimant's money is stopped while waiting for the decision. That is grossly unfair, especially as so many unemployment benefit officers show such complacency.
When a Member of Parliament contacts supplementary benefit officers on behalf of constituents, they show concern and do their best to give good service to the Member of Parliament and to the claimant. Unemployment benefit officers, however, seem arrogant about their supposed impartiality. That shows that most of them have never coped with living on benefits. They say that they sent a letter to the ex-employer which has not come back. Ex-employers must be given a fortnight in which to reply. If there was a row or a disagreement when the claimant left, it is not surprising that an employer is slow to reply. The officers then say that they must send a reminder. The thought of telephoning or trying to speed up the process leads them to throw up their hands in horror.
While the unemployment benefit officer takes his time making a decision, the claimant is deprived of money. The benefit officer may say, "If in the end I decide that he left his job with justification, he will get the money back." It is essential that those who claim benefits should get the money when they need it. Most of them do not have credit cards or bank accounts. They cannot borrow vast sums of money to tide them over temporary periods of hardship. They have to use cash to buy goods.
As to the history of the voluntary unemployment deductions, the present Parliamentary Private Secretary to the Prime Minister, the right hon. Member for Selby (Mr. Alison), first put them into statutory form. The House was assured that the Government would treat hardship cases with compassion and concern. As the number of hardship cases is continually whittled away, only a small category will qualify for that benefit.
What is hardship? The inspectorate's report attempted to define it. It said that hardship meant that somebody was going without food or essential services. Does that mean that the electricity or gas bills are not paid? Does it mean that the kids do not have an ice cream during the school holidays or that they do not have replacements for worn-out shoes? The inspectorate did not make any objective test. It just gave its impressions. It would be simple for a Government to institute some independent research on this subject, but the present Government simply take their beliefs in some vague way from the inspectors' reports.
The uncertainty about the hardship allowance affects most harshly those of my constituents who try to improve themselves. It does not affect those who make little effort. Two of my constituents who were desperate for jobs were persuaded to take canvassing work. The job sounded impressive. They were told that they would receive a commission, but they discovered very quickly that it was impossible to earn the money promised. In the end, through desperation and the poverty that the job produced, they decided to give it up. Having been conned by the employer, such people are then caught by the regulations. The message to them is not to go after the hope of a job because they are better off staying on benefit. If they go after a job and it does not work out, they are penalised.
One-parent families also face difficulties when trying to cope with a job and the children. Having obtained a job, the first thing that happens is that one of the chilren becomes ill, the child-minding arrangements fall through and the job has to be given up. An official then makes a 40 per cent. cut because he considers that giving up work was not essential. The Government must investigate the way in which people are penalised for getting a job which for some reason does not work out. It is unfair that those who make no effort suffer less.
The Government must examine their administration carefully. They must tell every unemployment benefit officer to make decisions quickly, within a week, on whether somebody left a job voluntarily. If he wishes to appeal, he must be able to do so within three weeks. We all know how long appeals take to be heard. If an appeal is successful, the money must automatically be repaid straight away. When the benefit officer decides that the person left a job for genuine reasons and should not be subjected to a deduction, that person should get the money back quickly.
We are retracing our steps over unclaimed benefits. Most of the information that we now receive from parliamentary answers shows that there is another area of unclaimed benefits that the Government are doing little about. In 1979, £360 million in benefit was not claimed. We have still not had an updated figure. I hope that the Minister will tell us how much benefit is unclaimed.
I should like to deal briefly with the board and lodging regulations. CHAR has made representations about the utterly illogical way in which those who are completely homeless get no money for personal expenses, whereas those who take board and lodging receive benefit. No doubt the Minister has received a long submission from CHAR. What will he do about its suggestions?
Another little meanness is the linking rule. The 13 weeks might have been a little harsh for some people, but to cut that to eight weeks means that those who want to get back into work or to get back together as a married couple will be affected. If those people try to make a go of it, they will be unable to return to the long-term supplementary benefit rate after eight weeks but will have to do another 12 months of working their way up from the short-term rate to qualify for the long-term rate. That is a harsh change which the Government cannot justify.
I should like to give the Government just one message. Poverty in Britain is increasing. The real problem is that parallel with that poverty runs increasing affluence. We must do something to achieve equality. It is all too easy for hon. Members to go down to the Terrace or watch people going to a garden party and reflect that it is an odd society in which there are many people who spend more on a hat today to go to a garden party than others have to live on for a week.
We should try to create a society that cares more and has far more compassion for those who have nothing and need benefits. Ministers should be making it clear that we are not doing enough for the poor, that we want to do more and that, as soon as the opportunity arises, they will be pleased to make the necessary regulations. They should not be suggesting that we can cope with more cuts in benefits next year, especially for the unemployed.
I am surprised to be standing here defending social security upratings that are as fair and, in some cases, as generous as those that we are discussing. When the economy is just beginning to gather momentum after a severe worldwide recession, it is remarkable that the Government have felt able to raise several benefits by more than the rate of inflation—some to their highest ever level of purchasing power. Foremost is child benefit, which affects 7 million families and 12·8 million children, and one-parent benefit which affects 500,000 families and 810,000 children. The valuable supplements to those two benefits will mean that they have more than doubled in value since 1979.
Our pre-election pledges to the elderly and the disabled have been redeemed.
Does the hon. Gentleman recall that the failure to keep the real value of child benefit at the 1979 level means that families have lost £80 for each child and that even the present uprating barely restores in real terms what the benefit was worth when the Conservatives came to office in 1979?
I am grateful to the hon. Gentleman for his information. That does not apply to one-parent benefit.
Since November 1978 the retirement pension has more than kept pace with inflation. Moreover, there has been a dramatic 7 per cent. increase since 1978–79 in the number of people who draw retirement pension. A record £350 million will be spent on special heating costs this year. Long-term benefits have been protected against inflation and the abatement in unemployment benefit, about which many were uneasy, has been restored. Therefore, people drawing unemployment benefit will receive an increase of more than 8 per cent. from November. The benefit will be higher in real terms than when the Government took office in 1979.
There has been a massive increase—21 per cent. above the rate of inflation—in cash benefits for the disabled and the long-term sick. Such benefits have increased from £1·73 billion in 1978 to £3·37 billion in 1982–83. Mobility allowance is now paid to nearly three times as many people as it was in 1978 and there has been an increase of 47 per cent. in the number of those receiving attendance allowance. Both of those benefits have been increased by far more than the rate of inflation.
I am astonished that I should have to defend upratings of that size. Opposition Members incessantly wheedle and howl for more to be spent on social security benefits. I am surprised that they have yet to tell us what they would have done had they won the general election. The truth, however, is that they did not win that election. Indeed, they suffered what must be the worst electoral defeat of a major party for 50 years. The reason for their defeat was in no small part due to the credibility gap between their policies and the real world. People simply did not believe that their policies were practical. One of the subjects over which there was greatest distrust was their policy on public expenditure and their attempted bribes with the social security budget. They suggested giving a bit more to this group and a bit more to that, to spend, spend, spend without giving any consideration to where that money would come from. The Labour party has always been able to be compassionate and to care passionately, with someone else's money. Care comes cheap when the other fellow is paying. The Labour party scores 10 on the Richter scale for care, but it gets a big fat zero for economic realism.
Although there are many needy people whom we wish to benefit by the upratings that are proposed for November, it is proposed that for those who leave their jobs for no good reason there should be tightening of the regulations. Several hon. Members have referred to that tightening. It is sensible. The vast majority of the people concerned are young, or very young, and give up their jobs with remarkably little thought about what they are doing.
I had not been in the House for more than about two weeks when I found myself being catapulted to an unwanted prominence in the News of the World. I hasten to add that it was not for any of the usual reasons that one finds oneself in that worthy journal. It was because a young pair of teenagers had left home and taken up residence together—I had better be a fide careful about unparliamentary language—in a substantial flat in my constituency. They were manipulated by an extremely unscrupulous landlord into claiming board and lodging allowance rather than rent. They also received some pocket money from the DHSS and were reported in the News of the World as enjoying an income of £110 a week courtesy of the DHSS. Neither of those two workshy youngsters has any need or inclination to seek work. It is not surprising that I was deluged with letters from angry pensioners from all over the country as a result of my expression of concern. Some regulations must be tightened.
The statutory instruments uprating the social security benefits are complicated, and I must have recourse to the brief that has translated their effects into English. The complication is symptomatic of the system. The social security benefit system is a bag of snakes that is not understood by the claimants and barely understood by many of the officials who administer it. The DHSS pamphlet attempts to explain which of no fewer than 60 cash benefits one may claim — means-tested, non-contributory and national insurance. The time has come for us to look more fundamentally at simplifying the system by the introduction of a tax credit system or a negative income tax system. The complexity of the present system, combined with its apparent inequities, brings the system into disrepute. This evening's debate is not the time to dwell on the prospects of a more simple system, but I hope that before next year's uprating debate some more basic thought will have been given to the entire social security system.
I end as I began by saying that I am astonished that I must defend upratings that are as fair and generous as those before us today.
I present my credentials to the House as the Liberal party's parliamentary spokesman on taxation and social security only a few weeks after I presented my credentials to the House as the new Member for Roxburgh and Berwickshire. I look forward to the arcane debates to which the hon. Member for Stockton, South (Mr. Wrigglesworth) referred. This is a complex subject, but I look forward to getting to grips with it and to participating in future debates.
I do not understand the analysis made by the hon. Member for Gillingham (Mr. Couchman) of the success that he claims for the instruments. The statistics that are bandied about during such debates are always essentially flawed. The family expenditure survey, which generates those statistics and the retail price index, measures the expenditure of households on goods and services. Some of the data are flawed because they are based on average families. However, the basis does not apply in many parts of Britain. The Scottish borders is a rural area with little agriculture and services, and a low-paid hosiery industry. Many of the national averages are wrong because they do not take into account those who cannot economise and budget properly, as they receive only supplementary benefit rates of income. People cannot travel because there is a disproportionate expenditure on transport. They must also pay interest and legal charges when their electricity is cut off and they are sued in the local sheriff court. I must tell the hon. Member for Gillingham that far from the south-east of England the people suffer greatly. The increases do not reflect the circumstances of rural areas.
I agree with the hon. Member for Gillingham that the system is complex. However, the Liberal-SDP alliance has a straight forward answer to the problem, which is to bring together taxation and social security in a unified benefits system called the tax credit scheme. Several people have applied their minds to the operation of such a scheme, and if hon. Members are interested in details I refer them to the third study report of the Treasury and Civil Service Select Committee. It considered the matter in some detail, and I commend the recommendations and summary conclusions, which are in favour of considering a unified taxation and social security system. That would solve some of the problems that have arisen in the interaction between the tax system and social security benefits.
As a local solicitor who dealt with social security matters, I have come to the conclusion that the Government must change the system because they are shoring up an edifice that is held together more by the good faith of those who operate it than by anything else. If they continue to shave off money while they are running a defective bureaucratic system, in the long term they will run into serious difficulties.
The Opposition do not share the Government's overall economic view. We believe that much more money should be devoted to financing the social security system, although we would ensure that the money was channelled in a direction that benefited special groups so that we could limit any increases in expenditure required to finance the increased benefits.
I was confused by the Minister's statement that the value of benefits will remain the same under the new system as they were under the old system of arriving at the increase in benefits. Perhaps the Minister will tell me later whether my analysis of the system is right. The old system of assessing the increase operated from November to November. If that is true, we must ensure that the benefits obtaining in November 1982 have a similar value in November 1984. Under the old system the benefit assessment period was from November 1982 to November 1984. Under the new system brought in by the Social Security and Housing Benefits Act 1983, the reference period will be May 1982 to May 1984. The common period runs from November 1982 to May 1984. During the six months between May 1982 and November 1982 the increase in the retail price index was 1·3 per cent. The old system forgets the six months between May 1984 and November 1984. If the increase in the retail price index between May 1984 and November 1984 is more than 1·3 per cent., it is self-evident that those who have received the increase have lost overall.
On 9 May my noble Friend Lord Banks in another place referred to that anomaly and said that it would leave people worse off than they would have been, which is different from what the Government are saying.
Indeed, Lord Trefgarne wrote to him as follows:
I write to confirm that, as you said, the difference between the two review periods will depend on the difference between the rise in prices in the period May to November 1982—which we know to be 1·3 per cent.—and the corresponding movement between May *and November 1984".
It is not true to say that the increase will be wholly made up. For the reason that I have just given, I believe that under the new system people will be much worse off.
We shall look carefully at the increases that the Government will bring before the House during the remainder of this Parliament. We are watching with great interest the public expenditure battles that are now taking place in Cabinet. If next year the Minister tries to do another patch-up job by shaving off expenditure at the expense of the poor, he will be in even deeper trouble. The Government must take the opportunity now to recast the whole system of social security benefits and to move in the direction of a properly worked out and costed tax credit system. If they do not, they will do themselves and the country a great disservice and injustice.
My right hon. and hon. Friends can rely on me to welcome the increase in child benefit. I welcome the fact that it has now been raised to its highest ever level in real terms. I was particularly pleased when the then Chancellor of the Exchequer referred to child benefit in his Budget Statement as one of the keystones of the Government's social policy.
Child benefit has the particular advantage of being a universal benefit. There is no humiliation to the beneficiary in drawing child benefit. It is not a divisive form of charity; instead it is built into our tax and social policies. The Government are entirely right to raise child benefit now by an amount greater than is called for simply to match the change in the cost of living. Not only is child benefit satisfactory as a universal benefit, it also has a high take-up, as a result of which the money that is intended to be given to the people who qualify is indeed reaching them.
A point that is often made—I too want to make it—is that a high rate of child benefit helps to stabilise wages and is conducive to the Government's policy of fighting inflation by every possible means. It helps to stabilise wages without hardship, because the people most in need of more resources to meet the cost of living, especially when there are changes in the price of foodstuffs, are dealt with selectively. Child benefit therefore operates selectively although it is a universal benefit. It goes to those most in need of help when there are rises in the cost of household essentials, because it goes to the large families that are the most adversely affected. It does not go to the people who often have more money to spend than they need—such as teenagers in work who are living at home. Instead, it goes to the mothers who have the plates to cover and the shoes to buy.
It also effects a small-scale redistribution within the home itself between husband and wife. We must not forget that mothers have a greater propensity to spend their money for the benefit of the children, whereas if there is more money in the wallet of the wage earner there is a greater tendency for it to be spent in ways that do not necessarily benefit the family as a whole. That may be an old-fashioned point of view, and I know that many things are changing in the relationship between husband and wife; but there are fundamental benefits to society in making a deduction through tax from the wage earner and restoring it to the family in the form of a benefit that is primarily available to the mother.
I accordingly congratulate the Department on increasing child benefit. We should move as rapidly as we can in making all scales of child benefit the same, whether for those in work or for those in need. If we are to overcome the problems of the disincentives to work and save, the major step that we must take is to rectify the anomaly in regard to the scale of child allowances whereby the benefit available to the children of those in work is so much smaller than that available to those who are obliged to apply for unemployment relief or supplementary benefit.
I also particularly welcome the increase to £3,000 in the amount of the disregard in capital resources that is permissible for people applying for supplementary benefit. The economy is consuming too much and saving too little. It therefore cannot be right to force people to run down their savings and to use their capital for current consumption. Yet that is the way in which the supplementary benefit rules apply. By raising the disregard to £3,000, the Government are taking a small step in the right direction.
It must be contrary to the Government's policy to force people to run down their savings at a time when we are trying to encourage them to save and invest. It also frustrates the whole purpose of thrift. If people discover that there is no point in saving, the incentive to thrift is undermined. We must remember that there are millions of supplementary benefit cases. At one time or another a large proportion of the population will go in and out of the supplementary benefit system. At present there are 7 million people who are dependent on supplementary benefit, and if they discover that thrift is pointless, that lesson will remain with them and the whole ethos of the benefit of self-reliance, saving and prudence will be lost. We must not teach people that saving is futile if they are ever likely to fall on hard times; but that is what we are doing by the way in which we operate the supplementary benefit system. By this change the Government are modifying the ill effects of that system, and it is right that they should be commended for doing so. However, it is only a small step in the right direction.
I have spoken at length this week on the financing of the welfare state, and I do not want to go too deeply into points that I have already made, albeit in a House attended by only one Labour Member and no Member from any of the other opposition parties. I am glad to say that a good number of Conservative Members attended and they made some notable contributions. I hope that Opposition Members will take the trouble to read that debate. It was a pity that they did not come along and make their own contributions.
On 26 July I asked the Secretary of State for Social Services:
what reforms he proposes to introduce in the social security system to increase incentives to work for people in receipt of supplementary benefit".
The Minister for Social Security replied:
None at present, but work incentives are amongst the important issues to be taken into account when any changes in the social security system are being considered".
That was reassuring, but it was not totally reassuring because we do not know what the Department's time scale is.
On the question of timing, the House has got used to the idea that, for administrative reasons, we can afford to introduce only one uprating a year, and that the way in which it is done has to be so slow that it is weeks or months before a decision taken by the Government it can be put into effect. It must be 10 years since I was a member of a small party that was taken to Brussels by one of the computer companies to spend a day looking at ways in which in Belgium the pension system had been put on to a computer, and at the advantages that were available as a result.
I was impressed by the fact that when the Belgian Government decided to make an uprating in the system they were able to do it for the whole of Belgium within days by using a computer. It was not a particularly advanced or difficult model. If the Belgians could do it 10 years ago, surely we should be able to do it by now. But the Department is still happy to continue—indefinitely, as far as we know—with the old manual methods that date back to before the war. The House should bring pressure to bear on the Department to increase the speed with which it operates when uprating benefits.
I join with those who congratulated the hon. Member for Dunfermline, East (Mr. Brown) on his maiden speech. I am sorry that he is not here now to hear what I have to say. It was a magnificent maiden speech and held the attention of everyone in the House, because he was speaking with an absolute mastery of his subject, with a splendid delivery and with complete conviction. It was a speech that everyone welcomed, even if it stirred feelings of considerable anxiety, because so much of what he said was undeniably true.
If I may venture one criticism of the hon. Gentleman's speech, it is that, although he outlined the problems extraordinarily well, I do not think that we can look to it — I shall certainly read it — to find many practical solutions. Hon. Members on each side of the House must be careful of finding fault with the social services, which it is easy to do, without putting forward their own practical solutions. There are solutions, which I think are practicable and not too expensive.
The question is not whether we can afford to improve the operation of the welfare state but how long we can afford not to do it. Hon. Members on each side of the House who are interested in the workings of the social services should work together to some extent to force the pace at which the Department responds to the obvious needs for reform of the entire system for the redistribution of income. For that reason I was interested to hear what the Liberal speaker, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said about the tax credit system. I do not see any reason why pressure for the introduction of the tax credit system — or the basic income guarantee—should be a matter for one party or for another. It is an administrative reform, which would bring enormous benefits to society, and it is not a matter that need be a source of division on party lines.
I repeat that it is urgent that we persuade the Department to introduce uprating machinery of a sort that has been well known and tested for years, and which would enable it to bring in upratings within days.
As a general point, I think that it is right to base the uprating on actual figures rather than on predictions. Mercifully, thanks to the efforts of my right hon. Friends, we have brought down the rate of inflation to the point where it will not be a matter of very great difference whether we use the actual figures or whether we make predictions, because we can tell, broadly speaking, the way in which the movement in household costs will evolve over the months or years ahead.
I think that upratings should be based—I know that this will offend those on the Opposition Benches—on the real performance of the economy and not on the changes in the cost of living. If I were to refer to speeches that I have made over the years on the uprating of benefits, I think I would be able to show that I have been consistent in saying that what society aims to do must be related to its capacity and not only to its hopes. Obviously, we want to protect people from changes in the cost of living, but the cost of living is not within the control of the British Government. If there were to be another upheaval in the price of oil, or major changes in world prices of foodstuffs, we could not undertake always to uprate social benefits to meet those changes. Equally, supposing that there were, for one reason or another, to be falls in the cost of living, I do not think that anyone in the House would be particularly anxious to be the first to recommend that there should be a fall in the level of benefit.
Applying our minds to the art of the possible, it is reasonable to say that what we redistribute should be related to what we have. I should like to see the gross national product — or perhaps some measure of the actual arisings from the tax system from time to time—used as the measure of what we have to distribute in benefits.
Before the hon. Gentleman leaves that point, will he develop it a little further? He is suggesting that benefits should not be linked to prices, and probably not to earnings, but to the real performance of the economy. How should the real performance of the economy be measured? What is the likely time-lag between getting those figures and using them for an uprating?
I am grateful to the hon. Gentleman for his helpful intervention. I suggested that we should try to use the GNP or some measure which indicated the actual arisings of tax. I realise that the hon. Gentleman's second point is that the likelihood of delay in producing the figures may cause difficulty, but I do not think that it would necessarily matter, if the Department were in arrears in making changes, if, for instance, it used an index relating to 1982 rather than 1983. It might not be particularly inaccurate, bearing in mind that such trends do not hover very wildly but are fairly consistent over the passage of time. If we choose wisely an index that indicates what society has in the way of disposable resources for redistribution, we are not likely to be proved wrong just because we are three, six or 12 months out of date.
I want to reconstitute the national insurance system on a more permanent basis, so that what goes out and what comes in have some relationship. I should like the entire redistribution of income to be taken out of the Budget and to become a self-balancing institution. It would not be right to place on that institution the responsibility of necessarily meeting changes in the cost of living, which it would not have the resources to do. It should be founded on the reality of the economy, and we should use the arisings of tax to meet the calls for income support on the basis of the money that is arising in society and is available for the purpose.
Over the course of years, such a system might sometimes work to the disadvantage of beneficiaries and sometimes to their advantage, but they would be carried in the economy in such a way that they would belong to the same economic system as the rest of us. I do not think that we should put pensioners — and particularly pensioners from the public service — into a sort of Shangri-la where they are protected from the real movements of prices and from the changes that affect the rest of us, and are increasingly distanced from the rest of the economy. We should continually try to find ways of bringing people on benefit back into the economy —preferably as productive members of it.
I am grateful for the way in which the hon. Gentleman responded to the intervention of my hon. Friend the Member for Birkenhead (Mr. Field). Does the hon. Gentleman realise the import of what he is proposing? Currently, earnings are rising by about 8 per cent. Pensioners will get 3·7 per cent., so their incomes will drop relative to the spending power of the average wage earner this year before the hon. Gentleman brings in his scheme to cut benefits further. Does he not think that pensioners and others on benefits are already being forced into the real world by the further erosion of their spending power relative to those in work? Will he take forward the consequences of his suggestion?
The hon. Gentleman is likely to drag me into a speech that will take me rather far away from the upratings that we are discussing. I should be happy to accompany him into this territory because the House needs to work over this ground and to come forward with clear ideas. The incentive to work has to be taken into account, and I wanted to come to that.
I appreciate the point that wages are still rising in some industries and occupations quite fast, but in others they are static. It is a little difficult to make comparisons between what people have through redistribution of income and what they have from their own earnings, to plot the course of these movements and to arrive at a logical comparison. I understand that, but there is a further point that concerns me. The Government are doing their utmost to keep down wage increases, and in certain occupations, particularly low paid ones, they are having considerable success. This is helping to diminish still more the incentive to work of people who are on benefit. If the Government raise benefits in line with the changing cost of living when the wages of people who are only just above the level of benefit are static or relatively static, they will add to the number of people who are beginning to ask themselves, "What is the point of working?" This is unhealthy and it is a problem that must be solved. It is no good shovelling it under the carpet from one year to the next hoping that it will go away. That is why I quoted the disappointing reply from my hon. Friend the Minister to my question about introducing social security system changes that would increase the incentive to work.
I have one suggestion to make. While we are waiting for a tax credit system or a basic income guarantee or something of that kind that would solve this problem, we should make a move in that direction. We could afford to increase the disregards in terms of permitted earnings or the hours of work that are allowed for those who are in receipt of unemployment benefit—or of supplementary benefits where they have exhausted their entitlement under the national insurance system — without loss of entitlement to help. Many people are tempted to take part-time work and perhaps even do so while drawing benefit. That is not necessarily a crime—rather the reverse. I admire people who better themselves when they are in financial difficulties and we shall all stand to gain if they do. It must be in the interests of the economy if people work who otherwise would be idle. I resent the system that forces millions into complete idleness, because that must be contrary to the basic health of the economy as a whole.
Part-time work may not be as good as a full-time job, but it is better than nothing. It is better for the self-respect of the person who goes to work and gains some independence. It keeps people in practice so that they do not become unused to the habits of work; and it gives them opportunities to acquire new skills through part-time work. People may discover that they have an aptitude about which they do not know and when they come to apply for jobs in the knowledge that they have already done some time in a new occupation and can rise to the challenge, that gives them confidence that they otherwise would not have.
There are many reasons why it would be highly desirable to allow people who have fallen out of full-time work to better themselves in any way and without the loss of benefit, at any rate for a long time. I hope that my right hon. and hon. Friends will consider that suggestion as a serious one.
If I allow hon. Members to turn this into a dialogue I shall take up too much of the time of the House. Unless the hon. Gentleman has an extremely pressing point that he wishes to make, it would be better if he made it in the form of a speech of his own, because I should be finishing my speech.
There is nothing about the Government's commitment to end the earnings rule, as far as I am able to discern, in any of this mass of papers that we are considering, but it is a commitment that the Government often repeat. It is an application of the same principle that I was recommending in regard to people of working age. How can there be a real cost to the economy in abolishing the earnings rule if the result is that people work and create wealth instead of doing nothing? We must look at the logic of this and not at the figures. The Government have allowed themselves to be persuaded that doing away with the earnings rule would be too costly at this time, but how can it be costly to encourage people to work instead of consuming without creating wealth in exchange?
Let me summarise the situation that we are analysing in this debate. The welfare state is an unhappy, transitional system on the verge of administrative breakdown. It operates against the Government's policies in ways that affect millions of people. It operates against the cohesion of society and against the independence and self-respect of millions of individual citizens. I hope that today's debate will help to create a sense of urgency among my right hon. and hon. Friends and in the Department of Health and Social Security. We look to the Secretary of State and to the Ministers to initiate major changes, and to act quickly.
The House will no doubt accept the view that the hon. Member for Kensington (Sir B. Rhys Williams) is much less malevolent than Ministers in his political approach, but if we were to pursue his suggestion and change the character of the social security calculations, the effect would probably be to remove the safety net, and not even the most malevolent of Ministers would suggest that. However, I endorse the hon. Gentleman's view that thrift should not be discouraged, and join him in the call for the rundown of individual assets to be stopped. The £3,000 mentioned in the documents is not enough. The hon. Member for Kensington suggested that he does not believe that the Government wish to see individuals run down their assets, but if they did, they would be consistent, as they are determined to run down the nation's assets. I share the hon. Gentleman's view in that I do not believe that sacrifice should be added to hardship and misfortune.
The Minister sought to present an ebullient image by appearing to create the impression that the Government were being sensible and flexible. He tried to do so by concentrating largely upon one part of the Government's responsibilities. He ignored the hostoric diminution of purchasing power and was willing, as the Government have always been willing, to maintain the situation in which hardship is imposed on many people. That hardship tends to be severe, and concentrated within industrial areas.
I congratulate my hon. Friend the Member for Dunfermline, East (Mr. Brown) on his maiden speech. He showed the effect of the Government's social policy in areas of high unemployment such as that which I represent, where there are 135 unemployed people for every job. Since the Government have come into office we have seen the number of social security beneficiaries treble in less than five years. That means that in areas such as mine the purchasing power of the community is depressed because so many people within the community are on supplementary benefit or other social security benefits. This reduces our capacity to promote recovery within our district because the unattractiveness of an area where purchasing power is below average does not assist economic recovery. The Government suggest that they are flexible and sensible, but their record does not justify that claim.
The hon. Member for Kensington berated my hon. Friend the Member for Dunfermline, East and claimed that in his distinguished maiden speech he admirably presented the problems, but failed to suggest solutions. But the solution was underlying the whole of my hon. Friend's speech, because he argued against the maintenance of the monetarist policies that are behind the difficulties that Ministers are trying to patch up.
I do not believe that the Government deserve to be described as flexible and sensible. I shall illustrate why by outlining the circumstances of a relevant case that is covered by the order.
I tabled a question for oral answer yesterday. As so often nowadays, with a smaller number of Labour Members asking more questions of an incompetent Administration, I was unable to get an oral answer. However, I received a written answer to my question in which I asked the Minister to improve the arrangements for paying the guardian's allowance. The Minister who replied told me that he could not improve the arrangements, but he would be happy to correspond with me about the details of the case. As the case has been the subject of correspondence with the Department in recent months, it hardly seems worth going round the course again.
However, the case illustrates the need for the flexibility and common sense that the Government claim to possess. A couple in my constituency have two small children of their own and do not receive a high income. As is common in south Yorkshire, they are fearful of redundancy. They have taken in the wife's brother, who is 13 years old.
Like me, the Minister worked in education for a long time and, even in most Wackfordian guise, he will agree that it is not cheap or easy to care for a 13-year-old boy. Despite economic pressures and their anxieties, the couple have taken the boy in, but have been deprived of the guardian's allowance because the lad is the wife's brother. They took him in because his mother died of cancer last year. His father is prematurely senile, disabled and incapable of looking after him.
The couple honourably took the brother in and are bringing him up as their own son. They are doing a first-class job, but they are denied the guardian's allowance. If redundancy strikes or their economic condition continues to decline, as it may, since we face the prospect of at least another four years of Conservative Government, their sacrifice in caring for the boy will be compounded.
If that couple's circumstances had not allowed them to take the boy in, my local authority would have had to take him into care. The Minister knows that the cost of taking a boy into care wou0ld be more than £150 a week. The Government might not mind that. They have made Britain accustomed to the experience of the Government loading burdens on to local shoulders. The Government might feel that Rotherham borough council, an effective local authority, should pay the bill.
I suggest that there is no flexibility or common sense in a Government who deny the excessively modest guardian's allowance to a family when the alternative would be a much larger bill—perhaps 20 times—to take a boy into care.
I thought that there might be some residual concern for flexibility and common sense. I have not known of a similar case in my 13 years as an hon. Member and it seemed to cry out for flexibility. I thought that it would be sensible to give that decent couple a little more money to help them cope with a boy who has seen one parent become enfeebled and lost another in distressing circumstances.
The family is worried about the future. The case that I have advanced in correspondence, that I should have liked to press at Question Time yesterday, and that I am fortunate to be able to present today ought to suggest to the Government that a more sensible approach to the guardian's allowance is essential. I urge the Minister to look at the matter again and ensure that justice is done.
I am sure that there will be other cases similar to that in the Wickersley-Bramley area of my constituency. As the boy is only 13, the Minister will understand why I do not wish to name the family and to inflict on them the attentions of the British press, which does not always command our esteem. However, the names and the family's address will be in the Minister's records. I trust that some flexibility and common sense will be shown on the guardian's allowance and that they will be shown soon to the family in my constituency.
I have noted with considerable surprise the sterility of the contributions of Opposition Members. There has been much talk about unemployment, which is not the subject of the debate, and about supposed cuts in unemployment benefit, which are not before the House and are not likely to be for a considerable time.
I know that the hon. Member is new to the House and believes that assertions made on platforms outside pass for evidence, but he must justify his statements. Where is the evidence that any organisation has abused the system? The hon. Gentleman will have heard his hon. Friend the Member for Saffron Walden (Mr. Haselhurst) put that point to the Minister, who replied that there was no evidence of any organisation abusing the system. What evidence does the hon. Gentleman have?
I am informed, and I am sure that my hon. Friend the Member for Halifax (Mr. Galley), who is knowledgeable about these matters, has also been informed, that a number of institutions have had board and lodging costs of £200 a week.
I cannot, because I do not have the names with me. I am prepared to contact the hon. Gentleman. We are informed that they are being paid £200 a week for board and lodging. Any Labour Member who does not believe that £200 a week is excessive for board and lodging is more in aerial space than is usual in the Labour party.
It would not be appropriate to mention names in this Chamber, but it is true that the levels have been artificially jacked up in a number of instances.
This evening we have discussed a regulation that will tighten up the rules for those who become voluntarily unemployed, the people who are unemployed without just cause. I find it inconceivable that anyone should leave a job voluntarily, except in the most extreme circumstances. People outside this Chamber would not accept any argument that the social security system should be exceedingly lenient with such a person. Deductions to discourage such activity are essential, and the regulations that are before us do that. That, apparently, is the only major issue on which the Labour party is prepared to divide the House.
Labour Members then grudgingly went on to say that they would not oppose the uprating orders. To my mind, that is mean-minded. I should have thought that they would welcome what was being done. Social security benefits have kept pace with inflation. Pensions are going up commensurate with inflation. Taking the last five years, they are 4 per cent. ahead. Supplementary benefit will be 1½ per cent. ahead. This year, in an act of considerable generosity, in my view, supplementary benefit is going up by 4·3 per cent. That is considerably more than the basic retail price index level of inflation. There is a record increase in child benefit, at 11 per cent.
No, I must get on, because I have already been interrupted.
We are restoring the 5 per cent. abatement of unemployment benefit. These are all vital measures, and one would have thought that the Government's generosity would be welcomed by the Opposition, but no. What we have is mean-mindedness and quibbles.
Poverty in this country, relatively, was as great under the Labour Government as it is now. Of course there are problems of relative deprivation. We would all like to do more. Wherever there are rules, there are bound to be individual cases where there is unfairness. One cannot devise a social security system that is right for every individual. I personally would like to see more given to widows. There are certain groups of disabled people who, ideally, deserve better treatment. I should have liked the Christmas bonus to be increased this year. I should have liked the £3,000 capital limit, which is being improved in these instruments, to be considerably reformed. It brings problems. It means that thrift is discouraged among many people, and I hope that in due course the Minister will introduce a tapering effect to overcome some of the injustices in the system.
There are many improvements in society that we should all like, but we have to take them step by step, and each has to be paid for. How are we to do that? We can pay for them by tightening the screws on fraud. My right hon. Friend has that in hand. We can improve the administration and thereby make more resources available for social benefits. My right hon. Friend has that in hand. We can tighten up the rules so that the money goes to the people who are really in need. That matter is in hand, and we are making progress in that respect tonight. We can simplify the system, and I sincerely hope that during this Parliament we shall make considerable progress in that respect.
Reference was made earlier in the debate to the possibility of a tax credit scheme or a negative income tax scheme, or something similar. There seems to be some unity across the Floor of the House about the desirability of such a scheme. There were a number of favourable comments about the idea of a tax credit scheme, but in simplifying the system we must keep an eye on the overall cost to the nation and the inequalities which can easily be built into that system. The difficulty in producing a simple system is that many anomalies arise and accretions result. It can become a complex monster with enormous difficulties. So, although I welcome any steps to simplify the system, we must he aware of those problems.
There have been a number of suggestions from the Opposition Benches to the effect that they want vastly to increase social security benefits. They would like to increase them to the level of earnings rather than inflation. That would add billions to the £35 billion that we are already paying in social security. That is almost a third of total public expenditure and that in itself is but a mere drop in the ocean of the programme that the Labour party put to the electorate at the last election and which was rejected because it had no cohesion or credibility.
I am delighted that my hon. Friend agrees with me because I have a great respect for his intellect and headmasterly qualities.
What would be the consequence of following all the suggestions that have been made by Labour Members in the debate? Are we to go towards massive rises in taxation and borrowing, as has been suggested? Are we to return to the days of 20 per cent. inflation and 20 per cent.
interest rates? If so, how will inflation of 20 per cent. and more help the poor, the needy and the pensioner? It is the inflation-ridden society that makes the poor particularly poor. Poverty increases when inflation is rampant. Labour Members may well laugh and giggle, but they have no significant intellectual argument to advance.
The disasters of the last Labour Government were based on such fantasies — [HON. MEMBERS: "Answer the question."]. I am answering it. That produced inflation of 26 per cent. at one stage. It was the precursor and the bedrock of today's unemployment. That is the sort of policy that the Labour party is still putting to the country, having learnt nothing, which will produce unemployment and inflation yet again.
Over the past 30 years high unemployment has followed high inflation. High inflation is the precursor of unemployment in every situation.
My knowledge of the history of the 1930s is a little limited. During the period of office of the Labour Government inflation rose by about 100 per cent. and unemployment also doubled.
The Labour party is seeking to mislead people by suggesting that there is a money tree at the bottom of the garden—a magic wand by which benefits can easily be increased across the board. That is complete hypocrisy and the Labour party is misleading the nation. Perhaps it comes down to the normal problem of the Liberal party.
My hon. Friend is right.
Perhaps those policies are still being put forward in the House because the Labour party is now in the position that the Liberal party has been in for many years—being able to make promises when it knows it will never have to face up to the responsibility of carrying them out.
We must pay tribute to the achievements in social security benefits in recent years. Improvements must come step by step. We cannot make radical changes overnight. The social reform record of past Conservative Governments shows our achievements. We have kept benefits, especially pensions, ahead of inflation. We are now paying out considerably more for pensions because there are a greater number of retired people. We have introduced a record rise in child benefit. There is more money available for—
More money is available than ever before for the heating fuel addition. The rise in unemployment benefit this year is more than 8 per cent. One-parent families will be better off than ever before. They are now eligible for the long-term rate of supplementary benefit after one year rather than two years. They can also earn more before the tapering effect comes into operation. There have been substantial increases in the take-up of attendance and mobility allowances. The level of mobility allowance has virtually doubled during the past five years, and it has been taken out of tax. We have extended the invalid care allowance and are removing the invalidity trap.
That series of achievements has not been given sufficient prominence. Opposition Members continually pooh-pooh our achievements. We are justly proud of our record.
I wish to comment on the actual and forecast methods of paying pensions and other benefits. It is more sensible and fair to pay benefits on the basis of what has happened than on the basis of what might happen. History shows that paying on the basis of what might happen produces anomalies. The subsequent readjustment to correct the anomalies is a painful process.
Pensioners should be treated in the same way as wage earners. Pay negotiations are based on historical and actual factors. The key factors are the level of inflation at the time of settlement and what a company can afford. Social benefits must be determined on the same basis—
Those in receipt of social security and pensions are better protected than many employed people. Some wage earners have accepted rises that are less than the current rate of inflation.
The Conservative Government have considerable achievements on their record. That is what we are debating tonight—not the petty, mealy-mouthed points raised by Opposition Members. They should remember that there has been a substantial rise in unemployment benefit.
I am pleased that the hon. Member for Halifax (Mr. Galley) was not making his maiden speech; because I do not have to go through the fiction of saying how pleased we were by his contribution. Indeed, I am not sure whether he had been called upon by the Government Whips, as a last resort, to make a contribution. I must warn him—I hope that he bears my words in mind when he next comes to contribute to a debate of this nature—that if he is not careful he will be given the lain Sproat award, and not many of us would wish to receive that.
There is great concern, particularly among my hon. Friends, about the way in which pension increases and other benefits are to be calculated for uprating purposes. As a result of the change which the Government have introduced, a retired married couple will lose 1.20 a week and single pensioners 75p a week, as my hon. Friend the Member for Pontypridd (Mr. John) pointed out. These are considerable sums for those living on limited incomes, and when one considers how pensions are no longer increased in line with earnings, no wonder retired people feel that they have had a rough deal under this Government.
Despite what the hon. Member for Halifax—I notice that he has already left the Chamber—said about the way in which pensioners were treated under the last Labour Government, there is no doubt that they received a much better deal, despite the difficulties which Labour then faced.
The Government argue that any loss—for example, as shown in the figures which I quoted—will not be all that great for pensioners because it will be made up next year. But some of them will not be around next year. Indeed, why should pensioners have to wait a year for any loss to be made good, bearing in mind the difficulties they have in making ends meet? We must remember, too, that the change in calculating benefits affects many other people.
People in some groups in society are obliged to spend much more on the essentials of life. I have a paper prepared by the Library showing average weekly household expenditure on certain items in the year ending June 1982. Whereas households in general spent 15·9 per cent. on housing, retired married couples spent 20 per cent. and single pensioners spent 29·5 per cent. General households spent 21·8 per cent. on food, but married pensioners spent 32 per cent. and single pensioners 27·2 per cent.
The point I particularly wish to stress tonight is the amount spent, especially by pensioners, on fuel, light and power. Whereas general households spend 6·1 per cent. per week on such items, retired married couples spend 11·1 per cent. and single pensioners 13·7 per cent. Clearly, therefore, the retail price index does not in many ways reflect the difficulties faced by those on low incomes, especially pensioners, in trying to make ends meet in terms of the basic essentials of life. I have often pointed out that the cost of fuel places a great burden on those on low incomes, particularly pensioners, but also those who do not quite qualify for supplementary benefit.
The Government embarked on a policy of ensuring that gas and electricity prices—certainly gas prices— are raised in excess of the rate of inflation. This causes tremendous difficulties for those on limited incomes. Pensioners who qualify not for supplementary benefit but for rent rebate are clearly on limited incomes, but they receive no assistance with their fuel bills. It is understandable that great hardship is incurred. Those on average incomes do not find it all that easy, especially during the winter months, to pay their fuel bills. I ask the House to imagine the plight of those who receive no assistance and who live on the incomes to which I have referred. The Government have a duty to extend the fuel scheme to ensure that it provides the necessary assistance.
The Minister has announced that in November 5 per cent. will be restored to unemployment benefit. We are pleased that this is so, but the Government should not have failed to restore it when unemployment benefit was subject to tax. In 1980, 5 per cent. was removed from the increase in unemployment benefit in lieu of taxation, but when the benefit was subject to taxation a year later the 5 per cent. was not restored. If there had not been a commotion in the House and if the issue had not been raised repeatedly, the Government would not have restored the 5 per cent. The Government were certainly not so keen to make the restoration and their past failure to do so has been a grave injustice to the unemployed. Indeed, it has been a form of double taxation and the Government can take no glory for the way in which they have acted.
What will happen to unemployment benefit next year? The Prime Minister has already warned that there is no promise that it will be increased in line with inflation, and that may be so for short-term supplementary benefit as well. If the Cabinet takes the view, as a result of the review of public expenditure, that unemployment benefit should not be increased in line with inflation in 1984, many Conservative Back Benchers should think carefully whether they can support the Government. There can be no justification for penalising the jobless in the way in which, apparently, the Cabinet are determined to do.
The Minister has told us that the disregard will be increased to £3,000. Like many other hon. Members, I am pleased that that is so. However, the disregard remains too low. If a person has saved during his working life to accumulate a nest egg for his retirement, and if we take into account the fact that the £3,000 includes, in many instances, redundancy payments, the effect of the disregard is to penalise those who have saved. If a man is made redundant when he is in his fifties and he has to spend in excess of the disregard of £3,000, he will have less money when he retires. The effect is all the stronger when people in their fifties are made redundant and they find that they are unable to get any other employment.
The system that was operated when my party was in government was much fairer than the one that has been adopted by this Administration. At one time under this Government the disregard was £2,000, and it has been raised rather slowly to £3,000. The disregard will continue to penalise a good number of people whose only crime is that they happen to save during their working lives. I should like to see a higher figure than £3,000.
Millions of households rely on supplementary benefit because of mass unemployment caused by Government policies. It is an indictment of the Government that so many people are forced to claim and live on supplementary benefit. If we listened only to the way in which some Conservative Members spoke tonight, we would not appreciate unless we knew the truth — the acute hardship and the poverty faced by so many of our constituents who find it a daily battle to make ends meet. During the immediate post-war years we were proud that in the large majority of cases children were no longer brought up in poverty. Today, the situation is different. In my constituency, there are households where the breadwinner is unemployed and can no longer fulfil his role. That state of affairs obtains throughout the country.
The Minister and his colleagues should be telling us that the Government will change their policies so that people can stand on their own two feet. The Prime Minister and her supporters always talk about their wish that this be so, and it can be achieved, by pursuing policies that enable people to earn a living. That is the most effective way to undermine the poverty and hardship to which we have been referring tonight.
The welfare state has never been under greater threat. The Cabinet, in carrying out its review of public spending, intends to make cuts that will further undermine the welfare state, which came into existence after the second world war. If the Cabinet succeeds then in getting its supporters into the Division Lobby to support it there will be a further lowering of living standards for many of those who are forced to live on supplementary benefit. Until there is a change in economic policy and economic sanity is restored, unfortunately millions of people will continue to live in poverty and near-poverty and many will be denied the opportunity to earn their own living. We shall have the sort of circumstances about which my hon. Friend the Member for Dunfermline, East (Mr. Brown) spoke in his distinguished maiden speech. What he said about his constituency is true of many others.
I am sorry to have to begin by apologising for the fact that I shall not be here throughout the debate. My excuse is that I have an engagement, which means that I may not be able to stay for the Minister's reply. I am consoled to some extent by the knowledge that many of the faces opposite are different from those that were here when I attended the early part of the debate, when I heard a distinguished maiden speech by the hon. Member for Dunfermline, East (Mr. Brown).
Few discussions are more important than one about those who are least fortunate in our society. I am one of those hon. Members who believes strongly that this is a matter of grave priority to which we should all pay attention.
In my only previous speech to the House, I argued that the entire social security system needs radical change. I am to some extent happy in the knowledge that only six hon. Members were present when I made that speech because I may therefore say, although somewhat differently, some of the things I said before.
Few things show more clearly how times and remedies alter than the fact that one of the greatest obstacles to the creation of a modern social security system is the spirit of Lord Beveridge—alive and well in the Elephant and Castle. Beveridge believed in a national insurance principle. We do not have one any more. Beveridge believed in the recipricocity of rights and obligations. For a variety of reasons many people, especially among the younger generation, have no reason to see the link between those two concepts. I am not blaming anyone. Because of the way society has evolved there are many young people leaving school who believe genuinely that the world owes them a living. All my generation has a responsibility to explain to them some of the obligations they have to shoulder as members of society.
Beveridge believed also that the man would always be the breadwinner and that a woman should have to show a higher proof of need. That part of the Beveridge concept lingers on, to the considerable detriment of many people with profound disabilities or deteriorating circumstances. We need to study that concept closely. I am delighted to see that the regulations take a further step towards eliminating inequalities between the sexes. However, I do not believe that the Government have genuinely accepted that principle.
Beveridge also believed in the "safety net" concept. There are 7 million people in receipt of supplementary benefit. Far from being a safety net, it resembles more closely the net with which a group of men went out and caught a miraculous draft of fishes. It is an indictment of the way in which, over the years, successive Governments have allowed the social security system to become outdated.
A major consequence of the destruction, in practice, of the insurance principle—
My hon. Friend has told us of several items that Beveridge included in his report. He has neglected to say that Beveridge also said that there should be a work test and that, after receiving unemployment benefit as a right for a certain period, work should be offered in lieu of benefit. Does my hon. Friend also realise that Beveridge said that young people should never leave school and immediately join the dole queue? Those two important facts have been left out.
I am grateful to my hon. Friend. He has reinforced my contention that Beveridge has been superseded and is out of date.
I should like to see a system whereby people leaving school are offered a work opportunity of a kind that society respects. One of the great problems of our society is that children are compelled to stay in school for 15,000 hours. School is the only compulsory attendance, apart from prison, foisted upon our citizens. As many as 40 per cent. of the children now leaving school have nothing to offer society because of the way the education system is designed. That is another indictment of our attitudes, which are becoming out of date.
A major consequence of the destruction in practice of the insurance principle, with its attenuated survival in theory, has been the sharp differentiation between the self-employed and the employed. Men and women have the courage to accept the challenge rightly put before them by our Government to go into business for themselves, frequently using their redundancy money to do so. If after a period of self-employment they find that their venture fails, they are at a considerable disadvantage compared with those who have gone straight from employment into unemployment. That is unjust and improper.
We see the same iniquitous unfairness, which the hon. Member for Walsall, North (Mr. Winnick) mentioned, in that those who have scrimped and saved to set aside a small portion of their wage each week to build up some security for themselves and their family are at a severe disadvantage when they become unemployed. That is a dreadful indictment of the description "unearned income", which is a remarkable rhetorical trick to devalue the efforts of those who are prepared to save rather than spend every penny that they have. That too needs change.
Therefore, I am pleased to see the steps that have been taken in the regulations to improve the level of benefit and to honour the pledge that the Government made that the people at the poorest end of the spectrum shall not suffer because of the level of prices. However, the time has come to look closely at the real costs of administering the ragged boundary between work and non-work, between self-employment and employment, between the male and the female breadwinner, and between those who have some savings and those who do not. We should find a better way. Whether that way lies with the policies of my hon. Friend the Member for Kensington (Sir B. Rhys Williams), I am not sure, but I am certain of one thing. My hon. Friend has taken enormous pains to find out where the present social security system fails and to suggest constructive alternatives. I very much hope that many people in the Conservative party will join him in the endeavour to find a more equitable system.
Unfortunately, the hon. Member for Kensington (Sir B. Rhys Williams) is not in the Chamber. I wished to intervene to ask him whether the drift of his argument was towards a suggestion to the Minister that the special claims control unit should be abolished in the light of the fact that benefits should not be reduced for part-time work.
I wish to follow the argument of the hon. Member for Mid-Kent (Mr. Rowe) because William Beveridge's great 1944 pamphlet was "Full employment in a free society". It is interesting to note that in paragraph 3·4 of its annual report for 1982 the social security advisory committee stated that at that time the Government accepted the principle that the long-term supplementary benefit rate should be made available to the long-term unemployed. The only obstacle was cost.
In a recent parliamentary reply to me, the Secretary of State for Social Services added a new element. He is no longer happy to accept that principle because he is worried that the incentive effect for those in work may not operate if the long-term rate applied to those receiving long-term supplementary benefit. I am very worried about that. The reason is that under this Government long-term unemployment has increased at a rate unknown in British economic history. "Chronic unemployment" has become a new term in our economic textbooks. In my county of west Glamorgan, two in every five people out of work have been on the dole for more than a year. Despite the new uprating regulation, the long-term rate of supplementary benefit is denied to the unemployed.
In referring to the uprating, I shall confine my remarks to the board and lodging allowance, about which I shall make three points. First, I am pleased to note that the Government accept that the setting of limits for board and lodging has been unsatisfactory. In Newcastle the boarding allowance was recently increased by 80 per cent. The DHSS paid £37 per week for board and lodging. That Department carried out a survey using its own guidelines and criteria which showed that the figure should be £63 per week. The figure was increased in May this year to £60 per week.
Secondly, it is not sufficient to consider cost by itself. It is vital to check that the accommodation is satisfactory. Price is not the only criterion to be considered. If the accommodation is not checked landlords may abuse their position. They may exploit those receiving this benefit by allowing overcrowded conditions as well as fire and health hazards. The Minister must consider those matters in his reply.
Thirdly, will the Minister assure the House that under the three-tier scheme organisations such as Women's Aid and hostels for the homeless, especially those run by volunteers, will continue to play a vital role in the provision of board and lodging?
I welcome regulation 4, which states:
Supplementary benefit officers should consult housing aid associations and other bodies regularly involved in housing the homeless in setting the limits.
On 9 May I was informed by Mr. Kearns, the Wales area supplementary benefit officer, that the local level is reviewed once a year, usually when uprating of benefits
takes place. It is essential that the limit should be set after an adequate assessment has been made, especially when tourists come into the area at different times of the year.
Therefore, I hope that the Minister will examine the need for a winter and a summer rate. It is not easy to find board and lodging for £30 or £35 a week in Caernarfon or Colwyn Bay respectively at this time of year. That problem should be carefully examined. Perhaps the Minister will consider an MSC scheme whereby geography graduates examine in detail each DHSS area office and make a comprehensive survey so that the figures and the information that supplementary benefits officers make are accurate, that there is decent accommodation and that it is checked. They could also ensure that the system works properly, fairly and adequately.
I hope that the final point of my hon. Friend the Member for Gower (Mr. Wardell) will be taken up by the Government as a practical, positive and cost-effective suggestion which would improve the efficiency of the Department.
This has been a typical social security debate. There has been a virtually empty Chamber, a completely empty Press Gallery, and no sign of the SDP and all that goes with that. It is no different from what has happened in the past four years. The highlight of the debate—I suspect that it will remain so when we divide at 10 o'clock — was the maiden speech of my hon. Friend the Member for Dunfermline, East (Mr. Brown). It was a privilege for my right hon. and hon. Friends and me and, I suspect, Conservative Members to listen to that speech. In some respects, it is a pity that the hon. Member for Halifax (Mr. Galley) was not making his maiden speech as we should not then have been able to interrupt him as we did. He did not do the cause of the citizens of Halifax much good with the quality of his speech. He did not come to participate in our debate as was evidenced by his almost immediate departure from the Chamber after making his speech.
We are discussing a mixture of 14 regulations and orders. They affect virtually half the country's population. We are dealing with 9 million pensioners, 3 million unemployed, 12 million children — 24 million of our citizens who form quite distinct groups. To that figure we must add the sick and disabled. We are discussing the total income support for the vast majority of nearly half the population.
The House does not take the subject seriously. Although I enjoy his speeches, I must tell the Minister that he did not take the subject seriously. He should have done so, in view of the seriousness of it.
The debate has centred on the uprating system and arguments about voluntary unemployment. The Opposition bitterly resent the way in which the Government have changed the system for uprating pensions and other benefits during a year in which recipients will lose. My hon. Friend the Member for Pontypridd (Mr. John) said that people did not engage in a vast academic discussion of the system if, when the system is changed, action is taken to ensure that people do not lose. No such action was taken when the Government put through the Social Security and Housing Benefits Act 1983. Under that Act, pensioners will lose money from November — single people 75p a week and married couples £1·20 a week. That does not include all of the other cuts that pensioners have suffered since the Government came to office in 1979.
The evidence for that is clear. From November this year, a married couple will receive the basic state retirement pension of £54·50. However, it should be £58, which was the figure published by the Labour party during the election campaign. It arrived at the figure by restoring what pensioners lost because of the break with earnings and allowing for 6 per cent. inflation in November. Anyone who says that the Government continue to increase benefits but do not cut them, does not take into account what has happened during the past four years.
However much the Government wish to argue the point, at no time did the previous Labour Government introduce a Bill or order to claw back benefits. We know that the forecasts were wrong. People talk about that as though it were bad, but the forecasts were more often wrong in the right direction than in the wrong direction, so there was a net gain in real terms. At no time did the Labour Government bring forward a Bill, such as the Government have done twice, to cut the benefits that would be paid in the following November. They cut a penny in the pound in 1981 and 2½p in the pound this year.
I remind the Government about a few matters not included in the uprating orders. I make my following remarks with humility because of the dates that I shall mention, so the Minister of State can remain seated and calm. The blindness addition to supplementary benefit of £1·25 has not been changed since 1962. Why was it not uprated this year? The extra pension for the over-80s has been 25p since 1971. Why has that not been changed? Why has not the earnings disregard for the single parent changed? That example is more pertinent than the previous two. The earnings disregard was changed in November 1980, so why are the Government freezing the disregard for the single parent at £4 plus half of the next £16? Has it not been changed because the Government have given up hope that the single parent could take account of the disregard because they know that he will not get a job? It is an acceptance of long-term mass unemployment. I hope that that will be considered in the 1984 uprating.
One point of contention is the last order, upon which we shall seek to divide the House, which affects so-called voluntary unemploymet. The matter has been discussed at length today and I shall not repeat the arguments of hon. Members on both sides of the House. However, the south Birmingham family service unit sent a note to Members of Parliament, which stated:
On the matter of voluntary unemployment SB disqualification—how's this for injustice? A dairy that operates locally has decided to make several roundsmen redundant and pay them one statutory amount of redundancy. In the case of our client £800 (for six years) and then offers to sell their jobs back at £2,000—this is called a franchise. He can also buy the milk float and thereby receive the right to sell the goods supplied by that dairy. In the case of our client he raised the loan to buy his job back but the firm would not sell him his round and sold the franchise to another man who had only 12 months' association with the firm. As a token attempt to assuage their guilt they offered him employment on another round to the south of Redditch, at a depot approximately 13 miles from his home.
There is no public transport at 5.30 am and our client does not have a car that is 100 per cent. reliable. He can either cycle, bus or get a lift to his present depot, which is three miles from his home in the Selly Oak constituency. He has a clean record (ie. no disciplinary proceedings against him). I do not think that anyone would reasonably say that by not taking the job in Redditch our client was making himself voluntarily unemployed but the unemployment benefit office saw fit to disallow unemployment benefit and, of course, the DHSS fall into line and disqualify SB".
That is allegedly an example of someone who has put himself out of work and who will now have to live below the safety net. That rock-solid example, which I have read verbatim, was sent to us by the family service unit in Birmingham. I need not dwell further on why we intend to vote against that regulation.
The Secretary of State, who graced us earlier with his presence, was complimented on his courage in trying to fight the cuts, but what are the Government trying to cook up? The House and the country are entitled to know, not by press leak but by statements made here.
On 25 July The Guardian ran a headline:
Fowler declines to lead revolt on cuts.
The story said that the Secretary of State
is expected to resist appeals to heroism by his Cabinet colleagues.
The front page of The Times on the same day carried the headline:
Dole benefits may be kept below cost of living",
and a paragraph in that story stated:
Specific reports that Mr. Fowler is contemplating resignation if the pressure grows too great were firmly denied yesterday. On the contrary, it was stated that he means to fight.
Who for—the social security beneficiaries or his own job? A headline in the Daily Mirror, again on 25 July, was:
Ministers 'may quit' in cuts fight.
Obviously, there is much talk between Ministers and journalists. The Daily Mirror story says that the Minister for Health and the Secretary of State
are said to be ready to fight to the point of resignation"—
not to resignation, but to the point of resignation. We know that the Prime Minister has more or less laid down the law on the uprating of benefits, and in a moment I shall remind the House of what she and her ministerial colleagues are on record as saying.
The Minister for Social Security referred to the safety net of supplementary benefit and, almost in passing, to the earnings-related state pension scheme, known in some quarters as the O'Malley Act. That Act of Parliament and the system of earnings-related state benefits have been, and are continuing to be, wrecked by the Government. Today's 30, 40 and 50-year-olds who think that they are paying an earnings-related contribution that will get them an additional earnings-related pension on top of their state pension which will be good enough to keep them off the means test, are under a sad delusion.
The linking of the state retirement pension to prices is a cut, because this year earnings are likely to rise by about 8 per cent. The upper and lower earnings limits on which the national insurance system is based are directly tied to the state retirement pension. Therefore, the money that flows into the national insurance fund flows in between those earnings limits which, now that they are linked to the pension, are no longer moving in line with earnings. As a result, not enough money will go into the national insurance fund, and people out of work will not have the chance to contribute more because a smaller portion of their incomes is liable to national insurance. Consequently, they are prevented from paying a proper contribution so that they get a proper pension when they retire.
That was a by-product of the Government breaking the link between earnings and the State retirement pension in 1980, and we are still waiting for them to say what they intend to do about it. If they leave it much longer—certainly for the lifetime of this Parliament—they will cause catastrophic damage to a system that will provide for 10 million people a pension that is above the means test and will get them off supplementary pension. It is something that they have paid for and contributed to and is related to their best 20 years of earnings. The scheme went through the House with the approval of the Conservative party.
The Government claim that they have done nothing to change the Social Security Pensions Act 1975. They are dead right. They have changed the Social Security Act 1975 by breaking the pension link with earnings. That is where the knock-over effect has come. One day soon, if not tonight, Ministers will have to come clean in relation to half the working population.
I want now to refer to what the Prime Minister has said and to what might be in waiting for pensioners next year. At Question Time on one or two occasions in the last few weeks the Prime Minister has been under pressure from Labour Members—and also from the right hon. Member for Chesham and Amersham (Sir I. Gilmour). He got his comeuppance at the end of Question Time, after the Prime Minister had avoided giving a commitment to protect, in line with prices, supplementary benefits to the unemployed. She said to the right hon. Member:
As my right hon. Friend will know, many of those who receive short-term benefits receive supplementary benefit if the amounts are inadequate for their purposes. For example, the unemployed often receive a rather larger proportion of their income from supplementary benefit than from unemployment pay. However, I cannot go further than the promises I have given upon which"—
and here she put in the knife—
my right hon. Friend fought the last election." — [Official Report, 14 July 1983; Vol. 45, c. 1022.]
The right hon. Gentleman has not come to the House tonight to deliver one of his speeches, so I shall make one for him. The Tory manifesto, on page 26, boasts:
Supplementary benefits, too, have been raised ahead of prices.
We are talking of the safety net below which no person would be expected to survive—supplementary benefit, means-tested. In the last few years there have been frequent assurances by Ministers. For example, the present Secretary of State for the Environmment said:
The guarantee that really matters is the guarantee against rising prices … long term benefits, as well as short-term benefits, should be increased at least in line with the movement of prices." — [Official Report, 13 June 1979; Vol. 986, c. 439.]
The then Chancellor of the Exchequer—now Foreign Secretary—said that
any civilised society should provide a safety net below which a poor person's standard of living should not fall.
In the same debate he said:
Accordingly, we propose that supplementary benefit rates, too, will be increased next November in line with the projected level of prices."—[Official Report, 26 March 1980, Vol. 981, c. 1458–9.]
The then the Secretary of State for Social Services, now Secretary of State for the Environment, said:
The Government are determined to maintain the safety net for the poorest people and accordingly the scale rates of short-term supplementary benefit will be fully price-protected".[Official Report, 27 March 1980; Vol. 981, c. 1659.]
The same right hon. Gentleman, on Second Reading of the Social Security (No. 2) Bill in 1980, which cut 5p in the pound off five different benefits and abolished earnings-related supplement, causing the unemployed a loss of £11 a week, said:
In particular, we will ensure that retirement pensions are protected against rising prices, that needy families with children are given extra help through family income supplement and the child addition for lone parents, and that the safety net below which none shall fall is maintained intact and fully price protected." — [Official Report, 15 April 1980, Vol. 982, c. 1033.]
I shall not refer to some of the other quotations that I intend to use because I want to refer to one that is nearer home. The statement was made before the general election, and the Prime Minister has clearly shown that she has changed her mandate during the election. The then Chancellor, the present Foreign Secretary, said in his Budget statement:
While we need to ensure that social security benefits go to those most in need",
he was concerned that people should not be discouraged from saving. He was making his point about the change from £2,000 to £3,000 for the capital limit of supplementary benefit. He had already claimed:
The uprating this November will be based on the rise in prices in the 12 months".—[Official Report, 15 March 1983, Vol. 39, c. 143–4.]
Let us not argue about May to May or November to November; it was just the "rise in prices". To avoid any doubt, I shall give one quote since the election, from the present Secretary of State who said:
However, in the case of supplementary benefit, which goes to those most in need, I propose to increase all scale rates, including those for supplementary pension, by a higher amount of 4–3 per cent."—[Official Report, 23 June 1983; Vol. 44, c. 162.]
That is basically in line with prices.
What I, my right hon. and hon. Friends and the country are entitled to know is why the Prime Minister will not give a straight answer when she is asked a straight question. Given all those statements from her Ministers, all of whom are still in her Government, why can she not bring herself to say that the safety net for the poor, which is supplementary beenefit, below which none shall fall, and which is for the most needy people in our society, will be protected in line with prices? If she cannot or will not say that, it is incumbent upon the Under-Secretary, given his record before he became a Minister and, in many respects, his record since becoming a Minister, to make that statement. He should tell the House that all the quotations that I have read to the House, directly from Hansard, are still Government policy. They were Government policy when they were made from the Dispatch Box and he should say that they remain Government policy today. If he does that, we can call upon him to resign when the Government start to cut benefit.
There is much uncertainty, which has been started by the Prime Minister and fed by the Chancellor of the Exchequer, who has made it clear that he thinks that the unemployed are getting too much. As my hon. Friend the Member for Dunfermline, East said earlier today in his maiden speech, when he quoted the article written by Sam Brittan — that article is lost to the readers of the Financial Times, but gained by those who receive those little circulars that travel around the City and occasionally find their way into this place—it is unethical to tackle the problem that the Government think that they have by cutting the income to the unemployed. As the Prime Minister has said, the vast majority of the income to the unemployed is means-tested supplementary benefit. It would be a moral outrage for the Government to change this, having claimed in their manifesto that supplementary benefits have been raised above prices, the implication being, "Our record is good, vote for us and we shall carry on doing this great job." That is the inference that anyone reading the manifesto would rightly draw.
If the Under-Secretary says nothing else in the next 20 minutes or so, we should like him to make that statement. We shall vote against the resolution that cuts supplementary benefit to the so-called voluntarily unemployed, but at least some of those who live on means-tested benefits, on the edges and just below the line of poverty, may be able to live and sleep a little more easily for a few more weeks.
In the language of the House, we have had a wide-ranging debate, one commensurate with the breadth of the orders and regulations—all eight complicated sets of them.
I associate myself with what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and a number of hon. Members on both sides of the House have said about the impressive maiden speech of the hon. Member for Dunfermline, East (Mr. Brown). So many compliments have been paid to him that it would be almost superfluous for me to add to them, but it was just the speech that an hon. Member should make for his maiden speech, not because I agreed with every word of it — the hon. Gentleman would not expect that—but because it was wide ranging, powerful and formidably argued. It is clear that we have a significant addition to the potential contributors to our social security debates.
I sense from the debate that there is increased interest and greater expertise in social security matters on both sides of the House. That is likely to improve our debates, even if it makes them more uncomfortable for Ministers. For once, the complaint of the hon. Member for Pontypridd (Mr. John) about the lack of time for the debate, which we have noted, is justified. In the past, we have had complaints about lack of time and then found that the Opposition Whips have had to make desperate attempts to drag hon. Members into the Chamber to spin out time at the end of a debate.
I start by taking up the points raised by the hon. Member for Perry Barr, lest it be thought that I might be tempted to dodge them. As far as I could judge, he read out accurately a number of reasonable statements which accurately expressed what the Government were doing in a series of upratings, including the present one, over a, long period. As he knows, because of the Rossi index—I see that its progenitor has modestly stayed away — the increase in supplementary benefits this year is larger, at 4·3 per cent., than the increase in other benefits. That is a fact. I state it and restate it and, in that sense, confirm the statements read out by the hon. Member for Perry Barr.
However, the hon. Member, when referring to the Conservative manifesto, neglected to say that the statement of fact about supplementary benefits came after a sentence which specifically limited our pledge to pensions and other linked long-term benefits. There is nothing sinister about that. The Government have made it clear for many years that they do not think it right, in difficult economic circumstances, to continue piling pledge after pledge on those that have already been made and commit Governments for all time, regardless of circumstances that cannot be forecast.
The only sensible thing for me to say to the hon. Member for Perry Barr is that the next uprating is nearly 11 months away and that it would be irresponsible and wrong for any Government to start making new commitments about the nature of that uprating. I remind Opposition Members that their profligate tendencies to make wild promises about social security spending are one reason why they are in opposition and we are in government.
It is tempting to range widely and to avoid some of the difficult detailed questions that have been put to me. I hope that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and my hon. Friend the Member for Kensington (Sir B. Rhys Williams) will forgive me if I do not follow them into the total reform of the social security system that they advocated. I have little more than 15 minutes left before the end of the debate.
The hon. Member for Pontypridd, my hon. Friend the Member for Kensington and the hon. Member for Gower (Mr. Wardell) mentioned incentives to work and the earnings disregard, as did the hon. Member for Perry Barr when talking about the position of single parent families, which we significantly improved in the uprating to which he referred.
Any improvement in earnings disregards must, by definition, mean extending additional benefit entitlement to those who are not the worst-off beneficiaries. By definition, they have other income. Therefore, at a time when we have to examine priorities carefully, we have generally taken the view in the past year that we should concentrate additional benefit expenditure on those who have no additional income. We must keep the position under review and I recognise the force of some of the points that have been made, but that is the basis on which we have operated. In all these issues the Government have to strike a balance between different and often conflicting considerations.
The hon. Member for Denton and Reddish (Mr. Bennett) spoke about the amount of unclaimed benefit. He complained that the current estimates, as he rightly said, go back to a survey that was mounted in 1979. An analysis of the 1981 family expenditure survey should be available shortly, and if it becomes available in the recess I shall try to write to the hon. Gentleman and pass on any information that he may find helpful. I accept that 1981 will still not be the perfect answer, but at least it is two years better than 1979, of which he spoke.
I come now to some of the more detailed matters that were raised, in particular those about the board and lodging regulations. My hon. Friend fully explained the background to the proposed changes in paragraphs 9(4) and 9(5) of the relevant regulations. The hon. Members for Pontypridd and for Gower spoke about unscrupulous landlords. The policing and control of housing standards is not a matter for the DHSS. To those who say to me, "You are just trying to push the responsibility on to local authorities," where it properly belongs, I reply, "What would you think if a beneficiary went to a DHSS office and said that he had found a room, and as he did not have the money to pay for it he wanted that office to pay for it, as he qualified, to which the DHSS office replied that it did not approve of the room, so it would not pay, and that he would have to find an approved room before it would pay for a roof over his head?" In my opinion, it would not be sensible or acceptable for the DHSS to choose what a claimant might do with his money. That, in effect, is what would happen if our local offices were asked to become the police of accommodation standards. However, I do not dismiss the anxiety. I simply say that it is a matter for the local authorities, as I think they themselves would recognise.
In answer to a comment of the hon. Member for Gower, I see no reason why the changes in the rules should affect the hostels that are provided by Women's Aid, or whatever. We hope that housing associations and similar bodies will consult about the setting of local limits. It is a matter for the local supplementary benefit officers, but I understand that the chief supplementary benefit officer will issue guidance on how the limits should be determined and will say specifically the local housing aid associations should be consulted. Similarly, we expect that the advice will suggest that benefit officers should review the limits at least annually, and more often if necessary because of local circumstances. I can give no guarantee about the local circumstances that the hon. Gentleman described, but there is certainly room for a summer and winter difference to be taken into account in the administration of the regulations.
Anxiety was expressed, quite forcefully, by the hon. Member for Pontypridd and my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) about certain aspects of the regulations. The hon. Member for Pontypridd referred to the administration. I entirely accept his argument, which was that of the social security advisory committee, that the new system will work as we intend only if the limits are properly set. I have already said that guidance will be issued by the chief supplementary benefit officer, and we are working closely with him to make sure that the new system works in the way that both the hon. Gentlemen and I would like. We are making arrangements to monitor the effects that the new limits have on claimants and the accommodation provided for them. Local limits will be set by reference to the charges made for that type of accommodation in the area. In response to my hon. Friend the Member for Saffron Walden, who was concerned about the speed of the monitoring and survey work and the effect on claimants, may I say that we hope it will be conducted with what, by the Government's standards, is real speed—that is, in August, September and October of this year. I hope that that will reassure my hon. Friend.
The hon. Member for Pontypridd referred to his doubts about the exclusion of claimants in receipt of the long-term supplementary benefit rate from the former list of those who qualified for an extension of some kind. Merely being in receipt of the long-term supplementary benefit rate does not necessarily mean that there are special housing needs, which is what the policy is directed towards. It is important to remember that single parents will benefit significantly if they qualify from improvements to the children's limits, which is one of the points on which we responded to the comments of the social security advisory committee. Children aged 11 or over will receive the adult local limit. Children under 11 will receive one ar d a half times the scale rate. That is in response to the SSAC and will help the position of single parents generally under the regulations. If the survey shows that there is a problem of the kind that the hon. Gentleman fears but which we do not expect at present, we would urgently consider what might be done.
My hon. Friend the Member for Saffron Walden, with his honourable, welcome and valuable connection with Turning Point and the work that it does for drug and alcohol abuse, asked me to make it clear within which category the sort of hostels with which he was concerned would come. There will be the limit for ordinary board and lodging accommodation but the extension of £15·35 will be available if the charge exceeds the local limit. My hon. Friend also suggested that there should be a separate category to cover the sort of hostels with which he is concerned in order to remove or ease the problems that are exercising him. The three categories that we have listed will cover the majority of claimants, but once again if the survey shows that that is not so we shall urgently consider what has to be done.
Lastly, my hon. Friend asked about the position of alcoholics and drug addicts who had been excluded from the transitional provisions that we have introduced to protect others who might be affected by the withdrawal of provisions in the current regulation 9(5). Our view is that those hostels have, in effect, benefited from what it may be unfair to call a loophole but which was certainly a wholly unintended effect of the regulations. Therefore, we did not think it right to provide transitional protection in those cases as distinct from the others. We are simply returning to the position as it was thought to be a few months ago, and I think that that is reasonable. Again, I can refer to the survey.
The board and lodging limits are an improvement and will bring additional help to important groups of claimants, particularly with the increased extensions. I am not in any way suggesting that Turning Point, or many other bodies, have behaved improperly or are necessarily charging too much for the services in their hostels. We are simply saying that the charges that they make include charges for purposes especially of rehabilitation and, in some cases, health care, which go beyond what the supplementary benefit system is properly intended, or ought to be expected, to meet. We are anxious to ensure that the risk does not arise whereby other authorities with clear statutory responsibilities to provide for rehabilitation and care would be in a position simply to pass their bills on to the supplementary benefit system. We do not think that that would be satisfactory.
Does my hon. Friend accept that there are certain categories in the amended regulations wherein the limit fixed will be higher than that which is likely to be fixed for those hostels that deal with drug addicts and alcoholics? If the Department can pay that, why cannot it recognise the special case of the drug hostels?
I shall consider my hon. Friend's point further. We need to monitor the changes carefully. It has not simply been our purpose to minimise: our bill. I hope that it is clear from what we have said tonight that we are concerned to ensure that there is adequate help and support available through the supplementary benefit system to meet the housing needs of those with supplementary benefit needs. We want to draw a sustainable line between the costs that should be met under supplementary benefit and those that should more properly be met by local authorities, and especially local authority social service departments. If we find that we have not achieved that, we shall reconsider the position.
Much of the debate has concentrated on the voluntary unemployment deductions. I am glad that there; was relatively little talk about the administrative difficulties of the system that have emerged, which no one is seeking to defend. My hon. Friend the Minister is making vigorous efforts to correct them.
I shall concentrate my remarks on the questions of principle and policy that arise in relation to the voluntary unemployment deductions. I was astonished by some of the remarks of Opposition Members, including those of the hon. Member for Dunfermline, East in his maiden speech. There was no recognition that the deduction is related to those who have left their jobs voluntarily or been sacked for misconduct. It is possible to argue about the machinery, but it has existed not only under this Government but under Labour Governments.
There appears to have been a challenge to the whole principle, and that goes beyond what the public or any Conservative Member would think reasonable. Is the hon. Member for Pontypridd suggesting that a man who leaves his work voluntarily and does not receive unemployment benefit should receive it? Is he saying that a man who insures against unemployment and then becomes voluntarily unemployed should nevertheless receive that insurance benefit? If so, that, is an extraordinary notion.
If the hon. Gentleman is not suggesting that unemployment benefit should be paid, how can it make sense to suggest that supplementary benefit should be paid so that anything that a man loses on unemployment benefit would be picked up on supplementary benefit? Under the regulations the withdrawal of unemployment benefit stands clear. It makes no sense to have a withdrawal of unemployment benefit if there is no penalty because supplementary benefit makes up the difference. I am astonished that Opposition Members should pursue that tack.
Another point that has not been properly explored is the categories of people who will be affected. My hon. Friend the Minister rightly mentioned the inspectors' report. In the years before 1980, when the Labour party was in office, the unemployment benefit deductions at the reduced level of 20 per cent, were going to only 2 per cent, of the relevant claimants. After our changes the figure jumped to 34 per cent. It is now suggested that if we move back from 34 per cent, it will mean that the wicked Tory Government are grinding the faces of the poor. Yet all we are doing is returning to the previous position.
Are Opposition Members saying that, although unemployment rose sharply under their Government, not only did they do nothing about the massive hardship but they did not even notice that it existed? All that we are proposing is a return to the position that existed in the supplementary benefit system when it was operated by the Opposition. That is a good illustration of the extent to which the arguments put forward by the Opposition tonight are bogus and do not hang together. They will be strongly rejected by Conservative Members.
That the draft Supplementary Benefit Up-rating Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Child Benefit (Up-rating) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Family Income Supplements (Computation) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Housing Benefits (Increase of Needs Allowances) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Pensioners' Lump Sum Payments Order 1983, which was laid before this House on 7th July, be approved.—[Dr. Boyson.]
|Division No.44]||[10 pm|
|Adley, Robert||Douglas-Hamilton, Lord J.|
|Aitken, Jonathan||Dover, Denshore|
|Alexander, Richard||Dunn, Robert|
|Alison, Rt Hon Michael||Durant, Tony|
|Amery, Rt Hon Julian||Dykes, Hugh|
|Amess, David||Eggar, Tim|
|Arnold, Tom||Evennett, David|
|Ashby, David||Eyre, Reginald|
|Aspinwall, Jack||Fallon, Michael|
|Atkins, Robert (South Ribble)||Farr, John|
|Atkinson, David (B'm'th E)||Favell, Anthony|
|Baker, Nicholas (N Dorset)||Finsberg, Geoffrey|
|Baldry, Anthony||Fookes, Miss Janet|
|Batiste, Spencer||Forman, Nigel|
|Beaumont-Dark, Anthony||Forsyth, Michael (Stirling)|
|Bellingham, Henry||Forth, Eric|
|Benyon, William||Fowler, Rt Hon Norman|
|Bevan, David Gilroy||Franks, Cecil|
|Biffen, Rt Hon John||Fraser, Peter (Angus East)|
|Biggs-Davison, Sir John||Freeman, Roger|
|Blackburn, John||Fry, Peter|
|Body, Richard||Gale, Roger|
|Boscawen, Hon Robert||Galley, Roy|
|Bottomley, Peter||Goodlad, Alastair|
|Bowden, A. (Brighton K'to'n)||Gow, Ian|
|Bowden, Gerald (Dulwich)||Gower, Sir Raymond|
|Boyson, Dr Rhodes||Greenway, Harry|
|Brandon-Bravo, Martin||Gregory, Conal|
|Brooke, Hon Peter||Griffiths, E. (B'y St Edm'ds)|
|Brown, M. (Brigg & Cl'thpes)||Griffiths, Peter (Portsm'th N)|
|Bruinvels, Peter||Ground, Patrick|
|Bryan, Sir Paul||Grylls, Michael|
|Burt, Alistair||Gummer, John Selwyn|
|Butterfill, John||Hamilton, Neil (Tatton)|
|Carttiss, Michael||Hampson, Dr Keith|
|Chapman, Sydney||Hanley, Jeremy|
|Chope, Christopher||Hargreaves, Kenneth|
|Clark, Dr Michael (Rochford)||Harris, David|
|Clegg, Sir Walter||Harvey, Robert|
|Colvin, Michael||Haselhurst, Alan|
|Conway, Derek||Havers, Rt Hon Sir Michael|
|Coombs, Simon||Hawkins, C. (High Peak)|
|Cope, John||Hawkins, Sir Paul (SW N'folk)|
|Couchman, James||Hawksley, Warren|
|Crouch, David||Hayhoe, Barney|
|Currie, Mrs Edwina||Hayward, Robert|
|Dorrell, Stephen||Heathcoat-Amory, David|
|Heddle, John||Moate, Roger|
|Henderson, Barry||Montgomery, Fergus|
|Hickmet, Richard||Morris, M. (N'hampton, S)|
|Hicks, Robert||Morrison, Hon C. (Devizes)|
|Higgins, Rt Hon Terence L.||Moynihan, Hon C.|
|Hill, James||Mudd, David|
|Hirst, Michael||Murphy, Christopher|
|Hogg, Hon Douglas (Gr'th'm)||Neale, Gerrard|
|Holland, Sir Philip (Gedling)||Needham, Richard|
|Holt, Richard||Nelson, Anthony|
|Hooson, Tom||Neubert, Michael|
|Howard, Michael||Newton, Tony|
|Howarth, Alan (Stratfd-on-A)||Nicholls, Patrick|
|Howarth, Gerald (Cannock)||Normanton, Tom|
|Howell, Rt Hon D. (G'ldford)||Norris, Steven|
|Howell, Ralph (N Norfolk)||Onslow, Cranley|
|Hubbard-Miles, Peter||Osborn, Sir John|
|Hunt, David (Wirral)||Ottaway, Richard|
|Hunt, John (Ravensbourne)||Page, John (Harrow W)|
|Hunter, Andrew||Page, Richard (Herts SW)|
|Hurd, Rt Hon Douglas||Parkinson, Rt Hon Cecil|
|Jackson, Robert||Parris, Matthew|
|Jessel, Toby||Patten, John (Oxford)|
|Johnson-Smith, Sir Geoffrey||Pattie, Geoffrey|
|Jones, Gwilym (Cardiff N)||Pawsey, James|
|Jones, Robert (W Herts)||Peacock, Mrs Elizabeth|
|Joseph, Rt Hon Sir Keith||Percival, Rt Hon Sir Ian|
|Kellett-Bowman, Mrs Elaine||Pink, R. Bonner|
|Kershaw, Sir Anthony||Porter, Barry|
|Key, Robert||Powell, William (Corby)|
|Kilfedder, James A.||Powley, John|
|King, Roger (B'ham N'field)||Prentice, Rt Hon Reg|
|King, Rt Hon Tom||Price, Sir David|
|Knight, Gregory (Derby N)||Raffan, Keith|
|Knowles, Michael||Rhodes James, Robert|
|Knox, David||Rhys Williams, Sir Brandon|
|Lamont, Norman||Ridley, Rt Hon Nicholas|
|Lang, Ian||Ridsdale, Sir Julian|
|Latham, Michael||Robinson, Mark (N'port W)|
|Lawler, Geoffrey||Roe, Mrs Marion|
|Lawrence, Ivan||Rossi, Sir Hugh|
|Lawson, Rt Hon Nigel||Rowe, Andrew|
|Lee, John (Pendle)||Rumbold, Mrs Angela|
|Leigh, Edward (Gainsbor'gh)||Ryder, Richard|
|Lennox-Boyd, Hon Mark||Sackville, Hon Thomas|
|Lester, Jim||Sainsbury, Hon Timothy|
|Lewis, Sir Kenneth (Stamf'd)||St. John-Stevas, Rt Hon N.|
|Lightbown, David||Sayeed, Jonathan|
|Lloyd, Ian (Havant)||Shaw, Sir Michael (Scarb1)|
|Lloyd, Peter, (Fareham)||Shelton, William (Streatham)|
|Lord, Michael||Shepherd, Colin (Hereford)|
|Luce, Richard||Silvester, Fred|
|Lyell, Nicholas||Sims, Roger|
|McCrindle, Robert||Skeet, T. H. H.|
|McCurley, Mrs Anna||Smith, Tim (Beaconsfield)|
|Macfarlane, Neil||Soames, Hon Nicholas|
|MacGregor, John||Speller, Tony|
|MacKay, Andrew (Berkshire)||Spence, John|
|MacKay, John (Argyll & Bute)||Spencer, D.|
|Macmillan, Rt Hon M.||Spicer, Jim (W Dorset)|
|McNair-Wilson, P. (New F'st)||Spicer, Michael (S Worcs)|
|McQuarrie, Albert||Squire, Robin|
|Madel, David||Stanbrook, Ivor|
|Major, John||Stern, Michael|
|Malins, Humfrey||Stevens, Lewis (Nuneaton)|
|Malone, Gerald||Stevens, Martin (Fulham)|
|Maples, John||Stewart, Allan (Eastwood)|
|Marland, Paul||Stewart, Andrew (Sherwood)|
|Marlow, Antony||Stewart, Ian (N Hertf'dshire)|
|Mates, Michael||Stokes, John|
|Mather, Carol||Stradling Thomas, J.|
|Maude, Francis||Taylor, John (Solihull)|
|Mawhinney, Dr Brian||Taylor, Teddy (S'end E)|
|Maxwell-Hyslop, Robin||Tebbit, Rt Hon Norman|
|Mayhew, Sir Patrick||Temple-Morris, Peter|
|Mellor, David||Terlezki, Stefan|
|Merchant, Piers||Thomas, Rt Hon Peter|
|Meyer, Sir Anthony||Thompson, Donald (Calder V)|
|Miller, Hal (B'grove)||Thompson, Patrick (N'ich N)|
|Mills, Iain (Meriden)||Thome, Neil (Ilford S)|
|Thornton, Malcolm||Wells, John (Maidstone)|
|Tracey, Richard||Wheeler, John|
|Trotter, Neville||Whitfield, John|
|Twinn, Dr Ian||Whitney, Raymond|
|van Straubenzee, Sir W.||Wilkinson, John|
|Vaughan, Dr Gerard||Winterton, Mrs Ann|
|Viggers, Peter||Wintertor, Nicholas|
|Waddington, David||Wolfson, Mark|
|Wakeham, Rt Hon John||Wood, Timothy|
|Waldegrave, Hon William||Woodcock, Michael|
|Walden, George||Yeo, Tim|
|Walker, Bill (T'side N)||Young, Sir George (Acton)|
|Waller, Gary||Younger, Rt Hon George|
|Wardle, C. (Bexhill)||Tellers for the Ayes:|
|Warren, Kenneth||Mr. Trisan Garel-Jones and|
|Wells, Bowen (Hertford)||Mr. Archie Hamilton.|
|Abse, Leo||Coleman, Donald|
|Archer, Rt Hon Peter||Concannon, Rt Hon J. D.|
|Ashley, Rt Hon Jack||Conlan, Bernard|
|Ashton, Joe||Cook, Frank (Stockton North)|
|Atkinson, N. (Tottenham)||Corbett, Fiobin|
|Bagier, Gordon A. T.||Corbyn, Joremy|
|Banks, Tony (Newham NW)||Cox, Thomas (Tooting)|
|Barnett, Guy||Craigen, J. M.|
|Barron, Kevin||Crowther, Stan|
|Beckett, Mrs Margaret||Davies, Rt Hon Denzil (L'lli)|
|Beith, A. J.||Davies, Ronald (Caerphilly)|
|Bell, Stuart||Davis, Terry (B'ham, H'ge H'I)|
|Bennett, A. (Dent'n & Red'sh)||Deakins, Eiric|
|Bermingham, Gerald||Dewar, Donald|
|Bidwell, Sydney||Dixon, Donald|
|Blair, Anthony||Dobson, Frank|
|Boothroyd, Miss Betty||Dormand, Jack|
|Boyes, Roland||Dubs, Alfrud|
|Bray, Dr Jeremy||Duffy, A. E P.|
|Brown, Gordon (D'f'mline E)||Eastham, Ken|
|Brown, Hugh D. (Provan)||Edwards, R. (W'hampt'n SE)|
|Brown, N. (N'c'tle-u-Tyne E)||Evans, loan (Cynon Valley)|
|Brown, R. (N'c'tle-u-Tyne N)||Evans, John (St. Helens N)|
|Brown, Ron (E'burgh, Leith)||Fatchett, Derek|
|Bruce, Malcolm||Faulds, Andrew|
|Buchan, Norman||Field, Frank (Birkenhead)|
|Caborn, Richard||Fields, T. (L'pool Broad Gn)|
|Callaghan, Jim (Heyw'd & M)||Fisher, Mark|
|Campbell-Savours, Dale||Flannery, Martin|
|Carlile, Alexander (Montg'y)||Foot, Rt Hun Michael|
|Clark, Dr David (S Shields)||Forrester, John|
|Clarke, Thomas||Foster, Derek|
|Clay, Robert||Fraser, J. (Norwood)|
|Cocks, Rt Hon M. (Bristol S.)||Freeson, Rt Hon Reginald|
|Cohen, Harry||Godman, Dr Norman|
|Golding, John||Morris, Rt Hon J. (Aberavon)|
|Gould, Bryan||Nellist, David|
|Hamilton, James (M'well N)||O'Brien, William|
|Hamilton, W. W. (Central Fife)||Orme, Rt Hon Stanley|
|Hardy, Peter||Park, George|
|Harman, Ms Harriet||Parry, Robert|
|Harrison, Rt Hon Walter||Pavitt, Laurie|
|Hattersley, Rt Hon Roy||Penhaligon, David|
|Healey, Rt Hon Denis||Pike, Peter|
|Heffer, Eric S.||Powell, Raymond (Ogmore)|
|Hogg, N. (C'nauld & Kilsyth)||Prescott, John|
|Holland, Stuart (Vauxhall)||Radice, Giles|
|Home Robertson, John||Redmond, M.|
|Howell, Rt Hon D. (S'heath)||Rees, Rt Hon M. (Leeds S)|
|Hoyle, Douglas||Richardson, Ms Jo|
|Hughes, Mark (Durham)||Roberts, Allan (Bootle)|
|Hughes, Robert (Aberdeen N)||Roberts, Ernest (Hackney N)|
|Hughes, Roy (Newport East)||Robinson, G. (Coventry NW)|
|Hughes, Sean (Knowsley S)||Rogers, Allan|
|Janner, Hon Greville||Rooker, J. W.|
|John, Brynmor||Ross, Ernest (Dundee W)|
|Jones, Barry (Alyn & Deeside)||Rowlands, Ted|
|Kaufman, Rt Hon Gerald||Sedgemore, Brian|
|Kilroy-Silk, Robert||Sheerman, Barry|
|Kirkwood, Archibald||Sheldon, Rt Hon R.|
|Lamond, James||Shore, Rt Hon Peter|
|Leighton, Ronald||Short, Ms Clare (Ladywood)|
|Lewis, Ron (Carlisle)||Skinner, Dennis|
|Lewis, Terence (Worsley)||Smith, C.(Isl'ton S & F'bury)|
|Litherland, Robert||Soley, Clive|
|Lloyd, Tony (Stretford)||Spearing, Nigel|
|Lofthouse, Geoffrey||Straw, Jack|
|McCartney, Hugh||Thomas, Dr R. (Carmarthen)|
|McDonald, Dr Oonagh||Thompson, J. (Wansbeck)|
|McGuire, Michael||Tinn, James|
|McKelvey, William||Varley, Rt Hon Eric G.|
|Mackenzie, Rt Hon Gregor||Wainwright, R.|
|McNamara, Kevin||Warden, Gareth (Gower)|
|McTaggart, Robert||Wareing, Robert|
|McWilliam, John||Welsh, Michael|
|Madden, Max||Wig ley, Dafydd|
|Marek, Dr John||Williams, Rt Hon A.|
|Maxton, John||Wilson, Gordon|
|Maynard, Miss Joan||Winnick, David|
|Meacher, Michael||Woodall, Alec|
|Meadowcroft, Michael||Young, David (Bolton SE)|
|Mikardo, Ian||Tellers for the Noes:|
|Millan, Rt Hon Bruce||Mr. Harry Cowans and|
|Mitchell, Austin (G't Grimsby)||Mr. Frank Haynes.|
|Morris, Rt Hon A. (W'shawe)|