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Social Security

Part of Ways and Means – in the House of Commons at 10:15 pm on 20th December 1983.

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Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North 10:15 pm, 20th December 1983

Yes, his minder, as the Opposition recognise. However, when we look at all social security benefit expenditure, the balance in recent years has been moving from the contributor towards the taxpayer. Over recent years we have moved to more non-contributory benefits. The hon. Member for Birkenhead raised the point last year. He is always consistent, which is why I am stressing this point, otherwise, he will ask me questions towards the end. He may still, but I make that point now.

It means that 50 per cent. of total social security expenditure comes from the state as against only 45·1 per cent. in the last year of the Labour Government in 1978–79. In 1984–85 we are reducing this to 49 per cent., a reduction of 1 per cent. It will still mean that the proportion of total social security expenditure that will come directly from the state and not the contributors will be 3-9 percentage points higher than in 1978–79. I mention this because I am sure the hon. Member will take the matter up at some later date, if not tonight. I wish the hon. Member would listen because I always find his arguments interesting and stimulating, and it helps if we are talking about the same thing from time to time. I would be delighted to debate on some platform the question where we are as compared with where Beveridge intended us to be because, with all this contributory and non-contributory argument, I can think of no one better to debate it with than the hon. Gentleman.

We may need a debate as to how the percentage provided by the state compared with the percentage intended by Beveridge. The share covered by the state has greatly increased since the 1960s from 34·9 per cent. in 1965–66 at the time of the Labour Government to 50 per cent. in 1983–84. All we shall do by this 2 per cent. reduction in the Treasury supplement is to reduce to 49 per cent. the amount coming from the state as its share of the global expenditure on social security. One major difference is that we now have an openly pay-as-you-go scheme as against the actuarially based scheme intended at times by Beveridge, and there has been a massive growth in Exchequer-finance expenditure.

Those are the changes that we are proposing. For the first time in several years, it is not proposed to increase the class 1 or class 4 contribution rate, and I believe this will be as welcome to the majority of hon. Members present as it is to employers and employees.

The two orders and three sets of regulations are the result of a necessary exercise in care and maintenance to keep the national insurance contributory system up to date and to make sure that money is available to pay for benefits. It is on this basis that I commend them to the House.