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Part of Orders of the Day — Social Security Bill – in the House of Commons at 8:24 pm on 20th May 1986.

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Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee 8:24 pm, 20th May 1986

Nearly 2·5 million pensioners will lose, 250,000 lone parents will lose, 100,000 low-paid families with children will lose, 60,000 sick and disabled persons will lose and 1·75 million other persons in different categories of need will lose.

Those are the Government's own figures. They exclude losses from the ending of single payments, which cost more than £300 million last year. Nor do they include the package full of nasties that the Government served up without notice and without consultation in the last week of the three-month Committee stage and afterwards. The Government tacked on to the Bill a savage new penalty for people who have been unemployed for more than six weeks after leaving a job for reasons that do not satisfy a DHSS official. The only intelligible justification which the Minister was able to offer the Standing Committee for that was that it was a means of saving another £30 million.

People on income support are now to be required to pay more of their mortgage interest, as half will no longer be covered by supplementary benefit as has always previously been the case. They will have to pay it out of money intended for basic needs. The Government have also cut out all of those people who previously qualified for industrial injury benefit but had an assessment of less than 15 per cent. disability. That still involves a serious accident. Another 180,000 people will lose, saving £155 million.

The Government have always said—the Secretary of State repeated it today—that there are three basic aims behind the Bill. I should like to explore them. The first is better targeting of resources on the poor. I refer the Secretary of State and others to the answer given to the hon. Member for Kensington (Sir B. Rhys Williams) in a parliamentary reply of 13 February. On the figures which the Government provided, it appears that two-parent families with two children, with £100 a week gross earnings or less, will lose. The highest losses are on earnings between £60 and £80 a week—they range from just under £8 a week to just over £9 a week. The picture is similar for three-children families on £110 gross or less. There are approaching 250,000 two-parent families on such low wages.

The losses faced by lone parents earning £100 a week or less are even greater, according to the answer received by the hon. Member for Kensington. They are as high as £11 on gross earnings of £60 a week or more. I do not see how those figures can possibly be considered compatible with concentrating resources on those in greatest need. It is the reverse.

The only people whom the Government have successfully targeted on are the rich—the top 5 per cent. who have received £3·5 billion in the past seven years in income tax concessions, to say nothing of capital tax concessions through weakening capital transfer tax, capital gains tax and abolition of the investment income surcharge, which benefits only those with more than £100,000 stashed away on the stock exchange.

Secondly, the Secretary of State said that the Bill would reduce complexity. I suggest that he has severely increased it, partly through the social fund, which will be an extremely complex mechanism, instead of the basically much simpler and fairer grants as of right, and through a manifold increase in means testing — abolition of universal benefits such as death grant and maternity grant.

Thirdly, the Secretary of State said that his aim was to ease the poverty trap. I put it to him that the Bill will substantially extend the poverty trap. The number of families or individuals who will lose more than 70p out of each extra £1 that they earn will double to 500,000. The number who will lose more than 60p in every £1, which is a higher marginal rate than is imposed on Britain's richest business men, will quadruple. So much for easing the poverty trap.

I should like to give a few examples of the Bill's effects. I shall limit myself to three. Miss F is a lone parent with an epileptic child for whom she receives a diet allowance of £35. Her current supplementary benefit entitlement before rent is £82·60 a week. Under income support, she would get only £49·90, as her child will not, it seems, qualify for the double family premium. She will lose £32·70 a week.

Mrs. T is a widow with severe disabilities. She suffers from arthritis, diverticular disease in the large bowel, incontinence and a suspected hiatus hernia. She is mostly bedridden and receives an attendance allowance. Her current supplementary benefit entitlement before rent is £52·10 a week, £15·60 of which is to meet her additional requirements. On the illustrative support rate which the Government have provided her entitlement would be £42·85—a loss of £9·25.

Mrs. W is a 74-year-old widow with Parkinson's disease. She receives the higher rate of attendance allowance and has a resident help as she would be unable to live on her own without care. She receives £42·90 towards the cost of that help and her supplementary benefit entitlement before rent is £79·40 a week. Under income support she would receive £42·85—a loss of £36·55 a week. In case anybody believes that that is an exceptional case, I draw attention to the fact that the Minister for Social Security admitted in Committee that 2,500 very severely disabled persons will lose between £50 and £60 a week under the Bill.