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Part of Orders of the Day — Social Security Bill – in the House of Commons at 9:12 pm on 20th May 1986.

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Photo of Mr Ralph Howell Mr Ralph Howell , North Norfolk 9:12 pm, 20th May 1986

I shall support the Bill, but with considerable reluctance, because the Government have made a genuine effort to limit the ever increasing cost of the welfare system—I believe that that has to be done—and because the Opposition have shown no concept of responsibility and are constantly asking for more to be spent in every direction. It is no exaggeration to say that the cost of their programme would put VAT up to 41 per cent.

I believe that we have missed a great opportunity to reform the entire welfare, taxation and employment system. We held the various reviews but, unfortunately, the advice given was ignored. I believe that we will very much regret that we did not heed those who called for a unified system. It is ridiculous to go on taxing the lower paid and giving benefit at the same time.

I have much sympathy with my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden). This Bill will not be remembered. It will not be the great new Beveridge that we might have had and should have had 40 years on. In fact, if we had implemented the Beveridge report as it was first written we could have achieved a great deal.

One of my chief criticisms is that we are saying that we shall give income support and family credit on after-tax income. That makes nonsense of the whole thing. How can it make sense to tax the low paid to such an extent that they need Government support to bring their income back to a reasonable level? We should find a way of raising tax thresholds considerably, so that no one who pays income tax needs extra help from the Government. Government support should be concentrated on the very low paid. There should never be any question of taxing such low incomes.

This Bill will not eliminate the poverty trap or the unemployment trap. It may stop people losing more than 100 per cent. of their extra earnings, but that is not much help if they lose 99 per cent., 90 per cent., 80 per cent., or even 70 per cent. A great many people will lose unacceptably high levels of extra earnings.

Another of my chief criticisms is that the opportunity to offer training to all between 16 and 18 should have been taken, and benefit should be withdrawn. It is wrong to continue to give young people the choice of accepting benefit and doing nothing, or going in for YTS or other training. We should be firm, and withdraw benefit. In other countries, that is acceptable. In Switzerland no benefit is paid until the person is 20, or, if he is in further education, until he is 25. The situation in Sweden is similar.

We shall also still pay benefit to anybody who happens to be in this country and without money. There is no reciprocal——