Orders of the Day — Disability Living Allowance and Disability Working Allowance Bill

Part of the debate – in the House of Commons at 7:01 pm on 21st November 1990.

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Photo of Paul Flynn Paul Flynn , Newport West 7:01 pm, 21st November 1990

The hon. Member for Eastleigh (Sir D. Price) ended his speech on a poetic note, referring to a wave coming in on the top of a tide. That metaphor is perhaps more helpful to Labour Members, as the present tide has defied the laws of nature and taken eleven and a half years to come in, whereas normally tides come in twice a day. Tides often have another unfortunate effect—they not only come in but go out, leaving a mudscape that is unsightly and ugly.

We must consider what is behind the Bill. One hates to be accused of being churlish, but much of it is cosmetic and its main effect is to recycle money. The hon. Member for Bolton, North-East (Mr. Thurnham), like many other hon. Members who have participated in the debate, has made a distinguished contribution and has a deep commitment to the needs of disabled people. Unfortunately, as he confessed, he was in some difficulty because he was expecting to speak tomorrow and had to rely on a handout from the Royal Association for Disability and Rehabilitation for most of his speech. He unfairly attacked my hon. Friend the Member for Oldham, West (Mr. Meacher) for referring to the finances of the Bill, which are absolutely crucial. Our 6·5 million disabled people have been waiting a long time for a Bill that is radical, progressive and fundamental. Those people, who have been short-changed by life or cheated by nature, have a right to expect something far better than the Bill. Without question, there are improvements in the Bill. Hon. Members have complained about how disabled benefits have worked, but some of the Bill's provisions will be effective.

There are two parts to any Bill—first, the philosophy of whether it will work and whether it is the right thing to do and, secondly, how it underpins measures and the generosity behind it. We hear daily from Conservative Members about the improving prosperity of our society, but what share of that is going to disabled people? The Bill paints a different picture. It is a means of recycling money. All disabled people have a complex income structure from multiple sources, but the Bill attempts to rob Peter to pay Peter.

"The Way Ahead" was part of the Government's much trumpeted process of targeting. The Government are brilliant at targeting income tax handouts on the best off, but the improvements in benefits for disabled people will be financed from existing benefits. That must be understood. Projecting forward is the only sensible way of gauging their benefits. These are wedge-shaped cuts. The point of the wedge is felt immediately and, although it may be thin and slight, it expands over the years and an enormous amount of money is involved.

If we are to make a sensible judgment, we must consider the other changes that the Government have made, often to little known benefits of which people are unaware. A Bill of this kind is heralded with much publicity and adjectival assault from the Government, but what effect have their other little cuts had? The disability working allowance is expected to be self-financing. The total cost of the allowance will be covered by the loss of other benefits paid to disabled people. From the Government's point of view, it is even better than that because the Government will profit from the additional £10 million income tax that recipients are expected to pay.

The disability living allowance will involve an estimated additional cost of £120 million in 1992–93—not a huge sum of public expenditure—rising to £240 million by 1993–94. After the first few years, that additional cost will be more than outweighed by the savings resulting from the other proposals in "The Way Ahead".

The biggest cut, which was made in the Social Security Act 1990, is the abolition of the earnings-related element of invalidity benefit. That is a bit of a mouthful and is little understood, but it is a vital lifeline to many disabled people. The earnings-related element was introduced by the Labour Government's Social Security Pensions Act 1975, which had all-party support but was savagely cut by the Social Security Act 1986, the effects of which were expected to save about £400 million per year by 2013 and £1 billion by 2003—far more than the amount needed to cover the entire cost of this Bill. According to Government figures in parliamentary answers, the abolition of what remained of the earnings-related invalidity benefit is expected to save a further £1·3 billion net by 2025–26.

The second major cut made by the Social Security Act 1990 as part of "The Way Ahead" package was the abolition of reduced earnings allowance for the victims of industrial injuries and diseases. Again, this was the culmination of a series of salami cuts in that benefit over the years. The abolition of what remained is expected to cut a further £130 million by 2001–02.

Much play was made of the changes in the disregard to help disabled people back to work. The Bill may have that effect, but another Bill which is to be brought before us next week cuts statutory sick pay and shifts the burden to employers. That must be a disincentive for employers to employ disabled people and will have a further balancing effect on any benefit from the changes in disregard.

The Government are entitled to argue, as I am sure that they will, that the money has to come from somewhere, but there are far better ways of obtaining it. The lady who was Prime Minister at 3.30 pm—so far as I know, she is still Prime Minister; I would not want my remark to cause alarm among Conservative Members—explained how the Government would make changes in terms of the waste of money on armaments in past 40 years. Despite the Gulf crisis and other dangers in the world, the peace dividend will result in major savings. Surely, therefore, the worst possible way to raise money to improve conditions for people with disabilities is the way that has been used by the Government, whereby benefits to which those people were already entitled have been taken away. That is like providing a starving child with a meal by taking away his shirt, or mending the walls of a house by taking stones from its foundations. The disability groups and the bodies which represent them will judge the Bill and the Government's record as unhelpful and ungenerous.