Benefits (Value)

Oral Answers to Questions — Social Security – in the House of Commons at 12:00 am on 2nd November 1992.

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Photo of Robert Wareing Robert Wareing , Liverpool, West Derby 12:00 am, 2nd November 1992

To ask the Secretary of State for Social Security if he will make it his policy to ensure that in the next upgrading of social security benefits their real value will be maintained.

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

The annual statement on those benefits will be made in due course.

Photo of Robert Wareing Robert Wareing , Liverpool, West Derby

The Government were not so coy last April about explaining their public expenditure plans when the Tory manifesto stated that the real value of state pensions against price rises would be maintained. How can any civilised Government seek to sacrifice the aged and the disabled on the altar of their own economic incompetence? Can the Secretary of State explain to the House how the under-indexation and taxation of invalidity benefits can stimulate or help to stimulate economic activity?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

The hon. Gentleman will recall my telling the House some Question Times ago that although there would doubtless be speculation about every conceivable benefit during the course of the expenditure round, I did not propose to comment on such speculation until the round was over, when the House would be told, in full, the details of what we propose.

I shall not take lessons from the Labour party on the treatment of the elderly—a party which wiped out the savings of pensioners by a quarter in a single year, broke its pledges on uprating benefits, cut the real value of pensions by 6 per cent. and is now proposing to means-test pensions.

Photo of Charles Hendry Charles Hendry , High Peak

Will my right hon. Friend confirm that since 1979 the Government's expenditure on social security has gone up by 50 per cent. in real terms and expenditure on the long-term sick and disabled has gone up by 170 per cent? Is that not a cast-iron demonstration of the Government's determination to look after those in most need?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

I have some sympathy with my hon. Friend. I am often not recognised, but at least I am not mistaken for a socialist. Of course, my hon. Friend is right. The Government have increased spending on the poor, the sick and the elderly by more than a half. We have also helped disabled people. We have spent almost three times as much as the Labour Government and are helping four times as many people with mobility allowances and six times as many with attendance care—so we do not take lectures from the Labour party.

Photo of Frank Field Frank Field , Birkenhead

As people on benefits are generally poorer and as poorer people have gained the smallest increase in their living standards since 1979, will the Secretary of State tell us what support he will have for defending their living standards when he raises their needs around the Cabinet table?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

Very considerable support. As the hon. Gentleman will see from our record, it is obvious that we have endeavoured to channel money to those in greatest need—I am thinking of the extra £600 million a year that goes to families in need, the introduction of family credit and the help given to older and poorer pensioners in a variety of ways. We believe that we should try increasingly, as we improve the benefit system over the years, to focus help on the most needy.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

Does my right hon. Friend agree that since 1979 an extra £700 million has been given to help the poorer pensioners? Is that not a splendid example of the Government's commitment to help those pensioners most in need?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

That is absolutely right. One reason why we have had to help those who retired before 1979 is that they saw their savings wiped out under the Labour Government's inflation. Any party that is a friend of inflation is an enemy of the poor.

Hon. Members:

The hon. Gentleman is on the wrong side of the House.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I know precisely which side of the House he is on.

Photo of Mr Archy Kirkwood Mr Archy Kirkwood Liberal Democrat Chief Whip

I am on the right side. I take up the question raised by the hon. Member for Birkenhead (Mr. Field). Will the Secretary of State say what cognisance he will take of the household below average income statistics from 1979 to 1989, which show that people in the lowest tenth of income distribution saw their real income, excluding housing costs, fall by 6 per cent., whereas the national average in that period was an increase of some 30 per cent? Surely, that must have some bearing on the annual uprating statement, which we anticipate in the next few days. [Interruption.]

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

I am of course grateful to the hon. Gentleman for his ongoing support. The figures require careful examination. In the lowest tenth of the income distribution, for example—the figures come from the family expenditure survey—half a million people are recorded as having zero or negative income. However, when their expenditure is examined, it is found to be greater than that of the average person. That is why we are producing some revised and improved figures, which were originally prompted by the Select Committee. Those figures will be published in future. They will give a much better guide to incomes, rather than the expenditure of lower-income families.

Photo of Mr John Marshall Mr John Marshall , Hendon South

Does my right hon. Friend agree that the greatest threat to those who receive unemployment benefits would be the introduction of a national minimum wage and the imposition of the social chapter, both of which would drastically increase unemployment?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

That is correct. There is no doubt that in a particularly tough world economic climate the consequences of such steps would be even graver. I recall that when my right hon. Friend the Prime Minister rightly said "non" to the social chapter, he was criticised by Mr. Delors, who said that we were thereby making this country a paradise for investors. So we are. That is the best source of future jobs and the best kind of help for those who are unemployed and who want to get back to work, as the vast majority of them do.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I recognise the reasons for the right hon. Gentleman's caution about the prospects, given the bitter infighting in the Cabinet over the public expenditure round, but does he not think that manifesto promises deserve some respect? Would it not be wise to end the speculation by confirming now that the specific promises on child benefit and retirement pension will survive the present shambles? If the right hon. Gentleman wants to maintain his cherished reputation for anonymity, he would do well to dismiss the suggestion in The Times leader today that income support, invalidity benefit and other benefits are to be uprated by 2 per cent. only. Will he note that a sense of outrage will be felt far beyond Opposition Benches if those on benefit are put in the firing line in order to save the Chancellor from the consequences of his own incompetence?

Photo of Peter Lilley Peter Lilley Secretary of State for Social Security

Taunts about anonymity come rich from someone whose only claim to fame is that he is less well-known than I am. The hon. Gentleman knows full well that I will not spell out the position on any of the items on which there has been speculation until the round is over and the results are announced. When it comes to election pledges and promises, I recall that before the election the Labour party was keen on universal benefits and said that it would upgrade pensions immediately by £5 for a single person and £8 for a couple. Suddenly, after the election, during the leadership contest, the leader of the Labour party realised that he could no longer get by by raising taxes and he decided to recycle benefits. The leader of the Labour party wanted the hon. Gentleman to consider means-testing every single universal benefit—some changes in pledges!