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Mr. Cryer : Was the Chancellor of the Exchequer misunderstood by all the reporters?
Mr. Moore : The unelectability of the Labour party is illustrated by the idiotic remarks from below the Gangway. We need no lectures from the Opposition about our record on pensions. It is an extremely unwise tactic for them to adopt because they can be nailed by the facts. I intend to ensure that the facts of our relative records are made clear. [Interruption.] The facts are clearly unpalatable to the Opposition.
First, under the Labour Government, pensioners' total income-- [Interruption.] I am not surprised to see the shadow Leader of the House leaving the Chamber. Under the Labour Government, pensioners' total income rose by a pathetic 0.6 per cent. per year--a total of 3 per cent. in the whole of Labour's period of office. We have equalled that total on average every year since we have been in office. Secondly, the average total income of pensioners has risen by 23 per cent. since 1979--twice as fast as for the population as a whole.
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Mr. Moore : I am always happy to welcome the hon. Gentleman. The truth may even help his digestion. [Interruption.] A course in wit from the shadow Leader of the House--what a perversion of the truth! Thirdly, the average gross income of a pensioner-- [Interruption.] There is plenty of time to bring out the unpalatable facts about the appalling record of this miserable Opposition when in government. The average gross income of a pensioner as a percentage of adult manual earnings was 55 per cent. in 1974. By 1979, it had declined to 53 per cent. By 1986, it had come back up, not just to 55 per cent., but to 60 per cent. That is quite a contrast.
Savings, too, are vital to the elderly as the reward for thrift. That is why elderly people are so vulnerable to inflation. They will never forget the Parliament under which inflation averaged 15 per cent. a year for five years so that income from savings fell by 3 per cent. per year. That is to be compared with an increase of 7 per cent. per year in the past nine years --a staggering 64 per cent. in all.
Looking at the pensioners of our country, I have great difficulty recognising the poverty-stricken stereotype that Labour Members love to portray, because it is simply not borne out by the facts. In 1979, 38 per cent. of pensioners were in the bottom fifth of national income distribution. Happily, the proportion has now fallen to 24 per cent. Everyone should welcome that crucial and major change in such a relatively short period.
We have always recognised that some pensioners do not fit the picture of rising prosperity that has transformed the lives of so many others. The House will be aware of the group to which I refer. They are the older pensioners-- [Interruption.] If the hon. Member for Newport, West (Mr. Flynn) will be patient, however difficult that may be for a Socialist, he will hear the facts. I refer to the older pensioners and the disabled who have little or no other income than their basic state pension. Many will have had their working lives disrupted by war and their savings battered by the rampant inflation of the 1970s. The present income support scheme already provides extra help for pensioners through the pensioner and higher pensioner premiums, currently worth £10.65 and £13.05 per week for single pensioners and larger sums for couples.
However, for some time we have been considering additional ways of helping that group of pensioners. I am delighted to tell the House that, as a result of that work, we have decided on the best way to channel significant extra resources to that group. Without the success of my right hon. Friend the Chancellor of the Exchequer and a successful economy, I should not be able to make this statement today.
Mr. Eric S. Heffer (Liverpool, Walton) : On a point of order, Mr. Speaker. Some of my constituents are down here today, trying to lobby hon. Members. They are not being allowed to come anywhere near the House, and when I went out to try to meet some of them I was informed by a young policeman, "Get over there on the right hand side." [Interruption.] Unlike many Conservative Members, I have been here for a long time. I have always known that the constituents of all hon. Members have the right to come to the House, go through Westminster Hall perhaps, and on to the Central Lobby to lobby their Member of Parliament. That is not being allowed to happen at the moment and people are not
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getting near the House of Commons. This is one further attack on the liberties of our people, and it must stop. Our constituents have a right to come here.Mr. Dennis Skinner (Bolsover) : On a point of order, Mr. Speaker.
Mr. Speaker : Was the hon. Gentleman here before?
Mr. Skinner : Yes, I was. I have just been out there. It has been made clear to us that several thousand students--and students are being hammered by the Government by the change in the student grant system and its replacement by loans--will not get into this building. Even those with a letter from a Member of Parliament are not being allowed into the building. If they had come from the City of London, they would no doubt have been allowed in at the drop of a hat. I want you, Mr. Speaker, to investigate whether instructions have been given by the Tory Government and their lackeys here today because they do not want to meet students who would give them an earhole bashing about the introduction of student loans. Were instructions sent out to stop those students?
Mr. David Shaw (Dover) : On a point of order, Mr. Speaker.
Mr. Speaker : Order. I am listening to a point of order, I do not expect another to be raised in the middle of it.
Mr. Skinner : Some students are saying loud and clear that Tory Members are refusing to go out and meet them, so one can draw the conclusion that they are so embarrassed by the Government's proposals that they are stopping students coming into this building. Mr. Nigel Spearing (Newham, South) rose --
Mr. Speaker : Order. Surely it would be better to get on with this debate. I shall take the point of order from the hon. Member for Newham, South (Mr. Spearing), because he gave me notice in the Chair.
Mr. Spearing : On a point of order, Mr. Speaker. I had intended to raise this point of order when the Secretary of State for Social Security had sat down, but in view of the points of order that have been raised by my hon. Friends the Members for Bolsover (Mr. Skinner) and for Liverpool, Walton (Mr. Heffer), I want to ask you to order an investigation.
Shortly before 3.30 pm I saw, from my office on the fourth floor of the Norman Shaw North building, a range of mounted policemen opposite an approximately equal number of students on the road. The mounted policemen charged those students on two occasions and, from my position, it appeared that the amount of force that was being used was out of proportion to whatever crime had theoretically been committed. I know that processions are not permitted in the precincts of the House, or near it, while the House is sitting. However, I am not convinced that the action taken on this occasion was concomitant with the rights of people to come to the House. I ask you to carry out an investigation.
Mr. Nicholas Bennett (Pembroke) : Further to the point of order, Mr. Speaker. The traffic jams around the Palace of Westminster stretch for at least 3 miles. I know that because it has taken me an hour and a half to come from south London. Students are blocking Westminster bridge
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at the moment by sitting on it. They are obstructing the passage of hon. Members to the House and preventing hon. Members from getting here so that we may speak to them. May I ask you to have a word with the Commissioner of the Metropolitan police when the demonstration is over, to discover the facts about the obstruction caused to hon. Members?Mr. Speaker : I am well aware that a large number of students are involved : I understand that there are several thousand. Equally I am aware that some of them have staged a sit-down and that that is causing a degree of confusion. I am not responsible for what goes on in the streets, other than the streets in the vicinity of the Palace of Westminster, but the hon. Member for Newham, South (Mr. Spearing) has raised an important point. I shall certainly look into it, and I shall be receiving reports.
Mr. Moore : I shall go back a fraction, because what I have to say has considerable relevance to a large number of pensioners. As I said, for some time we have been looking for additional ways of helping a specific group of pensioners. I am delighted to tell the House that, as a result of that work, we have been able to decide on the best way to channel significant extra resources to this group.
I am pleased to be able to tell the House that, subject to the necessary consultative procedures, we intend to introduce into the income support scheme a new and enhanced structure of pensioner premiums with effect from October next year. The new pattern of premiums will result in extra help, carefully focused on three groups--pensioners over 75 on income support, disabled pensioners over 60 on income support, and poorer pensioners in those groups whose income is at present just above the qualifying level for income support and who will get extra help through housing benefit. Let me take each of the groups in turn. Before doing that, however, let me make a general point, which may be helpful. I recognise the complexity of what I am about to announce. There will, of course, be time to discuss these matters further when the necessary regulations are brought before the House.
First, to help the over-75s, I propose to introduce a completely new premium, for those aged between 75 and 79. It will be worth an extra £2.50 for single pensioners and an extra £3.50 for a couple. That will, of course, be above the rates of pensioner premium announced for next April. The measure will raise the income support premium available to those aged between 75 and 79 to £13.70 a week for single people, and £20.55 for couples. In addition, there will be an improved premium for the over-80s. This will enhance the existing higher pensioner premium, which currently goes to some 550,000 pensioners. The over-80s premium will also be increased by £2.50 a week for a single person and by £3.50 for a pensioner couple. That means that a single pensioner over the age of 80 on income support will receive a premium of £16.20, rising to £23 for a married couple.
Secondly, I propose to enhance the disabled pensioner premium for those over 60 by £2.50 for single people and £3.50 for couples. The House will know that at the moment all disabled pensioners over 60 receive the higher pensioner premium. I propose that they should continue to receive the highest rate of premium at the same level as the over-80s.
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I estimate that the first two changes will result in around 940, 000 pensioners on income support receiving increases of £2.50 or £3.50 a week. What is more, those increases will be on top of the increases in income support that I recently announced, with effect from next April. Taken together, all the changes will give most of these pensioners an increase of around 10 per cent. in their benefit, and in some cases even more.Mr. Peter Thurnham (Bolton, North-East) : My right hon. Friend is giving good news for pensioners. Can he confirm that these are additional resources over and above what has been made known so far?
Mr. Moore : I am coming to that point, but I confirm that these are additional resources above and beyond all that I have announced. These proposals benefit not only the poorest pensioners, but those whose incomes currently place them just over the qualifying level for income support by raising the income level at which pensioners can obtain help for housing costs. As a result of the new structure of premiums, a further 1,030,000 poorer pensioners will receive additional help through housing benefit. In all, more than 2.5 million pensioners and their spouses will receive significant increases, at a total additional cost of some £100 million in 1989-90 and £200 million for a full year. That will be met from the reserve within existing planning totals. It is all new money for pensioners. These changes are in addition to those already announced in my uprating statement, and work on the uprating statement is already well in hand. I propose, subject to consultation with local authorities and to the passage of the necessary regulations, to introduce these changes in October 1989. This will enable my benefit officers and local authorities to give pensioners this extra help before the onset of next winter. These elderly and disabled pensioners can look forward to two upratings next year--one in the spring and the other in the autumn.
Mr. Hugh Dykes (Harrow, East) : Does my right hon. Friend agree that this dramatic announcement of additional assistance for pensioners will be widely welcomed? Allowing for the rate of inflation, which is under half the average when the Labour party was in office, it means that pensioners, whether receiving universal benefit or targeted benefit, have never been better off than now.
Mr. Moore : I am grateful to my hon. Friend, who has a great interest in this subject.
For most of those involved the increase will be automatic. They will not need to make any new claim or fill in any form. Some of my hon. Friends will be concerned about whether pensioners will claim the benefits to which they are entitled, so I propose to mount a publicity campaign to tell pensioners about the new arrangements that will come in next October. As part of that campaign we shall be writing to all pensioners over 75 whose address we hold, to explain the changes.
Mr. Robert Hayward (Kingswood) : Is my right hon. Friend aware that for some time I have been concerned about those immediately above income support level? Some of us represent constituencies where there are large numbers of such people. Can he clarify the details of the
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income support qualifications for those individuals, or will they be provided in papers at some later date? This is excellent news.Mr. Moore : I am aware of the need of hon. Members for additional details, and hon. Members on both sides will be pleased with the assistance that I shall seek to give them. Apart from this speech, details will be available immediately in the Vote Office and, with permission, I shall arrange for details to be printed in the Official Report.
Mr. Peter Hardy (Wentworth) : Can the Secretary of State assure the House that the additional moneys, welcome though they are, will not be at the expense of any transitional payment that currently applies? If transitional payments are reduced, the Government's generosity will be even more in question.
Mr. Moore : I am happy to assure the hon. Gentleman and the House that these payments will not affect transitional payments.
Sir Barney Hayhoe (Brentford and Isleworth) : As my right hon. Friend knows, I have commented on these matters recently. Today's announcement will be warmly welcomed by all who are concerned with these matters. Can he give some indication of the total annual cost of these substantial improvements?
Mr. Moore : I believe that I said it was nearly £200 million. The package of measures that I have just announced will bring extra help to more than 2.5 million of our least well-off pensioners. It will do so by directing almost £200 million to those who genuinely need it. I am confident that it will be warmly welcomed by the House and by the British people. But the new measures must be seen against the background of the steady increases in the living standards of pensioners as a whole. The new measures will tackle something which I thought was a tenet of the Labour party : they will give most help to those who need it most. That is one of our key objectives for social security, and we intend to see it through.
Following are the details--
Extra help for pensioners--the Government's proposals It is proposed that income support paid to pensioners will be restructured from October 1989. There will be new premiums for pensioners 75 and over, 80 and over and disabled pensioners. These will provide an extra £2.50 a week for single pensioners and an extra £3.50 a week for couples. This will be over and above the increases already announced for the April uprating. The same increase will apply to the housing benefit rates so that pensioners slightly above income support levels will also benefit through extra help with rent and rates or community charge.
Resulting Income Support Levels for Pensioners
£ per week
|Current |April 1989 |October 1989
----------------------------------------------------------------------------
Age 60-74
Single |44.05 |46.10 |46.10
Couple |67.70 |71.85 |71.85
Age 75-79
Single |44.05 |46.10 |48.60
Couple |67.70 |71.85 |75.35
Age 80 plus or Disabled
Single |46.45 |48.60 |51.10
Couple |70.05 |74.30 |77.80
Number who benefit in a full year
2 million pensioners claimants gain in a full year:
* 940,000 on income support (including 140,000 disabled)
* A further 1,030,000 on housing benefit (including 200,000 disabled)
Including husbands and wives, 2.6 million pensioners will be better off.
Cost
£95 million in 1989-90
£195 million in 1990-91
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Resulting Income Support Levels for Pensioners
£ per week
|Current |April 1989 |October 1989
----------------------------------------------------------------------------
Age 60-74
Single |44.05 |46.10 |46.10
Couple |67.70 |71.85 |71.85
Age 75-79
Single |44.05 |46.10 |48.60
Couple |67.70 |71.85 |75.35
Age 80 plus or Disabled
Single |46.45 |48.60 |51.10
Couple |70.05 |74.30 |77.80
Number who benefit in a full year
2 million pensioners claimants gain in a full year:
* 940,000 on income support (including 140,000 disabled)
* A further 1,030,000 on housing benefit (including 200,000 disabled)
Including husbands and wives, 2.6 million pensioners will be better off.
Cost
£95 million in 1989-90
£195 million in 1990-91
3.50 pm
Mrs. Ann Clwyd (Cynon Valley) : On a point of order, Mr. Speaker. I have just returned from witnessing the peaceful demonstration by students outside the House. The House should have an urgent statement from the Home Secretary about the unnecessary violence that has been used against those students and the unnecessary brutality to women students, with four or five policemen needed to drag one woman across the road. When officials of the National Union of Students were trying to get the crowd to move back, the police horses were moved in without warning. Two Tory voters came up to me, introduced themselves, and said that they had seen such events in Fascist countries but had not believed that they could happen in a country such as Britain. The Home Secretary should be asked to come to the House to make a statement on the tactics that were chosen for this demonstration. It is outrageous.
Mr. Speaker : I do not know whether the hon. Lady was here a moment ago when another hon. Member raised that point with me, in relation to events outside Norman Shaw, North. I have already said that I shall send for a report on the matter.
3.51 pm
Mr. Robin Cook (Livingston) : The Secretary of State made two important announcements. The first was that we will have a Bill on social security that will be fashioned further to restrict entitlement to unemployment benefit and social security for those who are unemployed by tackling the availability for work test. I note the Secretary of State's assent that that is his intention. That Bill will build on a precedent that occurred in the previous Session, when a similar Bill was devised to remove benefit from another group of unemployed claimants--16 and 17-year-olds-- all of whom have lost benefit since the beginning of the summer recess.
Those young people lost benefit because of a pledge that was given to the House when we debated the Bill, that there would be a YTS place for every 16 and 17-year-old who lost benefit. On Second Reading, in Committee and
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on Report we warned the Secretary of State that that guarantee would not be met. I regret to inform the House that we were correct. The Government have admitted that we were correct by conceding that on 9 November more than 13,000 16 and 17-year-olds who were looking for YTS places had not been provided with them.There is a cruel dimension to those figures in relation to the north-south divide. Most of the teenagers who are looking for places but cannot find them live in constituencies represented by Labour Members in the north- west, the north-east, central Scotland and south Wales--areas of high unemployment. Teenagers must suffer further discrimination because they come from areas of social deprivation. Half the 13,000--6,600--are in Scotland. One of them, a teenage girl in Edinburgh known to me, has just lost her bridging allowance, which ran for eight weeks from the end of her entitlement to benefit on 12 September. In those eight weeks she turned up and sought interviews for eight YTS places, and on each occasion found that they had been filled. Despite those desperate and serious attempts to find a place, 10 days ago she lost all entitlement to any income support and for the past 10 days has had no cash for food or fuel--that is in one of the coldest periods that we have had this year--and she is now left completely destitute. That girl had seriously looked for work, but the Government could not provide her either with work or with a traineeship. Against that background, I can promise the Secretary of State that if he brings forward a Bill designed to inflict that same humiliation and hardship on larger numbers, the Opposition will resist it entirely.
The Secretary of State also made another major statement in relation to those at the other end of the age spectrum--pensioners. We are, of course, aware of the genesis of his statement. Curiously, the figures and the new measures that he announced today were omitted from the uprating statement only three weeks ago. It is rather surprising that, given this extra £200 million from the back pocket and all this additional largesse to pensioners, the Secretary of State could not find a couple of minutes in the uprating statement to include any reference to it.
We know that the origins of today's statement do not rest with the uprating exercise in the Department. The origins of today's statement can be traced to the lucubrations of the Chancellor before the Sunday lobby a couple of weeks ago.
Mr. Moore : The hon. Gentleman and I have known each other for some time. He will expect me to say this carefully. I have been working on a package of measures for poorer pensioners for a considerable time. I repeat that. Knowing the right hon. Gentleman as well as I do, I do not imagine that he would like to continue ignoring that fact.
Mr. Cook : I assure the Secretary of State that I would not deny what he says. I am sure that he has been working on a package. I am sure that it featured in his discussions with the Chief Secretary. What was interesting was that that did not feature in his uprating statement to the House, from which we can only conclude that at the time that he was having his discussions with the Chief Secretary he was unable to persuade him quite so effectively as the Chancellor was able to persuade him on the Sunday morning when he woke up and read the Sunday papers.
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The Chancellor's observations are the backdrop to the statement that we have just heard because what the Chancellor spelt out was that the Government regard poverty among pensioners as the problem of a minority.Mr. Neil Kinnock (Islwyn) : A small minority.
Mr. Cook : A tiny minority. With characteristic fairness, my right hon. Friend does not go quite the whole way. The Chancellor described it as a tiny minority. He was perhaps unwise enough to make that observation immediately before the weather turned colder, when large numbers of pensioners will be driven to distraction trying to make ends meet in order to pay their heating bills, many of whom will fail. As a country, we have a death rate that increases by 20 per cent. in the winter months compared with the rest of the year. Other countries with much colder climates, such as Sweden, nevertheless manage to do much better and see an increase in their death rate of only 6 per cent. in the winter.
The explanation is simple. It is hard cash. Pensioners in Britain spend less on heating than other groups in Britain. Those in work spend more on heating. Pensioners spend less on heating not because they need it less-- they need it more--but because they can afford it less.
The hon. Member for Derbyshire, South (Mrs. Currie) understands that point. I would, in parenthesies, congratulate the Secretary of State. One effect of the recent ministerial changes is that he has the consolation that he no longer has ministerial responsibility for the hon. Lady. But the hon. Lady diverted us the other week by inviting pensioners to go to bed in a woolly nightcap because--on this matter the hon. Lady speaks with authority--one can lose a lot of heat through one's head. While her advice may be entertaining to us, to pensioners it is deeply insulting. It suggests that the rest of us can go to warm, well-heated bedrooms, but it is good enough for them to go to bed with tea cosies on their heads.
Who are the tiny minority who have a problem making ends meet and paying their heating bills? The week after the Chancellor's briefing, the Prime Minister put her own gloss on that minority, which I notice was picked up in the Secretary of State's targeting of his benefit. The Prime Minister said that only 18 per cent. of pensioners are on income support, from which I presume we are to conclude that they are the tiny minority who have difficulty making ends meet. They are overwhelmingly the group targeted in the statement that we have just heard. The Prime Minister was wise to say "only" 18 per cent., because we know that 27 per cent. of pensioners are eligible for income support.
The fact that 1 million pensioners would rather live below the breadline than submit to a means test is one reason why we in the Labour party do not accept that it is possible to end poverty in old age by a means-tested benefit. There will always be many pensioners who will put their pride before their purses.
One could argue that 20 per cent. is a minority, although it is not tiny. However, another 30 per cent. are only 40 per cent. or less in income terms above the breadline of income support. I presume that we are to conclude that they have no difficulty making ends meet. That must be the logic of the Chancellor's and the Prime Minister's observations. If we add in that 30 per cent. to
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the 27 per cent., we are not talking about a minority, far less a tiny minority--it is a clear majority. So presumably that 30 per cent. has no difficulty in making ends meet.What is the income of those people? It is up to £20 to £30 higher than the income support levels. That figure exaggerates the extent to which they are better off than those on the breadline. That group of pensioners-- the 3 million who, as the Secretary of State observed, are not among the worst off--are the true victims of the means test. They are always on the wrong side of the means test. They were the victims of the cuts in housing benefit. They are the people who lost 85p for every £1 by which they were above that income support level. I must tell the House, in case hon. Members have failed to notice, that the entire relaxation and relief held out to that group by the announcement that we have just heard is that those people are now entitled to an increase in their housing benefit by a grand total of £1.95 a week, compared with the cuts of £12, £15 and £20 a week that my hon. Friends and I have seen among our constituents.
Those people were also the victims of the increases in health charges. I am grateful to my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley), who drew my attention to a constituent of his who visited him. She is a widow, with an income of £69 a week, who has just had to pay £8.75 for her most recent visit to the dentist. Those people are also the victims of new charges in the Health Service. Those 3 million will have to pay £10 the next time they go to the optometrist to have their eyes tested.
I notice that the Chief Secretary, when he addressed the Select Committee yesterday, described means testing as "a benevolent principle". The right hon. Gentleman should try to express that benevolent principle to the 3 million people who find constantly that the means test deprives them of help, although they are precisely the people who have taken the Government at their word. They have been prudent and provided for their old age but, as a result of that prudence and provision, they are no better off.
Mr. Timothy Raison (Aylesbury) : The House knows that I am not the greatest advocate of selectivity in some of those benefits, but is the hon. Gentleman really saying that the Labour party would abolish all forms of supplementary pension?
Mr. Cook : Of course the Labour party is not saying any such thing, nor was there anything in my remarks to suggest that. There always have been, and there always will be, means-tested benefits in any welfare system. What we object to is the way in which the Government are consistently failing to use universal benefits to provide a decent floor on which to top up those means-tested benefits. One can see the way in which the Government have failed to do that by looking at what has happened to the state pension.
The Secretary of State had some fun with one of my hon. Friends, accusing him of using selective statistics. Nothing that the Opposition have done can compare with the selectivity of the statistics that the Secretary of State provided on pensioners' income. He is responsible for the state pension. Between 1974 and 1979, the real value of the state pension increased by 20 per cent. In the nine years of this Government's period of office, it has increased by merely 2 per cent.
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The reason why it has shown such a small increase over the past nine years is that one of the very first acts of this Government was to smash the link between the pension and the rise in earnings. If that link had been maintained, single pensioners would now be £11 a week better off and married pensioners would be £18 a week better off. Compare and contrast that with the £2.50 that has just been announced for special categories of old-age pensioners. Compare also the £200 million that the Secretary of State has just announced with the £5,000 million that the Government saved by smashing the link with earnings. The Government have taken £5,000 million away and now invite us to thank them for giving back £200 million.Mr. David Shaw : Is the hon. Gentleman saying that it would be Labour party policy at the next election to restore the link, or, as happened in 1976, will the link be restored only when it can be done in such a way that eight months' inflation can be taken out of the calculation?
Mr. Cook : The Government have uprated the pension in precisely the same way as the Labour Government did when they introduced the link in 1977. The hon. Gentleman's question was fair. It is not something that I or any of my hon. Friends have tried to conceal. It appears that we have failied, but we have tried to get it across to every pensioner in the land that we would restore the link with earnings. That will be one of our major planks at the next election, and it is a plank with which we shall beat the Secretary of State about both ears.
Several Hon. Members rose--
Mr. Cook : I should like to make progress with my speech, so I shall not give way.
One of the reasons why we believe that it is not possible to end poverty in old age by means testing alone is that, inevitably with such means testing comes a stigma. Universal benefits go to everybody as citizens, and they can be worn as a badge of citizenship. Means-tested benefits go only to the poor, so they are a label of poverty.
Sometimes the Department of Social Security appears to go out of its way to rub in and stigmatise that poverty. I have a copy of form AG1, which pensioners and others who wish help with prescriptions on grounds of low income have to complete. It runs to 15 pages and has 18 separate parts. The most interesting feature about the document is that the income test for free prescriptions is the same as that for assistance to visit a relative in prison. The Department of Social Security, presumably to consolidate prices and the cost of the document, has provided a common form for applications for help with free prescriptions or with travel to visit a relative in prison. If one wishes to apply for help, one of the first things that one finds on page 1 is the advice :
"Claim now if you think you or your partner will need things like NHS prescriptions or are going to visit someone in prison." Confronted with that, thousands of pensioners in Britain will close up the form then and there and refuse to apply rather than submit to such a stigmatised test. That is why this is so important. If we are to end the poverty of those in old age, while allowing them to retain their dignity, it is vital, in addition to looking at means-tested benefits, to provide a decent universal flat-rate state pension. We approach the Government's commitment to means- tested benefits with some jaundice because we have
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had an opportunity over the past year to observe what happens to means-tested benefits under this Administration. We notice that they have a tendency to become even meaner. This debate comes at the start of a new parliamentary year, but halfway through the social security year. It is a convenient point at which to take stock of the changes that we have seen--particularly those in April. This debate is doubly convenient because the reply will be given by the architect of those changes.The then Secretary of State for Social Services, the right hon. Member for Sutton Coldfield (Mr. Fowler), will recall his constant promise that his reform of the social security system was the biggest for 40 years and that it had to stand the test of the next 40 years. Over the past couple of months I have often wondered what thoughts are passing through the right hon. Gentleman's mind as he notes the observations of his right hon. and hon. Friends, who appear to consider that his reforms have not stood the test of the first year. The Chancellor, in expansive form, suggests that the social security system needs major restructuring--so major that it will require a programme of re-education of Government Back Benchers. The Secretary of State for Social Security and his hon. Friend the Minister told the House that he did not make any secret of his belief that child benefit is not an effective way of helping the poor. That is perfectly true. I accept that the right hon. Gentleman has never made any secret of his distaste for child benefit. I am happy to assure him that I for one never believed the stories that he was fighting hard to uprate child benefit.
The difficulty is that the Secretary of State never shared his little secret before polling day. The author of the Conservative manifesto's comment on child benefit was not the Secretary of State for Social Security but his right hon. Friend the Member for Sutton Coldfield. His manifesto commitment was :
"Child benefit will continue to be paid as now, and direct to the mother."
The comma is important. We have it on the Chancellor of the Exchequer's authority that he is not able to go back on the manifesto because of the comma. When asked who was responsible for inserting the comma, the Chancellor replied :
"I don't know--not me."
Today, we have the author of the comma. The Secretary of State for Employment must be rueful that his most enduring legacy to his successor is a comma, without which his colleagues would not wait another 40 hours, never mind 40 years, before attacking the structure of child benefit.
The unfortunate feature of all this is that child benefit is the one thing that the right hon. Member for Sutton Coldfield got right. In his White Paper before the reforms, he presented the view : "Child benefit is simple, straightforward, well understood and preferred as it is. The case for changing it has not been made out." The question that I ask at this early point, so that the right hon. Gentleman may have an opportunity to reflect on it before replying, is whether he stands by that quotation ; or has he, too, been the subject of a re-education programme and does he now accept the case made by his right hon. Friend the Secretary of State for Social Security that child benefit should be frozen until death? I turn from the assurance of the right hon. Member for Sutton Coldfield to that of his successor, which has proved
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to be equally flexible. I remind the Secretary of State for Social Security that when the changes were debated in April, he promised the House that 88 per cent. of claimants would be no worse off. Two weeks ago, the National Association of Citizens' Advice Bureaux survey showed that four out of five claimants seeking help had lost money. The NACAB reported also that the elderly fared significantly worse.Mr. Ian Bruce (Dorset, South) : Surely it is not beyond the hon. Gentleman's logic or understanding that a person going to a citizens' advice bureau for guidance on social security benefits will probably be complaining about a reduction. Therefore, to find that 20 per cent. of such people are better off is a good rather than a bad thought.
Mr. Kinnock : But it is only a tiny majority!
Mr. Cook : I am glad that I let the hon. Gentleman intervene. He made precisely the point that I anticipated he would. If he bothers to refer to the NACAB survey--and it is obvious from his intervention and from the Secretary of State's response that neither of them has--he will find that it also anticipates his comment :
"It is an over-simplification to say that it is the casualties of the system who are seen by bureaux are unrepresentative. The numbers involved, the nature of the enquiries, the similarities with other research findings and the nature of the Citizens' Advice Bureaux Service--a generalist information, advice and advocacy service--all suggest that the circumstances identified will occur with sufficient frequency to warrant the Government giving them serious attention."
I concede that such an observation may not be spot on and that it may not be the case that 80 per cent. of claimants are worse off ; nevertheless, Ministers now know the figures. They promised the House that they would monitor the effects of the changes. Let them now come forward with the results of that monitoring. Let them say whether their figures are nearer the Government's claim that 88 per cent. of claimants are no worse off or nearer the NACAB claim that 20 per cent. are no worse off but that everybody else is worse off. Let us have the results of the Government's monitoring.
I do not accept the Government's suggestion that we should ignore the NACAB report because, as the Minister expressed it, it is old news. It is a snapshot of what occurred in April and May. I am puzzled as to why the Secretary of State should think that the situation has improved since then. On the contrary, for many individuals it has grown worse. There are, for example, all the claimants who lost transitional protection.
I refer to the case of Mr. and Mrs. Summers of Warley. They are both in their fifties, they are in receipt of supplementary benefit and they are ill. They receive extra allowances for diet, heating, laundry and other additions on account of their illness. They made the mistake of marrying. It is instructive to see what has happened to them, under the party of the family, because they did so. Their marriage triggered a fresh assessment of their social security claims. As a result, they lost their entitlement to transitional protection, and with that all their extra allowances for heating, diet and laundry to which they were previously entitled. In a letter to me, Mr. Summers points out that, as a result of the introduction of the social fund, he had to borrow money to buy furniture when he married. The couple are now in debt. He writes :
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"We have been forced to go into debt and are now in a position where we can't make the repayments. We are in a terrible state and in deep trouble. We feel suicidal."Mr. and Mrs. Summers--who are now in a terrible state, in deep trouble and feeling suicidal--idiotically and perversely figure among the 88 per cent. whom the Government claim are no worse off. Patently they are worse off. Patently, any candid monitoring of the system is bound to admit that the Government's figure was wrong and that since April the situation has, far from improving, deteriorated. There is one other area to which I shall refer before concluding, because it is one that we cannot ignore in any review of the year behind and the year ahead. I refer to those who last April were in receipt of housing benefit and the cuts that they have experienced. So great is their hardship and so severe their effects--which the Government failed to anticipate and about which they failed sufficiently to educate their Back Benchers in advance--that the Government were compelled to introduce an emergency scheme on transitional protection. It is highly relevant to all the fashionable chatter about targeting because transitional protection was targeted on only 350,000 of the worst cases. That is against the background of over 5 million people who lost housing benefit--and 350,000 out of 5 million is pinpoint targeting indeed.
It is constructive to note how the Government have succeeded with this precisely targeted benefit. The answer is, as so often, that they are missing most of the targets. Six months after the scheme was introduced, only 125,000 people are in receipt of transitional protection--one third of the original estimate. Two thirds of the original estimate are being missed out and are losing their transitional protection.
I make another prediction. During the next parliamentary Session, that figure of 125,000 will go down sharply. It will go down next April because the Government have announced what they are pleased to call an erosion factor. Next April there will be an erosion factor of £2, and it will be applied to everybody who is on transitional protection for housing benefit. The average amount that is being paid out in transitional protection is only £4. In other words, the average amount that is being received in transitional protection will be halved during the year and a large proportion of the 125,000 will be removed from protection altogether.
Ms. Dawn Primarolo (Bristol, South) : As a result of the housing benefit changes, a single parent with dependent children has lost £16 a week. She applied for transitional protection and was granted the grand total of 98p per week. That left her £15.98 worse off per week as a result of the housing benefit changes. How will she be affected by what happens next April--by the erosion factor of £2 that my hon. Friend mentioned? Where is her protection?
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