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Column 306clearing banks another £5 million, to set up a trust fund to enable Motability to increase its help to disabled people to obtain vehicles.
Mr. Scott : The right hon. Gentleman refers to a mere 354 people. A new scheme such as the independent living fund requires personal visits by social workers to applicants to assess their needs if they are to maintain their independence. For that reason the independent living fund has got off to a slow start, but the vast majority of the payments to those people are made on a weekly basis. Those payments will continue. I am absolutely certain that the independent living fund will be a very important part of the support that the Government give to the more severely disabled people.
Mr. Robert N. Wareing (Liverpool, West Derby) : How much has been spent on advertising the existence of the independent living fund? Does it match the £66 million that was spent on advertising shares in nine publicly owned authorities?
Mr. Scott : We are talking about a small number of people who need exceptional help in order to maintain their independence in the community. It is the responsibility of the independent living fund's trustees to advertise. They have placed advertisements in the specialist press so that social workers and others who are in touch with severely disabled people will know what kind of support can be given to the severely disabled. They are also responsible for distributing thousands of leaflets and posters to the offices that are in touch with severely disabled people in order to get the message across. The number of applications being made to the fund is a tribute to that publicity. I am quite confident that the independent living fund will form a very important part of the support for severely disabled people.
Mr. Michael Jack (Fylde) : Is my hon. Friend aware that in the Disablement Income Group's magazine Progress , No. 15, it is confirmed that by August of this year the fund had received 800 applications and that applications are now arriving at the rate of 25 a day?
I turn finally to a subject that I know arouses strong feelings in all parts of the House and that I understand is to be used as a pretext by the Opposition to vote against the second order. We all know why the hon. Member for Livingston should be seeking, with varying degrees of success, if I understand correctly the radio reports, to persuade his right hon. and hon. Friends-- [Interruption.] I am not surprised that Opposition Members do not like listening to this. Do they intend to troop through the Lobby and vote against pension increases and increased benefits for disabled people? Is that where the hon. Member for Livingston is to lead his Back Benchers? I am
Column 307astonished that he should be thinking along those lines, and I am not at all surprised that the Opposition should not like to have it spelt out to them.
The two best descriptions that I heard on the radio this morning about the path down which the hon. Member for Livingston is seeking to lead his Back Benchers were, first, that they have scored an own goal and, secondly, that they have shot themselves in the foot. I leave the House to decide which of those two descriptions is the best way to describe the path down which they are going.
This year--as last year--we have not uprated child benefit. However, the hon. Member for Livingston was wrong this morning to describe the stand taken by my right hon. Friend the Secretary of State as a freeze for all time. My right hon. Friend is under a duty year by year to review child benefit and to decide whether it should be uprated. It may be that next year or the year after it will be appropriate for child benefit to be increased and to be uprated in line with inflation, but this year we have decided to follow a different path.
Mr. Robin Cook (Livingston) : I am most grateful for this ray of hope at the end of the tunnel. Will the Minister explain precisely what considerations led to this year's freeze when the Chancellor of the Exchequer had a surplus of £10,000 million to give away in the Budget? What possible additional surplus would lead him next year to believe that he was able to afford an increase in child benefit?
Mr. Scott : We shall have to wait and see. If the hon. Gentleman, instead of enunciating the views that he expressed this morning on the radio, had read my hon. Friend's uprating statement, he would have understood perfectly the arguments that lay behind the decision not to uprate child benefit this year.
Mr. Robert McCrindle (Brentwood and Ongar) : Leaving aside the question of uprating, and taking a little further what the Minister has been telling the House in the past few minutes, would it not be helpful if he were on record as telling the House and the country that the question of uprating must be separated from the continued existence of child benefit? Will he give the House an undertaking that at least until the next general election, when a future Government may or may not have a mandate for replacing it, child benefit will continue to be paid as now, with the decision on uprating being left from one year to the next?
Mr. Scott : That is precisely the stance that my right hon. Friend the Secretary of State has taken. Child benefit will continue to be paid to the mother as now, and the decision will be taken annually whether to uprate it fully or partially. My right hon. Friend will take those decisions at the appropriate time.
Mr. Jim Lester (Broxtowe) : I recommend to my hon. Friend and to my right hon. Friend the Secretary of State an excellent article by Hermione Parker in The Times today about targeting benefit and whether we should be content with a system of child benefit when a family earning £137 a week pays more in tax than it receives in child benefit.
Mr. Scott : I read Miss Parker's article. I thought that it was rather long on analysis and short on prescription. It covered familiar territory. My hon. Friend and I have discussed the matter from time to time and I understand very well that if one applies a universal benefit, one maximises take-up, but the benefit tends to be ill-focused on those who need it most. On the other hand, if a benefit is better focused and targeted on those who need help, there is a take-up problem. Using a phrase which first came from the Opposition, my judgment is that a sensible social security system needs a judicious mixture of universal and targeted benefits. That is a sensible way forward. That judicious mixture may well apply not only to the range of benefits, but to the time when upratings and other measures take effect. It remains the duty of my right hon. Friend the Secretary of State to weigh all those matters in the balance at each uprating.
It is worth reminding the House that, although child benefit has not been uprated this year, it remains a very important means of support for families in Britain. It comprises one tenth of social security expenditure amounting to some £4.5 billion. That sum continues to go to families in child benefit.
Mr. Tony Banks (Newham, North-West) : Surely the issue is that targeted benefits have to reach the target. The thing that bothers us is that the target benefits are not reaching the people who need them. I hope that the Minister has seen a press release from the London Welfare Rights Officers Group which shows that boroughs around London cannot even get the leaflets to tell people about their rights. What does the Minister propose to do about that?
Mr. Scott : If the hon. Gentleman draws my attention to any such cases, of course I shall look at them. But I acknowledged the problem of take-up. Of course it is in the Government's interests to seek to ensure that take-up is as high as possible. If we provide benefits, we want them to reach people and we shall be taking further steps to increase the take- up of family credit.
Child benefit remains a very important benefit. I want the House to be absolutely clear about the effect of freezing child benefit on the uprating of family credit. Child benefit is disregarded in the assessment of family credit, so unless we compensate families receiving family benefit they will suffer from the fact that child benefit is not to be uprated. Therefore, we are compensating them. We are uprating child credits by the "Rossi" index and then adding to them the 45p by which the child benefit would have been uprated had we increased it in line with the increase in the RPI. Therefore, families on family credit have lost nothing by the freezing of child benefit. As I have explained, they are gaining considerably because we are adding a further 50p to each child credit at a total cost of some £25 million. Thus we are increasing each child credit by 95p in addition to the increase for inflation.
I shall illustrate the effect from next April. A family with just one child aged five and with gross earnings of £75 would presently get family credit of about £25 and would be entitled to more than £30 under the new rates from next April and would still be entitled to some family credit if its gross earnings were up to £139 a week. Families with two children would be even better off. The benefit is not limited to the very poor. Many families on quite reasonable earnings can qualify for the extra help of family credit.
Column 309This month we are issuing a leaflet about family credit for every family collecting child benefit from the Post Office. I hope, and my right hon. Friend the Secretary of State expressed this view at Question Time yesterday, that hon. Members on both sides of the House will take every opportunity to bring the benefits to the attention of their constituents. We are running a radio campaign and at the time of the uprating next April we shall be running a major advertising campaign involving television and other media.
Mr. Bob Cryer (Bradford, South) : Will the Minister use his influence with Conservative-controlled Bradford council which is closing three benefit advice shops dealing with more than 50,000 inquiries a year and providing valuable advice? One-stop shops with leaflets, if they actually arrive, are no substitute for the expert advice which, according to the Minister, fits in exactly with his policy on the take-up of benefits.
Mr. Rooker : Where is it stated that it is the function of civil servants in the Department of Social Security to give advice? It is not their function. That is why on every leaflet that the Department produces constituents and claimants are directed to citizens advice bureaux. Is it the function of civil servants to give advice? If it is, can we have a proper statement and a proper advice shop in every local office?
Mr. Scott : The Government give massive help to citizens advice bureaux across the country, but there is no question but that the staff of social security offices are willing and able to advise claimants about their rights.
The uprating package for income-related benefits which my right hon. Friend the Secretary of State has already announced and against which I understand the Opposition intend to vote is a package for poorer families. It is an essential element in the Government's efforts to ensure that poorer families are given extra help rather than spreading the jam thinly across the population. We are making extra resources available to children and young people through income support and housing benefit as well as family credit. The benefits are totally in accord with our policy aims of concentrating help on those who need it most. The uprating provides for substantially more than inflation. For example, the income support allowance for a child under 11 has gone up by no less than 9.3 per cent.
I understand the arguments advanced by my hon. Friends and others for universal as opposed to focused benefits. I repeat my belief that we need a judicious mixture. Without prejudging next year, I believe that our priorities this year are absolutely right to concentrate help in the way that I have discussed with the House. It is a generous uprating which directs massive resources to where they are most needed. It is a substantial increase in a programme which is already the biggest in Government. Our proposals strike a fair balance between protecting the interests of benefit recipients and the interests of those who pay for those benefits. I commend the orders to the House.
Column 3105.8 pm
Mr. Robin Cook (Livingston) : I am delighted that the Minister began by putting on the record the contrast between the ways in which the Government and the last Labour Government treated pensioners. He was encouraged by my hon. Friend the Member for Birkenhead (Mr. Field) to place on record--and, as he admitted, it is factually correct--that under the Labour Government the state pension increased by 20 per cent. in real terms over six years. I entirely concur with the Minister that the Government have found that unaffordable ; they certainly have not attempted to emulate it. Over the nine years in which they have been in office, the state pension has increased by a beggarly 2 per cent. in real terms. That is the true contrast between the stewardship of the Government and that of the last Labour Government.
It is perfectly fair to focus on those figures, because the state pension is the part of pensioners' income for which the state is responsible. It is not true that the last Labour Government were obsessed only with state pensions. On the contrary, they introduced SERPS, the earnings-related pension, because they recognised the inadequacy of the basic state pension. Like any income-related or occupational pension, it would have taken a couple of decades to come fully into use. It will never do so, because the Government have remain obsessed with the state pension and only two years ago halved the value of SERPS for future pensioners on the ground--the Minister rightly anticipated this--that its future value would not be affordable. The only problem is that, although that was a statement by Ministers, it was not subsequently supported by the Government Actuary, who pointed out that the financial costs could be met. It was doubtful whether the political will would be found to meet those costs, which is at the bottom of the contrast.
The debate stems from the uprating statement that was made two months ago. On that occasion, we pressed for an emergency debate so that the House could express a view on the Government's decision to freeze child benefit to death. The application was refused, but the Leader of the House said that the House would have an opportunity to debate the freezing of child benefit when the uprating orders were before the House. He went so far as to promise us a debate before Christmas, which was not much of a concession because it is necessary to resolve the orders before Christmas so that the books can be made up in time for April. We are humble people and take what crumbs we can from the Leader of the House.
Having said that this debate was the right time to express our opposition to the freezing of child benefit, the Government machine has spent the past couple of days on heavy briefing saying that we are voting against the orders because we are opposed to any increase in pensions. For all that I know, it has been briefing people in the Press Gallery that we are in favour of cutting pensions, turning off heating supplies to the elderly and turning them out into the night. I was startled to read in the Sunday Times that I had turned down a separate vote on child benefit. Given the lengths to which we went to obtain a separate debate, it is rich cheek to suggest that we turned one down. Conservative Members know that that is not true and that the House was never offered a separate debate.
Column 311[Interruption.] I asked in the House, and we also asked through the usual channels, for a separate debate on child benefit, but we were consistently refused one.
The Secretary of State prides himself on the fact that he has made no secret of his hostility to child benefit but he has never had the courage to ask the House to put it in cold storage. It is on record in the Sunday Times, courtesy of Rupert Murdoch, that the Secretary of State, or Bernard Ingham--it is not clear who--thinks that there shoud be a separate vote on child benefit. I am happy to assure the Secretary of State that his dearest wish will be fulfilled. We shall provide the House with the opportunity of a separate vote on child benefit in the new year and invite it to consider whether it wants Britain to approach 1992 as the only country in Europe that is running away from child support. Tonight, we shall merely treat with indifference the miserable increases provided for in the uprating order.
Nowhere are the increases more miserable than in those offered to pensioners. The uprating order provides that pensions will be increased by 5.9 per cent. in April but long before April inflation will hit 7 per cent. Moreover, a large part of that inflation will hit pensioners especially hard as a result of Government action. The cost of electricity has increase by this year by 9 per cent., and in April it will increase a further 6 per cent. Water has increased by 10 per cent. this year and in April it will increase by by a further 10 per cent. Gas has increased by 6 per cent. this year and in April will increase by a further 6 per cent. Rents have increased this year by 12 per cent. and in April will increase by a further 10 per cent. All those increases are in sectors directly under the influence of the Government, but they are all increasing at a greater rate than that which the Government are offering pensioners.
Mr. Edward Leigh (Gainsborough and Horncastle) : While the hon. Gentleman is dealing with pensioners, perhaps he will reflect on the wise words of my right hon. Friend the Secretary of State that there is no point in promising the earth but delivering the International Monetary Fund. In so reflecting, will he say what happened to the pensioners' Christmas bonus in 1975 and 1976?
Mr. Cook : I have already told the House--the hon. Gentleman needs to be told the same thing twice before he gets it through both ears, so I will repeat myself--that under the last Labour Government pensioners' income increased by 20 per cent. in real terms, despite the IMF, the difficulty that the Government faced, and the fact that we did not have oil revenues to squander on the rich.
Mr. Rooker : My hon. Friend has made it quite clear that the Opposition will facilitate a specific and targeted vote on the freezing of child benefit. Will he make it clear that the Opposition will be prepared to make it a free vote? Will the Government do the same?
Mr. Scott : In the heat of the moment, the hon. Gentleman may have used words that, when he checks Hansard, may not prove to be accurate. He said that under the Labour Government pensioners' incomes increased by 20 per cent. in real terms ; they increased by only 3 per cent.
Column 312Government pensions have increased by only 2 per cent.? I will give way to him if he will agree about the clear contrast between increases of 20 per cent. under the last Labour Government and only 2 per cent. under this one. Moreover, that 2 per cent. increase has been made over the past nine years. The Minister is anxious to talk about the last Labour Government, but it would be nice if he was equally as anxious to discuss the Government's miserable record. Another set of figures are relevant--
Mr. Cook : I am not wriggling. We would welcome confirmation of those figures from the Secretary of State. There is a tenfold difference between them, and it was achieved in two thirds of the time, which is why Labour Members can hold up their heads about what the Labour Government did for pensioners.
Ministers constantly take refuge in the increase in SERPS and what has happened to occupational pensions, but they should be ashamed of what they have done to state pensions.
Another set of figures is more relevant than the issue of prices--those for inflation, not only in prices but in earnings. The Labour Government provided for pensions to be increased in line not with prices but with earnings. If that formula had been retained, the basic state pension today would be worth £11 a week more for the single pensioner and £18 a week more for couples, which is about a quarter of its present value. That is the measure of the difference between the record of the Labour Government and this one.
Mr. McCrindle rose--
While prices have increased by 5.9 per cent. over the past year, earnings have risen by 8.6 per cent. Why was it adequate for the pension to keep pace with prices when everybody else was trying to get ahead of prices? That difference between inflation of prices and inflation of earnings would mean that the increase that we are debating tonight, had it gone up with earnings, would be almost half as much again--that is, an extra £1.15 a week for a single pensioner. That is the equivalent of a daily newspaper every day or half a pint of milk a day. That is the meaning of £1 a week if one lives on the subsistence income of so many pensioners, and that is what the order cheats them of.
Mr. McCrindle : The hon. Gentleman has made the perfectly reasonable point that, under his Government, pensions were linked to earnings, whereas they are now linked to prices. Does he consider it appropriate to remind the House that, desirable though that objective may have been, out of the five years during which his Government were in office, it was possible to carry through that link on only three occasions? That was as a result, I seem to recall, of the appalling economic situation over which he presided.
Mr. Cook : The hon. Gentleman was good enough to say that my point was entirely reasonable. Let me respond in the same moderate way. He has also made a perfectly reasonable point. The pension was fully uprated in line with earnings three years out of five, which compares starkly with the performance of this Government, who have not uprated in line with earnings in one out of nine years. The bottom line is that, as a result of the three increases, the pension was worth 20 per cent. more at the end of those five years. Conservative Members cannot get away from that figure.
Many pensioners will not smell a penny from this uprating, because they are the victims of last April's cuts. Last April, they found that the cash that they received exceeded their entitlement under the new rules. As a result, their benefit was frozen at its current level, and it will not go up with inflation next April. Next April, 500,000 claimants will get no increase as a result of transitional protection. The reason they are caught in the new version of the property trap that was invented by the Government is that they were receiving extra additions for diet, laundry and heating, all of which were abolished in April.
Mr. Cook : As my hon. Friend says, by definition, all those extra additions were targeted on the frail, the elderly and the disabled. We are talking not just about 500,000 claimants but about 500,000 of the most vulnerable and most disabled claimants. The Disability Alliance calculates that it will take several years before some of the most severely disabled claimants get an increase in any uprating order.
If there is one thing worse than getting no increase because one is receiving transitional protection, it is losing one's transitional protection. It is appropriate to reflect on the thousands of claimants who, since last April, have lost their transitional protection and, next April will find themselves worse off in cash terms than they were last April.
Three weeks ago, I brought to the attention of the House claimants who had lost their transitional protection, because, under the party of the family, they were ill-advised enough to get married, and that triggered the loss of their transitional protection. I share with the House three other cases, all of whom were corralled among the 88 per cent. last April who we were told were not losers as a result of the changes.
The first is a constituent of my hon. Friend the Member for Newport, West (Mr. Flynn), Mrs. Edwards. Mrs. Edwards was in receipt of £7.77 towards the extra costs of a diet that she required for herself. Since last April, her husband has died. As a result of the death of her husband there was triggered a fresh assessment of entitlement to social security. In the course of that fresh assessment she lost all her transitional protection, even though it was in respect of an allowance for her own dietary and health needs. She still has the same health needs, but she gets no help for them.
Mr. Cook : The second case comes to me from Sandwell citizens advice bureau. It relates to Mrs. Finden, aged 85 and a widow for 26 years. She is severely disabled with arthritis. Recently, Mrs. Finden had the misfortune to be admitted to hospital for seven weeks. After six weeks her
Column 314benefit was suspended. She came out of hospital only one week later, but, because her benefit had been suspended, when she came out there was a fresh assessment of her benefit. Because there was a fresh assessment of her benefit, she lost her transitional protection. Having come out of hospital, she is £3.25 a week worse off. In its letter, the citizens advice bureau explained :
"We find it difficult to explain to this elderly and confused claimant why her benefit has gone down."
The Government are putting doctors in the bizarre position of advising patients that, irrespective of their health, it would be better to get out within six weeks, because they might otherwise lose part of their benefit.
It is not only pensioners who are losing transitional protection. One can lose transitional protection by having children. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has drawn my attention to the case of one of his constituents, Mr. Peter McKay. In April, Mr. Peter McKay was left with £11.50 a week transitional protection for laundry and diet. His wife recently had another child. The other child should have brought about an entitlement to increase in income support of £10.75 a week. However, as their benefit already exceeded their entitlement by more than that sum, they did not get a penny of the additional sum to which they had been entitled for that child. In other words, they are left with an extra mouth to feed and no extra resources. Effectively, they are being asked to spend on the child the resources that formerly went to Mr. McKay for his own diet.
That case brings us naturally and inevitably to the most objectionable part of the uprating order. The Minister said that this is a package for poor families. We certainly assent. It is a package to make families poorer. Paragraph 8 of the order provides that child benefit will be frozen for the second year running. To be fair to the Secretary of State, when he spoke of uprating, he made no pretence that the decision had been reluctantly forced on him this year alone by the shortage of ready cash. It would be difficult to make that case. The Chancellor is sitting on a Budget surplus which is substantial enough to support even his solid frame. The last time he counted the surplus, he came up with a figure of £10,000 million. It is fair to say that people who have made stabs at it since then have come up with larger figures.
How much bigger must the Budget surplus be before the Government can afford to increase child benefit? These are the circumstances in which the Secretary of State should be grabbing his share for claimants. The rich had their share of the Budget in March. It is now time for claimants to get the crumbs from the table. Instead, the Secretary of State is planning to spend £100 million less next year than he planned to spend last January in the expenditure White Paper.
That is the background to the freeze in child benefit. We have a Chancellor who has more money than he expected, and a Secretary of State who discovers that he has more room to spare in his budget than expected. It should not have been so difficult for the Secretary of State to get the money out of the Treasury. After all, who is the man with whom he negotiates at the Treasury but the Chief Secretary? Who was the Chief Secretary two years ago? He was the Minister for Social Security, who, only two years ago in Committee said :
"we believe that universal child benefit is desirable." I am afraid that he was wrong. He said :
Column 315"We are likely to be boringly consistent on that point for the foreseeable future, and, I hope, permanently."--[ Official Report, Standing Committee B, 6 March 1986 ; c. 684.]
He was the person with whom the Secretary of State had to negotiate--a man who regarded his commitment to universal child benefit as boringly consistent.
Against that background it is quite clear that the reason for the freeze in child benefit is not financial but political. To be fair, the Secretary of State is quite open about it. Since his appointment, I cannot recall the Secretary of State finding a kind word to say about child benefit. The benefit is a sorry thing. It is in the care of a team who are not committed to it. If they were more honest, they would say that they want to abolish it. At least then we would get a separate vote on it. Instead, they are allowing it to fade away by failing to do the annual maintenance.
Let me couch three arguments in terms which even Tory Members can relate to and understand. I invite them to think of child benefit, not as a benefit, but as a tax allowance. After all, it replaced child tax allowance and it is the only means by which we now recognise the extra cost of children. If hon. Gentlemen try to think about it as a tax allowance, I know how much more warmly they will think about it. Had child tax allowance remained, I have not the slightest doubt that they would have uprated it each year without pausing for thought.
It is instructive to compare and contrast what has happened to tax allowances and child benefit. As I said at Question Time yesterday, the married man's tax allowance has increased by 22 per cent. more than the rate of inflation under the Government while child benefit has fallen by 13 per cent. I did not get an answer yesterday, so I ask again : by what possible mental gymnastics can the Government argue that the cost of maintaining a wife has increased by one fifth and the cost of maintaining a child has decreased by one eighth? Why is there not the same chatter about how badly targeted the married man's tax allowance is? After all, like child benefit, it also goes to the rich. Indeed, unlike child benefit, it is worth more to the rich. They get their tax allowance at 40 per cent. not 25 per cent. That brings me to another consideration why hon. Gentlemen should think of retaining child benefit. Child benefit is a highly efficient benefit. The Tory party claims to be the party of cost efficiency in the public sector. Child benefit has one of the smallest administrative overheads. Its administration costs 2.5 per cent. of total expenditure. That is almost half the administrative cost of family credit which takes 4.5 per cent. of total expenditure. I find it curious that the party of public efficiency should wish to change to a benefit which, pro rata, requires twice as many bureaucrats. I find it odd that the party of targeting is in favour of a benefit in the form of family credit which is so badly aimed.
In January the Secretary of State and the Minister promised us that family credit would hit 60 per cent. of its target. They never explained why. When my hon. Friend the Member for Derby, South (Mrs. Beckett) challenged them, the Minister replied that of course family credit would be better known because more people would know about it. That appeared a rather circular chain of reasoning which was not entirely convincing. In the event, take-up of family credit is not 60 per cent. It is not even the 50 per cent. that family income supplement used to hit. It is still below 40 per cent.
Column 316There is now a cheerful cynicism being expressed on Government Back Benches--so far it has not crept forward to the Front Benches--that it is not their fault that the take-up rate is so low. They have done their duty. They have made the benefit available. It is not their fault that people do not rush forward to claim it. That is the look-out of those entitled to it. That argument will not do because Conservative Members are putting forward family credit as a substitute for uprating child benefit and child benefit does not go to 40 per cent., 50 per cent., or 60 per cent., but to 98 per cent. of those who are eligible.
Mr. Cook : It is extremely well targeted on mothers. Ninety-eight per cent. of mothers with young children claim and receive child benefit-- not double but nearly treble the number who get on to family credit. I always understood that the Government believed in decisions being market- led and that one should repond to the market. It is clear from the take-up rate that the market demands child benefit. It is to that success story that this House and the Government should stick.
My final reason why the Tory party should retain child benefit and uprate it has been anticipated by my hon. Friend the Member for Bradford, South (Mr. Cryer) for the past 10 minutes. The reason why the Treasury Bench and the Government should support child benefit is that, as they so frequently remind us, they are the party of the family. Child benefit is now the only universally applied recognition of the cost of bringing up children. It goes to the women who feed and clothe those children. For many women it is the only income that they can claim as their own and on which they can rely. It gives them a touch of independence of the family budget. As the author of this letter passed to me by Child Poverty Action Group said :
"As a woman with 2 children who had a husband earning £250 a week"--
well above family credit level--
"but provided us with nothing, the only way we survived was with our child benefit, and that was only because he could not get his hands on it."
That is the reality for many women. That is why the party of the family should support child benefit and its uprating.
It may well be that it is the fault of the father that those children were not being better provided for, but it was certainly not the fault of the children and why should they be penalised by having their benefit frozen? Heaven knows, child benefit is little enough--only one third to a quarter of the cost of bringing up a child in any week. It does not meet many of the new charges being levied on us. For example, for mothers in Bradford under a new Conservative council which now charges them £4 a week for school meals per child, that means over half of their child benefit.
A constituent of my hon. Friend the Member for Bradford, West (Mr. Madden) is a widow with five children. Because she is a widow on widow's benefit she does not receive any family credit. She does not qualify. Nor does she receive any income support because her weekly income is exactly 14p above the income support level. Because she is not in receipt of income support, her children do not qualify for free school meals. Since the Conservatives gained control of Bradford city council she is faced with a weekly bill of £20 for school meals for those five children--an increase of £9 in this year alone. Moreover, under this Conservative Government her child
Column 317benefit is now worth £5.50 a week less than in 1979. For that lady child benefit is not, as the Secretary of State described it, a decorative overlay ; it is one of the basic foundations of her budget. It is for her family the difference between one cooked meal a day and none.
It is for that lady's sake and the sake of her children that we shall return to this issue in the new year and give the House an opportunity to record its contempt of a Government who can find the cash for open-handed generosity to top rate taxpayers and funds that generosity by tight-fisted meanness to pensioners and children. 5.37 pm
Mr. Timothy Raison (Aylesbury) : I shall not comment or speculate on the sub-plot of the debate this afternoon, which is the intriguing question why the Opposition apparently thought that they would vote against the order and then decided that they would not after all. It is something to do with the fact that the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is leaving the Chamber, reminded himself that at one point he wanted to be the Opposition Chief Whip, so managed to persuade his colleagues that it would be remarkably foolish to vote against these orders.
I have no intention of voting against these orders because I welcome the increase embodied in them, particularly the greater help for those over 75 and some of the elderly disabled. It would be absurd to do anything other than support them.
Nevertheless, the Government are making a mistake in not uprating child benefit and I regret the decision in article 18 of part III of the order. A policy of continuously freezing child benefit would be a great mistake both politically and, more important, in terms of the interests of families.
I have spoken on this subject a number of times during the past year or so and I do not intend to weary the House by going over all the ground again. However, I could not let this debate pass without making one or two comments. A number of my hon. Friends and I will certainly look for an opportunity during the passage of the Social Security Bill to establish the principle that the existence of child benefit is right, and that for child benefit to do its job it must be uprated with inflation.
The Government say--and I understand the reply that my hon. Friend the Minister has made--that the increase in child benefit would do nothing for those with children on family credit and income support. I am not sure whether that would apply, too, to those on single parent benefit. What really does this attempt at targeting achieve? I remind the House that the money for the uprating was in the last public expenditure White Paper. There was in no sense a demand for additional money if the benefit was to be uprated. The Chancellor of the Exchequer had agreed that the money was available. I am glad to say that the Chancellor of the Exchequer is still providing money for uprating in future years. Therefore, it is not just that the economy is in a strong enough condition to bear this, but that the money has been specifically allocated by the Treasury for that purpose, which makes it all the more sad that it should not be used for that. I am glad to see my hon. Friend the Minister for Social Security on the Front Bench. Will he tell us how much, net, will actually be saved by the decision not to uprate child benefit, especially bearing in mind the significant point
Column 318that an increase in child benefit would have the advantage of taking out of family credit some of those now receiving it? Those people would then move above the level of means-tested benefits. I wonder whether that factor has been allowed for when calculating the savings to be achieved by not uprating child benefit.
The article by Hermione Parker in today's The Times has already been mentioned. I must say that that was a brilliant statement about the weakness of means-tested benefit. I hope that my hon. Friends on the Front Bench will think about it carefully. What I thought was especially formidable in her article was the way in which she stressed that the more we rely on means-tested benefits, the more we shall increase the culture of dependency, which my right hon. Friend the Secretary of State and others have talked about recently. There is no doubt that it is the means-tested benefit, much more than the universal benefit, which brings about dependency and, of course, brings about, in conjunction with it, a disincentive to move on to paid employment or to better one's income. That is a serious drawback of all the means-tested benefits. I know that the Government have tried to reduce this in some respects by tapering, and they have had some success. However, there are other parts of the social security system where the incentive for increasing one's income by going out to work, if looked at in hard practical terms, is small indeed.
I do not deny that the problem of dependency exists. It is right that my hon. Friend should focus on that, but I strongly believe that the answer that is being put forward of constant recourse to targeting and means- tested benefit is not meeting the problem. I have already said that I do not intend to deploy the argument for child benefit at length. We have heard already today that there is a take-up problem with family credit. I believe that the figures for family credit must be considered depressing and, of course, there is also the problem of incentives, to which I have referred. I simply want to stress that, as a country and as a party, we need to work hard to find a family policy that is relevant to current needs. If we look back at the figures of 30 years ago, we see that about half of the poverty was to be found among the old. Happily, that figure is now down to about a quarter, which is a great advance. The substantial advance in the position of old people is entirely good and is due to different factors, including, of course, the spread of second pensions. Although I do not deny that there is poverty among many old people, the overall picture for them is better.
When we think about poverty and hardship today, we must consider especially the people who are trying to bring up young children in circumstances that are often difficult. I, and I suspect a number of other hon. Members, will say that the peculiar factor that has deteriorated especially during the last decade or two has been the enormous increase in family breakdown. In my surgery, I am constantly struck by the way in which in earlier times it was really quite unusual for housing problems to be essentially a product of divorce or of one-parent families. Now, over and over again, that is the factor causing the tough social difficulties. I believe that that factor has a great relevance to child benefit, because it appears that women, especially, who are trying to bring up children in difficult circumstances, often against a very rough background in a harsh great city, are the people whom we should be considering.
Column 319Although I acknowledge that family credit and income support are useful and that the increases in such benefits are valuable to those who receive them, I nevertheless believe strongly that the continuity of child benefit--the fact that one knows when one will receive it without any means test--gives parents bringing up children the kind of confidence that very many of them badly need. I would apply that not only to the poorest and those facing the toughest of all situations, but to many others, especially those who are not quite poor--those who, relatively speaking, if one looks at the total income of the parents, should be not at all badly off. If we are thinking about a genuine family policy designed to meet the difficulties that people face in the circumstances of which I have spoken, child benefit should form an important part of that.
Of course, there is no point in saying that child benefit should be an important part of that policy unless one is prepared to go on to say that, for it to be meaningful, it must be uprated. It cannot be allowed to be frozen and to wither away.
I hope that, when the Minister said that there has been no long-term decision about the uprating of child benefit, he meant it. I am sure that he did, because he is an honourable man. I hope that the Government will take on board the fact that they have the resources allocated to uprate child benefit in the future and that the social and political arguments and arguments of straight Conservative philosophy all point in that direction.
I recall that last time I spoke I was interrupted by my hon. Friend the Member for Norfolk, North (Mr. Howell) who said that it was absurd to give all this money to people who could perfectly well afford to do without it, and what would the old people say about what was going on. I do not believe that most of the old people begrudge the existence of child benefit, any more than those who receive child benefit begrudge the fact that very prosperous old people, perhaps, receive the £10 Christmas bonus and can travel at very low rates on the London public transport system. I do not believe that that is the prevailing mood in this country. People by and large are reasonable and civilised.
I am glad that the window has not been completely shut, but I believe that it is of great importance that we should uprate child benefit. We should consider it a major instrument of social policy. I hope that the Government will announce shortly that they aim to uprate it.
Several Hon. Members rose--