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House of Commons

Monday 22 May 1989

The House met at half-past Two o'clock


[Mr. Speaker-- in the Chair ]


For Glasgow, Central, in the room of Robert McTaggart Esquire, deceased.-- [Mr. Foster.]

Motion made and Question proposed,

That Mr. Speaker do issue his warrant for the Clerk of the Crown to make out a new writ for the electing of a Member to serve in this present Parliament for the constituency of Vauxhall in the room of Stuart Kingsley Holland Esquire, who, since his election for the said constituency, hath accepted the Office of Steward or Bailiff of Her Majesty's Three Chiltern Hundreds of Stoke, Desborough and Burnham in the County of Buckingham.-- [Mr. Foster.]

Mr. Bernie Grant (Tottenham) rose --

Mr. Speaker : Does the hon. Gentleman wish to object?

Mr. Grant : Yes, Mr. Speaker.

Mr. Speaker : In that case, the motion stands over until the commencement of public business.

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Oral Answers to Questions


Earnings Rule

1. Mr. Brazier : To ask the Secretary of State for Social Security what is his latest estimate of the public expenditure cost of abolishing the earnings rule.

The Parliamentary Under-Secretary of State for Social Security (Mr. Peter Lloyd) : The estimated total public expenditure cost of abolishing the earnings rule for pensioners is £205 million in 1980- 90, and £375 million in 1990-91.

Mr. Brazier : Is my hon. Friend aware that this measure will be greatly welcomed by many people of pensionable age, not least in my constituency, who seek to better themselves after the formal retirement age? Does he further agree that the welcome stimulus that it will provide to the economy by releasing many valuable skills back into the economy should, in the long run, make the measure self-financing?

Mr. Lloyd : My hon. Friend is right. There will be greater choice for the elderly, the economy will benefit from the skills and experience supplied by pensioners continuing to work, and there will of course, be additional revenue for the Exchequer.

Mrs. Roe : Is my hon. Friend able to say how those people affected by the change will be informed of the new arrangements?

Mr. Lloyd : Yes, we plan to write next month to all those in receipt of a reduced pension and all those who have deferred their pension. There will be others, of course, earning under £75 per week of whom we are not directly aware, but I hope and expect that they will learn of the measure through the extensive publicity and editorial comment.

Residential Homes

2. Mr. Eastham : To ask the Secretary of State for Social Security when he last reviewed the payment limits for residential homes.

The Minister for Social Security (Mr. Nicholas Scott) : We reviewed the limits last October and announced significant increases, which took effect last month.

Mr. Eastham : Is the Minister aware that there is growing concern particularly among charitable organisations which want to offer high quality provision but are unable to do so due to inadequate funding, which they believe is not being met by the Government? The feeling that local authority provision of residential care is inadequately funded is causing anxiety and worry to many families, and there is growing suspicion that some of the private organisations which have been set up are becoming money -making bodies. Will the Minister apply his mind to those problems?

Mr. Scott : Of course, we watch all of this carefully. It is worth reminding the House that when the Government

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came to office we were spending some £10 million per year on such support ; 10 years later, the figure has increased to £1 billion per year.

About two out of three people in this type of accommodation are able to pay their fees from the support that they receive. The level of support set must take account of the interests of the taxpayer and not fuel the market. It was never designed to pay every fee that is charged in every area. I think that we achieved about the right balance in the upratings last month.

Mr. McCrindle : I recognise that substantial sums are being expended in this area of social security, but does my hon. Friend agree that in the process of building up that substantial figure public expenditure on the provision of accommodation for elderly people has been able to be curbed quite considerably? When my hon. Friend comes to review further requests for still greater assistance, will he bear in mind that in many ways it is rather a good investment as it may mean that local authorities do not have to expend quite so much as would otherwise be necessary?

Mr. Scott : I am sure that the system of national limits that we introduced in 1985 is a much better way of combining the interests of the taxpayer and the need to keep public expenditure under some sort of proper control with meeting the needs of those who require this kind of accommodation. As my hon. Friend will know, we are considering all these matters in the light of the Griffiths report on community care and the need to make proper judgments between the need for institutional care and domiciliary support.

Mr. Frank Field : When do the Government intend to respond to the Griffiths report?

Mr. Scott : My right hon. Friend and hon. Friends in the Department of Health have that matter at the top of their agenda--

[Interruption.] The hon. Gentleman will know better than almost anyone in the House how complicated the subject is, and how important it is that those who have to make judgments between domiciliary care and residential care are able to do so, as far as possible, in a financially neutral climate. The Government are addressing the matter as one of great urgency and I hope to be able to make an announcement in the not too distant future.

Mr. Soames : I welcome what my hon. Friend has said about increased resources, but is he aware that there are great disparities in the cost of residential homes between the north and the south due to the difficult situation in the labour market in my constituency and elsewhere in the south-east? Does my hon. Friend agree that in this area of the public provision, as in so many others, there should be some form of regional fixing of income and allowances to assist those who find life extremely difficult?

Mr. Scott : My hon. Friend knows that at present only London has a special enhancement of the rates that are paid, but I am conscious that the geographical spread, in a sense, goes wider than that. That is one of the matters that we shall have to bear in mind when we come to consider the Griffiths report.

Mr. Fearn : Has the Minister had any discussions with the National Care Homes Association or with Age Concern? I presume that he has seen the report from Age

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Concern that many elderly people who have been in residential homes for some time are now being asked to quit.

Mr. Scott : If the hon. Gentleman has evidence relating to the many cases of which he speaks, I hope that he will make it available to me or to my colleagues in the Department of Health. We are constantly in touch with the providers and the time is coming when we shall need to take a fresh look at these matters in the context of the Griffiths report.

Mr. Anthony Coombs : Will my hon. Friend confirm that the only monitoring of care standards or staff qualifications at small homes with fewer than four residents, which do not have to be registered under the Registered Homes Act 1984, is on initial application and that there is no statutory requirement for continuous monitoring? Will the Department support the Department of Health in its review of the remit of the Registered Homes Act to bring smaller homes under statutory monitoring?

Mr. Scott : When these measures were first introduced there was a need to balance bureaucratic intrusion and complexity with the need to achieve proper standards. I know that my colleagues in the Department of Health are concerned and they will have my full support in any action that they choose to take.

Mrs. Beckett : If the Minister is in touch with the care providers, what response does he intend to make to the now almost universal call, particularly from charities, for an urgent review of benefit rates in this year--1989--to avert an otherwise threatened financial collapse? Does he realise that many people, particularly the most dependent elderly people, are very fearful about the difficulty that they face in meeting the gap between rising costs and static benefit rates? Is the Minister aware that in many cases their children are also pensioners and cannot help them? When do the Government intend to do something about that?

Mr. Scott : I have no evidence whatever of any imminent collapse in provision in that area. Many people can look to other sources of income, including support from their families, and so on. It was never intended that the rates should meet the fee which is charged anywhere in the country, at whatever level it is set. If we did that, we should be making the market in that area, and it would not be sensible for us to do that. We listen very carefully to the providers, but I see no prospect of any enhancement of the rates in the current year.

Family Support

5. Mr. David Nicholson : To ask the Secretary of State for Social Security what assessment he has made of the level of Government financial support for the family in the EC ; and if he will make a statement.

The Secretary of State for Social Security (Mr. John Moore) : The United Kingdom compares very favourably with other European Community member states in the financial support made available for the family. As far as child benefit is concerned, the real value of benefits for the majority of families is considerably higher than in most of the other states. Furthermore, our family credit scheme has no parallel elsewhere in the Community.

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Mr. Nicholson : As the elections to the European Parliament will give the Government's opponents the opportunity to make the usual far- fetched allegations about our welfare benefits and contrast them with those in the EEC, will my right hon. Friend say whether other EEC countries have the same system of child benefit as ours, which is universal and tax-free? Will he also confirm that other EEC countries do not have our system of income support to low-income families, which is most welcome to such families?

Mr. Moore : There are quite a few points in that question. Essentially my hon. Friend is absolutely right. There is no comparable pattern of benefit. Italy, Germany and Greece have means tests for their child benefit systems. France does not pay benefits for the first child. To take an overall pattern, of the domestic purchasing power, for a two-parent family with one child under the age of two, the United Kingdom child benefit payment is the highest in the Community. For a two-child family with both children under the age of six--the average family size in Europe- -the United Kingdom ranks third in the Community. I confirm my hon. Friend's point about income support. That structure, like family credit, must be seen in relation to the £9 billion which we spend to help families with children while part of that--£4.5 billion--goes to child benefit support.

Ms. Short : Will the Secretary of State confirm that the elderly members of our families--our pensioners--have the worst income in the EEC and that the situation is getting worse for pensioners throughout the country as their transitional protection is eroded? Does he accept that it was a mistake and wrong to break the link between pensions and earnings and that unless he changes that, British pensioners will become even poorer, when they are already feeling the squeeze?

Mr. Moore : The hon. Lady's first point was complete and utter nonsense. It was factually inaccurate and I must make that clear time and again. One of our difficulties in trying to make comparisons between our pensioners' rates and those in Europe is that our pensioners, like pensioners in only two other countries in Europe, have the benefit of a basic pension as well as the additional benefits to which my hon. Friend the Minister for Social Security referred earlier, such as income support. The only accurate way to try to assess and judge the way in which this country tries to assist pensioners relative to the way in which other European countries treat pensioners is in regard to the percentage of gross domestic product overall--

Ms. Short : Flannel.

Mr. Moore : Those who shout "flannel" or "rubbish" from sedentary positions may like to be reminded of this. Would they like a system whereby those on low incomes for most of their lives--the vast majority in continental countries--receive no basic pension because pensions are earnings-related? I do not imagine that they would like such a system. The only comparison that can be made is with gross domestic product, and in that respect our pensioners rank third highest in the European league table, if there can be said to be such a thing.

Mr. Tredinnick : Child benefits in this country are universal and tax-free, but can the same be said of other EEC countries?

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Mr. Moore : No. As I said earlier, the position varies enormously. Germany, Italy and Greece operate a means test, and much lower benefits are paid in most European Community countries by comparison with our child benefit. We pay the highest child benefit in Europe for a family with a child aged below two. As to the typical two-child family, we rank third in the Community. It is not possible to make specific comparisons, and I have tried to abjure from doing so.

Mr. Frank Field : How many claimants in Europe have been affected by transitional protection arrangements? So that we may make a comparison between this country and our European neighbours, can the Secretary of State also say how many British claimants failed to secure increased income in 1986, 1987 and 1988?

Mr. Moore : I commend the hon. Gentleman for trying to get in the question that his three absent hon. Friends were unable to put, but which I looked forward to answering. Those in Europe who might like to put such questions might be delighted to have the kind of income support structure that the Labour party has not sought to deny in its review, as I believe it is called.

Mr. Burns : Does my right hon. Friend agree that £1 billion of the £4.5 billion spent on child benefit goes to families with incomes in excess of £20,000? Would it not be better if more of the money going to wealthier families were targeted instead on genuinely less well- off families?

Mr. Moore : My hon. Friend was among those who recognised what I sought to do in this year's uprating decision, which was to add more than £70 million for the assistance of poorer families with children, thus recognising how much better off are many families with higher than average incomes. My hon. Friend is right to draw attention to one specific group benefiting from the £4.5 billion that we spend on child benefit.

Mr. Robin Cook : Did the Secretary of State, in his study of EEC data, consider the Commission's recent report that the number of families in Britain with below half the average income has almost doubled? Is not that the real reason why he is so anxious to judge poverty by the absolute standards of the Victorians? Does the right hon. Gentleman accept that, judged by any relative standard, the rich are much richer and the poor are even further behind them?

Mr. Moore : I am surprised that the hon. Gentleman seeks to embrace the absurd statistical illusions which suggest by definition that half of a nation, whatever its wealth, is in poverty. That kind of statistical absurdity, as I have tried to persuade people-- [Interruption.] The hon. Member for Birkenhead (Mr. Field) would not like it to be drawn to the attention of the House that he recognised and supported the point that I am trying to make in an article in The Sunday Times. I do not for one moment doubt that there is a need, and I would not be expending £51 billion-- the largest social security expenditure this country has ever seen--if I did not think that there was a requirement to help and assist people. I would never deny that there is need, but that is not the same as citing absurd statistical nostrums which suggest that one third to half the nation is in poverty, which is rubbish.

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Reforms (Review)

8. Mr. McCrindle : To ask the Secretary of State for Social Security what current plans he has to review any aspect of the reforms introduced on 1 April 1988.

Mr. Moore : We have given an undertaking to monitor all aspects of the social security reforms, and that is a continuing process. We have given extra help to the least well-off families with children, for example, and we are making nearly £200 million extra available to older and disabled pensioners from October.

Mr. McCrindle : Given that many of the people within the Government's sights in terms of targeting benefits more efficiently are benefiting as a consequence of the 1988 review, will my right hon. Friend nevertheless take account of the failure, seemingly, of targeting to reach people just above income support level who were recently described in a pamphlet as being "not rich, not poor"? As many of them did not have the opportunity to build up an occupational pension, as so many people now retiring have done, are they not a section of society to which the Government ought urgently to turn their attention?

Mr. Moore : I am glad that my hon. Friend recognises that the new income support system is fairer and more generous. He also said--I thought it a fair point--that we should always remember that just above the income support line are people who, by any definition, are not well off. I know that he will be pleased about the way in which family credit tries to help poorer families with children, going some way up the income scale. He will also be delighted not only with the adjustments to transitional arrangements for housing benefit for those above income support level that we made last spring, but with the news that 1.4 million of the 2.6 million elderly and disabled pensioners who will benefit this autumn from the changes that we are introducing will be above that level.

Mr. Madden : In his review of the social security system, will the Secretary of State ensure that the practice of giving food vouchers to people who apply for crisis loans is scrapped? A constituent of mine, the mother of three children under eight, recently lost all her money. When she applied to the local office for £20, she was given a food voucher which stipulated that she could spend the money only at a named store within a week of its issue, that she must not spend it on tobacco, alcohol or sweets, and that the loan must be repaid in 1990. That food voucher was useless for her purpose--to buy a present for her son. Is the right hon. Gentleman proud of a system which represents all the worst aspects of the old poor relief system which we all thought that we had left behind years ago?

Mr. Moore : I am extremely pleased that as a result of the Government's economic success we are able to spend vast amounts on income support and, in addition, on such things as the social fund. Some people receive vouchers of the kind to which the hon. Gentleman has referred. I shall look into what he has said, but I am sure that he would wish to put this into perspective.

Mr. Madden : So would my constituent.

Mr. Moore : If the hon. Gentleman could contain his inherent bitterness for a second, he might like to concern

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himself with the million or so people who have already benefited from the social fund. They are not exactly complaining.

Mr. Baldry : Will my right hon. Friend base his review on one criterion--the existence of a strong net below which no one can fall? Does he agree that we must not become confused by those in the media who, in recent weeks, have tried to relate such a net to equality? The purpose of the social security system has never been to introduce more equality into society. It has always been to ensure that people are properly protected.

Mr. Moore : My hon. Friend has expressed very well points that I have lately been trying to address. We are trying to help large numbers of our fellow citizens who are clearly in need. We must keep that clear in our minds, and not be forced by distorted statistics into the pretence that the country is somehow failing, creating an illusory poverty affecting one third of the population. My hon. Friend is absolutely right to ask me to look constantly to see what parts of society need additional help, and I shall seek consistently to do that.

Mr. Robin Cook : What hope does the right hon. Gentleman's review hold for the quarter of a million pensioners and other claimants receiving transitional protection, who received no increase last year or this year and who under the present rules will receive none next year? Is he aware that by definition they are among the frailest and most disabled claimants? It would be outrageous if they spent a third year on a frozen income, reduced to what by any standards--absolute or relative--is a degree of poverty that is a disgrace to any civilised society.

Mr. Moore : I congratulate the hon. Gentleman on getting back to the question that his hon. Friends keep trying to ask but never seem to be present to do so. I will put the matter into perspective. The hon. Gentleman seems not to be endorsing the new structural income support system that his own team's review does not seem to wish to reject.

Of those on supplementary benefit, 35 per cent. received no payment for additional requirements of any kind. The average additional requirement payment to the sick and disabled--the hon. Gentleman mentioned the disabled --was £5.34 a week. Instead, 220,000 claimants are now receiving a disability premium of £13.20. That is a considerable improvement, which I would expect both sides of the House to welcome.

Some 4,400 disabled people were receiving domestic assistance additions, averaging-- [Interruption.] I realise that this answer will be unpalatable to the Opposition Front Bench. Those people were getting domestic assistance addition, averaging £4.87 a week. Now over 7,000 are, I am happy to say, getting the severe disability premium of £26.20 a week. That is an illustration of the change to a new and better system to help those who are most disadvantaged.

Maternity Benefits

9. Mrs. Gillian Shephard : To ask the Secretary of State for Social Security what comparative assessment he has made of the United Kingdom system of maternity benefits as against those of other EC member states.

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Mr. Scott : We do of course in this area, as in many others, take note of what is happening elsewhere in the Community. We concluded that our record compares very favourably with the other European Community member states where only two countries--Denmark and Italy--provide income replacement for a longer period.

Mrs. Shephard : I thank my hon. Friend for his reply. Do all other EEC countries provide maternity grants?

Mr. Scott : In Germany, Greece and Portugal, only insured people are entitled to such benefit, whereas we provide benefit for all working pregnant women by means of one or other of the allowances or benefits.

Ms. Mowlam : Does the Minister agree that one ought to look not only at the amount of maternity benefit that women receive but at the length of time that they are allowed maternity benefit? I am sure that the Minister will want to hear about a most interesting comparison--I look forward to his comments--of the length of time that women receive maternity benefit. If I were pregnant in West Germany, I would get benefit for 32 weeks, In Italy for 21 weeks, in France for 16 weeks, in Spain for 14 weeks and in Ireland for 14 weeks, but here women get it for six weeks. [Interruption.] Obviously male Conservative Members of Parliament do not have the child care problems that many women in this country have to face. I am sure that the Minister will accept that that is the important comparison.

Mr. Scott : Only two countries in the European Community--Denmark and Italy--pay income replacement for longer periods than we do. There are some insured benefits, but they are not on the basis of income replacement, as ours is.

Mr. Thurnham : Will my hon. Friend put the record absolutely straight? Is he aware that although we are one of the most generous payers of maternity benefit, Labour party MEPs have been advertising at great expense, and quite falsely, that we pay maternity benefit only for six weeks?

Mr. Scott : I am surprised that the Opposition should be so economical with the truth in that particular area. Although earnings- related SMP runs only for six weeks, for another 12 weeks after that it continues as a flat rate benefit.

Ms. Richardson : I do not understand how the Minister can be so smug about the benefits that he claims are available to pregnant women. Britain is the worst provider of statutory maternity pay for pregnant working women in the EEC. The eligibility criteria that the Government have introduced have deprived over half Britain's working women of any entitlement at all. Will the Minister comment on the fact that Britian is unique in Europe in giving no maternity leave, as of right to all pregnant women in employment? Furthermore, 87 per cent. of the part-timers working less than 20 hours are women. There is no universal right to a maternity grant. Many women notice that to their detriment.

Mr. Scott : Maternity leave is provided for women in full-time regular employment. That is the basis of the system. That is why it was introduced, and it is right that it should be on that basis. If we allowed any part-timer

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--however many hours were worked--to have maternity leave, we should open the gates to all sorts of abuses of the system.

Departmental Expenditure

10. Mr. Cran : To ask the Secretary of State for Social Security by what amount spending by his Department has changed in real terms over the past five years for which figures are available.

Mr. Moore : By about £2.25 billion between 1983-84 and 1988-89, a real increase of 5 per cent. We plan to increase spending by a further £3.5 billion in the present year, bringing total expenditure to over £51 billion, nearly one third of public spending.

Mr. Cran : Will my right hon. Friend take this opportunity to condemn some elements of the professional poverty lobby in this country who continue to ignore the fact that everybody is better off than they were, as is evidenced by the fact that in the 15 years to 1985 average household incomes rose by 25 per cent. in real terms? In addition, the poor and the needy are now in receipt of 31 per cent of public spending this year, as against 25 per cent. in 1979.

Mr. Moore : My hon. Friend is absolutely right. Perhaps unwisely, I tried in a recent speech, which attracted some attention, to take a period of time which is disconnected from any particular party's period of office to illustrate what has happened during the past 40 years, during which successive Governments have tried to improve the lot of the least well-off people in society. It does no service to them, or to those of us who try to help them, to distort the truth. We shall help people who are genuinely in need much more effectively through our current massive, and record, social security spending.

Mr. Heffer : I accept that the mass of the people are far better off than they were in the 1930s. We are not talking in terms of that type of poverty. Is it not clear that people who are at the lowest end of the income scale, who are struggling on benefits and on low wages, could have been a lot better off if the Government had not given great hand-outs in tax to their friends but had given that money to the people at the lower end of the scale?

Mr. Moore : The hon. Member genuinely cares about these issues. I am glad that he recognises that all are better off. His argument seems to be that those at the bottom could have been even better off as a result of different economic policies. It is extraordinary that the Opposition's argument is now about how to spend the results of Conservative economic success. It may be of interest to the hon. Member to know and consider that, 10 years ago, the top 5 per cent. paid 25 per cent. of gross income tax. Today they pay nearly 30 per cent. Their success has added to the success that allows me to spend the present record sums on those in need.

Disabled Parents

11. Mr. Bowis : To ask the Secretary of State for Social Security if he will take steps to improve social security benefits for children of disabled parents.

Mr. Scott : As my hon. Friend knows we have increased real spending on the long-term sick and disabled by 90 per

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cent. to £7.3 billion since 1978-79. He will also know that, when we have all six reports from the Office of Population Censuses and Surveys, we will be better placed to judge whether this help is well directed.

Mr. Bowis : My hon. Friend gives an excellent report in terms of what we have been able to achieve so far. We are talking about a particularly brave group of children and parents. Will he consider two aspects of their lives closely? First, when a child's education is continually disrupted by being called out of school to look after a sick and disabled parent, perhaps some form of additional care and respite could alleviate that.

Secondly, when two disabled parents manage to cope in the home but have difficulty getting their able-bodied child to school, a discretionary payment can be made by the education authority, but when no payment is made, as has recently been the case with the Inner London education authority, such families receive no help.

Mr. Scott : I note what my hon. Friend says. It is clear that, in the circumstances which he described, the Child Care Act 1980 lays a responsibility on local authority social services departments to promote the welfare of such children. Normally, when such a case is brought to the attention of the social services department, it liaises with health authorities and voluntary agencies and is able to provide a wide range of domiciliary services, including respite care, which are in the interests of the child.

Mr. Alfred Morris : Is the Minister aware that children of disabled parents whose incomes were cut in last year's social security changes also became poorer at a time of rapidly rising prices and when child benefit has been losing its value? Has this not piled handicap on handicap for these families? In advance of the review of disablement benefits, not to ignore what the hon. Member for Battersea (Mr. Bowis) said, will the Minister introduce a special allowance for families in which children do so much for their parents to enable them to stay at home?

Mr. Scott : Apart from reiterating my opening reply, I remind the House that when we introduced income support, the income support disability premium gave £60 million extra to 270,000 people--an important enhancement of support for disabled people. I am not dismissing the problems of child carers, but I reiterate that they have to be addressed by a partnership between central Government, local authorities and local health authorities in the provision that they can make for individual cases.

Community Charge

12. Mr. Haynes : To ask the Secretary of State for Social Security if he will make a statement on the arrangements for paying the community charge rebate.

16. Mr. Robert Hughes : To ask the Scretary of State for Social Security if he will make a statement on the arrangements for paying the rebate of the community charge.

Mr. Peter Lloyd : We estimate that one in four of those liable for community charge in Great Britain will benefit from the effective help given by the rebate scheme to those on low incomes. In addition, the special element built into

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the rates of the income-related benefits will help nearly 9 million people with the minimum contribution they have to make from their own resources.

Mr. Haynes : Will the Minister let the Secretary of State know that I am here, and I am always here? Is he aware that last Friday we met Church leaders in Nottinghamshire? The have their feet on the ground in the community and know about the problems of people in poverty. I use the word poverty because it is there. When will the Government spend some money on telling the people about their rights to rebates for the community charge? Wake up!

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