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T H EP A R L I A M E N T A R Y D E B A T E S
OFFICIAL REPORT
IN THE THIRD SESSION OF THE FIFTIETH PARLIAMENT OF THE
UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
[WHICH OPENED 25 JUNE 1987]
THIRTY-NINTH YEAR OF THE REIGN OF
HER MAJESTY QUEEN ELIZABETH II
SIXTH SERIES VOLUME 173
TWELFTH VOLUME OF SESSION 1989-90
House of Commons
Monday 21 May 1990
The House met at half-past Two o'clock
PRAYERS
[ Mr. Speaker-- in the Chair ]
Oral Answers to Questions
SOCIAL SECURITY
War Widows' Pensions
1. Mr. Pike : To ask the Secretary of State for Social Security what percentage of claims for war widows' pensions are successful (a) on initial application and (b) on appeal.
The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard) : About 46 per cent. of claims for war widowpensions are successful on initial application. Some 19 per cent. of cases which go to appeal are successful.
Mr. Pike : Does the Minister recognise that incomplete records and the passage of time make it increasingly difficult to prove or disprove that war service has contributed to the death of a pensioner? Many widows as well as their husbands suffer for many years and find it extremely difficult. Is not it time that we took a more generous approach to widows whose husbands suffered as a result of giving service to the country during the war?
Mrs. Gillian Shephard : I know that the hon. Gentleman has a particular case in mind and I have every sympathy with the lady--he will know that her case is to go to
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appeal. He seems to be asking about automatic entitlement to a war widow's pension. The basic condition for the award of a war widow's pension must be that the husband's death was due to or substantially hastened by service in the armed forces. There must be that causal connection or the rates of the war widow's pension could not be justified.Disabled People
2. Mr. Bowis : To ask the Secretary of State for Social Security if he will make a further statement on the implementation of proposals in "The Way Ahead" to benefit disabled people who want to achieve independence through working.
The Minister for Social Security (Mr. Nicholas Scott) : Detailed work is progressing on our proposal in "The Way Ahead" to introduce a new benefit, disability employment credit, which will make it easier for disabled people to work. We intend to introduce legislation in time to bring the new benefit into effect from April 1992.
Mr. Bowis : Does my right hon. Friend agree that the new benefit will give enormous new opportunities to disabled people to join the community in the fullest sense? Does he also agree that three elements are necessary to make that possible? The first is training--will he talk to his hon. Friends about that? Secondly, employers should display a degree of patience to enable people to settle into the work. Thirdly, a safety net should always be provided so that those who try to go out to work but find that it is not possible will always be able to return to receiving the full benefits to which they were previously entitled.
Mr. Scott : I agree very much with the points that my hon. Friend has made. We shall be aiding the provision of a safety net by enabling those on invalidity benefit before they go into work, which attracts the disability employment credit, to retain their underlying entitlement to that benefit. Therefore, they will not have to requalify for it if by chance they are unable to sustain the job. I believe that the disability employment credit will be an important encouragement to people to go into work. It
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will reinforce the emerging demographic pattern, which I believe will compel employers to look beyond the disabilities that they see to the abilities that frequently lie behind them.Mr. Tom Clarke : Is the Minister aware that there is great concern among people with disabilities and their carers about the Government's attitude to the independent living fund? Will he therefore seek to persuade the Treasury that it is extremely important that people with disabilities should not experience poverty and that poverty and disability should not be synonymous?
Mr. Scott : As the hon. Gentleman will recall, I was able to announce an extra £8 million for the independent living fund and I am in discussion with the trustees of the fund about its future.
Mr. Alfred Morris : Does the Minister still expect to save £10 million by introducing the new credit as I was told in a parliamentary reply? Is he aware of the concern of Nicole Davoud and her working group on the credit that it should not exclude people who can work only for less than 24 hours per week, that it should not be means tested like family credit, and that the maximum allowable income should not restrict disabled people to lower-paid work? What assurances can the Minister give to the working group on those important issues?
Mr. Scott : I recognise the right hon. Gentleman's right--indeed, duty--to press me on those matters, but we have exchanged views on it before and he knows as well as I do that we are still working on the details of the benefit. We estimate that it will cost about £80 million to help 50,000 disabled people to obtain employment. The right hon. Gentleman should recognise that that is an important step in the right direction.
Lone Parents
3. Ms. Short : To ask the Secretary of State for Social Security how much a lone parent with two children would have to earn to be better off in work than on benefits, making an appropriate assumption about the costs of child care.
8. Mrs. Mahon : To ask the Secretary of State for Social Security how much a lone parent with two children would have to earn to be better off in work than on benefits, making an appropriate assumption about the costs of child care.
The Secretary of State for Social Security (Mr. Tony Newton) : It is not possible to generalise in the way that the questions seek as individual circumstances vary so widely and lone parents' income in work will also depend on whether maintenance is paid. The benefit system does, however, recognise that lone parents who work may face additional costs of various kinds, and the earnings disregard for such lone parents on housing benefit is to be increased from £15 to £25 a week in October.
Ms. Short : First, will the Secretary of State apologise, on behalf of the chair of the Conservative party, to lone parents throughout the country who are deeply hurt by the suggestion that their children are likely to become criminals and are taking part in a wrecking of society? Secondly, do the Government understand that many lone parents would love to work but cannot do so because of
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the costs of child care? Will he reconsider the Government's decision to prevent lone parents offsetting the costs of child care against benefit because the Government are thus trapping large numbers of them into poverty and into living on benefits when they would like to be independent and give a better life to their children?Mr Newton : With regard to the first part of the hon. Lady's question, I do not accept--nor do I think that my right hon. Friend would accept--the interpretation that the hon. Lady has placed on his remarks. We all share a common concern to improve the position of lone parents. My right hon. Friend was doing no more than talk about some of the difficulties that they and their families may face, which we are all concerned to tackle.
With regard to the second part of the hon. Lady's question, I have already referred to one significant improvement that we are making in the in-work earnings disregard. She will be aware that a significant number of lone parent families are helped by family credit, which is very much directed at them--about a third of those on family credit are lone parents. We shall continue to try to improve the benefits system, not least to try to improve the collection of maintenance, which provides portable income for those who receive benefit and then gain work. That will make a significant contribution to the problem.
Mrs. Mahon : The Minister will be aware that many lone parents will be disappointed with that answer. Will he reconsider taking the cost of child care into account? I add my support to the remarks of my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) about the right hon. Member for Mole Valley (Mr. Baker). Will the Minister also send a message to the Prime Minister, and point out to her that the majority of lone parents have not had the access to wealth that she had when bringing up children?
Mr Newton : Undoubtedly, many lone parents are in difficult circumstances. That is why we have made a number of improvements in the benefit system which are designed to help them. Some have already come into effect. Another, to which I have referred, will come into effect in October. Perhaps the biggest single weakness in our system at present is the lack of effective collection of maintenance to which we are directing close attention.
Mr. Favell : Labour Members talk as though the money to provide child care for lone parents will drop out of the sky. It has to be paid for by other taxpayers--[ Hon. Members :-- "What about directors' pay rises?"] Is it reasonable that a tax-paying couple should provide Rolls -Royce child care treatment for lone parents when it is perfectly open to those parents to do what other working women have to do--look to their mothers, aunts or neighbours to help out, rather than expect the help to come from taxes?
Mr. Newton : It is certainly the case that any improvement, as some would see it, or change in the benefit system in this sector, as in others, would cost money, and a decision would have to be taken about where that should come from and whether it might be better spent elsewhere. The last survey done on this subject--admittedly, it is rather old as it was done nearly 10 years ago by the social policy research unit--showed that about four out of five lone parents did not have any child care costs, even when they were in part-time work.
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Mr. Rooker : Is the Secretary of State aware that last week the accounting officer of his Department, when asked why there had been a massive disincentive for lone parents to work during the past eight years, as identified by the Comptroller and Auditor General, twice told the Public Accounts Committee that it was due to ministerial policy decisions?Mr. Newton : I am aware, having talked with my Permanent Secretary about the matter this morning, that he had some interesting exchanges with the hon. Gentleman last week. But I have not yet been able to read the transcript--
Mr. Newton : Because it is not available.
Mr. Newton : The hon. Member for Birmingham, Perry Barr (Mr. Rooker) will forgive me if I do not get drawn further down that path, especially as I believe that he has been promised a further note on some of the matters involved.
I must also tell the hon. Gentleman for the third time, but without apology, that the aspect of the system that has most obviously changed for the worse in the past 10 years has been the growing deficiency in collecting maintenance, which we are now vigorously trying to correct--I am glad to see the hon. Gentleman nodding in agreement.
Low-paid Workers
4. Mr. Corbyn : To ask the Secretary of State for Social Security how many low-paid workers are entitled to claim means-tested benefits and also liable to pay income tax ; and what was the number in 1985.
Mr. Newton : Although the information is not available on the basis requested, there are at present about 470,000 benefit units where the head is in full-time employment, pays income tax and receives an income-related benefit. Comparable information is not available for 1985.
Mr. Corbyn : I find that answer extremely surprising, because on 16 March 1990 such an answer was indeed given to my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), and an analysis done by the Low Pay Unit showed that in the past four years the number of people who fall into the means test trap has risen from 290,000 to more than 400,000. That is because--I hope that the Minister will tell us what plans he has to change this rule--indexing is linked to prices, not earnings, so many more families than before are worse off as a result of the policies adopted by the Department. If the Minister is serious about conquering poverty in this country--I have my doubts whether he is--will he kindly change the indexing formula so that more families will not get caught in the poverty trap as they do now?
Mr. Newton : I think that the hon. Gentleman may agree that the position is rather more complicated than he has acknowledged. He has referred to figures relating to the number of people with marginal deduction rates of 70 per cent. or more. An important part of the reforms that we undertook was dramatically to reduce the numbers subject to marginal deduction rates far higher than that. For example, whereas before the reforms more than
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200,000 people were suffering deduction rates of more than 90 per cent., that number has fallen sharply but there has been some corresponding increase lower down.Mr. Brazier : Does my right hon. Friend agree that since the Conservatives took office we have taken people out of the income tax net because real income tax allowances have increased by 25 per cent. more than inflation, and that the reason why the overlap has increased is that we have also increased benefits available to the low paid? Indeed, the family income supplement, the forerunner of the present family credit, which was designed to assist the low paid was introduced by a Conservative Government.
Mr. Newton : My hon. Friend is right to say that the number of people paying income tax would be far higher but for the changes that the Government have made. He is also right to refer to the changes that we have made which mean that income-related benefits are now calculated on income net of tax and national insurance contributions, which has helped to reduce those high marginal deduction rates and been a significant improvement in the system.
Housing Benefit
5. Mrs. Gorman : To ask the Secretary of State for Social Security if he has any plans to review the operation of the housing benefit system.
Mrs. Gillian Shephard : Although we monitor closely the working of the housing benefit scheme, we have no plans for a major review.
Mrs. Gorman : I thank my hon. Friend for her reply. Does she agree that if we subsidise something we often get more of it, and that people in local government who administer housing benefit and, incidentally, the Housing (Homeless Persons) Act 1977 believe that such subsidies are often a temptation to people to throw themselves on the authority for accommodation? If she agrees with that, would she further agree that the way to do something about the housing problem is to recreate a market in rented homes, and that if we could abolish controls on newly rented property we would reinstate the friendly landlady, who would be willing to take in many of the young people and others who sleep rough on our streets?
Mrs. Shephard : I am aware of my hon. Friend's concern in this matter. She has raised it before in the House and she will know that regulation of rents is a matter for the Department of the Environment. She will also know that housing benefit is not intended to help pay excessively high rents. Our arrangements for reimbursing local authorities for housing benefit expenditure give them an incentive not to pay benefit above reasonable market levels. Local authorities have powers to restrict benefit in cases where accommodation is over-large for a claimant's needs or unreasonably expensive. In the longer term, we propose to restrict the amount of housing benefit payable for properties at the top end of the market, but information to achieve that is not ready and will not be ready for some time.
Mr. Kirkwood : If the Government will not undertake a major review of the housing benefit system, will they take an urgent look at the way in which the housing benefit system prejudices the young, especially the
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homeless young? Will the Minister study the speech by Mr. Donald Maclean, president of the Association of Scottish Police Superintendents, who said in Peebles on Friday that stray dogs get a better deal than the young homeless in Scotland and that a civilised society such as ours should be able to do better than that? This is the first time in my experience that a senior and respected police officer has become involved in the benefit debate, and the Government should not ignore that. In the monitoring or review process, will the Minister bring forward urgent help for people under 25?Mrs. Shephard : I am not aware of the speech made by Mr. Donald Maclean but I will certainly look at it. The hon. Gentleman spoke of the young homeless. I am sure that he is aware of the administrative and other changes introduced by the Department to help 16 and 17-year-olds become entitled to benefit. An announcement about that was made in November and changes were made in the interaction between benefit and youth training schemes. Those were announced by the Department of Employment in March. In July we made a substantial change in benefit arrangements for young people who have to live away from home. Of course, we continue to monitor the situation.
Mr. Hind : My hon. Friend constantly reviews the housing benefit system. Will she look at the position of pensioners in receipt of small occupational pensions for which they have paid during their working life? When money becomes available will my hon. Friend try to improve their standard of living through the rates of benefit paid to them as that group of people has been hard hit by current inflation and the introduction of the community charge.
Mrs. Shephard : As my hon. Friend says, the Department continues to review the position of all groups. One result of such review was the changes made in October to help particularly needy pensioners of the kind described by my hon. Friend.
Mr. Winnick : Is the Minister aware of the appalling hardship and deprivation caused to many people and certainly to my constituents because, as the hon. Member for Lancashire, West (Mr. Hind) has said, the occupational pension is fully taken into account and the amount of housing benefit is therefore either derisory or none at all? Why do the Government penalise time and again so many of our senior citizens who, because they receive such a pension--in many cases a small amount--have to pay large amounts in rent and rates so that their standard of living is constantly being undermined? The Government bear a heavy burden of responsibility for the shocking poverty which has resulted from the changes in housing benefit.
Mrs. Shephard : I repeat that it was precisely such groups that the Government sought to target with our October package of help for older and poorer pensioners and, of course, are keeping the position under review.
Mr. Burns : Will my hon. Friend accept that there is a genuine problem about the payment of housing benefit? It usually takes two weeks and sometimes more to process an application, but many people who become homeless have to pay their rent weekly and landlords will not wait until the housing benefit application has been processed. It
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seems to be a vicious circle. I am sure that all hon. Members would be extremely grateful if my hon. Friend's Department could come up with any reasonable way to look at the rules and allow flexibility to minimise the number of people caught in that unfortunate trap.Mrs. Shephard : The administration of housing benefit is a matter for local authorities. I believe that my hon. Friend has raised previously his concern about the way in which this is done in his constituency. Housing benefit claims are meant to be processed in 14 days. Many authorities achieve this target, and there is no reason why all of them should not do so. However, if claimants have to wait because of the inefficient operation of housing authorities there is the possibility of a crisis loan.
Benefit Uprating
6. Mr. Battle : To ask the Secretary of State for Social Security in which years during the 1980s the uprating of supplementary benefit or income support rates provided for an increase in their real value ; and by what percentage.
Mr. Scott : These benefit levels have been uprated every year to take account of forecast or actual movements in the appropriate index. In a number of years there has also been specific extra help for special groups such as pensioners, disabled people and families with children.
Mr. Battle : We are beginning to view with deep suspicion the statistics that the Government give us. Will the Minister recommend that all Conservative Members read the Select Committee on Social Services' report on low-income statistics before repeating the false claim that the poor are better off under this Government? Is not it a fact that the real value of income support fell by 3.7 per cent. between 1981 and 1989? How would the Minister respond to my constituents who spell out the fact that their income is £84.99 a week on benefit and their outgoings on basic essentials are £91.84, so there is a shortfall of £6.85 every week? How would Conservative Members manage on such an income for at least a year?
Mr. Scott : We are studying the Select Committee report. We note that the Select Committee has said that it wants further work to be done on the pattern of statistics and the way in which they are provided and to increase both in scope and depth the figures provided by the Government on these matters. We shall take account of those recommendations as we consider the report.
I repeat that the benefits are uprated year by year by the appropriate index. In addition, we have found the money to provide extra help for low income families, for older and disabled pensioners and for families with children.
Pensioners' Charter
7. Mr. Skinner : To ask the Secretary of State for Social Security when he last met a group of pensioners' representatives to discuss the pensioners' charter ; and if he will make a statement.
Mr. Scott : We regularly meet representatives from pensioner organisations to discuss a range of issues of concern to them. Most recently, I accompanied the Prime Minister at a meeting with a delegation from the National Pensioners Convention.
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Mr. Skinner : The Minister will know that one of the demands made by pensioners is for the Government to restore the link between pensions and the prices and earnings index. The breaking of that link resulted in the Government stealing £12 per week from every pensioner. He will also be aware that pensioners want to abolish standing charges and prescription charges and to have free travel like Ministers who are carted all over the country. They also want to get rid of the poll tax. Why does not the Minister go down to her bunker in Downing street and tell her to get rid of it and get off the pensioners' backs?Mr. Scott : The hon. Gentleman, who, as ever, is strong on rhetoric but short on facts, may remember that the last Labour Government failed to honour its obligation to uprate pensions annually in line with the RPI. Their record in allowing inflation to run rampant through the incomes of pensioners also let the pensioners down considerably. It comes ill from the mouths of Labour Members to criticise us on this.
Mr. Ashby : When my hon. Friend meets the pensioners' representatives will he point out the real things that the Government have done to ensure that future generations of pensioners have a decent pension- -
Mr. Ashby : --such as personal pension plans and so on, so that by the year 2000, most pensioners will have an occupational pension as well as a state pension and will have a decent standard of living?
Mr. Scott : I agree very much with my hon. Friend. The encouragement of the growth of occupational pensions, the introduction of personal pensions, and the encouragement for people to save during their working lives is bound to transform the lives and prospects of people in retirement.
Mrs. Margaret Ewing : Does the Minister accept that a major point of concern to all pensioners is the right to fuel and heating? Will he give serious consideration to the abolition of standing charges for gas and electricity supplies to pensioners and to the introduction of a cold climate allowance that is automatic and continuous?
Mr. Scott : I appreciate the hon. Lady's point, but I am not sure that the abolition of standing charges would necessarily help those most in need of assistance with heating. We incorporated the old heating allowances when we moved to the new system of income support. The case for the abolition of standing charges is not, in my view, convincing.
Mr. Barry Field : Has my right hon. Friend read the comment by the person to whom we may not refer in this House that the challenge facing the country is to find a more active role for pensioners? Does my right hon. Friend agree that many a nimble tune is played on an old fiddle? Will he consider my ten-minute Bill, which attempts to abolish age discrimination? Many pensioners are fed up with the emphasis placed on the quantity of life rather than the quality, as they have a real contribution to make to society.
Mr. Scott : I agree with my hon. Friend's sentiments, if not with the precise terms of his ten-minute Bill. Demography will encourage employers to take more
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notice of the abilities that senior citizens can bring to our economy. By abolishing the earnings rule, we have taken a substantial step in encouraging pensioners to contribute.Mr. Meacher : In the light of the Minister's first reply, does he accept that the basic pension rose by 20 per cent. in real terms after six years of Labour Government, but by only 2 per cent. after 11 years of Tory Government? Does he acknowledge that the decision by the European Court of Justice last Thursday concerning pension ages has implications for not only occupational pension schemes but the state retirement pension? Does he agree that aligning the pensionable ages of men and women need not be unduly costly if it is undertaken gradually and if the individual is given the choice between a lower retirement age or a higher pension? As the European Court judgment was made in respect of article 119 of the treaty, which is directly applicable in courts in the United Kingdom, will the Secretary of State act before he is forced to do so? If so, when and how?
Mr. Scott : As to the hon. Gentleman's first point, it is not the level of the basic pension but pensioners' total income that matters. Under the present Government, that has risen twice as fast as that of the population as a whole, by 31 per cent. or 3.5 per cent. per annum, compared with 0.6 per cent. per annum under the previous Labour Administration. We are studying the implications of the European Court's judgment and will announce our conclusions to the House in due course.
Maintenance Payments
9. Mr. David Nicholson : To ask the Secretary of State for Social Security what action he is taking to ensure that more maintenance is recovered from absent parents.
Mr. Newton : We are currently reviewing the maintenance system and aim to bring forward proposals later this year. In the meantime, we have taken action to increase maintenance recovered under the current system.
Mr. Nicholson : Is my right hon. Friend aware that those initiatives, though somewhat delayed, are very welcome? Non-payment of maintenance is an abuse which comes to the attention of many right hon. and hon. Members--certainly it comes to my attention. Referring to earlier exchanges, may I ask my right hon. Friend whether he is aware that there is unwillingness on the part of the average taxpayer constantly to plough money into public spending? If the hon. Member for Oldham, West (Mr. Meacher) and some of his unreconstructed followers do not recognise that, the right hon. and learned Member for Monklands, East (Mr. Smith) certainly appears to do so. What sums of money does my right hon. Friend expect to recover from absent parents this year?
Mr. Newton : I shall regard the latter part of my hon. Friend's remarks as a question properly and accurately directed at members of the Opposition Front Bench. The amount of maintenance that we expect to recover should increase from rather less than £200 million last year to £260 million in the current year, which is a significant increase. For that reason, I am a little resistant to his suggestion that we have been slow on these initiatives. Much has been done within the present system, and we are considering whether it can be made much better.
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Mr. Frank Field : Will the Secretary of State accept the congratulations of Labour Members on, after 11 years of inaction, doing at least something on this front? But will he accept our criticism of a scheme that allows mothers on welfare to make over their maintenance payments to the state being extended to when they return to work? If it is, will not he create yet another disincentive to work?Mr. Newton : I understand the hon. Gentleman's point, which we can consider in the wider review. I hope that he will agree--he was not inclined to do so the last time we discussed this--that for the state to involve itself in wholly private transactions would be a major step that should not be embarked on without consideration.
Mrs. Roe : Does my right hon. Friend accept that walking out on one's family is not an option which fathers should be able to consider? Will he undertake to consider the effect of the system that was introduced in Australia in 1988 for national collection and enforcement and its introduction in this country?
Mr. Newton : Yes, we have looked to see what we can learn from the Australian system. I was in the United States at Easter examining a system that operates in two states which has something in common with that in Australia. We can learn from both, even though we might not be able to copy either exactly.
Mr. Meacher : Is not this whole exercise purely aimed at cutting public expenditure rather than assisting lone parents, precisely because any maintenance recovered is used to dock benefit by a corresponding amount? If the Government wanted to assist mothers and their families, would not they use the £80 million that the Secretary of State expects to gain from the recovery of maintenance to return to mothers and their families at least some of the £1,100 million that they have stolen from them by freezing child benefit over the past three years?
Mr. Newton : Far more than £80 million has been allocated in the past two years to help low-income families with children, not least lone-parent families. As to the first, rhetorical, half of the hon. Gentleman's question, the answer is no. The plain fact is that lone parents who are receiving maintenance and their children are in a better position than those who are not receiving it, which is why we want to introduce a system for maintenance.
Benefit Processing
10. Miss Widdecombe : To ask the Secretary of State for Social Security what proposals he has to improve the working of the Glasgow social security centre ; and what plans he has to extend benefit processing work away from south-east England.
Mrs. Gillian Shephard : The Glasgow centre is processing claims for income support faster and more accurately than the London offices from which the work was relocated. As ever, we are continuing to look for even greater improvements.
We plan to relocate the work of 21 London offices to centres in Glasgow, Belfast and Makerfield.
Miss Widdecombe : Does my hon. Friend agree that that greater speed and accuracy--I should be grateful if she would quantify it--has been achieved by the greater ease
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of retention and recruitment away from London and the south-east? Is not there a lesson in that not only for her Department but for others?Mrs. Shephard : The policy of other Departments is a matter for them, but the Department of Health, in conjunction with the Department of Social Security, is transferring many staff to Leeds. On my hon. Friend's point about accuracy and speed, in the London offices there was a 29 per cent. error rate in the payment of income support. That has fallen steadily and now stands at 9 per cent., which is a vast improvement. Income support can now be assessed within five days, compared with up to 14 days previously. The problems in the London offices were, as she says, caused by the retention and recruitment of staff--a problem shared by the DSS with many large private concerns.
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