The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack) : I am pleased to tell the House that at the end of February 1991 there were 322,000 families in receipt of family credit--a figure more than four times higher than the 79,000 families who were in receipt of family income supplement in February 1979. The figure is the latest available, but does not fully reflect the full effects of the recent advertising campaign.
Mr. Greenway : Is not this increase in the number of families receiving special help through family credit--more than four times the number who used to receive the old family income supplement--a vindication of the Government's policy of introducing this rather better structured benefit? Will my hon. Friend undertake a review of the arrangements for claims by self-employed people on low incomes, many of whom find the process of claiming onerous and taxing? Does he agree that if the Government streamlined the application process that would show their clear commitment to helping low-income families facing genuine hardship?
Mr. Jack : I thank my hon. Friend for his commendation of family credit. He asked specifically about the structure of the benefit. It may be worth reflecting that 65 per cent. of people on the benefit receive £20 a week or more, 30 per cent. receive £40 a week or more and 17 per cent. receive £50 a week or more. Forty-five per cent. of the self-employed get £50 a week or more. I assure my hon. Friend that work is under way at the university of York to investigate the matters to which he referred.
Mr. Battle : Do not those figures show that more people need family credit because of an increase in poverty resulting from low pay? Will the Minister tell us the percentage uptake of family credit? That would be the key figure.
Column 622accurate figure be available to answer his question. However, I can tell him that, as a result of our advertising campaign, claims are running at an all-time high of about 20,000 a week. I like to think that that reflects improved awareness of the excellence of the structure of family credit.
Sir Peter Emery : Will my hon. Friend tell the House exactly how much money the taxpayer is spending on such support? Will he confirm that the Opposition thought that the benefit should be allowed to "wither on the vine"? What will people claiming the benefit do if that happens?
Mr. Jack : I assure my hon. Friend that, far from allowing this excellent credit to wither on the vine, we have fertilised its roots. The uptake is growing considerably and we estimate that we shall spend some £543 million on it this year.
The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : Income support, which was introduced in Apri1988, is structured to provide extra benefit to groups facing the greatest pressures. Those groups were identified by the Department's analysis of low -income groups and the findings of a research survey commissioned by the Government from the Policy Studies Institute.
Mr. Cohen : Does the Minister acknowledge that income support levels are miserably low when set against nutritional needs? The poor get ripped off for the food that they have to buy. It may be cheap, but it is of poor quality. Families in my constituency tell me that on present income support levels they cannot afford to get take-away fish and chips once a month. Does not that tell the Minister that there is something fishy about income support levels? They are too low.
Miss Widdecombe : Our medical advice is that there is no reason why someone on income support should not be able to follow a normal and healthy diet. Where a general practitioner decides that it is in a patient's interests to have an additional special diet, it is available on prescription. The hon. Gentleman will know that prescriptions for those on income support are free.
Mr. Brandon-Bravo : Will my hon. Friend examine one technical problem that arises--that of people faced with bringing up a family on their own? If people in that unhappy position go back to school or take up training, they lose income support and that puts them in a dreadful Catch- 22 situation. Can the problem be redressed?
responsibilities for maintaining young people in education and for supplying training to older people reside respectively with my right hon. and learned Friends the Secretaries of State for Education and Science and for Employment. Training, employment and education are vital in enabling people to become free of state benefits and to go back to work. I assure my hon. Friend that much attention is directed to the problem that he mentions.
Column 623Mr. Alfred Morris : Will the Minister confirm that people with AIDS could receive £30 a week before April 1988 for a special diet and nothing afterwards? Has the Department yet replied to Naomi Wayne, of the Terrence Higgins Trust, about the misuse of Anita MacDonald's research? Will she comment on Katie Peck's research, which showed that a high-protein, high-calorie therapeutic diet for people with symptomatic HIV in London now costs £42 a week? Why should they be left to complain that they are literally dying for want of the help that was available before April 1988?
Miss Widdecombe : I must refer the right hon. Gentleman to the reply that I gave a few moments ago--that those who need special additions which cannot be provided within a normal diet can obtain them on prescription. Our medical advice is that a high-calorie, high-protein diet can be achieved within the support that we are currently making available. The right hon. Gentleman makes an important point. It is not likely to be overlooked and we have the matter under constant review.
4. Mr. Alison : To ask the Secretary of State for Social Security if he has any estimate of the number of low-income families facing marginal deduction rates in excess of 100 per cent. (a) in 1978-79 and (b) for the latest year for which figures are available.
The Secretary of State for Social Security (Mr. Tony Newton) : As a result of the social security reforms, virtually no families have marginal deduction rates of over 100 per cent. in 1991-92. In 1985, 70,000 families had potential deduction rates of over 100 per cent. The 1985 figure is the earliest available.
Mr. Alison : I am grateful to my right hon. Friend for that encouraging reply. Will he confirm that the latest figures on low incomes show that families with children in the bottom fifth of income distribution received increases in income of 19 per cent. in real terms between 1981 and 1987? Does not this give the lie to much false propaganda about the poor getting poorer under the Conservative Governments?
Mr. Newton : I can certainly confirm my right hon. Friend's figure, which is drawn directly from last week's Select Committee report on low incomes. It helps to put in perspective some of the wilder and more misleading claims by the hon. Member for Oldham, West (Mr. Meacher).
Mr. Wigley : Does the Secretary of State accept that some people in the very low income groups are poorer as a result of increases in fixed costs, such as water rates, which have gone up by 50 per cent. in Wales in the past two years? Will he undertake to examine methods of helping low- income people suffering from high water rates to see whether, in parallel with changes on the introduction of the council tax, something analogous to community charge benefit might be introduced?
Mr. Newton : To take the latter part of the question first, I am not sure that I would want to go down the path of adding to the complexity of our benefit structure a water rate benefit, because it would give rise to questions whether there should be an electricity or gas benefit, or benefits for other charges. The right course is to take
Column 624account of all these things when we look at the annual increase in benefits and that is something that I always keep under review.
Mr. Meacher : What is the point of boasting about lower marginal deduction rates when, according to the Select Committee figures that the Secretary of State cited a moment ago, the incomes of the poorest 5 million people have, after three periods of Tory Government, fallen by an average of 6.2 per cent? Is not it an obscenity that the numbers of people with less than half average incomes has more than doubled since 1979, yet the salaries of Social Security Ministers, who are supposed to meet the needs of such people have risen over the same period by more than 240 per cent? As the Government believe in performance-related pay, is not it high time that the Secretary of State apologised for his failure by taking a massive cut in his pay?
Mr. Newton : All that the hon. Gentleman has done in the past few seconds is to do what he did last week--use the figures on a basis that the Select Committee and the Institute of Fiscal Studies, both of which are independent of the Government, warned is not the most sensible and proper way to use the figures. The Select Committee report says :
"Real disposable incomes grew by more than 30 per cent. between 1979 and 1988, with increases in real income being seen at all levels of the income scale."
The hon. Gentleman should acknowledge that.
Mr. Norris : Given the eminent good sense of helping those who want to care for disabled people to do so at home, I congratulate my right hon. Friend on the fact that the number of those who can claim an allowance while caring for invalids at home rose from 5,000 when the Government came into office to over 125,000 last year. Given the evident success of enhancing the earnings disregard, which last year more than doubled the number of people who are able to claim it while working, will my right hon. Friend take on board the idea of extending the earnings disregard principle further?
Mr. Scott : We monitor this carefully. It is worth reminding the House that expenditure has increased from £4 million in 1978-79 to £213 million in 1990-91. That shows our concern for those who care for the most severely disabled. I am equally convinced that generous earnings allowances encourage the carers to join or remain in employment.
Column 625Mr. Newton : Research undertaken in 1989 in connection with the White Paper "Children Come First" shows that only 30 per cent. of lone mothers and 3 per cent. of lone fathers receive regular maintenance.
Mr. Greenway : Is not it time that fathers--and mothers where appropriate--took responsibility for their children after walking out on them, rather than expecting society to fund their responsibilities to the tune of billions of pounds?
Mr. Newton : In a word, yes. I am glad that we shall, I hope, make substantial further progress in that direction with the Child Support Bill, which received its Third Reading in another place last week and which I hope will be debated here before too long.
Mr. Frank Field : As the Government have allowed, over the past 11 years, the near-collapse of the payment of maintenance from fathers and mothers on supplementary benefit income support, I welcome their 11th-hour conversion. Will the Minister give an undertaking that any moneys that are gained by the payment of this maintenance will be ploughed back into the social security budget and not paid back to the Treasury?
Mr. Newton : I would not wish to be taken as accepting the way in which the hon. Gentleman put the first part of his supplementary question. Substantial efforts were made over the two or three years before the Child Support Bill was put before Parliament to increase the amount of maintenance moneys being collected. As for the second part of the hon. Gentleman's question, we need to consider all the relevant factors together. Large additional sums of benefit have been directed towards low- income families, including lone-parent families, for many years. We wish to ensure that there is a proper balance between what the taxpayer finds and what is found by others.
7. Mr. Paice : To ask the Secretary of State for Social Security what proportion of pensioners own their own homes ; and whether he has made any estimate of how this is likely to change over the next 20 years.
Miss Widdecombe : The latest information shows that, in 1987, 49 per cent. of pensioners owned their own homes compared with only 40 per cent. in 1979. As an even higher proportion of younger people now own their own homes, we have every reason to believe that that upward trend will continue into the next century.
Mr. Paice : My hon. Friend will agree that the figures bear testament to the Government's positive action to encourage home ownership. As increased home ownership works through into the pensioner age group over the next decade, the next two decades and onwards, will my hon. Friend do everything in her power to encourage policies that will enable the asset value of home ownership to be uesd to help pensioners in their later years when they need every penny of income that they can get?
Miss Widdecombe : My hon. Friend makes an important point. There are already schemes to help pensioners to use the capital asset of their homes where that would help them because their current income is restricted. I am grateful to my hon. Friend for raising the matter. As I have said, there are already such policies and they will continue to be produced.
Mr. Bowis : Does my hon. Friend agree that over the past 10 years we have taken great steps forward to improve security for pensioners in terms of their income, their homes and their persons? Will she confirm that there has been a great increase in home ownership and an increase in telephone links to those homes, from 50 to over 80 per cent? Will she consider further ways of extending that and other home security measures so that pensioners feel that they have security at home as well as in the street?
Miss Widdecombe : My hon. Friend is right to suggest that there has been an increase in all forms of pensioners' income. There was a 31 per cent. rise in pensioners' incomes during the first eight years of this Government. There has been a substantial increase in the ownership of telephones and of all consumer goods by pensioners. In general, there has been a rise in the economic position of pensioners, including their savings, income and home ownership.
Bearing in mind the fact that there are about 70,000 home repossessions a year, may I ask the Minister how many pensioners have had their homes repossessed? Given the consequent difficulties for local authorities, will the hon. Lady have a word with the appropriate Minister in the Department of the Environment to ensure that local authorities are able to rehouse pensioners whose homes have been repossessed? The authorities have not had the money to build houses and bungalows for those people.
Miss Widdecombe : Only 4 per cent. of pensioners are still paying a mortgage. All other pensioners who own their homes own them outright. The problem of repossessions is not as great among pensioners as it is in the rest of the population.
Miss Widdecombe : My hon. Friend will be interested to hear that in 1987 a total of 84 per cent. of pensioners received some form of income other than the retirement pension and associated state benefits.
Mr. Moss : Does my hon. Friend agree that those excellent and revealing statistics underline yet again the encouragement that the Government have given to people to save for their retirement? Is she aware that that resulted in a major increase in pensioners' incomes of about 31 per cent. between 1979 and 1987?
Miss Widdecombe : Indeed, and more than half all pensioners now enjoy the benefits of an occupational pension. As an even larger percentage of recently retired pensioners have occupational pensions, there is every prospect of increasing independence among the elderly.
Mr. Winnick : Why should there be any room for complacency when, on the Government's own figures, two thirds of all pensioners have incomes of less than £5,000 a year? When will the Government apologise--if ever-- for the way in which, 10 years ago, they broke the link between pensions and earnings? As a consequence, a married pensioner couple is now £24 a week worse off and a single pensioner £14 a week worse off. That is directly attributable to the actions of a Tory Government.
Column 627Miss Widdecombe : I see no reason to apologise for a 31 per cent. rise in pensioners' incomes, when all that a Labour Government could manage was a 3 per cent. increase--and that despite the operation of an earnings link. That proves that it is not an earnings link that matters, but the overall state of the economy.
Mrs. Roe : I am sure that my hon. Friend the Minister is aware that many people are anxious to learn the Government's views on equalisation of the state pension age and the implications that that will have for private pension schemes. Can my hon. Friend say what action has been taken by other countries in the European Community and whether we might learn a lesson from it?
Miss Widdecombe : For some time, the Government have been committed in principle to equalisation of pension ages. I am sure that my hon. Friend is aware that it presents immense practical economic, demographic and social difficulties. We maintain our commitment to equalisation and the question of pensionable age is being debated throughout Europe. Many European countries are considering proposals for raising the pensionable age to achieve equalisation. We are not ready to present detailed proposals, but we are committed in principle to that very important policy.
Mr. Allen McKay : When considering pensioners' incomes, will the Government consider not only the numbers involved but the amounts payable? Many thousands of elderly people receive a very small pension, so can the Under-Secretary confirm that it is not the Government's intention to means- test benefits or state pensions?
Miss Widdecombe : It is precisely because we recognise the huge variety of income levels among the elderly that we target resources at the poorer pensioner. It is also why, over the past two years, we have directed £280 million in additional support at the poorer pensioner. Even those above the income support line have available to them housing benefit, community charge benefit, free NHS prescriptions and other benefits that are available in full to those who are on income support. Our policies acknowledge that there is not a homogeneous income level among the elderly and, accordingly, direct assistance towards those most in need.
Mr. Newton : Based on 1990-91 figures, if the upper earnings limit for employees' national insurance contributions were removed, it is estimated that about 3.4 million people would pay more in contributions. If the corresponding upper profits limit for self-employed people were also removed, it is estimated that about another 0.5 million people would also pay more in contributions.
Sir Trevor Skeet : Will my right hon. Friend draw attention to the fact that the vast increases in social security payments and health service expenditure that occur almost every year are funded not by any special taxes but from the wealth of the nation--which is created
Column 628only by Conservatives? Will my right hon. Friend confirm that because of the ceiling placed on national insurance contributions advanced by the Opposition, one seventh of the working population would have to pay additional taxes?
Mr. Newton : I agree very much with my hon. Friend. The more rapid economic growth achieved over the past decade under the present Government has been a crucial factor in enabling greater spending on both health and social security and in reversing some of the cuts in the hospital capital building programme that were made by the previous Labour Government. It is becoming clearer by the day that a significant part of the population-- including senior nurses, managers and middle-managers, experienced teachers and many others--would be hit very hard by Labour's proposals for financing some of their promises.
Mr. Allen : Does the Secretary of State agree that many people earning £20,000, £30,000, £100,000 or £1 million a year see the justice of paying national insurance contributions on all their income? They see the justice because they know that it will fund an increase in pensions for the single pensioner of £5 a week and for the couple of £8 a week, with index linking thereafter, as well as restoring child benefit to its 1987 level. Does the right hon. Gentleman accept that national insurance payers are annoyed because they are having to fork out an extra £6 billion a year to pay for the Secretary of State's scheme to get people to opt out of state sector pensions and into private pension plans?
Mr. Newton : Very large numbers of those who will be expected to pay sizeable imposts under the Labour party's proposals will feel that there is no reason why they should pay increased national insurance contributions to finance a non-national insurance benefit, which has never before been paid out of the national insurance fund--child benefit. For the first time, they will apparently be expected to pay large amounts in national insurance contributions, for which they will gain no benefit.
Mr. Jack : It is expected that the agency's operation will reduce the taxpayer's expenditure on benefit by an additional £400 million per year in the long term. That is in addition to the benefit savings presently being achieved of £180 million.
Mr. Amess : Is my hon. Friend aware that many women, and some men, in my constituency of Basildon are valiantly bringing up families on their own, with no support from their former partners and that they are delighted with the Government's legislative proposals? I accept the impressiveness of the figures which my hon. Friend announced, but will he take this opportunity to reassure the House that the Child Support Agency is not just to do with saving money on the overall expenditure on benefits?
Column 629with me on behalf of the women's refuge and battered wives' home in his constituency. I should like to reassure him and the House that this is not merely about benefit savings. First and foremost, it is about establishing a line of responsibility for maintenance by absent fathers for their children. It is also a pathway to the future for some of those lone parents who wish to go back to work through the changes that we are making to family credit by reducing the number of hours from 24 to 16, thus making this benefit much more accessible to them, and giving them £15 of any maintenance recovered in the form of a disregard at that time.
Mr. Janner : Is there any hope of any of that £400 million saved being used for day nurseries or other facilities so that lone parents who wish to go back to work can afford to do so? Is the hon. Gentleman aware that the problem is not merely the award of maintenance but its collection? Many women who are back at work and earning about as much as they need to pay the babysitter have no financial help, no resources, no offer from the Government and not much hope for the future.
Mr. Jack : There is hope for the future. The hon. and learned Gentleman mentioned collection. The Child Support Agency will be powerful and fully equipped, both administratively and with information technology, to do the job of collecting maintenance. I have said that the women to whom the hon. and learned Gentleman referred would be on family credit and I have described the improvements in that benefit which will arise in parallel with this measure. I refer the hon. and learned Gentleman to example 10 in the White Paper, "Children Come First", where he will see well exemplified the point which he draws to my attention, showing that women will be better off in work with family credit as we propose it.
Mr. Lester : Although I welcome the principle of the Child Support Bill, will my hon. Friend also take account of the fact that many fathers are denied access to their children because of marital difficulties and that one reason why they do not support their children is that their previous spouse may make it difficult for them to play a part in their children's upbringing? Will he bear it in mind that that factor is critical when striking a balance? Fathers should support children, but they should also have a part to play in their upbringing.
Mr. Jack : There have been many representations to the Government on the Child Support Bill and that matter. We have listened carefully to my hon. Friend. Access arrangements are entirely matters for the courts during, for example, divorce proceedings. I certainly would not like financial help for children to be used as a lever, to a child's detriment.
Mr. Scott : I have received representations from many bodies on the future of the independent living fund. We will of course, take them into account when making decisions about the future of the fund.
Mr. McFall : The Government set up the independent living fund as a knee-jerk response to repressive social security legislation in 1987. There will be no future for disabled people after 1992, and the Minister knows that. I have received representations from many disabled people. They know that the budget is cash limited instead of being dependent on need. When will the Minister have a decent answer for disabled people, so that they will have a future, just like able-bodied people in our society?
Mr. Scott : I should have expected a harangue rather than a proper question about the future of the independent living fund. As the hon. Gentleman knows, between its inception and this financial year, we have increased expenditure on the fund tenfold to meet the needs of severely disabled people. We shall listen carefully to the arguments when we debate Lords amendments to the Disability Living Allowance and Disability Working Allowance Bill tomorrow, and we look forward to responding then.
Mr. Hannam : Will my right hon. Friend accept the congratulations of disabled people and of those who are interested in their welfare on the establishment of the fund and on the huge tenfold increase in Government funding? Does he accept that voluntary organisations are concerned about the future of special funding for the 7,000 or 8,000 severely disabled people who are helped by the fund because after 1993 responsibility is likely to pass to local authorities? Will my right hon. Friend give an assurance that funds will be available from local authorities when that change takes place?
Mr. Scott : As I said to the hon. Member for Dumbarton (Mr. McFall), we shall have an extended opportunity tomorrow to consider that matter when we discuss Lords amendments to the Disability Living Allowance and Disability Working Allowance Bill. I look forward to responding more fully then. I recognise the importance of ensuring that, after 1993, proper arrangements are made to cope with the needs of severely disabled people.
Mr. Scott : In making that point, the hon. Gentleman prejudges the arrangements that will be made for either existing or new cases. The vast majority--indeed, the totality--of those who represent disabled people are anxious that proper arrangements are made after 1993 to ensure that the needs of disabled people are properly taken into account.
13. Mr. Sumberg : To ask the Secretary of State for Social Security what is his estimate of the number of low-income families which faced marginal deduction rates in excess of 100 per cent. in 1978-79 and the latest year for which figures are available.
15. Mr. Brazier : To ask the Secretary of State for Social Security what is his estimate of the number of low-income families which faced marginal deduction rates in excess of 100 per cent. in 1978-79 and the latest year for which figures are available.
Column 631Mr. Newton : I refer my hon. Friends to the reply that I gave my right hon. Friend the Member for Selby (Mr. Alison) earlier today.
Mr. Sumberg : I am grateful to my right hon. Friend for that answer. His earlier answer set out our commendable record. Is he aware that this weekend the Labour party dropped its pledge to low-income families to introduce a lower rate of tax for the poorest in our community? Is not that another example of the chaos and confusion in the Labour party on its proposals to help the lowest paid?
Mr. Brazier : Does my right hon. Friend agree that on taking office in 1979 we found that one of the worst effects of the previous Labour Government was that many people would have been better off on the dole although they were working long, hard hours in low-paid jobs? Does he agree that the Government's great achievement is that they tackled that problem with a combination of better family credit payments and reductions in taxation for the low paid? It would be a great shame if a future Government were to reverse that.
Mr. Newton : I very much agree with my hon. Friend. One of the worst defects of the social security system as we originally found it was that it did not pay large numbers of people to work at all. That is not satisfactory from anyone's point of view, including that of those people. I regard the fact that we have reduced that number so greatly as a major gain.
Mr. Pike : Is not the Secretary of State concerned about low-income families who may be forced to take out an essential loan and then find that the capital for that loan is taken into account as income, thereby losing them their entitlement to benefit? Is not that wrong and does not it penalise low-income families?
Mr. Newton : I must admit that I am not certain what point the hon. Gentleman is making. However, the availability of interest-free loans under the social security system in certain circumstances is an important advantage to many people compared with people just above the social security income support level who have to borrow at commercial rates.
Mr. Wilson : Is the Minister aware of a written reply that I received from his Department recently which set out a table of the marginal benefit increases for earnings between £100 and £150 a week? That table revealed the extraordinary fact that an average family with two children paying average rent and average poll tax and with entitlement to benefit would receive, if its income rose from £100 to £120, a benefit increase of £2.12 a week. Those getting what seems like a windfall increase from £100 to £150 a week would have a real increase in income of less than £7 a week out of £50. They are incredible marginal rates compared to those for top earners. What does the Minister propose to do to give a real incentive to those low-paid people who are so hard hit by the system as it stands?
Column 632these exchanges, to the poverty trap, which is the result of the high marginal deduction rates to which he referred. There, too, he will find that, because of the changes that we have made, the numbers of people subject to the highest marginal deduction rate--80 per cent. and above--have been drastically reduced.
The Attorney-General (Sir Patrick Mayhew) : Sir John May's inquiry into the Guildford and Woolwich case extends to the Maguire convictions. He is expected to resume his inquiry into this aspect once the Maguire appeal is decided. He cannot complete his investigation of the circumstances surrounding the convictions of the Guildford and Woolwich defendants until criminal proceedings against members of the Surrey police force have been concluded.
Mr. Banks : Is it not a fact that the Birmingham and Guildford stitch-ups have done great damage to the concept of British justice? The people want someone brought to account for those perversions of justice. We are talking not about humble coppers at the bottom, but about the people right at the top. Will the Attorney-General give a guarantee that if Sir John May's inquiries point the finger at Lords Havers, Donaldson and Roskill, he will not nobble Sir John May?
The Attorney-General : I regret the language with which the hon. Gentleman referred to cases which are now sub judice. He said that the British people are anxious to get justice. That will be done according to the rules and not to prejudged statements, which are not helpful. Last week, the chief constable of Devon and Cornwall police delivered a report to the Director of Public Prosecutions. As I said in my earlier answer, proceedings are now in train against certain former members of the Surrey police regarding the Guildford case.
Mr. Cohen : It is not a matter of language but of people being imprisoned falsely and of the people who did that having a cover-up in their favour. Will the Attorney-General confirm that the original convictions were based on false confessions and phoney forensic evidence? Have not the Government and other influential figures within the state been keen for Sir John May's inquiry to be half-hearted and slowed down? Is not the reason for that the fact that many senior police and legal officers, including people in the DPP, knew right from the start of the case that innocent people had been convicted?