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Mr. Willetts : If, in the future, we have groups of poorer pensioners, who are not just old pensioners, and if we have a greater diversity of income between pensioners, does not it follow that an uprating, an increase in the real value of the basic pension, above inflation, would be a particularly inefficient way in which to help the very people to whom the hon. Gentleman has referred ? Has not he made the case for the poorer-pensioner package which John Moore introduced and the subsequent poorer-pensioner package that was introduced in 1990 ?
Mr. Field : I hope that I would do more than what has been achieved by those limited measures, welcome though they are to the people in receipt of additional benefits. That intervention takes me on to the other part of my speech, which relates to imagining what contribution Beveridge would make to our debate today. That will make up the second and shorter half of my speech.
Mr. Dewar : How can one have a shorter half ?
Mr. Field : I am about to embark on my actuary-unsound contribution.
I am sure that Beveridge would draw enormous pleasure from the real successes that his report has ensured for many groups in our society. However, I do not believe that he would commend to us the idea that he came down
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from Mount Sinai with that report, that everything was written on tablets of stone and that nothing should be changed.The House underestimates the current Secretary of State for Social Security if it does not believe that, at some stage, he will bring forward some radical plans to reshape our welfare state. The Labour party is committed to a debate, at least, about such a reform. I wish to keep alive the rumour that we will establish a social justice commission, which will think radically about what should be done.
Mr. Kirkwood : The hon. Gentleman should give evidence to it.
Mr. Field : Yes, I hope to do so.
Mr. Ralph Howell (Norfolk, North) : Is the hon. Gentleman implying that we are likely to make some changes to the welfare system in the near future, but that he would insist on everything carrying on as before? If not, would he mind telling us what changes he would like to see?
Mr. Field : I am suggesting that if we do not think very radically, we will drift into our fifth election defeat and we will deserve that. I am seeking to keep alive the rumour that we are going to think radically. I want to propose one or two ideas and to suggest the atmosphere in which that debate should take place.
If there is to be a debate on such changes and if one is to contribute to it, one might be persuaded by other people's views. We should therefore encourage people to give their ideas even if, by the time we draw conclusions from that debate, we may have changed our minds three or four times. One should encourage different contributions, rather than score points off people who may behave inconsistently.
My first suggestion has already been put by my hon. Friend the Member for Croydon, North-West. It is inconceivable that we should conduct our debate about a radical reform of the welfare state without being prepared to take on board the issues relating to full employment. If we talk about moving back to a time of full employment, it is clear that we will all have to entertain new thoughts in order to achieve that objective.
That objective will be more difficult to achieve than that achieved by Keynes. He advanced his ideas, or managed to pinch others' ideas and convince people that they were his, at a time of falling prices. We are living in a time of mass unemployment, when prices are rising--they are not going up as much as before, thank goodness, but they are still rising. In those circumstances, it is much more difficult than it was in the 1930s to consider what measures one should take to try to reflate the economy. Then, the Treasury, without telling anyone, followed the policy of constructing a tariff rule and it reflated the economy behind the rule. We all know that that policy was successful well before the second world war broke out.
When we conduct that debate and when we allow ourselves to think in a totally different way, we should not limit ourselves to considering ideas from this country. The German trade unions are equally worried about the extent of unemployment. Those trade unions are now saying that if they forgo wage increases, given the rate of productivity in society, their employers and the Government should start talking about expanding the job base as a result of
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those forgone productivity increases. In other words, the German trade unions are now saying that they will break up the cartel that has operated in western society. That cartel is composed of those in work and, all too often, it operates against the interests of the unemployed.That idea may not work out to be the most profitable way in which to return to full employment--I accept that it is one of many such strategies. However, the German trade unions are thinking about a dynamic policy. It is not equivalent to the old crude policy of wage freezes or the policy for which we voted just the other day : to shift resources from the employed to the unemployed in a manner which would give those people a chance to work. We should consider that policy very carefully.
Mr. Ralph Howell : I am extremely interested in the hon. Gentleman's remarks. Does he subscribe to the idea of the right to work? Does he recognise that if we could institute a workfare system in this country it would, over time, eliminate unemployment? I should be interested to know whether he supports that idea.
Mr. Field : I think that we should consider that proposal. I understand that the Cabinet has considered it, but rejected it because it would be immensely expensive. It is not a cheap scheme and it does not rely on what my constituents call "Mickey Mouse" training.
Under such a scheme the public sector could initially create jobs that paid proper wages. On the other hand, running alongside that provision, one could build up pukka training schemes. People could opt for training, and the compulsion element would operate on the work side. Therefore, benefits would be withdrawn from those who failed to take up the work opportunities. That would be a totally different scheme from anything that has been discussed publicly in this country--I know that the Government have, privately, considered the option, but have rejected it because it would be so costly. I read the record of the debate that was initiated by the hon. Member for Norfolk, North (Mr. Howell) on the Friday before last--I was unable to be present--and I noted that the Government said that they would conduct a pilot study in the hon. Gentleman's constituency. He is a wily old bird and he does not need my advice on this, but I am sure that he will ensure that the jobs offered under that study are proper ones and that decent wages will be paid. I am sure that he will ensure that that study does not resemble what one might have been offered--a scheme whereby people would be given a small addition to their benefits and threatened with the loss of their benefits if they did not take up the job offered. I know that the hon. Gentleman has a healthy majority, but it will be slimmed down greatly if he does not stick to his guns, as I see them, on this point.
Mr. Ralph Howell : The hon. Gentleman is one of the most radical thinkers in this House. Surely he is making a mistake by saying that the scheme that I have advanced for so many years would be so expensive. No one knows, because no one knows what percentage of the unemployed would take up the option. If there were a 100 per cent. take-up, and it was voluntary, I accept that the scheme would be expensive, but if only two thirds of those eligible took it up, many others would still be engaged in lucrative work in society, known as the black economy. Until we have tried it, nobody knows whether it will work. It would be helpful if the hon. Gentleman put his weight behind
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trying the scheme effectively. We shall know only when we have operated, perhaps not the pilot scheme that has been promised but a true pilot scheme, such as I have been suggesting.Mr. Field : If the scheme is voluntary, we shall never know whether hordes of people are undertaking work on the side, because they will not volunteer for the hon. Gentleman's scheme. We would only know about that if there were an element of compulsion in the scheme. We know that the scheme that the Cabinet has considered was rejected on the ground of cost. The effort of ensuring that the jobs would pay proper wages and that there were training schemes which the hon. Gentleman and I would be prepared to go on, rather than some of those offered, is much more expensive than what is now being provided. I shall watch with interest to see how the hon. Gentleman boxes from his corner when the Government try to unleash that experiment in his constituency. As he says, we shall not know the true cost until the pilot scheme has been run. I hope that it will be a genuine scheme that offers proper jobs and training, not one that tries to operate on the cheap.
Mr. Nicholls : May I return to the point which the hon. Gentleman was making a few moments ago when he said that the German trade unions might be prepared to trade off job losses for restrictive or no pay increases? Surely that would institutionalise overmanning. The hon. Gentleman will admit that one can hide unemployment in a number of ways, one of which might be with the scheme that my hon. Friend the Member for Norfolk, North (Mr. Howell) has in mind. At least that would be an honest and open "hiding". What the hon. Member for Birkenhead (Mr. Field) has in mind would institutionalise and structuralise inefficiency. I do not think that that is what he means.
Mr. Field : No, I do not mean that. Discussions are going on among the car unions in Europe on the basis that workers should not accept lay- offs but should all accept shorter time. They would then not add to the job queues, which may lead to what the hon. Gentleman is saying. That is separate from what the German trade unions are beginning to discuss, which is a scheme whereby workers would not take a salary increase, even though increased productivity figures might show that it had been earned, provided that the job base was expanded by the wealth so created. That might lead to the inefficiency that the hon. Gentleman described, but it probably would not.
It is an interesting debate and, if we are serious about breaking up the employment cartel to which most of us fortunately belong--people on the outside feel that it is almost impossible to break into it--those ideas must be considered. If we are to think about a new Beveridge scheme, it must be run in harness with a serious debate on achieving full employment.
I shall end this part of my "actuary-unsound" contribution by saying that, in the 1920s, reformers were disturbed that some workers had entered the third winter of unemployment. In all our constituencies now there are households with third generation unemployed. That is how long unemployment has stayed with certain groups of people. There is no urgency in this debate about moving back to full employment and therefore offering people hope of the chance to work again. I look forward to having that debate in the next year or two.
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We should rethink the welfare state. I happily pick up the challenge made by the hon. Member for Havant about pension increases and the reforms that we should at least say are on the table, even if, on balance, we decide that we do not wish to back them. At a time when an increasing number of people are retiring with occupational pensions that are substantially greater than their state pensions, it is worth debating whether we should continually increase the national insurance pension for everybody at the same rate as in the past. Should we not think of ways in which we could concentrate on to the poorest pensioners the sum it would cost to increase the state pension for everybody?Every time that we put regulations through the House, without a vote, to increase the national insurance rate, we are increasing our own old-age pension without knowing what our circumstances will be and whether we will need that help. When we consider the proportion of the current pensions budget to the large social security budget--it is about a third--we cannot leave undebated our approach to that topic. We may ultimately still think that the method by which we now provide benefit is the most perfect form of benefit provisions that mankind has ever devised, though I should be surprised.
We now have a budget of £75,000 million to £80,000 million, yet many of our constituents are desperately poor. They are unemployed, do not know whether they can pay heating bills, must economise on food, and do not know how they will provide Christmas presents without getting into the money lenders' hands. Moreover, they know that it is not just this year but that, unless we come up with a full employment policy, that future may stretch on and on into the sunset. In those circumstances, it is important that we consider whether we could spend some of that £75,000 million to £80,000 million more effectively to offer a greater chance to people who have least. We must bite the bullet on that issue and realise that if we are to advocate such a policy, we shall not give increases to other much more advantaged groups of people and we must do that in an electorally successful way.
The exercise cannot, therefore, be conducted in a purely statistical way, balancing the books. The review on full employment and welfare must be conducted within a framework that sets the public imagination alive, as Beveridge managed to do 50 years ago tomorrow. Unless one gets over the sense that those two policies are building a different Britain, it will be impossible to win electoral support to take help away from some people and give it to those who have least. 7.47 pm
Mr. David Faber (Westbury) : I am grateful for the opportunity to add a few words to this debate. I am a newcomer to social security debates and I have enjoyed listening to the whole of this debate. My hon. Friends and Opposition Members have made many interesting contributions.
It is a pleasure and a privilege, albeit a daunting task, to follow the hon. Member for Birkenhead (Mr. Field), whose knowledge of these issues is so well known and on whose Select Committee I, too, am pleased to serve. I particularly welcome the praise which he lavished at the start of his speech on my right hon. Friend the Secretary of State.
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Mr. Frank Field : I lavished praise on the Opposition Front Bench, too.
Mr. Faber : The hon. Gentleman is absolutely right--the praise which he lavished on my right hon. Friend and his hon. Friends, on their performances after the autumn statement.
I particularly enjoyed the erudite intervention from my hon. Friend the Member for Havant (Mr. Willetts), whose expertise in the subject is also well known. I enjoyed listening to my hon. Friend and the hon. Member for Croydon, North-West (Mr. Wicks) swapping stories about Beveridge. Had I known last week that the hon. Members for Birkenhead and for Croydon, North -West and my hon. Friend the Member for Havant were so well versed on Beveridge before I spent a rather windy night with two of them earlier last week, I would have swotted up on Beveridge so that we would have had a little more to talk about late into the night.
I enjoyed the speeches by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and by my hon. Friend the Member for Teignbridge (Mr. Nicholls) both of whom brought considerable experience to the debate-- certainly more than I can bring, especially as I cannot claim to be an expert on "Coronation Street". We all agree that the issue of national insurance contributions will be the subject of another debate. I look forward to playing a part in that in the House and, I hope, in the Select Committee.
I warmly welcome the Bill's further measures to widen the personal choice that is already available to most people in providing for their retirement. The Government have shown foresight not only in safeguarding their current pension provision but in ensuring that as many people as possible will be able to seize the opportunity to provide for themselves in retirement. The Bill is part of the Government's continuing policy to promote personal pensions--one tier of their comprehensive strategy to improve living standards for all pensioners now and in the future.
The strategy has three main strands, the first of which is to maintain at all times the basic state retirement pension, always increasing it in line with prices. The Government have done that and, as we know from the autumn statement, they will continue to do it. It is worth repeating that since 1979 social security spending has risen by more than 50 per cent. over inflation and that in 1988 the average pensioner was about 34 per cent. better off than he was in 1979, a point made by my hon. Friend the Member for High Peak (Mr. Hendry). Secondly, the Bill is part of continuing Government policy to make everybody responsible for his own pension provision where and when he is able to do so. People may make provision through occupational and personal pensions and, if possible, through savings or other investments so that they can add to income from the state pension. As my hon. Friend the Member for High Peak said, the recent falls in interest rates were warmly welcomed by all hon. Members because they are essential for recovery, but they are not always so warmly welcomed by pensioners. More than three quarters of those who have recently reached retirement age derive income from savings and the average income from those savings doubled between 1979 and 1988. Therefore, personal savings are playing an ever more important part in the life and financial considerations of pensioners.
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Thirdly, Government policy focuses additional resources on those who are less well off. That is especially true in recent years for some older pensioners who have had less time to build up personal pensions or whose savings were ravaged by the inflation of the 1970s. Therefore, it is right that over the past three years special attention has been paid to those pensioners, and income-related benefits have been targeted more than ever to the tune of about £700 million a year over that time.As we enter the next century the number of people over pensionable age will be much higher than at present. My hon. Friend the Member for Teignbridge dwelt on that at length and I shall add my example to those that he employed. On Friday evening my wife and I were fortunate enough to attend the 80th birthday party of one of the most loyal party workers in my constituency, Mrs. Edith Belcher. On that happy occasion Mrs. Belcher did not qualify for a telegram from Her Majesty the Queen, but she received many telegrams and letters from my right hon. Friends and from some of my noble Friends. She reminded me that a few years ago she held a 25th anniversary party for my predecessor, Sir Dennis Walters, and that 25 years before that she held a 25th anniversary party for his predecessor, Sir Robert Grimston. She left me with the news that she intended to hold my 25th anniversary party 25 years from now.
Many people are now living to a much greater age, and that means that we shall have to make much greater provision for pensioners in the next century. That was why we introduced personal pensions in 1988 as part of a wider Conservative philosophy to increase choice and personal responsibility and to help to increase the freedom epitomised by other landmark Conservative legislation such as our highly successful privatisation programme and the sale of council homes.
Since 1988 nearly 5 million people have taken out personal pensions. They are already making a massive contribution to an ever-stronger structure of pension provision into the next century. Everyone is now able to make a choice as he prepares for retirement and to do it as he best sees fit. Personal pensions are now available to almost every employee, irrespective of whether his or her employer operates an occupational pension scheme. Personal pensions also provide a crucial source of finance for industry. The schemes are almost always fully funded and provide an important stimulus to industry through investment.
Since 1979 people of this country have voted four times for a Conservative Government. That is a resounding yes four times over for greater choice and greater flexibility--the sort of flexibility that the Bill seeks to provide. On each occasion such choice and flexibility would have been denied to people if there had been a different electoral result. So that we do not overburden the next generation, it is essential to continue to spread the message about the benefits of non-state pension schemes across the whole age spectrum.
The advantages of personal pensions are undoubtedly greater for younger people, and that is shown by their take-up among that age group and the vigorous marketing directed at them. I understand that the Institute for Fiscal Studies has calculated that the take-up of personal pensions is highest among the age groups 22 to 26 and 27 to 31.
Clause 1 introduces the 1 per cent. additional rebate for holders of personal pensions who are over 30 years of age
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and is in line with the commitment in our election manifesto. The new rebates should help about 2 million people and will be a vital incentive to those entering that age group to maintain their personal pensions. My hon. Friend the Member for Havant spoke about that. I understand that this is to be a temporary measure and, as we know, the existing 2 per cent. rebate for those who opt out of SERPS will end in April.I welcome the Minister's news that a new system of age-related rebates and all options will be considered. I welcome his offer to consult widely on that so that such a system may start to operate in April 1996. The Government want to see all age ranges and groups benefit from personal pensions and not just younger people. By using clause 1 to remove the anomaly the Government fully comply with their manifesto pledge
"of ensuring that personal pensions remain attractive across the age range."
Clause 2 relates to the national insurance fund and ensures that the top-up grant will become available to the fund from the Treasury from 1993-94 and, if necessary, subsequently. In his absence I congratulate my right hon. Friend the Chancellor on the autumn statement and for rightly safeguarding, as we knew he would, all social security spending. It was welcome news, despite scaremongering in the press, that all benefits are to be uprated in line with inflation. The hon. Member for Birkenhead claimed that the stories were put about by the Government. I prefer to agree with my hon. Friends who said that the stories were put about by the Opposition.
Mr. Frank Field : It is unfair of the hon. Gentleman to downgrade the achievements of the Secretary of State, who had two successes. He managed to frighten--goodness knows how--his Cabinet colleagues into agreeing his budget. At the same time he had the energy and wit to orchestrate extraordinary campaigns saying that everything would be smashed. He was able to claim those successes in the House. I was not trying to make mischief. I wanted the House to give full credit to the Secretary of State for his double success.
Mr. Faber : Having had the pleasure in recent weeks of serving on the Select Committee under the chairmanship of the hon. Member for Birkenhead, I would not accuse him of making mischief. I do not believe that he was doing so here. However, he credits my right hon. Friend the Secretary of State with doing a better public relations job than even he would lay claim to.
The national insurance fund is financed by contributions from employees and employers alike through national insurance payments. Therefore, as has been pointed out, it is sadly inevitable that, at a time of severe world-wide recession, income to the fund will fall while benefits payments will rise. It would have been all too easy for my right hon. Friend the Chancellor to have increased national insurance contributions the other day, thus easily increasing income to the fund, but that would also greatly have increased the tax burden on employers and employees alike, which would have been fatal in a time of recession.
It is also worth remembering that, had the Labour party won the general election in April, we would have seen those increases in national insurance contributions, as promised in its election manifesto. However, I am a little confused--I say that in all seriousness--following a recent statement in The Guardian by the hon. Member for
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Dunfermline, East (Mr. Brown) that such rises in national insurance contributions were no longer necessary. I cannot understand why in April those rises would have stimulated recovery and growth in a recession, but for some reason they have now become dependent upon recovery and the end of the recession.Clause 2 will introduce a top-up grant to enable the fund to meet fully its commitments to those in receipt of all social security benefits, without hitting employers or employees in their pockets. The Bill is innovative in that, unlike the old Treasury grant, it will not be automatic, but will be used only when needed, and will not be implemented when there is no need for its provisions. That will result in greater flexibility in management as the grant will vary in each year according to need. Most important of all, it means that the taxpayer's money will not be wasted on surpluses, and there will be no effect on overall public expenditure.
We have heard that spending on social security over the next three years will be £79.8 billion, £82.9 billion and £87 billion respectively. That is an accurate gauge of the Government's commitment to the needy, sick and elderly. We shall maintain full support for those hit hardest by the recession, while focusing additional support on the most needy and safeguarding the pledges that we made to the elderly in our manifesto. We heard from my right hon. Friend in the autumn statement that all major benefits will be increased by 3.6 per cent., fully in line with the rate of inflation. That uprating will cost us some £2.5 billion next year and real increases in disposable income for the needy will cost a further £1 billion.
One aspect of the autumn statement and the social security uprating that has not been mentioned so far is social security fraud. In considering a top-up-grant to the national insurance fund, we should also remember the many millions of pounds that are lost every year through social security fraud. I warmly welcome the Government's plans to combat fraud and especially my right hon. Friend's reiteration in the autumn statement of his determination to step up his efforts in that direction. Total savings next year are expected to be £1 billion--a staggering amount of money- -and that can only ensure that more money is available to the majority of needy claimants.
My constituents in rural Wiltshire need no reminders of the problems of social security fraud. Year in and year out, hordes of scroungers dressed up as new age travellers descend on our farmlands, villages and famous beauty spots. Most infamous was the mass invasion of our landmark white horse between Westbury and Bratton. My constituents witnessed at first hand the mobile benefits officers dishing out money to those who had no intention of ever looking for work in their lives.
Mr. Frank Field : I cannot understand why the Government and Conservative Members draw attention to that. Is it not a disgrace that the Government took so long to deal with the matter?
Mr. Faber : I can only repeat what I said earlier. I warmly welcome the fact that the Government have reiterated their intention to crack down on fraud, and I hope that that will be done swiftly. I also hope that my right hon. and hon. Friends in the Department of Social
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Security will get together with other Departments to try to find some lasting solution to the problems that my constituents have to face year in and year out, and which they dread.Mr. Frank Field : It was not just the hon. Gentleman's constituents who suffered. The Government allowed mainly women benefit officers to go there and be almost abused by some of those people. That was the other shameful part of such incidents, which continued year in and year out before the Government did something about them.
Mr. Faber : The invasion of Bratton was three years ago and I was not then Member of Parliament for the constituency, so I did not have the opportunity to comment on it. I agree with the hon. Gentleman. It is wrong that anybody should have to hand out allowances from mobile caravans, dishing out income-related benefits to people who had no intention of looking for work.
Mr. Nicholls : Does my hon. Friend agree that the full extent of the problem was found out only this summer, and at that stage my right hon. Friend the Minister for Social Security and Disabled People acted with commendable speed? Given that the hon. Member for Birkenhead (Mr. Field) is an acknowledged expert in social security matters, does my hon. Friend not find it curious that he did not bring this matter to the attention of the Government before?
Mr. Faber : I am grateful to my hon. Friend. The hon. Member for Birkenhead knows that the invasion of Bratton was one of the first of such incidents that drew the problem to people's attention. My hon. Friend is right. The problem became significantly worse, possibly last summer but certainly this summer. I welcome the speedy action taken by my right hon. Friend the Minister to deal with the matter. The Government are committed to improving living standards for the whole community, and that includes people for whom national insurance contributions make provision in their old age. We now have lower inflation and interest rates and pensioner incomes are higher than they have ever been before. Spreading the ownership of personal pensions will encourage that trend to continue, and that is the aim of the Bill. I am pleased to support the Bill and I urge the House to do likewise.
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Mr. Jim Cunningham (Coventry, South-East) : Like the hon. Member for Westbury (Mr. Faber), I am not an expert on pensions. I can only relate to the House some of the things that my constituents have had to say about the present system. Pensions have become a political football. The Government often dress up ideas in such a way that they appear good and seem to benefit people, when they do not in reality do so. The Government's scheme to encourage people to leave SERPS and join private pension schemes has done more to cause confusion than to improve the situation for people who might want to retire before pensionable age. Such people believe that they have security, but they often find that private pension schemes do not give them the benefits to which they thought they were entitled. As a result, there is a long series of complaints to the ombudsman, sometimes there is redress, but sometimes there is not.
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We cannot say often enough that pensioners in this country have made a major contribution to its wealth and it is not their fault or that of the unemployed that the prospects for wealth creation have been called into question. That problem is basically due to the Government's policies. The key to the problem of private and state pension schemes lies in contributions and higher insurance premiums. Wealth creation is needed in order to fund those contributions. The Opposition say that we must get people back to work to create wealth--to use a Conservative expression. We would rather see full employment, whereas Conservatives would rather see wealth creation. The Government never exactly tell us how they intend to achieve that end, despite various Budgets over the years.As long as there is high unemployment in this country, there will always be a generation of pensioners who miss out, primarily because they cannot afford the contributions. That is the fundamental isssue, which some of my colleagues mentioned earlier. Wealth creation and full employment should be the major topics for debate in future. The central thrust of the argument is that wherever there is segregation, whatever the economic policies, there will always be funding problems.
I have had consultations with pensioners in my constituency. We had a meeting not long ago that 500 to 600 pensioners attended. Before we start discussing targeting, we must ensure that pensions are adequate. Many of the pensioners at the meeting wanted a minimum pension of £100 a week. I do not think that that is too much for pensioners to ask in this day and age, given the sacrifices and contributions that they have made to the wealth creation of this country. The House must consider whether the pension is enough for pensioners to be able to afford television licences.
The Government say that they believe in consultation, but I have not heard very much from the Government about how they propose to consult pensioners to find out their views. From time to time, we hear a variety of opinions from the Government about what they believe to be pensioners' needs. We must set up the machinery so that pensioners' organisations can be consulted and their needs taken into consideration.
I am sure that some hon. Members--at least, those in Glasgow--will have seen the Channel 4 programme some weeks ago about a number of people with young families who were out of work. They found themselves in the hands of money lenders. How many districts are there in this country where advice bureaux give financial advice to families who find themselves in such a position? Not only do many families in this country go to money lenders, but they suffer considerable intimidation. All those who saw the programme would recognise some of the problems that seem to be hidden from the Government when they look at the needs of pensioners and those who are unemployed through not fault of their own.
Very often, Conservative Members such as the hon. Member for Westbury are more interested in the propaganda of what the Government are doing and how many people are caught abusing the system. Those abusing the system are obviously in the wrong and should be caught and brought to book, but the real issue is the level of pensions and how we see pensions in the future.
Some 40 or 50 years ago, Beveridge predicted what would happen. Today's debate probably took place in the early 1930s--the clock has been turned back during the
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past 10 to 12 years. The Labour party is not in government--the general election is over and the responsibility lies with the Conservative Government. They must stop reminding us of what happened in the 1970s and what we said during the general election, and instead deal with the injustices in society.An old-age pensioner in my constituency has a serious heart problem and cannot obtain the necessities of life such as a replacement cooker. Anybody who considered the injustices that I have witnessed in my constituency would realise the laborious processes involved. Those in need have to talk to voluntary organisations to see whether they can provide a gas cooker or a little bit of furniture on the cheap.
It is time that we had a realistic debate on the problem of unemployment in this country. We do not need any more phoney training schemes ; we need adequate pensions and unemployment benefit. The debate should be about how we can achieve those goals in future. 8.16 pm
Mr. Hartley Booth (Finchley) : I rise with some temerity to speak on the subject of social security, as, during the debate, many hon. Members such as my hon. Friend the Member for Havant (Mr. Willetts) and the hon. Member for Birkenhead (Mr. Field) have spoken with the benefit of an enormous wealth of experience on the issue. I welcome the debate, and the Social Security Bill. I am often brought face to face with the stark reality--the comparison between now and the 1930s before we had a social security system, so many benefits, and the capacity to care for those in need. The comparison between the 1930s and now is nothing more than a stark contrast between darkness and light.
My hon. Friend the Member for Havant dealt with the Beveridge report, complete with suntan oil stains. I entered the debate in the 1970s in Islington, when, as a young barrister, in my spare time in the evenings I tried to give free legal advice to those who needed it. Young barristers need to work in their spare time to gain experience and give help where they can.
I found that we had a generation of people who had relied on the results of Beveridge and lived through the myth that Whitehall could provide for all their needs. I found people who were disillusioned by the promises of socialism. There were poor people who had never been told that their talents could provide for them if only they could be taught the confidence to use them.
The Bill will be judged on four criteria. First, will it make people better off? It certainly will--2 million people will be £160 million better off as a result of the Bill. If we work that out as an annual payment with uprating, on a conservative estimate, each of those 2 million people will be £3,000 to £4,000 better off. I stand to be corrected by my hon. Friend the Under-Secretary of State, the hon. Member for Maidstone (Miss Widdecombe).
Secondly, will the Bill penalise other pensioners? Of course not. At Question Time today, we heard that even The Guardian welcomed the fact that this autumn, despite the recession, pensions had been uprated in line with prices.
Thirdly, will the Bill improve choice and resolve a problem? The answer is yes to both those questions--and we have discussed that.
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Fourthly, will the Bill provide a disincentive to all those people in the matrix of helping and caring for the needy to come forward? I believe not. I wish to talk about this matrix of care. A distinctive feature of what my right hon. and hon. Friends understand by care is that, beside state provision, which is the main thrust of the debate, is private care, such as care for a neighbour. That fits into the pattern of provision of every constituency.In Finchley, which I represent, there is everything from the Milly Apthorpe trust, which provides for the disabled when they are in need, to talking newspapers for the blind, from excellent homes for the elderly to the Finchley friends of the local hospital, who provide for the geriatric wards. We need idealism. We need a matrix and a partnership in care.
In the past, young men dreamed dreams and old men saw visions. We on the Conservative Benches are now told that it is the middle-aged Members who mess things up. Of course we need idealism, even those of us who carry the burden of government, but we must aim higher. We have heard about the realities of demography, and to expand upon that, I tell the House that the uncle of one of my constituents recently died at the age of 118 years.
People will live longer, and we must provide for them. Some call for the cause of euthanasia to be advanced. I vehemently oppose that, as a matter of deep conviction. Surely we want to see the quality of life after retirement improved and improved again.
My hon. Friends and I are proud that pensioners have seen annual growth in their receipts from the Government--five times faster than that achieved during the Labour Administration. Pensions have increased in line with prices. Many argue--for example, Pensioners' Voice--that pensions should be linked to the rise in average earnings, but the entire picture needs to be put in perspective and all factors taken into account.
Pensioners' incomes doubled between 1979 and 1988, whereas they fell by 16 per cent. between 1974 and 1979. If we set inflation alongside pensioners' savings and their income from their savings, we find a generation of pensioners who are better off. In 1986, I came across a sad case of a delightful old man who had put aside £1,000 since 1974 to pay for his funeral, which meant a great deal to him. By 1980, the value of that £1,000 had been whittled away. It was then worth only £400. He was deeply worried, because that sum would not pay for his funeral. As I have said, we must consider all the aspects of care. Inflation and the excellent increases that will stem from the Bill must be set side by side.
We Conservatives alone have had the courage to deal with fraud within the social security system. We have provided an extra £10 million this year to tackle fraud and abuse of the system. We estimate that £100 million will be brought back to help provide for the extra benefits that will stem from the Bill. It is this approach that will make the money available, and we want to provide it for those who are in need. I ask Opposition Members to condemn fraud in the social security system, which they have not done.
Let us compare provision in the United Kingdom with that in other parts of Europe. Taken against France, Germany, Italy, the Netherlands and Spain, Britain fares well. A study was published on 29 November by an
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organisation called Hannan Ltd. Media Scan. It compared six individual cases, and went into its research in great detail. In every case, the United Kingdom took either first or second place, except for one in which it came third. We have a proud record in provision of care for the elderly through pensions and other benefits and allowances. The survey justifiably demonstrates that. Of course there is more to do. There will always be more to do to help those who are in need, including the elderly, and the Bill is a step forward. It is sensible, short and balanced. That balance continues to provide an incentive to public as well as private provision, and I commend the Bill to the House.8.25 pm
Mrs. Angela Browning (Tiverton) : I welcome the Bill and the opportunity that it provides to debate yet again the merits of pensions-- especially personal pensions--for the current generation. It is easy-- perhaps this is typical of the Conservative party--to confine ourselves to present needs, but perhaps it would be more advantageous to consider the burden upon taxpayers as we move into the next century. In other words, we should consider the position of the next generation. Perhaps I should declare a personal interest : I am a member of the generation who will be pensioners to be supported by the next generation. It is probable that I shall be asking my children's generation to pay out to meet any entitlement that I may have to a state pension.
The Government, in taking account of demography and actuarial figures, especially in relation to the state earnings-related pension scheme as it is attached to the state pension for the next century, are right to draw attention to the fact, as they have done since 1988, that it will be our children's generation who will have to earn the money and pay the taxes to provide for our generation when we receive the money at a post office or in our bank accounts.
I hesitate to use the word "philosophy", because it has many connotations that tend to be rarefied and academic, but that is not so of pensions. When talking of pensions we are discussing the practicalities of people's lives. Many years ago, when they were asked what they most wanted in life, people in my peer grouping said that they wanted a home of their own. If we ask people in my generation--those in their 40s--to identify their aspirations, we find that they are looking forward to their years of retirement and are interested in what their quality of life will be in their 60s, 70s and 80s.
We are asking people now to start making provision for their years of retirement during their working lives, when they are earning money and paying national insurance contributions and taxes. We know that, as people's health improves and there is the prospect of living much longer, the money available for retirement will have to last much longer. Fortunately, people often remain much fitter for much longer than hitherto. That means that their expectation of what they will be able to do in retirement is greatly enhanced when set against the expectations of previous generations.
The average woman has a life expectancy to the middle 70s. Let us take 74 as an example. If she retires at the current retirement age of 60 and we consider her potential for making provision for her retirement, we find that the first 18 years of her life were spent in the education system,
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