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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 FIRST SESSION OF THE FIFTY-FIRST PARLIAMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
[WHICH OPENED 27 APRIL 1992]
FORTY-SECOND YEAR OF THE REIGN OF
HER MAJESTY QUEEN ELIZABETH II
SIXTH SERIES VOLUME 221
FIFTEENTH VOLUME OF SESSION 1992-93
House of Commons
Monday 15 March 1993
The House met at half-past Two o'clock
PRAYERS
[ Madam Speaker-- in the Chair ]
Oral Answers to Questions
SOCIAL SECURITY
Private Pensions
1. Mr. Dunn : To ask the Secretary of State for Social Security what were the number and percentage of individuals over official retirement age in receipt of one or more occupational or private pensions as at (a) 1 January 1978 and (b) 1 January 1993 ; and if he will make a statement.
The Secretary of State for Social Security (Mr. Peter Lilley) : The number of people receiving occupational pensions increased from approximately 3 million in 1979 to 4.5 million in 1989. That represents an increase from a third to nearly one half of that age group in 10 years.
Mr. Dunn : Will the Secretary of State please confirm that pensioners' average income from occupational pensions has nearly doubled since 1979? Is not that strong evidence of the Conservative party's determination to continue to improve the living standards of those who are retired?
Mr. Lilley : My hon. Friend makes a powerful point. We have increased the number of people receiving occupational pensions and the size of the occupational
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pensions that they receive. Overall, during the past decade or so in which we have been in power, we have increased the living standards of pensioners on average every year by more than they increased in the entire five years under the previous Labour Government.Mrs. Golding : The Minister is, as ever, concerned to speak about the haves, not the have nots. How many times does he need to be asked before he much gives needed help to the pensioners who are refused additional benefits because they receive only tiny occupational pensions? When will he speak about helping them? Would it not have been better to have used the £2,600 that it cost to install a satellite television in benefit offices in Nottingham to show golden oldie films to claimants, to help those pensioners who are in such desperate need?
Mr. Lilley : My reference to the improvement in living standards of pensioners covered all categories of pensioners, not only those in receipt of an occupational pension, welcome though it is that now ; among those reaching retirement, two thirds have occupational pensions. However, in addition, we have increased provision for the least well-off pensioners as I was able to confirm in the uprating statement last autumn. I confirmed that an extra £ billion was to be channelled to pensioners through the pensioners' premium on income support, which was additional to the increase to compensate for inflation.
The hon. Lady may not want appropriate facilities in our benefit offices, but I believe that they should be good and appropriate to the needs of claimants.
Mr. Jenkin : Does my right hon. Friend agree that the worst possible pensions policy, which seems to be advoated or toyed with by the Labour party's social justice commission, would be to means-test the state pension while at the same time do nothing to encourage--or perhaps even discouraging--the alternative methods of private pensions provision?
Mr. Lilley : My hon. Friend is correct. There is an extraordinary new twist to the Labour party's policy. In the past, it undermined pensions by allowing inflation to
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be rampant and now it appears that it is to consider means-testing pensions while, at the same time, discouraging private provision. One wonders whether it wants to help pensioners or to harm them.Water and Sewerage Charges
3. Mr. Madden : To ask the Secretary of State for Social Security if he will make it his policy to increase that proportion of income support paid to contribute towards water and sewerage charges.
The Parliamentary Under-Secretary for Social Security (Mr. Alistair Burt) : Water and sewerage charges are treated similarly to electricity and gas in that there is no separate identifiable proportion of income support.
Mr. Madden : Is it not about time that there was a specific, and substantial, amount? Is not the Minister worried that water disconnections are now running at the rate of 400 a week nationally, 50 a week in Yorkshire and 40 a week in the Minister's area? Is he not aware that, as water charges rocket, a large number of people on income support are having deductions made from their benefit to pay those charges? Is it not time for a ban on water disconnections in homes and an end to compulsory water metering?
Mr. Burt : In fact, the number of deductions made is about 3 per cent. of the total income support load, which shows that the vast majority of people are able to manage water charges. Water charges are analogous to electiricity and gas charges rather than to anything else. It is up to the water companies to make provision for low-income customers. Over the years, the electricity and gas companies have developed a variety of methods-- often frequent payment methods--to help those on low incomes who might otherwise get into difficulties. The best way to prevent disconnections is for the water companies to follow that lead.
Mr. Jacques Arnold : Is not the important point the overall amount available to low-income families? Is not it a fact that income support for low-income families has gone well ahead of inflation in recent years?
Mr. Burt : Yes. The changes to income support made in the late 1980s enabled extra money to be channelled to low-income families. An extra £1 billion will have been spent by the end of the current year. The income support system, by providing premiums for disability and for families, tries to ensure that those who use more of a particular commodity, such as water, receive more money.
Mr. Kirkwood : The improvements made by the Government are welcome, as far as they go. However, does the Minister accept that water charges in the year to January 1993 went up by 10 per cent. compared with a 1.7 per cent. increase in the retail prices index? That position is set to worsen in the next 10 to 15 years as water authorities and local authorities in Scotland plan future capital investment in the water industry. Will the Minister at least consider the possibility of a formula or mechanism to take account of the drastic increases so that people who can hardly afford to buy food can at least afford water?
Mr. Burt : I am not sure that I can help the hon. Gentleman. As he knows, income support is not based on specific amounts for particular goods, simply because
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people on low incomes want the opportunity that everyone else has to spend what they want on different commodities. A change to that system would be a massive administrative change and I am not convinced that it would work to the benefit of low-income families. The national proportion of deductions for water charges remains at about 3 per cent. which suggests that the majority can manage. The difficulties that the hon. Gentleman mentioned with the increasing investment in water must be covered by the water companies and by their charging policies. The electricity and gas companies do that far better than the water companies. The Office of Water Services has recommended that all water companies should provide at least one frequent payment method. That would go some way towards alleviating the concern, which I share, expressed by the hon. Gentleman and others about disconnections.Mr. John Marshall : Can my hon. Friend confirm that those on income support can look forward to an increase in their living standards in April because income support rates will rise by more than the rate of inflation? Can he also confirm that the introduction of the council tax will benefit those who are on community charge benefit and in receipt of income support?
Mr. Burt : Yes. The amount that was previously in income support to cover the 20 per cent. payment of community charge has not been clawed back. It will provide £750 million for low-income families-- [Interruption.] Opposition Members may scoff ; it shows what they think about amounts such as £750 million. Once again, large amounts are like water to them.
Mr. Spearing : In so far as there is support for the rapidly rising water charges, is not the Minister aware that those charges cover potential losses incurred by the water companies in any business in virtually any part of the world? Will he look into the matter and will he confirm, or otherwise, that those charges and public money will defray the possible losses incurred by the companies virtually anywhere?
Mr. Burt : The hon. Gentleman is straying somewhat from my responsibilities. As I said, responsibility for water charges rests with the water companies. There are different ways in which the companies can help low-income customers.
Unemployment
4. Mr. Bayley : To ask the Secretary of State for Social Security what percentage of his Department's budget in 1992-93 can be accounted for by unemployment.
5. Mr. Wicks : To ask the Secretary of State for Social Security what is the total amount spent in the course of a year on benefits for those who have been unemployed for more than 12 months.
Mr. Burt : The estimated cost of unemployment benefit, housing benefit and social fund payments to unemployed people represents some 12 per cent. of my Department's budget. It is not possible to provide separate figures for benefit expenditure in respect of people who have been unemployed for more than 12 months.
Mr. Bayley : Does the Minister accept that that amounts to billions and billions of pounds a year, and that
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that goes a long way to explain why the proportion of national wealth taken in taxation by the Conservative Government now is higher than the proportion taken by the Labour Government in 1979? Will he guarantee that the Government will try to cut that sum-- [Hon. Members :-- "Oh!"]--by reducing the number of unemployed and not by cutting the scope or value of benefits for the unemployed?Mr. Burt : The hon. Gentleman almost dug a trap for himself but tried to extricate himself from it. The Government share the view of everyone that the best way to deal with unemployment benefit costs is to reduce the number of unemployed. The Government intend to provide practical help for those who are unemployed and we are, indeed, providing more practical help and advice than ever before for those who are looking for work.
It should also be recognised that the employment market is never static. In January, there were 180,000 vacancies in jobcentres--the highest figure for two years--and the Department of Employment and the Employment Service are constantly working to put people back into work. Last year they placed 1.3 million people and this year they hope to place 1.5 million people. I persist in saying that the best way to ensure that more people are employed is to ensure that interest rates and inflation are low. Those are precisely the policies which the Government are pursuing, and we shall see more jobs as a result.
Mr. Wicks : Does the Minister agree that his answers--and I am being generous--further illustrate the substantial impact that mass unemployment is making on his Department's budget and priorities and the fact that it is distorting the way in which we meet need? Does he agree that that is further evidence that Britain cannot afford unemployment, and that what the unemployed need is not income support but jobs--not workfare but fair work?
Mr. Burt : I do not disagree with the sentiment behind the hon. Gentleman's question ; I am happy to agree with it. Despite the recession, Britain has the highest percentage of people in work of any country in the European Community apart from Luxembourg and Denmark. Vacancies at jobcentres are at a two-year high and confidence among the business community has increased. The hon. Gentleman and his colleagues may have a vested interest in reducing confidence, but he should remember that he does not speak for the nation. We are determined to come through a very deep world recession with confidence, and to emerge from it with jobs, industry, dignity and success.
Mr. Evennett : Can my hon. Friend confirm that,, since the Government came to office in 1979, social security expenditure has increased by two thirds in real terms? Will he reaffirm the Conservative party's, and the Government's, belief in channelling benefits to those in the greatest need and confirm that we will continue to do that until we ensure that everyone has a decent standard of living?
Mr. Burt : My hon. Friend is quite correct. The Government place the highest priority on ensuring that benefits go to those most in need, while making sure that the economy works so that there are fewer unemployed in future. What the unemployed need, more than benefit, is jobs.
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Mr. Congdon : Will my hon. Friend confirm that now that base rates are down to 6 per cent., they are the lowest in Europe and that that provides the best basis for future growth and hence a reduction in unemployment?
Mr. Burt : My hon. Friend is quite right. Such statistics provide the basis for jobs in the future to which I referred.
Mr. Dewar : But will the Minister confirm that the 12 per cent. of his budget that goes on unemployment amounts to the frightening figure of £10.4 billion in the coming year? Is not that a condemnation of the destructive policies that the Government are following? If the Minister recognises that the real cure is to reduce the number in the dole queues, does not he have a duty to back policies designed to achieve that end, rather than holding to the rather primitive view of the Secretary of State that Governments should do nothing? Specifically, does he agree with his colleagues in the Department of Employment that the principle of workfare must be rejected because it would lead to
"a low wage, low productivity economy"?
Mr. Burt : The Government have no intention of introducing a workfare model in the manner described by the hon. Gentleman. The Government have been providing as much practical help for the unemployed as possible and the Department of Employment is doing just that. At the start of the hon. Gentleman's comments, he persisted in trying to suggest that unemployment and the recession are purely British phenomena. I suggest that the hon. Gentleman spends some of his spare time visiting his socialist friends in France who will very shortly be spending rather more time with their families because they are about to be thrown out of office. The hon. Gentleman and his colleagues do not have the distinction of being thrown out of office--simply because they were too awful to gain office in the first place.
Pensioners
7. Mr. Hawkins : To ask the Secretary of State for Social Security what extra help has been directed to lower income pensioners in the last three years.
The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : Poorer pensioners received extra help worth £70 million in April 1991, £60 million in April 1992, £315 million in October 1992 and they will gain a further £260 million this year because although income support recipients will no longer have to pay local taxes, their benefit will not be reduced.
Mr. Hawkins : Does my hon. Friend agree that pensioners' average income from savings has more than doubled since 1979 while between 1974 and 1979 pensioners' average income from savings in real terms fell by 16 per cent ? Does my hon. Friend agree that that is powerful evidence of the poverty that socialism brings for those on fixed incomes in comparison with the success of Conservative policies?
Miss Widdecombe : Indeed. My hon. Friend put it extremely well.
Mr. Olner : The Minister could not have put it better herself.
Miss Widdecombe : I could hardly have put it better, but I will now supplement my hon. Friend's comments by
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saying that inflation is the single biggest evil facing pensioners in their endeavours to save for their od age. The Labour Government managed so successfully to wipe out pensioners' savings in the inflation years of the 1970s that the net result was that many of the older pensioners who can no longer rely on their savings have had instead to be rescued by our package of help for poorer pensioners. We have much to be proud of and Opposition Members should hang their heads in shame.Mr. Winnick : If anyone should hang their heads in shame Government Ministers should. Do they not realise that millions of pensioners, especially pensioners who rely on the state pension and supplementary benefit or who perhaps have a small occupational pension, are in a desperate state because of low incomes? Why do so many pensioners ask Members of Parliament--they have certainly asked me this and I am sure that they have asked Conservative Members the same question--who won the last war? They ask that when they compare their plight with that of people in other European countries like Germany.
Miss Widdecombe : What they do know is that the pensioners won the last election. Our policies are such that pensioners are very much better off than they would have been if we had had a resurgence of Labour's policies which is all that Labour promised at the last election. As for pensioners having to rely on the state pension, very few people in this country have to manage on the state pension alone. It should not be forgotten that those who receive income support to supplement their state pensions can have 100 per cent. of their rent paid ; 100 per cent. of their council tax paid and, in many cases, they can double the value of their state pensions.
Mr. Ward : Does my hon. Friend agree that on average, pensioners' income increased by 30 per cent. between 1979 and 1993? My hon. Friend might like to contrast that with what happened under the Labour Government. Is it not important to continue to ensure that any funds available from the taxpayer go to those in greatest need rather than to increases across the board?
Miss Widdecombe : Yes, indeed. That is why our support plan for pensioners in the greatest need is worth about £1 billion a year. It is quite true that pensioners' incomes from all sources have risen by 30 per cent. since the Government have been in power. That is because, among other things, of our policy of encouraging occupational pensions, which was so deeply scorned by the Opposition, and of creating personal pensions. The Opposition fought against the incentives that enabled people to take up those pensions. The Government are wholly committed to the pensioner and to pensioners' incomes. We are not blinkered in believing that the only source of income is the state pension. [Hon. Members :-- "Boring."] As Opposition Members are shouting, "Boring", they obviously find the problems of pensioners boring because they do nothing about them.
Mr. Skinner : Will the Minister confirm that the pension is now equivalent to about 15 per cent. of the average weekly wage and that it has fallen dramatically in the past 14 years? Widows of retired miners in my constituency get £10 or £11 from British Coal, as a result of which they are disqualified from many of the benefits that the Minister
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mentioned. Pensioners in many other countries throughout the world, including some in the so-called Common Market countries, receive pensions that equate to 50 or 60 per cent. of average weekly earnings. Those retired miners' widows get nowhere near that, and if they surrender their coal allowance and take money for gas in lieu they lose every penny of housing benefit that they receive.Miss Widdecombe : The hon. Member for Bolsover (Mr. Skinner) was most unwise to mention other countries in the Common Market, because we do better by pensioners on half average earnings than do most of our European neighbours. The hon. Gentleman is quite wrong, because in, for example, Germany and France there is no basic pension. The pensions that he mentioned are for higher earners and are earnings related, whereas Britain has a flat basic-rate pension available to all who have paid national insurance contributions. The value of the state pension has been more than maintained since 1979, and those whose entitlement to coal takes them slightly above the income support level can still, in certain circumstances, get help with other income-related benefits.
Family Credit
8. Mr. Lidington : To ask the Secretary of State for Social Security what is the current size of the family credit caseload.
Mr. Lilley : At the end of October 1992, there were 450,000 families receiving family credit.
Mr. Lidington : Will my right hon. Friend confirm that his Department expects to spend more than £850 million on family credit in the forthcoming financial year? Does he agree that that is a sensible way of channelling Government resources to ensure that people are better off in work than out of it and are not caught in a poverty trap when they take on employment?
Mr. Lilley : I confirm my hon. Friend's point. We expect to spend £864 million in 1992-93--13 times the real value of expenditure on family income supplement, which this benefit replaced. It does an excellent job in enabling people to return to work without loss of income.
Mr. Rooney : Does the Secretary of State accept that, in many ways, family credit is a taxpayers' subsidy to the bad employer, and does he recognise the poverty trap in which people on family credit find themselves, with a claw-back rate of 93 per cent ?
Mr. Lilley : I do not accept that, because pay levels are set according to a range of people who are in and are seeking employment, not just those with families. It is not surprising that the Opposition try to snipe at this benefit because it was introduced by this Government. The Labour party has never done anything to deal with the problem and it should turn its mind constructively to doing so, not destructively.
Mrs. Angela Knight : Will my right hon. Friend confirm that the number of hours that have to be worked to be eligible for the benefit have recently been reduced from 24 a week to 16? Is not the impact of this change that more families will be eligible and helped by the benefit?
Mr. Lilley : Yes, my hon. Friend points to an important development. As a result of this change in the hours rule,
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60,000 extra families are already in receipt of this benefit and it is open to a wider number of people. I am sure that improvement in benefit will be widely welcomed by Conservative Members, even though Opposition Members do not seem to welcome it.Mr. Bradley : Does the Secretary of State acknowledge that a large proportion of the increase in family credit claimants is due to the change in the definition for income support of full-time work? Is he aware that many people who would have been entitled to income support from April 1992 onwards are now worse off because they cannot get help with their mortgage costs? Will he give an estimate of the number of people who have lost their entitlement to help with their mortgage interest charges as a result of the change in the hours rule, and will he urgently consider helping people on low incomes with their mortgage costs to ensure that no one is disadvantaged from taking up a job because they cannot afford to do so following the change in the hours rule?
Mr. Lilley : The number of people on this benefit has increased by 100,000 over the past year. As I said, about 60,000 of that is due to the improvement of the hours rule in respect of eligibility for the benefit.
I shall look into the hon. Gentleman's question to see whether I can give him figures for the impact on income support and I shall write to him.
Pensioners (Telephones)
9. Mrs. Roe : To ask the Secretary of State for Social Security how many pensioner households had a telephone in 1979 and in 1990.
Miss Widdecombe : Only half all pensioner households had a telephone in 1979. This had risen to 87 per cent. in 1990 and 89 per cent. in 1991. This of course reflects the general improvement in pensioners' living standards since we took office in 1979.
Mrs. Roe : I am grateful to my hon. Friend for that reply. Will she confirm that there has been not only an enormous increase in telephone ownership among pensioners, but a vast increase in the number of pensioner households with central heating? Does she agree that that is striking evidence of how the Government's economic policies have enormously benefited millions of pensioners?
Miss Widdecombe : Yes, indeed, I am pleased to confirm that, whereas in 1979, when we got rid of the Opposition, about 43 per cent. of pensioners had central heating, today 76 per cent.-- [Interruption.]
Madam Speaker : Order. This has been remiss of me. The question relates to telephones and I should be glad if questioners and those who answer would relate their remarks directly to the question on the Order Paper.
Miss Widdecombe : I am sorry, Madam Speaker, if I am out of order. A telephone is a consumable durable, as is central heating--
Madam Speaker : Order. In my book, there are two lines to this question, which asks
"how many pensioner households had a telephone in 1979 and in 1990."
That is the question to answer.
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Mrs. Helen Jackson : Given the Minister's reply, will she acknowledge that any suggestion tomorrow that VAT should be added to the cost of public utilities, such as telephone charges and other public utility charges, would have an extremely detrimental effect on pensioners' living standards?
Miss Widdecombe : The hon. Lady does not seem to understand what VAT is already charged on.
Mr. Thurnham : Is my hon. Friend aware that many pensioners in Bolton are using their telephones to ring the hotline run by Bolton hospital to seek counselling and advice on the problem of the doctor who had AIDS? Will she ask the Department of Health to give the hotline a little more information--
Madam Speaker : Order. The hon. Gentleman is now trying my patience. The question relates to the number of telephones. It has nothing to do with passing on information to Health Ministers. Does the hon. Gentleman have a direct question related to the question on the Order Paper? [Hon. Members :-- "No."] Leave it to me.
Young People (Benefits)
10. Miss Lestor : To ask the Secretary of State for Social Security how many people between the ages of 16 and 21 years are in receipt of benefits.
Mr. Lilley : It is not possible to give a single figure since some young people receive more than one benefit. But in 1991 there were 490,000 claiming income support, 143,000 claiming either housing benefit or community charge benefit, 49,000 claiming unemployment benefit, 34,200 on severe disablement allowance and 9,200 receiving family credit, plus small numbers on other benefits.
Miss Lestor : When does the Minister intend to do something about what amounts to a penalty on education and training for the large number of young people who are trying to continue in some form of education? They cannot find a job, yet they are penalised because they cannot get benefits. I remind him of the case in my constituency--I am sure that it has been repeated all over the country--of two young men serving apprenticeships who, when their firm went bust, tried to continue a college course to gain qualifications over a period of a year or two. They were denied benefits and thus became a burden on their families. Surely that is a penalty on education and training.
Mr. Lilley : As the hon. Lady knows, there is an allowance for those aged 16 to 17 on training schemes, but benefit has never been paid to those in school or further education. If there is a choice between spending money on maintenance or on increasing and improving education, we have opted for the latter. I am pleased to say that the number of people staying on at school and going on to further and higher education has increased enormously. If the hon. Lady thinks that there is a penalty, happily the vast majority of people are ignoring it and recognise the benefits of education, which is the important thing to get across.
Mr. Willetts : Does my right hon. Friend accept that since 1979 the number of people in the 16 to 21-year-old age group going into higher education has more than doubled and that there has been an enormous expansion in
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the number of training places? Was not the story of the 1980s a significant extension of public responsibility for people in that age group?Mr. Lilley : My hon. Friend puts it clearly and that is the case. On training alone, nearly 300,000 people are on youth training courses provided by the Government, compared with only 7,000 in 1978 when the Labour Government were in power.
Mr. Frank Field : As the Government's cuts in benefits for young people have directly resulted in large numbers of them sleeping rough on the streets, what are the Government going to do about it?
Mr. Lilley : I do not accept the premise of the hon. Gentleman's question. Far from cutting expenditure on that age group, we have substantially increased it through our increased spending on youth training. It was right to move away from a system in which people automatically had access to income support on leaving school and to replace it with the opportunity to stay on at school or to go to further or higher education or on a youth training course. The important thing is to activate and implement the guarantee. My right hon. Friend the Secretary of State for Employment has seen to it that every training and enterprise council has the money to implement that guarantee and see is vigorously ensuring that they do so. If young people do not have a place on a guaranteed training scheme, income support is available, even though they are aged only 16 or 17.
Mr. Brazier : Does my right hon. Friend agree that millions of taxpayers think that it is absolutely right that 16 and 17-year-olds who are not at school or in a job should be required to do youth training if they want to get assistance from the state? It is right that benefits are available only in the most exceptional circumstances to people in that age group.
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