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Column 55family will be £32.80 poorer under the incapacity benefit system than it would have been under the invalidity benefit system between the 28th and 52nd week.
The Minister may say that that is equivalent to throwing people off benefit to protect those who are on benefit, but he has chosen an odd way of doing that. It is the hair-shirt approach and I am particularly unsympathetic to such an approach when it is enforced on other people.
The second example is that of a married man with no children. According to the same calculation, he will be £3.60 down on his basic benefit. He will lose his adult dependency allowance of £33.70, so he will be £37.30 worse off during those six months. Even after the 52 weeks, that man's adult dependency allowance will not be reinstated until his wife is 60. That is a long time to wait.
Mr. Dewar : My second example is a man without children. The right hon. Gentleman is correct that that allowance is reinstated after 52 weeks for a man with children. That difference is one of the complexities of the system.
It is clear that people will lose almost £40 during those six months. If we went through the small print, we would find other hidden examples of substantial cuts. They will go towards making the substantial savings that are mentioned in the financial memorandum. The examples that I have cited are one reason why I am so certain that the Opposition are right to vote against the Bill tonight. I do not need to rely on the argument about additional pensions which are derived from SERPS. People have contributed over the years to that system, however, and they did so on the basis that they would receive a benefit. Now, that benefit will be taken from them. That raises a point of principle, although I accept that it is something of an anomaly when considered within the general pattern of benefit provision.
Mr. Lilley : The hon. Gentleman has still not told us what alternatives the Labour party has in mind. [Interruption.] He has referred repeatedly to cuts, but he knows that, even after the proposed changes, the real amount of expenditure on the benefit will not decline. If he proposed no changes to the system, there would be a substantial increase in that expenditure. If he has no alternatives to our proposals, the hon. Gentleman owes it to the House to tell us how much extra tax he would impose to finance that extra spending.
Mr. Dewar : The loyal baying behind the right hon. Gentleman sounded rather tired. He must realise that the old tax card, always a solid friend in a tight corner, is not quite as effective as it once was.
I have tried to outline some of the positive things that should be done to encourage people to go out to work and to remove the barriers to their doing so. I have made it clear that the test is not simply disability but incapacity for work. I concede that that means that the adjudication officer must take into account a wider gamut of circumstances than he is allowed to consider under this system. If the Government are looking for savings and tax increases, they should not start with this group of people. That may be something which the Secretary of State finds hard to comprehend, but most people would understand it.
Mr. Julian Brazier (Canterbury) : The hon. Gentleman is the Opposition spokesman on social security and he has just said that he would not start from here. That is exactly what every other Labour spokesman says. Where would the hon. Gentleman start in the search for savings in public spending?
Mr. Dewar : I know that the hon. Gentleman would love, above almost anything else, not to be here as a representative of his Government, given the state of their fiscal and tax policy. We are therefore entitled to say that we would not make their daft mistakes. I have sought to make a kind remark to the hon. Gentleman. I am not challenging the fact that, due to mismanagement of our affairs, we are faced with a problem with the public sector borrowing requirement. I accept that the Government feel that they must take steps to deal with that. I have suggested, however, that one would not start with a group of people who are vulnerable. I am sure that the hon. Gentleman would accept that. Those people receive invalidity benefit and I am sure that many of them will receive incapacity benefit, because there is no doubt about their entitlement to it. They are struggling with the impact of long-term ill health. If the hon. Gentleman wanted to look around Britain for people who might shell out a little bit more to help the national effort, I should like to think that he would put that particular group rather low on his list. If I am wrong, I can only say that perhaps I am paying him a compliment that he does not deserve. I suspect, however, that he would agree with me.
Problems lie ahead with the interrelated issue of taxation of incapacity benefit. It is not right to tax that group of people at this stage. It will lead to perceived inequality. I trust that the Minister of State will say something about that when he replies to the debate. I accept that this is a Treasury matter, but the right hon. Gentleman mentioned it and it knitted into the argument about incapacity benefit.
My concern about the perceived inequality is that anomalies will arise for a considerable time. Perhaps two people in the same street, or certainly in the same district, who are in similar financial circumstances and who perhaps suffer from a similar disability or long-term ill health, will not be treated in the same way for tax purposes. Those on incapacity benefit will pay tax on it, while those who remain on invalidity benefit, although they will have passed the same test to retain that benefit, will not pay tax.
The other day, someone asked me whether that meant that the Labour party is in favour of taxing invalidity benefit as well. The answer is no and I made that clear. Unless I have misunderstood the Bill--it is all too easy to misunderstand its technicalities--such differences in tax treatment will last for some time. I welcome the fact that 850,000 people will not be subject to the review process and will remain on invalidity benefit. I therefore presume that they will not be taxed. People who join the system and who will receive incapacity benefit, however, will be taxed. That will involve many people, once the cycle is run through. The House should consider that. On 21 June 1993, I asked a question about that matter. I was told that if one applied taxation to invalidity benefit, 900,000 people in receipt of it would pay, on average, another £500 a year in tax. Once the new system is operating, I presume that about that number of people, or slightly fewer, because fewer people will be on incapacity
Column 57benefit, will be taxed. Until the system has run its course, many people will be exempt, but an increasing number will be caught. Ministers have underestimated that figure.
Can the Minister of State tell me what will happen to those people who will be liable to pay tax, but who have no other income apart from incapacity benefit? I was told that there would be 200,000 such cases under invalidity benefit. It may be that the take-up of incapacity benefit will be so much lower than that of invalidity benefit that those people will disappear.
If the Government agree, that will be an expensive concession by them. If it is true, it is a clear illustration of how people will be prejudiced by the change. If that is not true, and a substantial number of people will still have to pay tax when they have no other income apart from incapacity benefit, how will that be managed under the pay-as-you-earn system? Who will be their employer? Will it be the Department of Social Security or will those people be considered to be outside the PAYE system, with all the complications that may ensue?
I hope that the Minister of State will respond to some of the points that I have raised. I make no apology for saying that I do not believe that the Government should have started from here. They should not target the long- term sick and disabled. Even if they believe that changes in eligibility are needed, it does not follow that those who qualify should be hit by reduced benefit and taxation, We must remember that many of those people are already fearful about the impact of VAT on domestic fuel and are already suffering as a result of the freeze on personal allowances, which hits those who are just marginally above the tax barriers.
The cumulative impact of the changes resulting from this Bill will be considerable. I have done rough and ready calculations--I am open to correction later--and it looks to me as though about 25 per cent. of the cost of invalidity benefit will rapidly disappear. [ Interruption.] I can take the Minister through the figures if he wants. The figures that I have quoted already make my point about the substantial sums at stake.
The saddest thing of all is that the Bill is creating, and will create, an enormous amount of anxiety, distress, frustration and fear among those who are on invalidity benefit. Evidence of that comes in from every side--the people we meet, the people who approach us, the people who write to hon. Members on the subject. Ministers are responsible and they should think again and not push through a Bill that is misconceived in principle and which will prejudice many people who have more problems than anyone in this House is ever likely to face.
Mr. Alan Howarth (Stratford-on-Avon) : I have always been proud of the fact that it was a Conservative Government who, in 1971, introduced invalidity benefit. I have often heard Ministers drawing attention, as grounds for satisfaction, to the large increase in spending on the long- term sick and disabled during the period of Conservative Government.
However, it is right to review the operation of any
benefit--certainly of one for which claimants and expenditure have increased so rapidly. As my right hon. Friend the Prime Minister has said, no responsible Government could ignore the increase in expenditure on invalidity benefit from £1.5 billion 10 years ago to more
Column 58than £6 billion this year. It is right to ensure value for money, to see that the administrative means are appropriate to the purpose of the benefit, to see that the benefit is reaching the people for whom we intend it, to see that there is no abuse, and if there is, that it is suitably and sensibly dealt with, and to ensure that the benefit fulfils sensible purposes in terms of personal and social need and of the economy.
Why has the number of recipients of invalidity benefit increased so much? Has there been, as my right hon. Friend the Secretary of State suggested, an epidemic of invalidity in a nation that is getting healthier, or is that formulation perhaps based on some misconception of the issues?
The hon. Member for Glasgow, Garscadden (Mr. Dewar) drew attention to the study by the Institute for Policy Studies, which found that 29 per cent. of the increases had come from the increase in the number of people over pensionable age choosing to draw the benefit. Another 16 per cent. of the increase derived from the number of women in the labour market paying national insurance contributions and thus qualifying for invalidity benefit. A further 13 per cent. of the increase arose for a demographic reason, the increase in the number of disabled people in the relevant age groups. I do not think that we can complain about any of those features of the growth in numbers. Another 42 per cent. of the increase arose from the growth in numbers of disabled people claiming invalidity benefit. Why should that have been so? It does not appear to be on account of any increase in the number of new awards being made. The Department's research, carried out for it by Bob Erens and Deborah Ghate, found that new awards to men declined during the 1980s and new awards to women increased only slightly. That background factor was mentioned in the introductory section of the study. We need to look more closely to see who those people were and what were their characteristics.
Erens and Ghate found that the great majority of all invalidity benefit recipients were over 50. They were poor. The vast majority of them earned, in the last job that they had had in 1991 or 1992, between £2 and £5 an hour. As the researchers say, they were much more likely than the working population in general to have worked in manual jobs.
No evidence that I have seen suggests that their invalidity was not genuine. The most common causes of health problems were found by the survey to be accidents at work at 12 per cent., followed by industrial diseases and other work-related causes at another 12 per cent. So unless one supposes that doctors are signing bogus certificates wholesale, it is impossible to contend that there is large-scale abuse. In any case, in most of the cases referred to the Benefits Agency medical service, the claimants were still found to be incapable of work. A parliamentary answer on 13 July 1992 told us that in about eight out of 10 references, and six out of 10 of those actually examined, the claimants were found to be incapable of work. Moreover, over half of appeals in respect of invalidity benefit are decided in the claimant's favour.
Other evidence also strongly suggests that claimants are most unlikely to be swinging the lead. The relationship of benefits to earnings, past and future, points to that judgment. As Erens and Ghate tell us, calculation of the backward-looking benefits-earnings ratio shows that the amount received in benefit replaced less than half of earnings for half of all respondents. Only 13 per cent. were
Column 59receiving more than 80 per cent. of their earnings in benefits. So there is no perverse structure of incentives there.
Likewise, the forward-looking benefits-earning ratio shows that, of those returning to work, two in five earned twice as much in their jobs after returning to work as they had received in benefit, and 15 per cent. were earning less than a fifth more then they received on benefit, but they clearly wanted to be back in work.
Interestingly, Erens and Ghate go on to observe that it is precisely those groups that are most likely to exhibit a higher ratio--women and the young- -who are the most likely to return to work and to be attached to the labour market. A high proportion of people on invalidity benefit had a stable employment history before they went on to the benefit--half of them had been in their last job for 10 years or more. The vast majority of recipients under 50, including those most severely affected by health problems, were attached to the labour market--they wanted to return to work if they could. However, it is vastly more difficult for people over 50 to return to work. The age of 50, the research shows, is the real watershed. By their second round of interviews, Erens and Ghate found that, up to the age of 40, about two fifths of people had left invalidity benefit. That proportion decreased to about one quarter for 40 to 49-year-olds, and to one in seven for 50 to 64-year-olds. That diminished likelihood of getting off the benefit, which is what very many people over 50 want to do, is explained in part by motivational factors. We can easily understand the demoralisation and pessimism that can set in. It is also partly explained by the nearness of retirement age. But it is mainly explained by labour market conditions.
It is hard for many people on invalidity benefit to get back into work. They tend to have poor educational qualifications. Only 17 per cent. of those surveyed by Erens and Ghate had remained in full-time education after 16, and 48 per cent. of them had no formal educational qualifications at all. Only 5 per cent. had A-levels and only 9 per cent. had higher educational qualifications below degree level. A further 14 per cent., only, had a recognised trade apprenticeship or had gained some commercial qualifications. So it is reasonable to suppose that those people lacked the skills and confidence necessary to re-enter work, and that employers did not see them as desirable recruits.
By far their best hope has been to go back to their previous employer, and 64 per cent. of those returning to work did so. It is often not easy or possible for people to go back to their last employer, who may no longer be in business--the recession has eliminated the possibility of return in all too many cases. More broadly speaking, the decline of manual jobs in the economy has made it more difficult for a significant proportion of those on benefit to get back into work.
Men over 50 with poor, or no, qualifications, are in deep difficulties in the labour market. Another problem that Erens and Ghate identified was the fact that employers were disappointingly inflexible in their attitude to the employment of people with sickness and disability problems. Three out of four respondents on benefit said
Column 60that their previous employers had not provided them with any assistance to help them carry on working, despite their ill health. Of those who returned to work, 81 per cent. went back to work hours similar to those of the last job. Half of those who were not able to stay in their return-to-work job said that their employers knew about their health condition but in only one case in five in which the employers knew did they provide any sort of assistance to help their employees to continue working.
Another disappointing finding of the research was that only two in three respondents on IVB were aware of Government schemes designed to help them, and only 10 per cent. of respondents had direct experience of them.
From all that, I conclude that the main reason for the growth in the number of people on invalidity benefit is the difficulty of returning to work.
What will happen if my right hon. Friend's proposals are implemented? An unknown but considerable number of people who previously received IVB will not receive incapacity benefit. Some will go on to unemployment benefit. There is no precise estimate of the number, although there are some speculative estimates in circulation. The Secretary of State made it clear that he does not have any forecast of the number of people who will not receive incapacity benefit. However, he has advised us in the Bill that he estimates that savings of £1,450 million will be achieved by 1996-97.
People, I am sorry to say, will become poorer as a result of the measure. They will be those who have a history of sickness and disability, who have been low earners when in work, who are poorly educated and skilled and who must be among the least fortunate and confident of our fellow citizens. It is estimated that those who fail the test and will no longer receive the benefit may be some £80 to £90--perhaps as much as £160--a week worse off. I do not think that that is what the Government want and it is not what I have understood the Conservative party to be about. Disraeli in his Crystal Palace speech in 1872, as you will recall, Madam Deputy Speaker--I mean from your deep knowledge of Conservative party history-- said that one of the great objects of the Tory party was to improve the condition of the people, and he had a particular concern for those suffering from ill health.
The Secretary of State has assured us that he is committed to the welfare state. In his Budget speech, my right hon. and learned Friend the Chancellor similarly reassured us, and my right hon. Friend the Prime Minister has done so on many occasions. However, the freezing of the additional pension for existing claimants, and the decision that there should be no additional pension for new claimants, the reduction of the age allowance for women claimants aged between 45 and 55 and for men between 45 and 60, the lower level of benefit between the 28th and the 52nd week of benefit entitlement and the reduction in the dependant's allowance for people under 60 without children will mean that those who are among the least fortunate in our society are likely to experience still lower incomes. Low-paid workers are to contribute more through increased employees' national insurance contributions, only to receive less for their benefit. The income of those who go on to unemployment benefit followed by the job seeker's allowance is likely to fall. There will be tighter eligibility tests for the job seeker's allowance and it will be received later than would previously have been the case. I am concerned about the
Column 61danger that some people will be found too fit for incapacity benefit and not fit enough for the job seeker's allowance. Those who fail the new medical test for incapacity benefit will be disqualified from disability premiums for means-tested benefits--income support, housing benefit and council tax benefit. We cannot assume that they will fall back from invalidity or incapacity benefit on to means- tested benefits, because invalidity and incapacity benefits are contributory, whereas entitlement to means-tested benefits is based on an assessment of family income.
What conclusions might the Government draw from that analysis and an observation of those facts? They should conclude what my right hon. Friend says that he has concluded, that the strategy should be to do everything possible to get people who are on invalidity benefit and, in due course, those on incapacity benefit, into work. That means a macro-economic strategy to secure growth and a panoply of policies to ensure that jobs are generated.
We need to look again at a number of relevant policies. If we want people to be in work and not on benefit, is it sensible to ask employers to bear a larger part of the costs of statutory sick pay ? The Secretary of State argued that it will encourage them to promote the health of their work force. I fear that it may at least equally encourage them not to employ people with health problems. Will the Government look again at the proposed new access to work measures ? Is it sensible to ask employers to pay 50 per cent. of the cost of equipment that enables disabled people to work ? That has been raised with me with some emphasis by the Council for Disabled People, based at the Royal Midland Counties hospital in south Warwickshire.
Will the Government consider the effect of taking people off incapacity benefit or making it harder for them to be on it, given that it is a passport to disability working allowance ? I may have misunderstood that, in which case I shall be glad to be corrected. Disability working allowance has proved somewhat fragile and it has been difficult to ensure an extensive take-up. While I welcome the reforms and improvements that the Secretary of State was able to announce in the uprating statement at the end of last year, it would be unfortunate if other changes made it harder for people to move to disability working allowance.
I hope that the Government will look positively at the case for anti- discrimination legislation to make it illegal for employers to discriminate against disabled people. That is the proper and decent thing to do : it is right in itself. The disabled have a great deal to contribute, much more than all too many employers recognise, and we should do all that we can, on humanitarian and economic grounds, to get them into the productive economy.
I hope that the Government will draw from the analysis of DSS research the moral that we have to continue to make every effort to improve education and training. That includes an intensified emphasis on distance learning, credit accumulation and transfer and support for part-time students. We also need to do more to create awareness of Government schemes and their opportunities.
We must be careful not to penalise disabled people who undertake education and training. The Royal Association for Disability and Rehabilitation has expressed concern that disabled people undertaking a formal course of study at an educational establishment may lose benefit. I was
Column 62pleased to note my right hon. Friend's assurance that the Government intend to be positive about transitional training. We must ensure the continuing improvement of health and safety at work. As I said, 24 per cent. of people in the survey were on invalidity benefit following an experience at work that had damaged their health. I know that the Government do not intend in the new deregulation legislation to do anything to undermine genuine health and safety, but it is important to be careful.
We must encourage employers to be flexible about the hours and conditions of work that they are prepared to offer disabled employees, just as they should be in helping single mothers to get back into work. The Government need to make a renewed effort, working with representatives of industry, to ensure that more and more employers are sensible in their own interests as well as in the interests of those who are on the margins of work, who want to work and are finding it difficult to find employment.
I hope that the Government will look at the possibility of a more differentiated policy on incapacity benefit which will take account, sensitively and constructively, of the varying circumstances of claimants. We have found that the big divide among those who are on the benefit is between those who are under 50 and those who are over it. The Government should look at the case for more generous rules for people over 50.
The research also shows that, naturally enough, there are problems for claimants in relation to travel to work. Erens and Ghate found that two thirds of their respondents said that it was important to find a job close to home. Can we examine the possibility of more flexible and generous rules for claimants in remote areas, where, with the best will in the world, there are few jobs to be found? More importantly, should we not look at more relaxed and generous rules in unemployment black spots, those unfortunate areas where we have endemic unemployment rates of 20, 30 and even 40 per cent.? Is it appropriate to apply the same stringency to the long-term sick and disabled when we know that, realistically, in areas where it is desperately hard for anybody, it is hardest of all for them to find work?
I hope that, as has been argued, we shall think carefully about the principle of an objective medical test. When he announced this change in the uprating statement, my right hon. Friend said that it was his intention to have a "more objective" test. I hope that that means that he will be willing to recognise that a mechanistic set of scores related to bodily or mental capacities will tell adjudication officers very little that is useful to know about the capacity of an individual to work, relative to his or her education or skills, work experience, history of disability and so forth, and relative to the jobs that may be available. My right hon. Friend risks giving a new and unfortunate meaning to the Benthamite calculus of pain. I shall say nothing about pleasure, because I do not think that there is any pleasure involved in this set of calculations.
I hope that the yellow consultation document--"A consultation on the medical assessment for Incapacity Benefit"--is not a tablet of stone and that discussions will lead to modifications. I appreciate my right hon. Friend's assurance that he wants to be flexible and is looking to ensure that the methodology really works. I fear that, as a matter of essential principle, it will not and cannot work.
Column 63We should recognise the impossibility of a medical officer who does not know the individual concerned making a worthwhile assessment not only of the whole variety of disabilities that disabled people have but of the fluctuating conditions that an individual disabled person may experience, such as varying degrees of pain and the varying impact of mental ill health.
I feel that doctors should accept responsibility in that respect. I am sorry that some of the doctors consulted by the Department felt that it was not a proper part of their responsibility. The DSS sample was of only 40 doctors and they were not unanimous. For example, one is reported as saying :
"Somebody's got to decide whether people are fit to work or not who else could know, who else could do it Because the GP knows more about the medical history of the patient than anybody else and he knows the patient well. He is the only medical person that knows the patient well."
That is a sensible and important observation.
The citizens advice bureau in Stratford-on-Avon, in my constituency, takes the view--I endorse its opinion--that local doctors feel that it is an appropriate part of their responsibility to make those assessments. We should look carefully at what self-assessment might mean. I may be wrong-- perhaps this is not what is envisaged--but if it is the intention to ask people with learning difficulties to score their own cognitive impairments, that would not seem to me to be a sensible or proper policy.
I welcome the provision that the Government are introducing to make it permissible for people to do 16 hours of voluntary work without forfeiting their benefit. However, let us again be careful in the practical administration of the system. I hope that, if people do do voluntary work for up to 16 hours, it will not be held on that account that they are fit for other work. I know that that is not my right hon. Friend's intention, but it is extremely important that we should be careful about that. That point has been put to me strongly by the council for disabled people at the Royal Midland Counties hospital in Warwickshire.
I should like to make an allied point about therapeutic earnings, an issue that we should treat with great sensitivity. Often, the agreement that a claimant can have therapeutic earnings is an important halfway house, easing a person back to work and helping to build their confidence, particularly perhaps in relation to a new and unfamiliar job. That is a point about which the Warwickshire welfare rights service is particularly concerned.
I ask my right hon. Friends to be willing to make rather less savings than is envisaged in their present policy. Of course I understand the need for control of public expenditure and I respect that motive. Of course we must be satisfied that the money being spent is going on proper purposes. In politics at the moment we are having a bit of a discussion on tax. There are good reasons and bad reasons to tax. The good reasons include helping the poor and the sick to live in less poverty, more dignity and more hope. Are these the people who should bear the costs of our economic difficulties of recent years? The good reasons also include enabling benefits claimants to have a better chance to get back into work. That would be the positive way to limit expenditure on that aspect, as others, of social security.
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Mr. Frank Field (Birkenhead) : It is a pleasure to follow the hon. Member for Stratford-on-Avon (Mr. Howarth). I hope to develop one or two of the themes on which he commented. I hope also that I shall be able to make my criticisms no less effectively, if more robustly, than he has done. If there is a financial crisis surrounding the payment of the benefit, it is one largely engendered by the Government. That is one of the themes on which I wish to speak. The way in which the Government are arbitrarily going to disengage themselves from this financial crisis, which is largely of their own making, will disadvantage thousands of our poorer constituents. That is the second theme to which I wish to address my comments. The Secretary of State said that there was some puzzlement about why the numbers of people claiming invalidity benefit had increased. I suggest that there is no puzzle at all. There are two main reasons, one of which was touched on by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). It pays people who are on benefit, once they have passed retirement age, to continue to draw invalidity benefit. It is to their advantage, for the obvious reason that retirement pension is taxable and invalidity benefit is not.
The civilised way of dealing with that local difficulty would have been to bring invalidity benefit into tax, which the Bill does. I would claim that that is long overdue. Hon. Members should note that, although I am saying that it should be taxable, I am not necessarily saying that people should pay tax on it. People will pay tax depending where the tax threshold is. If I went down that path, I am sure that you, Madam Deputy Speaker, would say that I was out of order, so I will leave that to one side.
That is one reason why there has been an explosion in expenditure on invalidity benefit. People have not been taking their retirement pension ; they have continued to draw invalidity benefit. There is another reason. If we look at the figures of claims, we see that they begin to rise steeply after 1986. We should devote some of our time this evening to the question why that happened after 1986. Again, I suggest that there is one simple reason for that : the then Prime Minister, Mrs. Thatcher, thought that one could not win an election if unemployment totals were rising. One did not have to get it down to full employment to win ; one had to get the total falling. Therefore, her Employment Minister, Lord Young, a Member of the other place, instructed his officials to persuade those people who were drawing unemployment benefit, or who were registered as unemployed and drawing the then means-tested support, wherever possible, to move over to invalidity benefit.
In our surgeries, those of us who were Members of Parliament at the time were puzzled at first why the Government appeared to be suggesting that people should make themselves better off by moving from a lower-paid benefit to a higher-paid benefit. Of course, it did not take us long to rumble what the reason was. It was part of the massaging of the unemployment figures. It was important in the run-up to the next general election to see the total fall.
Those are two of the main reasons for the escalation of expenditure on invalidity benefit. The Government have engaged in passive connivance with pensioners ; they have also exercised passive discrimination, putting pressure on the unemployed to stop registering as unemployed and
Column 65start claiming invalidity benefit. Then they have the audacity to say that they have a financial crisis on their hands : they tell us that the number of people claiming benefit should be cut, and that the cost of putting the books in order should be borne by many of our constituents--people who are already disadvantaged, and are least able to fend for themselves in today's world.
We must not allow the debate to continue without relating these changes to fundamental changes in the job market that have occurred, are occurring and will continue to occur. If we are favourably disposed to the Government's job creation record, we will exclude the first two years of Mrs. Thatcher's stewardship, and the current recession or slump. If we do that, the Government can say that the number of new jobs has increased considerably ; but who secured those new jobs ? They were secured, to an overwhelming extent, by women workers.
Men have been increasingly disfranchised in regard to the job market, finding it more and more difficult to get and keep jobs. According to the most recent figures published in the Employment Gazette, twice as many men as women lost jobs in the latest batch of redundancies. This year--probably for the first time in our history--there will be more women than men in work.
It could, of course, be said, in relation to the claiming of this benefit, that the Government have been helpful and thoughtful : that they have been anxious to soften the blows inflicted by a fundamental change in the job market, and to cushion the impact of the costs that the transition has imposed on male workers. The Government have worked themselves up into a panic over their mismanagement of the economy. Because of that, it will be largely the male workers who are disfranchised from benefit.
Let me give some examples of the way in which low-paid households, with males claiming invalidity benefit, will be affected by the Bill. Again, my hon. Friend the Member for Garscadden teased its consequences out of the Government. Many people who currently claim benefit will not be eligible for the new benefit ; they will be unable to draw income support, because they will be unable to work. If another member of the household is working, that will disqualify them from claiming income support.
The financial savings, therefore, will be made at the cost of women workers who are managing to hold on to their jobs. They will not merely have to meet most of the bills, with their income supplemented by invalidity benefit ; in future, they will have to meet the entire cost. That, too, will expose the vulnerability of males.
Already, under the present Government, one in five prime-age males is unemployed. Giving the Bill a Second Reading will add to that total, as well as depriving those males of any benefit. While making these savings, we should ask what people from whom we take benefit are to do. In a previous Parliament, the House confidently took benefit from 16 to 17-year- olds. We were told that their families would look after them--as families do, of course, if they can. But what do families do if they are on their uppers, and a benefit package is taken away when there is already not enough money to go round?
We do not have to be clever to answer that question. We are confronted with the answer every night when we leave the House after a Division to go back to our safe beds : we see people sleeping in doorways. That is one of the consequences of taking benefit away from people when there are no jobs.
Column 66What disturbs me so much about the Bill is the fact that the Government, sitting in their watertight compartment, have decided to ignore what is happening in the job market. More and more males are finding it increasingly difficult to obtain and hold down jobs. What will the Bill do to them and their families?
I shall not make easy points about the "back to basics" approach, because I am a heretic in regard to that issue--among others. I think that it involves an important theme : the way in which we can support families and enable them to do a good job, and how we can minimise the pressures on them at a time of massive economic changes not only in this country, but throughout the world.
Every hon. Member who holds surgeries knows of the near-violent tension in unemployed males who are desperate to receive invalidity benefit so that their wives can continue to work, or who face the prospect of losing it. The Bill will massively increase the pressure--violent pressure ; breaking- up pressure--in many low-income families. For that reason, if for no other, I hope that the House will reject it.
This is a financial crisis of the Government's own making, but the way in which they are disengaging themselves places the burden not on the broader shoulders, but on some of the narrowest. They will completely disfranchise some male claimants from benefit. We have already seen the consequences of denying young people benefit when no jobs are available. If the Bill had contained provisions designed to return prime-age males to work, it would have been received sympathetically, However, because the Government have failed to link it with employment measures to protect the most vulnerable group, I hope that the House will throw it out.
Mr. Dudley Fishburn (Kensington) : Stumbling into the debate this afternoon, I felt that I was part of a particularly close-knit fraternity-- a group of people who had pondered social security issues for many years. Such people--for instance, the hon. Member for Birkenhead (Mr. Field)--are able to make the kind of speech that can be made only with the confidence that results from having dealt with such issues of a long time. Another example is my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who--on the other side of the House--has taken up a cause long espoused by my predecessor, Sir Brandon Rhys Williams : the cause of the poorest and most disadvantaged in the land. That demonstrated that it takes time to become expert on such matters, and that he is fast on his way to becoming so.
I am here partly to learn about some of the issues, and partly with a view to continuing in the same vein if I am selected to serve on the Standing Committee.
The Secretary of State should be congratulated on highlighting this issue. The reform of the welfare system will be as important and painful a task in the years to come as it was over the years in the 1950s and 1960s, when hon. Members on both sides of the House built it up with Beveridge as their guide. There is no doubt that the system will need reform, and that reform will be the leitmotiv of politics over the next decade.
Because it prompts so many emotions, the difficult issue of invalidity benefit is a good basis on which to consider how society is to retreat from a welfare system that we
Column 67know we shall not be able to afford in the years ahead as the population grows older and as those in work become fewer relative to that population.
I feel comfortable with the fact that the Bill is the first step in a reform of the welfare system because of the Government's extraordinarily good record in recent years in dealing with those who are invalids or who are incapacitated. Their record bears all the hallmarks of my right hon. Friend the Minister of State who, perhaps more than any Minister, has systematically introduced measures to protect those people.
For example, 2 million people now receive help for care and mobility, five times more than in 1979. Total spending on invalidity benefit and other benefits for invalids has increased by almost £10 billion in real terms since 1979. Care has become such an important element in the new understanding of how we can help invalids and, as a result, the invalid care allowance has gone from nothing a few years ago to about £360 million. In other less dry and less statistical terms, the Government have a good, sensitive and decent record in helping the very people for whom we are this evening once again, although in slightly different terms, trying to redress the balance by helping those most in need and pulling away from those who are less so.
Members of the Government Front Bench have heard criticisms of the Bill from Conservative Members and, most tellingly, from the hon. Member for Birkenhead, but I hope that they will take succour from the Government's impeccable record in dealing with those who are incapacitated.
Why have we, as a party, and why have the Government, made such an effort? First, the Government have recognised that it is the Government's duty to help those who are unable to work, a duty that Beveridge and the movement that followed him recognised later than some other reforms. Secondly, the Government have recognised the extra costs, needs and standards of care which have encouraged the caring industry that has come to the forefront in the past few years.
Finally, and most important, we have recognised that in a society in which there is ever more free enterprise and in which, as the hon. Member for Birkenhead said, there is an ever freer labour force, more women workers and more part-timers, we have a greater responsibility to those who are left out and who cannot take advantage of the opportunities which, as the hon. Gentleman said with great force, put great strains on the family because they make it less easy for the man to find work while making it more possible for the woman to do so. The greatest strains are on those unable to find work at all because they are incapacitated.
The Bill contains much that is to be welcomed. Attention has already been drawn to the 16 hours of work that people can do for voluntary organisations without losing invalidity benefit. Clauses 6 and 7 go a long way to making the system of payments more efficient and targeted more on those whom we seek to assist. We have heard how 850,000 people will not have to undergo tests and they are, of course, the very people who most need reassurance. I was therefore pleased to hear a categoric reassurance. It is also good news--I think that all hon. Members will
Column 68recognise it as such--that invalidity benefit will be brought into the tax net. All other benefits have gone the same way and invalidity benefit was an outsider in that respect.
For the past 15 years, I have been a trustee of the Open university, which has done a great deal--perhaps more than any other institution of learning- -to help people left at home either because they are permanently incapacitated or because they are ill for a short time and want to use that period of adversity to upgrade their skills, so that, when they re-enter the labour market, they can do so at a higher level and find a better job. I was pleased to hear the reassurance that those who embark on higher and further education will not have their benefits cut and will therefore not be discouraged in any way.
In the years ahead, as all parties come to grips with what we need to do to reform the welfare state so that we are able to help those most in difficulty, we shall return time and again to the central fact that we shall need less welfare if we can educate people more. Higher standards of education will mean that more people can find and create jobs and the burden on the state will be less so that we can redirect welfare to those who need it most.
Today's debate is part of a larger debate that will continue as long as most of us are in Parliament. It is also taking place in every western European country. As we have all become aware, regardless of party, it is not possible for our welfare systems and public expenditure to continue unaltered. In most European countries, they now account for about 50 per cent. of gross national product. If that were to continue, the next generation would lynch us and refuse to pay the bill.
Mr. Paul Flynn (Newport, West) : We have tonight heard the Conservative party speaking with a voice similar to that of Disraeli, whom the hon. Member for Stratford-on-Avon (Mr. Howarth) mentioned. Even the Secretary of State spoke in rather gentler terms than we are used to hearing from him, especially in view of the Nuremberg-style rallies that the Conservatives hold every year and at which he produced his little list.
Perhaps the threat of crucifixion, real or imaginary, concentrates the mind, but the authentic voice of Toryism--the backroom, saloon-bar voice that we have frequently heard in the Chamber--is very much the inspiration behind the Bill. There is no doubt that the views of those who believe that we must crack down on scroungers and that the welfare state is being looted on a large scale were, in large measure, the inspiration for it.
In a revealing intervention of which I made a note, the hon. Member for Southport (Mr. Banks) asked :
"Is my right hon. Friend aware that the man who waved the flag at the grand national was on invalidity benefit?"
It is worth underlining the fact that last year's grand national was not our greatest or most successful sporting occasion. Was the hon. Gentleman saying that the man who started the race should be fully employed, should start all the races or should quietly stay at home with a towel wrapped around his head and exist on invalidity benefit? I am baffled and do not understand the hon. Gentleman's point.
My hon. Friend the Member for Birkenhead (Mr. Field) correctly identified the two main reasons for the increase in the number of claims for invalidity benefit. The first that he mentioned was the Government's desire to ensure that people were taken off the unemployment register in the