The Secretary of State for Social Security (Mr. Peter Lilley) : We expect the child care allowance to be very effective in helping low-income families back into work and improving their living standards.
Dr. Jones : Will the Secretary of State make it clear that that allowance is not a cash benefit and that, although some people will gain provided that they are not paying much more than £1.50 an hour for child care, the poorest--those receiving maximum family credit--and those who use relatives to look after their children will gain nothing ? What will the Secretary of State do to help them ?
Mr. Lilley : I will not make those things clear because they are not correct. I am sorry that the hon. Lady greets this welcome reform so sourly, as it has been welcomed by everyone else in the sphere. Far from its helping only a few, we estimate that it will help 150, 000 people, of whom 50,000 will be encouraged back to work. The people who are already on maximum family credit are usually those who work the shortest hours, many of whom will be able to increase their hours if they become eligible for child care costs. The allowance will enable them to put their children in care while they are working.
2. Mr. Bates : To ask the Secretary of State for Social Security what is the latest estimate of the value of the average pensioner's income from savings and occupational pensions ; and what were the comparable figures in 1979.
Mr. Lilley : In 1990-91--the latest year for which information is available--the estimated average value of pensioners' income from savings and occupational pensions was £63.20, which is an increase of more than 125 per cent. in real terms on the comparable figure of £27.80 in 1979.
Column 618number of pensioner couples in the lowest income band and the amount of press coverage that such excellent news receives ?
Mr. Lilley : My hon. Friend makes a good point. I have found that the most telling evidence of good news is the lack of reporting that it receives in the press. The fact that the income standards of pensioners are rising so strongly is extremely good news, and they are set to continue rising as more pensioners have occupational and private pensions.
Mr. Corbyn : Does the Secretary of State accept that the figures that he gave are utter nonsense ? The real increase in the level of the state old-age pension since 1979 is 3.6 per cent., as he has admitted. Will he stop bandying about figures that include investment income for a very small number of elderly people and instead consider the real levels of poverty among the elderly, the number of old people who die from hypothermia and the number of single women pensioners over the age of 75 who have no access to occupational pensions, savings or anything else and are living in poverty ? Will the right hon. Gentleman restore the link with earnings, which the Conservative Government broke in 1980, and give people a decent pension ?
Mr. Lilley : Apart from state provision, occupational pensions are the biggest single factor. It is true that in 1979--the year to which the hon. Member harks back--only 43 per cent. of retired people had occupational pensions. In the latest year for which we have figures, 61 per cent. of retired people had such pensions ; among the newly retired the figure is 70 per cent., which is excellent news. I simply remind the hon. Gentleman that, in every year since 1979, pensioners' incomes have increased on average by more than they did in all five years under Labour.
Dr. Spink : Will my right hon. Friend confirm that 10.7 million employees are members of occupational schemes ? Will he also confirm that the Government will continue to provide an environment in which such schemes can flourish ?
Mr. Lilley : I can certainly confirm that for my hon. Friend ; he is absolutely right. More than 10 million people in work are building up occupational pensions--apart from those retired people who are enjoying them--and 5 million additional people are building up private pensions for the future. That is good news, as is the additional provision that the Government have made for the least well-off--£1 billion a year since 1988.
The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : Community care grants play an important part in support of the Government's wider initiatives to promote care in the community. As in previous years, we have identified from our routine monitoring scope for some minor improvements to the Secretary of State's directions and guidance. Details of amendments taking effect from April 1994 are being placed in the Library today.
Mr. Field : As the Minister is talking about minor improvements, does he think that it is satisfactory that people living in hostels are deemed not to be living in the community and so qualify for community care grants, whereas people living rough on the streets are deemed to be living in the community and do not qualify for those grants ? When the right hon. Gentleman makes what he calls minor amendments, will he include the latter group so that such people qualify for the grants ?
Mr. Scott : Amendments have been placed in the Library today. The hon. Gentleman should bear in mind the fact that whether or not people are enabled to resettle in the community will depend on the care that they have been receiving hitherto. Many hostels provide such care and those who move from them into the wider community certainly have an entitlement to community care grants, subject, of course, to the flexibility of the fund.
4. Mr. Richards : To ask the Secretary of State for Social Security what representations he has received about the proportion of pensioners who own their own homes ; and what estimate he has made of how this is likely to change over the next 20 years.
The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague) : Information for the year 1990-91--the latest available --shows that an estimated 48 per cent. of all pensioners own their own homes and have paid off their mortgages. The comparable figure in 1979 was 37 per cent. We expect the rising trend in home ownership among pensioners to continue during the next 20 years.
Mr. Richards : Will my hon. Friend confirm that, even among pensioners on lower incomes, around a quarter own a home valued at about £25,000 ? Does he agree that that is evidence that home ownership among pensioners is spreading, thanks to the policies of the Government ?
Mr. Hague : My hon. Friend is right. Home ownership among pensioners has spread and will continue to do so because of the factors already described by my right hon. Friend the Secretary of State--the growth of occupational pension provision and income from savings. Those developments have occurred because we have had a Government who have encouraged diversity of pension provision and ensured low inflation so that savings are actually worth something.
Mr. Congdon : Does my hon. Friend agree that the figures that he has given demonstrate the spread of ownership among pensioners and the extent to which they are better off than their predecessors ? Will he also confirm that almost all pensioners now have a television, most have a telephone and a large majority have washing machines ? Is not that a tribute to the success of the Government's policies ?
Column 620telephone, whereas in 1979 barely half of pensioner households owned one. The number of pensioner households with cars has nearly doubled since 1979 and the percentage in the bottom decile of income distribution has fallen from 31 to 11 per cent. Those dramatic improvements seem to have escaped Opposition Members' notice.
Mr. Robert Hughes : Does the Minister accept that a real measure of prosperity would be how many pensioners bought their houses after they became pensioners ; how many had their houses bought for them by members of their family for investment purposes ; and how many houses were bought by members of the Tory party looking for a fast buck, such as the hon. Member for Rutland and Melton (Mr. Duncan) ?
Mr. Hague : What matters to pensioners is living in homes where they do not have a mortgage to pay. What matters to them is having all the household durables and other goods that we have mentioned, which make a big difference to their living standards. We have seen tremendous improvements in those standards.
Mr. Foulkes : Is the Minister aware that about 390,000 pensioners in Strathclyde--including my mother, incidentally--voted no in the referendum on the future of water services in Strathclyde ? Many of those pensioners own their own houses and are being ignored by the Government. Why ?
Mr. Hague : We would not dare to ignore the hon. Gentleman's mother ; I can assure him of that. Pensioners in Strathclyde will have shared with pensioners in the rest of the country the improvements in living standards to which we have already referred, with more owning their homes, more having cars, more having telephones and many having much greater incomes.
Mr. Scott : As the House knows, the Department is conducting a fundamental review of all social security expenditure. No decisions have been made and the Government will consult widely as and when proposals are ready. We have no plans to cap housing benefit.
Mr. Miller : I hope that that is a stronger promise than we had from the Ministers on VAT, and that they do not renege on commitments in that area. [Hon. Members :-- "Reading."] I am not reading. The Minister should realise that the Government's own policies have allowed the benefit to increase ; the deregulation of private sector rents has been the cause of that. The Minister should ensure, in liaison with his colleagues, that that is taken into account in the review and that there is no capping and no cuts whatever in the benefit.
Mr. Scott : Far from anticipating cuts, we expect that, by the end of the decade, expenditure on housing benefit is likely to increase from £7.3 billion to between £10 billion and £12 billion, so one can see growth in that area. I do, however, think that there is merit in concentrating subsidy for housing on individuals and their circumstances rather than entirely on bricks and mortar.
Mr. Willetts : Will my right hon. Friend confirm that the Government's figures show spending on rent allowance increasing by 7.1 per cent. a year and spending on rent rebates increasing by 5.5 per cent. a year until the year 2000, and that that shows the need for tight control over housing benefit spending ?
Mr. Scott : I am sure that that is true, and we have taken steps to enable local authorities to take action to prevent the meeting of very high rents where luxurious accommodation or over-generous provision of space is currently being subsidised by the taxpayer.
Mr. Winnick : But is not it a disgrace that, whereas in 1979, 9 per cent. of households had incomes below half the national average, the figure is now 25 per cent.--nearly a threefold increase in poverty ? Does not that show that, for many people, the Tory Government since 1979 have been a curse ?
Mr. Lilley : That is nonsense, as the hon. Gentleman knows. There has been a rise in living standards across the country. The average increase in income is about 35 per cent. in real terms. The figures that the hon. Gentleman cites do not reveal any worsening of people's real position--simply a change in the distribution of income, which is occurring in many other countries, too. I urge him to look closely at the figures ; he will find that, in the bottom 10 per cent. of households, there are 500,000 reporting zero or negative incomes, mainly consisting of self- employed people, who are none the less able to consume, on average, more than the average person in the population as a whole.
Mr. Dicks : With regard to those benefits, can my right hon. Friend confirm whether it is true that a certain Mr. Gerry Adams is receiving social security benefits while he is able to fly halfway round the world to decry the Government ? Will he examine that situation and ensure that he is taken off those benefits immediately ?
Mr. Lilley : I cannot comment on individual cases, but I will refer the question to my right hon. and learned Friend the Secretary of State for Northern Ireland, who has responsibility for social security in the Province. I am sure that if there is any evidence of wrongdoing by anyone in that area it will be inquired into.
Mr. Ingram : Has the Minister had an opportunity to study in detail the report produced last week by his Department, which showed that £2 billion in benefits remain unclaimed in 1991 ? Is he prepared to accept that such a shortfall in take-up increases the extent of family poverty in this country ? Instead of treating the problem with complacency, as his Department did last week, is he now prepared to accept that the Department has a responsibility and a duty to seek out those many claimants who do not take up the benefits and assist them in so doing ?
Mr. Lilley : We do not deal with that matter complacently. We are pleased that some 90 per cent. of benefit available is taken up. We want to ensure that those who, for any reason, are less able, knowledgeable or well equipped to claim benefit have the relevant knowledge to enable them to claim. We have been encouraging an increased uptake, particularly in family credit, with some success. That benefit helps people back into work, which means that, ultimately, they draw less benefit from the state but are better off because they are in work. Thus, everybody is better off : the person concerned, the taxpayer and the economy as a whole. We are encouraging that process further.
Mr. Evennett : Will my right hon. Friend confirm that the Government intend to target benefit towards those in genuine need and that that policy is widely supported throughout the country ? Will he further confirm that, since the Government have been in office, low-income families have benefited from family credit, income support and other benefits, and have done quite well within society because of what the Government have done to help them ?
Mr. Lilley : My hon. Friend is right. We must try to ensure that the benefit goes to those in need. That objective must be shared by all hon. Members. We have targeted benefits towards low-income families, to whom the extra benefit since 1988 is now worth £1 billion a year. For a typical low-income household, that is worth £13 a week more than it received under the previous regime.
9. Mr. Norman Hogg : To ask the Secretary of State for Social Security what plans he has to introduce an independent appeal procedure to the Child Support Agency system ; and if he will make a statement.
Mr. Lilley : The Child Support Agency was introduced to ensure that parents meet their responsibility for the financial maintenance of their children where they can afford to do so. It replaced an inconsistent, often unreliable system that resulted in a drastic decline in maintenance payments over the last decade.
There is already the right of appeal, on the basis of an incorrect application of the formula, against a decision of a child support officer, to an independent tribunal.
Mr. Hogg : Is the Secretary of State prepared to accept that the changes to the Child Support Act 1991 implemented in February have totally failed to deal with the extensive criticism of the Act ? Does he accept that there must be further fundamental changes if public confidence in the Act is to be restored ?
Mr. Lilley : The changes that we introduced in February have already benefited some 30,000 or 40,000 people as a result of a direct reduction in the amount that they were required to pay. Many more people who receive assessments in the future will benefit. Extra help will also be provided in the form of phasing, for which people are now applying. That will be welcomed by those with second families who already have maintenance agreements.
If the hon. Gentleman seriously believes that such a measure can be introduced with no criticism whatever, he is mistaken. In every other country where such a system has been introduced--Australia, New Zealand and various states of America--it has met with criticism. I remind the
Column 623hon. Gentleman that, since we introduced those changes, there has been criticism from lone parents who naturally receive less when absent parents pay less.
Mr. Ward : My hon. Friend will be aware that I support the principle of the Child Support Agency. Is he aware that, in a small number of cases, people may be better off unemployed than in employment if they pay what the Child Support Agency asks for ? Will he look at that aspect ?
Mr. Lilley : That was an aspect with which we tried to deal when we introduced changes in February. We nearly quadrupled the amount above income support level below which the income of an absent parent's second family cannot fall. We have increased the increment above that level which they can keep. That makes it difficult for people to find themselves in the position to which my hon. Friend refers. But, as I have made clear previously, we are keeping the matter under continual review as we want to ensure that we are aware of any continuing problems.
Mr. Kirkwood : The Secretary of State is right that there is a limited appeal system that will allow people to take cases to tribunals, but there is no appeal system for hardship. If the Government allowed a hardship tribunal for people who were asked to pay more than they could possibly afford, people would be given a chance to argue their case before an independent body. That would also provide the Government with better evidence of how badly the Act is turning out in practice for people with second families who are being blown apart by the sums of money that they are being asked to pay.
Mr. Lilley : We hope that, as a result of our changes and of the original proposals, endorsed by all parties represented in the House, people will have enough income left, after paying their child maintenance, to meet their other commitments. I am, however, keeping that matter under continual review. We must beware of going back to the discretionary system under which, in effect, the whole burden of child maintenance was transferred to the taxpayer. Indeed, we cannot go back to it : it betrayed the children, the parents caring for them and the taxpayer.
Mr. Brazier : I support my right hon. Friend's robust stance on this matter, but may I draw his attention to one anomaly that needs a fresh look --the problem of parents who are paying yet who believe that the money is not being spent on the children ? At present, no avenue is open to such parents ; I know of two constituency cases. Will my right hon. Friend look again at a system for dealing with such cases so that people can be sure that the money is being spent on the children ?
Mr. Lilley : This is a difficult issue and the problem applied under the old system, too. Essentially, a court awards the primary responsibility of caring for a child to one parent, and the money transferred in maintenance, under a court order or under a Child Support Agency order, has then to be allocated for the child by that parent. But I take my hon. Friend's point and I will look at it further.
Mr. Dewar : Does the Minister realise that the growing public anger, dismay and despair are undermining confidence in the Child Support Agency system and putting at risk the very principles of responsible parenting that that system was brought into being to buttress ? Does
Column 624he accept that there is, in the name of justice, a need for a system of redress for people who find that maintenance demands are out of line with their ability to pay ?
The Minister referred to the criticism that greeted the Australian system. Does he recall that, two or three years into the operation of that system, the Australians successfully introduced a review officer procedure to deal with some of the injustices and difficulties that we are encountering ? If there is a review, when will we see its outcome ?
Mr. Lilley : We discussed that issue in a full day's debate in the House a month ago. It became clear then that the hon. Gentleman's idea of a review system was very different from that practised in Australia, which is extremely limited, and which in some ways means a lesser alleviation of the burden on absent parents than is provided under our present system.
"Child Support Agency cleared of suicides blame" ?
Does he share my regret that misleading and sensational reporting by the tabloid press has distracted attention from the excellent work that the Child Support Agency is doing to ensure that maintenance is paid to thousands of mothers and their children ?
Mr. Lilley : I am grateful to my hon. Friend for drawing the attention of the House to that article. I read it, and I think that it would be well worth many people's time to read it. Suicide is always a terrible tragedy and a terrible shock for the family and friends left behind. But it is monstrous to try to use it as a weapon in a political campaign against an agency--which, incidentally, had the wholehearted support of the House--especially when it emerges that the evidence for some of the claims is, to say the least, flimsy. We in the Government do not comment on particular cases ; we will continue not to do so. I hope that others will be more responsible in their treatment of areas in which bereavement is involved.
Mr. Scott : In the period 5 April 1993 to 31 January 1994, the Child Support Agency issued more than 755,000 maintenance application forms to parents with care, of which more than 548,000 had been returned to the agency by 31 January 1994.
Mr. Cook : I am grateful to the Minister for that information. Does he realise that he is only just beginning to get into the water on this issue ? He is barely up to his ankles. By the time the legislation really bites in 1996 he will definitely be "dans la mer jusqu'au cou" and will find it exceedingly difficult. Conservative Members are already feeling the anger and resentment of people who have been wrongly targeted. The Opposition agree that the legislation is right in principle, but it is very wrong in practice. The wrong people are being targeted and it is about time that the Government quickly withdrew from the mire into which they have led their supporters and made adjustments to the legislation before the tidal wave of resentment overcomes them completely.
Mr. Scott : That was a fair old polemical outburst from the hon. Gentleman. It is in all our interests to get this policy right. As the hon. Gentleman has said, the legislation had widespread support in principle in the House. We have already made some changes to improve the shape of the system. We are continuing to keep it under review, but I do not think that anybody can challenge the principle that those who have care of children, particularly women, should be guaranteed a regular amount of money to enable them to discharge their responsibilities.
Mr. Scott : If my hon. Friend has any examples of cases in which he feels that individuals have not been so treated by the Child Support Agency, I hope that he will communicate them to me. The agency's aim is to deliver a speedy but sympathetic service to those who need its help.
Mr. Wicks : Does the Minister accept that those of us who genuinely believe in the principle of parental responsibility find it more difficult now to defend the Act against bad practice ? Does he agree that among the reforms that we need are reforms to ensure that lone parents on income support actually receive some child support in terms of extra money so that the legislation truly becomes a Child Support Act and not, as it is now, a Treasury support Act ?
Mr. Scott : I believe that it is right and to the benefit of, normally, the woman concerned who has care of children to receive a regular and guaranteed amount whether she remains at home looking after the children or takes on some employment, as many lone parents wish to do. People who started to earn money would have their benefits reduced. However, if they receive maintenance from a guaranteed source, manifestly they can use their earnings to enhance their living standards.
Mr. Waterson : Will my right hon. Friend confirm that about two thirds of the cases taken on this year by the Child Support Agency will be those in which no maintenance at all is being paid ? Does not that fly in the face of the current misconception that the agency is going after only absent parents who have already faced their responsibilities ?
Mr. Scott : My hon. Friend is right. One of the agency's great successes is that it has managed to obtain that maintenance for many women with care. It is all too easy for the Opposition to prate on about believing in the principle while seeking to undermine the practice of the agency every time they have the chance.
11. Mr. Flynn : To ask the Secretary of State for Social Security what is the total of incentive paid to those opting out of the state earnings-related pension scheme into personal pensions at the current date ; and what he expects the total to be five years hence.
Column 626incentive is not payable for periods after April 1993 and the total cost five years hence is therefore expected to be unchanged.
Mr. Flynn : Is not this the biggest financial deception since the South Sea Bubble--the equivalent of 100 Maxwell pension scandals ? Some 3.2 million people have been bribed and conned by the Government to their financial detriment, and the Government have been aided and abetted by wickedly deceitful advertising and pressure salesmanship from the pension industry. What has the Minister to say that will help those 3.2 million future pensioners and protect others from the salesmen, the muggers in smart suits from the pension industry ?
Mr. Hague : The introduction of personal pensions has given millions of people the opportunity, which they did not enjoy before, to build up a fund to add to the income available in their retirement. That is not a scandal. Personal pensions have given people greater flexibility and pension provision than ever before. If there has been mis-selling and people have taken decisions on bad advice, the Government expect the Securities and Investments Board to present acceptable, workable and effective remedies--and it is now working on them.
Mr. John Greenway : Does my hon. Friend agree that if there is any deception or scandal to concern the country, it is that successive Governments have taken national insurance contributions and spent that money, but did not use it to make provision for people in their old age ? Will my hon. Friend ensure that the Government give people every incentive to make their own pension provisions ? Does he further agree that had that been done 40 or 50 years ago, there would be far fewer elderly poor today ?
Mr. Hague : I am not sure that the national insurance fund is a scandal either, but my hon. Friend is right to say that things would be better in future if people built up a fund of their own, rather than rely on a pay-as-you-go state system. The increased diversity and provision of occupational and personal provisions is about that, and the Government will continue to encourage them.
12. Mr. Rooker : To ask the Secretary of State for Social Security how many working mothers in receipt of family credit have had a reduction in financial support from an absent father following the intervention of the Child Support Agency which they have been unable to replace with increased family credit.
Mr. Scott : We estimate that fewer than 1,000 families have temporarily lost income because of the combined effects of the child support changes and the fixed award rule in family credit. Those families entitled to housing benefit or council tax benefit, or who become so entitled following the reduction in maintenance, could recover up to 85 per cent. of their loss.
Mr. Rooker : I am grateful to the Minister for at least showing that the Department has counted the number of working women affected. Will he take it from me that the rigidity of family credit rules mean that working mothers such as one of my own constituents, Miss A--about whom I have written to the Minister--lose about £30 a week maintenance once the Child Support Agency becomes
Column 627involved ? Miss A is unable to have her family credit readjusted so, as far as she is concerned, the agency and the Minister do not care a damn about her circumstances. It is no answer for her to be told by Ministers, "If you lose your job, you can claim income support." Miss A does not want to lose her job--she wants to maintain her income. It is wholly unfair that she loses £40 maintenance weekly and receives only £10 through the Child Support Agency.
Mr. Scott : The success of the family credit 26-week rule has been widely welcomed. I am reluctant to interfere with that rule because of the impact on child support matters. Of course there will be gainers as well as losers under the present arrangement.
Mr. John Marshall : Will my right hon. Friend confirm that family credit is one of the Government's great successes ? Can he say how many families receive that benefit and how many received assistance under the old family income supplement ?
Mr. Scott : There has been a tremendous increase in the number of recipients over the old family income supplement. Some 500,000 families now benefit from the certainty that they will, for a 26-week period, receive a given amount of family credit support.
Mr. Hardy : How is it that the Minister can give my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) a detailed response when scores or hundreds of Members of Parliament have been waiting for detailed responses from the Child Support Agency since 1993 ? In many cases, injustice is matched with outrageous incompetence, which causes great concern and anxiety.
Mr. Scott : The agency's performance has steadily improved in recent months and it is intending to improve further in the weeks and months ahead. The job that the agency is doing is right, and it is doing that job increasingly well.
13. Mr. Rowe : To ask the Secretary of State for Social Security what measures to reform social security benefits are being taken in other European countries ; and what comparison he has made with his own approach to welfare reforms.
Mr. Scott : Most European countries are having to take immediate steps to contain social security costs, and balance budgets, because of rising unemployment and changes in social and demographic trends.
Mr. Rowe : Can my right hon. Friend confirm that, since 1979, our social security budget has risen two thirds ? Is not that in remarkable contrast to the panic action by many of our European Union partners, with which we have traditionally been unfavourably compared ?