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House of Commons

Monday 4 July 1994

The House met at half-past Two o'clock


[ Madam Speaker-- -- in the Chair ]

Oral Answers to Questions


Social Fund --

1. Mr. Bell : To ask the Secretary of State for Social Security what are the costs of administering the social fund expressed as a percentage of the money disbursed in the last year for which figures are available.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : In 1992-93, the overall cost of administering the social fund was equivalent to 52 per cent. of the money paid out.

Mr. Bell : I am grateful to the Minister for that reply. He might have continued and said that if one takes into account loans made to claimants, the figure is 35p in the pound. Is he satisfied with both figures ? The Social Security Advisory Committee clearly is not--and if it is not satisfied, why is the Minister satisfied ? Is there value for money or is money going into bureaucracy ? Why does not the Minister give us a full report and undertake a full review so that we can all debate the issue ?

Mr. Scott : In my view, the social fund represents good value for money. It provides control over the totality of

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expenditure in the interests of the taxpayer. It is well targeted on those who need most help and the decisions are made with considerable speed.

Occupational Pensions --

2. Mrs. Browning : To ask the Secretary of State for Social Security what was the average value of an occupational pension in 1979 and in the latest year for which figures are available.

The Secretary of State for Social Security (Mr. Peter Lilley) : It is estimated that at 1991 prices, the average value of occupational pensions was £41.90 per week in 1979 and £63.30 per week in 1991- -an increase of 51 per cent.

Mrs. Browning : Will my right hon. Friend confirm that occupational pensions will be made more secure by the proposals set out in his White Paper ? Will he also confirm that he will implement in full all the major proposals in the Goode report and that Opposition Members who say otherwise --such as the hon. Member for Glasgow, Garscadden (Mr. Dewar)--are simply indulging in scaremongering ?

Mr. Lilley : Yes, I can entirely confirm the points that my hon. Friend makes. The changes introduced in the White Paper, which have been widely accepted, will give the new regulator all the powers that the Goode committee recommended. We have implemented all the major recommendations of the Goode report. I believe that as a result, occupational pensioners can have their confidence in their occupational pension schemes fully restored after the problems caused by the Maxwell scandal. We want occupational pensions to go from strength to strength.

Mr. Flynn : Then why is the Secretary of State trying to tempt people from the safety and security of occupational pensions and the state earnings-related pensions scheme into the national lottery of personal pensions ? Will he tell the House what his Under-Secretary has told the House--that those on money-purchase pensions who bought annuities in 1990 find that those annuities have dropped in

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value by, on average, a quarter ? For women, they have dropped in value by a third. If that has happened in four years, what will happen in 20, 30 or 40 years' time ? Will the Secretary of State arrange for anyone whom he intends to bribe out of SERPS or occupational pensions to be told of the catastrophic drop in annuity values in the past four years ?

Mr. Lilley : The hon. Gentleman would like everyone to retain nationalised pensions. On the question of people remaining in occupational pensions or moving out of them, we have recently made clear to employers the advice that they can give to their members, which they have found helpful. The advice will make clear the advantages of occupational pensions and the way in which they are, in many cases, superior to private pensions.

I propose in my White Paper to increase the flexibility of annuities so that if people want to draw out their tax-free capital lump sum, they will still be able to defer taking their annuity, while withdrawing a sum for their on-going income, until the time when they think that they can get the best terms for their future annuity provision.

Civil Rights (Disabled Persons) Bill --

5. Mr. McAllion : To ask the Secretary of State for Social Security how many representations his Department has received about the blocking of further progress on the Civil Rights (Disabled Persons) Bill.

Mr. Scott : We have received a large number of representations about the Civil Rights (Disabled Persons) Bill.

Mr. McAllion : In a personal statement to the House on 10 May, the Minister admitted that his Department had been involved in preparing amendments which were then used to block the Bill. Four days earlier, on 6 May, the Minister had told the House that no one in his Department had been involved in any way in drafting the amendments. Does he accept, therefore, that his statement on 10 May showed clearly that he was peddling untruths to the House on 6 May ? Should not he, as the Minister responsible for this tawdry and discreditable denial of civil rights to people with disabilities, take the only honourable course and resign from his high office ?

Mr. Scott : Is that the best that the hon. Gentleman can do ? He omitted a key factor in the sequence of events. Immediately I realised that the information that I had given to the House was incorrect, I wrote to the hon. Member for Workington (Mr. Campbell-Savours) setting the record straight.

Mr. Alan Howarth : Does my right hon. Friend accept that his personal commitment to the support of the disabled is widely recognised ? Will he accept congratulations on the Government's commitment to consult with a view to preparing anti-discrimination legislation ?

Mr. Scott : I am grateful to my hon. Friend. As he mentioned, we have made clear our intention to consult on employment ; the impact of the building regulations on access to buildings ; goods and services and their availability to disabled people ; financial services ; and the establishment of a national body that the Government could consult on disability issues.

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Mr. Sheerman : Would the Minister accept an invitation to join me and many other hon. Members from both sides of the House at the Trafalgar square rally on Saturday, where he would learn of the bitterness that disabled people and their vast army of supporters feel about the way in which the Government subverted their civil rights Bill ? He would further learn that the people who will be there in their many hundreds, if not thousands, on Saturday, believe that they deserve and will get the Bill, the whole Bill and nothing but the Bill--not a Government milk-and-water, watered-down compromise ?

Mr. Scott : I shall not be able to join the hon. Gentleman at his gathering. However, I am aware, not least from the correspondence that I have received and representations from hon. Members on both sides of the House, of the strength of feeling in favour of the Bill. I happen to believe that the approach represented by the Bill is the wrong one at the moment and that the approach that the Government have suggested represents the right way to tackle the undoubted discrimination against disabled people. We are determined to tackle it in a practical and workmanlike manner.

Habitual Residence Test --

6. Mr. Lidington : To ask the Secretary of State for Social Security when he will announce the details of his proposed habitual residence test.

Mr. Lilley : I shall shortly lay regulations to prevent benefit tourism by introducing a residence test for people who claim income support, housing benefit and council tax benefit. The report from the Social Security Advisory Committee on the proposals, together with the Government's response, will be published at the same time.

Mr. Lidington : Does my right hon. Friend agree that decent folk who pay their taxes to help the needy find it outrageous that foreigners can still come over here and rip off our social security system ? Will he confirm that the proposals that the Government intend to implement would bring us into line with the practice of most other European countries ?

Mr. Lilley : I can, indeed, confirm that, as my hon. Friend would expect, the proposal is very communautaire. It will bring us into line with our European colleagues. I have always thought that they were more sensible in requiring a residence test to be met before handing out benefits and I am happy to follow their example. Certainly, they think that we are strange for doing what we do. I have an interesting article here from Le Nouvel Observateur , which I have no doubt is widely read, expressing amazement that young continentals can come here and pick up benefit with the ease with which they do it at present.

Mr. Rooney : Does the Secretary of State accept that the biggest element of the fraud of so-called benefit tourism is private landlords' exploitation of lax housing laws in Britain that allow hundreds of pounds a week of housing benefit to be paid to private landlords ?

Mr. Lilley : That is certainly an issue which we have addressed. As the hon. Gentleman will know, we have changed the system of reimbursing local authorities, which are responsible for handing out benefit, so that they are no

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longer penalised but share in the savings that are made when abuses and frauds are discovered in the housing benefit system. Such abuses can result from collusion between landlords and tenants of the kind that the hon. Gentleman describes. We are determined to stop that.

Mr. John Marshall : Would my right hon. Friend care to give a draft of his proposals to the Lord Chancellor so that benefit tourism in relation to the legal aid system can also be brought to an end ?

Mr. Lilley : I shall certainly make sure that my hon. Friend's remarks are drawn to the attention of the Lord Chancellor, who I know follows these debates with great assiduity.

Mr. Dewar : In connection with the habitual residence test, can the Minister say a word or two about his decision as it will apply to citizens of the Irish Republic ? It is known that he has had discussions with the Irish Minister for Social Services, Dr. Michael Woods. Did the right hon. Gentleman see the report in the Irish Post in the middle of last month to the effect that a definitive agreement had been reached which meant that the habitual residence test would not apply to citizens of the Irish Republic, those from the Channel islands and those from the Isle of Man ? Can he confirm that that is so ? I do not want to disturb his genuine reputation for being communautaire, but if it is, can he explain how that will be squared with his earlier statement that no differences would apply in relation to citizens of different countries within the European Union ?

Mr. Lilley : I made it clear in answer to a question at an earlier Social Security Question Time--perhaps it was from the hon. Gentleman-- that, in devising the regulations, I did not intend to disrupt the common travel area that exists between ourselves and other parts of the British Isles. Although I do not want to pre-empt my announcement, I hope that it will be possible to ensure that that is the case. The new phenomenon to which I am referring is that of people coming from the continent and taking advantage of regulations whose laxity they can scarcely believe.

Mr. Hawkins : Will my right hon. Friend consider that benefit tourism within the United Kingdom seriously disadvantages tourist resorts such as the one that I represent in Blackpool ? The "come and claim your dole and housing benefit by the sea" phenomenon is a serious problem. Will my right hon. Friend consider that matter seriously before he decides the final format of his new announcement ?

Mr. Lilley : I know that that issue causes concern in many seaside areas. The Government have endeavoured to deal with it and will keep a close eye on the problem. I have to disappoint my hon. Friend, however, as the regulations will not have a bearing on that problem.

Child Support Agency --

7. Mr. Robert Hughes : To ask the Secretary of State for Social Security what percentage of the money paid as a result of maintenance assessments made by the Child Support Agency is benefiting children and families ; and what percentage is reducing benefit expenditure for the Treasury.

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The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt) : All maintenance is of benefit to children. The payment of regular maintenance can transform the lives of parents with care and their families, and that is widely recognised by their representatives.

A large proportion of maintenance is paid direct to the parent with care by the absent parent. Of the money directly collected, under the Child Support Act 1991, by the Child Support Agency on behalf of parents with care, we estimate that about a third is retained by them and not offset against benefit expenditure.

Mr. Hughes : Does not that answer reveal to the House a disturbing set of figures, and that the Treasury is benefiting much more than anyone else from the activities of the CSA ? Why is the hon. Gentleman so secretive about the full figures--the CSA report published today does not carry the information ? Does not he understand that if the CSA is to work properly, it must be seen to be accountable and transparent and to be benefiting families and not the Treasury ?

Mr. Burt : On the hon. Gentleman's first point, the House always understood that one of the principles behind the Child Support Act 1991 was that it would ensure that taxpayers supported only those children for whom the state should have responsibility, and that responsibility for children should be passed on to parents, as is proper. That is why it is right that the taxpayer should benefit. As to the hon. Gentleman's second point, the report does, indeed, carry figures. During the past year, it became clear that some information was not as readily available as we would have wished it to be and steps have been taken within the agency to improve that situation. The agency knows how much is flowing through its books in relation to offset benefits. It is not possible for it to calculate all the money that is being paid directly by an absent parent to a parent with care of a child, however, although we are trying to get those figures.

Mr. Jacques Arnold : Does my right hon. Friend agree that the savings are made for the benefit of the taxpayer who, up to now, has been ripped off by some fathers who have paid little or nothing at all ? Is not it high time that they took up their responsibilities ? Is not that why the Child Support Agency is a thoroughly good thing ?

Mr. Burt : I am grateful to my hon. Friend. In the past, the system had a tendency to underpin separation agreements--unwittingly--through the taxpayer. That is one of the major reasons why the CSA was introduced--to end that discrimination against other taxpayers.

Mr. Kirkwood : Does the Minister acknowledge that earlier written parliamentary answers seemed to suggest that only 2 or 3 per cent. of the money went to children and into the hands of the caring parent, not 33.3 per cent., as he just announced ? Would he be prepared to put the documentation that establishes that figure in the House of Commons Library, so that hon. Members can look at it for themselves ? While he is at it, will he also say whether he is fighting in the Cabinet to get time for new amendments to the primary legislation in next year's legislative programme, because tinkering with the 1991 Act simply will not do ?

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Mr. Burt : I should love to be fighting in the Cabinet, but that opportunity has not yet been made available to me. It would be nice if it was, but I must not anticipate any decisions.

I am aware that my initial answer perhaps caused some surprise among Opposition Members, who may not have read carefully the letter from the chief executive to the hon. Member for Glasgow, Garscadden (Mr. Dewar), which he quoted this morning. I was seeking to say that that letter makes it clear that there are some sums that could not be calculated in terms of benefit saved in relation to the amount of money that had gone to the parent with care--crucially, in connection with family credit.

Now we have those figures and I am able to tell the House and the hon. Member for Garscadden that the figure of £210 million quoted in that letter can now be updated to £310 million, of which some £73 million goes direct to the parents. The increase is due to the calculation of family credit. It was mentioned in the letter that that calculation could not be done, but it is clear that if those family credit figures were not included, the quoted figures would be distorted. Those figures are now available and I am sure that the hon. Member for Garscadden would agree that they make a much better case for the retention of money for parents with care.

Lady Olga Maitland : Will my hon. Friend join me in condemning organisations that seek to undermine the good work of the CSA ? Is he aware of the appalling behaviour of Network Against the Child Support Agency, which has sent out hate mail and put up defamatory posters ? Does he agree that such behaviour is sour grapes on the part of disaffected fathers ?

Mr. Burt : The work of some of the groups that oppose the CSA has, sadly, undermined their cause. There are proper ways of expressing dissent and concern about Acts of Parliament, which many hon. Members have experienced in the form of proper letters from concerned parents. Those groups that have formed themselves deliberately to seek to wreck the work of the agency and which have put intense pressure on individual members of the agency and sent unpleasant and dangerous things through the post should realise that they do their case no good.

Ms Eagle : Does the Minister appreciate that the chief executive of the CSA does her case no good by taking three or four months to answer letters from Members of Parliament ? She then fills those letters with drivel and things that we already know. Will the Minister give an undertaking now that the chief executive will improve the service to Members and will deal with the issues that we raise instead of sending out useless propaganda ?

Mr. Burt : From some of the questions that I hear from Opposition Members, it seems clear that they need more information, not less. The chief executive and I acknowledge that the service to Members has not been as good as it should be. Steps are being taken by the agency to ensure that it is improved. The chief executive and I apologise for letters that have been sent out too slowly and we are determined to ensure that the service is better. The provision of information in those letters should be carefully noted by Opposition Members, as it is information which they sometimes badly need.

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Housing Benefit --

8. Mr. Alan Howarth : To ask the Secretary of State for Social Security if he will make a statement on his plans for housing benefit.

Mr. Lilley : My Department is conducting a fundamental review of all social security expenditure. No decisions have been taken affecting housing benefit since the changes announced in the social security uprating statement last year.

Mr. Howarth : Will my right hon. Friend ensure that housing benefit is paid in future at levels sufficient both to relieve the current poverty trap whereby families struggling to improve their incomes in work are penalised at rates of up to 97 per cent., and to induce investors to finance more accommodation for rent, which is badly needed to reduce homelessness and to improve the efficiency of the labour market ?

Mr. Lilley : The growth in expenditure on housing benefit has been great. My hon. Friend knows that it covers 100 per cent. of the value of rents and the withdrawal is simply in relation to people's incomes. If the withdrawal rate were alleviated, the cost would be even greater still. A balance must always be struck between the overall cost of the benefit and its impact in terms of disincentives on those who receive it.

Mr. Raynsford : Does the Secretary of State recognise that the huge growth in expenditure on housing benefit is a direct result of the policies pursued by the Department of the Environment, which has withdrawn subsidy for rented accommodation and forced higher rent levels ? Would not it be outrageous if people who were having the greatest difficulty in meeting high rents were to be penalised by cuts in housing benefit, when the Government pledged that housing benefit was there to take the strain of higher rents ?

Mr. Lilley : That is one of the factors, but our policy has been to move from subsidising bricks and mortar to subsidising people. As I said, they receive 100 per cent. of the cost. The hon. Gentleman may prefer to subsidise things rather than help people but our priority is the other way round.

Mr. Thurnham : In view of the rising cost of housing benefit, will my right hon. Friend look at ways of administering and controlling housing benefit on an area basis rather than paying unlimited personal benefit, which the Opposition love ?

Mr. Lilley : A modest change which I announced in the social security uprating means that, in future, rent officers will be asked to give the level of rents that are too great for housing benefit to be reimbursed if they are given in a particular area. That is to be done on an area-by-area basis and will provide guidance to local authorities on where they should direct housing benefit expenditure.

Incapacity Benefit --

9. Mr. Pickthall : To ask the Secretary of State for Social Security what he estimates the savings will be on his departmental budget arising from the introduction of incapacity benefit in each of the first three years starting with its introduction in April 1995.

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Mr. Scott : Our latest estimates are that the net savings in benefit expenditure will be £415 million in 1995-96 ; £1.2 billion 1996-97 ; and £1.7 billion in 1997-98.

Mr. Pickthall : Is not it contemptible that the Government should make those savings at the expense of the most vulnerable section of our community, especially in the wake of VAT on domestic fuel and changes to vehicle excise duty ? Is not it contemptible that, under the changes, a parent under the age of 40 with two children could lose up to £45 for a period of 24 weeks ? Is not the Minister ashamed to put such measures through Parliament ?

Mr. Scott : The hon. Gentleman should be as aware as the rest of the House that expenditure on the present invalidity benefit rose from £2.7 billion to £6.1 billion in real terms over the past decade. It was essential to get that expenditure under control. We are committed to retaining proper provision for genuine long-term sick and disabled people.

Mr. Bradley : At a time when the Government are trailing measures to reduce unemployment, will the Minister confirm that, on the Government's own estimates, the cuts in invalidity benefit will result in at least another 200,000 people on the dole queues ?

Mr. Scott : I certainly would not deny the figures which the hon. Gentleman has given. I would say that, in the first year, the figure would be about 90,000. It is right, however, that we should have a pattern of benefits that provides back-to-work benefits for those who are unemployed and able to get back into work, and proper benefits for those who are sick and unable to work in the long term.

Post Offices (Benefits Delivery) --

10. Mr. Jacques Arnold : To ask the Secretary of State for Social Security what action he is taking to maintain the continued delivery of social security benefits through a nationwide network of post offices.

15. Dr. Twinn : To ask the Secretary of State for Social Security whether benefits will continue to be delivered through post offices.

Mr. Lilley : Customers will continue to be able to choose to receive their pension or other benefits at the post office. I have three clear objectives for the delivery of benefits : to give our customers the choice of where they receive their benefit ; to reduce the cost of delivering that service ; and to eliminate fraud.

Mr. Arnold : Is not that good news, and does not it contradict the scaremongering at the expense of the vulnerable that we have heard from the Opposition ? Does not the continued use of sub-post offices by the Department provide a firm base for those sub-post offices further to extend their business and underwrite the future viability of sub-post offices in rural and suburban areas, which are of great importance and have the strong support of Conservative Members ?

Mr. Lilley : The proposals that I announced at the sub-postmasters' conference in Bournemouth to guarantee choice to everyone and automate the payment of benefits through post offices were well received by postmasters there and throughout the country since. They are good for

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post offices and offer the guarantee that we shall continue that help. They will enable post offices to widen their business by building on the back of those automated services. But they are also good for customers and taxpayers because they will help to eliminate costly fraud.

Dr. Twinn : May I thank my right hon. Friend for his crystal clear commitment to a national network of sub-post offices ? Does he agree that the scaremongering by the Opposition serves only further to undermine sub- post offices around the country ? Will he now press ahead with automation and identity card systems to make sub-post offices safe places for pensioners and benefit receivers to use ?

Mr. Lilley : I certainly can promise to do that. We are seeking the involvement of the private sector to expedite the process because we believe that it can bring in both finance and expertise to the rapid delivery of these complex systems.

Mr. Barry Jones : Can the right hon. Gentleman guarantee no closures of sub-post offices in Wales and in my constituency ?

Mr. Lilley : The hon. Gentleman knows full well that no one can do that. But what we have done is to offer a guarantee that there will continue to be a national automated network of sub-post offices which will be much stronger than it has ever been before.

DSS Offices (Staff) --

11. Mrs. Roche : To ask the Secretary of State for Social Security if he will make a statement about the numbers of staff currently employed in DSS offices in direct contact with the public.

Mr. Burt : Over 80 per cent. of staff across the Department are in some form of direct contact with the public, providing a caring and efficient service.

Mrs. Roche : Will the Minister undertake to look at the numbers again, given that the Archway Tower benefits office which serves my constituency is often closed for hours at a time without notice ? The complacent attitude to the number of staff is not good enough ; there needs to be sufficient staff to meet the needs of the public.

Mr. Burt : I will, indeed, look at the particular incidence that the hon. Lady mentions. But I would say that there is no complacency in the Benefits Agency, which continues to turn in good results, providing a good service. This year, it has beaten its target of, for instance, clearing income support claims within four days--it is now 3.5 days--and there is a range of other targets which it meets very well. I am sure therefore that the hon. Lady will agree that the agency does a good job serving all of its people.

Child Support Agency --

12. Ms Quin : To ask the Secretary of State for Social Security what further representations he has received concerning the Child Support Agency.

14. Mr. Bayley : To ask the Secretary of State for Social Security what recent representations he has received on the implementation of the Child Support Act 1991.

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Mr. Burt : I continue to receive representations from hon. Members, the public and interested organisations covering a wide range of views.

Ms Quin : Given that the Child Support Agency has failed to apply the principle of ability to pay, is it surprising that it risks becoming the greatest political fiasco since the poll tax ? Can the Minister tell the House how, in cases where benefit is reduced to mothers who do not give information about the father's whereabouts, that policy helps the child, who is often the wholly innocent victim in such cases ?

Mr. Burt : There are two points : first, the formula takes account of people's ability to pay, which is why it is weighted in this particular way ; and, secondly, although there was a tremendous amount of worry about benefit reductions before the Act came in, the number of such cases has been extremely small. The benefit reduction lasts for only a short period and it need not happen because the provision for good cause enables any woman who fears harm or undue stress to herself or her child to take advantage of that and therefore not suffer the benefit reduction. There have been many more examples of that than of any benefit reduction.

Mr. Bayley : Why is it right for the Child Support Act 1991 to be retrospective in the sense of setting aside clean-break settlements where, for instance, a home has been passed to the parent with care, but, at the same time, it is wrong for it to be retrospective in the sense of allowing parents with care to have their claim back-dated to the time that they made an application to the Child Support Agency ? I have heard of delays of six, eight or even 10 months from the time that an application is made to when the Child Support Agency sends the forms to the absent parent. Who compensates a parent with care for 10 months with no maintenance from the CSA ?

Mr. Burt : The Child Support Agency is determined to provide as efficient a service as it can. We know from today's first report that the agency has not been able in all cases to deal with the application forms coming in and to send assessments out as quickly as it would like. A compensation scheme is available if particular delays have been caused by an error in the department, but every effort is now being made to improve the speed with which applications are dealt with. Of course, the hon. Gentleman will know that in most cases time begins to run from when the maintenance inquiry form is sent out.

Mr. Jonathan Evans : Is my hon. Friend aware that the 11 reputable charities that form the child support monitoring group recently proposed that there should be a form of maintenance disregard as they feel that that would bring the public very much behind the whole concept of the Child Support Agency ? Bearing in mind the remarks made at the weekend by the hon. Member for Glasgow, Garscadden (Mr. Dewar), who has indicated that he is attracted by that proposal, has my hon. Friend received any specific figure proposed by the hon. Gentleman as to how much that might cost ?

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