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House of Commons

Monday 20 February 1995

The House met at half-past Two o'clock


[ Madam Speaker-- in the Chair ]


Madam Speaker: I regret to have to report to the House the death of Sir Nicholas Hardwick Fairbairn, QC, Member for Perth and Kinross. I am sure that hon. Members in all parts of the House will join me in mourning the loss of a colleague and in extending our sympathy to the hon. and learned Member's family and friends.

Oral Answers to Questions


Benefit Payments

1. Mr. MacShane: To ask the Secretary of State for Social Security what measures he will take to ensure regular weekly giro payments of benefits during the winter in Yorkshire.

The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): The Benefits Agency aims to ensure that all customersreceive their benefit entitlement on time. If, for whatever reasons, delays are experienced, procedures are in place to ensure that claimants receive their benefit entitlement.

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Mr. MacShane: I tabled the question on behalf of my constituent, Philip John Place of Rotherham, an energetic, out-of-work young man who is taking part in a jobseeker's club--

Madam Speaker: Order. I am sorry to interrupt the hon. Gentleman, but it is much better to deal with constituency matters in written representations to the relevant Minister. If the hon. Gentleman has a question, perhaps he will ask it immediately so that the Minister may answer.

Mr. MacShane: Will the Minister give my constituents an assurance that when there is bad weather giro payments will be made on the day, and that if there is a delay for any reason a crisis loan will be available at once to save claimants trouble, fear and anxiety? There is such a thing as cold weather in the north of England.

Mr. Evans: I cannot comment on Mr. Place, about whom I have no details, but I am aware that there was exceptionally bad weather in the hon. Gentleman's constituency on 27 January. I am advised that, as a result, the Royal Mail had difficulty making deliveries, which is a matter for regret and we apologise. The limited information available to me is that Rotherham office may have made one crisis loan on 27 January. Perhaps that emphasises more than anything the need for the proposals of my right hon. Friend the Secretary of State to introduce modern benefit payment methods.


2. Mr. Whittingdale: To ask the Secretary of State for Social Security what steps he is taking to increase choice in pensions.

10. Mr. David Evans: To ask the Secretary of State for Social Security what measures he is planning to increase choice in pensions.

The Minister for Social Security and Disabled People (Mr. William Hague): Government policies aim to provide a range of pensions provision from which

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individuals can choose with confidence. We propose to strengthen occupational pensions law, introduce age-related rebates for contracted-out personal and occupational money purchase schemes and give personal pension holders more flexibility in the use of their savings on retirement.

Mr. Whittingdale: Does my hon. Friend agree that public confidence in choosing an occupational pension will be considerably increased by the news that the Maxwell scheme trustees have accepted a settlement in principle? Does he agree that much of the credit for that lies with Sir John Cuckney, and will he convey to Sir John the congratulations of the House?

Mr. Hague: Yes, my hon. Friend is right to draw attention to the good news of the agreement in principle for Maxwell pensioners, which is welcome. Details remain to be finalised, but Sir John and others involved have done a tremendous job. I hope that they will now be able to bring their work to a successful conclusion.

Mr. David Evans: What plans does my hon. Friend have for pensioners and people on fixed incomes if the lot opposite ever come to power? Is he aware that under the last Labour Government, pensioners and people on fixed incomes had their incomes savaged by 27 per cent. inflation, and that the lot opposite did not even pay a Christmas bonus two years out of the last four when they were in power?

Mr. Hague: My hon. Friend is absolutely right. Pensioners on fixed incomes suffered greatly under the previous Labour Government when electricity prices rose by 2 per cent. every six weeks. Under this Government, the proportion of pensioners in the lower income groups of the population has fallen dramatically and that is testimony to the success of our policies.

Mr. Corbyn: Will the Minister confirm that when the previous Labour Government left office, the state pension was about 24 per cent. of average earnings? What is it now? Will he tell us by how much each year he is subsidising the national insurance fund to promote private personal pension schemes at the expense of the state earnings-related pension scheme?

Mr. Hague: That is the sort of hostility to the private provision of pensions that could be deeply damaging to the future of this country. People who have taken out personal pensions are paying, from their own incomes, more than £2.5 billion a year. They are putting that money aside for pension provision in the future under the arrangements that the hon. Gentleman spends his time attacking. It is vital that there is additional provision on top of entitlement to the state pension, with the state pension being indexed in line with prices.

Mr. Enright: Does the Minister agree that many miners who, legally but criminally, were persuaded to change their pensions from the miners' pension scheme to private pension schemes have been done out of huge sums, which they cannot now get back under any of the new mechanisms put in place by the Government? Is not it about time that the Government did something urgently about this because it is at least as scandalous as the Maxwell case?

Mr. Hague: Where there has been mis-selling of personal pensions, the Government are anxious to see that

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there is a remedy. The Government very much welcome the action that the Securities and Investments Board has now set in train to provide a remedy in precisely the circumstances that the hon. Gentleman describes.

Fraud Prevention

3. Mr. Ian Bruce: To ask the Secretary of State for Social Security if he will make a statement on the latest figures for social security fraud prevention.

The Secretary of State for Social Security (Mr. Peter Lilley): In 1993-94, a record £654 million of social security fraud was stopped by the Benefits Agency. In November, I announced an investment of £300 million over the next three years in measures designed to shift dramatically the emphasis of fraud work from detection and investigation towards prevention and deterrence. These measures will include more home visiting, improved information technology and automated payment of benefits at post offices. They are expected to save an additional £2.5 billion over the same period.

Mr. Bruce: I thank my right hon. Friend for that answer. Can he confirm that fraud prevention has increased by 17 per cent. this year? Can he give the House an assurance that officers in the Department of Social Security will make a special effort to check on people who have fraudulently claimed that they are asylum seekers and who have claimed many times? Clearly, although people in this country are only too happy to help genuine asylum seekers and their own citizens who have fallen on hard times, they will not stand for people flooding in to defraud our system.

Mr. Lilley: I can confirm, as my hon. Friend asks, the substantial rise in success in stopping fraud and thereby saving money for the taxpayer. We have made abuse of asylum applications much more difficult by introducing arrangements with the Home Office and by ensuring that the benefit is obtainable only from a single post office. Those measures have sharply reduced multiple applications and fraudulent abuse.

Mr. Frank Field: How do the Government answer the charge that they are soft on fraud and soft on causes? Is the Secretary of State aware that it is not just a matter of claimant fraud, with which all of us disagree, but a matter of the Department being open to fraud from gang warfare? Is he aware that there is massive landlord fraud in housing benefit and that the Department is now under attack from some of its own officers who open up bogus claims? Once a claim is opened up in the Department, how often is it audited?

Mr. Lilley: I assure the hon. Gentleman that the Government are not soft on fraud. I welcome the consistent support that he has given us on measures to crack down on fraud. Housing benefit is, of course, handled on behalf of the Government by local authorities. We have given them an increased incentive, both carrot and stick, to ensure that they eliminate wherever possible abuse of the housing benefit bill by landlords and tenants. It is absolutely right that they should do so and I urge every local authority to respond positively to the incentives that we have put in place.

Mr. Butcher: Will my right hon. Friend persist in the examination of housing benefit fraud? He will know that

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some time ago I advised his Department of strong evidence showing that housing benefit was being claimed from more than 6,000 empty properties in Birmingham--the so-called giro drop scandal. My fear is that his officials may see the fraud as an affront to their professional competence rather than as something to be vigorously pursued. May I urge him to redouble his efforts with local authorities to investigate that matter?

Mr. Lilley: I will again follow up my hon. Friend's point. I assure him that there is no question of officials taking such fraud as an affront to their personal efficacy, since they are not, as I explained to the hon. Member for Birkenhead (Mr. Field), directly responsible for it. They have ensured that incentives are given to local authorities to pursue housing benefit fraud. It is a scandal when local authorities do not pursue it, because they are letting down the taxpayer and the council tax payer.

Child Support Agency

4. Mr. Ronnie Campbell: To ask the Secretary of State for Social Security what would be the cost to the Child Support Agency of implementing an income disregard for parents with care to the value of (a) £5, (b) £8 and (c) £10.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): The estimated long-run costs of a £5, £8 or £10 maintenance disregard for parents with care in receipt of income support are approximately £110 million, £165 million and £205 million.

Mr. Ronnie Campbell: I agree with the Minister that, obviously, parents without care should pay for their children, but one of the problems that has arisen in the past year or so is that parents who remarry and have another family are penalised. The father is penalised in the sense that he has to pay for the children from his first family and his second family. [Hon. Members:-- "Quite right."] No, Conservative Members are wrong. I repeat that the father is being penalised twice. He is being penalised for the children from his first marriage and again for children from his second family, if he has a second family.

Mr. Burt: I am not quite sure how the disregard may affect that situation. Among Conservative Members and, by general agreement, around the country, the idea that a man should remain responsible for his first family, no matter what his subsequent circumstances are, is very important. The point of the disregard is to give some recognition to the parent with care in the maintenance being received. We believe that that point is much better dealt with by the Government's proposed maintenance credit, which will give an incentive to return to work and will certainly ensure that a father in those circumstances fully realises the impact of the money that he is paying in maintenance.

Mrs. Roe: Does my hon. Friend agree that the maintenance disregard proposed by the Labour party would create unfairness and make it less worth while for the lone mother to return to work? Does he also agree that if the Labour party supports a disregard, it should say how it would pay for it?

Mr. Burt: My hon. Friend is quite right. The figures that I gave showed just how expensive a maintenance

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disregard would be. We do not believe that it would achieve the object wished for by the Opposition. It would certainly create a higher barrier for those parents with care who wanted to return to work. As we know from all our surveys that most lone parents want to go back to work, we believe that a maintenance disregard with an incentive to return to work would be rather better than providing an incentive for not returning to work at all.

Mr. Dewar: On the costs of disregard, the Minister will remember that, throughout 1994, I was abused by him and the Secretary of State for profligacy on the ground that a £10 disregard would cost £340 million. Does he remember the way in which that figure dropped by May 1994 to £290 million? It is now £205 million. Will he please explain those discrepancies and apologise for some of the abuse that I received?

Mr. Burt: I cannot imagine either myself or my right hon. Friend abusing the hon. Gentleman on that point; it is not in our nature to do so. The changes in costs result from two matters in particular: first, we have been able to conduct greater sampling and, secondly, I am pleased to report that fewer lone parents are claiming income support, which most hon. Members should find quite encouraging.

Disabled People

5. Mr. Spring: To ask the Secretary of State for Social Security what steps he is taking to reduce discrimination against disabled people.

11. Mr. Congdon: To ask the Secretary of State for Social Security what recent representations he has received on the measures the Government are taking to help disabled people.

Mr. Hague: The Government's plans for ending discrimination against disabled people were set out in the White Paper on 12 January. They involve new initiatives in education and transport, in addition to the proposals in the Disability Discrimination Bill for new rights in employment and access to goods and services. These plans have been widely welcomed.

Mr. Spring: Does my hon. Friend agree that, apart from moral considerations, there are powerful commercial reasons to encourage businesses to provide access for disabled people? Does my hon. Friend agree that legislative proposals for businesses should be sensible and well judged and not based on wishful and woolly thinking?

Mr. Hague: My hon. Friend is absolutely right. Proposals must be clear, flexible and fair--as they are in the Government's Disability Discrimination Bill--and they must lead to genuine practical improvements, such as the recently agreed improvements to access at Bury St. Edmunds post office in my hon. Friend's constituency, in which he and many other people were involved and scored quite a success.

Mr. Congdon: I congratulate my hon. Friend on having the determination to get a Bill to eliminate discrimination on to the statute book. In proceeding with that Bill, will he give serious consideration to whether it might need strengthening to ensure that health and safety

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considerations do not cut across the legitimate aim of ensuring that disabled people have access to, for example, places of entertainment such as cinemas?

Mr. Hague: I thank my hon. Friend for his support. He was right to draw attention to that issue. We are determined to ensure that the requirements to provide physical and other forms of access actually mean something and work in practice. As the Bill progresses through the House and the other place, those matters will have to be discussed.

Mr. Barnes: Two Bills are before the House on discrimination against disabled people--the Government Bill, which was supported by 27 votes on a three-line Whip, and my private Member's Bill, which, on a free vote, was carried by 175 votes. My Bill has the support of hon. Members from 10 political parties in the House, including the two Conservative parties, unlike the Government's Bill, which is supported mainly on a three-line Whip by Conservatives. In those circumstances, should not the House have an opportunity to determine between the two Bills or to discover whether there is, alternatively, a move towards the principles contained in the Civil Rights (Disabled Persons) Bill?

Mr. Hague: Let us put the hon. Gentleman right. His Bill was supported in the House by 175 hon. Members, the Government's Bill was supported by 307 hon. Members. If it comes to a choice between them, I do not fancy his chances much. The Government's Bill is clear, flexible, fair and in the interests of disabled people. The hon. Gentleman's Bill is confusing, unfair, inflexible and not in the interests of disabled people.

Mr. Corbett: Does not every single organisation of and for disabled people much prefer the Civil Rights (Disabled Persons) Bill of my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) to the Government's puny measure? Will the Minister therefore accept the need for a disability rights commission to ensure that people with disabilities enjoy the same rights as the rest of us?

Mr. Hague: Disabled people throughout the country want workable legislation that brings about a change in the law and, at the same time, a change in attitudes. That is what the Government's Bill will achieve and that is one reason why we wish to tackle the issue of enforcement by having not a commission but a locally available advice and support network to which disabled people can turn. That will be the sound, practical way to deal with those problems.

Social Security Reforms

7. Lady Olga Maitland: To ask the Secretary of State for Social Security what savings will result from the social security reforms announced so far.

Mr. Lilley: Our reforms will reduce projected expenditure by £4 billion a year, in today's prices, by the end of the century. Once the pensions reforms have worked through, in the next century, the total savings will be £14 billion a year as a result of the changes that we have made.

Lady Olga Maitland: I thank my right hon. Friend for his reply. Will he confirm that, with the reduction of unemployment and with the attack on waste and fraud, by

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the turn of the century the burden on the taxpayer will be down by £8 billion or 3p in the pound on the basic rate of income tax?

Mr. Lilley: My hon. Friend is absolutely right. The forecasts of social security spending by the end of the century are now £8 billion less than when we first made them in response to the Social Security Select Committee and before the long-term review of social security spending began. Four billion pounds is due to the direct savings of the changes in the structure of the social security system, which we have announced, and the other £4 billion is due to the improved economic and social outlook in this country as a result of the Government's policies.

Ms Lynne: Does the Secretary of State agree that savings to the Government mean cuts in benefit to the most disadvantaged? Does he accept that Government policies such as the jobseeker's allowance will do more to allow tax cuts before the next election, rather than do anything to get the unemployed back into work?

Mr. Lilley: The hon. Lady, as is typical of her party and indeed of all Opposition parties, thinks that money comes from the Government. It comes from taxpayers. At present, it costs every working person, on average, £15 every working day to finance the social security system in this country. The Liberal Democrats' aim is to increase that amount; ours is to prevent it from increasing.

Mr. Alan Howarth: I welcome among my right hon. Friend's objectives his desire to eliminate fraud, but will he confirm that the Benefits Agency has found that only 5 per cent. of benefit fraud involves deception about identity? Will he at all times be vigilant to safeguard civil liberties in the development and application of smartcard technology, under the auspices of his Department? Will he set his face absolutely against the introduction of a national identity card scheme, whether voluntary or compulsory?

Mr. Lilley: My hon. Friend is quite correct. Of the identified frauds and abuse in my Department only 5 per cent. involve abuse through misrepresentation of identity. The bulk of fraud and abuse is the misrepresentation of circumstances of people whose identity is not in doubt. We believe that we can reduce that incidence of fraud and abuse very substantially by the introduction of a payments card, which I agree with my hon. Friend is a very different kettle of fish from an identity card. People who wish to receive benefit through the post office will need such a card. People who choose to receive benefit through banks will have whatever form of identification the banks require. We are also introducing other measures that will substantially reduce misrepresentation of identity fraud, so the extra gains which might come from a compulsory identity card would probably be very small.

Mr. Bradley: Does the Secretary of State accept that savings should not in any way undermine public confidence and trust in the social security system? Will he therefore investigate claims made on BBC South-West that the Benefits Agency in Bristol has contracted out the opening of mail to a private firm? Such mail might include sensitive and confidential information on benefit claims, and staff might not be accountable to the Benefits Agency or, more important, to Parliament.

Mr. Lilley: I assure the hon. Gentleman that anybody who has any involvement with facts and information

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about claimants will be bound by a duty of confidentiality, whether they are employed by the civil service or by a contractor for the civil service. Sub-post offices, all of which involve private entrepreneurs and not employees of the state, have an obligation to claimants equal to that of any civil servant.

Personal Pensions

8. Mr. Simon Coombs: To ask the Secretary of State for Social Security what measures he is taking to make personal pensions more attractive to older people.

The Parliamentary Under-Secretary of State for Social Security (Mr. James Arbuthnot): In the Pensions Bill, we are introducing age-related rebates for personal pensions to ensure that appropriate personal pensions are attractive over a broader age range.

Mr. Coombs: Will my hon. Friend confirm that the Pensions Bill, which is now in another place, is firmly on course to enact the manifesto commitment of the Conservative party to make personal pensions more attractive across the full range of ages? Does he agree that, with the proposal in law, personal pensions will be attractive to people of all ages and that it will be in their interests to sustain their pensions throughout their lives?

Mr. Arbuthnot: The age-related rebates which we are phasing in will mean that most people will be attracted to maintaining their personal pensions throughout their working lives. They will also be able to choose when to buy an annuity up to the age of 75.

Mr. Chisholm: Does the Minister accept that one of the most unattractive features of pensions for many older women is the diminution of their pension rights following divorce? Given that seven studies have been conducted into the matter already, why are the Government insisting on a further study? Why will they not accept the amendment that has been tabled in another place to ensure the equal division of pension rights following divorce?

Mr. Arbuthnot: The hon. Gentleman will know that the Pensions Law Review Committee said that this was an exceptionally complicated matter. The Government recognise that and, as a result, we have accepted the recommendation of the committee that further work should be done. The research will be available towards the end of the year. A debate is taking place in another place this afternoon on the matter, and no doubt the hon. Gentleman will go along to listen to it.

Dr. Spink: Will my hon. Friend confirm that the average total net income of pensioners grew by 50 per cent. between 1979 and 1992? Does that not show how much the Government care for pensioners? What targets does my hon. Friend have for that figure in the coming years?

Mr. Arbuthnot: My hon. Friend is right, but I do not have a limit on targets. Pensioners will do very much better in the next few decades. We have more funded pension provision than any other country in the European Union. The proposals of the Opposition would threaten that very good position.


9. Mr. Mackinlay: To ask the Secretary of State for Social Security if he will make it his policy to conduct a

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major survey of the incidence and extent of poverty currently prevailing in the United Kingdom; and if he will make a statement.

Mr. Burt: Information on the patterns of household disposable income are already provided in the "Households Below Average Income" publication of the Government Statistical Service, and more will be available from the first full year of the family resource survey. It is expected to be of considerable benefit to the Department in aiding the formulation and evaluation of social security policy.

Mr. Mackinlay: What is the Government's definitive response to the findings of the Joseph Rowntree Foundation and the Panorama programme "Dead Poor", which showed that the gap between those with health and wealth and those experiencing poverty is getting wider? Do the Government accept those findings? If not, why does the Minister think that they are flawed? If the Government do not accept the findings, will the Minister set up an inquiry using further survey methods to ascertain the full extent of poverty?

Mr. Burt: The hon. Gentleman knows well that poverty statistics are notoriously difficult to analyse. He will also know that whatever statistics he cares to choose will show that the access of the lowest 10 per cent., as regards income, to what used to be called luxury goods--cars, telephones, videos and so on--has risen inexorably over time.

Widening income inequality has tended to come from changes in the labour market, particularly the increase in two-earner couples, and changes in the rates given for different occupations over a period. The solution to the one is physically to restrain two-earner couples--I suspect that that is not the intent of the hon. Gentleman, nor of his party--and to the other is to deal with different wages by a prices and incomes policy. If that is the policy of the hon. Gentleman, he should tell people.

Mr. Jenkin: Does my hon. Friend agree that other measures of standards of living show that the poorest 10 per cent. have vastly improved access to things which improve the quality of their lives, such as telephones, freezers and washing machines? Does he also agree that a party which advocates a national minimum wage cannot be serious about reducing poverty, because a national minimum wage would enormously increase unemployment and poverty?

Mr. Burt: My hon. Friend makes a point about the minimum wage that was made by the right hon. Member for Kingston upon Hull, East (Mr. Prescott) before the last general election. It had its impact on jobs. My hon. Friend also points out that this is a genuinely complex matter. The best way in which poverty can be attacked is by bringing about improvements through creating jobs. That is why the Conservative Government have introduced policies that have helped unemployment to fall by some 500,000 in the past two years. If those policies were followed by some socialist economies on the continent, those economies might prove a little more successful than they currently are.

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Pension Entitlement (Divorcees)

12. Mr. Austin Mitchell: To ask the Secretary of State for Social Security what proposals he has for allowing divorcees who paid the reduced rate of contribution to share their husband's pension entitlement.

Mr. Arbuthnot: Provision already exists which allows a divorced woman who does not remarry before pension age to obtain a pension based on her former husband's national insurance contribution record instead of her own in respect of the period up to their divorce.

Mr. Mitchell: Is not that provision inadequate, given that the pension entitlement is one of the biggest assets that married couples have? Should we not have a simple rule that the entitlement from all pensions up to the date of divorce is divided between the couple? Why do we need the inquiry that the Minister mentioned earlier when the principle is clear and we are the only country in the European Union that does not give the wife some entitlement to her pension? Would there not be a considerable saving in benefit if that were done?

Mr. Arbuthnot: The hon. Gentleman is, I think, confusing the state retirement pension with rights to occupational or personal pensions, so I shall simply rely on what I have already said, which is that a great deal of further work is needed, as the Pensions Law Review Committee has said. We are doing that work.


13. Mr. Sims: To ask the Secretary of State for Social Security if benefits will continue to be delivered through post offices.

Mr. Lilley: We are committed to continuing to give pensioners and others the right to receive their benefits at the post office. We are moving speedily to an automated system for paying benefit at post offices, including the introduction of benefit payment cards to replace order books and girocheques.

Mr. Sims: Does my right hon. Friend accept that, while there are obvious advantages in making payments through banks and building societies, some people--particularly the elderly--prefer to go to post offices to collect their pensions? Will he confirm that the automated system to which he referred has been welcomed by sub-postmasters and will bring them additional business?

Mr. Lilley: My hon. Friend is right. Many pensioners and others prefer to receive their benefits at post offices. Many do not have bank accounts so they could not easily have their benefits paid elsewhere. My hon. Friend is also right that the measures that we have proposed have been warmly welcomed by the National Federation of Sub-Postmasters. By eliminating fraud, our proposals will be good for the taxpayer. By making payments more convenient, they will be good for the pensioners. By increasing the range of facilities of sub-post offices, they will strengthen the national network of sub-post offices.

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14. Dr. Twinn: To ask the Secretary of State for Social Security how he is planning to reduce fraud involving order books and giros.

Mr. Arbuthnot: My right hon. Friend the Secretary of State has announced his intention to replace order books and girocheques with a more secure system based on benefit payment cards. This should eliminate fraud related to payments, and will also provide substantial administrative savings.

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