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Mr. Major: Yes, I can confirm that for my hon. Friend. That point is explicitly made in the communique agreed between the Taoiseach and myself.
Mr. Ken Maginnis (Fermanagh and South Tyrone): May I begin by thanking the Prime Minister for clinging so tenaciously, if somewhat precariously, to his Washington third criterion, which requires that a full decommissioning process be agreed and the first phase be implemented before any paramilitary organisation can enter into substantive talks? May I caution him that the Irish are very good wordsmiths who are able to craft their language in a way which means all things to all people?
Does he recall that Albert Reynolds, who with him signed the Downing street declaration, was unable to understand the meaning of "commitment to exclusively peaceful means" to include decommissioning of illegal weapons?
Does he also recall that, in 1985, the Government's commitment to allowing the status of Northern Ireland to be decided by the people of Northern Ireland was overruled by the Irish Supreme Court, which said that status was not defined--carefully not defined? In the communique, could it be that the Irish believe that decommissioning is not defined--carefully not defined?
The Prime Minister:
The hon. Gentleman began by saying that there was great skill in the use of language in Ireland, and I would suggest that that skill extends to all
The hon. Gentleman was one of the early advocates of the possibility of an international body, and I congratulate him on his prescience in that respect. It is clearly a valid way forward, and we have decided to adopt it. We also were considering it at the time, and I am grateful for the hon. Gentleman's support. I believe that the hon. Gentleman is misjudging the communique in his use of language. The communique is not a fudge, and what is set out in it is very clear.
The only point of difference that exists between the British and Irish Governments has been set out clearly by both the Taoiseach and me last night and separately this morning. That point of difference has been acknowledged, but the substance of the communique is very clear and includes the remit of the international body and the nature of the arms to be considered by that body.
The Secretary of State for Social Security (Mr. Peter Lilley):
With permission, Madam Speaker, I should like to make a statement on social security following my right hon. and learned Friend the Chancellor's Budget statement.
For half a century since the creation of the welfare state, expenditure on social security has, on average, grown 5 per cent. a year faster than inflation. As a result, it has taken an ever-growing share of national income and it has been an engine for rising taxes. Social security now costs the average working person £15 every working day.
That is why, when I became Secretary of State for Social Security, I launched my programme of step-by-step reforms. Those reforms are having an effect. During the next three years, spending should grow by little more than 1 per cent. per annum, well below the growth in the economy, so it will be a declining share of national income. It will leave scope for sustainable reductions in taxes. That in turn is the best of all ways to stimulate activity in the economy, to create jobs and to reduce benefit dependency.
Next year, planned spending on social security will be
£90 billion. That is the figure I announced last year, and it is below the plans of two years ago. The figure includes nearly £3 billion to finance increased benefit rates. That is £600 million more than anticipated last year because it is based on the September inflation rate which jumped to 3.9 per cent., and has since fallen back to 3.2 per cent.
The measures that I am announcing today will save nearly £500 million in 1996-97 and more than £1 billion in 1998-99. Together, my reforms to date will save
£3.5 billion next year. By the turn of the century, they will save £5 billion a year.
To be able to help those in need, we have to stop fraud. Despite tough control on overall running costs, I am channelling extra resources to the battle against fraud. Last year the Benefits Agency detected and stopped a record £700 million of fraud, and local authorities doubled their savings to £170 million, but prevention is better than detection and I am therefore pursuing an anti-fraud strategy based on prevention and deterrence.
In total my anti-fraud measures across all benefits will save £2.5 billion by 1998-99. The Benefits Agency has just started deploying one of the most powerful data matching systems in the world to identify suspicious claims. The agency will investigate claims and carry out more than 1 million home visits and other checks. It will tackle employers who collude with people who claim unemployment benefits while working. Next year, we will start computerising post offices and launch the benefit payment card.
Local authorities have responsibility for administering housing benefit. A recent study suggests that housing benefit fraud costs almost £1 billion a year, so I shall strengthen the financial incentives for local authorities to tackle fraud. I shall invite local authorities to compete for challenge funding for innovative anti-fraud measures. Next year, I shall introduce a national computer record of housing benefit claimants. That will stop people claiming from more than one local authority.
From October 1996, further changes in housing benefit will reduce abuse and waste. Some tenants abscond without making initial payments to landlords, so I shall enable local authorities to make the first giro payable to the landlord.
Most other benefits are already paid in arrears. I shall align housing benefit with them. That will stop the wrongful payments that can arise when housing benefit is paid in advance.
In October, I announced proposals to limit asylum seekers' access to benefits. Seventy per cent. of people who claim asylum do not arrive as refugees, but make a claim some while after entering the United Kingdom illegally, or as tourists, students or visitors.
From next year, I intend to allow benefit only for people who claim asylum as they enter the UK. When a claimant is found not to be a refugee, benefit will cease. My proposals will save £160 million next year. My right hon. and learned Friend the Home Secretary is speeding up asylum decisions, which will further reduce the benefit cost. We will offer refugees a sanctuary, but we will not be a soft touch for social security.
During the past two decades, there has been a huge increase both in the number of lone parents and in their cost to the taxpayer, which is expected to reach £9.4 billion this year--equivalent to more than £1,500 a year extra tax on each working family with children of their own to support.
The right approach is neither to penalise nor to promote lone parenthood. The benefit system, however, gives special assistance to lone parents, which couples do not have. In particular, two components of benefit for lone parents have no equivalent for couples--one-parent benefit and lone-parent premium. They cost about £600 million a year.
To start bringing treatment of one-parent and two-parent families more into line, I propose no increase in either benefit next April. My intention over time is to continue to narrow the gap between the benefits that go to lone parents and those that go to couples. At the same time, I intend to build on our existing measures to help lone parents back to work.
Family credit has been of particular benefit to lone parents and I have greatly improved it. I extended family credit to people working part time, gave an extra £10 a week to people working full time and introduced a £40 a week allowance for the cost of child care. I now propose to increase that allowance to £60 a week. That will be of particular benefit to those who want to return to full-time work and those with more than one child. The provision of nursery vouchers will be an additional help to parents of pre-school children.
Maintenance is also an important stepping stone to work. Even absent parents on benefit should contribute to their child's support, so I propose to double the minimum payment of child maintenance to £4.80 a week from April next year. In addition, from April 1997, I shall pilot a major new scheme, which will provide individual help for up to 25,000 lone parents to find jobs or training opportunities.
Finally, my right hon. Friend the Secretary of State for Education and Employment will extend the very successful scheme that has already created places to care for 50,000 children out of school hours, creating a further 18,000 places over the next three years.
As a result of the reforms already implemented, the proportion of lone parents in work has increased. The four measures that I have announced today will help more lone parents to become self-supporting.
Most young people starting out in work either stay with their parents, share a flat or find a bedsit, but those who are without a job can claim housing benefit and choose to occupy a better property than they could afford if in work, so for single people under 25 who are renting privately I propose to limit housing benefit to the average cost of shared accommodation in each locality. That will reduce disincentives to work, discourage young people from leaving home before they can afford to and reduce the attraction of moving to seaside resorts. The changes will apply from next October.
Couples, people with children and those exempted from the January housing benefit changes will not be affected. Local authorities will be given funds to prevent hardship in exceptional cases.
The new scheme should save more than £100 million over three years. Last year, I announced a scheme to continue maximum help with housing benefit during the first four weeks of work. I am now extending it to people who have been on a Government training course. In a separate measure, I intend to increase non-dependant deductions for housing costs.
The state system of social security provides decent help for those in need. However, the voluntary and charitable sectors provide extra help to cope with unusual circumstances. Voluntary bodies and charities can already pay £10 a week without the recipient losing benefit. I propose to double that limit to £20 a week. I believe that the change will be widely welcomed.
I propose some smaller measures to remove anomalies. I shall amend the industrial injuries benefit scheme so that those who receive reduced earnings allowance to compensate for loss of earnings should normally transfer to retirement allowance when they reach pension age. Separately, I shall align the mobility component of disability living allowance more closely with similar benefits that are withdrawn during hospital stays. I shall improve the information gathering used to make assessments for disability living allowance.
Britain already has one of the lowest non-wage labour costs in Europe. I intend to reduce it further. From April 1996, employers will qualify for one year's remission from their national insurance contributions for each person they take on who has been out of work for two years or more.
I am cutting the national insurance class 4 contributions for self-employed people by 1.3 per cent. from April 1996. This outweighs the loss of tax relief on these contributions announced by my right hon. and learned Friend the Chancellor. Finally, I intend to cut the main rate of employers' national insurance contributions by
£500 million, some 0.2 per cent., from April 1997.
One of the main financial concerns facing elderly people is the prospect of needing long-term care. Providing for their needs in old age is, of course, one of
the reasons why people save, but Age Concern and others have argued that the capital limits applying to people in residential and nursing care are tougher than the rules for people who stay in their own homes. They have urged us to raise the capital limits for residential and nursing care to those that apply to housing benefit.
We are going further than that. We are not just doubling the upper limit to £16,000 but more than tripling the lower limit. Under our proposals, people with up to £16,000 of assets will qualify for state help and people with capital of less than £10,000 will not be required to make any contribution from their capital towards the cost of basic residential care.
The new limits will apply from April 1996 at the latest to all people in long-term residential care or nursing homes. About 50,000 people should benefit in the first year. However, we also want to ensure that, in future, more people can afford care.
One of this country's major successes has been encouraging more private pension provision than any other European country. The challenge facing us now is to be equally successful in enabling people to make decent provision for long-term care. We are announcing three important proposals to stimulate the development of attractive savings and insurance schemes.
First, benefits from long-term care insurance will be tax free. Secondly, my right hon. and learned Friend the Chancellor is consulting on how occupational pension schemes can enable pensioners to defer some income early in retirement so that they have more income to help with the cost of long-term care. Thirdly, we will consult on partnership schemes that would enable people to retain even more of their assets in return for providing for a corresponding amount of their long-term care costs. That would encourage more people to make provision for themselves and it should help the insurance market to develop new products, as the risks would be limited.
Social Security
4.15 pm
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