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Mr. Chris Smith (Islington, South and Finsbury): I remind the Secretary of State at the outset of the background against which his statement is delivered. It is a background of rising inequality in society. Earlier this year, the Joseph Rowntree trust inquiry into income and wealth showed that inequality in income had risen rapidly between 1977 and 1990 to reach a higher level than has been recorded at any time since the second world war. In Britain, the poor are getting poorer and the rich are getting richer.
The recent report of the Organisation for Economic Co-operation and Development shows that that growth is greater in the United Kingdom than in any other advanced industrial country. The number of people who are dependent on benefit has doubled since 1979, from one in 12 people to one in six. One in five non-pensioner households has no one in work. That is the background against which the statement comes; it is the background of a divided Britain. This statement and the Budget will make those divisions worse rather than better.
The proposal to pay housing benefit in arrears rather than in advance will not only harm landlords, but make it extremely difficult for people who need to claim housing benefit in order to move into new accommodation to do so. The present situation is bad enough--deposits are sought for which no funding is available--but this change will make it even worse.
The limitation of housing benefit amounts for young people under the age of 25 will have a series of malign consequences. It will force young people out of bedsits and one-bedroom flats into inadequate, unregulated and potentially dangerous multi-occupation dwellings. It will also be particularly damaging for young people coming out of care. They are often vulnerable and already face huge difficulties--we do not need to be reminded of recent tragedies to appreciate the dangers faced by lonely and vulnerable young people.
The proposal will also create a new unemployment trap. People on existing housing benefit who take up a job that might not last very long will be faced with a lower benefit and the potential loss of a home if they lose their job. The proposal will surely act as a disincentive to people in that position taking up work. Young people face a double whammy because, for the second year running, there is an increase in the non-dependant deduction on housing benefit that is well above the inflation rate. It will provide an incentive for families to remove adult children from the family home--and that is the proposal of a party that is supposed to favour keeping families together.
On the subject of families, perhaps I might discuss the measures for single parents. Is there not a fundamental fallacy at the heart of what the Government are doing?
Are not they telling us that the costs of bringing up a child or children are exactly the same for a single-parent household as for a two-parent household? It is patently obvious that that is not the case in a host of different ways, especially because the costs of child care fall to be met by one income alone. One can never rely on the unpaid help of the other member of the household if one is a single parent.
The Conservative Government used to recognise that obvious truth. The 1985 Green Paper on the reform of social security argued that one-parent benefit should be continued
In the White Paper that followed that Green Paper, the Government went even further. They emphasised that
When will Conservative Members wake up to the fact that single parents are real people with real needs, and are not to be scapegoated at every turn?
Freezing lone-parent premium and one-parent benefit is bad enough. How will the phasing out happen? Will lone-parent premium be reduced year by year as family premium is uprated? Will single parents be confronted with a complete standstill in premium income as a result?
It is especially malign to attack one-parent benefit. It is an in-work benefit; it provides a through train from benefit into work. It is one of the few bits of the present welfare system that acts as a genuine bridge into work. We need to be removing disincentives that affect the move from benefit to work, not removing one of the precious few incentives that there are in the system.
I should like also to ask about the increase in minimum maintenance payments, from £2.35 to £4.80, under the Child Support Act 1991. Is not that a payment from absent parents that will frequently go straight into the pockets of the Treasury rather than the hands of the child or the caring parent? Will not many children experience no benefit from that change? Will it not also represent an effective reduction in income support for a single person, who will lose £2.45 under that measure but gain only
£1.40 in the uprating? How can the Secretary of State justify his saying that a person in that position should live below what even the Government accept is the basic poverty line?
The increase in child care disregard on family credit-- I must correct the Secretary of State, it is not an allowance, it is a disregard and there is an important distinction between the two--is welcome, but I note in passing that many people in real need already receiving maximum family credit will not be able to benefit from the increase in the disregard. I also note the failure to uprate any of the other disregards on housing benefit, family credit and income support.
Of course we welcome the raising of the long-term care thresholds, but is that not a very small step that leaves the great majority unassisted? The homes of many who live alone will be counted as assets, and a £16,000 threshold will surely go nowhere towards meeting their needs. Will not many thousands still live in fear of losing their homes?
The Secretary of State has told us that 50,000 people will benefit from the change. Does that figure include those who may still be forced to sell their homes as a result of the current system? I must point out that the existing threshold has been frozen since 1988. Does the Secretary of State intend to uprate it regularly hereafter?
Does the introduction of a measure relating to industrial injuries in fact mean that those who have suffered an injury at work through no fault of their own will be forced out of reduced earnings allowance and lose three quarters of that benefit as a result? Will the Secretary of State also confirm that, of the cases that currently go to adjudication,
only 3 per cent. have resulted in the refusal or reduction of disability living allowance? Given that small degree of error, will the right hon. Gentleman's information-gathering exercise--of which we have been given no details--be cost-effective in any way?
We consider the Secretary of State's proposals relating to asylum seekers to be inhumane and unjust. We do not believe that they will produce any real savings, especially in view of their impact on children and local authority care costs. We will oppose the proposals. We believe that the real way in which to tackle the problem is to speed up the assessment of applications. That is obviously not happening now, given that there is a backlog of 65,000-- and it is growing.
I was pleased to note that the Government are to introduce tax exemption for compensation for mis-sold personal pensions for those who were wrongly advised to leave occupational pension schemes. That is a sensible measure: it represents the equivalent of a tax-free lump sum, and thus makes fiscal sense. What bearing has that proposal, however, on the position of those who may receive payments in respect of their having opted out of the state earnings-related pension scheme, rather than an occupational scheme, and what principles underlie the Secretary of State's approach in each case?
Today we have seen yet another relaunch of the fight against fraud. That fight is, of course, desperately important: every pound of which the system is defrauded is a pound less for someone in genuine need. Indeed, the Select Committee on Social Security recently told us that the figures were grossly underestimated, but why should we believe the targets that the Secretary of State has set today any more than the unachieved targets that he has announced in previous years? Last year, savings from the fight against fraud amounted to £717 million. The Red Book tells us that savings for 1998 will be £2.5 billion. Is the Red Book figure correct? How, precisely, will the Secretary of State achieve a 250 per cent. improvement in the tackling of fraud in the course of three years?
The Secretary of State has told us that there will be extra home visits each year. Even if the number reaches the 1 million home visits that the right hon. Gentleman anticipates, that figure will bring us barely above the 800,000 figure of 1989, and nowhere near the 6.6 million that took place in 1979. It is all very well to ring-fence special officers for fraud investigation, but should not every single member of DSS staff be part of the battle against fraud? If the administrative cost of the rest of the Secretary of State's Department is being squeezed, will that not damage the overall effort?
What about the level of errors? We know from the Comptroller and Auditor General's report that, in the last recorded year, £540 million was lost through departmental error in income support payments alone. Will not that be made worse, not better, by what is proposed in the statement? Will the Secretary of State now commit himself to implementing in full the Select Committee's recommendations on fraud?
"as a contribution to the additional costs"--
additional costs--
"faced by lone parents in bringing up children alone".
It approved the introduction of a lone-parent premium in order to recognise
"the extra pressures faced by lone parents."
In 1985, the Government recognised that extra pressures and extra costs were faced by lone parents; now it would appear that they do not. What has changed in the meantime?
"The principle of continued recognition of the need for specific further help for lone parents on top of that provided by the family premium has been welcomed."
It is that specific further help that they are now in the business of removing.
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