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6.23 pm
Mr. Alan Howarth (Stratford-on-Avon): Incapacity benefit has hardly been referred to so far. When it was set up, Ministers expected that about 220,000 people would come off benefit over about three years. It was part of a quest to reduce public expenditure in that area. How is it that, under the administrative arrangements that have now been established, Ministers will know that that is the position--if it is? Their computer programme makes it impossible for them to distinguish between present incapacity benefit claimants so as to determine who were previously claimants of invalidity benefit. Surely that is not a responsible way to proceed in an important and sensitive area. I believe that responsible Ministers would wish to monitor the impact of their new policy on the long-term sick and disabled as well as on public expenditure.
It seems that Ministers' expectations of the number of claimants falling away, as it were, will not be met.I understand from a parliamentary answer that, over the first six months, only 19,188 claimants were refused incapacity benefit, of whom 6,520 appealed. In terms of administrative costs, the Benefits Agency's medical service has found it necessary to recruit another220 doctors.
That brings me to my second point on incapacity benefit. We understand that it is the Government's intention to privatise the Benefits Agency's medical service. Private health care firms are tendering to get their hands on a budget of £6.9 billion involving 1.6 million people. What is the rationale for that? The results of a survey of doctors indicate that they do not think that it would be useful for the service to be privatised.
I understand that one of the organisations tendering is a well-known disability insurance group, which ran advertisements during the week of the introduction of incapacity benefit urging people to take out private insurance. It suggested that the benefit would be insufficient. It seems that there lies a considerable vested interest. I hope that Ministers will be careful when they evaluate that group's tender.
I understand also that another bid comes from two civil servants who were involved in the design of the scheme. It is suggested--I am happy to be corrected--that those civil servants have been on paid leave while preparing their bid. I hope that Ministers will consider carefully the propriety and suitability of the civil servants' tender.
I move on, perhaps more substantively, to a proposal for improvement. As Ministers review the operation of the scheme, I hope that they will find justification for
introducing a sliding scale of eligibility for people in the 55 to 65 age group. We all know that the real prospect of employment for people in that group who have suffered industrial injury or face continuing disability is extremely poor. Those who do not score the full 15 points know that to be a blighting reality in their life. I hope that Ministers will be able to find the generosity of intention and of fiscal margin to allow people after the age of 55 to qualify for benefit if they score fewer than the 15 points.
I have in mind the sad case of one of my constituents who saw me recently. He had been off work for two years with a spine and neck problem. He took early retirement at the age of 55. His employer enhanced my constituent's pension on medical grounds because he recognised that he was no longer capable of work. Under the old system, my constituenty was able to receive invalidity benefit. As he took the new test, however, with the Benefits Agency's medical service and scored only 14 points, his benefit stopped. It stopped on 3 November, but he did not receive the courtesy of being informed of that until 8 November. In the case that I am outlining, my constituent's wife works. As a result, he receives no benefits. His wife's income is modest and they face a grim future. I fear that all too many people are in the same predicament.
When unemployment was rising, the Government were content over the years that people should go on to the old invalidity benefit. It was presentationally advantageous to keep down the unemployment figures. It suited the Government well enough that people should be able to claim invalidity benefit during the traumatic period of the restructuring of some of the old, heavy and labour- intensive industries. It saddens me that, after those events, the Government reneged on the previous commitment, despite the fact that some six volumes of research commissioned by the DSS contained no evidence to justify the assertion, frequently made by Ministers, that far too many claimants of invalidity benefit were bogus.
The reality is that, as the Government mismanaged the economy, they ran up a borrowing requirement of£50 billion. They needed to rebalance the public finances, and one of the ways in which they did so, to some significant extent, was by cutting contributory benefits for the long-term sick and disabled. They compounded the injury by increasing employees' national insurance contributions by 10 per cent. That is a sad history and I hope that Ministers will be able to alleviate the conditions under which the new incapacity benefit may be claimed.
I now come to the Government's decision not to uprate one-parent benefit and the lone-parent premium. Lone parents have been among the principal sufferers of the widening inequality in society. The uprating--the policy context of the regulations that we are debating--is intended, as the Secretary of State told us, to save£5 billion by 2000 and to make room, as he explained quite explicitly, for tax cuts. We have already seen the 1p in the pound reduction in the basic rate of income tax, which is to be paid for by lone parents, young people and the old and the cold.
In his speech, the Secretary of State did not provide the House with any thorough rationale--let alone a persuasive one--for the decision to freeze one-parent benefit and the lone-parent premium on income support. I do not believe that the policy has anything to do with the growth of social security expenditure, which is an issue--a problem--that he has been right to address systematically.
In July 1993, the Secretary of State said that the Government were looking at ways to use the social security system to ensure more responsibility in young people by making the option of single parenthood less attractive. He is indeed fulfilling that pledge.
At the October 1993 Conservative party conference, we witnessed a hideously orchestrated campaign of vilification against single parents, which was one of the most shaming episodes in modern politics. I wrote an article in The Guardian, which was published on the first day of the Tory party conference, in which I asked my former party not to play that game. The difficulty is that my former colleagues do not read The Guardian. I dare say that if they had read it and seen my advice, they would have heeded it and history would have been very different, but that was not to be the case.
We are seeing one more instalment of the policy in the order that we are debating. As my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) pointed out, it is fiscal tokenism. In the year to come, the Government will save only about £5 million by freezing benefits for lone parents. We are seeing the expression of a certain set of values and social and moral purposes that are harsh, unjust and smack of scapegoating. That would certainly seem to be so, given the disproportion of the policy and the fact that the number of unmarried teenage mothers, against whom Ministers' ire was directed in October 1993, had been falling since 1987. It now stands at about 44,000 out of 1.3 million lone parents.
As all the surveys show, the vast majority of lone parents want to work--they are not the fecklessor undeserving poor of scapegoat mythology. The Government's survey shows that 90 per cent.of unemployed lone parents want to work--and a growing number are doing so, thanks in no small measure to the Government's policy of family credit, which has had its positive uses. How right it has been--because we should help lone parents.
If some hon. Members so disapprove of lone parents that they do not want to help them, surely they should at least want to help the children of lone parents. Lone parents and their children have a claim on all of us, being--as they are--poor and disadvantaged. That is a moral position, but it is improvident in terms of the economy not to support them because poverty begets poverty, and the burden on social security and the taxpayer grows all the time.
Mr. Hawkins:
Although I understand the hon. Gentleman's concern, I would have expected him--particularly with his background as a schoolmaster--not to use "scapegoat" as a verb.
Mr. Howarth:
If that is the only point on which the hon. Gentleman differs from me, I should be pleased,but I am not sure that it is.
The poverty of lone parents is demonstrable. Forty per cent. of lone-parent families have an income of less than £100 a week, compared with only 4 per cent. of two-parent families. Almost six in 10 lone-parent families live in poverty, which is defined as income below 50 per cent. of average income after housing costs. The Government use that measure in certain publications.
Relative poverty matters very much indeed, because it means exclusion, alienation, demoralisation and, in all too many cases, under-achievement.
The cost of help through the social security system to lone parents is not excessive by any reasonable standard. As we learnt today, out of a social security budget of£90 billion, some £9.5 billion is spent on lone parents,of which some £5.6 billion goes on income support and another £1 billion goes to lone parents who are in low-paid work. Do the Government really think it wrong to help people who are in poverty? The one-parent benefit is worth £6.30 a week; the lone-parent premium is worth £5.20 a week. These are, if we reflect on them, pitifully small figures. Together, they cost the taxpayer some£600 million a year, and that is eminently affordable.The £5 million that the Government hope to save is almost invisible in the public accounts.
It would be right if the Secretary of State's objective were to provide equivalent opportunities and incentives for lone parents to match their circumstances--as nearly as he can--with those of two-parent families and to ensure them a decent standard of living. If those are indeed his purposes, he should not freeze the two benefits and embark on his strategy of removing the differential in benefits between lone parents and couples with children.
The Secretary of State said that the benefits system gives special assistance for lone parents that couples do not have. It is absolutely right that it should do so.The costs of lone parenthood are higher. A study published at the end of last year under the auspices of the Rowntree Foundation, entitled "The Cost of Children and the Welfare State", found that the costs of a child relative to a single adult in a one-parent family are substantially higher than in a two-parent family. The cost of a child under the age of 11 is 30 per cent. of the cost of a single adult in a one-parent family, but only 20 per cent. in a two-parent family. When a child is over the age of 11,the differential is wider--the figures being 51 per cent.and 33 per cent. respectively.
The freeze will, over time, increase child poverty. As it is, a lone parent cannot adequately or decently bring up children on income support. Research by Elizabeth Dowler and Clare Calvert for the Family Policy Study Centre, entitled "Nutrition and Diet in Lone Parent Families in London", concludes that, on current levels of benefit, lone parents
In 1992, 78 per cent. of lone parents were living at or below income support level, compared with 18 per cent. of two-parent families. "Evaluating the Social Fund",a study commissioned by the Government and published in 1992, found that 35 per cent. of lone parents on low incomes lacked adequate bedding, that 31 per cent. lacked hot water, that 58 per cent. had problems with heating and that 38 per cent. had problems with damp.
Lone parents, of all people, should not have their benefits frozen; arguably, indeed, their benefits should be increased. Lone parents already bear a stigma--a stigma that was abating before the Government revived it. Inevitably, child care is a problem for many of them. The Government's disregard in relation to family credit, disability working allowance, housing benefit and council tax benefit is helpful as far as it goes, but it does not extend to children aged over 11--notwithstanding the higher relative costs associated with such children--or to second or subsequent children.
We must approve of the requirement to use registered child minders or nurseries, but it means that those lone parents who most need work often cannot be helped by the disregard because they cannot find work whose hours match the requirement relating to child minders and nurseries. Supermarkets, for instance, often tell those applying for work that they must do evening work at first, before being able to work hours that match school or nursery hours or the hours during which registered child minders are available.
If a claimant is on full family credit, the disregard will not help: it is, after all, a disregard rather than an allowance, and cannot raise the level of benefit above family credit.
I feel that there is a case for increasing the disregard of child care costs, and, indeed, for extending it to all benefits. The Government would do that if they were serious, but at present the disregard does not apply to claimants of income support.
I hope that the Government will carefully monitor the nursery voucher pilot scheme. If the pessimists are right, it may take places away from local education authorities and subsidise private nurseries, whose fees could well be beyond the capacity of lone parents on low incomes.
In framing the policy on benefits for lone parents, Ministers--Conservative Ministers certainly--should bear in mind the fact that it may not be appropriate for many lone parents to work. I understand that 63 per cent. of children of single mothers are under five, and it may be in the emotional and intellectual interests of the children for their mothers--or, perhaps, fathers--to stay at home.All too often, the circumstances of lone parenthood are sad: someone may have become a lone parent recently through bereavement, separation or divorce. Benefits policy should not drive such people out of the home and into jobs until they are ready to take such action.
Lone parents face a Kafkaesque maze of benefits, child care interactions, grants and loans. However helpful the whole policy apparatus may be, many become baffled and dispirited as they try to thread their way through that maze.
"cannot afford to eat healthily."
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