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4.40 pm
Mr. Malcolm Wicks (Croydon, North-West): It is nice to have an early opportunity to enter the debate, even though it is earlier than I, in my naivety, had expected.
We are discussing not only the recent work of the Select Committee but supplementary estimates. Indeed, we are formally asked to approve an extra £19 million to the cash limit for the running costs of the Department of Social Security. Often, the House takes scrutiny of public spending too lightly, but it should be no light matterthat we are asked to approve a further £19 million.As, according to my arithmetic, much of the money is for the running costs of the Child Support Agency, I shall focus later on the work of the CSA. I hope that the Minister will be encouraged to update us on its work and present a progress report, because we need progress on the implementation of child support.
I am a recently retired member of the Social Security Committee. It is appropriate that its esteemed Chairman, my hon. Friend the Member for Birkenhead (Mr. Field), opened the debate. It was a privilege to serve on itunder his chairmanship for one parliamentary Session.I welcome the opportunity that I had to work with him and, indeed, Conservative colleagues. I had the honour of contributing in a small way to the report that we are discussing today.
We should put the supplementary estimate in the context of the increase in public expenditure on social security. In 1989-90, we spent some £50 billion on social security. That figure is now £90 billion in cash terms, which is a considerable increase. It is easily the largest of our public expenditure programmes. Indeed, it represents a staggering one third of total public expenditure.
Mr. Frank Field:
Before my hon. Friend leaves this point, I hope that he will find time to talk about the change in the nature of poverty. Whereas we talked of it primarily in economic terms and causes, we now--as I think my hon. Friend is hinting at--talk of it as being much more socially based.
Mr. Wicks:
Indeed. The Chairman of my former Committee anticipates some of my remarks and hits on a very important point about family insecurity. I shall say something about that, but we should dwell on the sheer size of the social security budget, which now represents one third of total public spending. Although it would be rash, I suspect, to argue the possibility of bringing that total down, I feel instinctively that it is consuming too large a proportion of public spending and, given the other demands on the welfare state and the Government, we should look critically at it.
I ask the House to distinguish between the term social security--not in the sense of rather dry terminology for a set of benefits--and state benefits. I put it to the House that what makes social security, in the proper usage of that term, is not just state benefits. Many other factors contribute to social security. Indeed, many of the other factors are often more important than the contribution to security that comes from state benefits. I also argue that, on state benefits, we need to be vigorous and rigorous about defining objectives and to look critically at the public expenditure total to see to what extent some public spending relates directly to the objectives and to true social security, and to what extent public spending is perhaps more a symptom of social insecurity and of the fact that other parts of society, the economy and public policy are not working as well as they should. I shall give one example.
I do not think that any of the great figures who have set out social security objectives have ever said that it is an objective of social security policy to enable men in their 50s or early 60s to draw benefits--whether invalidity benefits or income support--as a stop-gap measure between an early period of unemployment or redundancy and when they are able to draw their state retirement pension, yet the data on economic inactivity, or what is essentially unemployment, show that a large proportion of men who are not so old are economically inactive.They are out of the labour market.
I sometimes think that the House has a strange custom of discussing the retirement age, not least in relation to European directives towards gender equality and whether to equalise at 65, 60 or 63. We have had that debate.It is all based on an assumption that men retire at 65. Some do. Some of us may hope to retire later.
Mr. David Congdon (Croydon, North-East):
The hon. Gentleman is being optimistic.
Mr. Wicks:
The hon. Gentleman--my pair--is worried about my employment security. I can tell him that I am rather more confident about it at the moment than he has any right to be about his.
Men aged 55 to 59 can hardly be considered old. One would expect some 90 per cent. of them to be in employment, but the reality is that one in three is out of work. In the slightly older group--those aged 60 to 64, who are in the period just before retirement--just over four out of 10 are in work. The amount of economic inactivity among middle-aged to older men is massive. That was never meant to be. William Beveridge, Labour Governments and Conservative Governments never said that we should support that group, through social security, income support or invalidity benefits of one kind or another to be on benefit and not in work, but it has come to be.
I was following the remarks of the hon. Member for Rotherham--
Mr. Wicks:
It was certainly somewhere beginning with an R. I apologise to the hon. Member for Rochdale(Ms Lynne) and the good people of--
Mr. Keith Bradley (Manchester, Withington):
Rotherham.
Mr. Wicks:
My ungallant Friend said Rotherham, but, being more gallant, I meant Rochdale. The hon. Lady argued that we should be able to afford that sum of money. I am inclined to agree with her at one level, but only if we are convinced that we are spending it properly. I am not convinced that we are doing so at present.Let us have a debate about social security objectives and ensure that public money is spent appropriately on them.
Mr. Field:
Before my hon. Friend develops that theme, may I take him back one step? He rightly emphasises that many people now feel insecure and that social security payments support that insecurity. Is it not also true that a
In my area--some distance from Croydon, but not that far from Rochdale--two former public utilities are merging and there will be large-scale lay-offs. We are also affected by the Mobil-BP merger, which will result in lay-offs. Does my hon. Friend think that we ought to consider whether it is necessary to issue social security impact statements when firms propose merging and, to use the euphemistic expression, downsizing their labour forces? Much of the cost of the two mergers in my area will be borne by taxpayers in general, who will have to pick up the social security costs of people who would otherwise be in work but will become unemployed, and soon unemployable, as a result of those changes.
Mr. Wicks:
That is an interesting observation and recommendation, to which we shall certainly want to give more thought. If it seems to be a good idea, given that the Department of Social Security plans so radically to cut its running costs and, presumably, its labour force, perhaps it should make the first social security impact statement. The Minister might want to announce that later if he intends to proceed along those lines.
Given the importance of spending our social security money effectively, the theme of fraud, which my hon. Friend the Member for Birkenhead introduced, is obviously important. I shall not add to his remarks, but we agree with the emphasis he put on the need to combat fraud. We welcome the recent increased determination of the Government, but we would want to go rather further. It would be worth calculating at some stage how much money has been squandered these past 16 years because the Government have made only lame attempts to combat fraud. It must become a key social security objective to ensure the promotion of the honest social security pound; to ensure that every pound of taxpayers' money is spent as honestly as possible.
In my advice surgery in Croydon, North-West, when I sometimes have to explain to people who are hard pressed that they will not receive more benefit, despite their old age or disability, it makes me furious to think that we are being defrauded of hundreds of thousands, millions or perhaps billions of pounds that could be used for people in genuine need. It is a very human matter.
We need to distinguish between the public policies that would make for social security and the role within them of state benefits. My theme is that the two are rather different. They are not necessarily the same. We need to use the phrase "social security" in the proper sense in the English language. What makes for social security in that wider sense? I suppose that most fundamental is the economy and employment, and enabling more of our citizens to find a secure place in the job market. That is obvious. It was well understood by William Beveridge, but we need a renewed determination to enable more of our citizens to get into employment.
Therefore, Opposition Members were in despair when we heard the proposals of the Deputy Prime Minister to deregulate the employment market for those in small businesses. If there was one thing that we did not need at this precise time, it was a suggestion that a Deputy
Prime Minister could be seriously contemplating making more of our citizens economically insecure and therefore insecure about their social life, their housing and the rest of it. This is precisely the time when enhancing and developing security should be one of the major and first responsibilities of government.
If economic security and employment security are important, we need to work hard at changing our social security system. I remember very well one particular constituent who came to my advice surgery in Thornton Heath about a housing problem. We talked more generally about her situation. She was on income support. She was drawing housing benefit. In some respects, she was totally dependent on the state. She was a prime example of the state of dependency that has been created these past 15 or so years, a state that we have to change in the coming five years.
When I asked my constituent how she saw her future, her eyes started to shine and she said, "I want a job."I asked her what she wanted to do. She wanted to be a traffic warden. Not only did she have determination, but she was brave, given the circumstances of Croydon traffic, and had an ambition which should have been fostered.I asked whether she ever talked of her ambition when she went to the DSS office and talked to various officials.She said that no one had ever asked her if she wanted a job. No one had ever sat down with her to talk about her ambition and how it might be realised.
Under the current social security regime, a lone mother is entitled to draw income support until her youngest child is 16. We have to start to change the culture. I am talking not about compulsion but about sensitivity. I am talking about a social security office where, in liaison with an employment office, someone would sit down with that young woman and say, "This is great news. You have a good ambition. We are going to help you. We are going to talk about your training and building any confidence that you might need,"--although this young woman did not need confidence; she had plenty of it--"We are going to talk about child care implications and the jobs that are available. We will certainly fix you up with the traffic warden people, but we will talk to other people. We can take some months on this." Was that happening? No, it was not.
The future social security system has to be in the business of helping young women such as my constituent who have no ambition to remain dependent or to draw social security for ever, but have an ambition to be independent. How we move from dependency to independence is the key theme of social security policy in the late 1990s.
I have talked about employment security. Let me also talk about family security and insecurity--the theme that my hon. Friend the Member for Birkenhead tempted me to discuss and one that I want to discuss. Family security is as important as economic security in enabling us to live our lives in a satisfactory way, not only in terms of cash, although that it important, but more generally. Family breakdown and related family change are now a major cause of poverty, disadvantage and new forms of inequality that are opening up in our society. If we need evidence of that, it comes in part from the Select Committee report on low income statistics that was published in February 1995. The report includes a table that shows that family breakdown and the rise of the
lone-parent family is probably a more important cause of poverty and disadvantage than are the traditional causes of unemployment and low wages.
Data for 1992 show that 3.6 million--almost3.7 million--children in Great Britain are dependent on income support or in families that have net resources below the income support level because of low wages. That is a shocking indicator of child poverty in a supposedly affluent society. Of those children, 1.8 million are in lone-parent families. Unemployment contributes a huge 1 million children, but the number of children in lone-parent families is much greater. William Beveridge would not have recognised that phenomenon. In 1942, when he and Parliament examined the causes of social insecurity that needed to be tackled by social insurance and the national assistance scheme, that factor was not uppermost in their minds. We need to work hard at addressing that considerable problem.
I want to consider how the power and pace of family change contribute to social insecurity and new forms of child poverty. First, more children are born out of wedlock. I make no moral judgments on that--it is not the subject of the debate--but the statistics relate to our theme of child poverty and social insecurity. Back in 1960, only 5 per cent. of children were born out of wedlock. Today, the proportion is a massive 32 per cent. Nearly one in three children are born outside marriage. Half of them are born to cohabiting couples; the other half to single unmarried mothers. We know that 85 per cent. of single unmarried mothers draw income support. It is a demographic trend of direct relevance to the estimates and public spending.
While cohabitation comes in all shapes and sizes and can include some of the most well-to-do and affluent couples, there is a general association between cohabitation and disadvantage. Although demographers are not clear about it, my reading of the research suggests that cohabiting parents are more likely to suffer a breakdown of their relationship than are married couple parents. That is a contributory factor to insecurity. I have mentioned the change since 1960, but over the past decade alone, the number of children born outside marriage has almost doubled. That is a rapid change with major consequences for our debates on social security and social insecurity.
There is also the question of divorce, which is exercising our minds and those of modern Governments more and more. It is no coincidence that the House will soon receive a Bill on divorce law reform from the other place. The key question is how to obtain a modern divorce law that puts children first. Pension splitting and the social security implications of divorce are related themes. The Child Support Agency is another consequence of divorce and has become a powerful theme. The bad news is that it will become even more important in the future.
I recently asked a parliamentary question to update some data with which I had been familiar when I worked at the Family Policy Studies Centre. I asked Government statisticians, who are the best in the country for such forecasting, what percentage of marriages are likely to end in divorce. The answer was 41 per cent.--more than four out of 10. That forecast is not wild, but a sober estimate by sensible demographers and scientists. The issues surrounding that, which relate to child maintenance, are
crucial to our social security. I shall come to them later. If we do not get that right, we are in deep trouble in respect of insecurities among families and of state spending on benefits.
Every year, there are 160,000 children under 16 in Great Britain whose parents divorce. It is interesting that the children involved are becoming younger. Divorces occur more quickly than they did 10 or 15 years ago.The figures for 1993 for England and Wales show that there were 55,000 children under five who had mums and dads who divorced--25 per cent. more than in 1983.Not only are many children affected by the phenomenon but they are wearing an even younger face than they used to. More children spend some or all of their childhoods in one-parent families.
The picture is further complicated by remarriage and, to use a slightly ugly expression, repartnering. The Minister winces because he is a sensitive man. I use the word because cohabitation is more common after the break-up of first marriages than as a substitute for first marriages. We have to invent a term for that. One in three marriages this weekend will involve someone marrying for the second time.
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