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5.36 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): This afternoon, we have listened to four very interesting speeches by my hon. Friend the Member for Beaconsfield (Mr. Smith) and by Opposition Members. This has been a shortish debate, which may reflect the fact that, in the past three weeks, we have had three major debates on social security. Opposition Members--and indeed Conservative Members--may be suffering from social security fatigue.
Coming relatively fresh to estimates debates, I am struck by how much has changed in the way in which these matters are discussed in the three years since my
right hon. Friend the Secretary of State delivered his Mais lecture. A copy of the lecture is indispensable to any discussion of social security in much the same way as the thoughts and writings of the hon. Member for Birkenhead (Mr. Field), who opened today's debate, whose speeches are also indispensable to any junior Minister trying to work his way through the maze of social security.
Three years ago, politicians tended to boast about the increase in welfare spending. I remember that a leading Labour academic wrote a paper called "The Future of Welfare: A Guide to the Debate", in which he advocated that an extra 5 per cent. of gross domestic product on social security spending would do the trick.
The hon. Member for Croydon, North-West (Mr. Wicks) made kind remarks about Government statisticians, which I shall pass on, and said that he wanted to consider appropriate objectives for social security. Conservative Members have little doubt what the appropriate objectives are. In recent years there has been a reduction in the underlying growth in social security, not only because it is a burden to the taxpayer, but because of the growth in the dependency culture, which is wrong. Many of those changes were enshrined in last year's heavy social security legislative programme. We are now enabling the country to meet genuine need without outstripping the country's ability to pay.
I fear that we remain in considerable doubt about the Labour party's views; it is not at all clear where it is heading. All will be revealed on 8 May when the hon. Member for Croydon, North-West and his hon. Friends on the Opposition Front Bench announce the result of their six-month review--they have been instructed by their leader to think the unthinkable. We are all waiting with bated breath to hear what emerges from that important process.
If we consider the international comparisons overseas, we see just how far ahead of the field the Government are on the issue of social security. In Germany, there is widespread discussion of the problem of non-wage labour costs and the burdens that they impose on an economy that is struggling to reach the Maastricht criteria. Unemployment in Germany is higher than at any time since the last war, and reached 4.3 million in February.
The position in France is no less severe. France is also suffering high social costs, as we know from the vivid media reports of the recent unrest in Paris and other big cities. In the face of widespread strikes by public sector workers in November, Jacques Barrot, the Social Affairs Minster, said: "There is no alternative" to welfare reform. The strikers were protesting against the social security reforms announced by the Prime Minister.
In a television interview in October, President Chirac called on France to follow the
in reducing public expenditure. He spoke of the urgent need to reduce the public deficit, especially that of the social security budget. He said that France had lived beyond its means for too long. But in the face of continued strikes and protests, the French Government have had to backtrack on some of their planned reforms: they have given way over public sector pensions and postponed the proposed taxation of family benefits.
I gave those international comparisons as they show not only the extent to which the Labour party is still wallowing about and trying to work out where to go, but how far ahead of the international game the British Government are in tackling those difficult problems.
Mr. Tim Smith:
My hon. Friend is right: there is no doubt that the United Kingdom Government are far ahead of the game in dealing with the burgeoning cost of social security spending. Does he agree that it is striking that the hon. Member for Croydon, North-West (Mr. Wicks) said that he wanted to cut the total amount of social security spending--he said that it was too high at one third of the total--but every time that the Secretary of State makes relatively minor reductions in spending, the Labour party opposes them?
Mr. Mitchell:
My hon. Friend is right, which is why he must make a note in his diary for 8 May, the date on which the Opposition will advise the House of their programmes and plans after their six-month review. I see from what my hon. Friend said that he is looking forward to that day as much as I am.
Mr. Wicks:
The Government--faced with rocketing social security spending because of the economic recession and a lack of decent social policy--have made benefit claimants suffer by cutting and withdrawing their benefits. But the proper strategy, which new Labour will adopt, is to get people off benefit; there are simply too many people on income support. We shall have a proper benefit-to-work strategy that will get people off benefit. The difference between the Conservatives and the Labour party is that, under the last Labour Government, there were not so many people on income support or supplementary benefit.
Mr. Mitchell:
The hon. Gentleman will have to do better than that if he is to convince the House on 8 May that his party has a serious social security strategy, and I look forward to what he has to say on that day.
In his important contribution, my hon. Friend the Member for Beaconsfield talked about the work of the agencies and the success that they have achieved. He mentioned the fact that the work of the Department and its agencies is tagged, in an attachment to the Select Committee's report, on today's Order Paper. The report confirms the agencies' success and the improvements that they have brought about.
The agencies' benefits include improved clarification of roles and responsibilities in framework documents, and greater public accountability through the publication of business plans and annual reports and accounts. Responsibility for decision making is devolved to the lowest suitable level closest to the point of delivery, allowing real improvements in customer service and efficiency to be made.
The improvements derived from agency status can also easily be seen by the agencies' customers in the service that they now receive. Better customer service has been achieved because the agencies have allowed improvements in management through greater coherence in control and planning, and through service-level agreements that protect the services that customers can expect to receive. As agencies focus on specific areas of
business, it has also been possible to consider ways of achieving further efficiencies, and each agency is required to identify and deliver a challenging efficiency programme each year.
The agencies are a success--that is easily demonstrated by a range of published figures. But there is still room for further improvements in efficiency, which is why my right hon. Friend the Secretary of State has announced the Department's change programme. Under that programme, a key step in our long-term review of social security, we are taking a fundamental look at what we deliver and how we deliver it over the next three years.
The hon. Member for Rochdale (Ms Lynne) asked me to comment on a leak in The Guardian. I do not normally comment on leaks of material, but the article refers to an early document relating to the Department's running costs review, and no decisions have been taken on the subjects mentioned.
The elimination of fraud--which was comprehensively covered in last week's debate and by the hon. Member for Birkenhead today--is not an afterthought. Reducing administrative costs will not be done at the expense of safeguarding benefit money. Our objective is to deliver the right money to the right people at the right time, whereas fraud involves money going to the wrong person. The extra funds secured for the security programme are ring-fenced for use on specific security and control activity, and cannot be diverted. We are committed to reducing the level of fraud by 70 per cent. over the security strategy period and the target will be unaffected by proposals in the change programme.
The hon. Member for Croydon, North-West spoke about the dangers and disasters of family breakdown.He spoke about security, particularly job security. I am sure that he would want to pay credit to the Government's in-work programme and their family credit programme, which make an important contribution at one level to the points that he raised. But at another level the hon. Gentleman spoke of the vital necessity of the Child Support Agency. I want to address a number of points that he raised on that subject.
I have today laid regulations before the House that pave the way for the trial of an important change in the way that child support liability is calculated. The new provisions will introduce an element of discretion that will allow the Child Support Agency to take account of certain special expenses and other commitments that the standard assessment formula is unable to accommodate.
The new provisions will deal with a number of specific issues. At present, the calculation of liability is governed by the assessment formula. That formula is necessarily detailed as it attempts to deal with the wide variety of circumstances that may be present in any particular case. However, despite the formula's detailed nature, it is impossible for such a system to meet every eventuality.
The new provisions will introduce the flexibility required to allow greater recognition of special expenses and other commitments that are not covered by the formula. It will also enable the agency to crack down on absent parents, principally fathers, who seek to reduce their child support liabilities by diverting income elsewhere.
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