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Mr. Paul Flynn (Newport, West): What the Secretary of State refers to as savings is taking money from the pockets of the poorest people in society, including, as we heard, the miners who came here today. He is taking money from the meagre income of disabled pensioners. Is he proud of that?
Mr. Lilley: The hon. Gentleman has a long and proud record of advocating increased expenditure on almost everything, but he is not a Front-Bench spokesman. Labour Front-Bench spokesmen pretend that they would not spend any more on social security but would cut it more effectively than would we.
Mr. Peter L. Pike (Burnley): While the right hon. Gentleman is on this theme, does he accept that the people in most need, by the Government's criteria are, those who are on income support? Does he agree, that when such people have used the social fund, it is outrageous that more than 40 per cent. of its costs still go on administration? Should we not get more of that money to the people who desperately need help?
Mr. Lilley: That is right. That is why I am seeking through the change programme to streamline all benefit administration and why I thought that it was extraordinary that it was rejected root and branch by the hon. Member for Islington, South and Finsbury. He has continued to object to every concrete measure in the general programme, despite the fact that the shadow Chief Secretary to the Treasury admitted in a leaked letter that my proposed savings were perfectly feasible.
When it comes down to it, the Government cut administration costs to avoid cutting benefit, and Labour proposes to cut benefits for pupils who stay at school after 16 because it is not prepared to cut administration costs. Labour is not only opposed to all the reforms that I have been introducing recently; it has opposed almost all the changes that I have introduced in this Parliament. It is also committed to increased expenditure. Almost every possible proposal that it has put forward involves increased expenditure, even when dressed up as a savings measure.
Of course, the Opposition are coy about their old pledges. Their document, "Security in Retirement", recently issued by the hon. Member for Islington, South and Finsbury, talks about ensuring
No wonder sharp-eyed commentators have called for more clarity. Lady Barbara Castle said:
Whether or not the Labour party implements its old pledge, it is certainly committed to new, expensive and dangerous pledges. The first is a guaranteed minimum pension. That was proposed by the leader of the Labour party in his party conference speech last October. He made it a defining characteristic of new Labour, and said:
Of course, we already guarantee a minimum income of more than £100 for a couple via income support. If Labour's minimum pension guarantee were only 10 per cent. higher, it would cost £3 billion a year, discourage saving and extend means testing. As Lady Castle and Peter Townsend pithily put it:
Mr. Lilley:
My hon. Friend is right. The Opposition are being hoist by their own petard. As they refuse to make any savings on administration, they would probably have to cut benefits elsewhere and doubtless, on the same measure, claim that they were reducing poverty.
The other main Opposition proposal is to introduce a flexible decade of retirement, allowing people to draw their pension at the age of 60 instead of 65. People can already defer taking their pensions and be rewarded by a 7 per cent. increase for every year that they defer. However, 90 per cent. of people take their pensions at the first opportunity. If they continue to do so under Labour's proposal, it would cost £15 billion a year extra. The hon. Member for Islington, South and
Finsbury put out a press release to criticise me when I last pointed out that his document says that that will be done only in a way that will mean no extra cost to the Treasury. The only way that the right to a pension can be extended by five years with no extra burden to the Treasury is by reducing the value of the pension. I will happily give way to Opposition spokesmen if they can suggest one.
Mr. Dennis Skinner (Bolsover):
Use the same formula that was introduced by the Government most recently for Ministers and Members of Parliament.
Mr. Lilley:
Unfortunately, that was not costless to the Treasury, which is why the Government opposed it. I would still be happy to give way to the Opposition's pensions spokesmen so that they can tell us, in qualitative terms, how they can make the flexible decade of retirement no extra burden on the Treasury without cutting the basic rate of pension. It cannot be done, and the Opposition ought to realise it.
My ultimate objective is an affordable welfare state which provides decent benefits to those who need them and are genuinely entitled to them. Therefore, my first objective is to save money without affecting benefit levels. That means cracking down on fraud and streamlining administration. Most organisations in the private sector have achieved dramatic improvements in efficiency. I believe that we can do likewise, especially if we learn from and, where appropriate, work with the private sector. That is why I launched my change programme, which aims to achieve a 25 per cent. increase in efficiency. That means savings worth £0.75 billion.
The hon. Member for Islington, South and Finsbury condemned my programme as damaging, dangerous and impossible when I announced it. His colleague the shadow Chief Secretary concluded that it was perfectly feasible. None the less, he has continued to attack each concrete step forward that I have announced. Indeed, he declared on the "Today" programme that he has an "ideological" objection--I use his word--to private participation in the administration of benefits. That would seem to mean that Labour would not continue to use the 19,000 sub-post offices, all of them private, to deliver benefits. I take it that it is not Labour's intention to nationalise them.
If not, how does the hon. Gentleman reconcile the continued use of a private sector delivery mechanism with his ideological objection to the private sector playing any part in the administration of the core benefits provided by the Department? The fact that the hon. Gentleman says mutually contradictory things on odd and even days of the week does not help the House elucidate exactly what he is committed to.
My second objective in reforming the welfare state has been to focus benefits on genuine need. Savings from my reforms will reach £5 billion a year in the next Parliament and £15 billion a year thereafter. The Opposition have opposed them all. They have not told us where they would get the extra money, so they start off that far behind, with that obligation to raise taxes. Finally, it is essential to encourage self-provision. We believe in a welfare society in which both the state and the private sector play full roles.
"that all pensioners, today and tomorrow, share fairly in the increasing prosperity of the nation".
When they talk privately to the financial press, they say that that does not mean that they are committed to the old link between pensions and earnings. Pensions will be uprated only in line with prices. When they talk privately to their activists, Back Benchers and constituents, they hint that they are committed to expensive increases in pensions after the election.
"The Labour party's policy statement--Security in Retirement--does not provide a plan of action or detailed and costed proposals about how to achieve adequate pensions . . . In too many respects the document is ambiguous and inconsistent . . . Labour must commit itself to the earnings link . . . But there is no such commitment in the document."
I know that the hon. Member for Bolsover (Mr. Skinner) will warmly support her campaign to persuade constituency Labour parties to commit the Labour party to that pledge.
"The aim of our policy is to guarantee a minimum income that provides dignity in old age. That is New Labour."
"It is difficult to see how in practice the Minimum Pension Guarantee would differ from Income Support . . . it is the same old hated and unworkable means test in disguise."
Mr. Bernard Jenkin:
My right hon. Friend missed one element of the equation. If many more people were put on to means testing, by the measure that the Opposition tend to use, many more people would be in "poverty". The system they advocate undermines the statistical basis on which they attack the Government.
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