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Mr. Ainsworth: The hon. Gentleman would do better to address his question to "blank", Member of Parliament for "blank".
The right hon. Member for Dunfermline, East (Mr. Brown) has said of the work by that Labour party activist that it
The issue has more to do with the debate between new Labour and old Labour than with the Conservative Government's policy. The lady in question--perhaps because of her embarrassment--seems, properly, not too keen to own up to being a Labour party activist. When she was asked by The Sunday Times whether she was seeking to be a Labour party candidate, she replied evasively several times and finally said:
Mr. Nigel Evans:
New Labour, new labour.
Mr. Ainsworth:
I shall resist the temptation to make an inappropriate and politically incorrect jest. The lady was at least thinking the unthinkable in the way that the Leader of the Opposition had in mind, and perhaps that is why she was unsuccessful in her bid for a parliamentary career.
We must continue to work to reduce the welfare bill. It is too high and it is unsustainable. We must work to continue to make welfare and benefits more effective where they are most needed. We can do that by focusing on those who are in real need, by encouraging personal responsibility and by improving incentives to work and to save. The Opposition will do none of that, partly, as my right hon. Friend the Secretary of State has said, because they are too dependent on the public sector unions to get away from the old ways of state provision for everybody and partly too, I suspect, because in many areas they have a vested interest in the dependency cycle and in the votes that come from dependency.
Ms Liz Lynne (Rochdale):
Whenever we talk about the future of the welfare state, value for money is hardly ever mentioned and it has not really been mentioned in the debate today. We have heard a lot about the total cost of the welfare budget, but nothing about what it buys or provides for people.
We have heard so much talk about private provision, but quite apart from the fact that the weakest will fall through the net if we change to private provision, we should consider the cost to the individual. If people have to buy private provision, their bills at the end of the week or month will be far greater than under the welfare state run by the Government. I know that the Government want to cut back on the welfare bill so that they can offer tax cuts before the next election. That is fine, but they should be honest and say how much a change to private provision would cost a family at the end of the month.
Let us take the example of health provision. In America now, people get a lesser service and have to spend more on it. Many Americans find it difficult to manage, but still people say that private provision is the best way forward for welfare benefit. Surely the basic principle of insurance is to spread the cost, and how better to spread the cost than through a Government-run scheme?
The next problem, if we introduced private provision, would be the social consequences. Anyone who thinks that private provision can replace the welfare state should consider the joint study published by the Disability Alliance and the Disablement Income Group entitled "There May Be Trouble Ahead". The report's conclusion is that occupational pensions and health insurance are no substitute for a state disability income scheme, especially for the most vulnerable in society.
Occupational pensions have their place--I do not dispute that--but that place is as an addition to the basic state pension. We believe that income support should be replaced by a top-up to the basic state pension, with occupational pensions in addition, not as a replacement for the current provision.
Other bodies are saying that private provision will not work. The 1994 report by the Social Security Advisory Committee suggested that those most at risk would get either inadequate cover or none at all. The report states:
Hon. Members may claim that the problem will be the proportion represented by the work force as compared with retired people, but that figure is not so bad as we have been led to believe by all the people in the media and the politicians who have gone on television talking about a demographic time bomb. There will not be a sizeable increase until the year 2020. After that, however, the increase will be substantial.
I accept that there is a problem, but it will not begin to bite for another 24 years. That being so, we should plan rather than panic. Unfortunately, however, people are panicking about the budget for the welfare state. Some are running from one television studio to another. Many
commentators are saying that we face a crisis and others are writing to that effect in the press. But we are not at that stage. The problem will not be reached until 24 years have passed, when there will be more people of pensionable age than of working age.
We must defend the basic principle of the welfare state. At the same time, we must make the system more efficient and effective. We must have a war on waste, and one consideration should be benefit overpayments. We know that income support overpayments amounted to £546 million last year alone, mainly due to official error. The Government must recognise that problem. There are all the other benefit overpayments. We must cut overpayments and benefit fraud, and I welcome some of the measures that the Government are taking to reduce benefit fraud.
We must also have a proper back-to-work strategy. Some politicians say that such a policy would slash the social security budget, but they seem to forget that more than half that budget is directed to pensioners, so there would not be the dramatic slash that some envisage. At the same time, we must not lose sight of the need to get people back into work.
It will not be an easy task to return people to work. No one in any political party argues to the contrary. There will be no real savings in the short term because child care and proper training cost a great deal of money, but a policy to return people to work will be a good investment for the future, and we must look to the future--especially to the year 2020. Investment must take place now to ensure that we can afford our pensions bill and the welfare state generally in the future.
One way of getting people back to work cheaply is the benefit transfer scheme whereby employers are paid the benefits that would otherwise go to keeping someone unemployed. Another approach is to merge income support and family credit so that people are always better off in work. The family credit taper could operate with one merged low-income benefit.
We must help disabled people into work. Many say that that is not a priority, but I believe that it is. We greatly need a civil rights for disabled persons Bill, and Liberal Democrats are committed to that. We must ensure that we get disabled people into work. It would also cut the benefits bill. It makes sense to help disabled people with transport and other access problems.
Child benefit must be protected. The Labour party is desperately wrong in proposing to cut child benefit for 16 to 18-year-olds. That will not encourage young people to stay on at school. The key feature of the benefit is that it is received by the mother. How are poorer families to support a young person at school? How will they support their children by providing food and clothes? The bills are enormous.
The Government are also wrong to have in mind privatising the delivery of child benefit. Are we at the start of the slippery slope? Are the Government starting with child benefit because it is fairly easy, but with the intention of moving on to other benefits thereafter? Are they saying that Government Departments cannot run the system well and cheaply? Are they saying that the private sector can run it more cheaply, notwithstanding profit
margins? It seems strange that the Department of Social Security does not have its own house in order. I am also worried about the confidentiality of records.
"provides an insight into a Tory fifth term that would be not just a lurch, but a stampede to the right."
"No, I am four months pregnant."
Since when was being four months pregnant an effective bar on becoming a Labour party candidate? That is not very new Labour.
"Unless the insurance industry produced a package which, in effect, replicated the wide coverage of risks accepted by the state scheme, we see little prospect of a greater involvement of the private sector in provision for sickness, disability and unemployment in such a way that it would supplant state provision for the majority of the population and for high risk vulnerable groups in particular."
So many people have said in the media and in the House that a demographic time bomb is ready to explode because of our aging population, but the reality is slightly different. The Department of Social Security's own statistics show that 15 per cent. of the population were over 65 in 1990 but that 14 per cent. would be over 65 in 2000--a decrease of 1 percentage point. The figure is projected to rise to 16 per cent. by 2020; that is worrying, but it is far from alarming.
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