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6.46 pm
The Minister for Social Security and Disabled People (Mr. Alistair Burt): At the end of the contribution by the hon. Member for Manchester, Withington (Mr. Bradley), one thing about which we were not clear is what sort of welfare state there would be under
the Labour party. What commitments have we heard the party make this evening to do anything about the matters that Labour spokesmen have raised with such indignation?
I intend to consider as many as possible of the points that have been raised in the debate, but first I shall say a little about the structure of the welfare state as we see it. The Government have faced up to the problems that have been mentioned by hon. Members on both sides of the House, which have produced a rising bill both for benefits and for delivering benefits.
Three years ago, my right hon. Friend the Secretary of State initiated the current debate about the growth in social security expenditure, and spelled out the principles that should underlie an effective and affordable system. Such a system should answer today's needs, not some outdated idea of what people require. It should protect the most vulnerable and focus on those in the greatest need, while bearing down on fraud and abuse. It should encourage independence and improve incentives, it should be affordable, and its administration should be efficient and offer value for money. I venture to suggest that that is still an effective set of principles according to which we can consider the future of the welfare state.
Does the Labour party really believe that the welfare state can somehow stand still? Do Labour Members think that the rising cost of welfare, and the rising cost of administering it, can simply be ignored, and that the taxpayer should, and will, simply go on paying? Do they think that abuse can be heaped on us for what we are doing and are attempting to do with the welfare state, without any commitment about what they would do?
It is precisely because the Government did accept, and continue to accept, that we have a responsibility not to pass on an escalating bill to future generations, because we made the hard decisions, and because we took the risk of breaking new ground, that social security in the future will be affordable. That does not mean ignoring the needs of those who cannot provide for themselves. The Government remain committed to maintaining a safety net that will ensure that the poorest in our society are supported and protected.
Just as we recognised the need to contain the cost of benefits, so we recognised the need to maximise efficiency and value for money in delivering them. Our aim is to save about 25 per cent. of the current £3 billion cost of operating the benefit system--about £750 million off the taxpayer's bill--while providing a service that is as good as or better than the present service and, most important, without resorting to reductions in benefits.
Significant savings can be made from simplified, efficient processes and from making the best use of the most modern information technology. We believe, however, that the only way to ensure maximum cost-effectiveness and value for money is to open up the system to competition: providing efficiency incentives for in-house suppliers, enabling comparison of their performance with each other and with private sector suppliers and moving to private sector administration where that provides better value for money.
Some Opposition Members clearly think that we are rushing into that in the same way as they rush into ill-thought-through plans for the future--plans from which they, as the Opposition, have the luxury of being
able to withdraw when they see that they do not work. On the contrary, we have a carefully planned strategy to move in a series of gradual steps towards a mixed economy of provision. We made a conscious decision to start with a relatively simple and straightforward benefit in child benefit, and we shall look carefully at the emerging results of that before we decide which other areas to consider for operation by the private sector.
I assure the House that there is no question of wholesale out-sourcing. There will be a pragmatic, step-by-step process, with testing and assurance at each stage, built on the principles that I mentioned. Out-sourcing will take place only where we are satisfied that there are real gains to be made, because the private sector can offer greater expertise or value for money. I should stress that that does not mean that we believe that our own staff have failed. We recognise that they have delivered many efficiencies over the years. We do not think that the private sector is necessarily superior in this, but we realise that it can offer expertise in process review and information technology, and has the capacity to make capital investment where it is needed to produce the best results.
There were a variety of fascinating contributions to the debate. The hon. Member for Walsall, North (Mr. Winnick), whom we welcome as a recent product of the national health service, made a series of speeches that he will not mind if I characterise as real old Labour. It is noticeable that he does not always get the response that he wants from the Opposition Front-Bench team. He was challenged about what his party would do on the jobseeker's allowance, and no commitment was forthcoming. He spoke movingly about the pensions link with earnings, but he knows that his colleagues have not decided whether they are going to restore it. He will pray in vain for that.
The concerns raised by the hon. Member for Walsall, North were mirrored in other Opposition contributions. The hon. Member for Dundee, East (Mr. McAllion) spoke with his customary passion and warmth for the people he represents. We are all confronted in our surgeries by people whose experiences are radically different from our own, and we know how miserable and difficult people's lives can be. We are all concerned to find out what we can do to make them different. The only point that divides the hon. Gentleman and me is that I do not believe that means and resources are the only way to deal with some of the problems. The difficulties of the woman he met at the hearings could stem as much from administration problems in her home town, and how to deal with increasing costs and special educational needs, as from anything else.
How is the hon. Member for Dundee, East going to satisfy the problems of the woman he heard at the hearings, if he believes that it is all about resources, but the taxation policy supported by his hon. Friend the Member for Coventry, North-West (Mr. Robinson), who said that he was satisfied with our policy on high-income earners and taxation, is to be the taxation policy for the future, and if the comments of the Leader of the Opposition today when he talked to local government--to the effect that there would be no new resources from local government from central Government--are true? They cannot be satisfied with Labour looking for the ever-empty pocket in the future. They have to be satisfied by the sort of hard and difficult work that we do to make
the public pound go further, to introduce the private sector and new ideas, to deliver better for the people whose lives are more difficult.
Mr. Geoffrey Robinson:
For the record, I by no means said what the Minister implied. If only the Government were as concerned about incentives to work at the bottom end of the scale as they are about the top end, we should have some changes in the welfare programme to encourage those. Far from being satisfied at the top end, my views are well known and have been made clear elsewhere. Perhaps the Minister will now tell us what he proposes to do to provide incentives at the bottom end of the income scale--incentives for people to work.
Mr. Burt:
The hon. Gentleman spoke with great warmth and passion about the existing tax situation for higher income earners, which I can well understand in the circumstances, but I accept what he said. The hon. Gentleman challenged us and asked what we were doing about the poverty trap and getting people back to work. Conservative Members gave him half a dozen examples of what we have done--family credit, the earnings top-up system, child care allowances, and the changes that my right hon. and learned Friend the Chancellor made a couple of years ago, from which 750,000 people will benefit this year--but he did not seem inclined to be that interested in those.
To return to the hon. Member for Dundee, East, there is one way to satisfy the need for revenue costs in his constituency that he did not mention: the tartan tax. The views that he expressed, and the sense that I got from him of the sort of commitment that he wants from his Front-Bench team, ought to be read and understood by many people in Scotland, as an example of what he would really like to do if he came to office. Many voters in Scotland would get a real sense of what Labour control would be like, if the hon. Gentleman could have his way.
Mr. McAllion:
Does the Minister not understand that taxes raised in Scotland with the consent of the Scottish people would help the poor in Scotland? That is why Labour is committed to giving a Scottish Parliament tax-raising powers.
Mr. Burt:
We all want resources to be used to help the poor. I was pointing out that the hon. Gentleman's care and concern for his constituents cannot be satisfied, in his view, without substantially increasing taxes. He wants to deliver everything through the public sector. He believes that massive resources will have to be introduced to do the job. I do not get any sense of that sort of commitment from his Front-Bench colleagues, and I bet he wishes sometimes that they would speak with half the passion and concern that he brings to debates.
A number of my Conservative colleagues made useful contributions. My hon. Friend the Member for East Surrey (Mr. Ainsworth), in a good contribution which we shall miss for some time, posed the Opposition sensible questions about the future of welfare, but he got no response. My hon. Friend the Member for Shoreham (Mr. Stephen) mentioned the Opposition's unwillingness to declare what they would do. Interestingly, he mentioned new technology, which at one and the same time affects jobs, but gives the social security system challenges, in terms of delivering benefits and dealing
with the future. He again mentioned the essential principle behind why we are opening up the social security delivery system to ideas from the private sector and to take more account of new technology.
My hon. Friend the Member for Ribble Valley (Mr. Evans), in his usual forthright contribution, again laid waste to the Opposition on child benefit, pointing out what we have come to know: whereas we have ideas to save money in administration on social security, the Opposition's only concrete idea for saving money has been to save £700 million from 16 and 17-year-olds who would otherwise have received child benefit. I pay tribute to my hon. Friend for his hard work in raising that issue.
In a fascinating contrast to the hon. Member for Dundee, East, my hon. Friend the Member for Billericay (Mrs. Gorman) put another side of the coin when she gave her views of individual responsibility. In essence, there should be no difficulty of reconciling those views in a modern society. The individual has to have a proper opportunity to grow, to develop responsibility and to develop all his or her talents or abilities. That will not produce equality of outcome, but there is no reason why the individual, in pursuing his or her talents or abilities for best, should not also have a community responsibility, which need not always be delivered through the tax system.
The hon. Member for Rochdale (Ms Lynne) made a balanced contribution, which I much enjoyed. She was right to talk about not panicking about the demographic situation in the United Kingdom. The reason the Government do not panic is that we have seen ahead and planned for those changes. We changed the earnings link with pensions precisely because we needed to. There is no evidence that the Opposition prepared for the future in the way that we did.
We have had intermittent fun this evening with Labour's draft press release--a paper full of blanks into which can be inserted whatever one wants. I wondered what it reminded me of, and, having listened to Labour's Front-Bench spokesmen, I now know: it is their draft manifesto. Anything can be inserted into the blanks. Will there be a change of policy? Their answer is, "Don't know, fill it in later." Will they retain what they have just opposed in the House? Their answer is, "Don't know, fill it in later." That is Labour party policy, about which we have heard nothing. The Government have given a concrete demonstration of the future structure of the welfare state. It is well thought through and it will be properly funded. It is the best opportunity that the country can have. Vote for us; leave them alone.
Question put, That the original words stand part of the Question:--
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