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Social Security Spending
4. Mr. Wilkinson: To ask the Secretary of State for Social Security what was the percentage of gross national product represented by Government spending on social security in (a) 1995, (b) 1990, (c) 1985 and (d) 1980. [6848]
Mr. Lilley: The figures are 12.5 per cent., 10 per cent., 11.5 per cent. and 10 per cent. respectively. Social security spending is now projected to drop as a proportion of national income over the remaining years of this century.
Mr. Wilkinson: I am grateful to my right hon. Friend for that detailed reply. As social security spending still accounts for a considerable proportion of gross national product, thereby preventing wealth from going into investment and the creation of wider prosperity and jobs, will he put in the Conservative manifesto imaginative,
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radical proposals such as a funded national state pension scheme, which, in the medium to longer term, would reduce the proportion to well below 10 per cent.?
Mr. Lilley: My hon. Friend is right. Social security has been among the fastest growing areas of expenditure for the past 50 years, since the welfare state was established.
Mr. Tony Banks: That is a mark of failure.
Mr. Lilley: The hon. Gentleman thinks that it has been a failure since Beveridge set it up. We have introduced reforms that will result in spending growing less rapidly than national income, to leave scope for reducing taxes and creating a more prosperous economy, getting people off work and enabling them to save and meet the costs of retirement, as my hon. Friend suggests.
Mr. Banks: You have been getting people off work for the past 17 years.
Mr. Frank Field: Will the Secretary of State tell the House the percentage increase in real terms in social security expenditure since 1979? When he meets the electorate, will he consider that record a matter for congratulation or for concern?
Mr. Lilley: I cannot give the figure offhand, but I think that it is about 4 per cent. a year. That is a matter both for congratulation and for concern. It is a matter for congratulation that we have met and safeguarded the needs of the unemployed, the sick, the disabled, the elderly and carers. However, it is a matter for concern because the bill has been outstripping the nation's ability to pay. My predecessor, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), introduced reforms in 1986, which I have continued. The beneficial effects of those reforms have begun to show. We are now almost alone in the western world in having got a grip on the problem, and we can look forward with confidence to the future.
Mr. David Shaw: Can my right hon. Friend explain the fact that, in 1980, just after the Government took office, social security expenditure represented quite a low proportion of gross domestic product? Was it because there were a number of social security cuts between 1974 and 1979? Is my right hon. Friend old enough in political terms to recall Labour cutting the pension in real terms in 1976? Is it not a tribute to the Government that, since 1979, we have always increased social security in relation to inflation?
Mr. Lilley: My hon. Friend is absolutely right. I do recall the cuts in real terms to pensions and the fact that for two years in succession Labour broke its promise on the Christmas bonus for pensioners. I do not believe that pensioners can look forward with confidence to another Labour Government, and I trust that they will remember that next May.
Mr. Wicks: Given the spending total on social security, does the Secretary of State really expect war pensioners to contribute to social security cuts? Is he really planning to stop the four-yearly assessments that lead to increased entitlements for veterans? Given the great service of our
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veterans, is that not a cut too far? Will the Secretary of State confirm that the war pensions memorandum was called "Sweeteners" and that he received a copy of it? Does he accept that people do not want sweeteners, but want justice for veterans?
Mr. Lilley: I had thought better of the hon. Gentleman than that he should join in such shameful scaremongering. He has got it wrong. The changes in long-term assessments to which he refers mean that pensioners can seek a review at any time they wish, but they will no longer receive a letter, which many pensioners and the pensioner lobbies found disturbing as it suggested that their pensions would no longer be paid. That will no longer happen. The change will not save significant money, but it is welcomed by the pensioner lobbies. It is particularly extraordinary that the Labour party should suggest that we pick and choose our medical advice on such matters. That is a frightening suggestion, as the only part of the benefit system that allows Government some discretion as to how much they give war pensioners is in local government matters, and all but two of the local authorities that do not give full help to war pensioners are Labour-controlled--[Interruption.] There are 18 of them. If anyone decides to pursue the scare, I shall list those 18 local authorities in the House.
Mr. Brazier: Will my right hon. Friend confirm that, apart from invalidity benefit, nearly all benefit increases have been in means-tested benefits, not universal benefits? Does he agree that we have to consider the dynamic effects of changes to the benefits system on social structures, not merely their immediate short-term impact? Does he accept the support of many Conservative Members for the courageous changes that he has made to housing benefit and payments to single-parent families as, in the long run, they should benefit the social structure and not merely produce short-term savings?
Mr. Lilley: I am grateful to my hon. Friend for the points that he makes. The growth has been not just in means-tested benefits. Benefit spending on war pensioners, for example, will increase next year--just as it has this year--because, unlike the Labour party, we are determined to protect and help war pensioners. My hon. Friend is right about trying to avoid means testing: I deplore Labour's plans to extend means testing into child benefit for those staying on at school and to pension entitlements--a proposal that Lady Castle has rightly condemned as a major extension of means testing to all pensioners.
Incapacity Benefit
5. Mr. Bradley: To ask the Secretary of State for Social Security if he will make a statement on the real-terms percentage change since 1979 in social security spending on incapacity benefit. [6849]
The Minister for Social Security and Disabled People (Mr. Alistair Burt): Between 1978-79 and 1994-95, expenditure on invalidity benefit rose by 216 per cent. in real terms. As a result of the introduction of incapacity benefit in April 1995, we expect expenditure in the long term to be significantly reduced.
Mr. Bradley: Is it not clear that the introduction of incapacity benefit will reduce benefit for people in ill
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health regardless of their circumstances? In the past month, two constituents have told me that they have had heart attacks and are still under the care of the local hospital and their general practitioners, but have had their incapacity benefit taken off them. Following my intervention, those benefits have been restored. Surely such people should be treated as being in exceptional circumstances due to their severe medical condition and should not have their benefit taken away. If the Minister agrees, will he ensure that fresh instructions are given to the Benefits Agency medical service so that no people who have had heart attacks and are under the care of a local hospital or a GP suffer the distress of having their benefits taken off them?
Mr. Burt: I have looked at the two cases that the hon. Gentleman raises: the matter is not quite as simple as he suggests. The treatment of those who have had heart attacks varies, as do their chances of getting back to work, depending on their condition. In the cases to which he referred, the system worked because there was an opportunity to review them. Whether somebody is capable of going back to work must essentially be a medical decision.
The hon. Gentleman attended a presentation of the all work test when he was an Opposition Front Bencher, and he had an opportunity to talk to doctors. He will be aware that there is no instruction from the Government to make life more difficult for those who suffer heart attacks. My concern is to ensure that doctors have sufficient scope to allow them to make the right decision. There is plenty of opportunity in the test to make exceptional decisions where they believe that there is a substantial risk to health. I am obviously concerned about some of the cases that have arisen recently, and I have already had meetings with officials in the Department. The all work test is being monitored, and a publication about it will be available early in the new year. At the moment, I am satisfied that doctors have the proper scope that they need.
Mr. Churchill:
By their nature, war disability pensioners are a declining band. Was it really necessary, therefore, for the Government to deprive them of that to which they would have been entitled this year and in the years ahead? Will my hon. Friend clarify exactly when the measures that were announced on 5 December will be implemented? I have already received a significant number of disturbing letters suggesting that, for deafness, the policy was implemented several months ago. Consequently, many hundreds--if not thousands--of people are being deprived of £40 a week that they would have stood to receive under the previous arrangements.
Mr. Burt:
I am not altogether sure whether my hon. Friend heard the earlier replies given by my right hon. Friend the Secretary of State. If he did not, I suggest that he reads them in tomorrow's Hansard. I can tell him that it has been the practice right the way through the system to accept the medical advice that has been given to the Government when dealing with such cases. Most often, medical advice may allow extra claims and extra opportunity. If my hon. Friend is siding with the Opposition in wanting to allow the Government to pick and choose what information is accepted, he must appreciate the great danger of that course. The medical
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Mr. Churchill:
When is it being implemented?
Mr. Burt:
--but to listen to colleagues and read debates that have already taken place with the groups with which the Government discuss the proper implementation date for such measures.
Ms Lynne:
Does the Minister accept that a number of people are not now getting incapacity benefit because they are allowed only five working days to prepare their appeal? That is happening at the same time as the Government are cutting benefits to war pensioners who gave their health in the service of this country. Is it not about time that the Government stopped attacking disabled people?
Mr. Burt:
Expenditure on the sick and disabled has risen by some 280 per cent. since the Government have been in office. That record is based on the strength of the economy and is one that the hon. Lady, had she been a member of the Lib-Lab pact, could never have afforded. The success rate for appeals on invalidity benefit is running at about 44 per cent., which is comparable with other social security appeals. There is no way that the Government are being mean towards disabled people. Indeed, we have produced a range of legislation that will improve the quality of life for disabled people for many years to come.
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