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Mr. Bernard Jenkin: The hon. Gentleman recited a very good question from my right hon. Friend the Secretary of State. We all share the concern about the extent of means testing in the benefit system, but what will the hon. Gentleman do about it? Let us not retreat into tiresome little jibes at each other at this time of the evening.
Mr. McLeish: The hon. Gentleman cannot distinguish a bird from an animal, so I am not inclined to take many more criticisms like that.
The Conservatives' cheap jibe leads me to another criticism that I wish to make. We heard tonight that in one in five non-pensionable households no one works. That is modern Britain under the Conservatives. Let me quote another statistic. One in three of all households in Britain are on means-tested benefits. When we add up the catalogue of misery, it is clear that we will inherit a legacy of Britain on benefit, Britain on the breadline. As I said earlier, give us a chance and when the election comes we will start to get on with the problem.
I have other considerations for the Minister who will reply, because we have heard--[Interruption.] The Government may not like this, but I am afraid that they are going to get some more of it.
Let us look at the labour market, which is crucial. Again we heard claims that, over the past four years, under the present premiership, things have improved. Let us look at the reality. Between February 1992 and February 1996, the number of people claiming income support increased by 403,000. At the same time, the number--doctored 30 or 33 times, but what does it really matter?--of unemployed people, as measured by the civilian work force in work, went down by 390,000. The important point is that the number of people in work went down by 96,000.
Income support shoots ahead, unemployment goes down, through a variety of manipulative means, and the number of people working also goes down. When the Minister deals with that little conundrum, I should like him to explain what type of productive society we are living in, given that unemployment has gone down, and we know why; income support has gone up, and I think we know why; but we do not know why there are fewer jobs in Britain. The Government's suggestion that this country is the enterprise capital of Europe is humbug and hypocrisy, and it is quite worrying when so many people are trying to get back to work.
There is a clear dividing line between the Labour party and the Government. The price of failure is being borne by millions of citizens. Like us, they must yearn for a change. We need to return to a society in which the
individual and his self-worth are paramount, and in which we can collectively as a nation start to put employment and education at the heart of the modernisation of the welfare state. We need a work ethic and a learning ethic. The learning ethic is the sound issue for the next millennium.
When we talk about taking costs from the welfare budget and investing that money in education, our proposals are derided. This is the old-fashioned Conservative party. It is not willing to accept that, unless we invest in those crucial areas, motivated by the learning ethic, we as a nation, whether a productive economy or a civilised country, will fail in the next millennium. The Government do not appreciate the reality.
We make the fundamental point that a successful and cohesive society goes hand in hand with a prosperous and successful economy. That is elementary. We must now take stock--to use another of the Prime Minister's famous phrases--of the calamitous mess into which the Government have got the labour market. If we acknowledge the two sets of statistics that I gave on the massive increase in poverty and dependency under the Government and the massive mess that they have made of the labour market, we can start to chart a way forward and to find solutions for the future.
An amazing development has taken place that is found nowhere else in the European Union or in other parts of the developed world. We have not only one welfare state in Britain, but three. In-work welfare is the new growth area. The Conservative party extols the virtues of family credit. There is clearly nothing wrong with family credit, but Conservative Members should appreciate that housing benefit, council tax benefit and family credit prop up low pay in the workplace. When we suggest a minimum wage, the Government find that horrible. The fact that there is minimum wage protection in 14 of the 15 European Union countries and in great swathes of the American economy, does not move them one iota.
There has been a massive extension of in-work welfare. The Government will not let people leave welfare and go into work, so £3 billion a year is spent on propping up low wages in the workplace. We want to do something about the cause and the cost of that, whereas the Government ignore the consequences and are unable to do anything about it.
The second welfare state is the out-of-work welfare state that we have had since Beveridge. Out-of-work welfare has grown, and we have witnessed the calamitous way in which it has been overseen by the Secretary of State for Social Security. We have in-work welfare and out-of-work welfare, but not content with ensnaring so many people into the welfare state, the Government have created a third one: it is called workfare, and it is neither work nor welfare. They are developing workfare as an alternative to their other policies.
If there is one word that sums up what the Government are about on social security it is "waste". We sat through a Committee considering the Social Security Administration (Fraud) Bill, and we made a number of suggestions.
Mr. Matthew Banks:
Not one policy.
Mr. McLeish:
Forgive me, Mr. Deputy Speaker, for ignoring the idle chat of Conservative Members.
In Committee, we suggested ways of tackling landlord fraud, but when matters come a little close to friends of the Conservative party, Conservative Members recoil. We wanted a register; we partly got that. We wanted a landlord offence; we did not get that. We wanted to help to toughen up a Government who are high on rhetoric but soft on reality. Waste is the key issue that distinguishes the Conservative party from a modern Labour party. We think that waste is a scandal. It is an abuse and it shows contempt for taxpayers.
We were very constructive in Committee, tried again on Report and perhaps might still toughen up the legislation in another place. Waste in social security was matched earlier in this Administration by waste under the poll tax. We now have the edifying spectacle of a beef tax, which is costing the nation £3.5 billion. Waste is no stranger to the Government. At the end of the day, the election will be fought on the basis that the Government are not interested in linking welfare to work, in tackling waste or in helping the 600,000 young people aged under 24 who are the victims of failed economic policies.
The Minister for Social Security and Disabled People (Mr. Alistair Burt):
It is a pleasure to follow the hon. Member for Fife, Central (Mr. McLeish), who was known as a wily midfielder in his day and certainly showed his wiliness at the Dispatch Box, producing an effort well worthy of him that rescued to some degree the speech of the hon. Member for Peckham (Ms Harman). His speech was, however, a striking parallel with that of the hon. Lady's in that it contained no policies whatever of any decent substance. The only reference to beef was a sly one directed at the Government Benches--there was no beef in any policies that he might have proposed.
It was noticeable that, for most of his speech, the hon. Member for Fife, Central was supported solely on the Back Benches by the hon. Member for Rochdale (Ms Lynne) and his hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who was elected by thousands of Conservative votes. We find ourselves with a select audience, which is a shame because the speeches, especially those of Conservative Members, have been extremely good. It is of some disappointment that they have not been heard by a wider audience, which might have been so had the Opposition sought to challenge any of the orders and put anything to the test of a vote. However, they chose not to do so.
I shall do my best to answer the debate rather than follow the hon. Member for Fife, Central. However, I should like to thank him in passing for his comments on his Benefits Agency manager. It was kind and gracious of him. I am sure that his comments reflect the appreciation felt by the majority of us of those who work extremely
hard on our behalf. I also thank my hon. Friend the Member for Southport (Mr. Banks) for expressing his appreciation of his citizens advice bureau manager.
Mr. McLeish:
I hope that the comments will be passed through the ministerial team in the Department.
Mr. Burt:
Yes, of course they will. I am again grateful to the hon. Gentleman.
The Opposition are supporting the measures that, from April, will increase benefit rates and therapeutic earning levels and revise national insurance rates. Opposition Members have in fact opposed all the measures that we have introduced in this Parliament to reform benefits, but the reforms have in some way contributed to allowing us the space for these upratings. I pay tribute to my right hon. Friend the Secretary of State. The number of comments made by my hon. Friends in appreciation of his handling of social security was noticeable, and I echo them.
My right hon. Friend reminded us that, in the 50 years since Beveridge, social security growth was 5 per cent. more than inflation. Thanks to our reforms, we have stabilised growth in social security to containable levels, even though there are pressures because the elderly are living longer and because of our support for the sick and disabled. That could be achieved only by the measures that we have taken in the past four Budgets. There now seems to be a consensus over the size of the budget, but it is disappointing that we had to get there on our own.
Consensus does not sit easily with some of the views that have been expressed tonight. There was a dispute across the Dispatch Box between my right hon. Friend the Secretary of State and the hon. Member for Peckham about the figures for growth in social security over the past few years. The figures are incontrovertible. I risk going over old ground, but the hon. Lady cannot make out that the majority of the increase in benefit expenditure has been caused by unemployment. The majority of the expenditure increases in the past few years have been related to the elderly and the long-term sick and disabled. Labour Members may see some form of black hole and think that there is an easy alternative way to look after our long-term sick and disabled and the elderly, but they never mention it.
The number of people in employment has increased from 24.4 million in 1979 to 25.8 million in the summer of last year. The figure is going higher still. The number of households with no one in work is a genuine issue. There has been an increase in the number of such households because of changes in the structure of society. There has been an increase in the number of single-adult households, including lone parents. Such households are less likely to include an earner than those with more adults.
The proportion of no-earner households in the United Kingdom is not radically different from that elsewhere--in Germany the figure is 15.5 per cent.; in France it is 16.5 per cent.; in Italy it is 17.2 per cent.; and in Spain it is 20.1 per cent. The growth in no-earner households is not just a United Kingdom phenomenon. The important question is what to do. Conservative Members are entitled to draw attention to the fact that the answers come from this side. All we get from the Opposition is criticism, but no decent answers to the difficult questions.
The hon. Member for Peckham ducked the major challenge offered by my right hon. Friend the Secretary of State on the minimum wage. He pointed out the gross inconsistency in supporting a policy that subsidises employment to get people back to work but not recognising the impact on an employer of increasing labour costs through the minimum wage. The hon. Lady cannot have it both ways. If bringing an employer's labour costs down through subsidy improves his perception of taking on a worker, putting his labour costs up through the minimum wage must also impact on his perception.
That is not even a fair balance. The numbers to be thrown out of work by Labour's minimum wage far outweigh the amount of money that would be recycled through the scheme of taxing someone else £3 billion to put others back to work in the spaces that are left because of the sackings caused by the minimum wage. The policy is barmy. My right hon. Friend offered the hon. Lady the chance to explain the inconsistency, but she did not.
The hon. Lady's speech was also instructive on another important issue. She advanced her previous argument on pensions. My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) made an exceptional contribution on pensions--a subject that he understands very well. He referred to the progress that has been made. I thought that important progress was made when the hon. Lady was dealing with Labour's plans for early retirement.
My right hon. Friend the Secretary of State smoked out some time ago the fact that if, under Labour's proposals, someone were to retire at the earliest possible age at no extra cost to the taxpayer, they would luxuriate in a pension for life £20 a week lower than the pension that they could expect if they retired at the earliest possible time under the current system, as most people do. That led to the question whether income-related benefits would be available to supplement a low pension.
The hon. Lady skated round that issue at the time, but she advanced her argument today when she said that there would be no extra cost to the system. Therefore, a person in that situation would not be eligible for income support. That is fascinating. Would people who are approaching retirement have to sign a pledge with the hon. Lady to say that they were willing to accept £20 less a week and that, if they fell on hard times, they would not seek access to the social security system in the future? Would that be a condition of taking early retirement? Is that what the hon. Lady means? Would people have to get permission from her to claim an early pension and then avoid falling on hard times, because she would not allow them access to income support? That was the clear implication of her remarks today.
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