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Mr. David Rendel (Newbury): The tide has turned.
Mr. Burgon: The tide has gone out, I think.
Just up the road in the Great Preston workhouse is the birthplace of Herbert Smith, an interesting character. He rose to become general secretary of the National Union of Mineworkers, and with its president--the mercurialA. J. Cook--led the miners through the stormy 1920s. I had to smile when I learned of Herbert Smith's negotiating technique, which could be commended to any Europhobes on the Opposition Benches. Smith used to listen to his opponents, take out his false teeth, give them a good wipe, put them back and say in his Yorkshire accent, "Nowt doing." Such an approach would take Brussels by storm.
Mr. Piers Merchant (Beckenham):
I am pleased to follow the maiden speech of the hon. Member for Elmet (Mr. Burgon), who spoke ably and with good humour. I look forward to hearing many of his speeches in future to this House. He was generous in the tribute he paid to his predecessor, Spencer Batiste, with whom I served for many years on the Government Benches. It is a shame that he is not here now, but the hon. Gentleman will no doubt prove to be an able successor.
The hon. Member spared us a tourist's guide to his constituency, but expressed his interest and his constituency's history in sport. Were I to have any ability in that area--which I do not--I would be attracted to his constituency. I am sure that others will be.
The hon. Member for Elmet made it clear that his constituency was not pronounced with an "H". I thought that that was appropriate in this debate because of the Secretary of State's apparent obsession with hats in her speech, when she seemed to be justifying the need for a change in the appeals process by referring to the number of hats she claimed were worn by various appeal tribunals sitting in one building. I searched the Bill in vain to find any reference to hats. Nevertheless, I welcome many of the Bill's proposals.
This is an impressive Bill, and I pay tribute the Secretary of State. The Bill contains many proposals and principles which I will find it easy to support. I did not think that she had it in her--and nor did she, in view of her previous remarks about many of the proposals contained in the Bill. I welcome her late conversion to the principles in the Bill, which I shall support as it progresses through the House.
The Bill has a strange and remarkable familiarity, which I put down to the fact that most of its proposals were made by the previous Government, and would no
doubt have become law in the fulness of time. One could be forgiven for imagining that the Secretary of State had reached up to a shelf in her Department, found a Tory Bill, dusted it down, altered a few clauses, and brought it to the House as one of her own.
My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) suggested that the Bill might be termed the "Peter Lilley memorial Bill", and there is a good argument for doing so. But he also referred to the man who liked the razor so much, he bought the company--Victor Kiam. Perhaps the Bill should be termed the "Victor Kiam memorial Bill", because the thinking behind it is similar. The Secretary of State has taken a Tory measure and dressed it up in new Labour rhetoric. I thought that she did so without much success, although she appears to have convinced many Government Back Benchers.
Perhaps I am being uncharitable towards the Secretary of State. I welcome her conversion, and hope that there will be more as she proceeds with her new responsibilities. She will find that the realities of her job increasingly draw her towards the same interpretations and policies adopted by the previous Government. If she continues in that direction, I for one will welcome her if, in the fulness of time, she crosses the Floor to join us.
This is a surprisingly tough Bill. Its purpose is to save money and to crack down on fraud, abuse and inefficiency. It will do so through a series of measures, including the institution of new fraud offences and penalties; the withdrawal and suspension of benefits in certain circumstances; compulsory medicals; the reduction from three months to one month for backdated claims; the introduction of computer decision making; cross-referencing and the transfer of information from one Department to another; and, last but by no means least, reductions in payments to single parents.
The streamlining of the appeals process is also welcome and it too is designed to save money and to make the system work more efficiently. According to the explanatory and financial memorandum, total savings will be £200 million a year, but if one includes the build-up of savings in subsequent years, as well as greater uptake, I suspect that those savings will be considerably higher, and could possibly approach £500 million a year.
The Bill is designed to save money and to cut the social security bill. It builds on the foundations laid by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) when he was Secretary of State for Social Security. He laid great emphasis on the need to reform the system and to save money--a task that he performed with great ability. In the past three years, the money saved by anti-fraud and related measures has grown considerably, from £889 million to £1.4 billion, and in the last financial year a saving of £1.8 billion was recorded.
Those savings were achieved as a result of measures designed to combat fraud and to achieve greater efficiency. My right hon. Friend made great virtue of the right argument that every pound wasted in inefficiency or paid out to a fraudulent claimant was a pound lost to a deserving case. That is why the Conservative Government laid great stress on the need to be tough on fraud and to cut it out. Our associated policy was designed to ensure
that those who rightfully applied to receive benefit could have their identities checked so that payments could be accurately made.
Kali Mountford (Colne Valley):
No one in the House would want to see fraudulent claims for benefit, but does the hon. Gentleman also agree that, if employers do not pay appropriate contributions on behalf of their employees, the cost to the state and to the individual who makes a claim are exceedingly grave? I represented people who thought that they were entitled to benefits but who were not eligible because of such non-payments. Does the hon. Gentleman agree that that is a new avenue of fraud which should be dealt with?
Mr. Merchant:
It is not a new avenue, because the previous Government were also concerned when national insurance contributions were not properly paid. Because the then system enabled employers to make use of avoidance measures, my right hon. Friend the then Secretary of State and my right hon. and learned Friend the then Chancellor introduced a number of measures to combat them. I greatly welcome the fact that their subsequent related proposals have been included in the Bill. Such anti-avoidance measures are part of the formula, which must be drawn up correctly so that the system can work with the greatest efficiency.
I congratulate the hon. Member for Colne Valley (Kali Mountford) on making progress, in the sense that she accepts that fraudulent claims have been made in the past. It may seem strange to her that I should say that, but when I sat on the Government Benches I remember how the then Opposition used to suggest that there was no fraud in the system. Just a few years ago, when the the Conservative Government introduced proposals to root it out, the Opposition used to argue that there was no problem, and that there was no need to take action.
I am glad that the majority of those in the Labour Government now accept that fraud exists in the system and that it is necessary to exert continuous pressure on the administrative processes and to check up on claimants to ensure that they are rightfully entitled. If we do not remove fraud from the system, a huge black hole will remain, down which large sums of money will be lost--money which cannot be directed to those entitled to it.
It is pleasing to see a new consensus emerging on welfare policy--a consensus that recognises that fraud exists and needs to be stopped; that inefficiencies in the system need to be rooted out and processes improved; and that welfare should exist as a hand-up rather than a hand-out. The Secretary of State used that phrase, which is identical to that used by my right hon. Friend the Member for Hitchin and Harpenden when he was Secretary of State.
Ms Stuart:
Does the hon. Gentleman accept that there is a difference between fraudulent claimants and fraud committed by employers? We particularly objected to the practice of employers who defrauded their employees by failing to make the appropriate national insurance contributions. I would appreciate it if he could recognise that difference.
Mr. Merchant:
Fraud is fraud however it is carried out. I condemn it equally in either circumstance that the
The previous Government did a great deal in their drive against fraud--witness the huge savings in the last financial year of £1.8 billion. The fact that the new Government have agreed to go further down the same road and to take on board the policies that were rightly applied by the previous Government is greatly welcome. That is why I support the Bill and the principles behind it, even though in some circumstances it will be necessary to look closely at the details.
I am concerned, for example, about the reduction from three months to one month for backdated claims. I thought that the Secretary of State's justification for that was somewhat glib, and she avoided answering the detailed questions to which she was subjected. I suspect that there will be individual cases of potential great hardship that could be caused by a rigid interpretation of clause 70. When we have an opportunity to consider it in more detail, I hope we can assured that sufficient checks and balances will exist to prevent undue hardship. I will strongly support any measure to prevent wrongful claims, but I would be wary should the Bill act against those who, through no fault of their own, may find themselves in difficult circumstances.
The streamlining of the appeals process will speed up the system, make it more efficient and benefit the would-be claimant and the taxpayer. I welcome that, but I would be concerned were the system to become so rigid, bureaucratic and swift in its decision taking that it prevented a person from making a genuine and persuasive appeal against a wrong decision in the first place. I support other aspects of the suggested reforms in principle, but it will be necessary to consider them in detail to prevent any injustice.
Finally, I turn to one other element of the Bill that I would not include in the general efficiency and anti-fraud section; it has been tacked on. It is clause 68, which refers to lone parents. It is an extraordinary clause, not because it is unjustified--it is not--but because it is being proposed by the Labour Government. The Secretary of State is on record as being opposed to precisely what she is now proposing. She has undergone a dramatic conversion--perhaps the most dramatic of all--and very quickly.
The right hon. Lady is taking her right hon. Friend the Prime Minister with her. As early as January, he spelled out, in crystal-clear language, that a future Labour Government would not adopt the proposal, which was then a Conservative proposal. The crystal-clear language he used consisted of one word--"No." He said he would not introduce the measure, yet now it is being introduced.
I welcome the proposal, because it equalises the position of married and single parents, and that equalisation is good in theory and practice. However, after all the opposition generated by Labour Members, I am surprised that they are now proposing it as one of their policies. That is another conversion--a welcome one, and a surprising one.
The Labour party has learnt that Conservative policy in this area was correct, and that Labour's original policy was wrong. I do not want to rub the Government's noses
in their conversion, but it should be drawn to the attention of the House and of their Back Benchers, who, only a few months ago, followed their cheerleaders in condemning the Conservative Government's proposals.
For all those reasons, I give the Bill a mark of about eight out of 10. I look forward to watching, and perhaps even participating in, its progress through the House. I also look forward to future social security measures, and to seeing whether they score as highly in my estimation as this one.
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