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Mr. Browne: Will the hon. Gentleman explain where the increased child care disregard provisions, which my right hon. Friend the Secretary of State mentioned, and the new deal for lone parents, which was piloted from yesterday--in Scotland it was piloted from today and I would have been there to see it but for this debate--fit in with the concept of a Treasury-constructed straitjacket? How are those measures Treasury driven?
Mr. Letwin: That is a remarkable intervention because, in a most remarkable way, it allows me to illustrate the very point that I am trying to raise. It is perfectly true that certain cosmetic measures have been implemented. [Interruption.] It is interesting that Labour Members should laugh, because the hon. Member whom I should like to quote in that regard is that well-known proponent of harsh Tory policies and that well-known inhabitant of the Conservative Benches, the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who gave a passionate, well-informed and devastating analysis of the
other changes that have been proposed in respect of lone parents, pointing out that they will be virtually without effect. By contrast, it has been stated on the record repeatedly, not only by the Secretary of State but by the Prime Minister and others, that this change is dangerous because it creates a considerable diminution in the immediate income of lone parents.
As I say, Conservative Members have no objection to that change because we believe that it creates an equilibrium, but the fact is that the costs saved by this measure are out of all proportion to the costs incurred by the other measures and the costs imposed on the lone parent are out of all proportion to the costs saved by the lone parent through the other measures.
Mr. Browne:
Will the hon. Gentleman please explain for my guidance, if for that of no other hon. Member, whether his calculations are based on the calculations of his hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) or on the calculations available to us all in Library research document No. 93 of 1997, which appears to have different and substantially lower figures than those quoted by his hon. Friend? Most important, figures that have been independently calculated and have been provided by the Library suggest that there is parity between one of the provisions about which I asked the hon. Gentleman and the total savings from this measure.
Mr. Letwin:
The contrast is between the effect of clause 68 in its first year and its cumulative effect over many years. The cumulative effect over many years will be substantial because increasing numbers of people who would have entered benefit in a particular mode will have entered it in another. Over the years, it is Conservative Members' firm belief, and, we understand, it was the firm belief of Ministers and officials in the previous Government, including those officials who were no doubt responsible for drafting the Bill, that the measure's cumulative effect will far outweigh the sums that it is claimed will be saved by the other measures to which the hon. Gentleman referred.
Mr. Browne:
With respect, will the hon. Gentleman deal with the simple point? Is he making the point based on the figures that the hon. Member for Chingford and Woodford Green used, or is he using the apparently independent figures that are available from the Library?
Mr. Letwin:
This may be becoming tedious to other hon. Members, but I shall reply finally to the point. Yes, I am basing my remarks on the cumulative effect as mentioned by my hon. Friend the Member for Chingford and Woodford Green and by others, including my hon. Friend the Member for Beckenham (Mr. Merchant) who, for a long time, was parliamentary private secretary to the previous Secretary of State for Social Security and has great expertise in the matter. There is no doubt that this change will have a large cumulative effect and I have no doubt that the matter will be further amplified when the Under-Secretary replies to the debate.
Mr. Phil Hope (Corby):
I congratulate my hon. Friends on making some well-informed and constructive contributions to and interventions in the debate. That is in stark contrast to Conservative Members, many of whom are no longer in the Chamber, who seemed to display their profound ignorance of the social security system. They still seem to be living with a world view based on 18 years of economic and social failure rather than seeing this as an opportunity for moving forward.
I have no doubt that the postbag and surgery case load of every hon. Member are dominated by the concerns of hundreds of individuals and their families who rely on the social security system for their financial survival and security. I am sure that each and every one of us can tell some horrific tales of individuals who feel and who have been let down by a system that is supposed to provide them with the financial support that they so often desperately need, yet all too often fail to get.
It is a system that touches the lives of millions of people. In Northamptonshire alone, where my constituency of Corby is situated, it has been estimated that 100,000 people are dependent on means-tested benefit. If all those who were eligible were to claim their benefits, that figure would rise to nearly 124,000 people. That is one in five of the Northamptonshire population. Therefore, 20 per cent. of the people of Northamptonshire are on incomes so low that they qualify for means-tested benefits to prevent them from living below the official poverty line. A significant proportion of the population are failing to claim the benefits to which they are entitled. That is the reality of 18 years of Conservative government and the legacy that the Labour Government have inherited. It is, therefore, no surprise that the Government's key priority is to introduce a Bill to reform the welfare state.
We must pledge ourselves to providing a better service for people who claim or who want to claim benefits. Rebuilding public support for that system is just as vital. Nationally, we spend £93 billion on the social security system through its five main agencies, yet, in direct contrast to public attitudes to the national health service, instead of celebrating that as evidence of a caring community in which no individual is left to live in poverty, the system that was put in place to meet people's needs is now viewed by claimants, staff and other agencies affected by it as over-complex, inefficient and manifestly unfair.
It is nonsense that people who use the social security system have to provide the same information about themselves several times over to different parts of the same organisation. Those of us who have a lot to do with social security departments know that much of the information technology used to administer benefits is outdated and clearly needs replacing. That repetition of information using outdated technology is a terrible waste of time and effort for service users and departments, and for taxpayers, as it wastes significant amounts of money.
Without doubt, there is a consensus that the task of modernising the welfare state and rebuilding public support for it requires a programme of reform to make the
system modern, efficient and fair. If we change public attitudes so that people respect and value the social security system, we will remove the undeserved stigma that is all too readily attached to people who rely on that system, and we will help to rebuild the morale and enthusiasm of the staff who work in it.
I hope and believe that the Social Security Bill will be the first step in a programme of reform to rebuild the public's faith and confidence in the system. We can take it as read that the system is over-complex and unduly bureaucratic. We spend almost £4 billion just to administer it. The process of decision making and appeals is difficult to understand not only for those receiving benefits but for the staff who administer the benefits and many of the organisations that give advice.
We have heard already that there are six different types of decision-making officers at the first tier, and that the variable quality of decision making by those officers is all too evident. The chief adjudication officer's statistics show that 68 per cent. of benefit decisions, such as those about family credit, involve possible payment errors.
There are five separate tribunal jurisdictions for appeals, including the social security appeal tribunals, the medical appeal tribunals, the disability appeal tribunals and the child support appeal tribunals. The result of this complex and unwieldy system is that people who appeal against a decision must wait an average of six months, and sometimes up to two years, before their appeal is heard.
Those problems are widely recognised in Government studies and by independent observers. They contribute directly to the underclaiming of benefits by people who are entitled to them. Northamptonshire county council's policy unit said:
It is appropriate for me to take this opportunity to recognise the excellent work of welfare rights centres and citizens advice bureaux, which play a vital role in assisting individuals and families to make use of the existing, albeit inefficient, social security system. Last week, I attended the annual general meeting of the welfare rights advisory service in Corby. I am looking forward to speaking at the open day of the Corby citizens advice bureau in September. Those services are vital to people in my constituency on low incomes, who struggle to grapple with the complexities of the current social security system.
In one year in Northamptonshire alone, the welfare rights centres and citizens advice bureaux dealt with 52,000 inquiries about benefits. Local research has shown that advice provision is one of the most effective ways of increasing benefit take-up rates, and consequently is an important way of tackling poverty and maintaining incomes for those on low incomes who are entitled to social security support. The Corby and Northampton welfare rights offices, which dealt with 27,000 of those inquiries, last year generated more than £5.3 million of annual income for local people. On behalf of the people who have directly benefited from their help and advice, I pay a heartfelt tribute to those agencies for that tremendous achievement.
We all want a system that does not require people to seek advice from welfare rights centres or citizens advice bureaux about obtaining the benefits to which they are rightly entitled, or to plough their way through the forms and the maze of the appeals system. I believe that the significant measures in the Bill will reduce the complexity, inefficiency and unfairness in the present system. I hope that the Bill will ensure that people receive the benefits to which they are entitled, at the right level and with minimum bureaucracy and delay.
The Bill will helpfully pave the way for reforming the system around the needs of claimants, so that people need give information about themselves only once. We should also make better use of information technology so that the system is efficient. The Bill will simplify the way in which decisions are made, and will streamline the appeals procedure. That will give a better service to those on benefit and to those wishing to claim, and will crucially cut waiting times. It will reduce the number of decision makers at the first tier from six to one. It will replace the many different tribunal jurisdictions with a single independent body. It will remove the rigid requirement for all cases to be heard by a three-person tribunal, and will enable the president to have the right expert for different appeals and for different claimants. It will allow tribunals to correct their own mistakes quickly and readily, rather than using the unwieldy system above the tribunal procedure. Those measures will substantially cut the waiting times that people currently have to endure. More important, the Bill will enable the public to be assured that the system of appeals is independent and impartial.
I have focused primarily on measures in the Bill that affect procedures within the social security system, but I should like to draw attention to its impact on national insurance contributions, about which we have had only a small discussion. The Conservative Administration failed completely to ensure that there was an effective system for compliance with national insurance contributions. A minority of employers do not fulfil their responsibilities on national insurance contributions. That is unfair to employees, who lose out on their rights to benefits, and it is unfair to other employers, such as those in my constituency who pay their fair share.
I am pleased that the Bill includes a number of measures on national insurance contributions to make the system fairer. It closes loopholes to limit avoidance, by allowing national insurance contributions to be charged on vouchers used by employers to pay their employees.
The Bill will increase compliance by introducing a new system of cash fines for minor non-compliance, and, I hope, new criminal penalties for serious cases of deliberate evasion and fraud. It will also cut red tape. The Conservative party promised that, but never delivered it; we promised it, and, like so many of our other promises, that promise has been implemented. It will be easier for employers to keep their fair share.
"The complexity of the system makes it difficult to understand and difficult to access which leads to a significant proportion of benefits going unclaimed every year."
For every person who does not claim benefit, there is another who is possibly living below the poverty line and below the standards that we expect as we move into the 21st century.
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