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13 Jul 1998 : Column 79

Department of Social Security

Mr. Deputy Speaker (Mr. Michael Lord): I have to tell the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

7.13 pm

Mr. Iain Duncan Smith (Chingford and Woodford Green): I beg to move,

Fourteen months into this Parliament, I and all my colleagues believe that the time is ripe for a review of the progress made by the Government and their Ministers in the Department of Social Security. [Interruption.] I knew that the Secretary of State would agree with me; I always set out to be helpful.

Today, we shall simply judge the Government, and the Secretary of State and her Ministers, by their own rhetoric and targets; we shall not invent any for them, but simply go by the ones that they set themselves. I and my colleagues want to see what has become of the Prime Minister's promise that Labour would be

that it would

    "design a modern welfare state based on rights and duties going together",

and that, ultimately, it would reduce dependency and spending. Those were the promises. Have the Labour Government achieved them, or have they achieved instead incompetence and political inertia? Those are the two charges against them.

Perhaps first we may deal with the charge of incompetence. I shall list some examples of the escalating levels of incompetence at the DSS which have occurred during the past 14 months. Perhaps we could start with the winter fuel payment scheme, which sums up that charge almost as well as any other. The Government spent nearly £1.7 million on an advertising campaign--some £850,000 on the television advertisement alone.

Mr. Phil Hope (Corby): Will the hon. Gentleman give way?

Mr. Duncan Smith: In a minute.

Yet pensioners were to receive those payments automatically, so the campaign was unnecessary. With pictures of cheques dropping through letter-boxes, the advertising campaign only made it worse. Pensioners were encouraged to believe, and actually believed--when I went around talking to them, many that I met certainly did--that they would receive those payments without having to do anything about it.

Mr. Hope rose--

Mr. Duncan Smith: I shall give way in a minute.

However, the majority of pensioners collected theirs through the post office, and the advertisement took no account of that reality. Of those lucky enough to receive the cheques, more than 40,000 were sent cheques that

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bounced because they were out of date. Then, more than 9,000 of those cheques were sent to those who did not even qualify--more than 1,000 of whom were in local authority residential care.

The pressure that the Government put on officials to get things done in a hurry was largely responsible for that problem. Officials that I have met in many of the Benefits Agency offices that I have visited around the country have complained and commented adversely about that.

In May, it was revealed that as many as 100,000 cheques were still to be collected at post offices.

Mr. Kevin Hughes (Doncaster, North): How many pensioners?

Mr. Duncan Smith: I said 100,000; perhaps the hon. Gentleman's ears need clearing out.

Many pensioners had probably been misled by the advertisements and were still waiting for the cheques to drop through the letter-box. They continued to wait.

Mr. David Hanson (Delyn): Will the hon. Gentleman give way?

Mr. Duncan Smith: In a moment.

There are also serious question marks over the selection of the advertising agency. Although the agency had been used by the DSS previously, when my colleagues were in government, the difference is that the present Government must have been aware at the time when they placed the campaign that the Labour party had an account with that agency. Why not, then, prevent speculation about why they placed that contract, by going out to competitive tender? They did no such thing. In fact, most interesting of all, they decided to place it without such a tendering process; I believe that it leaves them vulnerable to another charge of cronyism. It links very nicely with what has been going on over the weekend, and a certain amount of "cronygate".

Mr. Hanson: Instead of nit-picking and carping about some of the issues, will the hon. Gentleman tell the House straight: does he support the giving of that fuel grant in the first place? That is what pensioners in my constituency are interested in: the fuel grant received on their doorsteps, in their wage packets, in their bills, paying for those winter heating bills.

Mr. Duncan Smith: That is, of course, if they received them and were able to cash them. I must say to the hon. Gentleman--

Mr. Hanson: Does the hon. Gentleman support winter payments?

Mr. Duncan Smith: I am just about to answer that. In due course, I shall make some very serious charges about this wasted year, when policy has gone missing. In reply to the question of whether we support this, my simple answer is that I would support anything that improves and increases--[Interruption.] Wait a minute. I would support anything that improves and increases the income of pensioners, provided that the Government who do so can afford it. The question remains, can the Government now afford what they are promising

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pensioners? I shall come to that in a second. I believe that the hon. Gentleman will have less to say on that in due course.

I have left the subject of cronyism and the poor way in which the Government have handled the process of paying pensioners winter fuel payments, but there are manyother examples of incompetence. [Interruption.] If the Secretary of State would keep quiet for a second, she might learn some things about how matters have been mishandled throughout the past 14 months by her.

For example, in December 1997, the Secretary of State--the same one who seems intent on making comments from a sedentary position--was the first for more than 20 years not to make the uprating statement in the Chamber, or to speak in the uprating debate. That debate is possibly the single most important thing that happens to the Social Security Department in the year--and she did not come to the House. She sent someone else--two different people, in fact. They were the hon. Member for Manchester, Withington (Mr. Bradley), a junior Minister; and the Minister of State.

In September, the DSS head of information, Steve Reardon, was axed by the same Secretary of State. Apparently, the Secretary of State removed him because he could not read her mind. At first, she seemed to be for a Cabinet pay rise. Then, when the Chancellor expressed the opinion that he was not for a Cabinet pay rise, it appears that the Secretary of State was not for a Cabinet pay rise. Mr. Reardon, a long-standing civil servant held in high regard, apparently could not cope with the pace of Government U-turns. He could check what they were doing, he could follow the turn, but not that quickly, when it happened almost the same day.

However, firing the messenger is not the answer, and spin is not the solution. In November and December, a number of leaks revealed that the Government intended to cut disability benefit and introduce a tax on child benefit. Those leaks continued, with plenty of opportunity for the Secretary of State or her Ministers to say that they were rubbish.

In the new year, the Secretary of State caused unnecessary concern by again floating the idea of an affluence test--I believe that that was when the Prime Minister was in Japan--including the proposal to means-test the basic state pension. Originally the Government were quite keen on the idea of an affluence test but, suddenly, they thought that it would be unpopular, so the Secretary of State was instructed by Downing street to issue a denial. That served to highlight yet again the confusion at the heart of Government.

Mr. Hope: There is nothing to do with social security contributions in that speech. Does the hon. Gentleman's party support the winter fuel payments that this Government introduced? Can he confirm that he would support the increase in child benefit? Those are two substantial welfare reform measures that this Government have introduced in this Parliament.

Mr. Duncan Smith: I see that the Whips' messengers are out in force. I have already answered that question. If the hon. Gentleman was not listening, that is his problem. He should try to pay attention.

I shall press on. In February and March, the Government were forced into a series of face-saving concessions to try to salvage the benefit integrity project.

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The handling of that project provoked yet another rebuke from Downing street and also from Lord Ashley, the chairman of the all-party disablement group.

Then, the Secretary of State claimed with authority that there were women earning £1 million a year who claimed as much as £18,000 a week in maternity benefits. When journalists challenged that, the DSS had to explain the use of that figure. The Department replied:

The Secretary of State might like to carve that on her Dispatch Box. Perhaps it is a motto that she will take away with her. That is an absurd counter-statement from her own Department, when the Secretary of State uses figures that do not add up.

Of course, there was the Secretary of State's mishandling of the reform of lone parent benefits. Few of us will ever forget the Secretary of State cutting a lonely figure on the Front Bench in December, with no Cabinet colleague to give her support and her own Back Benchers angry about her change of heart on a policy that she had condemned before, and adopted after, the election.

The reason was simply costs. The Chancellor refused to budge. Not once in the run-up to that debate did the Secretary of State or the Prime Minister speak about the principle of the change. They talked about the cost and the need to stay within the budgets that they had inherited--never the principle.

In January, the Government started their road shows. The public were vetted, and only those who were members of the Labour party were allowed to attend. When Labour party members became too troublesome, only those who were good members of the Labour party could come to the road shows. Eventually, even the Secretary of State was not allowed to attend. It was only at the road shows that the Government started to talk tentatively about the principle. Perhaps the Secretary of State would like to give her opinion and tell us whether she supports principle or cost-saving.

So beleaguered had the Secretary of State become that, in March, she broke off an interview with the BBC's "Women's Hour", leaving the studio when an interviewer apparently asked an unfriendly question.

Those examples of incompetence bring us to the serious charge of failure of policy. If the Under-Secretary, the hon. Member for Withington, will listen carefully, he will understand how that leads directly to the failure of his Department.

When the Government were elected, the Prime Minister appointed the Minister of State to his new job, with the all-embracing title of Minister for Welfare Reform. His task was to think the unthinkable. Clearly, the Prime Minister wanted to make people believe that he was serious about a radical reform of social security. We all thought, when he appointed the Minister of State, the man with such a track record, that that might have been his intent. I expect the Minister thought so too.

By late September, the Prime Minister had in his possession the Minister of State's considered views on reform--a Green Paper. It was just such a Green Paper that had been promised as a matter of urgency back in May, yet, far from seeing the light of day, that document was kicked around between the Chancellor and thePrime Minister and later even the Secretary of State.

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The Government had expressed the intention that it would be published before Christmas. Nick Timmins wrote in the Financial Times:

    "Frank Field, the Minister for Welfare Reform had a publication date of December 7th pencilled in for his green paper."

He had clearly been carefully briefed.

However, the Chancellor ensured that the Green Paper did not come out until after he had delivered the Budget, where he signalled a very different set of changes from those outlined by the Minister of State in past publications. The result was an emasculated Green Paper in March, which a number of influential commentators dismissed.

In the Financial Times of 27 March, Nick Timmins, whom most hon. Members respect as a commentator, stated:

The Sunday Times of 29 March described that as "a missed opportunity" and Melanie Phillips, one of the people whom the Government like to brief, wrote in The Observer:

    "Presenting Frank Field's Green Paper on welfare reform after the budget is back to front politics. . . the reason for the disorder is the lack of a coherent approach in Government."

That is the real issue--the lack of a serious and coherent approach, with everyone taking a chunk of welfare reform.

A classic example of lack of coherence in the reform process is reflected in the working families tax credit package. People will be paid benefits--credits--even if they are earning more than £30,000 a year. However, the Secretary of State seems to be obsessed by the idea of middle-class dependency, and she will affluence-test the same people to whom she plans to pay that credit--a case of absurdity and confusion.

The saddest part of the saga is the way in which the Prime Minister has walked away from his Minister of State and let the Chancellor continue to concentrate power in the Treasury.

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