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Mr. Malcolm Wicks (Croydon, North): The Government whose social security policy is under scrutiny have published a strategy paper on welfare reform. Today, they published a paper on benefit fraud. Last week, they published a major document on child support. Will the shadow Secretary of State at some stage in his speech treat us to his views on substance, and will he get out of the gutter?

Mr. Duncan Smith: I have just dealt with substance. Labour Members do not like the fact that there is very little of substance in anything that the Government have yet produced. On the second point, they should not leave so much of what they think in the gutter.

Mr. Wicks: Let us deal with two matters of substance. We all agree, I hope, on the reform of child support. The Government propose a simpler formula and a maintenance

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disregard to give mothers some of the child maintenance. Does the shadow Secretary of State support those two major measures for reform?

Mr. Duncan Smith: The hon. Gentleman knows very well that, when the Secretary of State came to the House with her proposals for Child Support Agency reforms, I said that, as far as we could make them work, we would support any constructive reforms. I shall deal with that later, if the hon. Gentleman will wait. It is no good his talking about the gutter. Are The Observer, The Sunday Times and the Financial Times all in the gutter? Are all those commentators, who spend their lives considering social security matters, suddenly in the gutter because they disagree with the Government? That does the hon. Gentleman no credit.

Mr. Hope rose--

Mr. Duncan Smith: No, I have given way to the hon. Gentleman already. I shall make progress.

Beyond the Green Paper, perhaps the single most important issue facing the Government is the reform of pensions. What Melanie Phillips described as incoherence is well illustrated by the pensions policy review process. The Government are boxed in by their pre-election attacks on the basic pension plus proposals, which were described by The Times as the


that is, the 1997 general election campaign. The Government's commitment to the state earnings-related pension scheme conflicts with the Minister of State's views, and has added to the confusion over pension reform.

The Chancellor contributed to the confusion by taxing pension funds early on and devaluing the SERPS rebate by getting rid of advance corporation tax dividend tax credit, raiding £5 billion a year from those funds. That complicated a review of pensions that was already likely to be complicated, and that is, after three consultations and endless leaks, finally to be kicked into the long grass by the Chancellor, perhaps some time in the autumn, even though the Minister, as he knows full well, said that it would be published in the first half of this year.

What is absolutely clear is that this area has been taken over by the Treasury; we know that from the leaks at the weekend about top-up payments. Such announcements always beg more questions than they answer, and it seems ironic that the pensions review is delayed and delayed while the Chancellor leaks his proposals without regard to the process of pension reform. Yet again, the Chancellor is pre-empting another Department of Social Security Green Paper. The two Departments should work together, not against each other.

Mr. Hope: Does the hon. Gentleman realise that there have been more than 2,000 submissions to the pension review from a substantial range of private sector organisations, voluntary organisations and many others? Will he confirm that the number of submissions from Conservative Members is nil?

Mr. Duncan Smith: What is most interesting about the hon. Gentleman's comment is that he has obviously not studied how many submissions came in. There were

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2,000 to the first consultation but, by the time of the third, the number had dropped as low as about 10--people were sick and tired of constantly being asked to make policy for the Government. The Government were supposed to make proposals, but they have come forward with none. The hon. Gentleman should read those submissions, because they make fascinating reading--although his intervention was obviously quite facile.

No policy had been more hyped than the Secretary of State's pet project, the new deal for lone parents.

The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman): Hear, hear.

Mr. Duncan Smith: From the start, the figures showed that the vast majority of lone parents did not want to take part, with 75 per cent. not answering the first letter of invitation to interview and a return to work figure that oscillates, at best, between 5 and 7 per cent.

The right hon. Lady said, "Hear, hear," when I mentioned her pet project, but if she had spent a tenth of the time considering pensions and supporting the Minister for Welfare Reform, we might not have this problem. She has avoided the most serious area altogether, because she feels uncomfortable with it. If she had not been a single-issue merchant, and had got on with running the Department, we would not have the problem on pensions and we may not have had the problem on lone parents.

Mr. John Heppell (Nottingham, East): Will the hon. Gentleman give way?

Mr. Duncan Smith: No, I want to make progress.

Before any understanding of the figures could be gained, the Secretary of State leaped up and claimed success in September last year, a full two and a half months after the project got under way--wow! She claimed a figure of 20 per cent.; 5 per cent., the media said. The media were right. Furthermore, a large number of the 5 per cent. who returned to work would have done so any way, and the Secretary of State never gave us a breakdown for that figure.

That did not stop the Secretary of State continuing to issue press release after press release claiming success and credit when none was apparent. She has told us how much she is spending on the lone parent initiative, but, remember, she said, "Spend to save." She said that the initiative would save money by getting people into work. I have two questions for her, and perhaps she will answer right now: how much, exactly, will it save, and how many jobs will it create? I shall give way if she wants to give me the answers. No, she does not.

Mr. Steve Webb (Northavon): The hon. Gentleman has criticised the poor response rate to the new deal for lone parents. Is he aware that, when the Conservatives set up their parent plus pilot--of which, I believe, he was a supporter--they budgeted for a lower response rate than has been achieved on the new deal?

Mr. Duncan Smith: The hon. Gentleman raises an interesting point, because, as he will recall, that programme had one simple difference: the Secretary of State adopted the pilot areas, but she failed to take on the qualification programme involved with it. In every area,

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groups were divided into two and would have been checked from start to finish. Instead of having to rely on general figures from the Secretary of State, the hon. Gentleman would have known by now exactly what created the environment for people to go to work, which policy was the most successful and which were not working.

The Secretary of State has none of that in place, because, from the start, this was a political initiative aimed at saying, "Look, we did something." The Government, however, junked the most important part of the programme, which we had already set up. The hon. Gentleman, if he had checked, would have realised that we included the qualification programmes to check how the programme would work.

Let us deal with the cost, which is perhaps the most important issue. The most damning charge against the Government is the rising cost, given that Labour said that it would


The record is quite different. The working families tax credit will cost £420 million in 1999-2000, and £1.35 billion in 2000-01. Now we discover that the Chancellor is busy trying to hide £5 billion a year from the welfare bill by changing the way in which he accounts for the annual cost of the WFTC. By a process of smoke and mirrors, he intends to try to slide that money under the heading of accounting adjustments.

Everyone knows that that is an outrageous attempt to pretend that he has reduced the cost of welfare by £5 billion a year. The Office for National Statistics dismisses his claim that WFTC is part of the income tax system, and the Institute for Fiscal Studies said that it was "massively unhelpful" of the Chancellor to try to do that. He stands exposed not only of increasing the cost, but of trying to hide the core cost of £5 billion a year and pretending that he has saved money. That is a classic example of the Government saying and doing anything to pretend to the public that they are achieving their results.

The cost of the lone parent benefit, disability living allowance linking rule is an extra £10 million a year; changes to national insurance will cost £1.2 billion in 1999-2000 and £1.35 billion in 2000-01; the new child support package will cost £170 million in 1998-99, which will rise to £1.1 billion in 1999-2000 and more than that for 2000-01; and winter fuel payments cost £200 million in 1997-98, and will cost £200 million in 1998-99. The Government have never explained where they are getting the money for all that.


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