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Mr. Duncan Smith: Today, I received a reply to a specific parliamentary question about what action was taking place: the Minister said that there was none.

Mr. Kirkwood: I hope that the Government will consider the issue, which I do not think is in any way party political. I remember the former Secretary of State, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), waving a plastic benefit card in a splendid photo-opportunity, but he would not look quite so splendid if he did it again now, and neither would any current Minister. I hope that something will be done soon.

The access to corporate data schemes--the so-called Accord system--are also in danger of going wrong. I want to try to encourage Ministers to look differently at the project. As I understand it, it is no more or less than a procurement exercise. If we cannot get the three private sector consortiums to come up with a complete redesign that goes right through from the local office to the

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over-arching system, buying a new set of computers and a software application to be used locally will not realise the potential of the experiments.

I am in favour of benchmarking, and a lot can be learned from the private sector, but we must be careful about the proprieties of the contribution of Benefits Agency staff. I hope that I am wrong and that the Accord process is not simply a way of enhancing service delivery at area level. I hope that it will be an intrinsic part of the future development and simplification of the whole benefits programme.

The Green Paper on fraud was published today. My local authority has been struggling in an attempt to work out how it can take part in the so-called benefits verification framework, which would allow it to bear down on council tax and housing benefit fraud. I am told that the estimated cost for the council to introduce the framework is about £110,000, while the Department's subsidy is only £16,000. The council estimates the recurring cost at £250,000 per annum, for which it will receive a maximum of £40,000 from the Department, if it does everything 100 per cent. the way that the Department wants.

I do not know how accurate those figures are, but they are frightening. The scheme is voluntary at the moment, and there is no way in which we can persuade local authorities to get involved if that is the difference between what they are offered and what they estimate that the cost will be. Everyone can see the need for the scheme, although it may be that the Department has gold-plated it. The practice is everything: it is all very well having fancy Green Papers and great plans--we all support them--if cash-strapped local authorities cannot implement them.

There is a lot of work to do, and with a wee bit of good faith we can make some improvements. The Government need to be realistic about how we need to spend to save. The Treasury acknowledges that. We need to put more capital expenditure into the benefits system so that we can simplify it for the long-term benefit of everyone, including the claimants.

8.46 pm

Mr. Malcolm Wicks (Croydon, North): It is a privilege to follow the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)--my hon. Friend--whose chairmanship of the Social Security Select Committee we all appreciate, given the challenging agenda that we have.

I always welcome a debate on social security, although my first instinct was to regret the fact that the official Opposition had not tabled a motion that looked to the future, wanting instead to dwell, in a very partisan way, on the immediate past; but, on reflection, it is usefulto have an opportunity to scrutinise carefully the mismanagement of the Department of Social Security over the past 20 years, because in considering future challenges we need to understand what has gone wrong in the past.

There is a sense in which the time span is even longer, although there is no time to dwell on all the history. It is half a century since the foundation stones of a modern welfare state and a modern social security system were laid. The first key foundation stone was a relationship between work and welfare, which is a modern theme and challenge, and in those days the assumption--of Keynes, Beveridge and many others--was that we could afford a

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decent social security system only if the foundation stone was full employment. Many politicians of all parties accepted that. The roll call includes not only Bevan, Attlee, Beveridge and Keynes, but Conservative leaders such as Harold Macmillan, who, leading Governments in the earlier post-war period, recognised that full employment was important.

The second foundation stone was an ethical one, involving national insurance. It was said that all citizens had a duty and a responsibility to pay contributions into a community chest, and had the right to draw out of that chest in times of need, both when they were old and when they became sick or unemployed.

At a time when we are trying to recreate a sense of honesty and fairness in our systems, it is useful to look back to that age. There was a safety net--national assistance, which is now called income support--based on a means test, but it was meant to be for the few, not the many, to coin a phrase. It has turned out very differently.

I welcome the Opposition's debate. The abandonment of the goal of full employment during the Thatcher era was crucial. Suddenly, the state did not agree with Macmillan and Attlee and other, wiser people. It was no longer the job of the state to maintain full employment. It was thought that the market would try to create full employment, but it was not the Government's job to do so.

The Thatcher Governments sought to set people free from the state, but, with growing poverty and inequality, the paradox was that many more people found themselves totally dependent on the state for their income during the Thatcher and Major years than ever did in the wicked days of social intervention. The number of those dependent on income support doubled during those years, from one in 12 of the population to one in six. The irony is that Thatcherism created the very dependency state from which it had promised to set people free. Perhaps some apology should be made from the Conservative Front Bench.

One of the most appalling statistics I have ever read came in an answer to a parliamentary question late in the previous Parliament. I asked how many babies in Britain were born to parents on income support, or on family credit because their wages were low. The answer was one in three. We all aspire to do well for our children, but the poorest in Britain are the new-born. What kind of society is that?

We need a debate on the mismanagement of social security over recent years. The social security budget is distorted if we spend less on insurance benefits and more on means testing. Some 35 per cent. of social security spending is devoted to means-tested benefits. In 1979-80, the figure was quite high at 16 per cent., but it doubled during the Conservative years, and with that came poverty traps and disincentives that all of us should deplore. Fraud also grew because of the growth of means testing.

Sadly, former Governments lowered their guard against fraud by cutting the number of home visits, which was a cardinal error. Criminals--those who make multiple claims, and landlords who defraud the system of thousands of pounds a week--saw a new market for their operation. It is controversial to say so, but the climate of division and greed that existed during the Thatcher and Major era, when there was, apparently, no such thing as society, led to a culture of dishonesty among some people. If it was okay to defraud the tax system, some thought, it was also okay to defraud the social security system.

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The new Green Paper on benefit fraud is crucial to undoing much bad work. Its emphasis on deterrence, detection and prevention is important. In creating new benefits such as the working families tax credit, which the Select Committee is currently considering, we must try to design fraud out. That is easier said than done, but fraud must be one of the criteria in policy design.

Mr. Webb: The hon. Gentleman mentioned the growth of means testing. Is it not simplistic to say that that means testing is always bad? The working families tax credit is family credit by any other name, although it will be accounted for differently. It is still income-dependent. As well as increasing that category of means testing, the Government will help pensioners to claim more income support, which will mean more spending on means testing. Both those policies are presumably welcome to the hon. Gentleman.

Mr. Wicks: The hon. Gentleman knows that I am anti-means tests by instinct. I am a universalist, and if that is old-fashioned, tough. The working families tax credit is an ingenious new method of targeting without the crudities of a means test. Income taxation is a means test, but the Chancellor is developing a new way, through what some of us know as fiscal welfare, to target the poor, not just benefit the rich, through tax reliefs and allowances.

On issues regarding old age, I welcome attempts to use data matching and local authority records, as the hon. Member for Northavon (Mr. Webb) has suggested, to help people--often in their 70s, 80s or 90s--who should be claiming income support. Like the hon. Gentleman, I have an interest in alternative methods of helping the elderly, and I wonder whether there should be a pension premium--perhaps on a cohort basis so that it could be phased out--for people over 80, who tend to be the poorest among our elders.


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