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9.15 pm

Mr. Phil Hope (Corby): We are debating an Opposition motion which claims that the Government have wasted their first year in office and failed to reform the social security system. I find that an intriguing notion when we compare our inheritance from the previous 18 years of Conservative stewardship of the welfare state with the action that has been taken by the new Government in their first 12 months.

We have inherited a mess from the Tory Government. Millions of children are growing up in poverty. Millions of pensioners are living below the poverty line. There has been rising inequality between the richest and poorest pensioners and, if nothing changes, that will continue. Thousands of disabled people were written off to live on invalidity benefit with no hope for the future. Millions of lone parents were made scapegoats by the Conservatives simply because they are lone parents and left with no hope for the future. The establishment of the Child Support Agency, as I am sure all hon. Members know from their surgery experience, has created massive despair and distress among families throughout the country. There was also the scandal of pensions mis-selling, which the Conservative party encouraged and failed to stop when it realised the magnitude of the disaster that it had caused.

The Conservative party's 18-year stewardship wasnot only incompetent but vindictive, divisive and self-destructive. Indeed, it would have gone further. A pamphlet, entitled "Who Benefits?", written by the shadow Secretary of State for Social Security, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), shows that, if the Conservatives had remained in government, they would have called for the effective abolition of the welfare state. The hon. Gentleman stated:

In effect, there would be one rule for the rich and another for the poor.

Mr. Loughton: Does the hon. Gentleman agree with the Prime Minister's comments in the foreword to the Green Paper that was published in March, which state that the Government intend the welfare state to remain

Mr. Hope: The hon. Gentleman has failed to understand, or even to read, the Green Paper on welfare reform, which is one of the most radical documents to emerge from any Government this century. It takes forward a programme of welfare reform that will enhance people's lives and help not just those who have to rely on the welfare state for their income but the whole community. It is essential that a welfare state not only meets the needs of those in poverty but has the full support of the whole community--[Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Member for East Worthing and Shoreham (Mr. Loughton) must behave himself.

Mr. Hope: Thank you, Mr. Deputy Speaker.

Having inherited that appalling crisis, the Government have had to do two things simultaneously: first, they have had to act immediately to tackle the poverty that they

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inherited; and, secondly, they have had to lay down the foundation for a new direction for the welfare state in preparation for the next millennium.

Mr. Rendel: I am interested in the idea that the Government acted immediately to overcome the poverty that they inherited. Is that why they cut lone parent benefit?

Mr. Hope: It might have been helpful if the hon. Gentleman had waited until I had finished speaking about the action that the Government have taken in their first 12 months in office to tackle the crisis that they inherited from the Conservatives. For example, in the Budget we increased child benefit by £2.50 a head per week for families whose oldest child is under the age of 11. That is the highest increase since child benefit was introduced.

We have introduced the working families tax credit and the child care tax credit, which, combined, mean that the poorest 20 per cent. of families will be on average £500 a year better off. For young people whose lives were decimated by the Conservatives and who were thrown on the scrap heap when they left school, we have introduced the new deal, which provides them with jobs, training, opportunities and hope for the future.

For parents, we have introduced the national child care strategy, which will provide affordable and accessible child care. It will enable parents--whether they are lone parents or two-parent families--to work and earn income to lift their families out of poverty. We have provided a new deal specifically targeted at lone parents, which many hon. Members have already said is a successful programme of support to help lone parents to work. The White Paper on "Fairness at Work" spells out a range of family-friendly policies to enable parents to work.

Another group that was hammered by the Conservatives in their 18 years of stewardship of the welfare state is the disabled. We have introduced the new deal for disabled people, to help those who can work to get off the dole and into work. We have introduced the disabled person's tax credit to give disabled people a fair wage, so that they have a decent income on which to live. We have made a commitment in the Green Paper on welfare reform to provide universal disability living allowance and attendance allowance. Moreover, a disability rights commission will be set up to establish firm rights in terms of security of employment and services for disabled people.

We have introduced winter fuel payments of £20 for all pensioner households and £50 for all pensioner households on income support. That is universal support, targeted to meet the needs of the poorest. In addition, we have cut VAT on fuel, which was introduced by the Conservatives when they were in power, and introduced a zero rating on the gas levy.

Those are tangible benefits for disabled people, pensioners, children, parents and young people, all of whom were left in despair by the previous Government. Naturally, we must plan for the long term. Action is needed not just to tackle poverty here and now, but to prevent poverty from returning in the future.

I have already referred to the welfare reforms outlined in the Green Paper published earlier this year, which contains clear principles and a new direction to eliminate poverty in the future while tackling poverty today.

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The Green Paper on the Child Support Agency also introduces radical reforms. One of its outcomes will be to raise the incomes of parents on benefit by £10 a week, as they will get the first £10 of maintenance that is paid. That is extra money for the caring parents in a relationship.

There is to be a new Bill on pension sharing to help divorced women and to ensure that they are not disadvantaged when they reach pensionable age. As other hon. Members have said, we also have new proposals to tackle benefit fraud.

Much more important, the combination of all those measures--active communities, programmes, welfare state support and the new deal--will mean that people will be in work, self-sufficient, with incomes that make work pay. There will be voluntary action, with active citizenship and new schemes such as the millennium volunteers, which my right hon. Friend the Secretary of State for Education and Employment is introducing, and which will engage young people--and older people, in years to come--in actively supporting and regenerating their community. Reform of the welfare state is not only about income, but about people's lives--people having the confidence, ability and independence to live positive lives.

Much remains to be done. I look forward to the Green Paper on pension reform--which will introduce the new, value-for-money stakeholder pension and the new citizenship pension, which will cut the routes to pensioner poverty for women--because we need a pensions strategy for the future that can cope with a slowly aging society without placing a burden of unsustainable costs on our children.

I believe that, far from its having been a wasted year, as the Conservative motion suggests, the Government have begun to tackle the poverty that we inherited from the previous Government. They have also laid the foundations for wide-ranging reform to regenerate the lives of the families in most need and build a new welfare state, which has the support of the whole community.

9.25 pm

Mr. Oliver Letwin (West Dorset): The debate has been most interesting, because of what it has revealed about the gap between analysis and delivery. The hon. Member for Croydon, North (Mr. Wicks) gave an eloquent disquisition on what he regarded as the major disadvantages of the welfare system that the Government inherited. Although many of us do not go the whole way with him in his attribution of cause, many Opposition Members, as well as Labour Members, would agree with him that the welfare state, as the Government encountered it on coming to office, was deficient.

The Minister for Welfare Reform wrote a series of pamphlets and books describing what he saw as the root cause of that deficiency. Many Conservative Members read those words, and I believe that we even understood them. More--we were persuaded by much of what is in them that, at root, there is a severe disadvantage in a welfare system that is a compound of means tests, a compound of disincentives and a compound of misincentives.

We understood that, when the present Government came to power, with the present Opposition in place, there was an historic opportunity--an opportunity to follow on from that analysis by delivering a new type of welfare

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state, a welfare state that would not be a compound of such disincentives and misincentives because it would not have a plethora of means tests attached. It would have learnt the lessons of the past.

What has been interesting about the debate is the fact that no Labour Member has even attempted--I know that the Minister wants to speak urgently; perhaps he will make such an attempt, but I doubt it--to argue that the past year shows even the beginnings of such a radical overhaul. On the contrary, the Secretary of State told us at considerable length about marginal acts--acts which, on her reckoning, will affect 1 per cent. of lone parents, or which will slightly ameliorate the circumstances of old-age pensioners by helping them to pay their heating bills. They may or may not be important measures. They may or may not work. In any case, they cannot conceivably be represented, and they were not represented by the Secretary of State or by any other Labour Member, as deep or radical measures to change the structure of the welfare state.

That is sad, not only because the Government might have made such radical changes, but because the official Opposition would have worked with the Government to do that. It was perhaps the first time in British history since the war when a Government and an Opposition largely shared an analysis, and might have worked together to convert that analysis into action. That opportunity has been missed.

It is worse than that, because, as my hon. Friend the Member for Arundel and South Downs (Mr. Flight) amply illustrated, in many respects--from the best of intentions, as has so often been the case--the Government have actually worsened the misincentives and disincentives. The apparatus of the working families tax credit and everything that goes with it deepen the extent of the disincentives to work and the misincentives vis-a-vis the family. My hon. Friend could have gone on to provide other examples. If I had the time, I would do so myself.

The tragedy is that the actions of the DSS over the past year have been governed by something outwith the Department that has nothing to do with the vision of the Minister for Welfare Reform. What is that outside force? It is, of course, the Treasury. What has happened to the Government is sad, but not unusual. The Department of Social Security has been bowled over and pushed to the ground by a Chancellor who has his own agenda, which has nothing to do with welfare reform in the radical sense.

I fear, therefore, that there will be no change and no eloquent defence from the Under-Secretary, because there cannot be change in the face of the force of the Chancellor, and there cannot be eloquent defence when the Under-Secretary knows that he would never be allowed to do anything that the radical programme of his right hon. Friend might have suggested that he should do. That is one of the great sadnesses which, for many Opposition Members, will abide throughout the lifetime of this Government.

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