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Mr. Darling: I am grateful to the hon. Gentleman for acknowledging the fact that I gave him a copy of the statement, but I had hoped that he would read it. The proposals contain no short-term savings, as my right hon. Friend the Chancellor has pointed out. As I said in the statement, we are spending more in the short term to meet immediate need. The £500 million savings will be in the long term--like the measures that I announced some three weeks ago, these proposals represent major structural changes to the benefits system, which will enable us to plan for the future.

I am also grateful to the hon. Gentleman for welcoming the fact that the lump sum will be increased, which most people recognise will meet an immediate need. He said that we were right to extend the benefits to men and women, although he thought that we were premature in taking account of the case that is before the European Court. I take a slightly different view: I believe that it is unfair to treat men and women differently, which is why I wanted to put right that wrong.

If the best that the hon. Gentleman can say is that he is against my announcement because it did not deal with pensions, I shall have to accept it. I shall make a separate statement on pensions when the Government publish their proposals, as we have promised. Today's announcement was about widows benefits.

The hon. Gentleman asked about the make-up of the £85 a week. That figure--the widows maintenance allowance--will depend on how many children a widow has. There is an allowance of £9.90 for the first child and £11.30 for the second. There is also a state earnings- related pension scheme element. The hon. Gentleman asks whether we will keep the figure under review. As he should know, all benefit figures are kept under review.

The contributory principle is worthy of discussion, although perhaps not in these exchanges. Successive Governments have changed the conditions attached to the contributory principle. Indeed, the previous Government did so on several occasions--most recently in 1996, when the entitlement to unemployment benefit was reduced from a year to six months. We are in many respects increasing the benefits available--we are extending benefits to men, and we are increasing the lump sum.

Over the past few weeks, the hon. Gentleman and other Conservative Members have called for welfare reform. However, whenever any reform is suggested, they say: "Welfare reform, yes, but not this." They will not address themselves to the fact that there are many problems with the current benefits system and that not least among them

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is the problem that we are paying benefits to people who do not need them and not doing enough for people who do. That in itself is a case for reform, and that reform deserves support.

Conservative Members must do a little bit better than merely apologising for cutting the married persons tax allowance--which is their policy on the family--and proposing a transferable tax allowance which would cost £4 billion every year; they cannot tell us how they would fund it.

Mr. Frank Field (Birkenhead): Is the Secretary of State proposing that the existing package of benefits for widows should be extended to widowers? If so, how many widowers and how many women will lose benefit when the reforms come into force, and how many people will be pushed on to means tests?

Mr. Darling: No, we are not proposing to apply the existing benefits regime to men. That would cost about £250 million a year and could not be justified. We are continuing the system of support for mothers, and now fathers, with young children, which is entirely justified, and ensuring that the allowance payable to people without children runs for six months only. That is a major change from the present scheme. We cannot justify spending money on those who do not need it while many people who need help are not supported.

I know my right hon. Friend's view on income support--he is against means-testing--but income support and means-testing are ways of ensuring that we get the help to those who need it most, and that is an extremely important safeguard as a fundamental part of the structure of the benefit system. Our reforms for widows benefits overall will ensure that we give help where it is needed.

On my right hon. Friend's detailed points, I sent him a copy of the consultation document, and he ought by now to have received it.

Mr. David Rendel (Newbury): I, too, am grateful to the Secretary of State for giving me a chance to read his statement before he delivered it. I have both read it and listened to him delivering it, so I hope that I know what is in it. The Liberal Democrats welcome the doubling of the lump sum but, given the Secretary of State's cogent arguments for it, should it not be done straight away? It will be given universal acclaim and could probably be implemented by regulation rather than by primary legislation. If the costs are already much greater than £1,000, we could surely do something about that immediately.

We also welcome the reform to make all the payments payable to men who lose their wives as well as to wives who lose their husbands. That is clearly right, as I have said to the Secretary of State before, and I am glad that he has acknowledged that in his statement. Is the new bereavement allowance to have an earnings-related element, as I believe the current widows pensions do?

Is not six months far too short a time for the bereavement allowance to run? The Secretary of State will surely know that, when people lose their spouses in middle age, it can take them months to get over it or even to start thinking straight again about their future. His comments about those who will be over 55 in 2001

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suggest that such people may take much longer than six months to start making new plans. Would it not be sensible for the bereavement allowance to last some years rather than some months?

Mr. Darling: I cannot agree with the hon. Gentleman on that point. The period for which an allowance should run is always a matter of judgment. We took the view that six months would be a suitable period to allow someone to adapt to changed circumstances. Almost as many women work as men; the situation is now very different from 50 years ago, when very few women worked after marriage. All the experience shows that women wanting to return to work want to do so rather sooner than after a period of several years.

The hon. Gentleman asked why the lump sum cannot be introduced now. The proposals are part of a package. Following an exchange that one of the hon. Gentleman's colleagues had with my right hon. Friend the Prime Minister during Prime Minister's Question Time, I must tell the Liberal Democrats that, at some point, they have to square up to the fact that all these things have to be paid for. This is a coherent package of reform.

I am grateful for the general welcome that the hon. Gentleman has given to a number of the specific proposals. The hon. Gentleman asked whether there will be an earnings-related element. I was not quite sure exactly what he was getting at. The widows payment is taxable now. If he is concerned about the state earnings-related pension scheme, he will see that the details are spelled out in the consultation paper. However, SERPS continues for the parents allowance.

Mr. Malcolm Wicks (Croydon, North): I welcome the Government's search for a modern approach to this important issue on widows, widowers and bereavement. I welcome particularly those parts of the package that do not rely on means-testing. There are some useful ideas about targeting resources without recourse to the means test.

I put it to the Secretary of State that, over the past 20 years, a number of ad hoc policy reforms have touched on the national insurance system, yet, paradoxically, we have never had a serious debate about the future of national insurance and the contributory principle in this country. We have to find a means of holding that serious debate about a national insurance system based on the principle that people contribute to the community chest when they can, and draw out, as of right, when they need to do so. Given the new issues such as how we fund long-term care and perhaps pay for parental leave, surely we need a debate to see whether a renaissance of the social insurance principle could be the future of social security if we are to avoid the increasing move towards the nastiness and division of the means test.

Mr. Darling: As my hon. Friend knows more than most, the benefits system in this country is complex. The contributory system sits alongside means-tested payments for extra costs and so on. I suspect that most people going along to the Benefits Agency will ask not about the origin of the payment but about how much they will get and the conditions of entitlement. I agree that this matter ought to be debated and I know that a number of hon. Members would like such a debate. By good luck, my right hon. Friend the Leader of the House is sitting next to me, and

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she will no doubt be pencilling in a date as we speak. It is a serious debate in which I intend to engage before too long.

The Government approach this as a matter of principle. In general terms, first, we want to ensure that we encourage all those who can work to do so and, secondly, we want to provide security for those who cannot. In each case, particularly where we want to provide greater security, we must ask ourselves how we can best get money to those who need it most. This afternoon's announcement goes a long way to meeting some of the gaps in need that have existed before. I believe that income-related benefits will remain part of the system for some time to come. They are important, particularly for the low-paid. I shall be happy to have a general debate; I am sure that some hon. Members cannot wait, but I suspect that others possibly can.


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