Examination of witnesses (Questions 1 - 19)
WEDNESDAY 25 FEBRUARY 1998
RT HON
HARRIET HARMAN,
MP and RT
HON FRANK
FIELD, MP
Chairman
1. Can I call the public session of evidence to order
and welcome warmly the Secretary of State and the Minister of
State to our proceedings? I know that these meetings involve a
lot more than just the time spent sitting here responding to the
questions. I know a lot of work is put in and we are very grateful
to you for taking the time. This is the first ministerial appearance
we have had this session. I want to acknowledge the help that
we have had both at staff level and at ministerial level in terms
of the ongoing work which the Committee has been doing to date.
I am convinced that the informal conversations we have had, which
led us to decide to do tax and benefits as an earlier report—and
we are just about to produce the second phase of that report hopefully
in time for the Budget—was immensely useful for us, and
in the fullness of time when we look back I am sure it will be
found to have been the right thing to do. There were perhaps other
more immediately interesting things of a political nature that
passed us by on the way, but I think in the long term the work
that the Committee is doing, and will continue to do after the
Budget when we will be doing an implementation report, will serve
the purposes of the public debate best in the long run. I want
to thank you both for the assistance you have given us in that
regard, and I give a particular welcome to the Minister of State
who has been here in a previous incarnation in another role. If
he starts asking questions of the Committee I shall rule him out
of order! I know that both the Secretary of State and the Minister
of State are well aware of this, but although we are in the middle
of an important inquiry into tax and benefit integration, we are
also looking at the principles of welfare reform. We do not want
to try to anticipate what will be in the Minister of State's Green
Paper, but it is important for us to try to contribute to what
will be inevitably, whether people like it or not, a long discussion,
a public discussion, that will settle the policy in the longer
term. We are also, incidentally, doing our report in the near
future on disability benefits because we are responding to the
all party disability group's concern. There has been a good deal
of confusion expressed about how the programme is working in practice
and how the future of disability benefits might unfold in the
long term too. So that is the programme that we are facing, and
this piece of public evidence is very important to us to get the
underlying, long term principles on benefit reform established.
We want to try to contribute positively to that debate. In terms
of describing what the Committee is trying to do, as far as I
am concerned, I would like to use the metaphor of the man with
a red flag in front of the train trying to make sure that the
train gets to its destination without too many casualties on the
way. If we, as a committee, could stay just ahead of what the
Government was thinking of doing and illuminate the process and
try to anticipate some of the problems, I think that is the best
role that we can serve. I have said it before, although it may
not be a unanimous view, but I and certainly most of my colleagues
welcome the fact that the Government is actually attempting to
do some of these appropriate reforms across government departments.
If they try to do everything rooted in the Benefits Agency, paying
Giro cheques, it is too restricted a view to get sensible long
term change. We are interested in long term, sustainable, workable
change. That is what we are all trying to aim at. The best way
of using your time for us would be to invite you, Secretary of
State, and then perhaps the Minister of State thereafter, to say
a few words about how you see the process of reform, in the context
perhaps of the fact that there is now a wee bit of concern. I
have said I am in favour of doing these things across departments.
There is a feeling out there that there are so many reviews that
the Government is in danger of losing its cohesion. Is the ministerial
team properly focused? Are you confident that you are motivated
in the same direction and that you are all working to the same
game plan? I do not know what the collective noun for reviews
is—a rave of reviews?
(Mr Field) The answer to that question, Chairman,
is actually yes.
2. Thank you. Perhaps you could make a few opening remarks,
and tell us how they all fit together. We are concerned about
housing benefit. How does that fit in to what the team in the
Department of Social Security is doing? Could you set the scene
and then we can take it from there?
(Ms Harman) Thank you very much, Archy. I would
like to thank you and the Committee for inviting us today. The
work of the Social Security Select Committee was immensely important
to us when we were in Opposition and I think it is going to be
no less important now that we are in Government. We all know that
we need to reform the welfare state and the Committee's work is
going to be central to the process and the debate around reform
on what is, as you acknowledge, a very complex and necessarily
long term reform. The debate is very much going to be enriched
by your involvement and indeed already has been. The evidence
you have taken and the reports that you have produced have not
only been reassuringly informative and interesting, but have waved
the odd red flag which we have been able to notice and take into
account. So your work has already been very informative, and I
very much welcome the informal discussions we have had and the
issues that you have chosen to work on, both on active help into
work and the working families tax credit in particular. Perhaps
I can briefly touch on the reasons we need to reform the welfare
state. They are set out, as you know, more fully in the focus
files. Poverty has increased. Britain has become more divided.
There are more households, particularly households with children,
where there is no one in work, yet at the same time more is being
spent on social security. Also fraud, and this is something Frank
worked on extensively in the Select Committee when we were in
opposition. Fraud is sapping both resources and public support
for the social security system. The principles on which we will
base our reform are set out in the Case for Reform and will be
explained more fully by Frank, and subsequently in the Green Paper.
Broadly, they are that society has a responsibility to help people
in genuine need who are unable to look after themselves, that
rights and responsibilities go hand in hand so that individuals
have a responsibility to help to provide for themselves when they
can do so; for those who can work, work is the best route out
of poverty. I would like to touch briefly on some of the work
that is already under way in the Department to try to match the
system with those objectives. It is a three track approach that
we have been pursuing: helping people into work, ensuring that
work pays and modernising our infrastructure to ensure it supports
employability. Those are areas where you have taken extensive
evidence already, and, as I have said, that evidence and your
reports have been very helpful. Firstly, active help to get people
into work. What Frank and I are trying to do is to turn the social
security system from a passive system which simply hands out benefits,
to an active, modern service, one that helps people into work.
I think we have made most progress on this in the new deal for
lone parents. The personal adviser sits down with the lone parent
and says, "How can we help you into work? How can we ensure
that you are better off in work? What are the obstacles that face
you in getting into work so that you can earn, be more independent
and have a better standard of living for yourself and your children?"
That approach is a hundred miles away from the normal, previous
approach of social security, which is simply to say, "How
much are you entitled to? Here it is". So this is the implementation,
if you like of the first stage of the hand up, not just a hand
out. It is a system which is designed to focus on what that individual
needs to help them into work, which is as flexible as it possibly
can be, using the benefits not only of the case worker approach,
but new technology. We have also begun work on the new deal for
the long term sick and disabled. We know there are something like
a million people with health or disability problems, but who,
nevertheless, would like to work and are capable of some work,
but, by the same token, we know there is not a system to support
them in work, to find out how to help them to work and help them
to stay in work. We have started on the new deal for the long
term sick and disabled to fund innovative approaches to pioneer
new ways of helping people achieve their potential in the work
force, who previously would have just been a benefit problem:
"Here's your benefit, that is you". That is about personal
advisers, but also potentially benefit changes to reduce the disincentive
to work. You obviously know very well that the new deal for the
young unemployed and the new deal for the long term unemployed
are also part of that approach, but what we have done is to go
wider than people who are on the unemployment register and registered
as available for work because we have looked at workless households
to see whether more broadly we can reduce dependency and encourage
independence. That is the first thing. The second is the issue
of making work pay. That is about introducing a floor under wages
with the minimum wage, and additional help through the tax system
to make work pay. Further announcements will be made about this
in the Budget, but I think the evidence you have taken here and
the reports that you have done have very interestingly identified
the history of all the problems of previous attempts to do that,
which have not succeeded, which have been salutary reading, and
have identified the problems which we have needed to solve. So
it is the minimum wage, the floor under wages and then making
work pay through the working families tax credit. The third strand
is modernising our infrastructure to support employability in
a very changed world of work. That means understanding that child
care is part of the infrastructure for employability and of course,
that skill levels, training, education, qualification are all
central parts of the welfare state which is enabling people to
have opportunities. Having made that brief introduction, I would
like to hand over to Frank.
(Mr Field) I thought it would be helpful if I
said something about my work within the Department on welfare
reform. I would like to report on three areas. Since the election
I have given a dozen or so public lectures, which have tried to
lay down the background to our welfare reform programme, and specifically
what people can expect in the Green Paper. Those lectures, starting
from Beveridge the point of the last great big effort to reform
social security, have been looking at how changed economic, social,
political and cultural circumstances make reform more challenging
today than it possibly was, when Beveridge went about the task.
The lectures also consider the point that when Beveridge set about
his task there was unanimity amongst consumers and politicians
that welfare would be increased, and that it would be increased
by state provision. The longer one looks at the history of welfare,
it can be seen that concentration on state provision is applicable
for only a limited period in time. It is not the norm for the
development of welfare in this country. For most of the time the
country has had a mixed economy of welfare, and if we want to
see welfare expenditure rise, and overcome the resistance of taxpayers
to extend, unthinkingly, public provision of welfare, then we
need to be thinking of other forms of supply of welfare, which
people will support. Beveridge dealt with a male orientated world,
his report was written for men, and his concern was how to extend
universal coverage to men? Women feature in the report, but they
feature largely because they are married to a man, and therefore,
they get their insurance rights through their husbands. It is
significant that when Beveridge's reforms were implemented over
a million fewer women were insured in their own right, as compared
with the number of women insured in their own right in 1939. Also
it is a mistake to think that there is a single big bang which
is going to deal with all of welfare. In your introductory remarks
you touched on a whole series of areas in which it would be impossible
to devise a single bang which dealt with all of them. In place
of a single bang we have tried to put forward, and we shall be
presenting, a big picture. The second area that I have been working
on, in the Department, has been the welfare reform focus files,
which really have two objectives. One is that we should become
more aware of the size of the projects and how that compares both
historically in this country and internationally, but also, and
I pose the question, whether the expenditure pattern now is what
we originally thought it should be. For example, when you as a
committee look at mobility allowances, the whole scheme for mobility
allowances was introduced to phase out trikes. The whole effort
was how to help people go to work. It would be very surprising
if more than five per cent of people claiming mobility allowances
actually go to work. It does not mean to say it is wrong, but
it does mean that we have a bigger, richer definition now of need
than we had. It is very important that one actually thinks carefully
about that. In the uprating debate, in which we and some members
here participated the other day, the dead hand of the past is
ever present. In the current bill over £5 in every £8
spent is determined by legislation passed before Beveridge. It
is actually very important for each generation to look at the
question of whether we should be spending money in this manner?
The third area with which I have been concerned is the Green Paper.
I am able to tell you the date of the Green Paper. It will be
published on 26 March. That is what is in my diary, anyway! Harriet
adds, this year! I know how cynical some of you can become. I
should not be so trusting even with a friendly committee. The
Green Paper will set out what our principles are, what our goals
are, what we hope to achieve during this Parliament, and what
our measurements are about how we can report back to Parliament
and to the country on how well we are achieving them. So in place
of Beveridge's concentration on history, we will concentrate on
principles. Whereas Beveridge was concerned about the genesis
of benefit rates; we will be talking about goals that we have
in mind. Whereas Beveridge was massively concerned with whether
it should be 15s.4d. or 16s.3d.; we will be putting forward measurements.
The idea behind this is that, whereas Beveridge, in fact, ended
a debate, the point of the Green Paper is to add to the debate
which is under way. One last point, all of us as Members of Parliament
have a particular duty to protect the vulnerable. Beveridge wrote
that the poor, and a great deal of the unskilled and semi-skilled
working class, were interchangeable. Therefore, policies which
would benefit a huge tranche of the electorate would also benefit
the poor. In one of my lectures I set out that there are really
four cycles of welfare. For much of our history we have been trying
to prevent, and put road blocks in the way of destitution. In
this century we have been concerned about preventing people becoming
poor. Harriet's introductory remarks were about how we move on
from that stage and prevent people becoming poor in the first
place. The fourth stage is actually about having a welfare state
in the most broad and generous sense of that term which allows
people to fulfil their full potential. It is in moving welfare
firmly, as Harriet said, into that third stage and fourth stage
that the Government sees the possibility of building political
coalitions in support of welfare, through which we will also be
able to protect the vulnerable. That is the background to our
thinking in the Department on welfare reform. We are pleased to
be able to give you the date of the publication of the Green Paper.
3. That is all fine. Actually I think it is very positive.
But in the mean time there are a lot of reviews. What you have
both just said amounts to a very substantial cultural change which
will take years, not months, and take longer than this Parliament
to achieve successfully. If what you have said and no more were
to be concentrated on, if that were the programme for the Government
and nothing else, it would take ten years to achieve before you
could really see the results of all that. What worries me, or
what frightens me is that we have Cabinet Ministers charging up
and down the length and breadth of the country in a state of frenzied
activity trying to persuade people that there is an argument to
be had about all this. I think they are wasting their time. I
do not think anybody would dissent from anything you have said.
Secondly, we have all this review going on constantly, ceaselessly
above and beyond what you have said. What worries me is that I
have no sense of where it all fits together. If all the Government
was doing was what you have said this morning, I would say, "Let
us look at that and let us contribute to that in a positive way",
but there is a tumbling background of review which to me comes
across as incoherence. Could you help us with the housing benefit
work that has been done in the Department? Beveridge himself wrote
12 pages on that and gave up.
(Mr Field) And he got it wrong.
4. Maybe you will address that in the Green Paper. There
is a sense that there is an agenda but on top of that there is
an expectation of change. People think the Government is going
to fix it all by the party conference in October and there is
a crisis out there which we cannot afford, and it is all nonsense.
If you just stuck to what you have just said and made that the
programme for Parliament we might get on better.
(Mr Field) I think you were on the radio on Friday,
Archy, and I agreed with what you said in that this is a very
long term programme. It is important that we put forward what
our principles are and get agreement on them. The Green Paper
will set out principles, so that as other parts of the reform
programme are brought forward people can judge whether it fits
into them. So, for example, before the summer is out we will probably
have the next stage of our proposals on pensions to discuss and
we will also have proposals on the reform of the CSA. When we
are able, as a government, to bring forward our proposals on long
term sick and disability reform we will do so. As the Prime Minister
has made clear, we will bring forward proposals for discussion.
We want an inclusive approach. This Committee in the previous
Parliament was largely responsible for initiating the debate on
the counter fraud strategy, to which the Government sensibly responded.
What we have done is to get the Department, itself, to think about
how to take forward our counter fraud proposals, largely from
the knowledge we gained from the people before this Committee,
who were the best people in the country and who knew most about
counter fraud. We asked a group of those individuals to do an
audit. We involved local government, the private sector, and those
with police knowledge. We are bringing those two strains of thinking
together, and at some stage, we will be presenting our ideas about
how to counter fraud much more effectively. I hope this shows
you that this government is inclusive. We actually want to move
forward carefully and safely. As Harriet said in her introductory
remarks, we are very concerned about the constructive role this
Committee will play, along with the House of Commons itself and
other organisations in the country, in developing the reform programme.
So move one is to get the direction right, and then within that,
to bring forward proposals. Those proposals are coordinated by
our work as a team in the Department. There are also, as with
housing benefit, reviews across departments. These reviews are
being looked at through the Public Expenditure Committee, on which
I also sit, so that the Government can have a long term view of
this whole process. I am therefore disappointed if it appears
as incoherence on the outside, as sometimes reported in the press.
But the press is not always totally accurate, as I am sure you
realise, Archy, and that may have some part to play in it. There
is a real attempt to formulate our ideas around these principles
and bring them forward. You say ten years. The aim the Government
has, with the Green Paper, is to move the direction of the oil
tanker, but to do that in a way that does not frighten people
because there are a lot of vulnerable people who could be frightened.
But that when we look back after ten, 15, 20 years people will
see that big, decisive changes were made by this House of Commons
during this Parliament.
5. I want to ask you about what you said about trying
to build a consensus. Have you seriously considered—and
this is a cheeky question— the offer made by the Leader
of the Official Opposition to talk to you about some of the principles
of change, and, if so, would you be willing to meet some of the
opposition parties to see if there was common ground?
(Mr Field) The Prime Minister says he is anxious
to follow up on every serious exchange of view that is offered.
It is crucial that at the end of the day we all feel it is our
reform programme, and that no one is rushing around trying to
claim it is theirs. It will be a measure of the success of this
House of Commons that it does make both the House of Commons and
the country feel that it is their programme and not a programme
by a small group of politicians who are not willing to discuss.
(Ms Harman) Both Frank and I have met the Opposition
spokesperson on social security, so we are genuinely trying to
draw on any constructive proposals that there are.
Mr Wicks
6. Thank you for the date of the Green Paper launch,
laying to rest the rumour that it was going to be launched in
the Millenium Dome.
(Mr Field) I am glad you did not put that forward
earlier.
7. May I ask the Secretary of State and the Minister
of State this question? We understand that there is a mixed economy
in social security, and friendly societies hopefully and the private
sector have a role to play so I am interested in your thinking
about that. But in terms of the major state benefits, and I am
thinking of the basic pension, child benefit and National Insurance
related benefits, what is your thinking on what has been the big
historical question this century on whether social security policy
is for the poor and that would mean now that we need to target
it more efficiently through the tax system, perhaps through poverty,
through means tests, through maybe an affluence test, as opposed
to the view that social security is about citizenship and all
people in their life cycles face certain needs and risks? People
may become disabled, they may become sick, they may become unemployed,
and most of us certainly are going to retire and need a benefit
in old age. What is your thinking about that question? Is it increasingly
a social security system for the poor and how do you achieve that,
or is it still about citizenship and trying to integrate everyone?
(Ms Harman) It has to be about both. It has to
be about tackling poverty, it must be about the poor, and it must
do a proper job in that respect. One of our critiques of the current
system is that there is unmet need. We have identified, for example,
pensioners who have fallen below the income support level and
are not getting the benefits to which they are entitled. So it
has to have a clear and sharp focus on the very poorest. But it
also must be a system which commands support and in which everybody
feels they have a stake. I think that the stake that people have
is across the welfare state, so that it is not just in the benefits
to which they might be contributing, for example their pension,
but also the education system that they can get and the health
service that they get. One of the ways in which I think we are
both helping tackle poverty and social exclusion, and extending
the stake of middle income is with our proposals for child care
because there is a shared desperation for good pre-school and
out of school care amongst women on excluded housing estates for
whom child care is essential to enable them to go to work. There
is a shared passion and commitment for the need for better child
care and out of school care in middle England for different reasons.
We need to look to ensure that the system does both effectively
and, where we can, always be broadening and cementing support.
(Mr Field) I do believe that we are about changing
the basis upon which people become entitled to benefits. You highlight
that in your question. We have moved from a situation where we
have had a very vague and woolly notion of citizenship. It is
on the basis of citizenship that people actually gain rights to
benefits. We are moving from a total emphasis on that, to a more
balanced one which is partly about that, but also one where citizenship
is based on contract. Often these changes occur, in a sense, in
response to public mood in a way that we do not often realise.
So, for example, the previous government in its reforms of unemployment
benefit, introducing the Job Seeker's Allowance, even for those
who had full contribution records, it laid down, rightly in my
view, certain conditions that had to be fulfilled so benefit could
be drawn. In other words, a new contract was struck and I do not
believe welfare is viable on the old basis alone. By strengthening
the contract side of welfare, then I do believe we are able to
negotiate with the electorate to protect the vulnerable. Sometimes,
in the last Parliament I would be criticised for emphasising fraud,
but I saw that campaign as something which it was proper to do
because we should look after public money very carefully. Because
people believe the system is riddled with fraud their confidence
is declining, and if there is a lack of confidence, then people
are more mindful to make changes that in the long run one would
not want to see. Therefore, gaining greater integrity in the system,
I believe, is crucial to maintaining and extending public benefits.
Only by extending the idea of contract between the community and
an individual, in our welfare arrangements, can I believe that
we maintain at the same time that view of citizenship that has
been important in this country. You may have seen that Raymond
Plant recently gave a lecture criticising the Government's changing
view of citizenship I think he misread it because we are developing
this dual view of citizenship, both in historic terms and one
which is much more firmed up on contract. The more we can do that
the greater possibility we have of securing and extending public
confidence.
8. Within the social security system currently and since
Beveridge the main contract has been through the National Insurance
system, namely, that you pay in when you can, and when you are
employed, and you draw out when you need to, including, most importantly,
the basic retirement benefit. Some say that it is not actuarially
sound and why not integrate it with income tax, and others say
why should there not be a renaissance of state social insurance?
Where is your thinking on that question?
(Mr Field) I think the electorate is very clear.
It is believed that they are striking and have struck a contract
with the Government. They believe they may be paying into the
insurance scheme, differently, according to their level of income,
but that they should be able to have the right to draw out at
the end. They see it as a closed fund in that respect. I believe
that this is an immensely important aspect of our social security
system and our manifesto pledges us to maintain that.
9. The Chairman talked about ten years' time. Do you
think in ten years' time there will still be a National Insurance
pension which the millionaire as well as the poorer person will
be able to draw?
(Mr Field) Certainly in this Parliament, we are
committed to maintaining the universality of the retirement pension.
That is our mandate. If we actually wish to put forward alternatives
we would need to seek a new mandate. We have not even completed
the first year of this Parliament, and whilst it is tempting to
try to take us forward, I think it is important that, as we issue
our next stage of consultation on pension reforms, you see it
in the context of this Parliament and extending it further. I
would be disappointed if in ten, 15, 20 years hence we had the
very rigid definition of what Beveridge meant by National Insurance,
and that we did not have a more extended and more varied view
of that. It is very peculiar that we have all, in this room grown
up with the idea that to be collective it has to be state, whereas
most older trade unionists would tell you, to be collective was
nothing to do with the state. The trade unions fought like mad
for the state not to take over their responsibilities for welfare.
It is possible to have different forms of common provision which
are not run by the government or by the state. While you, Malcolm,
raised the question of citizenship, it is also important to see
our welfare reform programme on this wider canvass. We are a parliament
of constitutional change and the Beveridge reforms did, in a very
serious way, undermine the organisations of civil society. It
is those bodies which operate between the individual and government.
I think it is very important that we see our welfare reforms encouraging
that diversity rather than having a narrow view. So the answer
is, of course, yes, but I hope that it will not be a backward
looking view about what we mean by National Insurance, but a forward
looking one and one concerned with collective revision, and one
that sees that there is a generosity of collective revision which
has nothing to do with the state or the government. Clearly, however,
you cannot envisage a welfare society which does not have a very
important role for government in it.
Mr Leigh
10. Thank you for telling us when the Green Paper is
going to emerge, 26 March. Is it true that it has been sitting
in your Secretary of State's pending tray for six months?
(Mr Field) Not at all. It is important for you
to realise how government works. I have been slightly surprised
because I have not had experience of it before. One thing is that
you have a whole array of very talented civil servants. You have
your Chairman's point that it is important that you not only agree
a line within a department, but it is a line that can be sustained
between departments. It is finally important that given that the
Prime Minister is asked to form a government by the monarch that
the whole government agrees with the line. So the tittle-tattle
that there has been in the newspapers is clearly amusing stuff
for that. It is untrue and must be hurtful.
11. When we were serving together on the Select Committee
in the last Parliament you wrote that means testing was the cancer
of the welfare state. Do you still regard that to be the case?
(Mr Field) I do indeed. When Archy was making
his introductory remarks it seemed to me possible to envisage
a system of welfare that does not have a role for means testing.
As a government, we are clear that at the end of the day, when
this long process is finished, if in fact means tests are more
dominant in welfare provision than they are now, that will be
a failure. We will be spelling out in the Green Paper what we
mean by welfare, and what the fourth stage of welfare is. We see
the welfare budget rising, but that proportion, the part which
the taxpayers pay directly, as falling within that larger total.
It is quite clear that our reforms will take into account human
nature in a way, perhaps, which previous governments said they
did, but actually did not do so.
(Ms Harman) In regard to the work that your Committee
has done, means testing can create an unemployment trap, it can
create a poverty trap to which we can add means testing, and where
it is not working properly it can provide a disincentive to save.
We want people to work, to be able to get on in their work, and
we want them to be able to save for their retirement. So we are
very much following through the lines of argument that Frank followed
in opposition about ensuring that the system works effectively
to underpin not just work and savings but also honesty.
12. Do I take it then that you are not going to maintain
the status quo on means testing? You are obviously not going to
extend it; you are going to seek to reduce it. Is that a fair
summary?
(Mr Field) I think you ought to wait for the proposals
as they develop. That is not me trying to avoid the question.
The answers will be much more sensible as you see the proposals
coming forward. In one area we have a manifesto commitment to
seek out the poorest pensioners. You could play silly games with
the Government, but if we fulfil that commitment, which we are
anxious to do—and I see from Harriet's diary that this afternoon
she is taking those ideas a stage forward in the Department—you
could turn around like little children and point fingers at us
and say, "The numbers on income support have gone up".
I hope we will go to the country saying that we have been successful
in diligently seeking out the poorest pensioners, and helping
them claim the entitlement to which they are due. That would be
an important goal. I do realise that if people were only interested—which
I know you are not—in making party points, you could then
turn round and say that the Government has failed on this single
aspect. The whole thing must be taken in the round.
(Ms Harman) The point is to look at what is actually
going on. So as Frank says, if in the short term you see an increase
in pensioners on income support, that will be the achievement
of the manifesto commitment to find the pensioners who are entitled
to income support and not getting it. If we see, as we want to
see, and expect to see—and there are going to be further
figures published tomorrow—the numbers of lone parents on
income support fall, then that will also be something on which
we want to see further progress. It is very important, as you
said, to look at the methodology, but we also have to look at
what is going on in practice and measure that against other principles.
13. Do you oppose the means testing of the basic state
pension?
(Mr Field) The whole Government is committed to
maintaining the standard retirement pension and increase it in
line with prices. I do not understand the question.
14. I do not think you are answering the question. Do
you oppose means testing the basic state pension?
(Mr Field) The Government is committed to maintaining
the status quo. I stood for election on that. I am happy to vote
for that in the House of Commons.
15. So the basic state pension is not going to be means
tested?
(Mr Field) The Government has no authority, in
this Parliament to go against its manifesto commitments. We have
put enormous store by trying to re-establish a link of trust with
the electorate.
16. So the basic state pension is not going to be means
tested?
(Ms Harman) I can confirm exactly what Frank has
said and add to it by saying that we want to look at all the issues
of income in retirement, which is not just the basic state pension,
which, as Frank said, is a manifesto commitment to maintain and
to operate it at least in line with prices, but also to tackle
problems of the poorest pensioners and also to tackle what we
mean by way of a pre-retirement strategy, which is all those people
who are heading towards retirement who themselves will end up
on means tested benefit unless we ensure that there is an extension
of good second tier pension provision. Of course, people's income
in retirement is made up of a number of elements. We want it to
be made up of a good basic state pension and a good second tier
pension provision. We do not want it to be made up of the basic
state pension and means tested benefit. That is our approach.
As you know, we have had a very thorough and wide-ranging pension
review and as part of implementing our manifesto commitment I
announced the establishment of the review in July. It has consulted
widely and it has had 2,000 responses. When, as Frank said earlier,
we bring forward our proposals for income in retirement, I hope
that this Committee will play a major role in waving the flags,
inviting evidence that we will anxiously read, and putting forward
reports that will contribute to the final conclusion. Whilst I
am on the subject of pensions, as you know we are drawing up a
Bill for pension sharing on divorce, and we have specifically
run a timetable so that we can keep our manifesto commitment to
pension sharing as we promised, but also that we can promise the
Bill in draft form so that it can come before this Committee,
you can consider it, take evidence on it, we can then make changes
before we introduce it to the House. I welcome that approach and
appreciate Archy's cooperation in that. We would like to do more
of that. Where there are complex issues, where they involve not
just public policy, but public policy and the private sector,
I think you have a crucial role to play in picking through all
those. I hope that in all the aspects of pension provision, not
just the basic state pension, you will be taking a big interest.
17. Do you oppose the means testing of DLA?
(Mr Field) There are no plans currently. We are
looking at DLA. When we have finalised our review we will bring
forward proposals and, as you know, the Prime Minister has said
that we will consult before those proposals are implemented. He
has also said, and I think it is immensely important, that people
who are vulnerable will be protected. We are not in the business
of taking benefits away from people who are entitled to them.
We do have a very real problem. Unfortunately, due to the last
government, which, with the best of intentions, introduced benefits,
there are real problems in delivering those benefits. This Committee
did a series of reports in the previous Parliament where I thought
at the time that the Government had lost its nerve and paid out
benefits. It is very important that we look at this carefully
to ensure that people are getting benefits they are entitled to
because that is what Parliament intended and that we are good
stewards of public money. Those who are properly claiming benefits
clearly have nothing to fear from the proposals that we will put
forward.
18. Secretary of State, do you think there are some people
receiving benefits who should not?
(Ms Harman) I think it is absolutely evident that
there are some people who are receiving benefits who should not.
There are some people receiving benefits for being out of work,
whom the system should be helping into work. There are some people
receiving benefits who are fraudulently claiming them. There are
some people receiving benefits, although they have not fraudulently
claimed them, because they claimed them and got them because the
system is so incredibly complex that it is very difficult for
people straightforwardly to make a claim and for the staff to
process the claim. I think we are absolutely certain that there
are many people who for many different reasons are claiming benefits
to which they are not entitled.
19. Do you, therefore, think that certain income should
be subject to an affluence test?
(Ms Harman) We have said that one of our principles
is to ensure that the social security system does a better job
than before. In one of Frank's focus files we identify that against
the background of the growing inequality, the share of social
security that has gone to the poorest 20 per cent has fallen.
It is worth looking at what other countries have done to try and
focus the social security system to make sure that it does a proper
job to protect people from poverty, which, as I say, ours is not
doing at the moment. Some of them say that everybody should get
benefits, others say that you have to prove that you are poor
before you get benefits; others say everybody can get benefits
except just a certain level and there is a cut-off point that
is tapered. I think we are looking, against a background of clear
objectives, worldwide at the experience and the approaches of
other countries.
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