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1.47 pm
Mr. Iain Duncan Smith (Chingford and Woodford Green): The Secretary of State set out to be brief, but his speech was dragged out for a bit longer than he anticipated. As he said, this is a low-key debate, but it is also wide ranging and has always been treated as such. We do not oppose the orders, for the obvious reason that many of the upratings and changes are vital for those who need the benefits. It is therefore important to consider the debate in the context of range--rather than specifics and too much detail--and to try to get to the bottom of what, exactly, the Government are about, now that we have had two years to look at this matter. Yet the one thing that the Secretary of State did not say much about was the famous pledge that the Prime Minister made before the election and continued to make not long after it. In April 1997, he said:
- "As we get welfare bills down . . . then we can release more money into education and health and services where we really want them".
- "I have asked Ministers at the Department of Social Security"--
- "to look in detail as to how we can make far reaching reforms that tackle insecurity and poverty as well as reducing the social security bills".
Mr. Darling: The hon. Gentleman is not on good ground.
Mr. Duncan Smith: I think that I am on good ground, and the right hon. Gentleman will find out just how much
good ground we are on today, because the Government set themselves a target and it is fair to measure them by it. I do not want to be churlish, and hon Members do not want to be too mean, but when someone is elected on a particular policy objective it is fair that people should know, each year, whether it is being met.
The Government carried out a huge spending review; indeed, the Secretary of State was the man responsible for that review, around which so much of the relevant measures are set. As we were told by the Prime Minister, the review was meant to reduce the cost of the social security spending, but we find, using the Government's form of accounting, that the rise over the three relevant years--three years towards the election--will be £37 billion.
We must not question whether that objective is good or bad, but whether that is exactly what the Government said. [Interruption.] No, from the Government's point of view. There is much in the review that is unnecessary, and we will deal with that in more detail later, but the Government disagree. They took on the Conservative Government's projections; the Secretary of State will remember that, because he considered them in his spending review.
The Conservative projections were for growth of £15 billion over the same period, but the Government's figure is £37 billion. The gap between the figures needs to be examined and set against the increases in health and education spending. After all, that spending was supposed to be increased as social security spending was due to be decreased.
Let us put some of the record straight in regard to the line that the Government inherited. In the financial year 1997-98, social security spending fell as a proportion of gross domestic product for the first time in a long period. That was the year in which Labour inherited total expenditure of 11.9 per cent. of gross domestic product. It followed four years of falling social security spending. The Secretary of State inherited a budget that was not climbing but falling, but the Government have managed to turn the position around and increase the budget.
We are talking about a massive increase. The Government will take the figure from 11.9 per cent. to about 13 per cent. before they leave office--and leave office they will: I feel certain of that, notwithstanding the temporary blip on the front page of today's edition ofThe Times. The wrong questions were clearly being asked.
The Secretary of State no longer refers to that basic failure, but we have referred to it. It is there, a badgeby which the Government will be measured. The Government have failed so far, and they will fail in the future; but what underlies their failure? That is what I really want to talk about.
Mr. Webb:
Anyone trying to be independent--as Liberal Democrats are, of course--in deciding which Government had spent more on social security would consider whole Parliaments, and would strip out the cyclical element. Picking different points in a cycle messes up such judgments. An independent assessor would not say that the first two years of a Labour Government did not count because that Government had been following Tory policies; they were in office,
Mr. Duncan Smith:
I do not disagree with that. I agree with the hon. Gentleman's point about cycles, but the point that I was making to the Secretary of State is that we were pressing down on social security spending, and that he therefore inherited a falling budget. That was the cycle in this instance. It is no good the Labour Government saying that they inherited a budget that was rising, which was inherent in what was said by the Secretary of State.
We can look all the way back to 1945, and see an inexorable rise in the budget, regardless of which party has been in government. During different cycles, the rise has been at different levels. That is what today's debate is all about. How can we deal with such a position, and how can we deal with the structure that has driven much of what has happened?
As I have said, when Labour came to office it set itself a specific target. The Prime Minister said, "We are going to cut social security spending", but the Secretary of State has to admit that the Government are not going to cut it. It will rise more rapidly than was predicted by the Conservative projections, which were examined independently by a number of bodies. That is the only point that I am making. The target is the Government's, and they must be measured against it. Does the Secretary of State accept that?
Mr. Darling:
What the Prime Minister and the rest of us said was that we would cut the bills of economic failure, getting people who could work into work. We also made it clear that we wanted to do more for pensioners, that we wanted to do more to end child poverty--which is why we are increasing child benefit--and that we wanted to help people with disabilities. As the hon. Gentleman will see if he looks at the increased spending for the next few years, half of it will be devoted to pensions, about a quarter will be devoted to people with disabilities, and a bit less will be devoted to children.
We know that the hon. Gentleman wants to cut, indeed abolish, working families tax credit. If he believes that our spending is wrong--and, if he does not, he should not criticise it--will he tell us what he will cut? The leader of his party and the shadow Chancellor have said that they will cut social security spending. What are they going to cut?
Mr. Duncan Smith:
That was a remarkable attempt to rejig the pledge. Let me repeat what I quoted earlier. The Prime Minister did not just say that the Government would transfer the money to deal with social ills. He clearly said:
I feel sorry for the Secretary of State. He has had to appear at the Dispatch Box yet again and pretend that none of this happened. The fact is, however, that the Government are raising social security spending by £37 billion a year. Does the Secretary of State disagree with that?
Mr. Darling:
We are spending more on pensioners. We are spending more on child benefit--a record amount. We are able to do that for two reasons. First, we are maintaining prudent control of public spending overall and have set our spending for the next three years. People accept that that is the right thing to do--it is affordable and prudent. The only people who are against it are Conservative Members. Secondly, by examining social security spending that we think should be cut--for example, that spent on people on benefit who should be in work, or gateways to benefit that should be tightened--we will cut those bills. I repeat the point that, in this Parliament--the hon. Member for Northavon (Mr. Webb) is right--the rate of growth of social security spending will be half that of the previous Parliament.
"As we get welfare bills down . . . then we can release more money into education and health".
Later, he added:
"as well as reducing the social security bills".
I am not going to discuss whether such proposals are good or bad; we could debate that at length. [Interruption.] I have my views, but I am making a clear point. With respect, Labour Members are in government. The point of today's debate is to decide what the Government will do about that pledge.
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