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4.55 pm
Mr. Howard Flight (Arundel and South Downs): It is clear that the Opposition share the Government's objective of seeking to find the right measures to look after and improve the lot of those who cannot look after themselves, and Labour Members' criticisms regarding the previous Government's policies will turn out to be misplaced.
I agree with my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) that the previous Government did not achieve the results for which they hoped, since social security expenditure
doubled in real terms. Since 1992--after black Wednesday, the withdrawal from the ERM and the return to a sensible exchange rate--the economy has been in a recovery cycle. Yet although the growth in social security expenditure has slowed a little, it has continued, in the main, to be faster than the growth in national income.
I would argue that the previous Government's quite generous measures during a period of substantially rising employment showed their own errors. To a large extent, they were creating many of the problems that they were setting out to solve.
In reality--behind the rhetoric and the phrases that are aimed at winning votes--what the Government are doing is a continuation of that: they are tweaking, being a little more generous here and producing a bit more means testing. To argue that working families tax credit is not merely a recasting of family credit--paid by the employer, instead of through the Benefits Agency--is semantics.
Our main criticism of welfare to work has been its inefficiency and the cost of creating jobs. However, the previous Government put in place similar measures, and we understand the principle that such a communications mechanism is necessary. I do not believe that what the Government are doing is a radical departure. It is not the radical rethink that many were expecting, and it is certainly not the radical rethink that its pioneer intended.
We are seven years into an economic expansion, and the Government are boasting that social security expenditure is not growing as fast as it has been. However, what they are putting in place will result in a pattern similar to that of the past 10 or 12 years, only even worse. Expenditure will rise and, as growth slows, it will rise even more--and the costs will become locked in.
The principle that the Government are expounding is that subsidising people into work will result in permanently lower unemployment and, therefore, permanently lower social expenditure. That is not the case--it did not happen between 1992 and 1997. The Government can become locked in to the costs. In terms of working families tax credit, there is no reason why people who can draw generous benefits while working for 16 hours a week will work any more hours if they do not want to. The benefits exist, and will go on being drawn.
The point about means testing, to be blunt, is that someone has to pay for benefits. Over the past 25 years, direct and indirect taxation on ordinary, middle-income families--the great majority of people who pay taxes--has risen substantially. The proposed increase in benefits will make hardly any difference to the standard of living of people whose incomes are broadly average.
That would be desirable as long as those same people were not the ones who had to pay. It is inherently unfair that people who are in full-time work and bringing up children and who are not entitled to the various means-tested benefits should have to finance other people enjoying the same standard of living. The reaction is quite natural: they do not save more and they do not take part in society's great dynamic of hard work and self-improvement.
A welfare system that levels everyone up to the average may sound very Christian and nice, but the reaction of the people in the middle of the average--the ones who pay for the system--must be remembered. I do not believe that those people will be willing to keep on paying in the long term.
The second problem is the familiar one that we live an age in which it has become more common for families to break up and for couples to divorce. As my hon. Friend the Member for Chingford and Woodford Green stressed, the measures introduced by the previous Government and by this Government are increasingly unfriendly to the family. Many professional commentators have observed that, over the past 15 years, it has been the efforts to solve the problem that have to a large extent created it. It is a classic case: make it easier for families to break up, and more will do so; take away the tax and other incentives for families to hold together and, when pressure is exerted, they will break up.
I am not opposed in principle to the concept of wanting to help women who are abandoned by their husbands and who have children to look after. I very much want to help them: the tragedy of their circumstances is only too evident in the work of the Child Support Agency. However, the problem must also be examined from another angle. If we want society to be satisfactory, with fewer problems, the best prescription remains the age-old one: families should have two parents who are married. All the statistics show that the children of such families are less likely to get into trouble and more likely to have successful careers, and so on. The opposite is equally true.
Moreover, the benefits of such a family group are felt by the parents as well as by the children. They depend on each other, especially when they get old: if one partner cannot work, the other provides care. I do not believe that most adults want to be alone, without a stable partner, as they go through life.
There is an argument in favour of tilting the tax and the welfare systems in favour of supporting the traditional family unit. If, with the best intentions in the world, a variety of measures are adopted that are tilted in the other direction, it is not surprising, in a very liberal society, that the family unit starts to break down.
Ms Stuart:
Does the hon. Gentleman agree that families come under the most severe strain when parents try to combine work with family life? Far from breaking up families, Government help with child care offers them significant support.
Mr. Flight:
I agree with the hon. Lady that there is added strain if both parents are working. However, although it may be that both parents work because they want to work, the major reason for both parents working is economic. The bill for the rising cost of welfare has been predominantly paid by people in the middle, and their economic response has often been that both parents have worked. Given the point made by the hon. Lady, I must ask her why the Government are making the position worse by virtually driving mothers out to work, even if they do not want to work, by saying that they will get family help and child care assistance only if they work, and that there will be none if they stay at home to look after their children. I cannot see your logic if you believe that.
Mr. Deputy Speaker:
Order. Could the hon. Gentleman use the correct parliamentary terms?
Mr. Flight:
I apologise, Mr. Deputy Speaker.
It is interesting to focus on how the Government have thought about the Green Paper on pensions. It strikes me that a well-intentioned, academic approach based on numbers analysis has been taken. The areas that need to be targeted are identified through proportions and statistics, and the Government seek then to fine-tune measures that will target those problems. That seems a logical way in which to address problems, but it fails to take account of the knock-on effect of those measures, and of human nature.
It is ironic that one of the great obsessions of the Chancellor, the main architect of social security policy, is the elimination of tax avoidance and tax evasion. One would have thought that he would realise that human nature is such that no individual much wishes to pay more tax than he is legally obliged to pay. The point is to make it absolutely clear where the law falls. The sin is with those who stray into evading taxes.
At the other end of the spectrum, the more benefits there are, and the more they are structured with means testing and with bells and whistles, the more inevitable it becomes that people will structure their circumstances to obtain the maximum benefit. Equally, it is more likely that they will slip over the edge from actions that are straightforward and honest to actions that may be fraudulent. The classic example--where there has been an explosion of such cases--concerns cohabitation.
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