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Mr. Pond: What do the hon. Gentleman's constituents feel about a Government who increased national insurance contributions and then cut significantly the benefits for which they paid, including pensions and unemployment benefit, which was scrapped and replaced by the much less generous jobseeker's allowance? Would his constituents applaud a Government for doing that? What does he say about the Government whom he supported?
Mr. Flight: The hon. Gentleman makes my point. No Government should fiddle with an insurance system.
He implicitly criticised the previous Government for that; we implicitly criticise this one for it as well. It is a bad principle. Both Governments fudged the issue, which needs to be brought out into the open to be addressed. If we move towards a system of purely means-tested benefits and roll national insurance into income tax, as some hon. Members suggested, people's willingness to accept, and participate in, that will grow very sour. I repeat my main point: the crucial negative is that the great burden falls on the rump in the middle.
The pensions Green Paper proposals seek to target defined areas of need, but no one has sat back and considered what the by-products might be. There is a risk that the proposals will lead to a deterioration in private sector pension provision for people in the middle, whether it is companies giving up occupational schemes for stakeholder schemes or the phasing out of group personal pension schemes. I forecast that the net result will be a reduction in overall pension accumulation in the private sector and a reduction in the pension that the ordinary, average person will get. The people at whom the proposals are targeted will benefit, but I believe that insufficient thought has been given in designing the changes to the likely by-products.
The other key problem is self-employment. The design has not been targeted adequately at the problems of the self-employed. Who are the self-employed? What incentives do they need to make their own pension provision? We can debate that more next week.
There is an element of Nelson's telescope in this. The Government look through it with one eye to arrive at their conclusion. That may be the blind eye; they have not looked through the other eye--or perhaps through the other end of the telescope--to see what the knock-on effects of their measures will be. In particular, they have not considered the effects on human behaviour. That was the great mistake that we made over the past 10 years. We introduced social security reforms following the same trend. I assure the House that they were well intended, but they created too much of a dependency culture and ballooned the bill without achieving their objective. I am not at all convinced that any major change in policy has taken place that will allow us to break out of the problems. I fear that many of the results will be contrary to the objectives, and that the ballooning in the expense will be much the same as when we were in office.
Mr. Donald Gorrie (Edinburgh, West):
My hon. Friend the Member for Newbury (Mr. Rendel) and my very avuncular and hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), have dealt with the general principles and issues very well. I should like to
First, the documents that we are asked to agree today are still based on the pernicious idea that people under the age of 25 can live more cheaply than people over 25. That is wrong. Beer, food and housing cost as much for under-25s as for over-25s. On Monday, the House spent a lot of time discussing the appropriate age for sexual activity. There are different ages at which one can drink, drive or get married, and students of whatever age are deemed to be involved financially with their parents. Thus the whole age thing is muddled, and it is not logical to say that 25-year-olds are different from people of any other age. It is a return to the Victorian idea of leaving money in trust to prevent members of one's family from marrying until they were 35, in the belief that only then would they have the sense to choose correctly. I appreciate that changes cannot be made over night, but I urge the Government to change that.
Secondly, as others have said, housing benefit is the single greatest obstacle to people taking up work. It must be dealt with more seriously than just introducing a bit of uprating here and there. If we are to enjoy so-called joined-up government in years to come, housing costs must be addressed collectively. Relatively speaking, rents are much higher than in the past and, therefore, benefits are much higher. We should see whether there are other ways to support either the revenue cost or the capital cost of housing.
Recent research has shown that, if the Treasury gave more support to the capital cost of social housing, it would save much more on benefits for people living in that housing than it spends on construction, and would save money overall. The whole issue of the volume of housing benefit and how it forms a huge obstacle to people taking up work must be addressed.
Thirdly, the Government should simplify the whole system. It is a long time since I did any mathematics, but one formula in schedule 8 is calculated as (A x B) x C divided by 52--I see no point in having the brackets. That merely illustrates the futility of the effort. If the entire House were to be given an exam on the benefits systems based on that sort of stuff, our performance would be so abysmal that the Secretary of State for Education and Employment would send in Mr. Woodhead and his bunch to sort us out as though we were a low-performing school.
The whole system is hopelessly overcomplicated. It was invented by very clever people, which is part of the trouble, although it is encouraging to see that even very clever people do not always notice a misprint, with the result that we have an extra document before us today. Even Homer nodded in his proofreading. The trouble with the benefits system is that it is invented by very clever people; it is enacted by somewhat less clever people such as ourselves; it is put into effect by well-meaning people in offices who are totally snowed under and who have great difficulty administering it; and it is all done for the benefit of people many of whom do not understand it at all.
Changes give rise to an immense amount of work for officials in housing benefit offices. I know that they can feed figures into computers, but the fact is that they have to alter every single person's allowance. Might I suggest
something simpler, by giving an example of a purely amateur nature, although it might cause ribaldry among the intelligentsia in the far corner?
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle):
There is no one in any corner.
Mr. Gorrie:
There is when viewed from here. Perhaps they are invisible.
When recalculating a person's benefit, one can either start at the beginning and change every step of the calculation, which is what we are doing today, and reach the answer about 15 calculations later; or one can accept all the existing calculations and simply take everyone's benefit as it stands and increase it by 2 per cent., 3 per cent., or whatever the figure is. The latter method would mean that one would not have to recalculate every single person's benefit; instead, one would simply uprate the benefit. Surely we can apply common sense in that way. Even if my proposal would not work, cleverer people could no doubt produce cleverer solutions.
The whole system is a disaster because it is far too complicated and an enormous amount of time and money is wasted administering it. I have only short experience as a Member of Parliament, but I served as a councillor for 26 years, during which time I tried to help people to understand the benefits system and attempted to get mistakes made by benefit office officials corrected. Anyone who has any experience of the system knows the trouble caused by its complexity.
Mr. Quentin Davies (Grantham and Stamford):
Mr. Deputy Speaker, today's debate has been especially interesting, which is due in large part to your judicious decision to allow it to range fairly wide, over all the policy areas that lie behind the uprating orders that are the formal subject of the debate.
I believe that there is considerable merit in the suggestion made by the Chairman of the Social Security Select Committee, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), that Department of Social Security matters might form the basis of an annual debate, thus allowing the DSS to follow the example of other Departments, most notably the Ministry of Defence, which has an annual debate on the defence estimates. That debate gives the House an opportunity to review all the policy issues that flow from those estimates. The hon. Gentleman made that suggestion to the business managers and I am happy to endorse it.
Another reason why our debate has been extremely interesting is that many of the hon. Members who have contributed to it are past or present members of the Social Security Select Committee, or have otherwise done their homework and put a great deal of thought into the subject. Very few hon. Members, if any, appeared to make a perfunctory political speech for the purpose of throwing slogans across the Chamber.
The hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) suggested that disability living allowance should be extended to children under three. I hope that the Under-Secretary will respond to that and all the other serious suggestions and questions that have been voiced this afternoon and will not brush them aside. I look forward to hearing his response.
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