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Mr. Pond: Was the hon. Gentleman also proud of the fact that his Government were clearly moving in the direction of means-testing, whose extent they doubled?
Mr. Davies: All these tactics are crafted in Walworth road. One of the principles contained in the handbook that I have not seen--I do not think that I would find it very attractive reading--is that those faced with an awkward statistic should distort it, and that is what has happened this afternoon.
Before I reply to the substance of the hon. Gentleman's intervention, I should point out that I am in a poor position either to take credit for the undoubted achievements of the last Administration or to defend what others may consider to have been that Administration's shortcomings. [Hon. Members: "Why?"] Because I was not a member of that Administration.
Nevertheless, I will grapple with the issue raised by the hon. Gentleman. Perhaps he is a victim; perhaps he has been bamboozled by the stuff coming out of Walworth road, and is not trying to bamboozle the House. I prefer that charitable interpretation.
The statistical point that the hon. Member for Gravesham makes reflects the fact that the last Conservative Administration introduced a number of new means-tested benefits, particularly for deprived and disabled people, and greatly extended family credit, which is a means-tested benefit and was a sensible addition to the panoply of instruments available to our welfare system. Of course, that produces a statistical increase in the total proportion of social security spending by way of means-tested benefits. It is emphatically not the same thing as what the Government whom he supports are doing, which is to means-test previously non- means-tested benefits.
That is what the Government have done with bereavement benefit. Widow's benefit, as it used to be called, has been abolished. It is now a new means-tested
benefit. That is what they have done with incapacity benefit and what they are doing with the minimum income guarantee. Running down the national insurance system, as they are doing, taking non-means-tested benefits and means-testing them is totally different from what the last Conservative Administration did, which was to preserve the national insurance system and to add to it by discreet and targeted additional means-tested benefits. If the hon. Member for Gravesham cannot tell the difference between those entirely different approaches, I am surprised that someone of such intelligence should have managed to spend so long on the Select Committee.
I have not finished with the Government yet because we cannot allow the debate to conclude without receiving some answers on what is happening with the national insurance recording system computer. The best the Government can ever do is say, "It is all the last lot's fault." It is no good saying, "It wasn't us wot signed the contract." That was roughly the excuse from the Secretary of State. The fact is that problems began to arise when the Labour Government had already been in office for about a year.
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley):
Rubbish.
Mr. Davies:
The hon Gentleman may say that, but if I am wrong--if the problems began to manifest themselves earlier than or from May 1997--the point that I am about to make is greatly reinforced: in their first 18 months of office, we heard absolutely nothing from the Government about them. If it were true that, as soon as they came to office, they identified those problems, it was a dereliction of duty on the part of the hon. Gentleman or his predecessor not to come to the House and to say, "We have hit a major problem."
Had the Minister or his predecessor had the good sense to do so in the summer of 1997, there would have been some credibility in saying, "It's not our fault guv. It's the fault of the last lot," but we heard nothing. There was no statement to the House. We heard nothing until we received the circular letter of last September, when the Secretary of State said that the problems would be solved within two weeks--some two weeks. [Interruption.] I hope that the right hon. Gentleman is not saying sotto voce that he did not say that, because we have it in writing. We will pass it across the Box to him if he has forgotten the injudicious use of words that he resorted to last September.
In fact, earlier this afternoon, the Secretary of State was not lying when he said, "It is not my fault. It is the people who advised me. I said it on advice." That was the phrase that I heard him use earlier.
Mr. Rendel:
Will the hon. Gentleman give way?
Mr. Davies:
No. It is too late to take any more interventions. I have taken a large number, as the hon. Gentleman will recognise.
For better or for worse--it is no doubt for worse--the Secretary of State is now in charge. He cannot go on like this. He is ultimately responsible for the people who give him advice. If he is receiving such dumb advice, there may be something wrong with his information technology advisers, as well as with Andersen Consulting, which set up the computer.
If such a problem were to arise in a business, one person would be put in charge. We want to know who really is in charge: is it the Secretary of State or one of his junior Ministers? One would hope that whoever was in charge would spend time knocking heads together; that there would be a precise plan on action to be taken; when it was to be taken and by whom; and that there would be a weekly report on the desk of the Secretary of State about what was going on. If there is such a report, the House deserves to see it. We are dealing with a massive waste of public money and a cause of enormous anxiety to millions of people.
I endorse the demands of the Liberal Democrats that the estates of pensioners who die before they have received the money that they are entitled to should be fully compensated and that widows who have made the wrong choice between a state retirement pension and widow's benefit because a material fact was not available should be able to change their choice.
I have another even more important demand. Those who have lost because their SERPS rebates have been underpaid into personal pensions should be put in the financial position that they would have been in had the Government not made the mistake. That is what would happen with pension mis-selling or other abuses or inefficiencies in the private sector. If people have missed the turn in the market because money should have been paid to them in September or October, since when the stock market has appreciated, they should be compensated, as they would be if such a mistake were made by a bank, a stockbroker or an insurance company. I hope that we shall have an assurance on that.
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley):
I was going to start my response by saying that we had had a good, thoughtful, quiet and considered debate on the benefit uprating orders and the welfare reform context that the Government have set for social security. We had, until the contribution of the hon. Member for Grantham and Stamford (Mr. Davies). He displayed a compassion for the poor that was notably absent from the policies of the Conservatives during 18 years in government.
The hon. Gentleman talked about means-testing, as though the Labour Government had a runaway policy to abandon the contributory principle and move to means-testing. Let us remind the House what happened when the Conservatives were in power. When they came to power, 16 per cent. of benefits were means-tested. When they left power, 34 per cent. of benefits were
means-tested. If the hon. Gentleman were doing his job as an Opposition spokesman he would have seen the answer--
Mr. Quentin Davies:
The hon. Gentleman is making a point that was made by his Back Benches in an intervention to my speech a few moments ago. He was obviously not listening to my response. He is drawing an inference from a statistical fact that comes from the Conservative Government introducing new means-tested benefits, but not running down existing contributory benefits. The difference between us and the Labour Government is that they are means-testing benefits that were previously not means-tested.
Mr. Bayley:
The hon. Gentleman seems to have forgotten that unemployment benefit--a contributory benefit--was withdrawn by the Conservative Government. He might like to look at the video of the part of his speech in which he was running down the record on means-testing of a previous Conservative Government in a way that would attract the sympathy of many of my hon. Friends, and see the expression on the face of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who did not appear to follow his argument point by point.
The hon. Member for Grantham and Stamford should also look at the written answer yesterday from the Under-Secretary of State for Social Security, my hon. Friend the Member for Wallasey (Angela Eagle) showing that it was not just a general move towards means-testing over an 18-year period. In the final four years of the Conservative Government the proportion of the social security budget spent on means-tested benefits increased each year, but it has decreased slightly--by less than 1 per cent.--under Labour.
To create a myth that the Labour Government are abandoning the contributory principle and moving to means-testing is not supported by the facts. The hon. Gentleman should look at the facts before making a charge.
In our 1997 election manifesto, we made a pledge to modernise the welfare state. Under the Conservatives social security spending had almost doubled. It had risen by £43,000 million a year in real terms, yet despite that increase inequality and insecurity continued to rise. By 1997 one child in three in Britain was born into a family that depended upon income support and the means-tested benefits to which the hon. Member for Grantham and Stamford referred.
The social security system that we inherited is failing the very people it was meant to help. We cannot tolerate the status quo and keep the system as it is. We need to change it for economic, social and moral reasons. Right across government we are committed to change--to tackle the root causes of social exclusion and economic insecurity.
It is important to be clear about the Government's approach to welfare. Unlike our predecessors, we see welfare as much more than DSS benefits. In response to my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) we want a modern, effective welfare state providing a mix of cash and services
administered nationally by the whole spectrum of Government Departments and locally by statutory, voluntary and private agencies. We see each part of that welfare state as interdependent so that the provision of education, skills and training promotes employability. Over time, investment in jobs and social security will reduce inequalities in health.
Our approach to the machinery of government, for example, the creation of the social exclusion unit, will tackle the manifestations of social exclusion such as crime and truancy by targeting the available resources where they are most needed
The hon. Member for Chingford and Woodford Green, who I got to know well in the previous Parliament when we were both members of the Select Committee on Health, made the charge that transferring the Contributions Agency will undermine the contributory principle. The decision to transfer the agency to the Inland Revenue is not an attack on the contributory principle; it is a sensible reform that will enable businesses and individuals to sort out their tax and national insurance with a single organisation. I should point out to the hon. Gentleman that the Inland Revenue already collects 95 per cent. of national insurance contributions.
The hon. Members for Chingford and Woodford Green and for Grantham and Stamford both waved at the Chamber the Benefits Agency questionnaire on child benefit. The point of that questionnaire is to support the Government's programme and ensure that benefits go to those who are clearly entitled to them. I am surprised that they should make a big issue of our determination and our action to ensure that benefits are properly paid.
My hon. Friend the Member for Blackpool, North and Fleetwood spoke about disability living allowance. I know that she has taken a close interest in that benefit. I would like to associate myself with the tribute that she paid to the staff of the DLA headquarters in her constituency. She welcomed the extension of the higher rate mobility component of DLA to three and four-year-olds and argued that it should perhaps be extended further, to younger children.
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