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9.44 pm
The Minister of State, Department of Social Security (Mr. Stephen Timms): This has been a lively and interesting debate. We have enjoyed the rumbustious speech made by the hon. Member for Grantham and Stamford (Mr. Davies); it was somewhat unguided and mistargeted, but no less enjoyable for all that.
I am pleased that so many hon. Members wanted to take part in the debate, recognising as they do the central importance of the task that the Bill takes on. The Government have set out to build a new Britain that will be modern and decent--and a modern and decent Britain needs a modern and decent welfare system. That is what the Bill is for.
There can be no dispute that the system needs reforming. A constituent--a young Asian man in his late 20s--came to see me at my surgery last summer. Four years ago, he was working at one of the big London sorting offices. While off work one day, he was in a car accident and he was left with only partial use of his left arm. He was forced to give up his job, awarded a low rate of disability benefit and has not worked since. He told me that he wanted to work again, but he obviously had no confidence at all that he would be able to do so. He is married with a young child and another on the way, and he has been deeply worried about how he can bring up his family decently on the low income that he now receives.
However, there is no reason why my constituent could not work: he is a bright young man, he is right-handed and his right arm is fine. What he needs--and what he should have been offered four years ago--is some serious help to plan a return to work. Better still, he should have received help so that he did not have to leave work in the first place. That young man has been badly let down by our benefit system, and it is the system that needs to change. Too much of what the system does is out of date, or is done in an out-of-date way. The result is that far too many people are badly off when they do not need to be.
The Bill marks the start of a process of vital reform: building a system that delivers for people and that provides help to people, instead of trapping them, by applying the success that we have seen in the new deal right across our welfare system. When the Bill was published, I heard a radio interviewer on "Good Morning Wales" talking to a lone parent, Bithig Davies, about work-focused interviews for making and renewing benefit claims. She did not denounce them, but said:
Dr. Lynne Jones:
My hon. Friend has quoted a young woman from a radio interview. I am sure that most people support the gateway and the concept of the individual, tailored approach. However, did the Government's consultation not reveal that the majority of the 1,000 or so respondents felt that job interviews should not be compulsory?
Mr. Timms:
Our proposals for single parents have been welcomed extremely widely, and the young woman whom I quoted from that radio interview speaks for the overwhelming majority of lone parents.
I turn to some of the points raised in this excellent debate. I shall comment first on the intervention that the hon. Member for South Antrim (Mr. Forsythe) made at the beginning of the debate about the effect of the Bill in Northern Ireland. The majority of the Bill's clauses--with the exception of those measures set out in clause 74--will not apply automatically in Northern Ireland, which has a separate system. It is anticipated that Northern Ireland will legislate to retain parity with the rest of the United Kingdom, but that will be achieved when the Assembly assumes its functions in March or April this year via a new fast-track procedure.
My hon. Friend the Member for High Peak (Mr. Levitt) rightly drew attention to the scale of the changes that have occurred in the past 50 years since the present welfare system was defined. He was absolutely right to state that disabled people, in particular, are no longer willing to be written off by the system, as has occurred in the past. Disabled people have ambitions, and the Government want those ambitions to be fulfilled.
The hon. Member for Newbury (Mr. Rendel) began an interesting contribution by denouncing the Tory party's amendment and then announced that he intended to lead his hon. Friends into the Lobby to vote for it. I lost the logic of his argument. Many people who voted for the Liberal Democrats at the general election will be surprised to learn this evening that Liberal Democrat Members are voting with the Tories on welfare.
My right hon. Friend the Member for Birkenhead (Mr. Field), in a characteristically thoughtful speech, welcomed the announcement that people who remain in education and become incapacitated before the age of 25--rather than 20, as the Bill states--will be passported on to incapacity benefit. My hon. Friend the Member for Preston (Audrey Wise) particularly welcomed that measure and the change to accessibility to the mobility component of disability living allowance for young children.
I disagree with my right hon. Friend the Member for Birkenhead in his interpretation of the effect of the changes that we are making. The Bill revitalises
contributory benefits by, for example, extending bereavement benefits to widowers. That is a new contributory benefit for people who have not had access to one in the past. We are proposing new contributory rights through the state second pension, which is a new, 100 per cent. contributory scheme to be introduced by the Government.
Mr. Forsythe:
Is the Minister telling the House that the Bill will not be introduced in Northern Ireland, except by the Assembly? If we suppose, for the sake of argument, that there is no agreement and no Assembly, are the Government saying that the legislation will never be introduced in Northern Ireland?
Mr. Timms:
I have every confidence that the Assembly will take up its powers within the next couple of months and introduce the necessary legislation, but the Bill's provisions will not automatically take effect in Northern Ireland.
On the future of the contributory principle, I point out that nobody starting from scratch would invent the system that we have today, with all its complexities. We are improving and rationalising contributory benefits for people of working age which account for only 20 per cent. of national insurance benefit spending. We make no apology for concentrating extra help on those who need it most. That is why we are giving young disabled people a new entitlement to incapacity benefit.
We remain firmly committed to a strong contributory basis for retirement benefits, including the basic state pension, which will not be means-tested, as well as the new state second pension. That is not the death of a principle; it is the birth of a strengthened and modernised benefit system.
In response to the points made by my right hon. Friend the Member for Birkenhead, I point out that, since last October, when we greatly extended the linking rules for incapacity benefit from eight to 52 weeks, disabled people have been assured that they can try work for short periods with a guarantee that they will be able to return to the same level of benefit if they should fall ill again. That rule also means that they will be able to meet the new contribution test; so, rather than making it harder for people to try work, we are making it easier, and it is absolutely right that we should do so.
My right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Kingswood (Mr. Berry) made several points about incapacity benefit. Those concerns have also been raised by members of the disability benefits forum and others. The changes that we are making are right. After the war, fewer than one third of people in work had access to a non-state pension. Today, about three quarters do. It is right to reflect that change in the rules for incapacity benefit, as we are doing, and to cut the incentive to retire early that the old system provides.
It is right also to ensure that incapacity benefit is an insurance benefit for people who become incapacitated while working, as was intended. The system should not engender in people who are unemployed for a long time an aspiration to become sick. We want a system that encourages people to aspire to work.
The changes are right, and they give us the opportunity to improve the help that we provide for the people who need it the most. I would say to the hon. Member
for Newbury in particular that it will not do, even given the notoriety of the Liberal Democrat party on this score, to applaud the extra spending in the Bill while deprecating the measures that make those improvements possible.
I had hoped to be able to respond to some of the interesting points that have been made about stakeholder pensions. Rightly, the hon. Member for Ryedale (Mr. Greenway) commented that they have been welcomed by the industry. In a well-informed speech, my hon. Friend the Member for Wyre Forest (Mr. Lock) spoke about the widespread interest in providing stakeholder pensions; I have no doubt that they will be very successful.
In one of the most effective speeches of the evening, my hon. Friend the Member for Cumbernauld and Kilsyth (Mrs. McKenna) spoke about the way in which the Employment Service had been transformed by the new deal; she was absolutely right. The Tory idea of social security was as a giro factory. The claimant went in and spoke to someone sitting behind a glass screen he or she they had never seen before and would never speak to again. If the claimant could persuade the system that he or she was entitled to benefit, it started to send giros; beyond that, it took no further interest in the person. And the cheaper the system was to operate, the better--never mind the consequences.
"It's nice to think that somebody actually cares about single parents who want to go back to work . . . In my case it didn't happen. Nobody bothered at all. "
23 Feb 1999 : Column 281
That is the real indictment of the system that we have inherited: it has not bothered. By building on the new deals already in place, the Bill will at last start to put things right. A modern and decent Britain needs modern and decent welfare that is active, people centred, efficient and robust on fraud and that exploits new technology to the full in delivery. That is the kind of welfare system that we want.
We want to rebuild the system around work and security: work for those who can and security for those who cannot. It must be driven by principle, recognising that, for those who are able to, having a job is the best way for people to realise their full potential.
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