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Mr. Webb: I welcome extra support for low-paid families. Nevertheless, the Government said in the Budget that, in the medium term, they wanted to develop a streamlined system of supporting families. Now, someone in a low-paid job will receive child benefit, child credit, child care tax credit and working families tax credit. Is that the type of simple system that the Government want? Why did they not introduce a streamlined system now rather than introducing a messy one first?
Mr. Darling: The hon. Gentleman is an academic and takes a keen interest in these matters. The Chancellor said that he wanted a streamlined system because--as the hon. Gentleman was right to say--the current system is quite complicated and can be difficult to understand. However, there are two problems. First, it always takes time to introduce a new system, as one must be confident that the new system will work and deliver payments most effectively and efficiently. Secondly, if we did nothing before introducing the new system, children growing up would miss out on the help that most of us agree is necessary.
In all our tax and benefit changes, therefore, we have chosen a judicious policy mix, one consideration driving that decision is the need to provide help as soon as we possibly can, consistent with our prudent management. The second consideration is to make the structural changes necessary to deliver more efficiently all the tax and benefit changes. We are on the case, and we are getting there. However, to do nothing until we have completely re-engineered the system would not be appreciated by those who would lose out meanwhile.
Another important element of our strategy to help the poorest families is an increase of nearly 30 per cent. in all income-related benefits for children under 11. We want to ensure that all children are looked after properly and that their families have the means of support to ensure that they get the same opportunities as everybody else.
We are also introducing the new sure start maternity grant to replace the existing social fund maternity payment from next year. That will help 200,000 families
by doubling the amount that they receive for a new baby from £100 to £200. One in four children born will benefit from that help. We are also doing more to protect the health of pregnant women and their unborn children by extending entitlement for maternity allowance to women on low wages, helping 14,000 mothers each year. From August next year, self-employed women will also benefit from a more generous maternity allowance, which we are increasing by 15 per cent.
We are helping children today because they need that help today. We are helping 700,000 children out of poverty, delivering on another manifesto commitment. In this Budget, we are ensuring that those children have better prospects, better opportunities and the chance of a better future.
We are also concerned that we should help pensioners, to ensure that they share in the rising prosperity of the country. We are providing significant new help for pensioners, with a £1 billion package of support. We are determined to do most to help those pensioners in greatest need, so we are delivering on our proposal in the pensions Green Paper that I published last December, by uprating the new minimum income guarantee in line with earnings in April next year. This year a single pensioner will get £75 and a couple will get £116. From next year, a single pensioner will get around £78 and a couple will get £121. That is a significant amount of help for some of the poorest pensioners in the country. From April next year, the poorest pensioner couples could benefit by nearly £800 a year compared with the help that they received from the previous Government. That is a real boost for the incomes of the poorest pensioners. The Government are delivering real security that was not there during the 18 years that the Conservatives were in power.
Mr. David Rendel (Newbury):
Does the Secretary of State accept that the poorest pensioners are those who are not on income support, who will not benefit from the minimum income guarantee?
Mr. Darling:
As I pointed out to the hon. Gentleman at Social Security questions last week, we made it clear in the pensions Green Paper that we recognise the problem of the nearly poor pensioner--someone with modest capital or a modest income from an occupational pension. We are determined to do more to help those pensioners. In the mean time, we have to tackle a problem that has built up over many years. There are too many pensioners who are very poor. They will benefit from the minimum tax guarantee.
Mr. Darling:
There is no point in the hon. Gentleman shaking his head. I understand that he is campaigning for the leadership of his party, so he ought to be aware that at least one member of his party does not agree with him. The hon. Member for Northavon (Mr. Webb) thinks that the minimum pension guarantee is a good thing. That is one vote gone before he starts, unless he can convince his hon. Friend to change his mind. The Government are doing more to help pensioners across the board.
Mr. Darling:
Let me set out what we are doing to help pensioners. We are taking 200,000 pensioners out of
Mr. Iain Duncan Smith (Chingford and Woodford Green):
The Secretary of State talks about increasing the winter fuel payment. Why did he not simply increase the basic state pension? Is the price of fuel going to increase by the amount that he has increased the payment, or is there some other reason?
Mr. Darling:
We wanted to deliver a significant payment to every pensioner household during the winter. Many pensioners find that in winter, increased fuel use and other costs mean that they will greatly value the additional single payment of £100. Most pensioners will welcome the additional help, and will recognise that the Government are doing more to meet other priorities as well.
Mr. Geraint Davies (Croydon, Central):
My right hon. Friend may know that that measure was warmly welcomed by Stella Hague, the mother of the Leader of the Opposition. On income tax, will not the change to a 10 per cent. income tax rate--taken together with the marginal rates of 20 and 23 per cent.--offer a net saving to all taxpayers, because--
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. It sounds as though the hon. Member for Croydon, Central (Mr. Davies) is trying to make a speech.
Mr. Darling:
My hon. Friend made two good points, one of which was that nearly 2 million low-paid people will benefit from the 10p starting rate. That is why it is such a useful addition to the tax regime. On his second point, I have no idea what the mother of the Leader of the Opposition thinks. If she welcomes our pension proposals, perhaps she is urging her son to embark on a reshuffle to get some better quality on the Opposition Front Bench.
I would be interested to learn, in the next half hour or so, what are the Conservative's proposals. Since the Budget, the Conservatives have been strangely silent--apart from the usual squabbling on Europe. There has not been much talk at the kitchen table over the weekend. I would be interested to know whether the Conservatives still adhere to the line that our spending is unaffordable and that, therefore, they would reverse our spending plans.
We are giving significant help to families with children and to pensioners. It would be interesting to know where the Conservatives stand on that. We know that they oppose our increased spending on the health service, housing and education. Let us hope that, this afternoon, they will tell us whether they support our proposals to give more help to families and to pensioners, or whether they support our plans to reduce the basic rate of tax--something that they were unable to do for much of the time that they were in office. Perhaps we will hear what the Conservatives would do.
In contrast to Conservative policies, the Budget will help 20 million households throughout the country. Those households are getting a better deal from the Government because we are promoting enterprise and securing a stronger economic future. We are controlling spending, while providing extra money for schools and hospitals. We are providing a better future for millions by cutting taxes to promote work, to help families find work and to help pensioners and the poorest in society.
Mr. Iain Duncan Smith (Chingford and Woodford Green):
Last Tuesday, the Chancellor produced his third Budget, three features of which I wish to deal with today: first, the way in which the Chancellor mentioned only what he considered to be the good things, preferring to leave unsaid many bad things--changes by stealth; secondly, the ending of the special place of marriage in the tax and benefits system; and thirdly, rising tax.
I know that the Secretary of State for Social Security does not want to be taken back to this matter, but we will run through it one more time. Last week, the Prime Minister, when confronted by my right hon. Friend the Leader of the Opposition about taxes, responded by saying that taxes had been cut. Perhaps he was economic with the truth, or perhaps he was intimated by his right hon. Friend the Chancellor, who was sitting next to him. One way or the other, even the Prime Minister admitted the week before that taxes are rising; yet a week later, he said something else.
In the Financial Times of 21 September 1995--this point was made by my right hon. Friend the Member for Horsham (Mr. Maude)--the Prime Minister said that he had
"no plans to increase tax at all."
That is a straightforward pledge, and it is fair that Labour in government should be measured by that pledge. However, the Government do not seem too happy. The fact remains that the two previous Budgets have increased taxes by approximately £40.7 billion over this Parliament, and taxes will rise in the coming year by £7.1 billion. It is the overall burden, not the headline income tax that matters. The overall burden of tax is what the public have to pay, not what the Chancellor wants to publicise. The public are presented with what appears to be a reduction while the Government are busy taking more money out of their pockets.
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