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1.45 am
It is also an impossible message to sell. How on earth do we tell people, as the legislation goes through, that the only way to deliver the widows benefit that they had hoped would be in place for their spouses is to do a Captain Oates and say, "I am going out now and I shall be gone for a while." We cannot say, "You have to act quickly before the legislation comes in. Die now while stocks last." That is hardly a commitment to a new, refounded welfare state, based on the principles of social inclusion and universality.
I hope that, when the Bill goes to another place, Ministers will take the opportunity to reflect on the fact that the House has other choices. It has better and more inclusive choices. I hope that, when the Bill comes back in its final stages, we will have found a way in which to honour and to extend widows' benefit rights, rather than contracting and limiting them.
Mr. Oliver Letwin (West Dorset):
I am, for once, grateful to have been called in the debate after many hon. Members have spoken--perhaps, for all I know, near the end of the debate. It has been a fascinating debate. In the course of it, I have understood much better some of the points that I wanted to make from the beginning. What has become clear is that we are discussing two separate, but connected issues. The first relates to the specific question of widows and their payments on bereavement.
In case Ministers do not do so in their answer to the debate, I should explain what I take to be the logic behind the Government's proposals on the precise question of widows. It is part of a general logic. If I were going to defend the Government's proposition on widows, I would say what the Government would say, if they were honest, about a range of their social security measures: the Government no longer accept what my hon. Friend the Member for Canterbury (Mr. Brazier) referred to implicitly, which is that with certain categories of person, regardless of their income, it is right to recognise their need for extra payments, or for reduced taxation, which come to the same thing, but in different ways. That is as true of the married couples allowance--which, obviously, I am not able to speak about tonight--as it is of widows benefit.
If they were defending their position against new clause 1, the Government would say, "We do not accept the idea that widows as widows have any right to any special payment on bereavement. For political purposes, we will admit to payment for six months." However, the six-month limit makes no sense. There is no logic to six months. While we are at it, there is no logic to a limit of three or nine months.
Mr. Duncan Smith:
It is plucked out of the air.
Mr. Letwin:
Indeed. It is plucked out of the air for understandable political reasons, but the proposition that
That is a reasonable proposition; it is rational. However, it is wrong because of two consequences. The first involves incentives; the right hon. Member for Birkenhead (Mr. Field) has talked many Labour Members and now, thankfully, almost all Conservative Members into recognising the argument. The proposition that it is always lack of income, and only lack of income, that should attract payment from the state, or reduction of tax from the state, is an incentive always to reduce, rather than to increase, income at any stage in life. The right hon. Gentleman has written lucidly and powerfully about that. In the Bill and in many other measures, the Government have forsaken the principles that he has enunciated.
The second reason why circumstances should count is that we should be giving positive incentives to people. In this case, we should be giving people incentives to save and to contribute; in other cases, they should be given incentives to look after themselves and to behave in certain ways--such as to enter stable relationships for the sake of children. If we do not admit the principle that certain circumstances, quite apart from income, are ipso facto a reason for being treated differently from other people, we sweep away the whole argument for using the tax and benefit system as a means of creating a better society and preserving that which is good in our society.
The conception that certain circumstances are not a reason for different treatment--if that is what Ministers believe--is a profound misconception. If that is not their conception, the argument for doing away with widows benefits collapses entirely. If one admits that circumstance is a reason for increased payments from the social security system, who could possibly be in a circumstance more meritorious and needy than someone who has been bereaved?
We have been discussing two issues: the first is that of widows; the second is a broader and deeper one, on the contributory principle. I should like to enlarge a little on a debate, which, although it has been very interesting, has not quite yet got to the nub of the issues.
It is clear that the contributory principle is a very special thing. It is not like a contribution or a contract between an individual and a private scheme, and I think that many hon. Members on both sides of the House will agree that that is a very fine thing.
As the right hon. Member for Birkenhead said, a principle in the Green Paper, and for the Prime Minister, has been to encourage private provision. However, private provision has a characteristic that contributions to the social security system can never share. More importantly, contributions to the social security system have a characteristic that private schemes can never share. Private schemes can never be as diversified as contributions coming compulsorily to the central pool. Compulsion is the basis for universality--which is the principle that I think that the hon. Member for Nottingham, South (Mr. Simpson) had in mind.
Mr. Edward Garnier (Harborough):
I am fascinated by the debate, and am delighted that I stayed up to listen to it. [Interruption.] I may be mad--and I hope that my hon. Friends will help me out when I am old--but I think
Mr. Letwin:
I am delighted that my hon. and learned Friend stayed up, not to listen to me, but to alight instantly on a point that is far distant in my speech, towards which I was gradually wending my way. My answer is no--I do not think that the contributory principle is a form of taxation. The problem, however, is that the Government do. I shall try in a moment to explain just what I mean by that.
The difference between contribution in social security and contribution to a private scheme is that, in a private scheme, a person is looking after himself or herself--[Hon. Members: "Here he is."] I certainly do not attribute the arrival of the Secretary of State to my own eloquence, but we are honoured by his presence.
In a private scheme, in which an individual looks after himself or herself, the individual necessarily is an economic proposition; otherwise, the private scheme would not be taking him or her on. All the other individuals in that private scheme also are economic propositions--which is a fine thing; there is nothing to be said against it. I think that my hon. Friends on the Front Bench will agree that any proper long-term provision for old age and the many other vicissitudes of life depends greatly on private provision. However, it will never satisfactorily wholly depend on private provision; neither will it ever satisfactorily wholly depend on means-tested benefits for those for whom private provision fails. There must be a middle portion that is funded by compulsory contribution into a pool that is sufficiently diversified for there to be a transparent link, in the words of the right hon. Member for Birkenhead, for those who, throughout their working life or for a large part of it, do not constitute economic propositions for private providers between what they contribute and what they receive. That link is not between the amount that they contribute and the amount that they receive, as in a private scheme, but between the fact of contributing and the fact of receiving. That is the huge distinction between contribution and tax.
Mr. Garnier:
Might I not have the same feelings about the payment of tax and what I eventually receive in an old age pension or another form of benefit?
Mr. Letwin:
I am particularly grateful to my hon. and learned Friend for that intervention, which moves me on to the next phase of my argument. My answer to his question is again no. When I make a tax payment, I do not believe that I have any right to expect particular results. For a long time, the House has recognised that distinction through the consolidated fund. We have also recognised that it is legitimate to change entitlements and tax regimes more or less willy-nilly, year after year, without trying to go back and ask whether someone making a tax payment in previous years had any contractual expectations.
Mr. Hayes:
Will my hon. Friend give way?
Mr. Letwin:
Of course I shall in a moment.
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