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Mr. Duncan Smith: The hon. Member for North-West Norfolk (Dr. Turner) said that he did not agree with everything in his party's manifesto. Did he tell the electorate that, or is he going to allow it to emerge as a disclosed secret later?
Dr. Turner: Will the hon. Gentleman give way?
Mr. Duncan Smith: All right, I will give way.
Dr. Turner: I told the electorate that I would support the manifesto and vote for measures specified in it, and that is what I shall do.
Mr. Duncan Smith: With respect, I suggest that the hon. Gentleman should not make claims that have no basis in reality. I suggest that, when people want to be bold and
brave and to make decisions about what they consider to be right and proper, they should work on that, but not claim subsequently that that is what they did.
This is likely to be our most important debate on the Bill, because it creates the greatest difficulty and generates the greatest interest. I congratulate the hon. Member for Kingswood (Mr. Berry) on tabling his amendment, and on speaking to it so well; but the whole debate should be seen in the context of what the Government have been doing throughout the realm of what they call welfare reform.
According to all the latest figures, including the Government's own figures, the social security budget is set to rise faster than the one that the Government inherited, and faster than was predicted in the context of the changes that would render an increase necessary. If it is rising by an average of about 3.3 per cent. a year, that will mean a total increase of £38 billion over the next three years. That is what the Government have done to the social security budget, and that is the most important backdrop to the debate. We should understand why some of the decisions that are being made now are having to be made, and what characterises them.
Let me say something about incapacity benefit, and the changes that are proposed. The rationale that has led the Government, and the Secretary of State, to believe that through means-testing they can reduce overall costs is driven by a short-term need to find the savings thatthey have apparently failed to find elsewhere. The Government's rhetoric in the run-up to the election suggested that they would cut social security costs so that they could spend more on health and education. In fact, they are doing both--and that is the problem.
The Government have decided to impose the means test anyway, which is a bad principle. They have chosen to do it for what they may believe are necessary reasons, but why have they done it in such a perverse way? Why attack, for example, someone who is on a modest income, has made an effort to save, and has tried to take himself out of the position of being dependent on handouts, as he would see it?
Why attack that individual when the Government, the Secretary of State and Prime Minister have said that they wanted to encourage people to save? They wanted to ensure that people lifted themselves out of dependency through saving and providing for their future, but the
Government's measures are a direct attack on their own words, their own principles and on the very type of person whom they hold up as a model.
Are people on £2,600 a year from their pension fund, rising to £9,000 a year, the wealthy people who now have to be struck out? Are they less incapacitated than the person standing next to them who did not make any effort to save? They are going to lose. That, in essence, is what the issue is about. It is not about an across-the-board, fair measure to find a solution.
The Government now seem confused. At first, in Committee, the purpose was not to save money but to be fair. Now, in the briefings to the press and in what we hear from the media, the Government's line is that the measure is to save money, so they have decided to save money by targeting a narrow group. That is why they are so confused.
Surely it cannot be right that people who do not need to save for a pension, who can manage to save in their own way because they are wealthy enough--perhaps through an individual savings account or some shares; at any rate something that is not identifiable as a pension fund, private or occupational--are okay and will have no problem; that people who have made no effort over all the years to save any money, who used to be described perhaps as feckless, who perhaps could not be bothered because they thought that the key thing was to ensure that they could never get caught with enough money to get themselves locked out of benefits, are okay; but that the people who made the effort are not okay.
Then there is the whole business of the two-year rule. I find that utterly perverse. It is a way of suggesting to people who have serious worries about whether they will have a progressive illness that will one day render them incapable of working that they had better make an early decision, because the last thing they want is a broken record of employment in the two-year period. Out go those people as well--not people who want to be out of work, but people who apparently may, through reasons beyond their control, be deposited out of work. Hence the selective and targeted process of the means test is incredibly short term and narrow minded.
Before the Secretary of State and other Labour Members crow about how they are taking the tough decisions and how their solution is the way ahead, I pray in aid two people who agree with me and who the Government believe--or at least they did yesterday--are the key men that they should listen to. The first is the Chancellor of the Exchequer. At the 1993 Labour conference, he said:
If reform of the welfare state is required--and it is--it must be about finding the characteristics that drive dependency and focusing on them. Before the Secretary of State says, "The Opposition are in favour of reform but do not support us on the tough decisions," I remind him of what happened when the Government decided to cut
the lone parent benefit. It was Conservative Members who went into the Lobby to support the Government, so the Secretary of State should be careful about using that argument. We are prepared to take the tough decisions as long as they deal with the issues relating to serious dependency.
The Government are in a mess of their own making and they will not get out of it by claiming that they will solve the problem by improving pensions. That is not the case. They will simply deliver yet another means test into the pension arrangements. The minimum income guarantee is nothing more than a massive disincentive to saving for someone on a modest income. Anybody on a lower level of income will now end up with a fund that will deliver them less income in retirement than somebody on income support. That is the result of the Government's reform and that is why they will end up with greater dependency.
All that has happened when that process has been employed in the past is that more and more people have found more and more ways to get round it. More of the lobby groups cry out with cases of hardship, and successive Governments have found more and more ways of increasing the benefit. It is a shrill set of rhetoric that will lead to more and more intervention in the future.
The Government's big argument is that there is a serious problem and that some people, apparently, should not be on incapacity benefit. This measure does not deal with that; it leaves those people on the benefit and deals only with those who might receive it in the future.
"I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved--the end of the means test".
As recently as 1998 the Prime Minister said:
"There are problems if you move to too much means testing."
To which group of people could he possibly have been speaking? Clearly, it was not the Secretary of State or his colleagues because they have taken a different view.
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