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Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Member must address the Chair.
Mr. Levitt: I beg your pardon, Mr. Deputy Speaker.
My hon. Friends must accept that there are people such as me who are cynical about the value of the contributory system. Our views need to be heard as well.
I make a special plea to Lord Ashley--a man whom I have admired throughout my political life and who has generated in me a concern for deafness that has led to our sitting together as trustees of a major organisation that works in the interests of deaf people in this country.
Because of his position, and the respect for him in another place and in this one, he has the power to inflict considerable damage--perhaps even fatal damage--on the Bill.
If Lord Ashley did that, there would be a cost. There would be a cost to disabled people, who will genuinely benefit from the Bill; a cost to the political credibility of the Government whom both he and I support; and a cost to the entire legislative programme. If this Bill has to be reintroduced in its original form, and its passage in the next Session takes up the time that it occupied in this one, it will certainly impact on other issues on which the Government will be wanting to legislate.
It would be profoundly wrong to take this issue further and to play ping-pong with the other place. That will not achieve anything. We have aired the issues; there have been compromises and some progress on ensuring realistic levels relating to the contribution period and for occupational pension rules. I commend the Government's position to the House, and I hope that this is the last debate on the Bill in this Session.
Mr. Pickles:
It is a great pleasure to follow the hon. Member for High Peak (Mr. Levitt), who served on the Committee that considered the Bill. I have great respect for his views, but to speak of the Parliament Act 1911 and ping-pong with the Lords, when we should be talking about disabled persons, is amazing. Frankly, I am not very impressed by the macho treatment of the other place. If the Government are prepared to listen, we shall be a long way away from such action. If they listen, ping-pong will not be necessary.
The hon. Member for High Peak is right that this has been a good debate of a high standard. I am thinking not least of the marvellous teaching of the hon. Member for Preston (Audrey Wise) that the best way in which an ambitious Back Bencher can become a Minister is to rebel, and of the Minister's dawning realisation that, after facing Lord Barnett after the 1977 rebellion, it is probably pay-back time.
One Labour Member said that he knew nothing about pensions or finance. That strikes me as a prerequisite for voting for the measure today. I am not impressed with the negotiations that seem to be taking place on the Floor of the House with regard to the other place, nor with the teachings about the Parliament Act, particularly as Ministers seem to be wrong.
We heard good speeches from my hon. Friends the Members for Gainsborough (Mr. Leigh) and for Bromsgrove (Miss Kirkbride), who spoke of the experience of constituents. The hon. Members for St. Ives (Mr. George) and for Preston dealt with severe disablement allowance.
At the last Social Security questions, the Secretary of State produced a rather innocuous letter from me, which had been leaked to him. It seems that leaking occurs both ways, as I have received a copy of his briefing toBack Benchers. In response to the question why the Government are reforming severe disablement allowance, the answer given is that SDA is not targeted at the most severely disabled, but is a non-contributory version of incapacity benefit that is paid at a lower level. The briefing goes on to state that SDA is ineffective, and for 70 per cent. of recipients must be topped up with income support.
Severe disablement allowance is supposed to be non-contributory. It was designed specifically to meet the needs of housewives who, through no fault of their own, were unable to pay national insurance contributions. It was a unique benefit to be paid solely on the grounds of disability.
Mr. Pickles:
The hon. Lady disagrees, but I believe that I am right. SDA was to be paid in cases of at least 80 per cent. disability. The Government have made a concession to allow young people with no chance of employment and no prospect of paying national insurance contributions to receive it.
Audrey Wise:
I intervene in the interests of accuracy. The hon. Gentleman is wrong when he suggests that the primary target of SDA was housewives. Initially, it was made more difficult for housewives than for men and single women to receive SDA. It affected everyone. After a bit of push, the benefit was extended to housewives on an equal basis. Recipients would qualify without a means test.
Mr. Pickles:
I stand corrected, but I was paraphrasing Lord Ashley, who made the point in another place.
The Government tell us that to pay for the concession to young people, SDA must be abolished. They propose to take away from one disabled group to give to another disabled group. They will remove one inequality by creating another.
In another place, the Minister, Lady Hollis, said:
I raised the matter with the Secretary of State. A disabled person who has £8,000-worth of capital or £3,000-worth of savings or a spouse who is earning will receive nothing, yet the purpose of the measure was to give disabled people some financial independence. When the point was put to the Secretary of State, all that he could do was bluster.
The Government's argument is that everyone above income support level is well off and should not receive SDA. The suggestion is that people with savings of more than £3,000 or capital of £8,000 or a spouse in employment should not receive it. If a wife who has taken time off to look after children becomes disabled during that period, she will receive nothing under the Government's proposals.
The Government say that if people do not make contributions, they are not entitled to receive benefit,yet the Government also say that if people make
contributions, they are not entitled to benefit. The Government are predetermining according to their whim the level of benefit that people should receive.
The Secretary of State told us this afternoon that he intended to ensure that the Tories would be prevented from cutting social security benefit. There was a time not long ago, before the general election, when it was the proud boast of the Labour party that the Tories would cut benefits. In a few moments the House will be asked to vote on a measure that the Tory party considered too harsh. If that is new Labour, good luck to it.
Mr. Rooker:
It is traditional to say that we have had an interesting debate. We have, but it has not been entirely accurate.
For obvious reasons, the detailed history of the Bill is much better known to many of my hon. Friends than it is to me. However, as I made clear earlier, this is not the Bill that was originally introduced or which left the House after Third Reading, and the Government are entitled to take some credit for that. There has hardly been a period when the Government have not been listening. Colleagues on both sides of the House could claim that we have not listened enough to meet all their demands, but no one will be able to vote against the Government tonight and claim that we have not listened. That would simply not be true.
I shall repeat another point, now that the hare is running. It ran for me first on Monday evening, secondly on the letters page of The Guardian today, and thirdly with one of my hon. Friends today when the issue of the retirement pension was raised. I repeat without apology that my right hon. Friend the Prime Minister made it unambiguously clear at Question Time today that the retirement pension is not in anyone's sights. It is not an intellectually honest argument to say that the changes in incapacity benefit are the thin end of the wedge, and that the retirement pension will be next in line.
There is no possibility of that happening under a Labour Government, irrespective of who the Prime Minister is. It is not part of our agenda, and we have made that clear. To set that hare running causes untold worry and unnecessary concern to those outside the House who watch or listen to our proceedings. To make claims that everyone knows are not true adds nothing to the argument about welfare reform. That point must be made again on the record.
There has been constant reference to cuts in benefit. It must be repeated that no cuts in benefit are planned. When hon. Members face the electorate, whatever arguments they may have in respect of future changes, the people whom they meet will be on the same benefit or will receive more under the Bill. That is the reality. As my hon. Friend the Member for High Peak (Mr. Levitt) said when he read out the list of measures in the Bill, there will be extra money for many people. That is at risk if the Bill falls. It is not true to say that the Bill is only about changes to incapacity benefit and that that is where the concentration is.
I must tell my right hon. and hon. Friends that nobody needs to apologise for raising these important issues. No one can gainsay the fact that there was concern in the original debates; we are not saying that there was not. That is proved by the fact that my right hon. Friend the
Secretary of State made it clear at the time--I was not in this Department, but I was in the House--that he would listen, take the matter away and rethink some points in the Bill. That is what happened during the parliamentary recess, and the same is true of the debates in the other place.
Therefore, it is wholly reasonable for us to say that we have made changes. Some of my hon. Friends might say that they are not enough and that there is no rigid formula for how we arrived at the figure of £85. That is true; there is no formula because it was not possible to use one. There was an original figure of £50, which is not in the Bill, and I understand that there were demands for it to be £105. We looked at the good trade union principle of splitting the difference, but £75 was not enough because it did not protect enough people. That is why we went to £85; it is as simple as that. There is no magic formula. We looked at all the issues and decided that with £85 being as near as dammit to the average occupational pension received by someone on incapacity benefit, more people would gain than under the median figure of £75. In order to reinforce that, we have put the figure in the Bill.
I will not be able to respond to all the detailed points raised in the debate, but I ought to try to respond to some of them, if only for the sake of accuracy. My right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke), in an interesting and powerful speech, talked about people with intermittent illness. If what he said was true, we would have cause for concern, but it is not. I want to put this on the record. Since last October--I remind my hon. Friends that there was a Labour Government then--when we extended the linking rules for incapacity benefit from eight to 52 weeks, disabled people have been assured that they can try for work for periods of up to one year with a guarantee of being able to return to the same level of benefit should they fall ill again. The same rules also mean that they will be able to meet the new contribution test. For people who receive the new disabled persons tax credit, the linking period is extended to two years. Rather than making it harder for people to try for work, we are making it easier.
For those not covered by the linking rules, we are making general provision for people to requalify without paying further national insurance contributions if they were on incapacity benefit in the last tax year. Nobody has to be continuously in work to qualify for IB. Someone on the minimum wage would pay the necessary contributions in 12 weeks, and on average earnings, four weeks would be enough. Someone in the circumstances described by my right hon. Friend the Member for Coatbridge and Chryston would not be covered by the changes in the Bill. Such a person would still be protected.
During the first 20 minutes of this debate there was only one Conservative Member on the Back Benches and I see that the hon. Member for Gainsborough (Mr. Leigh) has not returned to his seat. However, he did raise a point that has been laboured by many others. He talked about people who have made contributions for 30 years missing one year and being unable to claim. So many myths have built up over the years about the national insurance system that we have all come to believe them. We believe that it is a piggy bank, that there is a personal fund and that if stamps are paid over a number of years, there is entitlement to benefit. That has never been the case. Contributions or credits have been required in both the last two tax years for people to be able to qualify,
no matter how many years they have paid. If they do not have those contributions or credits from the last two tax years, they fail to qualify for incapacity benefit. The Bill does not change that. The Bill puts a time limit on the use of credits when someone is unemployed because they have pulled out of the job market completely and claimed their occupational pension.
There was a letter in one of the newspapers today asking what would be the incentive for people in such a position to go on retraining programmes or to get back into work. It looks for all the world as if we are talking about people who are not in receipt of an occupational pension. We are talking about people who have withdrawn from the labour market under the retirement age for their own reasons. The myth that that includes all disabled people is nonsense. The hare gets out and starts to run simply because of a misunderstanding about the national insurance rules. There is nothing new about this.
The hon. Member for St. Ives (Mr. George) said that some people believe that SDA will be taken away through the all work test. The existing SDA recipient will be receiving the allowance on the basis of being 80 per cent. disabled. Those who are 80 per cent. disabled are exempt from the all work test. These myths are suggested in letters from pressure groups with a legitimate axe to grind because they are in the business of getting more for a particular client group. Hon. Members come to the House and repeat those myths to strengthen their argument, without checking whether they are true. That devalues their contribution.
My hon. Friend the Member for Preston (Audrey Wise) made a contribution, but I do not have time to go into it now, except to say that, in 1977, the Government had not listened and were not intending to listen. There were no procedures for listening and my hon. Friend knows that because we both met my right hon. Friend the Member for Ashton- under-Lyne (Mr. Sheldon) and Lord Barnett at the Treasury. The junior Whip on that Finance Bill is now the Chief Whip and she is well aware of the fact that the Government were not moving. This Government have moved.
It is true that no one political party owns the Lobbies in this place. There is not a Lobby for the Labour party and a Lobby for the Tory party. I must tell my right hon. and hon. Friends however, that they cannot go into the Lobby to vote against the Government saying that the Government have not listened. That is not true. The Government have moved. If my right hon. and hon. Friends do not want to support the Government, I hope that they will think twice before voting against. That would send the wrong signals to the other place and it is important to take that into account given the time limits under which we are operating. If a sufficient number of hon. Members vote against the Government, the other place might start playing ping-pong. There is no doubt that the Bill is under threat. That is not an idle point.
6.45 pm
"I believe that that is the right focusing of the benefit--not continuing to give it to people who have chosen not to build up a contributory record, as in the case of some married women, or who would not need access to means-tested benefits because they have sufficient finances coming into the household."--[Official Report, House of Lords, 13 October 1999; Vol. 605, c. 461.]
The principal losers will be women. There are 2.4 million women who earn less than the national insurance threshold and cannot build up contributions. Lord Morris said in another place that the proposal represented not so much the reform of the benefit system as an attempt to put the clock back. He gave a number of moving examples to show how people would be affected.
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