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Mr. Pond: Does the hon. Gentleman understand that one role of means tests is to pull some of those people out of the wreckage created by the Conservative party in government? Does he not accept that the figure referred to by my right hon. Friend the Secretary of State--we are giving £6.4 billion back to pensioners during this Parliament--represents a good record, given that that sum is two thirds of the amount that his party took from pensioners over 18 years?
Mr. Willetts: I am afraid that that figure is a typical new Labour spin statistic that takes no account of, for example, the attack on occupational pensions represented by the taxation of the dividends that pension funds receive.
I would accept a strategy that was at least consistent. If the Secretary of State regularly told the House that he believed in more means testing, we could understand that, although we might disagree. If he told the House that, above all, we need more universal benefits, we could understand that. However, we and pensioners up and down the country cannot understand how one week they all have to be means-tested and targeted, but the next they are to receive new universal benefits. Those are the same people. One moment they are being deprived of the dividend credit, which pensioners with modest savings
below the full value of the personal tax allowance used to receive, but the next he pops up and proudly announces that he is introducing a pensioners credit. To do what? To help pensioners with modest savings, he says. No wonder this country's pensioners are totally confused by the Government's approach to social security. The previous Secretary of State and the previous Minister of State are right to say that there is no coherent and consistent strategy.
Mr. Jim Cunningham (Coventry, South): The hon. Gentleman accuses my right hon. Friend the Secretary of State of confusing people on pensions, but would he like to tell us his policy?
Mr. Willetts: What we have said is perfectly clear: we support the increase in the capital limits for pensions, although I have to say that this is the first time that there has ever been a special capital limit for pensioners that does not apply to other income support recipients. We believe that pensioners should become more affluent as a result of a combination of personal and occupational savings, as well as the receipt of state benefits. We criticise the Secretary of State above all because, through his changes in the tax treatment of pensions, he has attacked future pensions and the value of the savings provision of people in funded pensions.
Mr. David Watts (St. Helens, North): Can we clarify the position? Is the hon. Gentleman saying that he would like the pensions budget to be cut? If so, will he be specific about which parts would be cut?
Mr. Willetts: I shall not go through individual items of the Budget. Before the next general election, we shall set out a Conservative policy for pensions that will ensure that people enjoy rising living standards because of a combination of occupational pensions and savings, which the Government are attacking, and social security benefits.
Mr. Darling: I want to question the hon. Gentleman on one point, as he has made so much of it. Can I take it from his remarks that the Conservatives would get rid of the winter fuel payment?
Mr. Willetts: Before the next election, we shall announce the Conservative approach to pensions, which will ensure that pensioners enjoy rising living standards through a combination of funded savings and assistance from benefits.
I shall now deal with welfare to work and the new deal for lone parents. We want families as well as pensioners to be better off. We particularly appreciate the importance of ensuring that families are better off in work than out of work. That is why the late Lord Joseph introduced family income supplement almost 30 years ago. Baroness Thatcher and my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) introduced family credit 15 years ago to boost the incomes of low-income working families, but that is written out of the history books of new Labour.
We believe in ensuring that people are better off in work than out of work. I therefore welcome the important, if unglamorous, measures in the Budget that the Secretary of State has introduced to improve the run-ons for housing benefit and for people on income support, especially those
with mortgages. We accept those practical measures to ensure that people move from unemployment into work and are not caught out by administrative hoops and hurdles. In fact, those proposals may be the Secretary of State's last sensible decision before he relinquishes that area of policy entirely to another Minister. We recognise that those measures make sense.However, our doubts about the effectiveness of the new deal are confirmed by figures in the Treasury's own document, which was published only last month. Chart 3 in that document is revealing, because it shows long-term youth unemployment falling steadily from 1994. I challenge the Secretary of State to get out a magnifying glass and identify any change in the downward trend of youth unemployment since the introduction of the new deal. Anyone surveying that chart would not be able to identify the point at which the new deal for young people came in. The fact is that the downward trend in youth unemployment was established long before the new deal was introduced, and it has continued at the same rate. The new deal has had no effect whatever.
The Secretary of State referred to the new deal for lone parents, for which he is directly responsible. The Government are supposed to believe in evidence-based policy, but their presentation of the statistics on the new deal for lone parents is nothing short of a disgrace. The findings from their evaluation of the new deal are presented in a deeply misleading way.
Let me take the Secretary of State through some of the tricks that he plays, and which I am afraid he played again today. It is extremely difficult to extract information from the Government. We know from parliamentary answers that of the 450,000 single parents sent invitation letters under the new deal for lone parents, only 4.5 per cent.--20,000--have gone into employment.
However, the Secretary of State and his Ministers quote much larger figures. The Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), gave a figure of more than 28,000, and the Minister in the other place quoted almost 41,000. How do they reach those larger figures? Single parents who apply to join the gateway and come knocking on the door of the jobcentre because they are so keen to get into work are not part of the new deal and do not receive an invitation letter. But those lone parents who turn up at a jobcentre are counted as a success for the new deal, even though they are not part of the target group for the new deal and have never received an invitation letter. They have nothing to do with the invitation letters that the Secretary of State sends out. To start with a figure of 450,000 letters and then say that 40,000 lone parents have got work as a result of the new deal is to present the statistics in a misleading way.
That is not the end of the fiddle. Only the other day, in his press release about the evaluation of the new deal for lone parents, the Secretary of State said:
- the number of lone parents on income support was 3.3 per cent. lower than it would have been without NDLP--
The Secretary of State was strictly correct when he said that 3 per cent. fewer lone parents were on income support. Why? In areas with the new deal for lone parents, more lone parents repartnered, to use the language of his evaluation report. More ended up married or cohabiting. He may claim credit for quite a lot of things, but he cannot claim credit for ensuring that lone parents get married as a result of the new deal.
Mr. Willetts: I hope that the hon. Gentleman will explain and justify the misleading presentation of the statistics for which the Secretary of State is responsible.
Mr. Pond: The hon. Gentleman is sharing his confusion over the matter with the rest of the House, but perhaps the Secretary of State will explain the matter to him later.
Once the lone parents in my constituency have waded through the statistics that the hon. Gentleman has thrown them, they will know one thing: presumably, the Conservative party would scrap the help and advice that they get through the new deal for lone parents. They will also be anxious--I am sorry to return to the matter, but I have not had an answer--about whether it would scrap the working families tax credit, too. Please can they have an answer to that?
Mr. Willetts: We believe in helping people into work. At the next election, we will have policies that are a jolly sight more effective at doing that than the new deal for lone parents and some of the other measures that the Secretary of State has introduced. I will now turn to the working families tax credit because it is an important part of the Government's claimed agenda on welfare reform.
The Chancellor says that this is a Budget for hard-working families. Let us look at how it affects such families. What about the 100,000 hard-working families who are brought into higher rate tax as a result of the abolition of the married couples allowance? What about the millions of families who are losing that allowance, with compensation from the children's tax credit coming in a year later? What about the 300,000 hard-working families who will find that they have been brought into a marginal tax rate of 47 per cent. as the children's tax credit is withdrawn? Those families are not rich. They will be earning perhaps £30,000. They would not regard themselves as massively rich. There are 300,000 of them. They face a 47 per cent. marginal rate as the children's tax credit is withdrawn.
What about the 950,000 families--a figure in the Red Book; again, strangely, the Secretary of State did not refer to it--who we know from page 79 of the Red Book will face marginal deduction rates of 60 per cent. or more as a result of Budget 2000? The figure is up by 200,000 from that before the Budget of 1998. What about the 800,000
families who will lose the married couples allowance and do not receive any compensation whatever for that? What are the Government doing to help them?
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