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6.39 pm
The Secretary of State for Social Security (Mr. Alistair Darling): Today's debate has concentrated on health and social security. As the hon. Member for Havant (Mr. Willetts) rightly anticipated, I shall not endeavour to respond to some of the detailed points that were made on health. The hon. Member for East Hampshire (Mr. Mates) raised a quite detailed matter
about hospital administration to which the hon. Member for Havant also referred. My colleagues at the Department of Health were present for much of the debate. They will certainly read what was said and will no doubt respond to it.Like the hon. Member for Havant, I wish to single out the speech by my right hon. Friend the Member for Camberwell and Peckham (Ms Harman), who spoke extremely movingly about the tragic death of Damilola Taylor. She spoke of both despair and hope. I was struck by what she said about people living in the area being determined to help themselves and each other in a way that is not always apparent from some of the reports that we have read during the past few days. I am sure that the House was impressed by the feeling with which my right hon. Friend spoke.
Let me make a couple of observations on health. I was struck by the fact that the Opposition seemed remarkably anxious not to talk about the difficulties that they have got themselves into on health spending or to tell us what their policy is. There is a fundamental problem here. A number of Opposition Back-Bench Members spoke about the health service in their constituencies, and nearly all of them said that more resources should go into improving the health service. It is difficult for us to reconcile the demand that was made repeatedly for more money to be spent on the health service with the same Conservative party that opposed our extra spending at just about every turn.
We are introducing legislation today, but it is only a small part of the reforms that are necessary for the health service. We are backing that legislation with a significant increase in spending on the health service, which is up by one third over a five-year period. Every pound of that spending was opposed by Conservatives Members at the time of our spending review.
The shadow Chancellor has made it clear that he does not believe that spending should be increasing at the rate of growth that the Government propose. The gap between our proposals and those of the Tories is £16 billion, but they have not been able to tell us where they would cut those £16 billion.
One of the problems that the Tories face is a complete lack of credibility. We know where their instincts lie. They want to cut public spending, but they cannot or will not tell us where the axe will fall. Their attempt earlier this week to proffer a mere £5 billion of the £16 billion total has no credibility whatsoever. I intend to refer to one or two instances where their figures fall apart on examination.
The difficulties that the Tories are in were perhaps demonstrated when their health spokesman was asked whether or not the Tories would match the Government's 3.4 per cent. real-terms increase in social services. He was asked twice whether the Tories would match that figure and he declined to do so. He had ample opportunity to say that he would, but he would not. That is because, as the shadow Chief Secretary said on television the other night, it would appear that the Conservatives' commitments do not stand close examination.
It is also interesting that when there was a brief debate about the Conservatives' policy on the health service, perhaps illustrating why they cannot match our figures--they want to introduce more tax breaks for people to go private--the hon. Member for Woodspring (Dr. Fox) had
nothing at all to say. Earlier this year, he said that insurance companies ought to be covering
- conditions that are not high tech or expensive, like hip and knee replacements, hernia and cataract operations.
I quite fancy going out with a Conservative campaigner at the next election and knocking on pensioners' doors. In addition to telling them that the winter fuel payment of £200 would go, that there would be no more free TV licences or Christmas bonus, the Conservatives will have to tell pensioners that those on the minimum income guarantee will be £20 worse off on average as a result of their axing the minimum income guarantee.
Mr. Willetts: There would be no loss of means-tested benefit.
Mr. Darling: The hon. Gentleman says that there would be no loss of means-tested benefit, despite everything that he has said this evening about his opposition to means-tested benefits. How could anyone believe that?
In addition, the Tories will have to say that if non-essential operations are no longer on the NHS, a hip replacement--according to BUPA's latest price list--will cost some £7,800. A hernia operation costs £1,500 and a knee replacement £8,400. That is a rather large bill for pensioners--it is mostly older people who face such operations--to face. No wonder the Tories did not want to talk about their spending or health policies. Once we look at them, we see the same old Tory ideas--spending cuts and privatisation.
The hon. Gentleman faces the same credibility problem on social security. He has been told that he must come up with some £3 billion--at least, that was the figure two weeks ago--towards the £16 billion that the Tories must find. Earlier this week, he said that he could find only £2 billion. Of that figure, £1 billion was on fraud. I wondered how the Conservative party, given its record, was going to find this £1 billion of fraud. Very helpfully, the shadow Chancellor wrote an article in The Independent. Although it was on page 6 of the review section, I managed to find it. He said:
- We're going to set up a single benefits investigation squad, a national body that would have responsibility for investigating all forms of welfare fraud administered by the Benefits Agency. Common sense measures like these will yield at least £1 billion.
The £1 billion on fraud rang a bell with me. The hon. Gentleman was anxious to assert that the amount of known fraud in the system amounted to some £7 billion. I dimly remember a debate that took place the year before the previous election. The right hon. Member for Hitchin and Harpenden (Mr. Lilley), the deputy leader of the Tory party, was standing in my place, and he said that Labour--the then Opposition--had
- every incentive to exaggerate. It wants to appear tougher than the Government, so as to con people that it is no longer soft on fraud. Above all, it needs to conjure up imaginary "savings" to offset the real cost of its spending plans.
-
That is very familiar, is it not? The same thing seems to be happening now.
- The Opposition, having seized on the flimsy figure of an extra £1 billion of fraud, then had to invent even flimsier claims they could get it back. So they put together . . . rather tenuous fraud programmes, and plucked estimates for each of them out of the air. By an extraordinary coincidence, the savings from those three fraud programmes add up to exactly £1 billion.--[Official Report, 18 June 1996; Vol. 279, c.702-04.]
There is no evidence from the Tories' proposals that they could save £1 billion over and above the amount that we are already determined to save. Let us look at some of their other proposals announced earlier this week. They said that they wanted a freeze on civil service recruitment. Given the turnover in the Benefits Agency in the past year alone, that would mean 5,000 fewer staff. We know that the best way to stop fraud and error in the social security system is to have tight gateways to the benefits system, with staff checking claims and making sure that they are properly vouched for.
When we came to office, we found that two out of every five income support cases were wrong. We have halved that figure, saving £1 billion alone. The reason that there was so much error and fraud in the system was because the Conservatives had run down the front line, and they propose to do exactly the same again.
The hon. Member for Havant also mentioned organised fraud. He is normally pretty good at picking up our press releases and publicity, but he seems to have missed something. Earlier this year, I announced that we were setting up a national intelligence unit to look at organised fraud. As for the lack of publicity--I think it was not on a Friday but on a Monday--there was quite a lot of publicity about it, and I am sorry if the hon. Gentleman missed it.
I am also sorry that he missed the figures that we published a couple of weeks ago. They showed that, for the first time, there has been a significant reduction in fraud--some 6.5 per cent. in income support and jobseeker's allowance. That is just a beginning; we have a lot more to do. However, the hon. Gentleman must bear in mind that his party spent 18 years in office without even trying to measure fraud. Not until 1995 was there any attempt to measure fraud, let alone stop it. Indeed, it is an indictment of the Tories that when they left office the Department of Social Security was losing more in fraud and error than it cost to run it. What an indictment of a Government who were around for 18 years.
The National Audit Office first qualified the DSS accounts in 1988 because of the amount of fraud and error. The Tories had nine years after that to do something about it, but they did not, so their credibility on tackling fraud is not strong.
We are introducing new legislation and the House will have ample time to scrutinise it. We are introducing four new provisions. As we believe that people have rights to claim social security but also responsibilities, we are clear that if someone is convicted twice of benefit fraud, they ought to lose the right to benefit. We are also giving the DSS greater powers to access people's records if we suspect that they are not telling the truth, or we have
reasonable suspicion about someone's honesty. We will also make it an offence not to declare a change of circumstances, which is one of the biggest sources of fraud within the social security system. There will be other powers too.The hon. Member for Havant complained that the Queen's Speech and the welfare reforms did not demonstrate any vision. One contrasts the Government's position with that of the Opposition. On the economy, people know where we stand. We sorted out the debts that we inherited from the Tory party. In the previous Parliament, 42p in every pound of extra spending went to social security or debt servicing--debt repayment. That is now down to 17p.
We cleared the deficit that the Tories left us, and we now have a stable economy. We have low interest and mortgage rates and, because we have those, we can make the investment that we need in public services--the investment that is essential, in education for example, if we are to sustain growth at the levels that people expect. That is why we are driving up standards in schools and spending more money on education.
None of that would have happened if the previous Government had been re-elected at the general election. Their determination--their instinct--then, as now, is simply to slash and burn, regardless of the consequences. We are living with some of those consequences, not least in the health service. The problem with health, as in transport, is year after year of under-investment. We are putting that right. We have a lot more to do, but we are prepared to make those reforms. However, it is only because we have sorted out the economy--we have a stable economy--that we can produce that investment, which will in turn ensure future stability.
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