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27 Feb 2003 : Column 429—continued
Social Security
Mr. Deputy Speaker (Sir Alan Haselhurst): Before we debate the first of the two motions, I remind the House that the two orders to be considered this afternoon, on social security benefits uprating and on guaranteed minimum pensions increase, are to be debated separately for up to one and a half hours each. Debate should therefore relate to the merits of each order and should not extend to wider matters of social security or pensions policy.
1.55 pm
The Secretary of State for Work and Pensions (Mr. Andrew Smith): I beg to move,
- That the draft Social Security Benefits Up-rating Order 2003, which was laid before this House on 5th February, be approved.
The order will uprate most benefits in the normal way. National insurance benefits will rise by the retail prices index—1.7 per cent for the relevant period—and income-related benefits will rise by the Rossi index, 1.3 per cent. They add up to about £2.25 billion of extra Government spending to help those in most need and to tackle poverty.
This year, as in every year since 1998, we are able to increase some benefits by more than inflation. That contrasts starkly with the 1980s and 1990s, when child benefit was frozen for three years and pensioners received only inflation level increases, even as social security spending spiralled out of control.
In 1997, we said that we would cut the costs of social and economic failure, and we have done so. Despite a turbulent world economy, the latest unemployment figures show a record number of people in jobs and the lowest unemployment rate of the major industrialised countries. Through our investment in the new deal and Jobcentre Plus we have tackled the legacy of mass unemployment that we inherited. Since 1997 there have been nearly 1.5 million more jobs, with savings of £5 billion on the cost of unemployment that can be invested in improving services and tackling poverty.
Mr. Steve Webb (Northavon): In his opening remarks, the Secretary of State said that national insurance benefits had been increased at least in line with inflation. He will know, however, that there is one national insurance benefit for which that is not true—contributory jobseeker's allowance. For some reason, it was raised not by headline inflation but by the Rossi index—1.3 per cent. and not 1.7 per cent.—so it is a real-terms cut in a benefit that, at £50 a week, is already low. Will the Secretary of State or the Minister who responds to the debate explain why that benefit has been cut in real terms by being linked to Rossi, when normally national insurance benefits are linked to the all-items retail prices index?
Mr. Smith: I could hazard an answer now, but it will probably be best if my right hon. Friend the Minister for Pensions responds in the wind up.
My general case is valid: we have increased benefits according to the normal indices and, indeed, we have been able to go beyond that due to our success in
tackling mass unemployment. As a result of savings from tackling benefit fraud, we are able to ensure that more money is available to invest in services, providing extra help where it is needed and enabling more people to fulfil their potential, as well as, of course, tackling poverty. We have reversed the generation-long trend of rising child poverty. We have reduced by a third the number of families living on less than £10,000 per year and we are getting more money to pensioners than ever before.Our strategy has been to tackle the root causes of poverty and to ensure that families and pensioners have a decent income and that people of working age are better off in work. We are doing more to help families. Last year, we raised the standard rate of maternity allowance and statutory maternity pay by a record amount to £75. This year we shall go even further, increasing it by a third to £100 a week.
At the same time, we are increasing the period for maternity leave to 26 weeks, with the option of a further 26 weeks unpaid, allowing women to take a year off work after having a baby. We will provide help not just for mothers but for fathers. We are introducing statutory paternity pay and statutory adoption pay at £100 a week, plus the right to two weeks' paid paternity leave and 26 weeks' paid adoption leave. That package of support will help 750,000 parents to support and care for their children.
I can also announce further direct support for children. Child benefit will be increased by more than inflation for the third time by this Government, taking the cumulative real increase for the first child to £5 a week since 1997. In addition, all child allowances will be increased by more than inflation, benefiting some 1.3 million of the poorest families in our country. Under Labour, income support help for the poorest children has doubled.
We know that it is particularly hard for low-income families who are bringing up children with disabilities, so I can announce today substantial rises in support. The disabled child premium will increase by more than 16 per cent. to £41.30—nearly double its 1997 rate—and there will be additional help for poorer families bringing up the most severely disabled children: the enhanced disability premium will increase by nearly a half.
Mr. Tim Boswell (Daventry): The additional help being given to disabled children is welcome, but can the right hon. Gentleman give the House any information about any campaign, conducted by himself or in conjunction with the Treasury, to ensure that, as has been promised in the past, those new benefits are properly publicised to the families and parents of disabled children—particularly where those new benefits are linked to, or passported by, other benefits—so that they are drawn positively to their attention to ensure that the benefits get to those who need them?
Mr. Smith: I am grateful to the hon. Gentleman for welcoming the measures, and I am happy to give him the assurance that, yes, I am very concerned indeed that people should get the benefits to which they are entitled, and I will examine anything that has not been done in
response to a campaign that it would make sense to do. It is in all our interests that people get what they are entitled to, especially when we are talking about disabled children.Together, the measures that we set out will help more than 87,000 families bringing up disabled children. Our tax and benefit measures, combined with our successful employment policies, are helping to get more parents into work, enabling us to make major inroads into child poverty.
We also continue to tackle the legacy of pensioner poverty that we inherited. For the third year running, the retirement pension will be uprated by more than inflation, with an increase of £100 a year from next April for single pensioners and £160 a year for couples. We will increase the basic state pension by at least 2.5 per cent. each year during the lifetime of this Parliament, reaffirming the basic state pension as the foundation of security in retirement.
We will, as in every year since its introduction, increase the minimum income guarantee in line with earnings, giving more help to the poorest pensioners. Indeed, as a result of that measure alone, the incomes of the poorest pensioners will have gone up by over a third since 1997. In conjunction with the winter fuel payments and free television licences, we are already spending £6 billion extra in real terms on pensioners this year.
Paul Flynn (Newport, West): The Government are to be congratulated on their policy on pensioners, which has delivered an increase that is probably greater than any increase that would have been made if the link to earnings had been restored, but is it not true that many of the poorest pensioners are not claiming income support for various reasons? We should be considering those people, of whom there is a very large number. For reasons of pride or because of a disorganised life, or whatever, they are losing out, as their incomes are well below the minimum income guarantee level.
Mr. Smith: I agree that very many of the poorest pensioners are benefiting by more than a restoration of the earnings link would have given them, so I would not accept that they are especially losing out. Of course, it remains a challenge to increase take-up to the level that we would like, and creating a dedicated Pension Service will be a big help.
The Pension Service is more effectively organised to be sensitive to pensioners, as it has a local arm, and I am sure that all hon. Members are beginning to see the benefits in their constituencies of the local surgeries that are being organised. I am glad to see that some Conservative Members are nodding.
Getting such entitlements through the Pension Service is a very good way of tackling the stigma that many people have felt, wrongly, in getting something from social security. The more clearly we bracket those entitlements with the pension and as things that come through the Pension Service, the more we will encourage take-up.
Mr. Michael Jabez Foster (Hastings and Rye): My right hon. Friend may be interested to know that, in my constituency, more than 3,000 people have applied for the minimum income guarantee—calling it something
different has made a big difference. As he will know, couples now get £150 a week, plus all the other benefits, whereas if the Tory link had continued they would now get £105 a week. That is a massive difference.
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