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Earl Russell: My Lords, admirers of the late Sir Alan Herbert will realise that when I refer to the Bishop of Ipswich I am describing an entirely fictional character. I am tempted to greet this Statement with the favourite remark of that character, "Well, it could have been worse". I am pleased to welcome the back-to-work incentives. They embody what is rapidly becoming a three-party consensus. We might argue about which party had these ideas in the first place. I do not think we need bother. What matters is that somebody is thinking and taking action which, on the whole, goes in the right direction. That we cannot but welcome.

I welcome the concession on the employer's national insurance below £205. I welcome the incentive to take on the long-term unemployed although this will clearly need monitoring to make sure that employers do not dismiss people who are not long-term unemployed in order to take on those who are. I am glad to see the Minister nod. I look forward to his further explanation. I welcome the rebate for taking on two-year unemployed. But why is this to come in during 1996 when presumably the Government are hoping that unemployment will be a good deal lower than it is now? It reminds me a little of the schoolboy who was asked which was the more important, the sun or the moon. He said that clearly the moon was more important for the moon gives light when we need it at night and the sun gives light in the day when we do not need it.

I agree with the noble Baroness, Lady Hollis, that some measures the Government are taking may rob others of their effect. I was extremely interested to hear

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what she said. A fact sheet from the Rowntree Trust, which I suspect the noble Baroness also received, said that the most rapid increase in unemployment was among the spouses of the unemployed. The noble Baroness is the first to offer an explanation of that phenomenon, I believe that she has made an academic as well as a political contribution.

I welcome warmly the attempts to ensure more rapid assessment of housing benefit and family credit, the four-week tiding-over period and the attempt to ensure quicker assessment of family credit. However, these proposals will put burdens on staff in benefit offices. The biggest saving thrust of the Statement concerns staffing within the government machine. Last September we had worrying reports of staff shortages in benefit offices. There were reports last week of staff shortages in employment offices in London. I should like to be sure that staff in benefit offices, who are doing their best, are not going to be blamed for failing to do what they have not enough people to deliver. The situation will need watching.

The job finder's grant I welcome, as I did last year. It is an imaginative and practical idea. So far, I believe that there has been a pilot study only. I would be grateful for clarification. Is it now actually being made universally available or is it merely a rather bigger pilot scheme? I have not managed to understand what exactly the Statement is saying about that.

The back-to-work bonus I welcome, and also the fact that it is tax free. I wonder, however, if that is quite enough. It will inevitably be perceived, since this is money that people have earned while on income support, as the Government paying people their own money. The Government will, I think, be asked whether they intend to pay that money with interest or, if not, at the very least, in the phrase of the student loans Act,

    "at a zero real rate of interest."

hat is a point about which the Government might think.

I welcome, subject to the same reservation as put by the noble Baroness, the in-work family credit for the childless, and the full-time supplement. I will not make my party conference speech about that now. But the point needs thinking about. My main reservation on this section of the Statement is that over and over again we read the word "pilot". In fact, it looks like an airfield after rather a bad raid; it is all pilots and no planes. I would like to think that some planes will be supplied in the fairly near future so that some of these pilots can take off.

It is just not incentives in the benefits system that we need if we are to get people back to work; we need training. I regret totally the cuts in the budgets of the TECs, which are likely to work against the thrust of the welcome concessions contained in the Statement. In that context, and in the hope of saving the cost of severe hardship payments, I should like to ask whether there has been any uprating in the youth training allowance and the youth training bridging allowance, because, if not, the Department of Employment is, as usual, passing its bills over to the DSS. That is a form of recycling which I hope the department will agree is deplorable.

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There are a number of things that the Chancellor and the Secretary of State could have done in the way of making it easier to get back to work, which have not been done. There is no relaxing of the housing benefit tapers; there is no concession to the pressure for a disregard or taper on income support. This summer, at the Liberal summer school, our outside guest was Peter Morgan of the Institute of Directors. He argued at some length that the benefits system discourages enterprise. Your Lordships may imagine that I questioned him closely about what he meant. What he was concerned about was that the total lack of disregard discourages the unemployed from doing small, self-employed jobs such as, for example, window cleaning. I do not agree with his remedies, but he has pinpointed a very real problem. I hope that the Minister will think about it.

Nothing has been done about passported benefits which are one of the big disincentives to getting back to work. Nothing as been done about the costs of travel to work. That can easily be £6 and £7 a week. It forms a tidy hole at income support levels. There is no recognition of the numerous people who cannot go to work unless they have a car. I do not see how someone in that position who does not have a car can ever get back to work. I should like to think that some thought was being given to the problem.

If people are to get back to work, as well as changes in the benefit system they need housing. They need a supply of low-cost housing. Here again, one is tempted to think that the Government have literally got themselves into a situation where their left hand does not let their right hand know what it is doing—the left hand being the Chancellor and the right hand, of course, the Chief Secretary.

The cut in the grant to the Housing Corporation, and the cut in the local authority grant for managing and maintenance will not do anything to encourage low-cost housing. Nor, I think, will the changes in housing benefit. One of them, I welcome. It is one for which I have asked in the past, and therefore I must. That is the arrangement to allow the tenant to be notified of an eligible housing benefit before a tenancy is struck. I wrote to Sir George Young asking for that on 21st December last. I should like, rather belatedly, to give thanks that that has been noticed. On the other hand, I am not happy about the notion of subsidising the average rent only. Every cricketer among us knows that some scores are above average. Not every house on the market can have an average or below average rent. That is in the nature of an average. So some people always must be forced into paying rents above average, with the consequences the noble Baroness outlined.

I ask the Government for one technical concession which it might not be beyond their power to grant. It is that the word "average" should be interpreted as the average rent of houses which are fit for habitation because, as we know, there are a great many which are not. They pull down the average considerably. If we push people into living in those houses, it is the Department of Health which will pick up the bill, and that will not be good for the PSBR.

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I am interested in the proviso about people not receiving housing benefit if they are away from home for more than 13 weeks. I well understand the thinking behind the proviso. The example given in the Statement is that of prisoners. Again, I see the thinking behind the Statement. But the biggest difficulty in the reintegration of ex-prisoners in society is obtaining employment, and not having a home to which to return generally is not a help to obtaining employment. So I wonder whether here the Government may be cutting off their nose to spite their face. Other exceptions which I hope will be considered include seamen and members of the Armed Forces. I hope that there will be consultation about the matter because there is a good deal of thinking to be done.

My greatest misgiving relates to what is being done about mortgage interest. The cap is being reduced to £100,000. I hope that we can be told that that figure will exempt London. If it does not, it will be of little use. We are also told that the first nine months will not be covered. A lot can happen in nine months, including the building up of a very high level of debt. Once again I express my regret that the Government do not keep any figures about the levels of debt among those on benefit. A great many proposals might come out differently if that information were available to them.

The Government suggest that people should use private insurance. I am all in favour of people doing that when they and the insurance market can afford it, but at the moment our insurance market is under some strain. I should not have thought that it was in the national interest to persuade insurers to take on a great many heavy extra risks. I have looked into such insurance myself at various times when the university budget was under some strain. I found that on an academic salary the cost appeared prohibitive. If it is prohibitive on an academic salary, it will be prohibitive to a great many of those with whom we are concerned. They have the choice then of putting a greater strain on housing benefit or of becoming homeless and not working. I do not believe that either of those results are quite what the Government want. We shall have more repossessions. That will depress the housing market. It will diminish the feel-good factor, and that perhaps as much as anything else will lose the Government votes. It will not worry me. It will not worry the noble Baroness. I wonder whether it even worries the Government.

I agree with everything the noble Baroness said about that. It creates yet another poverty trap, and in a future Statement we shall be hearing of measures to relieve that. It makes me say yet once again how serious it is that students have been excluded from the benefits system and therefore excluded from help they need desperately.

Finally, and appropriately, I come to funerals. First, I want to ask the Minister whether the capital limit on the cost of funerals will be uprated every year. If not, it may cause severe hardship within a few years. Secondly, I want to ask the Minister whether he really supposes that the newly bereaved, talking to a funeral director, are, in any classic sense, customers in a free market. Most of us at that moment in our lives just do not regard it as

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decent to haggle and bargain over the price we are paying. So, for that reason, that proposal is not decent. I hope that the Government will withdraw it.

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