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Earl Russell: My Lords, Don Bradman, whom I used to enjoy watching when I was a boy, once had a nightmare. He was playing at Lord's on the sort of dreadful day that only an English June can produce. It was so dark that you were hardly certain it was daylight, so cold that you were hardly certain it was not December and the air was so moist that you could not tell whether it was raining or not. But still the game
went on. There was one solitary spectator high up in the stands. When Bradman was fielding on the boundary, he turned to the spectator and said: "Why don't you pack it in and let us go home? You must be very cold". The spectator stood up and, as he did so, Bradman saw a long tail projecting from the back of his overcoat. He said: "Yes, I am cold, colder than I've been in a million years, but I'm waiting to take one of you home".Those of us who attempt electioneering in the House of Lords in the dinner break might well remember that story. After all, the audience we address here does not contain any voters. None of us has the vote. Therefore we speak more for conversation between ourselves and for the written record.
I should like to begin by welcoming the good news--because there is good news. The Minister was entitled to say what he said about the success of the present Secretary of State in maintaining the annual uprating during his term of office. I should like to congratulate him on it. However, in saying that, I do not wish to imply that I am happy with benefit levels as they are at present.
I believe that the Minister is entitled to ask us to welcome lower unemployment. I do not know how much lower it is, but I believe it is lower, and I am glad of that. The Minister asked us why there was the difference between this country and continental European countries. I think the answer is quite simply that we are running on a rather different cycle. There was a period when they were doing much better than we were and Ministers did not welcome comparison at all. Now it is the other way around and comparisons are constantly made. I think that economic comparisons need to be made over a full cycle, in which case there is probably not much difference in it, though I have not studied the figures today.
With a reduction in the level of unemployment, social security becomes cheaper, but not by as much as it should. I think it is common ground that the reduction in unemployment has largely taken place in low-wage, part-time jobs. The Equal Opportunities Commission recently made some comments about that which I think deserve attention. That reduces the gain to the Exchequer in two ways. One is by continuing expenditure in in-work benefits where the total wage is below benefit level; the other is by lower yield in contributions--in national insurance, income tax and VAT.
If I may digress for a moment into another Bill, some of your Lordships probably heard the noble Lord, Lord Bingham of Cornhill, say that if you abolish discretion, you simply move it to another place. I sometimes suspect that if you try to abolish costs, you simply move them to another place. The Minister made great play on labour costs to employers. That is a real issue; it has a real effect. But, by keeping those costs down, if you diminish revenue to the Exchequer, you simply force the Exchequer to put higher taxes on a diminishing tax base. So at the end of the day we go round the mulberry bush and the game is not what people might have wished it to be.
In looking at the national insurance contributions uprating order, I looked at the lower earnings limit. As near as I can work it out without using a calculator, it came out at something like £3 per hour for a 40 hour week. I say nothing, any more than the party on my left does, about the level at which a minimum wage might be fixed, and I hope that nothing I say will be interpreted as anything but illustrative. Assume for the sake of argument that a minimum wage were fixed at £3.50 an hour. That would make a considerable difference in revenue, both in terms of employees' national insurance and employers' national insurance. The PSBR effect would be considerable. Such matters need to be taken into account as well as the points about labour costs which the Minister perfectly properly made. We need to strike a balance between them.
In thinking about national insurance rates, I have had a look at the report of the Comptroller and Auditor-General on the National Insurance Fund. He makes a series of technical points to which I hope we might return in the course of the Social Security Administration (Fraud) Bill about the way the accounts are put together. He says that they are not sufficiently developed to provide the information required for accruals-based accounting. That makes it difficult to investigate the extent of debt and underpayment and to have proper communication between national insurance and the Inland Revenue.
I understand that the department is aware of the problem and is taking action. I hope that when we come back to the fraud Bill we may hear something about that.
There seems to be a problem of underpayment of national insurance. The Inland Revenue and compliance officers have found underpayments of £291 million. If the Minister gets out his proverbial calculator, he can do quite a lot with £291 million. We should all be looking at maximising revenue. Where the money is already legally due, it should be paid by those who are liable to pay it rather than by those who pay their taxes already. I hope that that matter will receive some consideration.
I notice that in the uprating order the savings figure for family credit, disability working allowance, income support, housing benefit and council tax benefit remains at £3,000. I should be grateful if the Minister could tell me when that figure was last uprated for inflation.
I should also be grateful to know exactly how the savings limit is supposed to work. Are the savings calculated as income or as capital? It makes a considerable difference to how the savings limit ought to be calculated. If it is calculated on the assumption that the capital provides income, ought we not to take interest rates into account in uprating the savings limits and, with falling interest rates, ought we not to have a rather higher savings limit?
If it is considered as capital, ought not the sum to be at least high enough to equate to one year's income support? Would there be sense in index-linking it at that figure? Do we need another Rooker-Wise amendment to cover savings limits? I suspect that we do.
I welcome the uprating of child benefit. I welcome the success of the Secretary of State in preserving it, as he pledged to do, throughout the length of this Parliament. But the words have always been "during the lifetime of this Parliament". I hope that fairly soon we shall be hearing what, if they should be given the opportunity, the Government might do in the next Parliament.
I agree with everything that the noble Baroness has said with regard to asylum. When the Minister writes to her in reply to her questions about net savings, I should be extremely grateful if he would send me a copy.
To turn to housing benefit and shared residence, we already know of cases where people are losing accommodation because a shared residence is not available and because, having to find accommodation which is not a shared residence, they cannot afford a place at all on the housing benefit that they receive. I notice from a Written Answer to my honourable friend Mr. Bruce at the beginning of this week that the Government have already downgraded by £3 million the savings they expect to make. That is an interestingly precise figure. I should like to know why.
The Minister again outlined his case for, as he put it, equalising the treatment of single parents and married parents. Is "equalising" the correct way to describe identical treatment of two things that are not equal? I recall asking the Minister at Question Time, following a question by the noble Baroness, whether he could recall any other country which had practised this principle of equality, from biblical Israel to the present day.
The Minister confined himself to saying that he is not an historian. That is fair enough, but one does not have to be an historian to know about the treatment of single parents in our main industrial competitors within the European Union and the United States. If any of those practise the principle of equality, as the Minister set it out, I should be rather glad to hear about it. The work has been done and the Bradshaw study of 20 countries has the research base for answering that kind of question. I entirely agree with what the noble Baroness said about giving single parents a chance to return to work, including that it is a chance for company. I also hope she will agree with me that single parents who have young children also have a right not to work. We are concerned about freedom of choice. Mr. Tony Blair, in his lecture at Amsterdam, talked about interviews with single parents to investigate whether ways might be found of getting them into work. He can ensure that the interviews are so conducted by officials--some of them a very long way down the chain--that no element of threat is found. If the noble Baroness is able to intervene and give me an assurance on that I should be most grateful.
Baroness Hollis of Heigham: My Lords, I am not sure about the propriety of responding across the Benches in this way. However, what the noble Earl said is certainly right. Our policy is to work with the grain of lone parents' choices, to encourage them and to help them find ways back into work, which we know from all the research evidence, including that of Jonathan
Bradshaw, is exactly what lone parents want. Personally, I accept entirely the implication of the noble Earl's comments to the effect that parenting of young children is at least as important a social responsibility as it is to get off benefit and back to work.
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