House of Commons Hansard Debates for 4 Feb 1991

Hansard

Monday 4 February 1991

The House met at half-past Two o'clock

PRAYERS

[ Mr. Speaker-- in the Chair ]

Oral Answers to Questions

SOCIAL SECURITY

Pensioners' Earnings Rule

1. Mr. Waller : To ask the Secretary of State for Social Security how many pensioners are now benefiting from the abolition of the earnings rule.

The Secretary of State for Social Security (Mr. Tony Newton) : About 300,000.

Mr. Waller : Does my right hon. Friend agree that the change in the earnings rule, which was long sought by pensioners and the organisations representing them, has proved extremely popular? Does he accept that many pensioners have talents and skills, built up over many years, that are a great advantage to employers? Is not it regrettable that some employers still tend to refuse to consider applications from people over the age of 40 or 45? In considering further improvements to legislation, will he bear in mind the ability of older people to contribute in many different ways during the latter part of their working lives?

Mr. Newton : Subject to my being able to remember every part of the question, I think that the answer is yes to each proposition. I feel strongly that we tend to talk of

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people over retirement age as though, in some sense, they are a burden, whereas many are a huge asset to our community. I am glad to say that there are signs that, under the pressure of demographic trends, more employers are beginning to recognise that.

Mr. Winnick : Is the Minister aware that the abolition of the earnings rule is no compensation for married-couple pensioners, who have lost more than £20 a week, or for single pensioners, who have lost £13 a week, as a result of pensions no longer being increased in line with earnings? An answer that I have received from the Government shows that up to 67 per cent. of pensioners have a total annual income of less than £5,000 and that many have much less.

Mr. Newton : The hon. Gentleman, who persistently asks similar questions, equally persistently ignores the fact that as a result of a range of trends, including the growth of occupational pensions and income from savings, pensioners' average net incomes--I emphasise "average"--have risen much faster under this Government and I would acknowledge--I have done so explicitly and implicitly on numerous occasions--that many pensioners have not benefited from those trends. It is right to direct additional resources to them, as we did in October 1989 with a major increase in income support premiums for older and more disabled pensioners. We shall take a further step in that direction in April with the real increase in the basic pensioner premium.

Mrs. Roe : Although the abolition of the earnings rule has been greatly welcomed by pensioners, a number of my middle-aged constituents seek guidance on the Government's view on the equalisation of the state- pension age. Is my right hon. Friend able to comment on this highly complex issue?

Mr. Newton : As my hon. Friend says, this is a complex and wide- ranging issue. I do not think that I can add to what the Government said in response to a House of Lords Select Committee last year.

Mr. Allen : The Secretary of State had better get used to persistent questions on the level of pensions from Labour

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Members. He realises, as does my hon. Friend the Member for Walsall, North (Mr. Winnick), that single pensioners are now losing £14 a week and married couples £23 a week. Will the right hon. Gentleman explain where the proceeds are--the £23 billion that has accumulated since 1979--of the great pensions robbery?

Mr. Newton : I welcome the hon. Gentleman to his new position. We look forward to his incisive questioning in the forthcoming months. He need look only at the extensive publications of statistics and finance that were issued on Friday, on which the hon. Member for Walsall, North (Mr. Winnick) commented, to know that there has been a large increase in social security benefits, in a variety of directions, including, not least, for long-term sick and disabled people.

Maintenance Awards

3. Mr. Bill Walker : To ask the Secretary of State for Social Security what evidence he has that under the current system levels of maintenance awards vary significantly around the United Kingdom.

Mr. Newton : A special assessment survey conducted last year, some of whose findings are shown in tables 13 and 16 of volume 2 of the White Paper "Children Come First", showed clear variations, for example, between different kinds of court. Analysis of DSS statistics also shows considerable regional variation in the amount paid under court orders, ranging from an average of just over £13 a week in north-west England to over £20 a week in Scotland.

Mr. Walker : I thank my right hon. Friend for that reply. Does he agree that the present system is slow, inconsistent and variable? Is he aware that only about one third of mothers living alone with their children receive any regular payments and that those payments are often considerably less than the fathers could afford? Does my right hon. Friend therefore agree that something must be done?

Mr. Newton : Yes. Clearly the present system is unsatisfactory. There is wide variation and, as my hon. Friend said, the system can be slow and sometimes difficult to use. We have set out our proposals for reform, which in general have been widely welcomed. Obviously our proposals contain many points, on which people have commented.

Departmental Relocation

4. Mr. Brandon-Bravo : To ask the Secretary of State for Social Security what progress his Department has made in relocating work from London to the rest of the United Kingdom.

The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack) : The development of the Department's information technology systems has already enabled us to transfer 1,400 jobs to three social security centres in Glasgow, Belfast and

Ashton-in-Makerfield which will handle the backroom work of 21 local offices. In addition, a further 650 jobs from the benefit agency headquarters will be transferred to Leeds from May 1992.

Mr. Brandon-Bravo : I am grateful to my hon. Friend for that reply. There can be little doubt that the cities that

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benefit from the relocation--Nottingham and Derby are two in my immediate area--find it welcome and recognise the economic benefits flowing from it. Can my hon. Friend tell the House what ongoing relocation will occur in his Department and across the board in Whitehall? What are my hon. Friend's thoughts as to the position in London as a place for the remaining core activity once the main thrust is completed?

Mr. Jack : My hon. Friend will know that, by 1992, about 80 per cent. of the work force of the Department of Social Security will be located outside London. This is very much a frontline operation in terms of the delivery of service. Many of the remaining core services in London will be handled by branch offices, the number of which will be increased. The objective is to enhance the quality of service and information available to those who seek our benefits.

Mr. Simon Hughes : I do not object in principle to the relocation, but I seek three assurances from the Minister. First, will he assure me that paperwork and applications originating in London will not be delayed by being transferred out of London and brought back again? Secondly, will the hon. Gentleman assure me that the London offices will not suffer any further neglect of their structure? Many are in bad condition and need substantial improvements such as redecoration and refurbishment. Lastly, and in particular, will the hon. Gentleman assure me that the Thames south and Thames north offices which look after the homeless and those in hostels will not suffer a reduction in service and that the people at the bottom end of the social scale will have at least as good a service as they have now, if not better?

Mr. Jack : I am glad to know that some part of government is popular. Our experience in the three social security centres leads us to believe that, for example, the error rates in terms of income support will drop from 20 to 7 per cent. and that the turnaround will drop from nine to six days--in other words, service will improve. The hon. Gentleman asked about other London offices. One of the objectives of the benefits agency which I mentioned in response to my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) is to consider carefully the quality of delivery of our service, wherever it is located. I can give the hon. Gentleman the assurance that I shall draw that point and his observations on the other London offices to the attention of the agency's chief executive.

Efficiency Scrutiny

5. Mrs. Currie : To ask the Secretary of State for Social Security whether his Department has made any estimate of the savings to the taxpayer as a result of efficiency scrutinies since 1978-79.

Mr. Jack : Since 1979, 26 such scrutinies looking at both the Department's performance and quality of service delivery have been concluded. These have secured savings of over £145 million. In addition to the formal scrutiny programme, we are constantly looking for other efficiency savings and in 1989-90, these totalled some £60 million, £30 million of which was from purchasing and supply initiatives.

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Mrs. Currie : Am I right in thinking that the efficiency scrutiny that has been tackling fraud has enjoyed spectacular success, with savings of about £300 million a year? Will my hon. Friend join me in welcoming the fact that, instead of going to those who are not entitled to it, the money is now going to those who are entitled to it, especially benefiting those in greatest need?

Mr. Jack : With her characteristic skill and ministerial experience, my hon. Friend has put her finger on the point of the scrutiny process, certainly as regards fraud. She is right to say that if we were not posting back savings of £326 million for the next financial year, we would not have been able to paint such a comprehensive picture in our recent publication on public expenditure. Our objective is to ensure that the right people receive the right help from the benefit scheme.

I take this opportunity to congratulate my hon. Friend on her excellent suggestion about ways in which her own local office might improve its delivery of social security benefits. She will shortly receive in the post news of improvements in her local office.

Mr. Frank Field : Opposition Members welcome any improvement in efficiency and we are also pleased with any crackdown on abuse. In looking at the savings that can be made, however, should not the Government spend more time on a major factor--the national insurance fund? How does the Minister justify the £6 billion lost to the taxpayer through the Government's bribe to people leaving the state scheme to enter the private sector?

Mr. Jack : The hon. Gentleman's use of the word "bribe" is uncharitable. He has considerable knowledge of the social security system and he should realise that our analysis of the burden on the diminished work force in 2030 required the Government to take early action on the question of the state earnings-related retirement system. He is right that we must always pay attention to savings made as a result of scrutiny, but in that case, the action that we took was as a result of careful analysis of future trends.

Disability Working Allowance

6. Mr. Couchman : To ask the Secretary of State for Social Security how many people will benefit from the introduction of the new disability working allowance.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : Once the new benefit is established we expect about 50,000 people to be receiving disability working allowance at any one time.

Mr. Couchman : I am grateful to my right hon. Friend for his reply. Does he agree that the new disability working allowance will promote the employment of disabled people and will encourage employers to employ them where, hitherto, they have been somewhat remiss in fulfilling the quotas assigned to them?

Mr. Scott : I believe that the new allowance will play a significant part. I can reinforce what my right hon. Friend the Secretary of State said --that demographic trends will be important in encouraging employers to look beyond the disability that first confronts them to the abilities that often lie behind.

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Mrs. Margaret Ewing : Is the Minister satisfied that employers will ensure that disabled people are offered equality of opportunity and wages in jobs? Surely, one of the most ridiculous aspects of current legislation is that disabled people are offered very low-paid jobs with little incentive for further training. Will he assure us that there will be no repercussions for those who receive housing benefit if they take up the disability working allowance?

Mr. Scott : I wish to encourage to the greatest possible extent absolute equality of employment opportunity for people with disabilities. I urge employers and other agencies to ensure that that is possible. I suspect that there will always remain a group of people with disabilities who will be at a disadvantage one way or another. The benefit is being introduced so that the earnings that they have, which may be lower than those of able-bodied people in certain circumstances, can be topped up so that they can enjoy a proper job at a proper level of income.

Mr. Dickens : Does my right hon. Friend accept that spending in real terms has risen by 100 per cent. since 1978-79 and that that is a remarkable achievement by the Government?

Mr. Scott : I reckon that it must be 100 per cent. by now as it was 98 per cent. several months ago. That shows the Government's commitment to the interests of the long-term sick and disabled.

Mr. Alfred Morris : If the DWA is so good, why are the national organisations that speak for disabled people so united in their strong criticism of proposals for the allowance which, as the Minister knows, they see as family credits without the families? How can the Minister justify marginal tax rates as high as 94 per cent. for disabled recipients when any such imposition would be described as confiscation by non-disabled people? Will he also confirm that the allowance will ultimately be a cost saving to the Government?

Mr. Scott : I am surprised that the right hon. Gentleman is so grudging about a radical and innovatory effort to ensure that those people with disabilities who want to work and are able to work can get into work. Many of them may come into work for the first time with earnings topped up by DWA. They will eventually be able to improve their position so that they work to the fullest extent possible. Although organisations for the disabled might like the benefit to be more generous than it is at the moment, the majority of the people to whom I have talked welcome its concept warmly.

Poland and Czechoslovakia

7. Dr. Michael Clark : To ask the Secretary of State for Social Security what help has been given to Poland and Czechoslovakia to assist them with the setting up of social security systems.

Mr. Jack : Both Poland and Czechoslovakia are working to restructure their social security systems to be based on a contributory principle and in response to requests for help in that endeavour our officials have visited both countries. In addition, three senior officials from Czechoslovakia recently spent time visiting several of our offices.

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Dr. Clark : When discussing social security systems with representatives from Poland and Czechoslovakia, has my hon. Friend brought to their attention the so-called workfare system in the United States? Does he agree that workfare would avoid the Czechs and the Poles inheriting the extremes of our social security system and perhaps help them avoid having a litter-strewn country like ours by allowing more people to work for the benefit that they are receiving?

Mr. Jack : I listened carefully to my hon. Friend, but I should make it clear that we have been asked to assist Poland, Czechoslovakia and other eastern European countries in terms of methodologies and systems required to reconstruct and develop a social security system. In many eastern European countries, the concept of unemployment was officially unknown but they are now having to deal with that problem. It is not for us to determine what their policy should be, but to help them to deliver an efficient form of benefit where they believe that that is required.

Mr. Campbell-Savours : Has the Minister made it clear that computerisation in this area in the United Kingdom has not been too successful, that there are many errors and that those countries in eastern Europe should be aware of that when they decide what technology they want to purchase? While I recognise that those problems can be resolved, will the Minister assure us that those countries will not be misled into buying equipment the software for which breaks down, as it has done in the United Kingdom?

Mr. Jack : I admire the hon. Gentleman's attempt to juxtapose problems with our social security system with those in eastern Europe. However, the hon. Gentleman may be somewhat behind the times in terms of the development of our information technology. In my constituency, the centre for the information technology services agency, which I visited recently, has palpably demonstrated the great improvements in the subsequent development of the local office system in this country. If the hon. Gentleman had listened to my earlier reply, he would have learnt that in social security centres in places like Ashton-in-Makerfield, we are already seeing dramatic drops in error rates when dealing with benefit. I am sure that those lessons will not be lost on those eastern European countries that are seeking our help enthusiastically in the area of information technology.

Social Fund

9. Mr. Wray : To ask the Secretary of State for Social Security what action Her Majesty's Government are taking to solve problems resulting from the increase of refusals of social fund grants and loans.

Mr. Scott : In the first nine months of this year, 38 per cent. of decisions on applications to the social fund resulted in a refusal. That is the same as the overall rate for last year.

Mr. Wray : I cannot agree with the Minister's figures. The Observer has clearly reported that there has been a 60 per cent. increase in grant refusals and a 50 per cent. increase in loan refusals. Does the Minister agree that that is a shocking state of affairs with regard to the social fund? It has been used and abused for the most vulnerable people in society. There is £3,500 million in the contingency fund.

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Surely the Government are aware that one in four children in Scotland live in households that depend on income support. Will the Minister persuade the Government to give him more resources? Since 1988, because of social fund refusals they have made a saving of £2.5 million.

Mr. Scott : My experience of the social fund is that it has responded flexibly and fairly to those who need extra help beyond that of the normal provisions of the income support system. The hon. Gentleman's own constituency has the highest social fund allocation per capita--about two and a half times the average for Britain as a whole.

Sir Fergus Montgomery : While I accept that a grant-based system meant runaway costs that no Government could continue, what should I say to an old man in my constituency, with savings of less than £200, who applied to the social fund for a bed and was told to use those savings?

Mr. Scott : Those are matters for social fund officers in the first instance. My hon. Friend will know that there is provision first for an immediate review and then for an appeal to social fund inspectors if people are dissatisfied with individual decisions. I draw my hon. Friend's attention to the fact that, in 1989-90, 35,000 people who applied for loans from the social fund were awarded grants instead.

Mr. Meacher : Is the Minister aware that, under the notorious social fund, 3 million of the poorest pensioners are freezing in the coldest snap for four years? Does he accept that the Government's severe weather payments system is riddled with unfairness because the criteria are far too restrictive, because hundreds of thousands of those on the lowest incomes are excluded, and because it is paid retrospectively so that pensioners dare not spend the money when they really need to? Is not it a shame that the Government can suddenly find £1.5 billion to spend on the Gulf and yet, at the same time, can spend only peanuts to stop old people freezing, in some cases to death?

Mr. Scott : I am not quite sure what to read into the latter part of the hon. Gentleman's comments about what the Labour Front Bench's reaction would be, if it were under the hon. Gentleman's influence, to the crisis that confronts us in the Gulf. I do not accept the description of the social fund as notorious. About 3.3 million grants and loans have been paid out to the most needy people in our society as a result of its operation.

We introduced the cold weather payments system some years ago and we have since developed it in several ways. We have, of course, had some mild winters recently, which may have reduced overall expenditure on cold weather payments, but I am confident that we shall be able to respond to the needs of people on income support who have children in the family or who have pensioners or disabled people within the household. They will be helped by the scheme.

Sir Robert McCrindle : While I accept what my hon. Friend the Minister says about the social fund, is not it a fact that, as grants tend to be replaced by loans and as the same beneficiaries tend to make applications year after year, over a period the cumulative interest which many will find impossible to pay will create a situation to which we shall need to turn our attention?

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Mr. Scott : With respect to my hon. Friend, if further loans are made to somebody they are not expected to repay the second loan until the first has been completed. Of course, there is no question of interest being charged on any of the loans--they are all interest-free.

Child Benefit

10. Mr. Cousins : To ask the Secretary of State for Social Security if he intends to make any changes to child benefit.

Mr. Newton : I have already announced that, from April, an extra £1 a week will go to the eldest eligible child.

Mr. Cousins : Does the Minister agree that a Government who can subsidise chemical plant construction in Iraq to the tune of several hundred million pounds during the 1980s have no need to cheat children of £2.30 per week by freezing child benefit as they have since 1987?

Mr. Newton : What the Government have done--there has been no mystery about it--is to examine the pattern of support for families with children. In recent years, until this year when I announced an increase in child benefit, we decided that the right priority was to give extra money to the least well-off families with children. Those are families on income support and in receipt of family credit--in other words, low-income families in work. About £400 million of additional resources in real terms has gone to those less well-off groups in recent years. I make no apology for that.

Mr. Lester : Does my right hon. Friend agree that child benefit makes a valuable contribution to all families with children? Does he further agree that those who suggest returning to a tax allowance should look back at the history of this benefit, which was an allowance and was then converted? Does he agree that we should retain the value of child benefit, that it should be indexed and that it should continue to be paid to the mother, or the woman in the family?

Mr. Newton : No doubt there will continue to be a lively debate about precisely what the balance should be--not least in terms of my previous supplementary answer--between different forms of giving support to families. I made it clear in my uprating statement, and I am glad to make it clear again to my hon. Friend today, that child benefit is and will remain a strong element in our policies for family support.

Mr. Meacher : Does the Secretary of State recognise that if the Government abolished child benefit--which clearly they are considering--we would be the only European Community country with no universal child benefit? Will he confirm that, after four years of Tory freeze, child benefit per child is only half that which is currently paid in France? Will he at least have the grace to acknowledge that, unlike means-tested family credit and child tax allowances, child benefit has the combined advantages of 100 per cent. take-up, of being cheap to administer and of involving no poverty trap? Will he confirm that only child benefit achieves that?

Mr. Newton : I can only think that the hon. Gentleman has been present in the House on at least four or five occasions in the past few months without listening to what I have said. I repeated this afternoon and if the hon.

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Gentleman did not hear it 30 seconds ago, I state again that child benefit is and will remain a strong element in our policies for family support.

Income Support

11. Mr. Dykes : To ask the Secretary of State for Social Security if he will bring forward proposals for modifications to the income support system to enhance flexibility and support levels.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : We have no proposals to do so at present. Myright hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) undertook a full review of the social security system in 1986 and introduced comprehensive reforms which took effect in April 1988. Two of our major aims for income support were to improve flexibility and to enable us to direct resources more accurately than under supplementary benefit. Since then the structure of income support has allowed us to focus extra help on families, disabled people, carers and the elderly. All this has been in addition to the normal annual upratings of benefit levels.

Mr. Dykes : I thank my hon. Friend for that answer. In view of the increased targeting emphasis and the result that it has produced, and as extra cases of hardship may come through Members' surgeries, citizens advice bureaux and other agencies in the coming months if the recession temporarily produces further problems, will my hon. Friend ensure that any referrals from Members of Parliament and others are treated with extra special care to help the most needy and hard-pressed in the community?

Miss Widdecombe : It is an essential part of our policy that help should be targeted where it is most needed. Any representations will be carefully considered. Our offices are always seeking means to improve the efficiency and speed with which they deal with such applications.

Mr. Flynn : Has the Minister observed that part of the flexibility which the Government have introduced in the overall support given to the children of war widows has resulted in a real-value cut in the payment to them of one third? That is from 12.3 per cent. of average earnings in 1979 to a mere 7 per cent. today. Does the hon. Lady realise that those war widows, as well as many other people on invalidity support and pensions, will also be denied the value of the £1 increase in child benefit which will be enjoyed by other people? Is that what the Government call flexibility?

Miss Widdecombe : The hon. Gentleman has misread the position. That is surprising as he had an Adjournment debate on the subject which was answered in detail by my hon. Friend the Under-Secretary of State. The hon. Gentleman should realise not only that the reasons for the discrepancies that he has identified are historical but that the difference would be about 21p. He should not exaggerate the case before the House.

Residential Care Homes

12. Mr. Sims : To ask the Secretary of State for Social Security what recent representations he has received concerning the level of income support available to people in residential care homes.

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Miss Widdecombe : We have received many representations from individuals and bodies.

Mr. Sims : I thank my hon. Friend for that answer and for the time and trouble that she devoted to speaking and answering questions at the lobby organised last week by the National Care Homes Association. At the meeting I am sure that she realised the strength of concern among residents and care home owners about the gap between income support and the charges that have to be imposed by home owners. Has my hon. Friend had the opportunity to study the Age Concern critique of the Price Waterhouse survey? Will she study it carefully and consider making a more detailed survey of the true costs of running care homes, so that income support can be fixed at a realistic level?

Miss Widdecombe : My hon. Friend, who should be congratulated on the way in which he chaired the lobby last week, will be aware that we have already made substantial improvements to income support for the elderly in nursing homes, as we have for those in residential care. He will be aware that those in nursing homes received a considerable increase of £45 a week. Of course, we shall continue to keep the matter under review, although he will also be aware that after 1993 the position will change for new residents. I shall study the documents from Age Concern, as I shall consider all representations made to us, and my hon. Friend may rest assured that the Government regard it as extremely important that we have the levels right and that we fix them at a reasonable rate.

Mr. Flynn : On a point of order, Mr. Speaker. May I say to the hon. Lady--

Hon. Members : No.

Mr. Speaker : Order. No.

Mr. Flynn : I intend to raise this matter on the Adjournment--

Mr. Speaker : That means that others may not ask supplementary questions.

Mr. Flynn rose--

Mr. Speaker : If the hon. Gentleman says that he wishes to raise the matter on the Adjournment, I am afraid that that is the end of the question. Sir Rhodes Boyson--[ Hon. Members :-- "No."] Order. It was not the hon. Gentleman's question, so I withdraw that. I call Mr. Madden.

Mr. Madden : How many elderly people does the Minister think will go to bed tonight in residential homes fearful that they may be evicted because neither they nor their relatives have the money to pay the required fees? Does she really describe the income support limit, which will go up to £160 in April--just £5 a week above the current level--as a substantial increase? Why will not she come clean and be honest with all those people running homes, working in them and living in them that there is just not enough money? When is it going to be increased?

Miss Widdecombe : The hon. Gentleman would do well to study the Price Waterhouse report in some detail. We based our uprating on the findings of that report, which was a comprehensive survey. The answer to the first part of his question about how many old people will go to bed worried tonight is none.

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