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Mr. Leigh: I do not agree with my hon. Friend at all. He has paid into the system all his life. It is supposed, in some sense at least, to be a contributory system, so, if he has paid in, why should he not get something back? After all, if he has children, expenses are accrued. I see no reason why he should be cheated out of the money.
Mr. Nicholls: There are three reasons why I pay into the system. First, I have no choice, and I should get done if I did not. Secondly, bearing in mind that I have an earning potential considerably greater than the average,I need to pay into a common tax pool to help look after those people who cannot look after themselves. Thirdly, if I ever fall on hard times, I would expect to be able to say that, having paid in during my good years, I now want to draw something out in my bad years. However, it is inefficient in the meantime to give me a non-means-tested benefit on the off-chance that it might be useful to me.
My hon. Friend knows as well as I that some people's livelihood and the food on the table that very day depends on their getting child benefit, whereas for others child benefit is simply drawn out once a year to be spent on a holiday. That is not an efficient way in which to run our benefit system.
Mr. Nicholls:
Yes, I shall give way, because I have not forgotten the hon. Gentleman.
Mr. Smith:
I am following the hon. Gentleman's argument with considerable care and interest. Would he apply the principle that he has just applied to child benefit to the old age pension, which takes far and away the largest slice of the Department's expenditure but which is based precisely on the contributory principle, and is paid whether or not one is in need of it?
Mr. Nicholls:
No. I do not think that the analogy is fair, for a number of reasons, the principal one being that very few people are entirely dependent on a retirement pension. Their income is topped up in a variety of ways, if necessary, by income support. Increasingly, I am pleased to say, under this Government it will also be topped up by the provision made by people during their lifetime. For many people, although not the majority, the
I had not forgotten entirely what the hon. Gentleman said earlier. It says something about his party's attitude to the problem that he got into real difficulties when mention was made of the letter that he wrote to the shadow Chief Secretary. A section of it is worth reading out again in view of what he said. The letter says:
It says something about what the Government have done that, in private correspondence at least, the hon. Gentleman refers to "investment already undertaken".I sympathise with the hon. Gentleman--the last thing anyone wants is to have his private correspondence read out on the Floor of the House, although one does it without malice but with a great deal of glee.
The hon. Gentleman then said that we had got it all wrong and should look up the word "feasible" in the dictionary, because it means only possible, not desirable. In other words, the hon. Gentleman is saying that he accepted that it was possible to make savings for the taxpayer, but not desirable.
Mr. Smith:
I intervene wearily, because thehon. Gentleman is making precisely the same point that one of his colleagues made. He is also making the same mistake. I did not write the letter to which he refers; it was written by the shadow Chief Secretary to me. If he read the whole letter, he would have seen that my hon. Friend said clearly:
My hon. Friend was not endorsing the suggestions or saying that they were desirable, but that they were active suggestions in the Department and that he had doubts about whether they were achievable.
Mr. Nicholls:
So he was not saying that they were completely unacceptable, wrong, morally outrageous and risible, and should be rejected out of hand and scorned, but that there might be doubts about them. Fine--if the hon. Gentleman wants to put that gloss on matters, I am happy that he should do so.
I suspect that the explanation goes back to the underlying feeling that, for all that we see a new model Labour party, old ideas die hard. That was summed up very well by the hon. Member for Glasgow, Garscadden (Mr. Dewar) who is reported in the Daily Mirror--and, therefore, I assume, not misquoted--as criticising the use of new technology against fraudsters. He said:
He must be joking. I assume pretty much the same sort of people go to his surgery as come to mine. I find that people are outraged by the idea that some claimants are ripping off the system. The people who take the most
exception to fraud are not wealthy toffs and Members of Parliament on their inflated salaries: they are the working poor who get up early on a wet morning to do a boring, mundane job to support themselves, and who find that two doors down somebody is ripping off the system.
If people, be they claimants or pensioners, were told that the vast majority of claimants were honest, desperately sad about being out of work and anxious to get back to work, but that others were ripping off the system, and were asked whether they would co-operate in introducing a new-style pass using photographs, magnetic strips, DNA testing or whatever to ensure that they received the maximum amount of benefit and the rascals were stopped, an overwhelming majority--especially of those who complain to me about the benefits system--would reckon that was pretty much okay. That is the fault line running through Labour Members' thought. They seem to assume that, if one is claiming benefits, all inquiry must stop about whether one is entitled to those benefits.
Such a dichotomy is evident in relation to not only benefit fraud but asylum seekers. As far as the Labour party is concerned, anybody who says he is an asylum seeker is an asylum seeker. The fact that 90 per cent. of the claimants turn out to be bogus and fraudulent does not matter two hoots--it must not be tidied up. If somebody says he is a refugee, he is a refugee. It is an extraordinary flight from reality, and ultimately intellectually dishonest.
Until relatively recently, if a claimant had their mortgage paid by the Benefits Agency, they were paid an amount to hand over to the building society. Inevitably,a few people ripped off that system, and kept the money for themselves. That vice had to be stopped, because ultimately such people's houses would be repossessed, they would be made homeless, they would then present themselves to the local authority as having been made compulsorily homeless, and they would ask to be rehoused. That is not a sensible use of taxpayers' money.
I discovered two constituency cases relevant to that process. One was of a man who was severely disabled by polio in his youth, and, as a result of a number of extremely unpleasant and painful operations, was able to work. He worked his way up from a labourer to a management post, finally found that his health was breaking down, and had to give up work. To ensure that he was putting something into society, he took part in a number of charitable activities, and contributed a great deal.
One day he found that he was no longer--as he would see it subjectively--capable of looking after his own finances, and that his mortgage had to be paid for him. He eventually came to see me, because the Benefits Agency was paying in arrears, not in advance, and, given his contract with the building society and through absolutely no fault of his own, he suddenly had a notional amount of one month's arrears throughout the year, which resulted in typical correspondence with the building society.
The other case was of a person who had run a small independent school, fell on hard times, became a claimant, always discharged his mortgage, never misapplied the funds he received, and in due course found that he too was not allowed to pay his mortgage any longer. He got letters from the building society threatening repossession, because some arrears had accrued.
It is not simply a question of people being honest.If one finds that one has to live in straitened circumstances--extremely straitened circumstances in the cases to which I have referred--and one is able to do so competently and honestly, it ought to be possible in the system to distinguish between such people and the feckless and rascals.
Both my constituents asked why it was not possible to allow them to continue to discharge their liabilities unless and until there was some default. Both said that, as a result of an increased awareness of and campaign against fraudsters, of which they both entirely approved, almost unknowingly their dignity had been infringed--yet they had never let the system down.
I am not asking my hon. Friend the Minister to reply on that point in the debate. I have already written to him about both the people to whom I have referred. It is, however, relevant to the debate to say that we must always ensure that, in cracking down on the few who are ripping off the system, we never allow those who are behaving honestly to feel that the system is in some way directed against them.
"The advice I am getting, which is necessarily incomplete, nevertheless suggests that savings in running costs of this magnitude are perfectly feasible, given the opportunities for efficiency gains and the scale of investment already undertaken".
"There must be doubts about the wisdom of trying to achieve so much in so short a time."
"Benefit claimants may soon have to pass a palm print screening test to collect their State cash. It's one option now being considered in a fraud crackdown review, Social Security Peter Lilley revealed today. But Labour spokesman Donald Dewar denounced Government palm or finger printing, warning it would make pensioners claiming income support think that they are second class citizens".
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