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Social Security System (Changes)

Volume 131: debated on Wednesday 13 April 1988

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I have received an enormous number of applications from hon. Members on both sides of the House to take part in the debate. It would be extremely helpful if both Front Bench speakers would make brief speeches and if Back-Benchers would confine their speech to five minutes. There is hardly a constituency that is not affected by the changes in one way or another. It is my wish that most of those who want to take part in the debate should be able to do so.

4.2 pm

I beg to move, That this House do now adjourn.

Leave having been given on Tuesday 12 April under Standing Order No. 20 to discuss:
The impact of the changes in the social security system.
Today we are debating the impact of the social security changes that have been phased in over the past fortnight. The Government claim that these changes represent the biggest upheaval in social security in 40 years. It is certainly the biggest upheaval since the Government came to power, but I would not want it to be thought that this Government have been idle over the past nine years. In that time they have abolished the link between pensions and earnings, which means that the pension for a married couple is £14 less than it would otherwise be.

The Government have also abolished the short-term sickness benefit and the earnings-related supplementary unemployment benefit and they have taken what is left of unemployment benefit into taxation. They have repeatedly not uprated child benefit, so that it is now worth almost 10 per cent. less than it was worth in 1979, in real terms. They have removed the board and lodging allowance from all claimants under 25 on social security and, worst of all, over the past two years they have just about halved expenditure on single payments. That is quite a record.

Against that background, it took real determination to succeed in devising a new system that was even more mean than the one that it replaced and that leaves some people even worse off than they were under the previous system. The question at the heart of the debate is how many are worse off. Everyone on the Treasury Bench, from the Olympian height of the Prime Minister to the humble and retiring manner of the Under-Secretary of State for Health and Social Security, the hon. Member for Derbyshire, South (Mrs. Currie), has asserted that only 12 per cent. will be worse off as a result of the changes. It may help if I clarify the basis of that claim. It is based on two sources of data.

The first is a sample of claimants on supplementary benefit that was taken in February 1986, two years ago. The second is a family expenditure survey of data collected in 1985, three years ago. It is not a careful census of 8 million people affected by the changes. It is an estimate based on a sample that is small in relation to the millions affected, and it is a sample taken at a time so long ago that most of those who are now on social security were not claiming it at the time. It is also a calculation that wondrously treats the abolition of single payments as not being a cut at all.

The problem for the Secretary of State and for his Government colleagues in defending that estimate is that no organisation that has studied the impact of last week's changes agrees with it. Ministers and this Government are the victim of their own arrogance. They arrogantly believe that nobody deserves to be listened to and taken seriously unless they are employed by and working within the Government.

There was a superb example of that arrogance yesterday during the exchanges at Prime Minister's Question Time from the hon. Member for Mid-Worcestershire (Mr. Forth), who played such a distinguished part in our proceedings earlier this afternoon. When my hon. Friend the Member for Dundee, West (Mr. Ross) referred to the citizens advice bureaux and suggested that they were not militant, the hon. Member for Mid-Worcestershire interjected in his characteristically urbane fashion and said that they are all Trots. I am bound to say that that casts a new light on Sir Kenneth Clucas, the chair of the National Association of Citizens Advice Bureaux, new light that the security services would be interested in receiving, as Sir Kenneth was for three years a permanent secretary under this Government.

It is a measure of the Government's lack of confidence that they have commissioned no research of their own into the effect of these changes. I suggest that they ought to look at the work of bodies that have carried out research into the changes, such as the Policy Studies Institute. They cannot all be Trots. Indeed, the Government commissioned research from the Policy Studies Institute. As the director of the institute pointed out last month, the Government have ignored all the results of its research in preparing the new social security system, even though the institute was considered to be reliable enough to be commissioned to undertake research. Last month, the Policy Studies Institute calculated that the losers are not 12 per cent. but 48 per cent. That may not be a reliable figure, because the PSI based its calculation on data supplied by the Department of Health and Social Security.

Let me turn to the Oxford department of social administration, which wisely shunned information from the DHSS and carried out a study of 186 claimants in Oxford during the past month. It concluded that two thirds of them lose in cash terms, even if we do not count the abolition of single payments, and that three quarters lose in cash terms if we count the abolition of single payments. The research unit at Nottingham university has studied Nottingham on a ward-by-ward basis. Wandsworth has also been studied on a ward-by-ward basis on behalf of Wandsworth council—another well-known bunch of Trots. Both studies discovered that the losers outnumbered the gainers by 2:1.

Since I represent a Scottish constituency, let me pray in aid Strathclyde social work department. It studied 200 claimants last month and concluded that 154 of them would be worse off in cash terms. Like the Oxford study, but unlike the Government's figures, that is not an estimate; it is a head count of real claimants from samples that date not from 1985 but from 1988.

Ministers cannot even convince their own staff who daily see the claimants. Those staff, in advance of the changes, have insisted on floor to ceiling security to protect them from the frustration that they expect from claimants.

Perhaps the unkindest cut of all comes from the Social Security Advisory Committee, set up by the present Government as a source of independent, authoritative advice which they could then ignore. Last week, the committee produced its annual report. The chairman, Mr. Peter Rarclay—another unconscious Trotskyist—put the losers not at 12 per cent., but at 43 per cent. That figure has since been quoted as that of the Social Security Advisory Committee. In fairness, it should be put on record that it is not the committee's figure; it is the Government's own figure. It dates from the tables produced by them in November, which showed that 3,650,000 claimants would be better off if they simply kept the old scheme and uprated it by 3 per cent. for inflation.

With all its faults—with all the cuts that I paraded at the start—and not even taking into account the abolition of single payments, 3,650,000 claimants are worse off under the new scheme than under the old one. We can only conclude that Ministers consider that the principal fault of the old scheme was that it was too generous to too many people. Yet the Prime Minister persists in stating that 88 per cent. are better off, or no worse off. She reaches that simple conclusion on the basis that, although many people now have a lower entitlement to benefit, the DHSS does not actually take the cash away from them. Even the present Government shrank from that step. Instead, they simply let the benefit shrivel away with inflation.

One claimant among that 88 per cent. is Mr. St. Clair, a resident of Cornwall. His wife had a stroke two years ago, and since then has been paralysed. The only movement that she can make is to blink her eyelids. Mr. St. Clair left work two years ago to nurse her. She cannot swallow, because she is totally paralysed, and therefore all her food must be liquidised, which is an expensive process.

To be fair, the local DHSS staff appear to have pulled out all the stops to give Mr. and Mrs. St. Clair the maximum help. They currently receive £89 a week in benefit. Under the new rules, they are entitled to £70 a week. Of course, Mr. and Mrs. St. Clair are not losers. Their cash is not being taken away. Their benefit has been frozen at its present level until their new entitlement catches up, which at the present rates of inflation will mean their benefit remaining frozen until 1995. Nevertheless, they are among the 88 per cent. paraded as being no worse off.

It is worse than that, however. Mr. and Mrs. St. Clair advise me that they live in a two-storey cottage. Every night Mr. St. Clair carries his wife up and down the stairs. He had arranged to buy a single-storey bungalow. An additional £9 would be paid to him by the DHSS to cope with the additional cost. Under the new rules, that £9 is not added to his cash benefit; it is only added to his notional entitlement under the new rules, bringing that entitlement up to £79—less than its present level in cash—and leaving Mr. and Mrs. St. Clair not a penny better off. The purchase of the bungalow has fallen through and, every night, Mr. St. Clair carries Mrs. St. Clair up and down the stairs. None the less, we are told by the Prime Minister and every Minister in the Government that Mr. and Mrs. St. Clair are not losers.

This is a very complicated case. As the hon. Gentleman may appreciate, I had some dealing with it over a period. There is a conflict between the figures that I was given and those that the hon. Gentleman has given. I was told that, as the hon. Gentleman has said, until now the supplementary benefit payment to the St. Clairs has been £89·73 a week, but that income support has been awarded at £93 a week. There may be a reason for the difference between the figures, but I consider it only right that my figures should be put on the record.

I am obliged to the hon. Gentleman for his intervention. My figures, however, come straight from Mr. St. Clair, with whom I discussed the matter only last week. Of course, I shall be happy to check them again, but I assure the hon. Gentleman that when I last conversed with Mr. St. Clair he clearly believed that not only had he been left worse off and unable to purchase the house that he needed, but, without a shadow of a doubt, he was a loser in real terms from the changes brought in by the Government.

There is, of course, an added lesson to be learnt from that case: that any disabled person now about to claim for the first time will start at the new levels of benefit. Just how hard they will be hit is shown by the study produced by 15 citizens advice bureaux, based on 80 claimants who came to the bureaux for two days in early March. Forty-four of them will receive lower benefits under the new scheme if applying for the first time after 11 April.

Those who lose most are the old and the sick. That is not surprising, because a key feature of the new scheme is that it sweeps away all the extra additions for the special needs of the disabled and frail, such as diet, heating and laundry: all the additions to which a former Minister of State with responsibility for social security—now the Minister for Health—once referred in a television interview as the twiddly bits of the system. It is, of course, those "twiddly bits" that made life bearable for the disabled.

Of 20 pensioners in the study, 14 will be worse off under the new scheme. Of 19 disabled claimants, 16 will be worse off. Again, those are not estimates. They are not based on a computer model. They are actual assessments of real claimants who came to those bureaux only a month ago. They are deeply disturbing figures, and they are even more disturbing given that every year one third of the claimants who come on to the books of the social security system do so for the first time. In other 'words, next April one third of all claimants of income support will be assessed under the new rules, and if the experience of the citizens advice bureaux is any guide, more than half those new claimants will receive less under the new system than they would under the previous system, with all its faults.

Will my hon. Friend bring to the Minister's attention the ending of the transitional protection arrangements that existed before the new schemes came in? One of my constituents, Mrs. Margaret Wells, is in a home for people suffering from senile dementia, and has only £400 in savings. However, she had to leave behind a terraced house that the DHSS estimates now to be worth more than £6,000. Her payments for her stay in the home are being cut off, and her relatives are being told that, because they cannot afford the extra £100 that they must find, they must borrow: they must go into debt to pay it. Is that the kind of thrift that the Prime Minister is advocating?

A number of my colleagues have encountered identical cases, including my hon. Friend the Member for Bishop Auckland (Mr. Foster), two of whose constituents have lost £140 a week—money that they required to meet the fees of their accommodation in residential homes. I know that the Secretary of State has received a letter from the Association of Hospice Social Workers asking to take up that point with him. I hope that he will tell us that he will do the association the courtesy, and show the courage, of meeting its members and considering their objections to a rule that is causing so much harshness.

No, I shall not give way. Mr. Speaker has very properly advised the House that many hon. Members wish to speak. I should like to proceed with my speech.

There is common ground between the Government and the Opposition. Both sides accept that there are cash losers. Even the Prime Minister accepts that. Let us now consider who those losers are. Let us ask whether their losses are acceptable, even if they are only 12 per cent., or 960,000, a figure to which the Government admit. There can be few hon. Members who have visited their constituencies in the past fortnight who have not met some of those losers. Last weekend, in my constituency, I met a couple on invalidity benefit of £72 a week who have lost £11 a week in housing benefit—£44 a month. They have not £6,000 to their name. But 350,000 lose all their benefit and will experience an even worse impact on their living standards as a result of that rule.

Yesterday, my right hon. Friend the Leader of the Opposition referred the House to the case of Mrs. Williams. Let me refer the House to the case of Mrs. Phillips of Crewe. Mrs. Phillips received £41 in state pension and £12 in interest per week—a grand sum of £53 weekly. She received the interest on a capital sum of £9,000. Because the sum is over £6,000, last week she lost all her housing benefit. That increased her rent and rates by £12 a week.

Until last week, after housing and fuel costs, Mrs. Phillips was left with £33 per week for food, clothing and every other necessity. She is now left with £23 a week for those expenses. How many Conservative Members imagine that they could manage on that income per week? I know that some of them have had the courage to admit that they could not. I know that because some of them have been confronted by constituents hit by the new rule. I read in the press that the hon. Member for Mid-Kent (Mr. Rowe) has been advising those caught by the rule that they should put a deposit on their funeral with an undertaker in order to get below the £6,000 ceiling.

There is a much simpler and more effective way of solving the problem of the hon. Gentleman's constituents, and that is for him to use his vote in the House, to which his constituents sent him, to force the Government to change a rule that he will not defend.

Nor is it just those on housing benefit who lose. There are the 15,000 people who lose all social security because they or their partners work more than 24 hours a week. Among those 15,000 people are Mr. and Mrs. Godden, to whom I referred yesterday. Before I close, I wish to dwell on their case.

Mrs. Godden suffers from multiple sclerosis. That is a degenerative condition. It will get worse, not better. Already Mrs. Godden can barely walk the length of her house. She has three young daughters, the youngest of whom is two years old and the oldest is eight years old. She has a mentally handicapped son who stays in a hospital during the week and returns home at weekends. For such a household she needs constant attendance.

There is one solution—it is rapidly becoming the only solution available to the Goddens—and that is for Mr. Godden to give up his work and stay at home and for the family to live entirely on social security. Mr. Godden has chosen not to do that. To his credit, he has struggled to hold down his job—a job that involves him working six days a week from 9 am to 6 pm, for which he takes home £128 a week.

Mr. Godden is precisely the kind of person whom Conservative Members constantly tell us they want to support—people who choose to work for a low wage rather than go on the dole. It costs Mr. and Mrs. Godden £120 to secure constant attendance while Mr. Godden works. The net gain from Mr. Godden's work is £8. Under the old rules, the Goddens qualified for social security of £48 a week. Now they do not qualify for a penny.

There is another twist. The Secretary of State yesterday advised the House that their accommodation was rent-free. That is perfectly true. It is rent-free because it is tied accommodation. If Mr. Godden now gives up his job, as he may be obliged to do, the family will in turn be rendered homeless.

Mr. and Mrs. Godden came to Parliament before Easter. They spoke to a press conference of the parliamentary lobby in the Palace—possibly the most hardened and cynical audience known to man. Nevertheless, it was obvious that they were moved by Mr. and Mrs. Godden's plight. It is the mark of a civilised and decent society how it supports families in Mr. and Mrs. Godden's position; how it helps them to struggle to hold together their marriage and their children to prevent them from going into care. That is the nightmare that haunts Mrs. Godden, because, by a wicked irony, she herself was brought up in care.

I shall never forget the reception that her case received in the House yesterday. It was received on the Government Benches with laughter. What Conservative Members found funny was the Secretary of State's observation that the Goddens had been on holiday. They found it the biggest joke of the day that a disabled claimant had taken her children on holiday, as if people on benefit should be under a kind of house arrest.

Yes, all right, Mr. and Mrs. Godden had a holiday. It lasted six days and it ended 12 days ago. They went to Plymouth to see Mrs. Godden's relatives. Mr. Godden is a caravan salesman. His company gave him free use of a caravan for a week. They parked it in a farmer's field at a rent of £2 a night. That, and the petrol from Bristol, was the entire cost of the holiday that Conservative Members found so funny.

However, there is something that the Government have done to help the Goddens. It would be churlish of me not to refer to it before closing. As a result of the Budget, Mr. Godden's weekly net income has gone up to £130. He has gained £2 from tax cuts while losing £48 from benefit cuts.

Here we come to the final and shaming contrast—the contrast between tax cuts in March and benefit cuts in April. There need not have been any losers from the social security changes. We know that the Government had the money to prevent there being any losers. We know that because the Chancellor found £2,080 million to give to 750,000 top rate taxpayers only last month. There was no talk of targeting there in the Budget speech; no talk of concentrating help where it was most needed last month. The Chancellor actually gave away more money to 750,000 of the rich than the entire increase in the social security budget for 12 million claimants. That tells us all that we need to know about the Government's priorities. This is a Government who help the rich and punish the poor, and it is against those priorities that we shall vote tonight.

4.26 pm

It is extraordinary that the Opposition should call for an emergency debate—[Interruption.]

Order. The Opposition spokesman was heard in silence and I hope that the House will give an equally fair hearing to the Secretary of State.

As I started to say, it is extraordinary that the Opposition should call for an emergency debate on the social security changes as though anything that occurred on Monday had not been discussed and debated repeatedly—I am talking, Mr. Speaker, to the Opposition—and in minute detail, over the past months, and, indeed, years. In fact, the changes had been under scrutiny, in the House and elsewhere, since the review process started back in 1983 and 1984.

For example, the Opposition will be aware that the Social Security Act 1986, which provided the legislative basis for the changes, was debated for over 234 hours—a similar length of time to that given to the equivalent legislation in the 1940s. In Committee, 162 hours were spent in 42 sessions considering 1,498 amendments. The changes—[Interruption] There is time for me to make all the points that I am seeking to make. The changes were incorporated in the manifesto on which the Conservative party won the election. Finally, the detailed regulations for the new schemes and other changes this month were the subject of numerous further debates here and in another place.

Before I proceed—I shall endeavour to be as brief as I can in view of your comments, Mr. Speaker—I want to respond briefly to the detailed points on Mrs. Godden made by the hon. Member for Livingston (Mr. Cook). It is extremely difficult for those of us who are concerned about the genuine interests of benefit claimants, as I know the hon. Gentleman is, to seek to debate such matters across the Floor of the House. I sought yesterday, and I do so again now, to make certain that the facts were there—the facts that related to the inability of the local social services department and my Department to establish whether, on the Independent Living Fund or on additional facilities, the local social services could assist.

In the light of the hon. Gentleman's comments it might therefore be useful again to remind the House of the inaccuracies in the report in one of yesterday's newspapers. The mobility allowance—[Interruption.] It is useful for the House to know the facts if an individual case is being raised. Obviously we all welcome the fact that the family receives £23·05 a week in mobility allowance, which was not mentioned. The general increase in benefits this week brought the total benefit income up to £117·30 a week. There was an increase in the husband's wages to £130 a week and, as the hon. Member for Livingston rightly said, there is no liability to pay rent or rates. There was also no mention of the presence in the home of a non-dependent son who is in full-time work.

Together, those facts paint a different picture. After the changes this week, and prior to the application that will be considered under the independent living fund, Mrs. Godden has a weekly income of £247·70 for a family of five, with no rent or rates to pay, and a working son living at home. I am just reminding the House of the facts of the case.

We should put the changes this week into context. The hon. Member for Livingston failed to address the real problems of the old benefit system. Indeed, by every—

I am grateful, not only for the Secretary of State giving way, but for his attention to detail. Will he confirm that of the £247 of which he spoke £120 has to be spent because of the constant attendance requirements of Mrs. Godden? That is the price of a mother having multiple sclerosis. The effective income of the family is not, therefore, £247 a week, but £127 a week.

If we want to be even more accurate, the right hon. Gentleman is right in that particular, but his facts are incomplete. He is right to say that the private domestic help that Mrs. Godden is receiving is currently running at a cost of £125·38 a week. The local social services have visited her since I spoke yesterday and have offered—[Interruption.]

Order. The Secretary of State was asked a question and he is now seeking to reply to it.

The social services have offered assistance with domestic help, which has been refused.

The hon. Member for Livingston failed to address the real problems of the old benefits system. Indeed, by every comment and criticism that he makes of our changes, he implies that he would prefer to keep the old system in its old shape indefinitely into the future. If that is not his position, he holds out the absurd illusion that, in reforming a highly complex and frequently unbalanced structure into something more coherent and sensible, it is possible to leave everybody, even those who have benefited from the anomalies of the old system, just as well off as if the old system had been continued. Frankly, as all hon. Members know, that is a delusion.

What were the problems of the old structure of benefits? First—this is something on which many people of all political opinions will agree—the old structure was not sufficiently responsive to changes in society and to changing needs. The 1985 Green Paper, which launched. the reform process, showed that there had been important changes in the characteristics of those in the lowest income groups over the previous decade or so. In particular, the growing prosperity of pensioners meant that there were far fewer of them in the lowest income group by the early 1980s than there had been 10 years previously. Indeed, on average, pensioners' net incomes rose by 18 per cent. in real terms. [Interruption.]

Order. If the House is silent, hon. Members will be able to hear the Secretary of State.

Indeed, on average, pensioners' net incomes rose by 18 per cent. in real terms between 1979 and 1985; twice as fast as in the population as a whole, and very much faster than in the mid-1970s.

By contrast, the Green Paper showed an increase in the number of families, with children, on relatively low incomes and concluded that the social security system needed to be more responsive to their particular needs.

I should like to get further into my speech.

Secondly, the old structure tended to lock recipients into dependency rather than to liberate them from it. Too many people were in a position in which, if they sought to improve their position or that of their families, they could find themselves worse off as a result.

The absurdity of that situation can be shown in the case of a married couple, with three children aged three, eight and 11, paying average local authority rent and rates. Under the old structure, on gross earnings of £070 a week, they would have had, including benefits, a total net income of £111·80. However, if their gross earnings more than doubled, to £150, they would have been over £1 a week worse off. That was not only a ludicrous situation, but was deeply immoral. The system said, "If you want to better yourself, look to the state for help and not to your own efforts."

In addition to the complexities within each benefit, there was no real coherence between them, so that supplementary benefit and housing benefit—[Interruption.] I am trying to illustrate the kinds of complexities and problems that existed in the past in a way that I think most people would appreciate hearing. There was no real coherence between them, so that supplementary benefit, housing benefit and family income supplement each had its own rules and its own fine print to cover what were often much the same issues. It was a recipe for complexity, confusion and anomaly and it was emphatically not a satisfactory basis for the future.

The need for reform was therefore clear. Huge resources were going into social security. In 1978–79, about £16 billion was spent on benefits, and in the last financial year that had reached over £44 billion. Even after discounting inflation, there had been a real terms increase approaching 40 per cent., or over £12 billion, at current prices, but despite that record expenditure, the system was clearly not working. The reforms introduced this month are designed to tackle those very real and pressing problems.

All three income-related benefits are now far more closely aligned, achieving greater coherence between the help available to those on low incomes, whether in work or out of work, improving work incentives—

Order. May I say to those hon. Members who are now seeking to interrupt that it takes time out of the debate and also takes time away from those who may wish later to make contributions.

The new structure will make it easier for claimants to understand what is available and what they should receive. Equally important, it makes it possible to ensure that resources are directed to the priority groups which need them most. For example, we are using this new flexibility to give particular emphasis to the needs of families with children.

So far, I have spoken mainly—

about regular weekly benefits, but the system of one-off payments for exceptional needs was also included in the reform. The single payments scheme no longer achieved its aim—

nor did it direct taxpayers' money to those who needed it most. In particular, it was no longer a system of exceptional payments. In 1949, exceptional needs payments—

Order. The hon. Gentleman is one of those who have told me that they wish to take part in the debate. He cannot expect to intervene and also to make a speech.

As I was saying, it was no longer a system of exceptional payments. In 1949, exceptional needs payments were made at the rate of one for every 10 people on benefit. By 1979, that had become one for every three. Since 1980, the cost had been doubling every two years.

The facts in relation to the appalling old system are relevant.

That was out of all proportion to the increase in the number of people on benefit. In place of single payments, we have therefore introduced the social fund. As the hon. Member for Livingston rightly said, this has attracted a great deal of comment, but let us keep it in perspective. Single payments represented a tiny proportion of the total expenditure on social security and the budget for the social fund will be at about the same level as the cost of those payments in the last financial year.

Rightly, in my view, the vast bulk of social security goes on regular weekly benefits.

Order. I must tell the hon. Member for Coventry, South-East (Mr. Nellist) for the last time that he must not persist in rising if the Minister does not give way.

Order. I hope that the hon. Member for Coventry, South-East is not trying to ask his question through the Chair, which would be an unfair tactic.

Not at all, Mr. Speaker. My point of order is that if I rise every minute or every two minutes to ask the Secretary of State to give way, that is my perfect right as a Member of Parliament to try to put my point of view. This is the only chance that I get to ask the Secretary of State questions.

The hon. Gentleman has a right, but equally he is aware of the rules. If the Minister does not give way, or indeed if the hon. Gentleman is speaking and does not give way, another hon. Member seeking to intervene must not persist.

I want to consider the effects of the changes—this was the gravamen of the argument presented by the hon. Member for Livingston—on the incomes of claimants. Many scare stories have been thrown around on those effects and I want to clarify the position.

I want, first, to refer briefly to the point raised by the hon. Member for Livingston when he referred to the Policy Studies Institute, the Oxford study, the Wandsworth study and others. One of the problems with most of those studies, as opposed to the Government's data, is that they—the PSI study is an example—underplay the spending on transitional protection.

All the studies to which the hon. Member for Livingston referred—[Interruption.] I am trying to respond to the precise questions raised by the hon. Member for Livingston. All the studies in question made misleading comparisons by quoting average single payments figures for all income support families with children in the way in which the PSI did. They also misleadingly estimated single payments figures which predate the necessary changes made in 1986 and 1987.

Perhaps I should now repeat the basic point that we cannot move away from an old, complex, unbalanced and ultimately unsatisfactory system to something—

fairer and more equitable without in the process having both gainers and losers, and in that respect I recognise the point made by the hon. Member for Livingston.

What are the effects? I believe that the Government have been completely frank and open about the likely impact of the changes and we published detailed tables, based on the best available data, in 1985 and last October. We have shown the results in structural terms and in terms of the cash position of those on benefits at the time of change. I want to explain that distinction, because I accept entirely what the hon. Member for Livingston said when he claimed that this was a very important point.

I am trying as courteously as I can to respond to the basic points made by the shadow Social Services spokesman.

Order. This is a very brief debate. In fairness to the whole House, I ask the House—

Order. If the hon. Member for Coventry, South-East (Mr. Nellist) rises again and the Minister does not give way, I will have to ask him to leave the Chamber.

I am trying to address the very precise and important points made by the hon. Member for Livingston.

The structural tables describe an essentially hypothetical position, as they compare the position of recipients as they will be this year with the position that they would have been in had the old system of weekly benefits continued completely unchanged, but uprated on 11 April in line with inflation.

The tables are also hypothetical in the sense that they compare weekly benefit entitlement under the old scheme, had it continued, with the new scheme, but without taking account of the transitional protection which many beneficiaries will receive on top of their actual entitlement under the new schemes. I accept that that is an unavoidable difficulty with such tables, but it is important for anyone making serious comparisons or looking at the issue seriously to bear that point in mind. It means that, if used in isolation, the structural tables understate the true level of resources that the Government are committing to income-related benefits at the point of change.

The cash tables, which we have also published, give a clearer picture of the actual situation which real benefit—[Interruption.] I shall come in a moment to the precise figures which the hon. Member for Livingston rightly asked me to mention. The cash tables show the actual situation which real benefit recipients will experience this month.

The tables show the numbers who see an increase, decrease or no change in their weekly income at the time of transition, taking account of the changes in rules and benefit rates and the transitional cash protection that we are providing for those in the most vulnerable position—those on income support who would otherwise be worse off.

I expect that some of the confusion arises from a misunderstanding of the fact that, as the hon. Member for Livingston said, last October we published figures on both those bases. For instance, some have claimed to see an inconsistency between the Government's figures and those of the Social Security Advisory Committee. There is no discrepancy for, as the hon. Member for Livingston rightly said, the committee was simply quoting from the Government's structural tables.

The hon. Member for Livingston claimed yesterday that the SSAC figures were new. We are discussing the very points raised by the hon. Member for Livingston yesterday. He cited the fact that the figures were new, in order to justify today's emergency debate. In doing so, I believe that he has shown once again that he does not read what the Government publish and that he has not taken in the figures placed in the Library—

I must now ask the hon. Member for Coventry, South-East to leave the Chamber.

Order. There is no point of order arising from this. Will the hon. Gentleman please leave the Chamber? If he does not leave the Chamber, I shall be forced to name him, and that takes time out of the debate.

I give the hon. Member for Coventry, South-East one more chance. Will he now leave the Chamber?

Motion made, and Question put, pursuant to Standing Order No. 43 (Order in debate),

That Mr. Dave Nellist be suspended from the service of the House.—[Mr. Waddington.]

The House proceeded to a Division—

(seated and covered)

On a point of order, Mr. Speaker. At the point when this Division was called and in the seconds thereafter the hon. Member for Sunderland, North (Mr. Clay) was distinctly heard to refer to you as a Tory stooge. In so doing he gave great offence not only to the House but to yourself. I think that this is an appropriate point at which to raise this matter and insist that some action be taken about it as soon as the Division is over.

In the noise that ensued after I had named the hon. Member, I heard no allegation of that kind.

Order. I hope that the whole House will always support its Speaker when he has to do his duty, however painful and difficult.

The House having divided: Ayes 270, Noes 32.

Division No. 253]

[4.47 pm


Adams, Allen (Paisley N)Bennett, Nicholas (Pembroke)
Adley, RobertBenyon, W.
Aitken, JonathanBevan, David Gilroy
Alexander, RichardBiggs-Davison, Sir John
Alison, Rt Hon MichaelBlackburn, Dr John G.
Arnold, Jacques (Gravesham)Blair, Tony
Arnold, Tom (Hazel Grove)Blaker, Rt Hon Sir Peter
Ashby, DavidBonsor, Sir Nicholas
Ashdown, PaddyBoscawen, Hon Robert
Aspinwall, JackBoswell, Tim
Atkinson, DavidBowden, Gerald (Dulwich)
Baldry, TonyBowis, John
Banks, Robert (Harrogate)Boyes, Roland
Barnes, Mrs Rosie (Greenwich)Boyson, Rt Hon Dr Sir Rhodes
Barron, KevinBraine, Rt Hon Sir Bernard
Beaumont-Dark, AnthonyBrandon-Bravo, Martin
Beith, A. J.Brazier, Julian
Bell, StuartBrittan, Rt Hon Leon
Bellingham, HenryBruce, Ian (Dorset South)
Bendall, VivianBuchanan-Smith, Rt Hon Alick

Buck, Sir AntonyHolt, Richard
Budgen, NicholasHordern, Sir Peter
Burns, SimonHowarth, G. (Cannock & B'wd)
Burt, AlistairHowell, Ralph (North Norfolk)
Butler, ChrisHughes, Robert (Aberdeen N)
Campbell, Menzies (Fife NE)Hughes, Robert G. (Harrow W)
Carlile, Alex (Mont'g)Hunt, David (Wirral W)
Carlisle, John, (Luton N)Hunt, John (Ravensbourne)
Carlisle, Kenneth (Lincoln)Irvine, Michael
Carrington, MatthewIrving, Charles
Carttiss, MichaelJack, Michael
Cartwright, JohnJackson, Robert
Cash, WilliamJessel, Toby
Chapman, SydneyJohnson Smith, Sir Geoffrey
Churchill, MrJohnston, Sir Russell
Clark, Dr Michael (Rochford)Jones, Robert B (Herts W)
Clark, Sir W. (Croydon S)Kellett-Bowman, Dame Elaine
Coombs, Anthony (Wyre F'rest)Kilfedder, James
Coombs, Simon (Swindon)Kinnock, Rt Hon Neil
Couchman, JamesKirkhope, Timothy
Cunningham, Dr JohnKirkwood, Archy
Currie, Mrs EdwinaKnapman, Roger
Curry, DavidKnight, Greg (Derby North)
Day, StephenKnowles, Michael
Devlin, TimKnox, David
Dewar, DonaldLatham, Michael
Dobson, FrankLawrence, Ivan
Durant, TonyLennox-Boyd, Hon Mark
Emery, Sir PeterLightbown, David
Fallon, MichaelLilley, Peter
Farr, Sir JohnLivsey, Richard
Favell, TonyLloyd, Sir Ian (Havant)
Fearn, RonaldLloyd, Peter (Fareham)
Field, Frank (Birkenhead)Lofthouse, Geoffrey
Flynn, PaulLord, Michael
Fookes, Miss JanetMcCrindle, Robert
Forsyth, Michael (Stirling)Macdonald, Calum A.
Forth, EricMacfarlane, Sir Neil
Foster, DerekMcKay, Allen (Barnsley West)
Fowler, Rt Hon NormanMacKay, Andrew (E Berkshire)
Fox, Sir MarcusMaclean, David
Franks, CecilMaclennan, Robert
Freeman, RogerMcLoughlin, Patrick
Fry, PeterMcNair-Wilson, M. (Newbury)
Galbraith, SamMcNair-Wilson, P. (New Forest)
Gale, RogerMadel, David
Garel-Jones, TristanMans, Keith
Gilbert, Rt Hon Dr JohnMaples, John
Gill, ChristopherMarlow, Tony
Gilmour, Rt Hon Sir IanMartin, David (Portsmouth S)
Glyn, Dr AlanMartin, Michael J. (Springbum)
Golding, Mrs LlinMates, Michael
Goodhart, Sir PhilipMaude, Hon Francis
Goodlad, AlastairMawhinney, Dr Brian
Goodson-Wickes, Dr CharlesMaxwell-Hyslop, Robin
Gorst, JohnMeyer, Sir Anthony
Gow, IanMitchell, Andrew (Gedling)
Gower, Sir RaymondMolyneaux, Rt Hon James
Greenway, Harry (Ealing N)Monro, Sir Hector
Greenway, John (Ryedale)Moonie, Dr Lewis
Grylls, MichaelMoore, Rt Hon John
Gummer, Rt Hon John SelwynMorris, M (N'hampton S)
Hampson, Dr KeithMorrison, Hon Sir Charles
Hanley, JeremyMoss, Malcolm
Hannam, JohnNeale, Gerrard
Hargreaves, A. (B'ham H'll Gr')Nelson, Anthony
Hargreaves, Ken (Hyndburn)Neubert, Michael
Harris, DavidNicholson, David (Taunton)
Haselhurst, AlanNicholson, Emma (Devon West)
Hayes, JerryO'Brien, William
Hayhoe, Rt Hon Sir BarneyOnslow, Rt Hon Cranley
Hayward, RobertOppenheim, Phillip
Heathcoat-Amory, DavidOwen, Rt Hon Dr David
Heddle, JohnPage, Richard
Heseltine, Rt Hon MichaelPaice, James
Hicks, Mrs Maureen (Wolv' NE)Patten, John (Oxford W)
Hicks, Robert (Cornwall SE)Pawsey, James
Higgins, Rt Hon Terence L.Porter, Barry (Wirral S)
Hind, KennethPorter, David (Waveney)
Hogg, Hon Douglas (Gr'th'm)Portillo, Michael

Powell, William (Corby)Sumberg, David
Price, Sir DavidSummerson, Hugo
Radice, GilesTapsell, Sir Peter
Rathbone, TimTaylor, Ian (Esher)
Redwood, JohnTaylor, John M (Solihull)
Rhodes James, RobertTaylor, Matthew (Truro)
Riddick, GrahamTaylor, Teddy (S'end E)
Rifkind, Rt Hon MalcolmTebbit, Rt Hon Norman
Robertson, GeorgeTemple-Morris, Peter
Roe, Mrs MarionThompson, D. (Calder Valley)
Rooker, JeffThurnham, Peter
Rossi, Sir HughTownsend, Cyril D. (B'heath)
Rost, PeterTredinnick, David
Rowe, AndrewTrotter, Neville
Ryder, RichardVaughan, Sir Gerard
Sackville, Hon TomWaddington, Rt Hon David
Scott, NicholasWakeham, Rt Hon John
Shaw, David (Dover)Walden, George
Shaw, Sir Giles (Pudsey)Walker, Bill (T'side North)
Shaw, Sir Michael (Scarb')Wallace, James
Sheldon, Rt Hon RobertWalters, Dennis
Shephard, Mrs G. (Norfolk SW)Ward, John
Sims, RogerWarren, Kenneth
Skeet, Sir TrevorWheeler, John
Smith, Sir Dudley (Warwick)Whitney, Ray
Smith, Tim (Beaconsfield)Widdecombe, Ann
Soames, Hon NicholasWiggin, Jerry
Speller, TonyWilshire, David
Spicer, Sir Jim (Dorset W)Winterton, Mrs Ann
Squire, RobinWinterton, Nicholas
Stanbrook, IvorWolfson, Mark
Steel, Rt Hon DavidWood, Timothy
Steen, AnthonyYeo, Tim
Stern, Michael
Stevens, LewisTellers for the Ayes:
Stewart, Allan (Eastwood)Mr. Alan Howarth and
Stokes, JohnMr. Stephen Dorrell.


Abbott, Ms DianeMahon, Mrs Alice
Barnes, Harry (Derbyshire NE)Michie, Bill (Sheffield Heeley)
Benn, Rt Hon TonyMorley, Elliott
Bermingham, GeraldNellist, Dave
Bidwell, SydneyParry, Robert
Campbell, Ron (Blyth Valley)Patchett, Terry
Canavan, DennisRedmond, Martin
Clay, BobSalmond, Alex
Cohen, HarrySedgemore, Brian
Ewing, Mrs Margaret (Moray)Skinner, Dennis
Fields, Terry (L'pool B G'n)Thomas, Dr Dafydd Elis
Grant, Bernie (Tottenham)Vaz, Keith
Heffer, Eric S.Wall, Pat
Hinchliffe, DavidWelsh, Andrew (Angus E)
Lewis, Terry
Livingstone, KenTellers for the Noes:
Loyden, EddieMr. John Hughes and
Madden, MaxMr. Jeremy Corbyn.

Question accordingly agreed to.


That Mr. Dave Nellist be suspended from the service of the House.

The hon. Member then withdrew.

The interruption has taken time out of a Standing Order No. 20 debate that I granted yesterday, of great interest to the whole House. I ask the House now to allow the debate to proceed in good order so that as many hon. Members as possible may participate.

On a point of order, Mr. Speaker. Your kindness and generosity are well known, but the fact is that the whole House heard the hon. Member for Sunderland, North (Mr. Clay) call you a "Tory stooge". He did not do it once or twice accidentally. He made absolutely sure that everybody in the House heard that attack, not only on you, but on the great office that you hold. It was a deliberate attempt to undermine your authority and must be looked upon with disgust by all hon. Members, from whichever party they come.

I did not hear that comment. The mere fact that we are having a Standing Order No. 20 debate clearly refutes what the hon. Gentleman is alleged to have said.

Order. This is an opportunity for the House to obtain information from the Secretary of State for Social Services on a matter which is of great interest to the House and the country. did not hear the comment and do not propose to take any further points of order on it. Mr. Moore.

So far as the results of the estimates published by the Government are concerned, there is no secret that both sets of tables show that some are now better off, some in much the same position and some less well off following the changes. Overall, the results show that around 77 per cent. of couples with children, 60 per cent. of lone parents, and 81 per cent. of sick and disabled people are unaffected or are better off in structural terms as a result of the reforms. These are valuable improvements which will be widely welcomed. Overall, around three fifths, or 57 per cent., will be better off, or in the same position, simply on this structural—

I hesitate to interrupt, because I very much want to hear what the right hon. Gentleman is saying, but even those of us who have good and sharp hearing cannot hear what he is saying because he is speaking too quietly. Will he please be kind enough to speak up?

Order. I understand that the Secretary of State has an infection. I have done my best to help by having the microphones turned up to the fullest extent. I f the House listens in silence to what the right hon. Gentleman has to say, that will be greatly to the benefit of the House and will assist the Secretary of State.

Thank you, Mr. Speaker.

Overall, around three fifths, or 57 per cent., will be better off or in the same position, simply on this structural comparison, ignoring the effects of the transitional protection. That was the point that the hon. Member for Livingston rightly addressed.

Turning to the actual cash position, which real people actually experience this month, the published tables show that about 92 per cent. of couples with children, 89 per cent of lone parents, 87 per cent of pensioners and no less than 98 per cent. of sick and disabled people are either better off or no worse off in cash terms. In total, 88 per cent. of those receiving income-related benefits are in that position. Of course I recognise that hon. Members are concerned about individual cases and about those who may be less well off, but I hope that the figures help to put their position into context.

Before leaving this general area, let me say a few words about one particular change which I know has caused some concern to some of my hon. Friends—the change in the treatment of capital.

Let me emphasise that one of our prime aims is to focus help on those groups most in need. Until last week, one could be in receipt of housing benefit with £25,000 sitting in a current account. That simply did not make sense. It is entirely reasonable to ask people with substantial resources of their own to use such resources before turning to help from public funds. In comparison to the old system—

Perhaps I could explain the point about housing benefit. In comparison to the old system, the new rule is in fact very beneficial to those most in need and to those with small savings. Hitherto, those in greatest need were ineligible for any help through supplementary benefit if they had only £3,000 in capital. That limit is now doubled to £6,000. In housing benefit—like income support and family credit—we will now be completely ignoring the first £3,000 of capital—again benefiting those with only modest resources.

We have felt it both right and fair to expect those with more significant resources, particularly over £6,000, to look to those resources in the first place rather than to taxpayers, some of whom—

If I can complete the whole point, I shall be happy to give way to the hon. Lady.

We have felt it both right and fair to expect those with more significant resources, particularly over £6,000, to look to those resources in the first place rather than to taxpayers, some of whom may have fewer resources than themselves, for extra help. Let us be perfectly clear. Housing benefit, like all the income-related benefits, is for people who have little money of their own. That means testing both what they earn and what they own by way of capital. The only difference between housing benefit and income support is that one is for housing costs, the other for living costs in general. They are both paid for by taxpayers. Recognising the similarity between the two benefits, we now have the same test of capital for all the income-related benefits.

Some of my hon. Friends want to see a higher capital limit, but do they really believe that we should pay basic maintenance benefits to people with, for example, £10,000 in the bank? After all, one purpose of saving and thrift is to enable one to look after one's own needs rather than depend on other taxpayers. We have therefore struck a careful balance between the need to ensure that money goes only to those who really need it, and the need not to penalise thrift. It is, incidentally, ridiculous for the Opposition to talk about this Government penalizing thrift. Under the last Labour Administration, pensioners saw the value of their savings destroyed through inflation. Pensioners' income from savings fell in value by 16 per cent. under Labour, but increased in value by 52 per cent. in our first six years alone. I happily give way to the hon. Lady.

May I draw the Secretary of State's attention to a case that was brought to me this morning? [Interruption.] The point that I want to raise relates to the £6,000 cut-off limit.

The case relates to a woman in my constituency whose house is up for sale. She is 59 years old and draws £35 per week supplementary benefit. She has lost the whole of her benefit because she is deemed to have a capital asset. The house has been valued at £14,000. She has been trying to sell it for 12 months, but cannot. Will the Secretary of State tell us what transitional arrangements have been made for Mrs. Richardson and the two other people who contacted me this morning, one of whom has threatened suicide?

Obviously, I shall ask my hon. Friends to look at the detail. She can, of course, obtain a commercial loan with regard to the sale.

There is difficulty in trying to answer any individual case, but the fact is that a person could, in general, take a loan on the capital value whether or not she has income—[Interruption.] I will obviously, as the hon. Lady—

Order. I advise the hon. Lady that she is doing her colleagues a grave disservice because she, too, wrote to ask if she could participate in the debate.

If it is a point of order that I can answer, I shall have to take it. I hope that it is.

I believe that the Secretary of State is deliberately misleading the House—[Interruption.]

Order. The hon. Lady may not have been here very long, but she must know that that comment must be withdrawn immediately.

I am sorry if I was accidentally insulting the Secretary of State, but what he said was not true.

Order. The hon. Lady may have disagreed, but will she please withdraw the words, "deliberately misleading"?

Yes, of course. I do so quite willingly. But I have a point of order, Mr. Speaker. My point is that people without income cannot get loans. I do not think that the Secretary of State understands that.

I was trying to make the general point that is applicable in this kind of case, but I cannot comment on the individual case. If an asset is up for sale, it is possible to have a collateralised loan on it. I shall not pursue the point, but I ask the hon. Lady to let my junior Ministers have the details and we will pursue it.

While no one would expect that someone with £25,000 in the bank, as my right hon. Friend has suggested, should be given help, the aspect of targeting, which is part of what has happened, shows that there may be a problem at the £6,000 level. Will my right hon. Friend confirm that the level need not be immutable but could be adjusted at any time that the Government wished?

My hon. Friend is right about the statutory position.

There is one final misconception. The reforms are not about cuts. Quite the contrary: social security spending is already at record levels—far higher in real terms than under Labour. And we will be spending an extra £2 billion this year compared to last, taking the benefit budget to £46 billion, or around a third of total taxpayer expenditure. Even after allowing for the effects of the annual uprating of benefits, we are spending more on social security this year than last.

I recognise that no major change, even to a system as badly in need of reform as this one, can be easy or wholly painless, but the difficulties in making the actual transition cannot be allowed to preserve an unsatisfactory system for ever. This Government—unlike their predecessors have—had the courage to tackle the real and fundamental problems with the old structure. We have produced a benefits system which is simpler, better targeted on priority groups and which enhances rather than obstructs individual responsibility and choice. It is a charter for self-respect and directs more help to those who need it most. It is the right approach.

Order. In view of the time which has been lost in the debate, I again make an appeal for brief contributions.

5.12 pm

The social security shambles over which the Secretary of State presides may or may not provide the political banana skin on which the Government will slide, but it has certainly put the skids under the Secretary of State personally. No one could have listened to his speech without realising the discomfiture behind it. As the House well knows, the reason is that the Government forecast, that there are only 12 per cent. losers, defies the experience of hon. Members in their constituencies in every part of the country. Everyone knows that there has been a serious miscalculation.

On housing benefit, there is a general feeling that because rents are so different throughout the country it is appropriate that there should be a different capital limit and that £6,000 is much too low. There is no sign that the Government are prepared to think again on that. Apart from that, we have concrete evidence that the impact is extremely harsh on people where there is no question of cash but only an income assessment. An elderly widow on retirement pension, who is receiving her husband's Civil Service pension, was getting £54·30 a week. Her housing benefit was £28·25 per week. That has been cut to £17·04, leaving her to pay £22·72 . She has to manage on £31·58.

Innumerable nasties have suddenly appeared. It is all very well for the Secretary of State to talk about the hours of debate, but how many people have realised that prior to 11 April there was discretion to disregard totally a war pension when assessing a client's need but that it is now statutory that only £5 is disregarded? Citizens advice bureaux are reporting to us that this can mean the loss of up to £30 per week, although the average loss is about £10.

Wherever we look, we find hardship. The debate is about whether the Secretary of State and the Government are prepared to indicate that they will use the power of regulation and of advice to social security offices to introduce an element of discretion to alleviate the harshness of the impact on individual families. We have not had one sign that the Government are prepared to think again. If it transpires, as is widely felt, that there has been a serious underestimate of the number of losers and that the heart-rending cases which are coming up in constituency after constituency are real, will the Secretary of State follow the example of the Minister of State in relation to the disabled? The Minister of State discovered that some people would be really hard hit, and he introduced a fund. We may argue about the fund but at least there was an alleviation and a genuine attempt to deal with the problems of the disabled.

I am glad to see the former Secretary of State for Social Services on the Front Bench. It is widely reported that he anticipated the problem with the capital amount and asked for a £10,000 capital amount. It is widely reported that the amount of the grant that the Government's advisory committee wanted was four times as much.

The right hon. Gentleman has mentioned me. He talks about what has been widely reported. His statement is inaccurate. My view on the £6,000 capital limit was set out in the Green Paper. That capital limit applies not just to housing benefit, but, as my right hon. Friend the Secretary of State has just made clear, to supplementary benefit and to income support as well. If the right hon. Member for Plymouth, Devonport (Dr. Owen) feels so strongly about that, perhaps he will explain why the Government of which he was a member did nothing to extend the capital rule and had a wicked cut-off at £1,200, with a total cliff-edge effect.

I was giving the right hon. Gentleman more credit than appears to be due to him. Of course, The Independent in its editorial also gave credit to him, and it will no doubt wish to change its view. [HON. MEMBERS: "Answer."] If the right hon. Gentleman says that in Cabinet he argued for a £6,000 limit, I accept that. But the basic point is still the same. That is an inadequate limit. The hardship that is being imposed on the housing account is considerable. The example which I gave represents a case which has nothing to do with capital, and I could cite other examples.

I will not give way again.

What about the social fund? We now hear from Islington borough that it is being recalculated. In 1986–87, Islington borough was paying out about £4·5 million in single payments. The same offices in Islington have been given for social fund grants for 1988–89 a miserly £811,351—more than an 80 per cent. cut. Why? Because for the 32 weeks which were the basis for the calculation of the assessment, there was a shortage of staff and problems in the social security offices which were therefore paying out much less in discretionary grants. That is another indication of the arbitrary way in which the social fund has been calculated. Clearly a mistake has been made in Islington. It will have to be rectified and that will call in question the cash limits on the social fund.

Again, we ask the Government to indicate that they are prepared to use the contingency fund of £5 billion to make an alleviation on the social fund. People have repeatedly warned the Government throughout the hours of discussion that the cash limit on the social fund is grossly unfair and that there must be an alleviation. It is an unrealistic cash limit and it will have to be changed. Again, there must be flexibility.

There should also be flexibility in community care grants. They comprise the one element in respect of which people do not have to repay the grant that they are getting. There is an exceptional provision. It relates to the social fund guidance that goes to social security offices. Again, will it be possible to look at the guidance that goes to social security offices? When faced by such clearly exceptional cases, will they be able to use the community care grant rather wider than just to prevent people going into institutional care to alleviate their financial circumstances? Otherwise, there will be no way of helping such people.

Again, citizens advice bureaux record the fact that no charitable funds are available to alleviate hardship in individual cases. The debate—this is why, presumably, in your wisdom, Mr. Speaker, you chose to give the House this debate so urgently—is about the possibility of making regulations and introducing changes in the advice to social security offices that will alter the situation. That is what we urge. That is why the indignation that has been expressed needs to be taken seriously by the Government. They can tough it out; they can ignore it and say that it is a U-turn.

In fairness, parts of the legislation are welcome and long overdue, particularly on the unemployment trap, which has been overcome, and the new credit for families. But, because the restructuring of the legislation was unable to inject extra money to float off anomalies and hardship, the legislation, the Government and the Secretary of State are in danger of being discredited. We do not worry about their reputations, but we worry about individual cases. On their behalf, there is a wish in the House that the Government should think again.

5.21 pm

The debate has been mounted by the Opposition as an opportunity to criticise the Government for introducing changes to the social security system. We should take this opportunity to give credit to my right hon. and hon. Friends for tackling the social security confusion that has existed for so long. I include my right hon. Friend the Secretary of State for Employment and my right hon. Friend the Chief Secretary to the Treasury, both of whom did a great deal of groundwork on the matter.

Surely there is no dispute in the House that, as it existed, the previous system was almost impossible for claimants to understand. It was complex, difficult to administer, and uneven in its effect. It bristled with anomalies. We have heard how people were getting housing benefit, despite having substantial capital. It had reached the point at which one in three households was drawing housing benefit. There were cases in which people on supplementary benefit were better off than those who were receiving low wages. Of course, if they had got a job, they would have lost such benefits. That was a disincentive to try to find a job. There have been cases of families claiming single payments for items for which other families on modest incomes had to pay and budget for. That was expenditure not of Government money but of taxpayers' money. Taxpayers' money—often from people on small incomes—was deliberately redistributed.

The Government were right to review and to recast the system. It is now simpler, easier to administer and understand, and it is constructed to direct help where it is most needed. It is aimed especially at poorer families with children.

I confess that I am at a loss to understand how a system with such qualities can be described as wicked, iniquitous or unchristian by certain bishops who do not appear to have studied the details of the schemes. Of course, the problem is that, in order to administer any system of this sort, we need regulations and guidelines that are necessarily drawn up by civil servants and approved by Parliament to seek to cover every situation and every possible combination of circumstances.

Because human beings' situations differ, anomalies and omissions may appear as the scheme operates. If that is so, I am quite sure that Ministers will learn from experience. If there is a case for changes on the margins, Ministers will not be dilatory in making them. If such changes involve regulations requiring parliamentary approval, so be it

Bearing in mind what Mr. Speaker has said, I prefer to keep my remarks as brief as possible and to give hon. Members an opportunity to speak later.

One of the best features of the new system is the social fund. Instead of making single payments according to a rigid formula, it treats each case on its merits. That makes a great deal of sense. One of the many misrepresentations that we have heard from the Opposition is the suggestion that only loans will come from the social fund. It has been made perfectly clear that certain people will qualify for outright grants.

There has been much talk about winners and losers. Of course, if we recast a system, unless the previous system was absolutely faultless—it clearly was not—it is inevitable and indeed right that there will be losers and winners. We have heard what the figures are. Fewer than 1 million people will receive less, the circumstances of about 2 million people will be unchanged, and over 5 million people will be gainers, and gainers of some substance. Yesterday, in reply to a question from me, my right hon. Friend told me that 40 per cent. of gainers will be better off to the extent of £3 a week or more.

There is a philosophical divide. We know that the Labour party favours the mass redistribution of wealth, with benefits being given to all and sundry, regardless of their means or needs. At the other end of the political spectrum, the old-time Liberals would have endorsed a laissez-faire policy and said that no payment should be made to anybody. We have yet to learn the present Liberal party policy, whatever name it may come under. My right hon. and hon. Friends and I believe that the state should give help, but that it should be directed where it is needed and that it should not be on such a generous scale that people—

I shall not give way. If the hon. Lady does not mind, I wish to keep my remarks brief.

Help should not be on such a generous scale that recipients make no effort to provide for themselves. There is a real dilemma. Where do we draw the line?

That dilemma is vividly illustrated by the housing benefit controversy. Clearly, someone on a small income and with little or no capital will need and should receive housing help. Similarly, somebody with tens of thousands of pounds is well able to provide for himself. But people who have been putting money aside have done so for their old age. Should they be penalised by not getting benefit because they have put money aside, particularly when they see their neighbours, who have spent money on the good things of life, now qualifying for benefit?

Where do we draw the line? Of course, there is no right answer. Wherever we draw the line, it will be argued that people will be discouraged from being prudent and that, if they are above the line, they will realise that they can spend a little more freely so that they go below the line and enjoy benefit.

With housing benefit and other forms of social security there will always be bad borderline cases. It is right that hon. Members and others should draw attention to them. But it is not right that politicians should use half-truths, distortions and downright misrepresentations to whip up a campaign purely for party advantage, incidentally causing a great deal of unnecessary concern to individuals. The Labour party's campaign does its members no credit. This reform of the social security system will be looked upon as one of the Government's great achievements.

5.29 pm

I wish to make one comment about the previous contribution, as I greatly respect the hon. Member for Chislehurst (Mr. Sims). I think that it is probably fair to say that I agree with the content of his speech about as much as he really does, even though he did a reasonable job of trying to defend the Government's record.

I take issue with the remarks of the right hon. Member for Plymouth, Devonport (Dr. Owen) who, for once, decided to paint a very small picture on the political canvas. He was partially right that this debate is about trying to get the Government to give way and to make some concessions, although, had he taken even more time in his contribution, he might have answered his own question and said that we have very little chance of getting the Government to do that.

To me, this debate represents a watershed in a number of respects. This is the first debate in which I have participated in the House in which the issue of the poor has been of concern to a large number of hon. Members rather than to a few. Yet had we been holding this debate even only a few decades ago, we should have done so against the background of a link between the interests of the poor and the working class. One of the major factors that we have to take on board as a parliamentary democracy is the problem of how to represent the minority interests of the poor, which are clearly different from the interests of many working-class people.

Hon. Members will know that I probably owe my seat to my work for a pressure group representing the interests of poor families. Even with that background, however, I find it difficult to make the leap of imagination required of all of us when we are debating such matters and to contemplate what it is like having to live on the kind of income that will result from the reforms that the Government are introducing this week.

Let me give a couple of examples. For those under the age of 18, we are talking about £2·77a day for everything other than rent. For those aged 18 to 24, we are talking about £3·67 a day, for a married couple—for each individual—from which they must cover all their needs, including the famous holiday that we have heard about, of £3·76. I point the finger not just at Conservative Members, but at myself. It is extremely difficult to contemplate what it is like to experience that standard of living. Yet in this debate we are talking about cutting, not increasing, the number of pennies that people have.

Secondly, this debate represents a watershed because of the feeling that is emerging on the Conservative Benches. I think it was Oscar Wilde—if it was not, I am sure that he would have thought of doing so—who referred to the love that dare not speak its name. There is also on the Tory Benches an unease that dare not voice itself publicly. It is an unease that is founded not just on the fear of lost votes, because many hon. Members have probably rightly reached the conclusion that those who do not like Tory policies have long since ceased voting for the Tory party; it is an unease not just about our stick and carrot society, in which a huge carrot and a massively large stick are used to try to create incentives, although Conservative Members quietly express their concern about that; and it is an unease that stems not just from the fear of disorder on our streets, because Conservative Members know that the riot has been privatised—people go about in ones and twos to do their mugging and robbing—and that we shall not suffer the disorders of the 1930s. It is not even to do with the way in which the Prime Minister bangs on and on—I feel that if I hear any more I shall suffer permanent brain damage—or about her trickle-down theory; and it is some trickle for the constituents whom we are discussing today.

Conservative Members' unease lies not only in all those things, but in something more. Even in Tory seats, and! more so in Labour seats, whole ghettoes are appearing. Visiting them is like travelling back in a time machine and getting out 25 years ago. I see sights in my constituency that I have not seen in London since I was a boy. I see pinched faces, shuffling feet and ill-fitting clothes, which are all the signs of poverty. It is from those people that we are taking money.

That is part of Conservative Members' unease, because many of them react to those sights as we do. They feel a deep unease, either from a secular point of view—they experience a gut reaction that it is not right for a society to be generating such wealth and, cheek by jowl with it, such poverty—or from the straight Christian point of vim that each of us is an equally important part of the creation and that we should not be denying a large part of our population, albeit a minority, a share in the living standards that most of us can enjoy.

Thirdly, this debate represents a watershed because of the challenge that it poses to the Opposition, in addition to the challenge to Conservative Members to voice their unease. In her letter to the Leader of the Opposition, the Prime Minister chided him for always criticising the Government. That is amazing coming from someone who is so interested in how public money is spent, because the Leader of the Opposition is paid to oppose the Government. That is our job. Imagine what the response would be today if we were not doing our constitutional duty of opposing the Government. That is why I think that we shall carry the debate—in argument, if not in votes later—tonight.

However, if we are to follow up this immediate challenge, we need a vision of the sort of society that we are trying to create. We cannot get down to the fundamental job of recasting the welfare state, the tax system or any other aspect of home policy, unless we know the sort of society in which we wish to live. When we have that map and compass, we can get on with the task and with the second stage of opposition, which involves holding up an alternative vision to replacing rich ghettoes for the majority and increasing pauperisation for a large minority of our citizens.

While that task is underway, we are perfectly in order to carry out our duty by drawing the attention of the House and the country to social security reforms that take money away from people who are asked to live on £2.77 a day, £3.67 a day or, for the ultra-rich among the poor, £3.76 a day. That is what this debate is partly about, but I hope that I have convinced the right hon. Member for Devonport, at least, that it represents a watershed in many other ways as well.

5.38 pm

The hon. Member for Birkenhead (Mr. Field) will be aware that I have, indeed, expressed some unease over the past few days about some aspects of the social security changes. I propose to repeat some of those expressions of unease this evening. I hope that my colleagues on both the Back and the Front Benches will concede that, in my case, we are not talking about the expression of an unease that has suddenly come upon me. It is something to which I have drawn the attention of successive Ministers at the Department of Health and Social Security, and proof of my concern is evident throughout the pages of Hansard from 1986 to the present.

Before I express my unease, I feel that it would be wrong not to say at the outset that there is much in the reforms that I warmly commend. The Secretary of State was absolutely right to say that the old system was imperfect and full of loopholes and anomalies. There was no more fervent supporter than myself of a move to change that, and to introduce a system which, through such devices as income support and family credit, came closer to targeting those in the greatest need and paying benefits accordingly. I repeat unashamedly that much of what the Government have done is a move in the right direction. Therefore, it is a pity that some aspects of the housing benefit changes, upon which I shall concentrate, seem to be far too harsh and will hurt people because of the sharp reduction in the standard of living that they impose.

It is central to my argument not that we should ignore the existence of capital, but that the steepness with which we move into and out of entitlement to housing benefit has not been given sufficient attention by the Government. I could say much about housing benefits relating to single people under 25, but I hope that the House will forgive me if I devote the rest of my speech to pensioners. Whether we think that the percentage of losers is 12 per cent. or 43 per cent., no one has sought to deny that a sizeable proportion of the losers will be pensioners whose standard of living will undoubtedly fall as a result of the imposition of these requirements.

In essence, the existence of only two tapers by which housing benefits are reduced on £3,000 capital and eliminated on £6,000 capital is a wholly insufficient way of dealing with an undoubted problem. To reduce housing benefit on savings of £3,000 and to eliminate it on £6,000 is to fail to appreciate the psychology of the generation with which we are dealing. From my experience, that generation sees thrift not just as a practical matter but as something approaching a moral duty. In real terms, £6,000 is a very small nest egg in 1988.

Ministers are wrong to suggest that people accumulate savings so that they can use them as a necessary contribution to a basic standard of living. Elderly people accumulate savings so that they can afford a few luxuries in their later years. By and large, they do not touch the capital because it brings them reassurance and they can rely on the income from those savings. That is why the capital cut-off is so unfair.

I do not disagree in essence with a capital cut-off, because I concede immediately that there must be one. A person receiving old-age pension and a sizeable occupational pension but without savings of any sort is dealt with gently, and many such people will continue to receive housing benefit. However, a pensioner on the old-age pension only and £6,000 in savings is penalised. It is little wonder that such people feel that thrift is being discouraged. The only conclusion that they can reach is that the Government expect such pensioners to use the capital that they have accumulated with great pain and over a long time in order to save the Government money. That cannot be right.

I repeat that there must be a cut-off point. No one would suggest that people with sizeable deposits in a building society—a figure of £25,000 was mentioned—should continue to receive housing benefit. As I have said, the steepness of the cut-off is far too high. For the life of me I cannot see why the Government have concluded that £6,000 is the right figure for an individual and also the right figure for a couple. The Government should say that, although the figure may have to remain at £6,000 for an individual, they will move to £10,000 perhaps for a couple and that the figures should at least be linked to the retail prices index so that we know that they will not remain static. I remind the House that the figure has remained static since the Fowler review of 1985. For that reason alone, there is an argument for saying that the figure should be increased.

I have no doubt that it is very desirable to release people from what the Government choose to call dependence. However, independence will get a bad name if release is too swift and too harsh. I repeat my call for more than two tapers. That is a simple request and one that I have made during all the developments since the Fowler review. I know that there is no virtue in consistency in politics, but I have been repeating this point for three years. I hope that my colleagues, who may by this time be a little bored listening to it, will forgive me if I repeat it. Many of my hon. Friends share my views and have expressed them to me in private. I hope that sometimes some of them will be a little more vocal in their expressions of discontent.

I recognise that my speech is not calculated to bring the greatest comfort to the Government. I know that what I say is demonstrated by the cases that I have heard in my constituency surgery and by the letters that I have received. I remind Ministers that I should be astonished in the extreme if many of the people who have made these representations did not vote for me in June of last year. There is a political and humanitarian dimension. I know the Minister well and have a great regard for him. I hope that he will take these points on board and recognise that there is real concern, and that, if it cannot be eliminated, it can at least be decreased by a relatively small movement by the Government. Sooner or later the pressure will be such that the Minister will have to concede. Dare I hope that he will start to do so now?

5.47 pm

I never thought that I would see a Government attack our poor people. During my 12 years in local government I never thought that I would see a Government concentrate such a vicious assault on the living standards of many ordinary men and women who have fought for this country and done so much to make it great.

I listened the other night to one of the most heart-breaking pleas that I have ever heard. I received a phone call from one of my constituents and when she finished speaking to me I was in tears. The woman has a mentally handicapped son who is suffering from Down's syndrome. Her husband has suffered a massive heart attack and is on invalidity pension. Until recently she was paying £16 in rent and rates, but has now received the bombshell news that she has to pay £105. That is an increase of £89. The woman was absolutely shattered and does not know where she will get an extra £89 to keep her family. That is an enormous and obscene increase for someone in such dire circumstances. Knowing this Government, I could not offer her much hope. However, I have now heard the speech of the hon. Member for Brentwood and Ongar (Mr. McCrindle) and I hope that there are many like him who can give us support.

I heard another hon. Member speak about winners and losers. This must be the most obscene race ever created when we can see winners and losers in a society with millions of people unemployed and millions living on state benefits through no fault of their own. Talk in the House about winners and losers must be stopped. There should be no losers. All people should be able to gain and live a better life.

The social fund has been mentioned. I understand from the social workers of Strathclyde regional council that one of the first refusals has occurred. Social fund help was refused to a single-parent family in which there is a young boy under five years of age who has a heart murmur and an enlarged heart. A room caught fire in the house in which he lives and the bedding and beds were burnt to a cinder. His mother went to see whether she could obtain a community care grant after being advised by the social work department. Unbelievably, she was turned down.

There is nothing more blatant and open than a room burnt to a cinder. How can that person be denied a bed and bedding? I do not know what the social fund is all about. I understand that the young lady had been considered for a budgeting loan. Yet social workers have looked at her budget and said that her outstanding debt will not allow her to obtain a loan. Therefore, she is destitute. She needs help and the only place from which she can obtain that help is the Government, but the Government have turned their back on her this week.

I have in my hand the saddest letter I have ever received. I will not go into detail because the young lady wishes to remain anonymous. The letter is from an 18-year-old girl whose mother died last year. She has now become the legal guardian of her 14-year-old sister and is looking after her. She has written—

On a point of order, Mr. Deputy Speaker. I object strongly to the Government Front Bench laughing and giggling while we hear details of this tragic letter. It deals precisely with the issues involved in this debate.

As I have said, the young lady is looking after her 14-year-old sister. She works for the Government in a Civil Service department in a low-paid job. The Government's actions have abolished free school meals and free school milk and her young sister will not be able to receive those things because her elder sister is in work. She does not know what will happen as a result of the new legislation.

That letter was from a young kid who is trying to stand on her own two feet and keep her young family together so that they can face the world and have a better life. The Government are making it more difficult for her as time. goes on.

I have received another letter from a pensioner. The man concerned worked and fought for this country and now receives a miserable pension. He now has to pay double the amount of rent that he paid before. That person does not know what to do.

I have had the sad experience of walking through my constituency and seeing some shops selling yesterday's bread at half price. I have had the sad experience of walking through supermarkets and seeing elderly men and women and disabled people hunting about looking for scraps and out-of-date food. Is that the sort of society into which we are driving our folk? I attended a jumble sale the other night and saw people queueing up to buy old clothes in order to clothe their children. I have seen old women buying bashed tins at half price. Is that the sort of society we want?

One Minister has said that 16 to 17-year-olds need to speak to their parents about the benefit cuts to see whether they can help them; that if their parents cannot help them, they should speak to charities and local authorities; and that, if that does not help, they may be taken into care. I wonder whether the Minister could comment on that statement.

I plead with the Government to bring some sanity, fairness and justice into the system and ensure that people are not driven into the mire. We should stop this talk about winners and losers and allow my constituents to live with dignity and pride and finish their lives in comfort. They should not be driven to putting a wee bit aside for their coffin. That is an obscenity. Offer us some comfort and throw out the nonsensical social fund. Offer us something that meets the needs of Britain today, not the Britain of Victorian days.

5.56 pm

I shall be brief in this extremely important debate.

There has been substantial argument about the application of the changes to the people to whom they are directed. The thrust of the Secretary of State's argument and the concept with which the Government are seeking to grapple is to design or redesign a system suitable for the needs that are now apparent within the state. We must start from the premise that we are affording £46 billion per annum for social security provisions. That is a proud record of the Government that no one should seek to deny. We have to decide how best that sum should be spent in a way that is consistent with the obligations of the Government to ensure that social provision reaches those in greatest need.

I want to pay tribute to the courage of my right hon. Friend the Secretary of State and his predecessor in seeking to develop changes in a system that few had the courage to touch. We cannot deal with a fundamental review of the 1944–47 system without making significant changes. It is no use trying to make progress on the one hand without having change on the other. We have to change. The argument before the House tonight is the extent to which the changes make the system unworkable or inappropriate for those who will receive benefits.

No one could fail to be moved by the eloquence of the hon. Member for Birkenhead (Mr. Field) or by the significant contribution made by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). Both have voiced their anxiety that what is happening now will not fulfil the task that has been set before the Government. I have little doubt that my right hon. Friend the Secretary of State and his team will be among those monitoring closely the effectiveness of the changes. I have equally little doubt that a review when the issues have been put to the test is infinitely better than combating figures from various groups on their assessment of a projected element of benefit take-up.

No. I promised to be brief.

My right hon. Friend the Secretary of State is seeking to carry out the radical change in our benefit system that we felt, and continue to feel, was necessary in a way that relieves much of the bureaucratic nightmare of the present system yet in a way that is designed to put £46 billion of taxpayers' money into the hands of those who really need it.

The effectiveness of my right hon. Friend's actions must be viewed in the light of the comments of the hon. Member for Birkenhead and of my hon. Friend the Member for Brentwood and Ongar. Only then can we be sure that the good intentions that are encapsulated in the policy will be properly and truly delivered. That is why I shall support my right hon. Friend in the Lobby tonight.

6 pm

I have received a letter—one of many hundreds that I received when I was first elected—from the Rev. David Watkins, who lives in my constituency. He asked me to ensure that people on low incomes and those who find it difficult to manage are protected. I would not be carrying out my duty as an elected representative if I did not speak in the debate and represented the interests of the people about whom he was talking.

Like my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham), I am concerned by talk about gainers and losers. When I listened to the Secretary of State talking at Question Time yesterday about the facts of the matter, I did not know which way to turn next. What does it matter whether people are losers or gainers? Hon. Members are being contacted by hundreds of people who are telling them that they cannot manage because of these substantial reductions.

I can best demonstrate the problem by referring to a letter from a constituent. She writes:
"I wonder if you could speak up in the house of commons … on our behalf. I am a householder. I have an unemployed sister and an old-age pensioner sister. I am on supplementary benefit. I have just received a £1·30p increase and my rates have been increased from paying £57 half yearly to £209 half yearly and water rates £136 yearly. I don't have any savings, so how can they possibly expect people to pay these bills, gas and electric insurances, etc.? I am making myself ill worrying about this as I am sure so many other people are with similar problems. They say we will be better off—how? Why can't they stop living in their own world and see how people really are struggling just to live on the poverty line? We don't smoke, drink and have not had a holiday in 8 years because we couldn't afford it and at Christmas it's heartbreaking to receive gifts and not be able to buy anything back for fear of getting into debt. I know they won't do anything because they just don't care, only for the rich, but at least our views can be known when they say how much better off we are. Thank you."
I make no apology for reading that short note, which sums up most admirably the difficulties facing people.

I have sat through the debate and listened to the lack-lustre performance of the Secretary of State. The fact that so many hon. Members are intervening to speak of individual constituency cases shows that, whatever the Prime Minister may say about the facts, the vast majority of people who are dependent on benefits are worried sick and cannot manage. They want the Prime Minister, the Secretary of State for Social Services and the Under-Secretary of State for Health and Social Security to tell them how they can maintain a decent standard of living on these paltry sums of money.

I do not have any illusions that the Government will give in. The Prime Minister has already said that she does not intend to do anything about the £6,000 per year limit, about which we have heard so much. Perhaps we shall be as successful, as my hon. Friend the Member for Livingston (Mr. Cook) was in obtaining this debate, and get that limit changed slightly.

Such a change will lead only to modifications, but there are many more modifications that the Government could make if they cared. They could take note of the many miners and miners' widows who are being penalised by these new arrangements. They are having to receive payment in lieu of free coal which previously they received. If the Government cared, there are many ways in which they could make modifications.

I challenge the Government to carry out some proper research and to fund independent research to help citizens, the citizens advice bureau in Stoke-on-Trent, the university of Keele and independent research throughout the country so that in a short time we can obtain information and the facts. We could use that information and those facts to ensure that people who are not living with dignity have an improved standard of living. Failure to do that will bring much more quickly a Labour Government who care and only the Government will pay the price.

6.4 pm

Many of the matters that have been raised in the debate have not, I regret, been raised more forcefully in previous debates. There were adequate opportunities to discuss the matter during debates on the Social Security Act 1986 and the housing benefit regulations.

I take issue with Opposition Members who have referred to this measure as a vicious attack on the poor. We must consider the global position in relation to the resources that are given. In 1978–79, the social security buget was £16·4 billion. Today it is £46·4 billion, which is the largest ever social security budget.

I shall not give way, because I am sure that the hon. Gentleman will want to catch Mr. Speaker's eye later.

Under the new system, two fundamental matters must be brought forward and considered carefully. The right hon. Member for Plymouth, Devonport (Dr. Owen) referred to the most important intention of this legislation—to deal with the unemployment trap. In the long term there must be incentives for people to take employment and to seek work. A gap must exist between those receiving benefit and those in work. It must be made worth while to seek a job. The figures for the number of long-term unemployed people show that the largest number of long-term unemployed people are in the south-east, where job vacancies are at the highest level and where opportunities are being offered.

The new system does away with the old, bad anomalies in the previous system. They have been tackled and the unemployment trap is much better controlled than it was in the past.

Social security benefits are a safety net; they are not intended to become a way of life for people. Unfortunately, I have experienced the problems—I am sure that other hon. Members have experienced them—of people being unemployed on a long-term basis who have rounded down their expectations of income to the levels of various unemployment benefits. I recommend that hon. Members go to a job club and talk to people attending on the first day about motivation. They should then return at the end of the week and see the difference. The job club has built up people's expectations and made people believe in themselves and appreciate that matters can be improved.

An edifice has built up in recent years and it has created the unemployment benefit dependent society, which Labour Governments predominantly built up. If Beveridge were to come back he would not recognise the system that he created in 1944. The system was devised to deal with hardship by what we in Lancashire and Yorkshire call the pan crack. If hon. Members ask people on benefit in Lancashire and Yorkshire what they are living on, they say, "Pan crack, lad." The crack has been filled in and overlaid many times as the system has built up.

We must deal with the unemployment culture, and one of the ways to do so is by this new system.

First, the problem of people who have families with young children was tackled. Where is the incentive for people who are staying at home watching television—[Interruption.] Those people who are sitting at home getting depressed will feel that there is no incentive to go out and do anything. This system targets resources on families with children, who will be better off under this system.

I represent a constituency with high unemployment. Like Opposition Members, I have received distressing letters, but interestingly enough I have not had one letter from families with children to whom the major part of this policy has been directed and who will benefit from it.

I suggest that Opposition Members do not do themselves justice in some of their criticisms. The hon. Member for Livingston (Mr. Cook) referred to two samples—one from the Oxford study, and another from Strathclyde. Those samples are far too small. Anyone who has done any research will realise that 200 is far too small a sample to consider. The Wandsworth sample took into account single payments. Because of that, the reduction in income appears to be much larger.

I am sure that the hon. Members will get an opportunity to speak.

Only 9 per cent. of those who are eligible for single payments have claimed them.


We must consider those matters carefully, instead of winding up the anxieties of the public.

I accept that certain vulnerable groups will lose out. Conservative Members have anxieties about housing benefit because in the majority of cases the losers in this system are those in receipt of housing benefit and not from the system in general. Therefore, perhaps my right hon. Friend and his ministerial colleagues will look at that in the long term. I suggest that he does not need primary legislation to deal with it. No doubt he will review the matter in the long term and will take on board some of my hon. Friends' comments.

The hon. Member for Livingston referred to Mrs. Godden and to disabled people. One factor that has not been highlighted by Opposition Members is that special provision has been made for 15,000 severely disabled people. Opposition Members ignore the fact that a trust has been set up and it is likely that many of those people will be in the same position when the matter is sorted out as they are today.

I can recall the occasions on which we debated what is now the Social Security Act. We talked for hours about severely disabled people. My right hon. Friend has made real efforts to deal with the severely disabled and he should be given credit for that and for listening to the comments.

I return to the point on which I started my remarks. Under the budget, £46·4 billion is being spent on social security for the next 12 months—the biggest expenditure ever. In the past 12 months there has been a fall of 500,000 in the number of people unemployed. That is a large number of people who will not now be eligible to claim. We must take into consideration the fact that fewer people will benefit from a larger budget. Opposition Members say, "What do you tell them in Skelmersdale?" In the new town of Skelmersdale, in my constituency, 1,500 people have jobs and consequently will not be claiming from the social fund. I am not suggesting that the system is perfect. Criticisms have been made about the social fund and about housing benefit.

Those matters can be dealt with along the way. They need not be subject to primary legislation.

Overall, this is a courageous attempt to tackle a very difficult problem. My hon. Friends have dealt with it well. They have tackled a very difficult problem and they have suggested solutions that, obviously, many people do not like. Let us give it a chance to work, and when we find flaws, let us monitor those flaws and correct them in the long term. It is up to hon. Members on both sides of the House to bring forward cases and argue points. This is a good system that will stand the test of time, and I commend it to my hon. Friends.

Order. It may be helpful if I say that I understand that the first Front-Bench spokesman will seek to rise at 6.35 pm. In the intervening time, if hon. Members are brief, I shall be able to call more of them.


When the hon. Member for Lancashire, West (Mr. Hind) considers what he said this evening he will find on reflection that it will not do him any credit. He started his speech by saying that we should look at the global benefit provisions. I remind him that £25 billion or £26 billion of the £46 billion that he mentioned actually relates to national insurance contributory benefits which cover pensions, widows' benefits, unemployment benefits, industrial injury benefits, family benefits, death grants and maternity allowances under the old system. If he were honest about it he would say that he was concerned only about the £8 billion that covers benefits such as supplementary benefit under the old system and £3·5 billion that relates to housing benefit. It is disingenuous of him to use global figures as if the £46 billion were all going direct to benefit of that kind in the coming year.

Secondly, the hon. Gentleman said that he was surprised that people were suddenly enthusiastic to speak on this subject. I do not think that he served on the Standing Committee which considered the Social Security Bill in 1986. If he did, he was conspicuous in that he said absolutely nothing on the record. If he was on the Committee he should have taken that opportunity to unburden himself at that time.

I shall not give way to the hon. Gentleman. He has made his own speech and he can reflect on it later.

As an hon. Member who tried to take an active part in that Committee, I found it very difficult indeed to make any sense of the primary legislation. The primary legislation contained no detailed figures of what is happening to claimants now that all the rates of benefits and rebates are available. Nor did the primary legislation say anything about the detail that would be given in the statutory instruments or the guidance given to social fund officers that followed from the primary legislation. That made it almost impossible for hon. Members on that Standing Committee to make any real judgments about the full and dramatic effects of the legislation on individuals when the scheme was implemented.

I can give the House a brief example of that. The Social Security Act 1986 states that social fund officers must "have regard" to the budget in coming to their decisions—that is to say, the budget of their own integrated local DHSS offices. The recently published guidelines, however, contain a different version of the phrase "have regard". They state that an officer must
"under no circumstances make an award resulting in overspending against the local office's budget."
That is entirely different in tone and interpretation from the discussions that we had in Committee. During the Committee stage it was therefore very difficult to make any sense of what was actually to happen.

It is wrong to suggest that hon. Members could have made those detailed points before now. I agree with the hon. Member for Birkenhead (Mr. Field) who said that this was a watershed debate. It is a watershed debate because hon. Members are being forced to pay regard to the changes because they are now beginning to hit them where it hurts—in their constituency clinics and in the constituency work that they undertake.

The hon. Member for Pudsey (Sir G. Shaw) said that he was confident that the Government would monitor the effects of the new system. I have serious doubts about whether they will. If, at the end of the debate, the Minister is able to say that he will monitor month by month the effect of the reforms, I shall be slightly happier.

Does the hon. Gentleman agree that it is the responsibility of every hon. Member to ensure that Department of Health and Social Security Ministers are inundated with every constituency case that is put to us?

I agree entirely with the hon. Lady. No other course is open to hon. Members. The hon. Lady has given sound advice and I, for one, shall take it.

It cannot be disputed that housing benefit will be reduced by £650 million. Of the £420 million that has been allocated to income support, £200 million will only be to cover transitional support. The hon. Member for Lancashire, West said that those losing housing benefit will suffer the most. However, when the transitional income support protection wears away, he will only then realise the true, full impact of these income support cuts. There will not therefore in reality be an additional £420 million for income support. I accept that there is to be an increase of £200 million in the budget for family credit, but it takes no account of the £120 million that has already been saved by recently freezing child benefit. It takes no account, either, of the take-up rate. The Government's target is a 60 per cent. rate of take-up as opposed to a 50 per cent. take-up rate for the existing family income supplement.

The Government spent huge sums of money on advertising shares in privatisations such as British Telecom and BP. Instead of engaging in fancy privatisation advertising, they should have advertised on television what is available under the social security system. It is a scandal and a disgrace that the savings that these reforms will make for the Treasury are between £300 million and £600 million. If Conservative Members do not recognise that fact now, they will recognise it in a year's time when individual constituency cases start to hit them in their surgeries and correspondence.

The social fund budget for next year is just over £200 million. The Government make as much as they can out of that, but the real figure that is allocated for social fund grants is only £60 million. That expenditure has to be contrasted with the single payments budget for the last financial year, which totalled £190 million. That highlights the swingeing nature of the cuts in the social fund.

The way in which the community care grants will be applied in practice is a great disappointment to me. The Green Paper stated that community care grants would be made to avert the need for institutional care for frail, elderly claimants. There is no way in which the £30 single one-off payments can begin to provide care in the community for such people. The social fund guidelines, in their full and collective glory, that are now being sent to social fund officers make that fact very clear. I am very disappointed that the opportunity has not been taken to make institutionalised care a thing of the past and real and effective care a thing of the future.

As for the way in which pensioners are to be treated, the speech of the hon. Member for Brentwood and Ongar (Mr. McCrindle) will repay careful study. The way that this Government have treated pensioners in general is a scandal. They should take the advice of their own Social Security Advisory Committee and every so often increase pensions above the figure that is justified by increases in the retail prices index. If the Government are not prepared to take the advice of the Social Security Advisory Committee, what advice are they prepared to take? The Government have carried out no research and there has been no proper consultation. The way in which the Government have handled the reform is a disgrace and they deserve to reap their reward at the hands of the public at the next general election.

6.25 pm

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) was right to stress the importance of monitoring the developments of the new arrangements. The unease that has been expressed in many speeches on both sides of the House may to some extent be alleviated if the monitoring is close and if certain changes are made in the months to come. There will be many opportunities for that to happen because the regulations are governed by secondary legislation. If they were so minded, the Government could put changes into effect fairly quickly.

In his speech my right hon. Friend the Secretary of State seemed to express surprise that an emergency debate was necessary, as the matter had been debated so thoroughly and at great length in the past. That is a perfectly fair point, but the position has changed in the last few days. There is a feeling of emergency in the DHSS office in my constituency. The telephone lines are jammed almost permanently and large queues are spilling out into the street. The beleaguered staff inside have only two copies of the income support adjudication guide. It is being passed around 120 officials who are struggling to answer the often emotional and sometimes hysterical queries from pensioners and other claimants. I am glad that from these Benches my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) sounded a note of unease that ought to be answered in the winding-up speech. It is right that the Government should be aware of such anxieties.

What is going on in Ramsgate, the biggest DHSS office in south-east England, with 16,000 claimants, is going on in DHSS offices up and down the country. All major reforms face start-up problems. At the beginning they are bound to create difficulties for some people. The question we have to ask ourselves is whether these are just teething troubles or whether there is something radically wrong with the reforms that have been put in place. We have to return to the first principles that lie behind the reforms.

I do not disagree that the supplementary benefit arrangements were far too complicated and needed to be simplified. Moreover, benefits for all are the enemy of care for the few. We need better targeting to give most help to those who are most in distress. The Government are increasing expenditure on social security benefits. Next year they will total £48 billion, which is 13 per cent. of gross domestic product. It cannot be right to attack the Government for stinginess or meanness when they have introduced the reforms that these principles seek to enshrine.

The reforms are right in principle but they are flawed in practice. There are three major flaws. The first flaw is the £6,000 housing benefit cut-off point. I agree with my hon. Friend the Member for Brentwood and Ongar that this figure is too low. My hon. Friend the Member for Thanet, North (Mr. Gale) and I represent one of the largest concentrations of pensioners with slender means in the south-east of England. They live on the margin; their life is not easy.

My hon. Friend the Member for Brentwood and Ongar referred to the fact that pensioners plan ahead in order to live in accordance with their means. They take into account the housing benefit that they already receive. If their standard of living is to be somewhat derailed by this arbitrary cut-off point—fixed, incidentally, without any relationship to income—it is bound to cause widespread distress and anxiety. There has to be a cut-off point, but what that is has to be a matter of judgment.

I agree that the cut-off point should be £10,000. Alternatively, let us have a sliding scale starting at the £6,000 cut-off point and going up slowly to a £10,000 cut-off point. I feel that the guillotine suddenness of total decapitation of housing benefit at £6,000 of savings is wrong. Unless my right hon. Friend the Secretary of State wants to go down in history as the Robespierre of housing benefit for hard-up pensioners, I urge him to find a higher—and gentler—limit as soon as possible.

There is also the plight of the unemployed, striving to clamber back into employment through part-time work. They are being clobbered by the new rules: they can keep only the first £5 a week of their earnings before losing £1 in benefit for every pound that they earn. That level needs some adjustment.

A constituent of mine, Mrs. Fiona Thomas of Broadstairs, wrote me a moving letter. As a one-parent family, she is therefore given a £15 rather than a £5 limit. She writes:
"I have taken the step of trying to help myself by getting a part time job in a chemists. I now work twenty-hours a week, come home tired out, and all I can keep of my wages is £15 and all expenses like childminder and bus fares also have to come out of that £15. Before income support one could claim expenses back. Is it really worth trying to work?"
I think that the answer, at present, must be no.

Anyone with a high-unemployment constituency knows that part-time work is often the best ladder back into full-time work, and I believe that we should help people to get back on to that ladder—back into the habit of work—back to a place where they can grab vacancies in full-time jobs. Part-time jobs are today's socio-economic trend, and we need to encourage rather than discourage those who climb the ladder.

It is not clear whether the teething troubles to which I have referred will last. It all depends on the Government's responsiveness to criticism. It is easy for them to move by secondary legislation, in the Chancellor's Autumn Statement, or even sooner. We need some fine tuning, and perhaps some fine rethinking. I hope to hear some encouraging words in the winding-up speech before I decide how I shall vote tonight.

6.31 pm

I shall respect your request, Mr. Speaker, to sit down in four minutes' time to enable the Minister to make his winding-up speech. First, however, let me say one or two things very quickly.

I cannot understand some of the Government's arguments about the Opposition using lies to make party political points or to advance propaganda. During the last week, while I have been in my constituency, I have not been sitting there with old people—or young people—listening to lies. I have been listening to the truth. I have heard exactly what is happening to them, as from the beginning of April.

I find it deplorable that we are being accused of using this debate for party-political propaganda. The fact is that literally thousands of our people who have not been well off all their lives are now finding it impossible to meet their bills and demands. To sit between old people on a Sunday afternoon and try to placate them and allay their worries is difficult enough in most circumstances. But now I cannot even say, "Do not worry—we will work something out," because injustice is built into the legislation.

There is no doubt about the problems of, for example, an old-age pensioner living alone. Last night at 9.50 pm, before the vote, I received a telephone call asking, "Where shall I find £87 to pay my rates? I have to pay one fifth of the charge." There is no way in which that person can find the money. No longer can I say, "I will certainly go for an appeal. I will try to help you out, and argue the case." All that has been taken away from Members of the House—and, of course, from social workers and any other body trying to help.

I ask the Government to listen to the pleas that are being made. For goodness' sake, let us take the party-political blinkers from the Government's eyes so that they can see the suffering, pain and anxiety that they are inflicting on many people who deserve a darn sight better. That is all we ask.

I have had more telephone calls. Only today, at about 6.30, I attended to another. I was asked to request the Government to monitor and review the position genuinely in the future, and I ask the Minister now whether the Government will do that. I do not know whether they can. I am not sure how we shall know how many people have been refused in DHSS offices, and then go home and live with the misery—or go to their families, who are already under pressure with their mortgages and children. We shall never know the full figure.

However, I make this plea: will the Government please monitor the position honestly and sincerely, take away their present political prejudice and come back to the House in six months, so that we can have another debate? Then we can produce not one, not two, but hundreds of cases to prove that the legislation is causing unnecessary suffering to all concerned.

6.35 pm

When the Secretary of State opened the debate he made two revealing remarks that he may live to regret. First, he made a point of telling us that the proposals had been fully debated, thrashed out and explained over the past three years—years in which his predecessors and he have ridiculed and ignored all representations about the damaging net effects of their proposed legislation. What the Secretary of State was telling us, and what should be clearly set on the record today, is that the Government have made no mistake in what they are doing. They knew what would happen to the individuals and families whom we have discussed, and they chose to proceed.

The second thing that the Secretary of State said was that under the old system people had been locked into dependency, not liberated. One million of those whom the Government describe as a reduced caseload, who lose all entitlement to housing benefit, should clearly be grateful to the Government for liberating them from dependency. Felicity Godden should be grateful. She has been entirely liberated from the supplementary benefit that she now dependently draws. The way in which her case has been dealt with today and yesterday has been most instructive.

It is entirely true—as the Minister says, the Government have known all along—that the most severely disabled have always stood to be the greatest losers. It is fair to remind the House that the Government, knowing that, resisted to the last ditch—until they lost a vote in the other place—all demands to bridge the gap between what the severely disabled receive today and what they will be entitled to receive from this week. Finally, having lost that vote, they introduced a very limited premium for some of the severely disabled, but still with many losers remaining.

Only a few weeks ago, at the last gasp of the legislation, the Government came up with a proposal for the Independent Living Fund, a charitable fund from which there would be no right to help, and no independent appeal against refusal, but worst of all—at present—no fund. The Government have had three years, yet there are no trustees, no application form and no money. The Department has known for four weeks that Mrs. Godden would lose £48 a week: it told her, after all. Why was she not notified about the fund? Why was she not encouraged to make an application? Where is the information about the interim arrangements for payment that the Minister of State mentioned in passing yesterday, for the first time that I recall inside or outside the House?

All that Mrs. Godden has received from the Government are sneers, abuse and half-truths. Yesterday the Secretary of State said that his offices had not been able to contact her because she had been on holiday, which gave a few of his hon. Friends a good laugh, but Mrs. Godden has been back for 12 days.

The Secretary of State and the Prime Minister talked yesterday about inaccuracies in the story about Mrs. Godden, because they wanted the full list of all the help that she is not losing. Today the Secretary of State spoke about a 19-year-old son who is earning and implied—although he did not actually say it—that he was contributing to the household. He is not. He is only 19. He is a chef, and, as hon. Members on both sides of the House will know, under the Government his wages are so low that he is not able to contribute more than £15 for his own light, washing and heating. He can make no more contribution.

Today also, the Secretary of State said that Mrs. Godden had had a visit from the social services department who offered some domestic help. I understand that the last visit from anyone was on Friday and that some bits and pieces of extra help were offered, but nothing systematic or coherent. The bits and pieces of help included an offer to put the two-year-old child in a nursery, which Mrs. Godden does not want, having herself experienced being in care and not wishing any of her children to have to go into the care of the statutory services. That was the offer that the Secretary of State said was refused.

In all fairness to the Secretary of State, it should again be on the record that at no point did he or the Prime Minister deny that Mrs. Godden is losing £48 a week from this week. Does the Secretary of State deny that now?

I see that the right hon. Gentleman shakes his head.

I tell the Secretary of State bluntly that he and the Prime Minister should be ashamed of the way in which the implication has been made in the House that there is something dubious about Mrs. Godden's case. I challenge the Secretary of State and the Prime Minister to go and see Mrs. Godden and explain to her why the changes are a good idea. Mrs. Godden's offence is that she is a living contradiction of the Government's propaganda, which has implied that everybody will somehow be protected. The Government know that she is only one of those for whom no protection is available.

There are others who lose, as Mrs. Godden does, from rule changes, including the war pensioners, quoted by the citizens advice bureaux, who stand to lose on average £10 a week. I understand that the Prime Minister talks a lot about Winston. I wonder what Winston would have had to say about that. Of course, there are others who lose, as Lilian Williams does, from the levels of benefits now paid. They are all cases that give the lie to the Government's statement that 88 per cent. of people will be no worse off.

Many of those who show up as gainers on the Government's figures will be substantially worse off, because the Government will not look at the net effects of all the changes that are being made. The St. Clairs, referred to by my hon. Friend the Member for Livingston (Mr. Cook), whose figures the hon. Member for St. Ives (Mr. Harris) questioned, confirm that their basic entitlement under income support is indeed £70·05, which is some £18 less than they get today. It remains the case that they have had to give up the idea of moving to more suitable accommodation, because they would lose transitional protection if they did so, and they are trapped in their present situation.

A case was quoted yesterday in the House of someone who will be £1·60 a week better off in cash terms, but worse off by some £12 a week because of the loss of discretionary free school meals. Again, that is someone who shows up as a gainer on the Government's figures. Jim Foley, who, like Felicity Godden, should presumably be grateful to the Government for liberating him from dependency on benefit—he is certainly grateful that he has benefited from having a heart transplant—has had £1·60 added to his invalidity benefit entitlement, but he now loses all opportunity for help with fares. Because he is a heart transplant patient he must return to Papworth hospital at least every four, and sometimes every two weeks. He has to be accompanied because he is a diabetic and because he is so near to the time when he had his transplant. That travel costs him £158 per trip. He will get no help for that now, but under the Government's figures he shows up as a gainer.

The Government ignore not only the direct net effects on the standard of living but the net effects upon society. The young single homeless, who may have taken the advice of the right hon. Member for Chingford (Mr. Tebbit) and got on their bikes to look for work, will he left utterly destitute. There should not be young people wandering the streets alone, but there are, and the strains on poor families as a result of the cuts in benefits that we have been discussing today, particularly the cuts in benefit for the young, will mean that there are likely to he more in future than there are now.

The only accommodation available to such people is bed and breakfast, but in future that accommodation will not be available because benefit will be paid, if at all, in arrears. In London, in particular, young people are likely to need £150 before they reach their first pay day and the landlords of bed-and-breakfast accommodation are not accustomed to waiting for payment and simply will not take people. Of course, such people can apply for a crisis loan, but they are young and single and that means that they have no priority, even if they could be offered one large enough to cover the sort of sum needed.

Will such people have to swell the numbers of those sleeping rough or find other ways of making £150? How long will it be before we find the Home Office once again bewailing the rising crime figures—the rising figures for prostitution or drug offences— because the Government look only at part of the picture, the DHSS savings, and forget the cost in damaged lives?

More and more the Government exemplify the adage—they certainly have done in this debate—that the louder they talked of their honour, the faster we counted the spoons. The debates on the whole process of the Government's social security changes are an echo of all the debates that we have had on the National Health Service—fancy footwork, fancy figures, fancy words and grim reality for those who are not talking about what the Government are doing, but are living through it.

The fine words that the Secretary of State has uttered about transitional protection and help for the future will lead, most of all, to a hypothetical Felicity Jones, who, later this year, like the real Felicity Godden, is diagnosed as having multiple sclerosis, who finds herself ultimately with the same needs, difficulties and family problems, but who will never get the £48 that Mrs. Godden loses from this week—just one of the millions of future claimants who will be even poorer than those we have discussed today. What is the Government's motto for them? Is it "What you have never had, you never miss"?

The Government claim that they are simplifying the system, but the housing benefit form is now 20 pages, where it was four. They claim that they are targeting help on those in greatest need—a claim which has been shown over and over in the debate to be completely untrue. Most of all, they say that they cannot afford to do any more. That is the greatest untruth of all. It is plainly obvious from what was done in the Budget that the Government's record embodies the other adage, that there is one law for the rich and another for the poor. The Government have cast that in stone as a deliberate choice and a deliberate policy.

6.46 pm

In a sense, the debate comes at a curious time, and that is no criticism of the Chair. It comes at a time when the broad outlines of the reforms that we are discussing have been known for some years, when the details have been known for some months, and when we have had a series of debates on detailed aspects of the reforms, some in prime time and some after 10 o'clock, where the most outstanding characteristic of those debates has been the Opposition's inability to assemble any strength on the Opposition Benches to talk about these matters. The assembled strength on the Opposition Benches tonight owes rather more to the proximity of the local government elections than it does to their lately found concern for the poor.

Of course, in making that criticism I make no comment about the sustained, intelligent and well-informed campaigns that have been run by the Opposition Front Bench, the hon. Member for Birkenhead (Mr. Field) and a number of others who have maintained their interest in this subject and who have sought to present constructive criticisms of what the Government intend to do. I criticise only some of the behaviour that we have had in the House today.

The debate may be rather late because the details and the broad outlines of the changes have been known for some time. But, in a sense, it is also rather too early because it is difficult for us to assess in detail at this stage the impact of the reforms. We have had a great deal of speculation, much of it ill-informed. A considerable number of individual cases have been brought before the House with so-called evidence spelt out which, on the facts of the case, are found to be flawed. We should wait to see how the reforms work out in practice.

No, I will not give way. The hon. Member for Derby, South (Mrs. Beckett) and I shortened our speeches to enable as many hon. Members as possible to speak and I should like to get further into my speech before I give way to anybody.

Because of what I have just said about how difficult it is at this point to assess the impact of the changes on classes or individuals, the Government will give a clear and unequivocal undertaking to monitor with great care and sympathy the implementation of the reforms.

I know that we will not be the only people monitoring the impact of the reforms. I imagine that Opposition Members will be doing so too, and I know that academic organisations and welfare rights groups will be monitoring the impact.

No. The hon. Lady knows that I normally give way, but I should like to get on with my speech.

As the reforms bed down and people grow accustomed to their working, we will be carefully monitoring the outcome of the reforms and seeing how they work out in practice. As I have said before, in social security, nothing is for ever. We live in a dynamic society. We need a changing society. There are changing patterns of need in society and obviously, therefore, the need for provision must also change. We shall be monitoring that carefully as the weeks and months go by.

If anyone outside the House had listened to the Opposition's contributions this afternoon, he would have imagined that the reforms were about cuts in public expenditure, imposing some new and, dare I say it, wicked measures on the poor.

I shall deal in a moment with the serious point raised by the hon. Gentleman. I take his points seriously and with great respect.

Opposition Members have launched a great exercise of hunt the losers. They say, "Scour the country for individuals. Ignore the fact that the Government are putting £2 billion of extra expenditure into social security provision this year. Ignore the fact that, in cash terms, nine people out of 10 will be better off or no worse off after implementation. Forget that £1 in every £3 that the Government spend now goes on social security, whereas, when Labour left office, it was £1 in every £4. Forget, above all, the imperative to reform."

We needed to change the social security system. Since 1948, it had "just grow'd", like Topsy. Bits had been bolted on to it in a haphazard way to meet new needs without any sense of trying to obtain a coherent pattern of provision for those in real need. The time had come to tackle that. I can take no credit for that. My predecessors and those of my right hon. Friend had the courage to face up to that in 1985 and 1986 and set the pattern that we shall now be able to implement.

I remember the vehemence with which Opposition Members criticised the sale of council houses. I remember the way that they have adopted that, and now they do not want to go back to the old days. In a year or two, nobody will want to go back to the old system of social security.

It is worth reminding the House once more why we are implementing the reforms. We wanted to simplify a system that had become incomprehensible to claimants and difficult to administer. So far as possible, we wanted to get rid of the unemployment and poverty traps and to give people as much choice as possible.

Conservative Members did not make an issue of Mrs. Godden, but, as both the hon. Members for Livingston (Mr. Cook) and for Derby, South (Mrs. Beckett) have again raised the case, I thought that it might be worth going back to see what Mrs. Godden would have been entitled to when the Labour party was last in office. In 1979, Mrs. Godden would have been entitled to a mobility allowance of £10, attendance allowance of £14, a non-contributory invalidity pension of £16·80 and child benefit of £6·90. That comes to £47·70, which, uprated to current prices, gives a total of £96·50. Today she is entitled to £117·30.

I want to address the serious point about housing benefit put to me by some of my hon. Friends and by one or two Opposition Members. Of course, it is easy to select the capital cut-off of £6,000 and to say that, in some ways, it undermines the reform of housing benefit, but is should be worth the House's while to remember the benefits that will flow from the reform of that provision. In future, people in and out of work will be treated the same. There will be 100 per cent. support for rents and 80 per cent. support for rates for the most needy. We are now spending almost £5 billion on housing benefit. That is more money in real terms than the Labour party was spending when it left office.

However, I recognise my hon. Friend's concern when they talk about the £6,000 limit, and I ask them to address two issues. One of the benefits that has flowed from the reform of social security has been the alignment of the capital cut-off for all three income-related benefits. As my right hon. Friend the Secretary of State said, housing benefit is only one way of providing for the needs of poorer people. Income support provides another form of help for those people. I wonder whether my hon. Friends who urge a £6,000 capital cut-off for housing benefit would want to see all the income-related benefits extended in the same way.

They want to raise it from £6,000 to £10,000.

Of course I recognise that a line, wherever it is drawn, will be open to criticism, but it is not right in principle that people who may be on broadly the same income as those on housing benefit should be subsidising those who are entitled to that benefit. I do not believe that it is proper targeting of any benefit when it goes to one household in three. Although I have listened carefully to my hon. Friend's arguments, I believe that, when we seek to target benefits as accurately as possible, it would be wrong to consider the capital limit at the moment.

No, I shall not give way.

I wish to deal with the serious point raised by the hon. Member for Birkenhead about the level of benefits. He accused the Government not just of an uncaring but of an unchristian attitude towards the poorest in our society. I do not believe that the hon. Gentleman can sustain that argument.

The benefits that we are now administering are greater in real terms than they were in 1979. We have put substantial extra resources into those benefits, as the hon. Gentleman knows, so I do not know how he can complain that we have reduced them.

We do not have estimates in the London borough of Lewisham, but we now have assessments. There are 3,842 losers, compared with 2,758 gainers. Those people are losing sums of up to £25 a week. On the Government's assessment, they were poor people who were in need before the changes. They are now in even greater need.

I dare say that the hon. Lady is quoting from the local press. I am sorry that I gave way to her because I was trying to deal more broadly with the impact of the reforms. The Government's record in putting extra money in real terms into social security in excess of that paid out by the Labour Government acquits us of any accusations levelled by the hon. Member for Birkenhead or the hon. Member for Livingston of our being mean or not providing help for the poorest in our society. I am not ashamed to state that we want to target the help that is available on those who need it most.

Of course I recognise some of the apprehensions and concerns that have been addressed especially by some of my hon. Friends and by some Opposition Members. I have already given a clear undertaking that we will monitor carefully the impact of the reforms.

This year we will be spending £48 billion on social security. By 1990 we are budgeting to spend £53 billion. We could not have done that unless we were running a successful and prosperous economy. I do not believe that there is any chance that if Labour Members were in charge of the economic affairs of this country they could conceivably afford the pattern of social security that we are affording at the moment. I ask the House to support the Government in the Lobby.

Question put, That this House do now adjourn :—

The House divided: Ayes 215, Noes 311.

Division No. 254]

[7.00 pm


Abbott, Ms DianeBlair, Tony
Adams, Allen (Paisley N)Boateng, Paul
Allen, GrahamBoos, Roland
Archer, Rt Hon PeterBradley, Keith
Ashdown, PaddyBray, Dr Jeremy
Ashley, Rt Hon JackBrown, Gordon (D'mline E)
Ashton, JoeBrown, Nicholas (Newcastle E)
Banks, Tony (Newham NW)Bruce, Malcolm (Gordon)
Barnes, Harry (Derbyshire NE)Buchan, Norman
Barnes, Mrs Rosie (Greenwich)Buckley, George J.
Beckett, MargaretCaborn, Richard
Beggs, RoyCallaghan, Jim
Beith, A. J.Campbell, Menzies (Fife NE)
Bell, StuartCampbell, Ron (Blyth Valley)
Benn, Rt Hon TonyCampbell-Savours, D. N.
Bennett, A. F. (D'nt'n & R'dish)Canavan, Dennis
Bermingham, GeraldCarlile, Alex (Mont'g)
Bidwell, SydneyCartwright, John

Clark, Dr David (S Shields)Livsey, Richard
Clarke, Tom (Monklands W)Lloyd, Tony (Stretford)
Clay, BobLofthouse, Geoffrey
Clelland, DavidLoyden, Eddie
Clwyd, Mrs AnnMcAllion, John
Cohen, HarryMcAvoy, Thomas
Cook, Robin (Livingston)McCartney, Ian
Corbyn, JeremyMacdonald, Calum A.
Cousins, JimMcFall, John
Cox, TomMcKay, Allen (Barnsley West)
Crowther, StanMcKelvey, William
Cummings, JohnMcLeish, Henry
Cunliffe, LawrenceMaclennan, Robert
Cunningham, Dr JohnMcTaggart, Bob
Dalyell, TamMcWilliam, John
Darling, AlistairMadden, Max
Davies, Rt Hon Denzil (Llanelli)Mahon, Mrs Alice
Davies, Ron (Caerphilly)Marek, Dr John
Dewar, DonaldMarshall, David (Shettleston)
Dixon, DonMarshall, Jim (Leicester S)
Dobson, FrankMartin, Michael J. (Springburn)
Doran, FrankMartlew, Eric
Douglas, DickMaxton, John
Duffy, A. E. P.Meacher, Michael
Dunnachie, JimmyMichael, Alun
Dunwoody, Hon Mrs GwynethMichie, Bill (Sheffield Heeley)
Eadie, AlexanderMichie, Mrs Ray (Arg'l & Bute)
Ewing, Mrs Margaret (Moray)Milian, Rt Hon Bruce
Fatchett, DerekMitchell, Austin (G't Grimsby)
Fearn, RonaldMolyneaux, Rt Hon James
Field, Frank (Birkenhead)Moonie, Dr Lewis
Fields, Terry (L'pool B G'n)Morgan, Rhodri
Flynn, PaulMorley, Elliott
Foot, Rt Hon MichaelMorris, Rt Hon A. (W'shawe)
Forsythe, Clifford (Antrim S)Morris, Rt Hon J. (Aberavon)
Foster, DerekMowlam, Marjorie
Galbraith, SamMullin, Chris
Galloway, GeorgeMurphy, Paul
Garrett, John (Norwich South)Oakes, Rt Hon Gordon
George, BruceO'Brien, William
Gilbert, Rt Hon Dr JohnO'Neill, Martin
Godman, Dr Norman A.Orme, Rt Hon Stanley
Golding, Mrs LlinOwen, Rt Hon Dr David
Gould, BryanParry, Robert
Graham, ThomasPatchett, Terry
Grant, Bernie (Tottenham)Pendry, Tom
Griffiths, Nigel (Edinburgh S)Pike, Peter L.
Griffiths, Win (Bridgend)Powell, Ray (Ogmore)
Grocott, BrucePrescott, John
Hardy, PeterQuin, Ms Joyce
Harman, Ms HarrietRadice, Giles
Hattersley, Rt Hon RoyRandall, Stuart
Heffer, Eric S.Redmond, Martin
Henderson, DougRees, Rt Hon Merlyn
Hinchliffe, DavidReid, Dr John
Hogg, N. (C'nauld & Kilsyth)Richardson, Jo
Home Robertson, JohnRoberts, Allan (Bootle)
Hood, JimmyRobertson, George
Howarth, George (Knowsley N)Robinson, Geoffrey
Howells, GeraintRogers, Allan
Hoyle, DougRooker, Jeff
Hughes, John (Coventry NE)Ross, Ernie (Dundee W)
Hughes, Robert (Aberdeen N)Ross, William (Londonderry E)
Hughes, Simon (Southwark)Rowlands, Ted
Illsley, EricRuddock, Joan
Janner, GrevilleSalmond, Alex
Johnston, Sir RussellSedgemore, Brian
Jones, Barry (Alyn & Deeside)Sheerman, Barry
Jones, leuan (Ynys Môn)Sheldon, Rt Hon Robert
Jones, Martyn (Clwyd S W)Shore, Rt Hon Peter
Kaufman, Rt Hon GeraldShort, Clare
Kilfedder, JamesSkinner, Dennis
Kinnock, Rt Hon NeilSmith, C. (Isl'ton & F'bury)
Kirkwood, ArchySmith, Rt Hon J. (Monk'ds E)
Lambie, DavidSnape, Peter
Lamond, JamesSoley, Clive
Leadbitter, TedSpearing, Nigel
Leighton, RonSteel, Rt Hon David
Lewis, TerryStott, Roger
Litherland, RobertStrang, Gavin

Straw, JackWelsh, Michael (Doncaster N)
Taylor, Mrs Ann (Dewsbury)Williams, Rt Hon Alan
Taylor, Matthew (Truro)Williams, Alan W. (Carm'then)
Turner, DennisWilson, Brian
Vaz, KeithWinnick, David
Walker, A. Cecil (Belfast N)Worthington, Tony
Wall, PatYoung, David (Bolton SE)
Wallace, James
Walley, JoanTellers for the Ayes:
Wardell, Gareth (Gower)Mr. Frank Haynes and
Wareing, Robert N.Mr. Ken Eastham.
Welsh, Andrew (Angus E)


Adley, RobertCoombs, Simon (Swindon)
Aitken, JonathanCope, John
Alexander, RichardCormack, Patrick
Alison, Rt Hon MichaelCouchman, James
Allason, RupertCran, James
Amery, Rt Hon JulianCurrie, Mrs Edwina
Amess, DavidCurry, David
Amos, AlanDavies, Q. (Stamf'd & Spald'g)
Arbuthnot, JamesDavis, David (Boothferry)
Arnold, Jacques (Gravesham)Day, Stephen
Arnold, Tom (Hazel Grove)Devlin, Tim
Ashby, DavidDickens, Geoffrey
Aspinwall, JackDorrell, Stephen
Atkinson, DavidDouglas-Hamilton, Lord James
Baker, Rt Hon K. (Mole Valley)Dover, Den
Baker, Nicholas (Dorset N)Dunn, Bob
Baldry, TonyDurant, Tony
Banks, Robert (Harrogate)Eggar, Tim
Batiste, SpencerEmery, Sir Peter
Bellingham, HenryEvans, David (Welwyn Hatf'd)
Bendall, VivianFallon, Michael
Bennett, Nicholas (Pembroke)Farr, Sir John
Benyon, W.Favell, Tony
Bevan, David GilroyField, Barry (Isle of Wight)
Biggs-Davison, Sir JohnFookes, Miss Janet
Blackburn, Dr John G.Forman, Nigel
Blaker, Rt Hon Sir PeterForsyth, Michael (Stirling)
Body, Sir RichardForth, Eric
Bonsor, Sir NicholasFowler, Rt Hon Norman
Boswell, TimFox, Sir Marcus
Bottomley, PeterFranks, Cecil
Bowden, Gerald (Dulwich)Freeman, Roger
Bowis, JohnFry, Peter
Boyson, Rt Hon Dr Sir RhodesGale, Roger
Braine, Rt Hon Sir BernardGill, Christopher
Brandon-Bravo, MartinGlyn, Dr Alan
Brazier, JulianGoodhart, Sir Philip
Bright, GrahamGoodlad, Alastair
Brittan, Rt Hon LeonGoodson-Wickes, Dr Charles
Brooke, Rt Hon PeterGorman, Mrs Teresa
Brown, Michael (Brigg & Cl't's)Gorst, John
Bruce, Ian (Dorset South)Gow, Ian
Buchanan-Smith, Rt Hon AlickGower, Sir Raymond
Buck, Sir AntonyGrant, Sir Anthony (CambsSW)
Budgen, NicholasGreenway, Harry (Ealing N)
Burns, SimonGreenway, John (Ryedale)
Burt, AlistairGregory, Conal
Butcher, JohnGriffiths, Sir Eldon (Bury St E')
Butler, ChrisGriffiths, Peter (Portsmouth N)
Butterfill, JohnGrist, Ian
Carlisle, John, (Luton N)Ground, Patrick
Carlisle, Kenneth (Lincoln)Grylls, Michael
Carrington, MatthewGummer, Rt Hon John Selwyn
Carttiss, MichaelHamilton, Hon Archie (Epsom)
Cash, WilliamHampson, Dr Keith
Chalker, Rt Hon Mrs LyndaHanley, Jeremy
Channon, Rt Hon PaulHannam, John
Chapman, SydneyHargreaves, A. (B'ham H'll Gr')
Chope, ChristopherHargreaves, Ken (Hyndburn)
Churchill, MrHarris, David
Clark, Dr Michael (Rochford)Haselhurst, Alan
Clark, Sir W. (Croydon S)Hawkins, Christopher
Clarke, Rt Hon K. (Rushcliffe)Hayes, Jerry
Colvin, MichaelHayward, Robert
Conway, DerekHeathcoat-Amory, David
Coombs, Anthony (Wyre F'rest)Heddle, John

Heseltine, Rt Hon MichaelMadel, David
Hicks, Mrs Maureen (Wolv' NE)Major, Rt Hon John
Higgins, Rt Hon Terence L.Malins, Humfrey
Hind, KennethMans, Keith
Hogg, Hon Douglas (Gr'th'm)Maples, John
Holt, RichardMarlow, Tony
Hordern, Sir PeterMartin, David (Portsmouth S)
Howard, MichaelMates, Michael
Howarth, Alan (Strat'd-on-A)Maude, Hon Francis
Howarth, G. (Cannock & B'wd)Mawhinney, Dr Brian
Howe, Rt Hon Sir GeoffreyMaxwell-Hyslop, Robin
Howell, Ralph (North Norfolk)Mayhew, Rt Hon Sir Patrick
Hughes, Robert G. (Harrow W)Mellor, David
Hunt, David (Wirral W)Miller, Hal
Hunt, John (Ravensbourne)Mills, Iain
Hurd, Rt Hon DouglasMitchell, Andrew (Gedling)
Irvine, MichaelMitchell, David (Hants NW)
Irving, CharlesMoate, Roger
Jack, MichaelMonro, Sir Hector
Jackson, RobertMoore, Rt Hon John
Janman, TimMorris, M (N'hampton S)
Jessel, TobyMoss, Malcolm
Johnson Smith, Sir GeoffreyNeale, Gerrard
Jones, Gwilym (Cardiff N)Nelson, Anthony
Jones, Robert B (Herts W)Neubert, Michael
Jopling, Rt Hon MichaelNewton, Rt Hon Tony
Kellett-Bowman, Dame ElaineNicholls, Patrick
Key, RobertNicholson, David (Taunton)
King, Roger (B'ham N'thfield)Nicholson, Emma (Devon West)
King, Rt Hon Tom (Bridgwater)Onslow, Rt Hon Cranley
Kirkhope, TimothyOppenheim, Phillip
Knapman, RogerPage, Richard
Knight, Greg (Derby North)Paice, James
Knowles, MichaelParkinson, Rt Hon Cecil
Knox, DavidPatnick, Irvine
Lamont, Rt Hon NormanPatten, Chris (Bath)
Lang, IanPatten, John (Oxford W)
Latham, MichaelPattie, Rt Hon Sir Geoffrey
Lawrence, IvanPawsey, James
Lennox-Boyd, Hon MarkPeacock, Mrs Elizabeth
Lightbown, DavidPorter, Barry (Wirral S)
Lilley, PeterPorter, David (Waveney)
Lloyd, Sir Ian (Havant)Portillo, Michael
Lloyd, Peter (Fareham)Powell, William (Corby)
Lord, MichaelPrice, Sir David
Luce, Rt Hon RichardRaffan, Keith
Lyell, Sir NicholasRathbone, Tim
Macfarlane, Sir NeilRedwood, John
MacGregor, Rt Hon JohnRhodes James, Robert
MacKay, Andrew (E Berkshire)Riddick, Graham
Maclean, DavidRidley, Rt Hon Nicholas
McLoughlin, PatrickRifkind, Rt Hon Malcolm
McNair-Wilson, M. (Newbury)Roberts, Wyn (Conwy)
McNair-Wilson, P. (New Forest)Roe, Mrs Marion

Rossi, Sir HughThatcher, Rt Hon Margaret
Rost, PeterThompson, D. (Calder Valley)
Rowe, AndrewThompson, Patrick (Norwich N)
Ryder, RichardThurnham, Peter
Sackville, Hon TomTownsend, Cyril D. (B'heath)
Sainsbury, Hon TimTracey, Richard
Sayeed, JonathanTredinnick, David
Scott, NicholasTrippier, David
Shaw, David (Dover)Trotter, Neville
Shaw, Sir Giles (Pudsey)Twinn, Dr Ian
Shaw, Sir Michael (Scarb')Vaughan, Sir Gerard
Shephard, Mrs G. (Norfolk SW)Waddington, Rt Hon David
Shepherd, Richard (Aldridge)Wakeham, Rt Hon John
Sims, RogerWaldegrave, Hon William
Skeet, Sir TrevorWalden, George
Smith, Sir Dudley (Warwick)Walker, Bill (T'side North)
Smith, Tim (Beaconsfield)Waller, Gary
Soames, Hon NicholasWalters, Dennis
Speller, TonyWard, John
Spicer, Sir Jim (Dorset W)Wardle, Charles (Bexhill)
Spicer, Michael (S Worcs)Warren, Kenneth
Squire, RobinWells, Bowen
Stanbrook, IvorWheeler, John
Stanley, Rt Hon JohnWhitney, Ray
Steen, AnthonyWiddecombe, Ann
Stern, MichaelWiggin, Jerry
Stevens, LewisWilshire, David
Stewart, Allan (Eastwood)Winterton, Mrs Ann
Stewart, Ian (Hertfordshire N)Wolfson, Mark
Stokes, JohnWood, Timothy
Sumberg, DavidYeo, Tim
Summerson, HugoYoung, Sir George (Acton)
Tapsell, Sir PeterYounger, Rt Hon George
Taylor, Ian (Esher)
Taylor, John M (Solihull)Tellers for the Noes:
Taylor, Teddy (S'end E)Mr. Robert Boscawen and
Tebbit, Rt Hon NormanMr. Tristan Garel-Jones.
Temple-Morris, Peter

Question accordingly negatived.

Healthj And Medicines Bill Money (No 2)

Queen's Recommendation having been signified—


That, for the purposed of any Act resulting from the Health and Medicines Bill, it is expedient to authorise the issue out of the Consolidated Fund and repayment with interest into the consolidated Fund of any sum required for fulfilling any guarantee of the redemption or repayment of anhy stock issued or temporary loan raised by the successor company (within the meaning of any such Act) or of the payment of interest on any such stock or loan.— [Mr. Alan Howarth.]