House of Commons Hansard Debates for 2 Nov 1992

Hansard

Monday 2 November 1992

The House met at half-past Two o'clock

PRAYERS

[ Madam Speaker-- in the Chair ]

Oral Answers to Questions

SOCIAL SECURITY

Social Fund

1. Mr. Mandelson : To ask the Secretary of State for Social Security what steps he is taking to increase the social fund budget to take account of levels of unemployment.

3. Mr. Corbyn : To ask the Secretary of State for Social Security when he next expects to review the allocation of social fund money to local DSS offices.

The Secretary of State for Social Security (Mr. Peter Lilley) : With permission, Madam Speaker, I will answer this and Question 3 together.

Mr. Corbyn : We were not informed of that.

Mr. Lilley : I apologise for the fact that the hon. Gentleman was not informed.

I am pleased to announce that I have authorised the allocation of an additional £8 million to discretionary social fund budgets for this financial year. The extra money allocated to districts takes full account of their individual income support caseloads, which in turn reflect local unemployment levels. All districts will receive budget increases. Details will be placed in the Library in due course.

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Mr. Mandelson : In view of what the Secretary of State just said and the Conservatives' clear election pledge that the whole of the social security budget, including money allocated to the social fund and benefits for the unemployed, would not be cut, will he confirm that the Government will honour every one of their election promises to recipients of money from the social fund, the unemployed and the poorest sections of society so that the promises made in April do not become the betrayals of autumn?

Mr. Lilley : The hon. Gentleman knows full well that I am not going to give advance details of the outcome of the public expenditure round or comment on any speculation about it. None the less, I should have expected the hon. Gentleman to be more forthcoming in his appreciation of the increase, especially as it was made possible by our introduction of the loans system and by the better repayment rates--even better than we had expected--that resulted. If we had stuck with grants, as Opposition Members wished, we would have had to cut the support within the social fund by 60 per cent.

Mr. Corbyn : Will the Secretary of State concede that the cash- limiting of the social fund to local offices--I am thinking particularly of the Euston district office--has caused appalling problems for many people? That is especially the case with women who have been victims of domestic violence and who have subsequently been placed in hostels and then housed by a local authority or housing association and approved under direction 4aIII as being victims of violence and therefore vulnerable and in need of assistance. Those people are now being refused social fund payments because of cash-limiting. Does the right hon. Gentleman recognise that £8 million is an improvement, but it is crucial to end the obscenity of cash- limiting for people who are desperately in need of help?

Mr. Lilley : I understand the hon. Gentleman's concern about the case about which he has been in correspondence with the Benefits Agency. I believe that there was some dispute about whether an appeal was lodged. I hope that

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the matter has been carried forward and that progress has been made with an appeal, if that is what the lady concerned wishes. I am sorry that the hon. Gentleman does not welcome the 25 per cent. increase in his district's budget relative to what it was last year, before the increase that I am announcing, which will ensure an increase for his district as for everywhere else. I am also sorry that he does not recognise the considerable help provided by the social fund and the officers in his area following the local floods. In that regard, I want to quote from a letter from Islington borough council which states :

"The instant response for assistance and the flexibility of the staff involved played a major part in alleviating what was a major crisis for many people I would be grateful if the Borough's heartfelt thanks for a job well done could be passed on to the staff involved."

I hope that the hon. Gentleman will be equally appreciative.

Mr. Jenkin : Will my right hon. Friend confirm that more than 5 million interest-free loans have been made since the establishment of the social fund, amounting to £700 million over that period? Does that not clearly demonstrate the Government's commitment to social policies?

Mr. Lilley : My hon. Friend is absolutely right. Because the loans are made, repaid and then recycled, we are able to help far more people than we would be able to help if we had only a grant system. In addition to the point made by my hon. Friend, we have helped 1 million people through grants costing a further £300 million. The House should welcome the support provided through the fund.

Mr. Ward : Does my right hon. Friend accept that Opposition Members welcome the increase in the social fund? It is a pity that there could not be a little more grace from the Opposition--grace shown by Islington council, if not by some of its members. Does my right hon. Friend agree that the social fund gives us much better control to ensure that the sums available get to those most in need?

Mr. Lilley : That is, of course, correct. The Opposition are not enthusiastic about the improvement because they know that it would not have been possible if we had not introduced the principle of repayable loans. We have been able to help in a way that was not possible under the old rigid single-payment system, which was unfair, uncontrollable and utterly discredited.

Mr. Bradley : Although any increase in the social fund must be welcomed, I fear that it is far too little, too late. Has the Secretary of State read the report, "Evaluating the Social Fund", which was commissioned by the Government, and the report by the Social Security Advisory Committee, both of which stated that the system was absolutely appalling, unjust and inequitable? Does the right hon. Gentleman realise that until the social fund system is scrapped and there is a proper system to give support to those in greatest need, people in abject poverty will continue to suffer? Will the right hon. Gentleman agree to a debate on the social fund, so that every hon. Member who has constituents who have suffered because they cannot get loans or grants can debate the matter and so that there is proper consideration of the fund?

Mr. Lilley : I shall continue to give full consideration to the various reports on the social fund and its operation

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which have been published in recent months. None of them has undermined the basic principle of the system that we

established--reliance on loans, as well as grants, and the belief that there must be a discretionary element on top of the rules-based system which covers the bulk of the £70 billion that we allocate to social security. I am not tempted to return to the discredited single-payment system which Opposition Members apparently hanker after.

Mr. Nigel Evans : Does my right hon. Friend agree that interest-free loans from the social fund have become widely accepted, that recycling of loans means that more people get more help and that the position is far more credible than the Opposition's empty promises? That would have become apparent the day after the election, had the Labour party been elected, when it would have emptied the coffers.

Mr. Lilley : That is absolutely right. The York university study stated that the loan principle had become widely established and accepted. Surely it is better for people to have access to zero interest loans, rather than being reliant on loan sharks.

Unemployment

2. Mr. McFall : To ask the Secretary of State for Social Security what assessment he has made of the increase of costs for his Department which arises from an increase in unemployment of 100,000.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt) : My Department's second annual report shows the costof an increase in unemployment of 100,000 to be £330 million.

Mr. McFall : Given that £330 million, given that with 2.7 million people on the dole, the cost will amount to £8 billion next year and given the debilitating cost to the economy in lost taxes and national insurance, would it not make better sense to keep people off the dole so that there was economic recovery and a boost to the public purse? When will a shaft of sanity penetrate the Government's bodged actions and muddled thinking?

Mr. Burt : I am sure that the hon. Gentleman is aware that about 50 per cent. of people who become unemployed are taken off the register after three months and about 65 per cent. of those remaining are taken off after six months. The Employment Service has made a considerable effort to ensure that people come off benefit as quickly as possible to get back to work. The hon. Gentleman must also be aware that this country's employment problems are shared by many other countries on the continent and from Australia to America. One of the Opposition's biggest mistakes is to ignore world trade.

Mr. Willetts : Does my hon. Friend accept that the Government's proposals for one-stop shopping represent an important improvement in the potential service to the unemployed, who will no longer be caught in an administrative muddle between unemployment benefit and social security offices?

Mr. Burt : My hon. Friend is right. The Department is putting considerable efforts into finding the best ways possible to ensure that those who are caught up in

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unemployment have the best opportunities to seek advice and have to go through fewer administrative hurdles to claim that to which they are entitled.

Mr. Alfred Morris : Is the hon. Gentleman aware of the Prince of Wales's humane initiative to help the unemployed and others in dire need by distributing free food parcels in Manchester and other regional centres across the country? Is not the Prince's action a stark reminder that benefits for the unemployed, as for all poor people, must be protected in real terms at this evening's special meeting of the Cabinet about public expenditure?

Mr. Burt : The right hon. Gentleman is too wily in these matters not to know that I cannot possibly discuss public expenditure questions at this stage. The degree of concern that he expressed about the unemployed is shared by those on the Conservative Benches. He will know that the best help given to the unemployed is not benefits but efforts to get those people back into work. All the efforts of the Government and those of my colleagues who are involved in economic regeneration are designed to ensure that interest rates stay low, inflation comes down and the country has the best prospects for recovery and a return to proper jobs.

Mr. Fabricant : Will my hon. Friend acknowledge that, sad though it is that unemployment has gone up, Britain has the lowest proportion of unemployed anywhere in the European Community, apart from Denmark, and that 2 million more people are employed than in 1983?

Mr. Burt : My hon. Friend is right. There is a higher proportion of people in work in this country than in any other European country, other than Denmark, but that statistic is often missed. There is no doubt that the trade recession which has swept through Europe and the rest of the world has affected us as well. To ignore that problem and to see this country as totally isolated from that difficulty is unrealistic, but unrealism seems to be a permanent characteristic of the Opposition.

Benefits (Value)

4. Mr. Wareing : To ask the Secretary of State for Social Security if he will make it his policy to ensure that in the next upgrading of social security benefits their real value will be maintained.

Mr. Lilley : The annual statement on those benefits will be made in due course.

Mr. Wareing : The Government were not so coy last April about explaining their public expenditure plans when the Tory manifesto stated that the real value of state pensions against price rises would be maintained. How can any civilised Government seek to sacrifice the aged and the disabled on the altar of their own economic incompetence? Can the Secretary of State explain to the House how the under-indexation and taxation of invalidity benefits can stimulate or help to stimulate economic activity?

Mr. Lilley : The hon. Gentleman will recall my telling the House some Question Times ago that although there would doubtless be speculation about every conceivable benefit during the course of the expenditure round, I did not propose to comment on such speculation until the round was over, when the House would be told, in full, the details of what we propose.

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I shall not take lessons from the Labour party on the treatment of the elderly--a party which wiped out the savings of pensioners by a quarter in a single year, broke its pledges on uprating benefits, cut the real value of pensions by 6 per cent. and is now proposing to means-test pensions.

Mr. Hendry : Will my right hon. Friend confirm that since 1979 the Government's expenditure on social security has gone up by 50 per cent. in real terms and expenditure on the long-term sick and disabled has gone up by 170 per cent? Is that not a cast-iron demonstration of the Government's determination to look after those in most need?

Mr. Lilley : I have some sympathy with my hon. Friend. I am often not recognised, but at least I am not mistaken for a socialist. Of course, my hon. Friend is right. The Government have increased spending on the poor, the sick and the elderly by more than a half. We have also helped disabled people. We have spent almost three times as much as the Labour Government and are helping four times as many people with mobility allowances and six times as many with attendance care--so we do not take lectures from the Labour party.

Mr. Frank Field : As people on benefits are generally poorer and as poorer people have gained the smallest increase in their living standards since 1979, will the Secretary of State tell us what support he will have for defending their living standards when he raises their needs around the Cabinet table?

Mr. Lilley : Very considerable support. As the hon. Gentleman will see from our record, it is obvious that we have endeavoured to channel money to those in greatest need--I am thinking of the extra £600 million a year that goes to families in need, the introduction of family credit and the help given to older and poorer pensioners in a variety of ways. We believe that we should try increasingly, as we improve the benefit system over the years, to focus help on the most needy.

Lady Olga Maitland : Does my right hon. Friend agree that since 1979 an extra £700 million has been given to help the poorer pensioners? Is that not a splendid example of the Government's commitment to help those pensioners most in need?

Mr. Lilley : That is absolutely right. One reason why we have had to help those who retired before 1979 is that they saw their savings wiped out under the Labour Government's inflation. Any party that is a friend of inflation is an enemy of the poor.

Mr. Kirkwood rose --

Hon. Members : The hon. Gentleman is on the wrong side of the House.

Madam Speaker : Order. I know precisely which side of the House he is on.

Mr. Kirkwood : I am on the right side. I take up the question raised by the hon. Member for Birkenhead (Mr. Field). Will the Secretary of State say what cognisance he will take of the household below average income statistics from 1979 to 1989, which show that people in the lowest tenth of income distribution saw their real income, excluding housing costs, fall by 6 per cent., whereas the

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national average in that period was an increase of some 30 per cent? Surely, that must have some bearing on the annual uprating statement, which we anticipate in the next few days. [Interruption.]

Mr. Lilley : I am of course grateful to the hon. Gentleman for his ongoing support. The figures require careful examination. In the lowest tenth of the income distribution, for example--the figures come from the family expenditure survey--half a million people are recorded as having zero or negative income. However, when their expenditure is examined, it is found to be greater than that of the average person. That is why we are producing some revised and improved figures, which were originally prompted by the Select Committee. Those figures will be published in future. They will give a much better guide to incomes, rather than the expenditure of lower-income families.

Mr. John Marshall : Does my right hon. Friend agree that the greatest threat to those who receive unemployment benefits would be the introduction of a national minimum wage and the imposition of the social chapter, both of which would drastically increase unemployment?

Mr. Lilley : That is correct. There is no doubt that in a particularly tough world economic climate the consequences of such steps would be even graver. I recall that when my right hon. Friend the Prime Minister rightly said "non" to the social chapter, he was criticised by Mr. Delors, who said that we were thereby making this country a paradise for investors. So we are. That is the best source of future jobs and the best kind of help for those who are unemployed and who want to get back to work, as the vast majority of them do.

Mr. Dewar : I recognise the reasons for the right hon. Gentleman's caution about the prospects, given the bitter infighting in the Cabinet over the public expenditure round, but does he not think that manifesto promises deserve some respect? Would it not be wise to end the speculation by confirming now that the specific promises on child benefit and retirement pension will survive the present shambles? If the right hon. Gentleman wants to maintain his cherished reputation for anonymity, he would do well to dismiss the suggestion in The Times leader today that income support, invalidity benefit and other benefits are to be uprated by 2 per cent. only. Will he note that a sense of outrage will be felt far beyond Opposition Benches if those on benefit are put in the firing line in order to save the Chancellor from the consequences of his own incompetence?

Mr. Lilley : Taunts about anonymity come rich from someone whose only claim to fame is that he is less well-known than I am. The hon. Gentleman knows full well that I will not spell out the position on any of the items on which there has been speculation until the round is over and the results are announced. When it comes to election pledges and promises, I recall that before the election the Labour party was keen on universal benefits and said that it would upgrade pensions immediately by £5 for a single person and £8 for a couple. Suddenly, after the election, during the leadership contest, the leader of the Labour party realised that he could no longer get by by raising taxes and he decided to recycle benefits. The leader of the

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Labour party wanted the hon. Gentleman to consider means-testing every single universal benefit--some changes in pledges!

Disability Living Allowance

5. Mr. O'Hara : To ask the Secretary of State for Social Security if he will make a statement about the administration of claims for disability living allowance.

12. Mr. Evennett : To ask the Secretary of State for Social Security how long a claim for the disability living allowance usually takes to process ; and if he will make a statement.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : I have previously expressed, and I reiterate today, my regret that unacceptable delays have occurred in the processing of claims for disability living allowance and that, as a result, many disabled customers were not receiving a standard of service to which they are entitled.

The chief executive of the Benefits Agency wrote to all hon. Members on 19 October outlining the positive actions that the agency has taken to remedy the position. Substantial progress has been made and the chief executive of the agency tells me that it is now within sight of achieving a stable state of work outstanding.

I intend to have further discussions with the chief executive to see what lessons should be learnt from the experience, which has led to considerable distress for many disabled customers and their families.

Mr. O'Hara : Does the Minister accept that, in common with Opposition Members, he should be appalled that, after drafting in the necessary resources--a move which, presumably, has merely displaced the problems and moved them to elsewhere in the benefits system--250, 000 claimants of disability living allowance and attendance allowance were still awaiting payment at the end of September? Does he agree he should also be appalled that, according to statistics for the end of August, only 25 per cent. of disability living allowance claims were turned around in 60 days and only 3 per cent. of attendance allowance claims were turned around in 35 days? When will the Benefits Agency achieve the targets of a 60 per cent. turnaround in 30 days for disability living allowance and a 60 per cent. turnaround in 35 days for attendance allowance?

Mr. Scott : As from today, the agency is confident that it can achieve the targets of 60 per cent. within 30 days and 90 per cent. within 90 days for the outstanding caseload.

Mr. Evennett : I thank my right hon. Friend for his encouraging reply on a difficult issue. Is he aware that my constituents have been disappointed in the delays involved in processing cases? Will he confirm that all DLA payments will be backdated, no one will lose out because of delay and all claimants will ultimately obtain their money?

Mr. Scott : I have acknowledged on more than one occasion how disappointed I was with some of the delays that occurred in the early days of the introduction of DLA and other benefits associated with it, but the agency is now clearing twice as many claims as it was in June and many

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times the number of claims that it was clearing in February and March. I am confident that it is within sight of meeting its targets.

Mr. Wigley : Does the Minister accept that thousands of people are being denied their statutory rights? Can he ensure that if ever this sort of thing happens again there will be some mechanism to make certain that people get the money to which they are entitled, and that they can argue afterwards if it is the Government's machinery which is holding them back from their entitlement?

Mr. Scott : Nobody will be denied his statutory rights. If a claim is allowed, albeit delayed, it will be backdated to the date of the claim. That reassures all who have been waiting for their claims to be settled-- admittedly for too long--that they will receive their money.

Mr. Thurnham : Can my right hon. Friend confirm that 300,000 people are benefiting from this excellent new allowance, and that, if anything, the Benefits Agency is suffering from the problem of success after its wide promotion on television?

Mr. Scott : It is worth comparing the introduction of DLA, about which we hear so much criticism from the Opposition, with the introduction of the mobility allowance which, in the first year, was limited to 5,000 recipients and by the fourth year was reaching just 95,000. We have delivered this benefit to 250,000 people within seven months.

Mr. Rooney : The Minister will recall making similar statements last April, May, June and July, when he said that progress was being made. I am sure that the whole House will agree with me when I compliment the staff on the way in which they are dealing with an intolerable burden.

When a decision is made to refuse disability living allowance it takes between eight and 12 weeks for that decision to be issued and it can take another six months before an appeal is heard. So it may be 18 months after applying before the money is paid after a successful appeal. Does not the Minister think that disgraceful?

Mr. Scott : I can well understand that the agency has been concentrating on dealing with initial claims. It will turn its attention to reviews of decisions and appeals now that it is in prospect of achieving its targets for new claims.

Mr. Hawkins : Does my right hon. Friend agree that the large increase in the number of new staff--800 of them--dealing with disability living allowance is a clear sign of the Government's commitment to improving the system? Does he also accept that constituents of mine have been suffering from delays in the allocation of disability living allowance, and that other constituents who work in the system believe that, while great progress has been made, more could be done to train telephone answerers?

Mr. Scott : There was a time, I believe, when misunderstandings arose during the use of the inquiry line, but I believe that successful efforts have been made to resolve that problem, and it should not be recurring now. We should recognise that, in part at least, DLA has suffered from its own success. Our efforts and those of the many organisations of and for disabled people which helped in the launch of the allownace led to a tremendous surge of claims in the early days. That caused a problem in

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the administration of the Benefits Agency, but I am confident that it is tackling the problem and that success is in immediate prospect.

Mrs. Golding : Is the Minister aware that his remarks will give small comfort to thousands of disabled people, many of whom will have to wait until after Christmas to have their claims dealt with? Does he not realise that many of the staff at benefit offices are appalled by the failure to provide an efficient service? They think that it is due to the continued lack of permanent, full-time trained staff. Does the Minister realise the hardship and distress that he is causing by his incompetence?

Mr. Scott : I welcome the hon. Lady to her new responsibilities--no doubt we shall regularly cross swords. I ask her to acknowledge that the Government were right--most fair-minded people recognise that we were--to go ahead with launching DLA at a stroke rather than adopting the tentative approach of the Labour Government when they introduced the mobility allowance.

The hon. Lady should also bear it in mind that, for the first time in this area, we are relying not on medical examination but overwhelmingly on self- assessment by disabled people of the effect of disability on their lives. That has been a notable success. Some 80 per cent. of cases are now being decided without the need for medical examination. The Government are to be congratulated on that, not criticised.

Mr. Duncan : I congratulate my right hon. Friend on the setting up of a special telephone hot line specifically for hon. Members to bring to the attention of DLA offices cases of urgent need among their constituents. Will the Minister join me in condemning the irresponsible action of some Labour Members who have distributed that telephone number willy nilly to the severe detriment of genuine cases of urgent need?

Mr. Scott : There have been some examples of that sort, but, to be fair, they were fairly limited and not many people went down that route. I deplore the fact that some did because they could have set a pattern that might have been followed elsewhere. The establishment of a hot line for hon. Members should be seen against the background of a considerable number of additional lines and operators for the general public. The combination of those two initiatives has been a significant advance in advising people about the state of their claims.

Disability Living Allowance

6. Mrs. Ewing : To ask the Secretary of State for Social Security what has been the total number of applications received for disability living allowance ; how many have been (a) processed and (b) successful ; and what is the average time for a ruling to be reached.

11. Mr. Wray : To ask the Secretary of State for Social Security what is the total number of disability living allowance applications received by the Benefits Agency at the latest available date ; and what was his Department's forecast.

Mr. Scott : By the end of September, 498,000 claims for disability living allowance had been received and 351,000 had been cleared. These resulted in 126,000 new awards of

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DLA and 98,000 top-up awards to existing mobility and attendance allowance beneficiaries. The corresponding forecast was for 494,000 claims.

Mrs. Ewing : I recognise the importance of those statistics, but the Minister claims that the allowance has been a victim of its own success. Does he not realise that many thousands of families have been the victims of pious hopes and complacency by his Department in dealing with applications? Many thousands of families have gone through a great deal of misery waiting to hear whether DLA would be awarded because upon that depends the award of invalidity care allowance and possibly housing benefit. Many people have been subjected to a huge reduction in income. Will the Minister accept the buck for the failure of administration of this allowance in the past six months and will he assure the House that there will be effective monitoring and that this will never happen again?

Mr. Scott : It is certainly my intention that it never should. Nobody who read with care the letter by the chief executive that was sent out on 19 October outlining the steps that he had taken through the deployment of extra staff, the working of overtime and the setting up of an additional claims unit to deal with these claims could believe that there is any proof whatever of complacency. There has been a clear determination to overcome a problem which, perhaps, might have been perceived. Once it was established we tackled it with enthusiasm.

Mr. Wray : Does the Minister agree that the whole thing has been bungled? From February this year until April there were 116,000 DLA claims, 148,000 top-up claims and 183,000 other claims. It is now November and I am led to believe that there is still a backlog of 93, 000 DLA claims, 57,000 top-claims and 92,000 other claims. It is obvious that the Minister is not dealing with the problem but is only creating misery for those who are in need.

Mr. Scott : The hon. Gentleman, for whom I have considerable respect, usually goes over the top towards the end of his remarks. I have given the figures for where we are at the moment and have assured the House that from now on the agency is determined to meet the targets.

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