The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

1983-1987 Parliament

Mr Major’s Commons Response to the Poverty Debate – 30 January 1986

Below is the text of Mr Major’s Commons response to the Poverty Debate, held on 30th January 1986.

Mr. Roy Mason (Barnsley, Central) Rapidly increasing poverty in Barnsley over the past five years has had a dramatic and depressing impact on my town. I have represented Barnsley for nearly 33 years, and I have never known such misery on such a large scale as today. I lived through the 1930s and the pre-war depression years, but have never witnessed so many personal pictures of soul-destroying unhappiness through being penniless and pleading for help as are evident in Barnsley today.

That awful and worrying rise in poverty in Barnsley over the past five years of Tory administration has shattered individuals, many families, our small communities and our local economy. The crucial poverty indicators, such as the local level of unemployment, the number of social security claims and the increasing demand on social services section 1 moneys all reveal a sharp decline in personal and household incomes against a background of increasing job losses, redundancies and pit closures. That scale of poverty is placing intolerable pressure on our local services and resources, both statutory and voluntary, especially the social services, the advice services and housing.

Although Barnsley metropolitan district council has responded with various practical initiatives, trying to stave off the harshness of personal distress, Government cuts in the rate support grant, and the further cuts proposed in the so-called reform of social security will only exacerbate the serious poverty levels and the social security problems in Barnsley.

One might ask, where is the evidence? I believe it to be the frightening catalogue of social concern, which is the most distressing that I have ever come across in my time. One in five people in Barnsley is now without a job. In January this year 16,897 people were on the dole, and there was a 20 per cent. rate of unemployment, approximately 6 per cent. higher than the national average and 9.2 per cent. higher than in 1981.

The mass of poverty is startling. The social services, working on Department of Health and Social Security criteria, establish Barnsley’s poverty line as being a family of four on supplementary benefit receiving £69 weekly income. In Barnsley, there are 7,875 people on the poverty line and, below the poverty line, 3,375 unemployed and 1,500 in work – a total of 12,750 poverty-stricken people in the town of Barnsley. Is it any wonder that I decided to bring that to Parliament’s attention?

In November, 16,739 people were claiming unemployment benefit in the Barnsley travel-to-work area. Most disturbing was the rise in the number of long-term unemployed. Although most people believe them to be in the older age brackets, that is just not true in my town. Of the registered claimants between 19 and 24 years of age, there were 1,087 people unemployed over the year. That is 45.4 per cent. of all the registered unemployed in that age category. What a damning indictment of the Government it is that so many young people in one small town in Britain should be condemned to the dole for so long with no hope on the horizon. What, then, of their poverty?

Since the beginning of 1981, 11,420 redundancies in Barnsley have been notified to the Department of Employment. Barnsley council is on a fast-moving treadmill, struggling to fight this surge of job losses. The Regional Manpower Intelligence Unit in January 1985 compared the vacancy levels in travel-to-work areas throughout England. Barnsley was ranked as having the second highest number of unemployed per vacancy in England, with 128 registered unemployed for every vacancy.

That is an appalling picture of misery thrust upon my town and constituency by a Government who have used monetarist controls, who have squeezed the economy, slashed regional aid, ruthlessly closed steelworks and coal mines, cut social services and caused massive job losses in coal mining towns like Barnsley. Yet the Government cannot provide any answer to the problems in such areas.

Barnsley council has made strenuous efforts to stem the tide. It has established an employment strategy, built an enterprise centre, small factories, seedbed workshops, and an information technology centre. The council has 35 staff working in teams to help new firms to set up, to help existing firms to survive and expand and to attract new industry and training. I have led teams to Brussels to obtain European regional development grants for the development of a business and innovation centre. This worked has saved and created 1,000 jobs in 1985.

Barnsley council launched the coal field communities campaign, which now involves more than 60 local authorities representing 16 million people, in an attempt to draw attention to the social, economic and environmental problems facing coal field areas like Barnsley. The community campaign was also intended to advocate policies to alleviate poverty, misery and unemployment in the declining economies of the coal fields.

As everyone can see, Barnsley council has not sat on its backside. It is fighting the problem. Government policies will have to be radically changed if there is to be any hope of a solution to these problems. National Coal Board Enterprise Ltd. is not the answer. Even if it is creating 500 jobs a month, that is for Great Britain as a whole. Barnsley alone needs that figure every month this year just to stem the tide and avoid being swamped.

Some 50 per cent. of all Barnsley households are in receipt of housing benefit. Earlier this year the housing department undertook a review of the waiting list. The review revealed that there are now more than 4,700 people on the council’s waiting list. That means that over the past two years the waiting list has grown by 16 per cent. and in some cases in the borough the list has grown by more than 20 per cent. Of particular concern is the increased number of old-age pensioners on the list and the increasing demand for single person accommodation, which has increased by 22 per cent. over the past two years. During that time the number of single persons sharing households has increased from 200 to 286, an increase of 43 per cent. That is another tragic story of social distress for which the Government must accept responsibility.

The ratio of new house building has declined markedly in the council sector due almost entirely to Government restrictions. The rate of council house building has declined from an average of 330 units per annum in the mid-1970s to 128 in 1981-82; 15 units in 1982-83; 19 units in 1983-84; and 33 units in 1984-85.

With regard to housing benefits, I quote the case study of a miner’s widow on a widow’s pension of £38.38 and an NCB pension of £8.43. She receives a total housing benefit of £11.53. Under the new scheme her total housing benefit will be £9.01, a weekly loss of £2.52. That sum will be taken away from a miner’s widow. Bearing in mind that 50 per cent. of all Barnsley householders are in receipt of housing benefit, thousands more people will be driven into deeper poverty because of the effects of the Social Security Bill now going through the House.

It is estimated that 29,000 people in Barnsley could lose some or all of their benefits. In Barnsley, more than 19,000 people are dependent upon supplementary benefit for the whole or part of their income. Local DHSS officers are so overstretched that they are taking up to six weeks to process the many claims for single payments for exceptional need. According to their statistics, the Barnsley, east office has 10,893 supplementary benefit recipients and the Barnsley, west office has 8,155. That amounts to 19,048, which is a considerable work load for an overworked staff.

Also noticeable is the number of supplementary benefit and family income supplement appeals listed for Barnsley. Between January and December 1985 there were 699. The abolition of the right of appeal and the review which has been mentioned are not satisfactory. They represent a major erosion of the legal right of Barnsley claimants. A significant number win their case on appeal. If the appeals procedure is abolished, a claimant’s only recourse will be to the local DHSS manager. I doubt whether many decisions will be overturned under that system.

Many more claimants will approach the local authority’s social service departments for financial assistance. It is inevitable that the demand on the limited section 1 moneys will be intolerable. How much more poverty will result?

In Barnsley, the most significant area of increased demand on statutory and voluntary services arising from increasing poverty is on the welfare rights officers. Within the social services department, referrals to the welfare rights officers have increased by 100 per cent. in the past two years. All staff record a dramatic rise in the number of cases with a primarily financial content. There has been an alarming increase in the volume of debt-related problems. Council staff have recently attended a training course on debt counselling. A special leaflet has been produced to help people to cope with enormous debts owed to building societies, fuel boards and hire purchase firms.

The emergence of loan sharks during the recent miners’ strike was a new and worrying social phenomenon. Mrs. Catherine Allan, the Barnsley citizens advice bureau organiser, wrote to me and said: During 1984-85 the bureau dealt with 1,751 social security inquiries – a 63 per cent. increase in one year. In December 1985 the Barnsley CAB dealt with 731 inquiries compared with 569 in December 1984. Indicators of the increasing poverty of clients are the large numbers of debt problems. I received a letter from the Soldiers’, Sailors’ and Airmen’s Families Association. Mr. J. R. Foster. secretary of the Barnsley division, said: 1985 saw an increase of 25 per cent. in the number of applicants, a 33 per cent. increase in the Funds disbursed, and of the total number of cases, 41 per cent. were for assistance with. fuel, light, water rates and funeral expenses.

I have one case of a pensioner whose gas supply was cut off two years ago, one of a pensioner who has had no water supply since October 85 and some others who are or have been subject of court orders. Some of these are elderly ladies and the thought of court action frightens them a great deal so they cut out other things to pay these bills. I may add that being the widow of ex servicemen or the men themselves, they are very uptight at having suffered the privations of wartime service they have to call on SSAFA and like organisations in their last years. Fiona Moss, the secretary of Age Concern in Barnsley, wrote to me saying: I am perturbed by the increasing number of enquiries related to the standard of living of this area. In fact some are individuals who through pride have deliberately avoided what they believe to be the acceptance of charity. Many tears have been shed in my office.

We have miners widows with approximately £7 a week extra pension. Their claim for housing benefits are reduced by the same amount. She goes on to say: Can we afford to die? The £30 state grant is soon to be abolished. What will replace it? Our local paper states that elderly people worry about a ‘Pauper’s Grave’, and figures show that a Barnsley family paid almost £600 for a funeral in 1985 compared to £90 in 1972. I should know – it was my own mother’s funeral. In the past with fuller employment many elderly people were cared for by their own families. These families are also now in the poverty trap. I get many more of these families coming for advice about their parents’ problems – they themselves are at their wits end struggling to survive on low incomes. What a tale of woe and distress and more and more poverty.

The Barnsley Council’s co-ordinated welfare rights group, Barnsley’s anti-poverty team, has mounted several successful benefit take-up campaigns which have injected substantial amounts of cash to vulnerable groups such as the unemployed, the sick and the physically disabled. A team of dedicated civil servants and volunteers led by Roy Wardell, the director, and Councillor Judith Watts work well beyond their wage-related hours to alleviate stress and worry in the town.

Unfortunately, the council’s anti-poverty measures have to be seen against a background of appeals by central Government for restraint in spending and of targets set by the Government and block grant penalties. At present, Barnsley is penalised at the highest level. Existing spending plus allowances for inflation and current commitments will result in the target which has been set by the Government by 1985-86 being significantly exceeded.

Education officers in Barnsley have estimated that the percentage of schoolchildren on free school meals will be reduced from 26 per cent. to 18 per cent. under the proposed changes. This almost certainly will have an effect on the number of school meals staff employed by the council and increased poverty in many families.

The financial and housing restraints on the under-25 age group, forcing young people to stay in sometimes intolerable family situations, will lead to increased family stress and breakdown in Barnsley. I received a report from one welfare rights worker at the Barnsley centre against unemployment, which says: One of the most serious problems faced by the young unemployed is their inability to find accommodation. Shortage of rented property has forced up rents and many landlords refuse to let their property to unemployed people. Consequently, many young unemployed people find themselves having to move into board and lodging accommodation, the disadvantages of which have recently been exacerbated by the new board and lodging regulations, resulting mainly from landlords charging exorbitant rates for their accommodation in the knowledge of DHSS payments.

Although landlords have been largely to blame for the abuse of the system it is the young unemployed who have been penalised by reduction in benefits and time limits on their receipt of payment. Within two days of each other two young men, aged 16 and 17, attempted suicide, one by an overdose of valium and the other by slashing his wrists with broken glass. They were both lodgers in the same boarding house and both faced penalisation under the four week rule. In the same week, the week beginning 13 January, an 18 year old girl also overdosed. It is a nonsense to say that the under 25s should, if they have no employment, remain at home. The girl mentioned desperately needed her own accommodation due to her father’s violence towards her. Also unemployed families have their benefits reduced by having adult children at home leading often to domestic tension and violence. It is all so sickening to me and I hope that it is to the Minister.

Barnsley council and I believe that there is a direct link between economic decline, Government policies and the resulting fall in individual and household incomes poverty. The local economy has suffered more than most from the effects of disputes in the coal industry. Punitive and inequitable legislation in social security reform and local government finance will serve only to increase rather than decrease the scale of the problem of poverty in Barnsley.

This is the story of poverty in Barnsley brought about by heartless and ruthless Tory Government policies. The town refuses to be dejected. We shall fight on, but we deplore being neglected. That is why the Minister has had to listen to this case today.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major) It is never a hardship to listen to the right hon. Member for Barnsley, Central (Mr. Mason) representing his constituency. Yet again, he has spoken movingly about the problems that he sees in Barnsley, and I am pleased to be able to respond. I will try to pick up as many of the issues that he raised as possible in the time remaining to me. I am pleased to see that the hon. Members for Pontefract and Castleford (Mr. Lofthouse) and for Barnsley, West and Penistone (Mr. McKay) are in their places.

I am aware that social security provision is an emotive matter, which arouses considerable controversy. I also understand that the present Bill, which I strongly support, which proposes fundamental changes in the social security structure, is a matter of high political dispute. I hope that the right hon. Gentleman and his hon. Friends accept that, whatever might be the political disagreement between us, the Government share their deep concern for the effects of poverty. We believe that many of the proposals in our Bill, as with many of our other policy proposals, are geared to alleviate precisely the problems that the right hon. Gentleman has outlined.

The right hon. Gentleman mentioned some of the problems that apply to Barnsley at the moment. I appreciate, and would not deny, the special difficulties that have been caused to that area by pit closures and the resultant high unemployment. The latest unemployment figures for Barnsley are depressing and dispiriting. I cannot deny that and would not wish to.

I share with Opposition Members the hope that unemployment will soon begin to fall, but I can understand their frustration at the fact that the present high levels appear to be remaining for so long. Despite the difficult circumstances, people in Barnsley are finding jobs. Between April 1985 and January this year, the employment service placed more than 2,300 people in permanent employment in Barnsley – an increase of 23 per cent. on the same period in the previous year. I am sure that we all hope that that trend will continue.

It is not true that the Government are unconcerned and harsh about the problems in Barnsley and elsewhere. I might draw attention to the substantial funds that are made available to Barnsley in the urban programme. In recognition of its economic problems, the need to help the area and the need to broaden its industrial base, Barnsley qualifies for help under the Inner Urban Areas Act 1978. The council, to which the right hon. Gentleman paid tribute, has responded by establishing industrial and commercial improvement areas in Barnsley and in the outlying mining town of Goldthorpe. There is also a conservation workshop at Hoyle Mill, which is funded in conjunction with the Manpower Services Commission. It places 80 trainees, who are engaged in restoring sites of historic interest in and around Barnsley. There are other interesting and innovative projects in the area.

The right hon. Gentleman talked about housing and some of the related problems. To help Barnsley overcome its difficulties, some £6.7 million has been allocated under the housing investment programme, and there is a further allocation of up to £1 million to meet obligations under the Housing Defects Act 1984. Despite those and other initiatives with which I shall not bore the House, Barnsley faces great problems, many of which spill over into social security requirements.

The right hon. Gentleman spoke of current board and lodging regulations. We have monitored their effect carefully. On the basis of preliminary information, there is no evidence that they are causing nomadism on the scale that many people feared. The time limits to which the right hon. Gentleman referred are subject to many exemptions. For one reason or another, large numbers of young people will find that they are exempt from the time limits, even if they are in circumstances in which they would otherwise be applied. The right hon. Gentleman will know that the limits do not apply to people who were in their accommodation some time ago.

I am not familiar with the cases that the right hon. Gentleman has mentioned this evening, but I strongly suspect, although I cannot guarantee it, that those young people may have been entitled to some form of exemption. If the right hon. Gentleman cares to let me have the details of the cases, I shall carefully consider them and respond to them.

In his remarks the right hon. Gentleman spoke of social security provision. At present. spending on social security is running at more than £40 billion a year. That is a pretty substantial amount by any standards. It is the Government’s responsibility to ensure that that money is well spent, and primarily that is what we seek to do through the proposed changes in the Social Security Bill, which will go into Committee early next week. In many quarters, the review that preceded the Bill has been represented as a cost-cutting exercise. That is simply not so. I understand that that is the type of representation that often occurs in political debate. We believe that the proposals that underpin the Bill are principled and worthwhile. They are a part of the reform that we believe will simplify a social security system that is far too complex. They will direct resources far more effectively than at present to the people of whom the right hon. Gentleman spoke, who are in the greatest need.

The right hon. Gentleman is clearly worried about the living standards of those families in his constituency on low incomes. We, too, are worried about people on low incomes. Under the Bill those families are likely to be eligible for income support, if unemployed, or family credit if in work. The right hon. Gentleman said that many of his constituents would be worse off if the White Paper proposals were enacted. On the basis of the illustrative figures published with the White Paper we shall be spending £200 million a year more on family credit than we spend at present on family income supplement. The income support scheme is likely to cost more than we spend now on the main structure of the supplementary benefit scheme.

One aim of the social security reforms is to ensure that help goes to the people who need it most. Our reforms will direct that help to families with children. That applies to low-income working families and to those where the parents are unemployed. Today, those families are often in the greatest need, in Barnsley and sadly, in other areas too.

Our proposals will substantially reduce the unemployment trap, in which people are better off out of work than they are in work. They will eliminate the worse effects of the poverty trap, where a rise in earnings can be more or less wiped out as benefits are withdrawn.

The new family credit scheme will cost substantially more than family income supplement – about twice as much. It should reach more than 400,000 families – double the present number on family income supplement. Almost all those families will be better off than they are with family income supplement. On the basis of the illustrative rates in the technical annex to the White Paper, a couple with two children on gross earnings of £100 could receive £27.40 in family credit compared with £5.50 on family income supplement.

The right hon. Gentleman is rightly concerned about people who are not in work. Our proposals will get more help to families who are not working. Income support will replace supplementary benefit and in our judgment that will be a significant improvement. A noticeable feature will be its simplicity. At present, to determine the amount of weekly benefit, staff may need to make intrusive and detailed inquiries, such as the number of baths taken by a claimant or what his special laundry needs are if someone in the family is incontinent. However tactfully those inquiries are handled, they are plainly embarrassing and often insulting to the people to whom the inquiries are directed. Yorkshire men and women especially would find those inquiries deeply offensive.

We must find a better way of getting help to people who are in need, and with the system that we propose – one of premia based on easily identifiable criteria – it will be entirely possible to remove many of those intrusive inquiries. That simplicity – that certainty of entitlement – will be a great improvement, and will be generally welcomed in the House when the proposals are more fully understood.

I would have wished to have been able to say much more this evening, but only a short time remains. On the transitional protection for claimants, no one receiving supplementary benefit at the point of change to income support will have his weekly income reduced by the change. Anyone on family income supplement whose FIS award is higher than his family credit will keep the FIS award – the higher award – for the remainder of the 12-month award period. We made that clear in the illustrative figures published with the White Paper, and I emphasise it again this evening.

The right hon. Gentleman mentioned single payments. I deeply regret the fact that time does not permit me to deal in detail with the points that he raised, but if he wishes to discuss that matter later, I shall be happy to meet him and his hon. Friends at any time, when we can discuss the anxieties that he expressed this evening.

The reforms that we shall make will be seen in due course as a positive advantage to people on low incomes, whether in or out of work. That is part of the intention of the reforms, and we shall seek to persuade the House and the country that they are compelling and worthwhile reforms. In the meantime, may I conclude by telling the right hon. Gentleman that I understand the difficulties which he faces in Barnsley and which he has expressed this evening in such compelling fashion. I hope that he will accept from me that our reforms are aimed at helping people in special difficulty, wherever they live. We believe that they will, and we hope that they will generally be seen to do so when they are more fully understood.