Rt Hon Lord Lilley

    Mr. Peter Lilley (Hitchin and Harpenden) (Con):
    As the Minister knows, I fully support in principle the welfare reforms that his right hon. Friend the Secretary of State announced yesterday and to which he himself has referred today, but on the assumption that they would save money rather than cost money. Can he clarify that point? Outside the House, he and his colleagues have suggested that the reforms will, on balance, save the taxpayer money, but in the House yesterday the Secretary of State said that the reckless borrowing in the pre-Budget report-he was quoting a Conservative Member-was necessary because

      “it allocated an extra £1 billion and this White Paper allocates still further money.”-[ Official Report, 10 December 2008; Vol.485, c. 541.]

    The Minister said today that that further money would amount to £1.3 billion. Will he tell us whether the programme will cost money and require extra borrowing, or save money and reduce the borrowing and the cost to the taxpayer?

    Mr. McNulty:
    I know that the right hon. Gentleman has been consistent in his support for welfare reform, albeit, as he has said, in the context of saving rather than otherwise. We believe that not only the welfare reform proposals but all that we are seeking to do will, on balance-his words, not mine-be cost-neutral. We have said, however, that at least during the interim period, when savings can be made we want to work closely with local authorities to come up with flexibilities that will enable them to respond to the requirements of their areas. Not all the savings will be brought into the centre in the first instance.