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House of Commons

Monday 17 April 1989

The House met at half-past Two o'clock


[ Mr. Speaker-- in the Chair ]

Oral Answers to Questions



2. Miss Widdecombe : To ask the Secretary of State for Social Security what he is doing to help those 20,000 widows caught in an entitlement trap on the basis of the age bands operating before April 1988.

The Minister for Social Security (Mr. Nicholas Scott) : We intend to restore entitlement to widowed mothers' allowance and widows' pension to all women widowed before 11 April 1988.

Miss Widdecombe : I congratulate my hon. Friend on that proposed action, which will negate the trap. How is he identifying the widows concerned and how soon will the exercise be completed?

Mr. Scott : We estimate that about 20,000 widows are affected. We have checked our records and we have contacted all those whom we have identified. We believe that we have done so accurately but if anyone feels that she might be entitled and has not been contacted by the Department, she should get in touch with us.

Mr. Fearn : Has the Minister any proposals for increasing war widows' pensions?

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Mr. Scott : Apart from anything else, I do not think that that supplementary question arises from the main question.

National Insurance

3. Mr. Yeo : To ask the Secretary of State for Social Security what representations he has received about the effect of the proposed changes in national insurance contributions on the low paid.

The Secretary of State for Social Security (Mr. John Moore) : The proposals have been widely welcomed. I have received only one representation about the effect on the low paid.

Mr. Yeo : Does my right hon. Friend agree that the proposed changes are one of the most effective ways of giving help to those earning relatively low wages? Is he aware that 4 million people earning up to £115 a week will benefit by as much as £1.51 per week?

Mr. Moore : My hon. Friend is precisely right about the number of beneficiaries and the amount by which they will benefit. About 15 million people earning more than £115 per week will also gain considerably. They will benefit by £3 per week.

We are seeing the completion of the initial changes in the national insurance contribution rates that we introduced in 1985. The combination is an effective way of trying to help and to remove the two awkward steps that are part and parcel of the first stage of the reform.

Mr. Frank Field : I welcome the changes, but I ask the Government to go a stage further. Are the Government aware that Britain has 40 per cent. of all part-time workers in Europe? That is because the national insurance system rigs the labour market in favour of part-time work. Will the Government consider imposing national insurance contributions on employers from the first pound?

Mr. Moore : We always consider carefully what the hon. Gentleman suggests, and we shall keep this area of the Departments responsibilities under constant examination. I should stress, however, that I do not share the essential

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analysis which lies at the back of the hon. Gentleman's supplementary question. The growth of part-time work in most western societies, and certainly in Britain, is a feature of the changing pattern of work. It is welcomed by employers and employees alike and is important in terms of work incentives and disincentives.

Transitional Benefit

4. Mr. Andrew F. Bennett : To ask the Secretary of State for Social Security how many people have lost transitional benefit during April of the current year.

The Parliamentary Under-Secretary of State for Social Security (Mr. Peter Lloyd) : Some 610,000 income support recipients have been lifted out of transitional protection as a result of last week's uprating.

Mr. Bennett : Does the Minister agree that that reply is somewhat disingenuous? Would it not have been better to spell out the fact that last year 2.2 million recipients did not receive the full uprating in line with inflation and that about 1 million lost money? This year, about 500,000 will not receive any uprating and 3.5 million will receive less than the amount necessary to keep up with the inflation figure that the Government have picked. How would the Minister explain to one of my constituents--Mrs. Bridget Williams of 123 Wordsworth road, Haughton Green, Denton--that her uprating this year will be 24p? Does he agree that it is entirely unacceptable in what is basically an oil-rich country for pensioners such as Mrs. Williams to lose in that way?

Mr. Lloyd : I answered the hon. Gentleman's question precisely as he asked it. It is right that some recipients will not gain from this year's uprating, and I have given the number of recipients who will find themselves in that position. The number on transitional protection remains at about 14 per cent. of all those entitled to income support. The hon. Gentleman refers to a particular case, but I believe that it would be wrong to discuss that case across the Floor of the House. If the hon. Gentleman wishes to contact me about a particular matter, I will reply to him. The overall position of those on transitional support is that while they are on that support they receive more than those in similar circumstances coming newly on to benefit.

Mr. Baldry : Will my hon. Friend make it clear that the entitlement to income support of the overwhelming majority of claimants will be greater than it was under the supplementary benefit system--those who atcually receive an increase--and that for the 14 per cent. who are not in that category and who are entitled to transitional payments £200 million has been spent on transitional payments in the first year alone?

Mr. Lloyd : My hon. Friend is correct. At the point of change two thirds of those on income support received either the same amount or more. That explains why 32 per cent. of claimants received transitional payments.

Mr. John Evans : The Minister must be aware that the withdrawal of transitional payments has created widespread hardship in many parts of the country, but is he aware that a 66-year-old widow in my constituency has

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just received an increase of 35p per week, giving her a weekly income of £45.75? Does the Minister agree that that is a poverty wage?

Mr. Lloyd : There were massive changes under the new rules which came in last April. As I said in reply to my hon. Friend the Member for Banbury (Mr. Baldry), those changes brought real gains to many people. The changes also produced far greater simplicity in the system and greater fairness as between claimants in similar circumstances. It is not possible to make such massive changes without there being some sad and hard cases during the period of erosion of the transitional payments. I accept that, but I repeat that in all cases where the transitional payment is being made or being eroded, the individual concerned has been receiving payments greater than those to which people in similar circumstances are entitled when coming newly on to benefit.

Mr. Robin Cook : Did the Under-Secretary of State listen to the BBC feature last week on the loss of transitional protection by disabled people, for which the BBC could not find a Minister willing to take part? Did he hear of the case of Mrs. Hodgson of Northumberland, who cannot even turn over in bed unaided? Is he aware that when her teenage son became 18 he had to leave home so that she would not lose her severe disablement premium but that, as a result, she lost £7 per week in transitional protection? Is the Minister prepared to defend rules which penalise disabled families when they stay together and also when they break up, and if he cannot defend those rules, how does he intend to change them?

Mr. Lloyd : I am prepared to defend rules which bring in a special disability premium and make it absolutely certain that the premium reaches everyone in that category. I repeat that I cannot comment across the Floor of the House on particular cases for which I do not have the full details. I did not hear the programme, but it was not a question of a Minister being unwilling to take part--the programme makers did not accept our suggestion that a Minister should make a recording for the programme because the time suggested by the BBC was not possible for us due to other departmental commitments.

Mrs. Margaret Ewing : When the Minister claims that many people are better off as a result of the upratings, has he taken into account the real situation facing many people, especially disabled people and single parents? Will he give an analysis of the 610,000 and tell us how many are better off in real terms? Will he also give details of any regional variations as the loss of transitional benefits at the time of uprating has severely hit many people in Scotland, who now also have to face the reality of the community charge which came into effect on 1 April?

Mr. Lloyd : All those who had an uprating are better off as a result of it. The question that has been at issue is the difference between the old system of supplementary benefit and that of income support. The figures on transitional protection show clearly that two thirds have gained or are in exactly the same position as previously. As to community charge rebates, that aspect is generously organised and rebates are available to at least 1 million people in Scotland if they will apply for them. Those receiving housing benefit will automatically have rebates incorporated in their community charge bills.

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Widowers' Pension

5. Mr. Stern : To ask the Secretary of State for Social Security if he will arrange that all public sector staff pension schemes incorporate provision for widowers as a matter of course.

Mr. Scott : From 6 April this year, all occupational pension schemes used for contracting out of SERPS must provide benefits for widowers. Many public sector schemes have provided widowers' pensions for a number of years, and others are currently amending their rules to introduce them.

Mr. Stern : I am grateful to my hon. Friend for that reply. Does he agree that now that membership of all pension schemes is voluntary it behoves public sector schemes to keep at the forefront of current thinking on pensions? Does he also agree that in introducing funding for widowers' pensions these can be no question of retrospective funding at the taxpayers' expense where the unions did not bother to argue for it in the first place as in the case of teachers?

Mr. Scott : I certainly agree with my hon. Friend's comment that the question of who pays for any retrospection would arise. Many schemes introducing widowers' benefits provide a way for contributors to purchase backdated entitlement. That is a sensible provision. It is right that the Government should set an example by providing for widowers' benefits in the public sector.

Family Credit

6. Mr. Stevens : To ask the Secretary of State for Social Security what is being done to make it easier to claim family credit.

Mr. Moore : Last December we amended the regulations to make it easier for claimants who are self-employed to use their accounts as evidence of their income. This month we are bringing into use a simpler and shorter version of the family credit claim form.

Mr. Stevens : I am grateful to my right hon. Friend for that reply. I recall that when we reviewed the social security system in 1986 the extension of family credit was an important part of the process. I am sure that my right hon. Friend agrees that the extended help that he mentions will be greatly welcomed throughout the country. I am pleased to hear that the system has been made easier. As part of the publicity campaign, will my right hon. Friend tell the public of the significant number of claimants receiving more than £20 per week in family credit and perhaps comment on the recent uprating at the same time?

Mr. Moore : Approximately 60 per cent. of recipients receive £20 per week or more. My hon. Friend is right to say that that has been widely welcomed. The average payment per week under family credit is £25 per week compared with £15 under the old family income supplement. I have made it clear to the House in previous answers that we are now spending £422 million on family credit compared with £180 million on FIS.

Mr. Haynes : Is the Secretary of State aware that the Government spend billions of pounds advertising the sale of state-owned industries and public bodies? Why does he

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not find money to advertise family credit properly so that the public will understand their entitlement to benefits and claim for them? The Secretary of State is always moaning and groaning about the lack of take-up.

Mr. Moore : I am most grateful to the hon. Gentleman, who is also a very old friend of mine, for having arranged so carefully to allow me to express my congratulations to the media on the way in which they handled the family credit launch campaign last week. The hon. Gentleman will be delighted to learn that £7 million is being spent, quite rightly, on an excellent campaign to encourage low-income families to claim those benefits for which they are eligible under family credit. I am delighted to have the hon. Gentleman's warm congratulations in anticipation of that.

Mrs. Gillian Shephard : Will my right hon. Friend explain how the family credit uprating increases benefits more effectively for target families and children in need than would a simple increase in child benefit across the income board.

Mr. Moore : My hon. Friend is absolutely right to draw attention to the fact that, with the new structure of family credit combined with the system of income support, we have been able in last week's uprating to add substantially to the support that we give to families with children. Had there been a straight across-the-board increase in child benefit, more that 1.1 million families--counting those on family credit, 1.4 million, with more than 3 million children--would not have benefited as they have.

Young People

8. Mr. Hind : To ask the Secretary of State for Social Security what he is doing to help youngsters who for good reason cannot live at home.

Mr. Scott : I recently announced a package of measures which will be of real help to those relatively few 16 and 17-year-olds who have no choice but to live independently.

Mr. Hind : I am grateful for that answer, especially because, having promised to monitor the effects of income support, the Department is now matching words with concrete proposals. Will my hon. Friend explain how 16 and 17-year-olds will benefit from the proposed changes?

Mr. Scott : I am grateful to my hon. Friend for recognising that we are fulfilling our pledge to monitor the impact of the new reforms and, where necessary, to make changes. In effect, 16 and 17-year-olds who have to live away from home will enjoy the enhanced benefit equivalent to that paid to 18 to 25-year-olds.

Mr. Graham Allen : Will the Minister do anything to help families in my city, with 18-year-old children who next year will have to pay a sum approaching £300 in poll tax that will break up a number of families?

Mr. Scott : The main question relates directly to 16 and 17-year- olds, not to 18-year-olds, so the hon. Gentleman's question does not arise.

Mr. Stanbrook : In the light of the campaign by the Children's Society, what is my hon. Friend doing to protect organisations which attempt in good faith to assist children forced to live on their own?

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Mr. Scott : Not only have we changed the rate of benefit for 16 and 17-year-olds who have to live alone, but we have announced changes in the support that the Government give to hostels, with a long transitional protection period both for individuals in hostels and for hostels themselves.

Mr. Flynn : May we, with our customary magnanimity, welcome the improvements that have taken place? Now that the Government have acknowledged the existence of a labour market which does not differentiate between adults when deciding what is necessary to cover their housing costs, will the Minister go the whole way and pay the full adult rate to these people? Is the Minister not concerned that we may be going down the same road as America where a decade of neglect of social security has created an army of 3 million homeless tent people? When will the Government's actions match the growing and very worrying crisis for young people without homes, money or hope?

Mr. Scott : I am grateful for the restricted welcome that the hon. Gentleman has given to our proposals. I have to say, however, that I am certain that the broad thrust of our policy on 16 and 17-year-olds is right. It is wrong to give people of that age a perverse incentive to leave home. [Interruption.] I represent a constituency where in years gone by--and, indeed, all too often nowadays--young people believing that they could come to the city and chance their luck have been drawn into all kinds of temptation. I do not want to offer that kind of incentive. I believe that we are right to try to identify those who are estranged from their parents and have no option but to leave home and live independently, and to give them extra help.

Housing Benefit

10. Mr. Martyn Jones : To ask the Secretary of State for Social Security what consultations he has had recently with local authorities on housing benefit.

Mr. Peter Lloyd : The Department has regular meetings with the local authority associations throughout the year to discuss housing benefit, and we consult them formally on proposals for regulations.

Mr. Jones : The Department of the Environment is forcing councils in my area to put up rents. When will housing benefit be raised in line with those increases?

Mr. Lloyd : All those who pay rents at or below the market level will receive the full housing benefit appropriate to them. There is no problem about that. More people on lower incomes will have a wider choice of accommodation than they had before.

Mr. Thurnham : Does my hon. Friend accept that it is important that local authorities and local DSS offices should work closely together and co -ordinate their efforts to reduce delay and uncertainty for individual claimants?

Mr. Lloyd : Housing benefit is paid by the local authority, not by the local DSS, but I agree that there should always be close co-operation between local authorities and DSS offices.

Mr. Tony Lloyd : Will the Minister take steps to consult one of my local authorities--the borough of Trafford--

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about my constituent, Mr. Riley? When Mr. Riley's wife died, the joint pension that he and his wife had received was cut to a single pension. As his housing benefit was also cut, he ended up paying more rent out of a smaller income.

Mr. Lloyd : Again, I do not wish to talk about particular cases, but the personal allowance will be adjusted to meet the person's new and sad circumstances as a single person, which will have an effect on his entitlement to housing benefit. The rule is that people in similar situations should be treated similarly. A married person who, alas, becomes a single person through bereavement will find that the regulations which apply to him are the same as those which apply to unmarried people.

Mrs. Gorman : Does my hon. Friend agree with me that the root cause of the problem--and of the previous question about young people who cannot find housng on their own--is the fact that antiquated Rent Acts prevent many people from letting a room, a flat or part of their house because, rightly or wrongly, they fear that if they cannot get on with the tenants it will be impossible to get them out? Is my hon. Friend aware that Sweden faced exactly the same problems and has done away entirely with the legislation governing rent which has resulted in a flood of property on to the market and a surplus of accommodation?

Mr. Lloyd : I cannot follow my hon. Friend down that track because those are matters for the Department of the Envirionment, but to repeat what I said in reply to an earlier question : where market rents are charged in order to draw more property on to the market, full housing benefit will be available.

Mrs. Beckett : The Minister must be aware that his earlier answer to my hon. Friend the Member for Clwyd, South-West (Mr. Jones) was a little misleading. He must be aware that in the future, and even in some cases now, it is likely that the ceiling at which housing benefit is paid will not be the same as the rent demanded. If part of the mechanism for deciding the ceiling is to penalise elderly people who keep a spare room for their relatives, is the Minister aware that that will cause not just hardship but outrage?

Mr. Lloyd : When a person claims housing benefit, the rent officer will take into account the market rent for property of a size suitable for that individual, but the changes will result in a far wider choice of housing than there is now. For suitable property, housing benefit will be paid up to market levels.

Income Support

12. Mr. Pike : To ask the Secretary of State for Social Security what representations he has received regarding those pensioners on income support who receive no benefit uprating in April.

Mr. Peter Lloyd : Various representations have been received on this subject.

Mr. Pike : Does the Minister not recognise that when he replies to cases taken up with him it is no good just saying in his letters that the claimant will find the answer "disappointing". For the second year running 1,700 of my constituents in Burnley and Pendle, who are paid by the Burnley DSS office, have received no benefit uprating, with

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the result that they are at least 10 per cent. worse off than they were two years ago. They do not find the position disappointing--they find it appalling. Is it not time that the Government did something for those people?

Mr. Lloyd : As the hon. Gentleman's question refers to pensioners on income support, let me tell him one thing that the Government are doing. From next October, we are raising the rate for couples aged 75 and over by £3.50 a week and the rate for the disabled by the same amount.

Mr. Charles Wardle : The income support premium for pensioners is most welcome but it applies to people aged 75 and over and does not, therefore, help many women who retired at 60 without an occupational pension before the state earnings-related pension scheme was introduced in 1978. That applies to women now aged between 71 and 74, many of whose incomes have not risen by 23 per cent., more than the rate of inflation. What does my hon. Friend intend to do to help them?

Mr. Lloyd : The changes that have been announced in benefits for those who are older are not necessarily the last of the improvements that we shall make to the system. My right hon. Friend the Secretary of State has promised to consider carefully all aspects of the system and no doubt when change is demonstrably needed it will be effected in good time.

Mr. Kirkwood : If change is contemplated, will the Minister seriously consider helping those elderly people to whom the hon. Member for Bexhill and Battle (Mr. Wardle) referred, who have lost out and have no cash increases because transitional protection has been withdrawn? Is the machinery available to ensure that, if pensioners in that category can show, in good faith, that they have not been able to take account of the change--which some of them did not anticipate and of which they were ignorant--the Department can deliver cash help to them immediately?

Mr. Lloyd : The point about transitional protection being eroded is that it ensures that at no point will there be an actual cash loss or a surprise reduction such as that to which the hon. Gentleman referred.

Mr. Robin Cook : Was the Under-Secretary of State present last Tuesday when the Prime Minister said that she took credit for the fact that 98 per cent. of pensioners had received this year's uprating? Has he since had the courage to tell her that her figures were misleading? Will he take this opportunity to correct her and confirm that of those pensioners claiming income support, not 98 per cent., but fewer than 68 per cent., received the full uprating? Does the hon. Gentleman believe that it is to the credit of the Government that they have just cut the standard of living of a third of the poorest of all pensioners?

Mr. Lloyd : I was not present last week, but I understand my right hon. Friend the Prime Minister to have said that 98 per cent. of pensioners would receive an increase--not necessarily the full increase, but an increase.

Mr. John Marshall : Would my hon. Friend care to remind the House what has happened to the standard of living of pensioners over the past 10 years and how that period compares with the previous five years?

Mr. Lloyd : The figures have often been raised at Question Time and my hon. Friend is right to draw the

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attention of the House to them once more. The total income of pensioners has risen by 23 per cent. since 1979. That includes SERPS, interest from savings, changes in benefits and the uprating of pensions. All those go to make up an increase of 23 per cent. in total income.

Disability Benefits

13. Mr. Alfred Morris : To ask the Secretary of State for Social Security if his Department has drawn up proposals for the review of disability benefits ; and if he will make a statement.

Mr. Scott : The right hon. Gentleman may have heard my exchange with the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) in our debate last week. We have made it clear that we welcome comments and discussion on each of the reports of the Office of Population Censuses and Surveys disability surveys, when they are published and in the subsequent period. When we have all the reports, which will be in July, we hope to announce a timetable for further action.

Mr. Morris : In advance of that review, is it not both shocking and utterly wrong that tens of thousands of severely disabled people should have had not an extra penny from this month's uprating to protect them against an inflation rate that is nudging 8 per cent? Is the Minister aware that, for them, so-called transitional protection is fancy ministerial language for cutting their benefits last year and freezing them this year? Why should any severely disabled person have to sit up and beg for charity to protect already low living standards?

Mr. Scott : My hon. Friend the Under-Secretary of State has made it clear, in his answers to a number of questions, that the essence of transitional protection is that it is eroded over time. Otherwise, we should extend indefinitely the inequalities between claimants in similar circumstances. We should look at the question against the background of a 90 per cent. increase in real terms in expenditure on the disabled and the long-term sick under this Government. Our record compares favourably with that of the Government of which the right hon. Gentleman was a member.

Mr. Hannam : In looking at the basic financial costs faced by disabled people, will my hon. Friend ignore the ridiculously low figure of some £6 a week in the OPCS report which was based on far too wide an average of disabled people? Will he consider the costs of £40 or £50 a week to disabled people in trying to live normal lives? That estimate was worked out by the disability organisations including the Disablement Income Group and the Disability Alliance?

Mr. Scott : Of course I shall not ignore anything in the OPCS reports as the Government commissioned them and they provide a tremendous source of information on a scale that never existed before. But I recognise my hon. Friend's point. I shall be meeting a deputation, including DIG, in the not-too-distant future, and no doubt that will be one of the matters to be discussed.

Mr. Skinner : Is the Minister aware that one of the ways in which we can help the severely disabled is massively to increase the amount of money paid in constant attendance allowance, which is currently at just over £34, to those who

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look after disabled people? When compared with the amount of money that the state pays to private registered nursing homes which cost way over £200 a week for one individual, does it not make sense to give more money to those being paid constant attendance allowance so that more people can look after their friends, relatives and others?

Mr. Scott : The hon. Gentleman makes an important point as we consider the balance between the need for institutional care and care in the community. He will know that Sir Roy Griffiths produced an important report on the subject and the Government are considering their response to it. One of the most important matters that will have to be considered in the light of that report is the balance between domicillary care and care in institutions.

Family Credit

14. Mr. Bowis : To ask the Secretary of State for Social Security how far up the income scale family credit goes.

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