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Orders of the Day
Social Security Bill
Lords amendments considered.
Lords amendment : No. 1, after clause 4, insert the following new clause-- Increase for child benefit --
" . In section 63(2) of the Social Security Act 1986, after paragraph (a) there shall be inserted the following paragraph (aa) which increases the sum specified by virtue of section 5(1) of the Child Benefit Act 1975 by a percentage not less than the percentage by which the sum prescribed for the purposes of section 21(6)(a) above in respect of a child aged less than 11 years is increased by the up-rating order ; and'."
f divn list Mr. Speaker : This amendment involves privilege. 9.46 pm
The Secretary of State for Social Security (Mr. John Moore) : I beg to move, That this House doth disagree with the Lords in the said amendment.
The issue is not a new one for the House. We discussed it on 18 January on an Opposition Supply Day, on 24 April on Report and on 11 July on Report on the Finance Bill. In every case, the substance of the issue was debated and the House sustained the Government's decision by a large majority. Little new has emerged since then except for something in regard to family credit, to which I shall refer later, but the arguments have moved in favour of the Government. As succinctly as I can, because I do not want to detain the House unnecessarily, I shall explain the reasons for the decision that the Government took, to show why I shall urge the House to reject the Lords amendment.
I imagine that I shall take the hon. Member for Livingston (Mr. Cook) with me when I say that I shall not spend too much of our limited time on the Lords amendment itself, because I assume that the House will agree that in many ways it is a stalking horse for the same child benefit debate, and I understand that. Essentially, as one of my noble Friends described it, they are seeking to impose a statutory duty based on the exercise of discretion. For example, if this year we follow the provisions of the Lords amendment, and for the under-11s we were able to secure an increase of 20.7 per cent., extended across the whole of the child benefit range that would result in a public expenditure cost of £675 million. In many ways, the remarks of Tony Lynes, who occasionally is drawn to the attention of the House, in the New Statesman and Society this week was interesting. He pointed out the fallacy behind the amendment, which would prevent the Government from helping the poorest.
I shall remind the House of what I have said many times, first about what child benefit was supposed to be. I am not talking about what, perfectly honourably, many hon. Members on both sides of the House would like child benefit to be or about what many people think that it should have been when it was first introduced. I am talking about what child benefit was when it was created in the 1975 statute and what Governments of both political persuasions have sought to enact since. Therefore, I shall go back to the quotation that I have given many times
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from the debate on 13 May 1975 when the late Alec Jones, when discussing why he did not think it appropriate to have an annual index of the review of child benefit, said :"We do not propose that there should be anything similar to child benefit because it is a totally different kind of benefit, fulfilling a different purpose.
In the first place it is a new kind of benefit--a hybrid, which amalgamates a social security benefit with a tax allowance. In the second place, most of the people receiving it will be people at work, and the benefit will simply form a tax-free addition to their earned income. In this it is totally unlike benefits such as pensions which form the main source of income of those who receive them It will be raised from time to time in the light of inflation and other developments. But just as neither family allowances nor child tax allowances are subject to the rigid pattern of upratings that has been evolved for social security benefits nor will their successor benefit be."--[ Official Report, 13 May 1975 ; Vol. 892, c. 400-1.] On a later date, the then Mrs. Castle said :
"There is a difference between routine national insurance benefits and this new benefit. Indexation of the child benefit is inappropriate. National insurance benefits are major means of support when earning capacity is interrupted, but the child benefit is a tax-free supplement to families whose major source of income is earnings. Clearly maintenance benefits must be capable of moving automatically in line with changes in the cost of living. The child benefit is in a different category. ... A statutory duty is placed on the Secretary of State to examine the rate in the light of the overall social and economic policies."--[ Official Report, 7 July 1975 ; Vol. 895, c. 238.]
I shall not labour the point as I have made it many times in previous debates.
Mr. Jeff Rooker (Birmingham, Perry Barr) : I shall not labour the point either. It is all very well quoting 1975, but that was before the House, during the Report stage of the Finance Bill 1977, accepted statutory indexation of personal tax allowances. Those speeches in 1975 would not have been made and those briefs would not have been written in the light of the change of policy agreed by the House in 1977.
Mr. Moore : I disagree with the hon. Member but
Mr. Rooker : The Secretary of State knows that.
Mr. Moore : If the hon. Gentleman would be as courteous as he used to be and allow me to answer his point, rather than constantly interrupt me, I should be happy to do so. I was trying to illustrate the distinction that was clearly drawn between child benefit as introduced and other forms of then indexed benefit. There was a substantive debate then. I will be happy to go on, to illustrate why I think that is the case.
Mr. Tony Marlow (Northampton, North) : I hope that my right hon. Friend can reassure me and many of my colleagues. Does he agree that families with children have obviously got greater family commitments than those without children and that this should be taken account of within the tax and benefits system? All families, at whatever level of income, have got greater commitments. My right hon. Friend has said, and he has read out, that when this benefit was introduced, it was stated at the time that it should be, as a result of inflation, increased from time to time. Will my right hon. Friend tell the House that he agrees that child benefit should be increased from time to time?
Mr. Moore : I have said that the nature of the statutory duty is clear. One of the confusions that has entered the debate is that people seem to assume that child benefit is
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a substitute for family credit. It is not. Child benefit, as my right hon. Friend the Minister for Social Security has said on many occasions, and precisely, is still part and parcel of the overall help that is given to families with children. That parcel includes child benefit, which is not means tested, and other forms of benefit. It is a package. I shall illustrate the character of the package and the way that the combination works.Mr. Frank Field (Birkenhead) : I am grateful to the Secretary of State for reminding us of what Labour Ministers said about child benefit. Will he also remind the House that he is quoting the same people who tried to rat on the benefit, and that had there not been a leak of child benefit papers from the Cabinet, the child benefit scheme would not now exist. Would it not be appropriate to draw on sources other than that group of people to support his case?
Mr. Moore : I recognise in many instances the role of the hon. Gentleman outside the House as well as inside it. I was doing what I thought was my duty, which was to remind the House of the background to the nature of my statutory duty, which is the duty of all Governments.
I shall move on because I wish to be relatively brief.
Mr. Marlow : Will my right hon. Friend give way?
Mr. Moore : No. I have given way excessively--and courteously, I trust.
I shall move on from the nature of the history of child benefit and the statutory duty upon the Secretary of State to remind the House that in an earlier debate on these matters I drew attention to what child benefit had replaced. I shall take up the points that have been made by the hon. Member for Birkenhead (Mr. Field). It replaced family and child tax allowances, neither of which were expected to, or did, rise each year.
To ensure that the record is correct for the hon. Member for Birkenhead, in the article that he wrote, he took the period 1946 to 1970, but then added to that the period from 1970 to 1972, which actually changed the data. During that period, for two thirds of children in the basic category for all those under the age of 11, the real value declined. I shall send the hon. Gentleman the details because, being a serious person, he would no doubt wish to see them. The two allowances that child benefit replaced had different characteristics, but the one that they shared with child benefit was that they were not expected automatically to be indexed.
What was at the back of my statutory duty that made me take the decisions I did this year? I had to recognise the nature of the whole character of the economy, what happens to families in other parts of the social security and benefits system, as well as the overall pattern of earnings. It would be improper for me to ignore the radical reductions in taxation, under which 80 per cent. of families with children benefit. It would be improper for me to ignore the fact that for the year in question when I made my judgment, when I considered whether to increase child benefit by 45p, families on typical male average earnings had had a £20 per week gain in income after tax during the previous year. I have to put all those into the balance in addition to the other improvements in living standards.
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The Opposition and some of my right hon. and hon. Friends have argued their case from different angles. I respect many of their arguments. I pick out the eloquent speech of my hon. Friend the Member for Ealing, Acton (Sir G. Young) during Report on the Finance Bill recently. He put his points extremely well and very quietly, as he always does. Hon. Members argue about horizontal equity, but I think that they tend to be over-conscious of--I dare not say obsessed with--child benefit to the exclusion of the overall pattern of the Government's help and support for families with children. I am always grateful to the hon. Member for Birkenhead ; I found his piece in The Guardian today fascinating. For those who do not have The Guardian as their daily read, I shall quote what he said :"The Opposition and the poverty lobby will need to get their facts together."
I shall not remind the House what the hon. Gentleman said about the Leader of the Opposition, although it was no doubt flattering-- "Gesture politics here is the litany so often heard that child benefit is the only way of increasing family income."
It is in that context that it is essential that the Opposition and my right hon. and hon. Friends understand the pattern of improvement over the last decade--rightly in my judgment--in help for families with children. We have secured a massive increase in the overall pattern of support--the horizontal equity mentioned by my hon. Friends--of about 27.3 per cent. As a society, we are spending £9 billion-plus in that area.
I do not think that my hon. Friends need to be reminded of this, but the Opposition do. If they are obsessed with just one part of support for families with children--
Mr. Moore : I do not mean the hon. Gentleman, I mean the Opposition generally. We should recall their appalling record when they were last in office. I specifically remind them about the relative position of child tax and of family allowances and child benefit, the process of which was changed during their time in office. The last time that I stood at this Dispatch Box, I reminded the House that their real value for young children has been higher throughout the term of this Government's period in office that at any time during the last Labour Administration, except when Labour uprated benefits in its last month in office. I shall place the figures on the record. They reveal that spending in real terms on family allowance and child tax allowance in 1974-75 totalled £5,758 million. In 1978-79, the figure fell in real terms by 14 per cent. to £4,875 million, which is not a record of which Labour can be proud. 10 pm
Mr. Christopher Hawkins (High Peak) : My right hon. Friend says that child benefit should not be looked upon as the only means of helping those with children and of achieving horizontal equity. What help other than child benefit is given to people with children who have medium or high levels of income?
It being Ten o'clock, the debate stood adjourned.
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BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Lords amendments to the Social Security Bill and the Transport (Scotland) Bill may be proceeded with, though opposed, until any hour.-- [Mr. John M. Taylor.]
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Social Security Bill
Lords amendments again considered.
Mr. Moore : I commented that it was a judicious mix, and I go on to remind my hon. Friend and other right hon. and hon. Members of the way that we manage that mix. As my hon. Friend rightly says, it is a combination of child benefit. Sometimes, the media and certain of my right hon. and hon. Friends, as well as Opposition Members, behave as though child benefit is under threat. We are looking at a combination of benefits that matches the attempt to target additional help at poorer families with the universal benefit that is child benefit. Sometimes, it seems as though the only topic of debate is child benefit, but that is only part of the mixture.
Mr. Timothy Raison (Aylesbury) : My right hon. Friend referred, rightly, to Labour's appalling record when in government. One of the most powerful arguments for the automatic uprating of child benefits is that if Labour were ever returned to power, it would be unable to perpetuate its appalling record.
Mr. Moore : My right hon. Friend has made that point before, and it is reasonable that he should make it again.
We are trying to help families with children in a balanced and sensible way against the backcloth of a massive increase in real terms in 10 years. We are combining targeted help with help on a universal basis. My right hon. and hon. Friends should remember more than some of them do that we are dealing with an entirely new structure of benefit support for families with children. The structure of income support and family credit means that there is no immediate gain to such families from a simple increase in child benefit. However, families with children under 11 have, under family credit, enjoyed a real improvement this year of 20.7 per cent. As to the debate on targeting, I find it extraordinary that the Opposition act as though means-tested benefits, as opposed to universal benefits, are somehow a new invention and that an attempt to help people who are poorer than others is a new feature of Government policy. Anyone with knowledge of the subject will know that it has been a feature of our social security system for many years. The question is always how effective one can make such benefits. Most targeted benefits succeed very well, with £9 out of £10 of them reaching the people for whom they are intended. Most of the analysis that we have undertaken reveals that targeted benefits are not seen as demeaning by those who receive them. Certainly they are not seen as demeaning by lone-parent families, where the take-up of benefits is a successful 97 per cent.-plus.
I shall concentrate briefly on family credit. After two years, we have grown accustomed to the hon. Member for Livingston delighting us all, in advance of any debate on the Floor of the House, with the leaked proceedings of a conference or by distributing a piece of paper--if I may so describe the latest Walworth road press release, though I understand that that particular document was released at 00.01 hours.
That illustrates the essential dilemma faced by the hon. Member for Livingston. Looking at this piece of paper, it is clear that the first thing that we must do is try to work out what precisely are the Opposition's policies. In articles written outside the House, the hon. Gentleman has made it clear that he does not consider family credit a good
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benefit ; as a good Socialist, he would prefer a minimum income--I think that that was the phrase that he used in an interview about poverty last year.In public and in the House, however, the hon. Gentleman argues that, if family credit is to be provided, it should be taken up. I would have hoped, therefore--I am being as courteous and fair as I can--that he would address the matter a little more accurately than he did in that press release, which is a classic illustration of how to distort the facts by putting out incomplete information.
Let me take the hon. Gentleman's main points one by one, as they are central to the argument--especially that of my hon. Friends, whose frequent criticism is that, while they do not disagree with family credit, it should be made more effective and should reach more people. The hon. Gentleman's first point was elaborated on the radio this morning : "The Secretary of State cannot parade family credit as a substitute for child benefit." I have never done that, and shall never try to.
The hon. Gentleman's second point related to numbers : he quoted figures from the end of February and the end of June. Let me acquaint him with the precise position, which I could have done earlier had he asked me. At the end of March--at the beginning of the campaign--253, 528 people were in receipt of family credit. The latest figure--again, the hon. Gentleman would have been welcome to it had he asked--is 268, 984, an increase of 15,456, as opposed to the 9,400 that he suggested. More important, the underlying live load--those who might be expected to be full recipients of family credit--is now running at 315,000. There was an enormous surge in take-up, and 78,673 applications have not yet been considered.
The third point is interrelated. The hon. Gentleman suggested that the success rate was much higher before the campaign began, and gave a figure that did not conform to the facts. Let me remind the hon. Gentleman that the success rate before the campaign began was an impressive 70 per cent. When it began, a large number of people wrote in who were clearly not entitled to the money--people with no children, for example. I do not imagine that the hon. Gentleman would have liked us to help them. That, of course, meant that the initial disallowance rate was higher than it is now.
I know that the hon. Gentleman would like the campaign to succeed. He will be happy to know that since it began the success rate has risen to 55 per cent., and is improving : the figure for the current week is 60 per cent. The hon. Gentleman should be delighted at that. Some 315,000 people--which could be up to about 63 per cent. of the underlying potential beneficiaries --are now able to receive family credit. That represents something approaching 75 to 80 per cent. of the expenditure potential. Surely everyone wants us to succeed in helping poorer families at work.
In his attempt to decry aspects of the campaign, the hon. Gentleman was utterly mistaken in trying to illustrate--with figures that I have shown to be wrong--costs per person. Again he must be aware, as must the audience outside--I know that the hon. Member for Birkenhead is aware of this--that the potential claimant population is constantly changing. As is shown by research that I have
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placed in the House, the key is a lack of awareness of family credit : ignorance caused the main difficulty in targeting additional help effectively.Mr. Frank Field : Will the Minister give way?
Mr. Moore : No. Perhaps I could explain, because this is information that the House will find important.
The hon. Member for Birkenhead will be delighted to know that the latest research suggests that following the campaign, which ended during the last two weeks, 93 per cent. are now aware of family credit, 90 per cent. were aware of the campaign and 83 per cent. know that it is a benefit for working families. I thought that it would be useful to get that on the record. I should like the take-up to be even higher and more people on low incomes in work to benefit from family credit, but that shows that, happily, it is building up into a success story.
Mr. Frank Field : Will the Minister give way?
Mr. Moore : No. I want to bring my remarks to an end, because I have already been on my feet for some time.
I remind the House that I said that we are not talking about family credit as a substitute for child benefit. We are talking about a judicious admixture of child benefit--£4.5 billion--of family credit, where expenditure is well over £400 million, which is a very good increase on the £180 million for family income supplement, and of income support, which goes to 1.1 million families with 3 million children, when one adds up the income support and family credit beneficiaries.
I urge the House to reject the Lords amendment. It would take away the flexibility that has contributed to the Government's outstanding record of support for families, achieved by a combination of economic success and a judicious admixture of universal child benefit and targeted help through income support and family credit. It is clearly in the interests of families that we should retain the flexibility of the present statutes.
Mr. Robin Cook (Livingston) : The Secretary of State began his speech by referring to the number of times that we have debated the matter recently. I see from the speech that I made the last time we debated the matter in April that I said that the advantage of regular debates was that they reminded Ministers and the Treasury that this issue will not go away until child benefit is uprated. I did not, I must confess, appreciate that the issue would return to harass them quite as quickly as it has done. Nevertheless, the debate is timely because, at the end of October, the House will receive from the right hon. Gentleman, or his successor, an uprating statement for next April. In terms of sitting weeks, the end of October is only a fortnight away. This is the last chance to influence that statement before it is drawn up.
The Secretary of State referred to my former colleague, Alec Jones, whom I remember well as a close and valued friend. The Secretary of State quoted him as arguing why it would not be appropriate annually to uprate child benefit. The Secretary of State gave way to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) at that point. My hon. Friend the Member for Perry Barr was seeking to put to the Secretary of State the point that child benefit replaced, in part, the child tax allowance, a point to which the Secretary of State referred later.
The annual indexation of tax allowances was introduced in 1977, by which time child tax allowances
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were being phased out because they were being replaced by child benefit. If child benefit had not then already been coming into place, and if child tax allowances had had a stable future, there is no doubt whatsoever that child tax allowances would have been included in the statutory indexation. I think that I can say that with some authority. Although the Secretary of State disputed the point that was made by my hon. Friend the Member for Perry Barr, I think that my hon. Friend is in a better position to be an authority on this matter since he drafted the amendment that gave effect to the tax allowance indexation.The Secretary of State was good enough not to waste the time of the House by debating the amendment as such, and I shall follow his precedent, but the nub of the debate on this issue of principle is not whether child benefit should be annually uprated but why child benefit should be annually frozen. I noticed the interesting omission from the Secretary of State's speech of an answer to a question that he was asked from below the Gangway by one of his hon. Friends, the hon. Member for Northampton, North (Mr. Marlow), which was : accepting that child benefit may not require annual uprating, did the right hon. Gentleman accept that child benefit was appropriate for uprating from time to time? The House received no reply to that question. It is precisely because that question is unanswered that many of us believe that it is not only reasonable but prudent to conclude that child benefit is under threat.
10.15 pm
Mr. Moore : I did not and cannot answer, for reasons that the hon. Gentleman knows precisely. As my right hon. Friend the Member for Aylesbury (Mr. Raison) points out, there are clear arrangements in the public expenditure White Paper to allow annual indexation, but the Secretary of State is beholden to make a judgment each year. It would be improper for me to pre-empt that judgment.
Mr. Cook : I shall turn in a moment to what judgment the Secretary of State should exercise on the coming year. I shall willingly give way a second time if he wishes to clarify this point. Leaving aside what individual judgment he may reach next year, and leaving aside the individual judgment that he reached last year, does he or does he not accept that, perhaps not annually, but from time to time, it would be appropriate and correct to uprate child benefit? I shall give way to the Secretary of State again if he wishes to answer that question, which he has now ducked twice. [Interruption.] The Secretary of State has certainly not given me or the House the answer.
Mr. Moore : The hon. Gentleman is playing the usual games.
Mr. Cook : The Secretary of State says that I am playing the usual games. I am generously giving him an opportunity to clarify what is in his mind.
Mr. John Marshall (Hendon, South) : Will the hon. Gentleman give way?
Mr. Cook : I want to give way to the Secretary of State. Only he can answer this question. I am not interested in whether the hon. Gentleman thinks that it is appropriate from time to time to increase child benefit. I want to know whether the Secretary of State thinks that that is appropriate. The fact that he will not answer that question
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must leave hanging in the air the possibility, if not the certainty, that this Secretary of State does not believe that it is appropriate to increase child benefit.The Secretary of State said that he must apply his mind to that judgment in an agonising, painful reflection every year. I invite the House to apply its mind to the judgment that the Secretary of State might exercise for the coming year. We are talking about April 1990. The Lords amendment proceeds from the starting point that this year and last year are water under the bridge. We are debating what happens to uprating in April next year. That will be the third year of a freeze in child benefit if it is not uprated. Every additional year of freeze must make the judgment in uprating child benefit in the subsequent year that bit more compelling.
Child benefit has now been frozen for two years. In those two years, it has lost over 10 per cent. in value--£39 in a full year. That is a significant sum, especially to a mother on a tight budget. Some hon. Members will have noticed that during the Euro-elections I went shopping for clothes for an imaginary five-year-old. I was able with that sum to kit him out completely, with a track suit, shirt, vest, trainers and three pairs of socks and still have enough change left over to buy a milk shake to thank him for keeping quiet. It is important that those of us who do not feel the pinch of a weekly budget should recognise that it is that kind of shopping expedition that we make more difficult, if not impossible, for mothers by not uprating child benefit. It is against that background that the Secretary of State must exercise his judgment as to whether it would be appropriate to uprate child benefit next April.
Even if the Treasury is correct and inflation has peaked and from now will gently glide down in the same way that it bumped up, by next April the RPI will have notched up 17 percentage points since April 1987, when child benefit was last increased. In short, over those three years, child benefit will have lost a sixth of its purchasing power. In those circumstances, I find it impossible to conceive what may weigh in the balance when the Secretary of State comes to exercise his judgment to tell against uprating child benefit in that third year. The only reason why child benefit may be kept frozen for a third year is that those who freeze it hope that, if they leave it long enough in the deep freeze, it will be found frozen to death. If that were to happen, we would lose a very important benefit. I have three grounds of principle for that belief which I will rehearse briefly. First, child benefit puts money in the hands of the mother. The mother is overwhelmingly the parent who feeds and clothes the children and she gets the cash from child benefit. Secondly, it is reliable. It is often the only stable point of reference in the budget. Low-income families, especially under this Government, are prone to get stuck in the revolving door of alternative bouts of employment and unemployment. When in employment, their wage packet may unnervingly go through bumpy rides of seasonal fluctuations in overtime. Through all that, child benefit may be the only reliable, predictable payment in the hands of the mother. It is the one income on which she can budget with confidence for her children. Thirdly, child benefit provides a ladder out of the poverty trap. Its greatest strength is precisely the point that the Secretary of State keeps perceiving as its greatest weakness--that it does not go down if the family income goes up. It provides the family, therefore, with an incentive to find a job or do overtime without being penalised by the
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benefit being clawed back. It is worth recalling that a family on family credit and housing benefit can now face a clawback of over 90p in benefit for every extra pound earned. That is a penal rate of marginal taxation--double the rate of marginal taxation now experienced by the wealthiest in our community. The difficulty for the Secretary of State is that the better he and his colleagues succeed in targeting benefits, the more difficult they make it for such households to climb out of the poverty trap.I want to refer here to what the Secretary of State said in relation to family credit. It would be churlish of me not to welcome the marked difference of tone in the description by the Secretary of State of family credit and the way in which he related it to child benefit. I am bound to say that it was not only a different tone but a somewhat chastened tone, for a reason that I shall come to in a moment.
I entirely accept that any comprehensive system of benefits for families will be a mix of means-tested benefits and universal benefits. The Opposition have never had any doubt about that. We accept that means-tested benefits will have a role to play. The doubt that has existed in previous debates is whether the Secretary of State accepted that universal benefits, in the shape of child benefit, had any future role in that mix. I accept from what he said tonight that there appeared to be a new note of caution in his assessment and that there appeared to be a willingness to recognise that means-tested benefits require to be supported by universal benefits such as child benefit.
The reason for that is not far to seek. Since the last debate, to which the Secretary of State was good enough to refer, we have had the relaunch of family credit. As the Secretary of State will recall, family credit was forecast to achieve an uptake of 470,000. We must measure the subsequent numbers who claim against that forecast. Mr. Moore indicated dissent.
Mr. Cook : The Secretary of State shakes his head. That figure was in the public expenditure White Paper that was printed for last year, and if a figure that was included in the public expenditure White Paper does not constitute a Government forecast, we are moving into an era of rubbery statistics to an extent that I had not previously expected even of this Government.
Mr. Moore : Does the hon. Gentleman assume that if new data appear they are ignored by the Government and that if the old data are wrong we just ignore that? If he argues on the basis of the only clear knowledge we have, he knows the audience we believe to exist, as opposed to the 1985-86 figures, is a potential audience of 500,000 in 1988-89. He knows that that is the potential beneficiary audience for family credit, so what on earth is he talking about?
Mr. Cook : I am not talking about the 1985-86 figures, and I am rather surprised that the Secretary of State should think that the forecast of 470,000 was for 1985-86. The figure appeared in the White Paper for 1987 -88, for which the right hon. Gentleman was responsible. It was the figure that he himself chose. I entirely agree with him that it turned out to be completely wrong, but it was his figure and his forecast. [Interruption.] I am using it to
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point out to the Secretary of State the margin of error in his forecast. His forecast was 470,000, and I agree with him, in the light of history, that it was a risible figure.The take-up for family credit has since settled down at around the 250,000 mark. The Secretary of State taxed me with using figures in error in my press release. I have to confess that he may be right that the figures are erroneous ; after all, they are entirely drawn from figures supplied by him in parliamentary answers.
[Interruption.] To the end of June. It was the figure that he quoted at social security questions only 10 days ago.
The figure of 263,000 is, as I said in my press release, precisely 9,400 more than the figure for the end of February. I could have made the figure even smaller. I could have taken the figure for the end of November. The figure for the end of November last year was 260,000--at least, that was the figure given by the Secretary of State, although perhaps he will wish to correct it now. That means that the figure is 9,400 higher than in March and only 3,400 higher than at the end of November.
Suppose that I take the point made by the Secretary of State and accept his latest revision of the figures, which would give us an additional 15,000 since the end of February--although only 9,000 since the end of November. I agree that that will change my calculations. In my press release I calculated that we were paying £510 in advertising costs for every additional new claimant of family credit. I concede that that was based on the figure of 9,400 claimants, which I had taken from the earlier figures given by the Secretary of State.
Suppose that I take the figure that the Secretary of State has given the House tonight--15,000 additional new claimants. That means that the advertising fee per additional claimant is working out at £320. Even at £320 in extra expenditure for every new claimant, we must be looking at what must bid fair for the prize for the least efficient benefit in Europe. Not only that, but we are left with barely a quarter of a million claimants and a refusal rate that has increased. In my press release I cited a refusal rate of 44 per cent. The Secretary of State corrected that by saying that the success rate is 55 per cent. If he reflects for a moment, he will notice that the two figures add up to 100 per cent. and are entirely reconcilable. The chief result of all the publicity-- [Interruption.] If I did not, I cheerfully accept the correction. The figure is 44 per cent., although I am mystified as to why the Secretary of State should think that we believed any other figure as we are trusting, simple souls using information that he gives in parliamentary answers. The Secretary of State has carried out a bold experiment, and I suppose that we should be grateful to him for it. He has tested means- tested benefits as a means of targeting families with children. So far it has been an expensive experiment. It has cost his Department and the taxpayer £5 million. The more he has persisted with the experiment in family credit, the more he has underlined the attractions of child benefit.
Child benefit is cost-effective. There is no need to advertise child benefit on every passing bus. It is cheap to administer. It costs only 2p per pound delivered to the claimant. Secondly, it achieves near complete take-up. Unlike family credit, it hits nearly all its targets. It gets through to many more mothers in poor families than family credit. In particular, it gets through to the quarter
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of a million families poor enough to qualify for family credit whom the Secretary of State cannot find or cannot persuade to apply for family credit.10.30 pm
I began by mentioning how often we have debated this issue. I want to end by asking a question to which I have sought an answer on each of the past three occasions when we have debated the issue. It is a question which the Secretary of State, perhaps wisely, has never attempted to answer. As he fairly said, child benefit in part replaced child tax allowance. Had it remained a tax allowance I have not the slightest doubt, and I question whether any Conservative right hon. of hon. Member doubts, that the Government would have uprated it annually. They would have come to the House with pride and asked us to admire them for having done so.
There is, however, a clear and pertinent contrast. Under the Government, the married man's tax allowance has gone up by 22 per cent. in real terms. In the same period, child benefit has gone down by 13 per cent. If the amendment is rejected, and if the Secretary of State subsequently fails to uprate child benefit for next April, child benefit will have declined under the Government, not by 13 per cent., but by between 19 and 20 per cent., depending on what the rate of inflation is next April.
I ask the Secretary of State, or any hon. Member who can think of a convincing answer, by what feat of mental gymnastics can it be said that the cost of maintaining a wife has gone up one fifth while the cost of bringing up a child has gone down one fifth? Those who can find an honest answer to that question to their own satisfaction are welcome to vote with the Secretary of State ; plainly they are beyond the bounds of reason. I invite into our Lobby tonight those who find that question difficult and troubling to answer and who recognise that it exposes the double standards of an Administration willing to cut benefits in order to cut taxation. We shall vote tonight against those double standards.
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