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House of Commons

Monday 16 May 1994

The House met at half-past Two o'clock


[ Madam Speaker-- -- in the Chair ]

Oral Answers to Questions


Students (Benefits) --

1. Mr. Rooker : To ask the Secretary of State for Social Security how many inquiries have been made to his Department's freephone service from persons asking about benefits available to students in the latest convenient period for which figures are available.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt) : Freeline managers estimate that about 1 per cent. otheir calls are from students ; it is not possible to say how many inquiries might be about student benefits.

Mr. Rooker : I am grateful for that answer. Would the Minister pass on to the freephone staff the thanks of mature students, potential students and access co-ordinators, certainly in Birmingham and the west midlands, for a very helpful service when students who are not the normal 18-year- olds ring up ? However, will he have a word with the staff in the offices ? When unemployed, mature people ask at the offices what is available for mature students, they are sometimes met by a knee-jerk reaction. They are told that no benefits are available, which is not the case for the unemployed, single parents and disabled mature students, who can sometimes retain housing benefit and income support. That area is not dealt with as well in the offices as it is on the freephone.

Mr. Burt : I am grateful for what the hon. Gentleman has said about the freeline service ; that will be passed on. I am also grateful for his courtesy this morning during his telephone call. I hope that he has received by now a reply to his letter. The local area director makes it clear that the Benefits Agency has a number of different types of student with whom to deal. We try to ensure that all information is available to all students. In the case to which the hon. Gentleman refers, there is an officer with particular technical expertise who can deal with the issues. There is a district information officer available in all districts to deal with the issues. However, in view of what the hon. Gentleman has said, I will, of course, make inquiries at the Benefits Agency to ensure that its information for students is as good as it can be.

Mr. Brazier : Can my hon. Friend confirm, however, that with the huge and welcome expansion in the number of students, the best way to cope with the difficulties in the long term is not to return to the widespread availability of

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benefits for students, but to do what almost every country in the developed world does--ensure that the majority of students go from home to local universities ?

Mr. Burt : Some of those matters are for the Department for Education rather than for me. I can confirm that my hon. Friend is right about the expanding number of students, and that expansion can be paid for only by asking students to pay an increasing contribution themselves. That is why students were moved out of the benefits system. It must be best that students look towards the education maintenance system for support rather than to benefits. My hon. Friend will be glad to know that an increasing number of students continue to want access to university and higher education. That is welcome and is something for which we can pay.

Pension Age --

3. Mr. Legg : To ask the Secretary of State for Social Security which countries since 1964 have a state pension age higher than that of the United Kingdom.

The Secretary of State for Social Security (Mr. Peter Lilley) : Denmark, Iceland and Norway currently have equal state pension ages above 65 and many others, such as Canada, Luxembourg, Netherlands, Spain, Sweden and the USA, have equal state pension ages higher than the present retirement age of British women. The majority of European Community countries have equalised, or are intending to equalise, state pension ages at 65. Most of the Scandinavian countries and the USA have, or are moving to, an equal state pension age of 67.

Mr. Legg : Can my right hon. Friend confirm that equalising the pension age at 60 will cost £12 billion more than equalising the pension age at 65 ? Can he confirm that claims by the Trades Union Congress that equalising at 60 will save money are politically motivated rubbish ?

Mr. Lilley : I can confirm the points that my hon. Friend makes. During the period in which we intend to introduce equality in the state pension age, it would cost about £12 billion a year more to equalise at age 60 than to equalise at age 65. I do not believe that that would be a sensible use of a huge amount of public fiscal resources--equivalent to 6p or more on income tax. Suggestions that we could save money by equalising at 60 are way off beam.

Mr. Wigley : Does the Secretary of State accept that there is considerable dismay among many men who very often have to retire even earlier than 60 ? The average age at which men retire is now 57 and they are unable to obtain pensions, whereas women can get them at 60. In the present economic climate, people should not have to feel deprived if they do not have a pension with their work because they should be able rely on the state pension much earlier than 65.

Mr. Lilley : Of course, there can be other state assistance for people who, for any reason, have to retire or are jobless prior to the state pension age. A great many people have private pensions, which enable them to retire earlier than that age. It would be an odd use of public resources if extra money were to be channelled to those who have perfectly adequate resources to look after themselves in retirement.

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Benefit Increases --

4. Mr. Pawsey : To ask the Secretary of State for Social Security by how much the main social security benefits have increased since their inception.

Mr. Lilley : All main social security benefits are now worth as much or more in real terms than at their inception.

Mr. Pawsey : May I thank my right hon. Friend for that helpful reply ? Does he agree that the majority of benefits have, in fact, increased and quite substantially ? Does he agree that that defies public perception ? Will he therefore say how much money is now being spent by his Department on benefits and, to make the figure more realistic, will he break it down per taxpayer ?

Mr. Lilley : My hon. Friend is absolutely right. The amount spent on social security benefits has increased by 75 per cent. in real terms under this Government and it now costs more than £80 billion a year of taxpayers' money. I cannot express the equivalent on a taxpayer basis, but I can express it per head of the working population. To finance social security, on average, every working person in the country has to pay £15 every working day.

Mr. Flynn : Has the Secretary of State seen the articles in the Financial Adviser this month and last month, which celebrate the fact that 10 million people will have to take out additional personal insurance from insurance companies because of the cuts in the welfare state ? Is not it an outrage that the same people sold 3 million dodgy personal pension policies on the basis of 50 per cent. of the premiums being taken in administration charges and commissions? Now 10 million people have had benefit cut and have been taken out of the national insurance scheme, which is good value and takes only 5 per cent. in Administration? Why is he throwing 10 million of our people to the vultures of the personal pension markets ?

Mr. Lilley : I have not seen the article to which the hon. Gentleman refers, but if it is as loosely based as his addendum to it, it certainly requires some re-writing. As he will know, the Securities and Investments Board is requiring that, where there has been mis-selling, remedies are available, which will mean that the people who were mis-sold pensions do not lose out. Surely, that is good news and means that we will wipe the slate clean of the past misdemeanours and ensure that, in future, people can have confidence in the whole system of occupational and personal pensions.

Mr. Burns : Does my right hon. Friend agree that it is strange that when social security spending to help the less well-off has increased in real terms year in year out, people who should know better are constantly trying to put across the impression that the opposite has happened and never point out that, whereas our social security has increased each year, a number of our European partners have cut their help to the less well-off ?

Mr. Lilley : It is rather strange, but we have become used to a certain proportion of the chattering classes referring to any increase that is less than they want as a cut. There have been substantial improvements and increases in total social security spending over the years. We have made sensible reforms and, as a result, have avoided the abrupt, arbitrary and painful cuts that some other countries

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have had to make. That is to our credit and shows our good sense. Other countries wish that they had taken earlier the reforming measures that we have taken.

Mr. Sheerman : Does not the right hon. Gentleman's chatter disguise the fact that since 1979, when the Conservative Government took office, the incomes of disabled people have plummeted ? There has been a widening gap-- [Interruption.] I had my figures checked by the House of Commons Library only 10 minutes ago. While average income has risen by a factor of four, disabled persons' income has risen by only 2.6 per cent. That is a terrible reduction in income.

Mr. Lilley : On close inspection, it appears that the hon. Gentleman has decided that a 2.6 per cent. increase in the incomes of disabled people can be described as a cut. The truth is that we have more than trebled spending on disabled people--a record in which we take some pride.

Widowed Parents --

5. Mr. Viggers : To ask the Secretary of State for Social Security what support is available for (a) widowed fathers and (b) widowed mothers ; and if he will make a statement.

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague) : Child benefit, together with the range of income- related benefits, is available to both widowed fathers and mothers. In addition, widowed mothers are entitled to receive contributory widows' benefits and widowed fathers receive one parent benefit.

Mr. Viggers : Does my hon. Friend agree that ever since the Beveridge report in the 1940s, our social security system has been based on the principle of a bread-winning father and a dependent mother ? The Government have built upon that recently by increasing widows' benefits. However, does my hon. Friend recognise that some of the 30,000 widowed fathers find life difficult ? Would not it be appropriate to consider assisting them further ?

Mr. Hague : My hon. Friend rightly draws attention to the existence of widowed fathers. I stress that the qualifying criteria for widowed mothers and fathers for income support, the lone-parent premium in income support, housing benefit, child benefit, one-parent benefit, family credit and the forthcoming disregard for child care in family credit, are all the same.

There is the additional provision of the widowed mothers' allowance, which reflects the fact that women are more likely than men to have been dependent on their spouses and that wives who are working when widowed earn, on average, less than their husbands. To extend equal treatment between widowed mothers and widowed fathers would involve either paying benefits to some men who do not need to be dependent on the state or taking some benefits away from widows, neither of which is an attractive course.

Mr. Winnick : Is the Minister aware that some of the widowed mothers and fathers are disabled people ? Apart from financial matters, those people desperately need the sort of measure that my hon. Friend the Member for Kingswood (Mr. Berry) tried to introduce. In view of the Government's dishonesty and treachery in defeating the

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Civil Rights (Disabled Persons) Bill, should they not now acknowledge that the Bill should become law at the earliest opportunity ?

Mr. Hague : There has been no dishonesty or treachery by the Government. My right hon. Friend has announced a series of consultations on these subjects, to which the hon. Gentleman should direct his attention.

The point of the main question concerns the benefits available to widowed fathers and mothers. Those benefits are very considerable--a fact which should be recognised.

Occupational Pensions --

6. Mr. Thomason : To ask the Secretary of State for Social Security what proportion of pensioners currently have an occupational pension ; and how many had one in 1979.

Mr. Hague : In 1990-91, the latest year for which figures are available, an estimated 61 per cent. of all pensioners had an occupational pension. The equivalent figure for 1979 was 43 per cent.

Mr. Thomason : I am grateful to my hon. Friend for that answer. Can he confirm that the figures for the more recently retired are even better than those that he has just cited ? About 70 per cent. of those who have recently retired have income from occupational pension schemes. Can he confirm that in 1979 the figure was under 50 per cent?

Mr. Hague : My hon. Friend is right to say that almost 70 per cent. of recently retired pensioners have income from an occupational pension scheme. That figure was very substantially lower in 1979--just over half the total. Apart from that, 76 per cent. of pensioners now have income from investments and savings, which again is a considerable increase on the 62 per cent. equivalent figure in 1979. Those factors have all contributed to the rise in pensioners' living standards.

Mr. Olner : Is the Minister aware that many men and women find that their occupational pensions are not realised to their fullest extent because they are made redundant at an early stage ? Surely the Minister should be examining the phenomenon. He should have it well in mind also that many people have put a misplaced trust in companies offering personal pensions, thinking that they would be given a reasonable return for their money.

Mr. Hague : The security of personal pensions is being dealt with by the Securities and Investments Board. The board has already published a series of measures that are to be taken. We await its further consideration.

During the 1980s, the Government introduced considerable improvements to the indexation of occupational pensions for those employees who leave schemes early before their normal retirement age. That has been of great assistance to many hundreds of thousands of people.

Mr. Alan Howarth : While I welcome the spread of occupational pensions in many parts of the population, I remind my hon. Friend that only about 40 per cent. of recipients of invalidity benefit are also in receipt of an occupational pension. Will he ensure that restrictions on benefit under the new incapacity benefit do not lead to hardship among those who are genuinely unfit to work and

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do not have access to other resources such as occupational pensions, permanent health insurance or income from savings ?

Mr. Hague : I know that my hon. Friend pursued that point during the passage of the Social Security (Incapacity for Work) Bill and that my right hon. Friends have taken note of that. The introduction of an objective medical test is intended to ensure that there is no hardship and that help is directed at those who most need it.

Mr. Corbyn : Does the Minister recognise that the Government's reliance on the large proportion of pensioners having either occupational or private contributory pensions masks the serious problem of poverty among older women pensioners who have to rely entirely on the state pension plus housing benefit to survive ? Their poverty is becoming worse, as is the humiliation of their lives. The Government's refusal to uprate the pension in line with average earnings means that such pensioners' living standards are deteriorating year on year. What does the Minister plan to do about these people ?

Mr. Hague : It is because older pensioners in particular have not had the benefit of occupational pensions, investments and savings to the same extent as younger pensioners that, since 1988, the Government have targeted additional resources totalling £1.2 billion in the form of additional benefits on the poorer and the older pensioners. That is our response to the problem, and it will continue.

Mr. Willetts : Does my hon. Friend agree that as the labour market becomes more flexible it makes more sense for more and more people to have personal pensions, as the best way of saving for their retirement ?

Mr. Hague : The availability of personal pensions, as my hon. Friend rightly suggests, is extremely important in a more flexible and mobile labour force. The availability of these pensions has meant that people are now saving for their retirement some billions of pounds that were not being saved before. These moneys will provide additional income in their retirement.

Child Support Agency --

7. Mr. Spellar : To ask the Secretary of State for Social Security when he expects to announce further changes to the operations of the Child Support Agency.

Mr. Burt : A number of changes were put in place in February and these must be given time to take effect. We have no plans for further changes at present, but the operation of the Child Support Agency will continue to be kept under review.

Mr. Spellar : Does the Minister accept that that is an entirely unacceptable answer for the thousands of families throughout the country who are facing ruin as a result of the operations of the agency ? When will he understand that what is needed is not further tinkering or analysis but a fundamental change to the basis of the agency and its operations ? Will he convey to the agency that the public expect it to spend less money on holding courses in expensive hotels when its staff should be back at their offices dealing with correspondence from Members and their constituents ?

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Mr. Burt : I do not accept the hon. Gentleman's premise. The agency is getting on with doing its job of producing assessments and higher rates of maintenance for parents with care of their children. That is its job and those are the principles that guide it--the hon. Gentleman is well aware that those principles are endorsed by a variety of people. The reforms that we made in February were not cosmetic and resulted in a reduction in the number of assessments made at that time. It is right that they should be given time to have effect. As the hon. Gentleman knows, we are continuing to keep the agency under review, which is right and proper.

Mr. Harris : Does my hon. Friend accept that it was an eye-opener to many of us to discover the extent to which some people ripped off the state in the past by expecting the system to look after their children ? Having said that, the CSA scheme is clearly littered with anomalies. I pay tribute to my hon. Friend and I ask him to have a word with our right hon. Friend, the Secretary of State, and ask him kindly not to embark on any more general reforms of the social security system until the Government have sorted out the scheme, all its anomalies and all the other things that have gone wrong with it.

Mr. Burt : I am grateful to my hon. Friend for the way in which he put his question. He is right to draw the attention of the House to the terrible anomalies in the previous system, which left parents with care without adequate maintenance and depended far too much on the benefits system to support separating couples. It should be known that 96 per cent. of all the cases with which the CSA is currently dealing involve those who are on benefit.

My hon. Friend also drew attention to the concerns that have been expressed by a number of parties about the operation of the scheme. He will know that different voices have expressed different views ; only last week, the National Council for One Parent Families issued a statement in association with Gingerbread calling on us not to forget the interests of lone parents when considering the operation of the CSA.

Any further consideration that we give to the matter would have to balance interests, because it is important that the House supports a proper system of maintenance for all in the United Kingdom. That is why we think it right to keep the affairs of the CSA under careful review.

Mr. Kirkwood : Hon. Members on both sides of the House agree that interests must be balanced. Does the Minister accept, however, that anomalies in the system have created overwhelming pressure, in particular financial pressure on second families, which is quite intolerable ? The Minister has been quite right to wait to see how the February changes have bedded down, but the key question is at what stage he will feel able to make a move. That moment must be close and some changes must be made.

Mr. Burt : I take the hon. Gentleman's point. He referred to the February changes, the bulk of which were designed to provide some form of assistance for those who had been complaining about the agency, particularly because of the second family problem and similar issues. The support that we gave in February to protected income, which improved matters beyond the recommendations made on that particular point by the Select Committee on Social Security, was designed to help those second families. Our desire to ensure that the agency is properly

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reviewed is governed by our wish to see how those changes are working. Those changes were only introduced in February, just three months ago, and it is important to give them time. As my right hon. Friends, the Prime Minister and the Secretary of State have said from the Dispatch Box, if the need for further change is proved, it will be made.

Mr. Congdon : May I welcome the changes that were introduced in February, in particular in respect of phasing ? I am sure that my hon. Friend agrees that one of the biggest difficulties facing absent parents is when the costs that they incur increase greatly as a result of a maintenance assessment replacing a court order. Does he agree that it is important that we keep that under review to ensure that the system works fairly ? In so doing, we must not only ensure that it works fairly, for the absent parent, but must bear strongly in mind the needs of the lone parent and the parent with care.

Mr. Burt : Yes. My hon. Friend puts the case correctly. In relation to the amount of money left after the maintenance requirement has been made, the intention behind the formula was that some 70 per cent. of net income, as calculated in that formula, should be left available to absent parents to meet their other needs and obligations. My hon. Friend is right to say that the House must balance carefully the interests of all parties-- parents with care, children, absent parents and the taxpayer.

Mr. Dewar : Does the Minister accept that a policy of wait and see is not heroic, but it is just plain stupid given the crisis now facing the agency ? Can he give me one reason why there should not be an independent appeal procedure to deal with cases where there are genuine hard circumstances and where the maintenance demands have lost touch with the ability to pay, as has happened in some cases ? Has he noted the repeated press reports that the Government have decided to legislate soon to ensure, for example, that financial and property settlements that were intended to effect maintenance payments could be taken into account by the agency ? Given the Minister's main reply to the question, is he telling us that that is not true ? If so, does he recognise that that is totally unacceptable to the Labour party and to many people in the country ?

Mr. Burt : I should have thought that the hon. Gentleman was long enough in the tooth to know to take with a pinch of salt what is in the newspapers. We stand by the answer that we have continually given in relation to this matter : as I said to the hon. Member for Warley, West (Mr. Spellar), we have made the changes and we want to find out their effect. We have been through the answer to the hon. Gentleman's question about appeals before. The danger is that a completely open system of appeal would return us to the totally discretionary system that the House and many other people have said on many occasions they do not desire.

Mr. Waterson : Does my hon. Friend agree that much of the media comment since the CSA began to operate has tended to ignore the plight of single deserted mothers and, even more, the plight of millions of working couples who have set up stable traditional family units and who, as we heard earlier, contribute £15 a day on average towards the costs of the social security system ?

Mr. Burt : My hon. Friend draws attention to the other side of the coin, which is important. It is true that, in the

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early days of the CSA, by far the greatest running in terms of press comment was made by absent parents and in relation to the issues that concerned them. Only in the past few weeks have the representatives of lone parents said that they want their voice to be heard and got their side of the case across. No one necessarily represents taxpayers in these matters except Her Majesty's Government ; it is right that we should take into account taxpayers' interests for the very reasons mentioned by my hon. Friend, which were accepted by hon. Members on both sides of the House when the legislation was originally passed.

8. Mr. Norman Hogg : To ask the Secretary of State for Social Security what response he has made to the recent report by the National Association of Citizens Advice Bureaux on the first year of operation of the Child Support Agency, a copy of which has been sent to him ; and what measures he proposes to introduce as a consequence.

Mr. Lilley : I am giving NACAB's recent report careful consideration, as we do any representations about the scheme.

Mr. Hogg : Does the Minister recognise that the citizens advice bureau is an organisation that enjoys a very special respect among the British people, and that he should pay a great deal of attention to what NACAB has to say about this contentious matter ? Does he agree that a more positive attitude by him and the Parliamentary Under-Secretary of State, the hon. Member for Bury, North (Mr. Burt) would be welcome ?

Mr. Lilley : I entirely agree with the hon. Gentleman about NACAB. I will as I said, give full consideration to its report. I always respect reports coming from that organisation. I am sure that most people concerned with citizens advice bureaux share the view of most hon. Members that parents are responsible for their children ; that that responsibility persists even if, sadly, they split up ; and that the taxpayer should be involved only to the extent that parents do not have the means to support their children. It is therefore appropriate that we have a system for assessing parents' means. We tried to get that system right originally, then to reform it in February. As my hon. Friend the Under-Secretary said, it is important to see how those changes work out.

Dr. Spink : In the light of NACAB's representations on the CSA, will my right hon. Friend take all possible steps to ensure that errant fathers are made to pay and to co-operate with the CSA--including, where necessary, the immediate attachment of earnings at source ?

Mr. Lilley : I take my hon. Friend's point. The NACAB report called for more stringent enforcement measures and we are working in that direction. My hon. Friend will be pleased to know that we have been more successful in pursuing those so-called feckless fathers who had left with the mother looking after the child not a trace of their whereabouts. More than 85 per cent.--about 29,000 of such cases--have been tracked down so far. That is a greater level of success than we perhaps expected when we established the agency. and is an important aspect of its work.

Mr. Frank Field : Further to the NACAB report, can the Secretary of State confirm that the system that the Child Support Agency replaced gained maintenance payments for those on benefits for less than 60 per cent. of eligible

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mothers, but that in its first year of operation the CSA is raising less money for taxpayers than the liable relative system that it replaced ? What conclusions does he draw from that ?

Mr. Lilley : The hon. Gentleman is right. Under the old system there were some 1.3 million lone parents, 1 million of whom were dependent on income support and more than three out of four of whom were not receiving a penny of regular maintenance from the absent parent. As yet, we have no final figures for the first year of the new system's operation. We are conscious that, given that it is in its first year, it will fall short of the targets set for it, but its performance will build up over time.

Mr. Nicholls : Is not it thoroughly dishonest of Opposition Members to criticise the principle of the CSA, given that it had all-party support ? That should not obscure the fact that a number of anomalies in the system will have to be dealt with. The fact that so much evidence is becoming available should mean that we can at least set a date by which we are prepared to assess that evidence. If my right hon. Friend would agree to look in a year's time at the evidence of the previous year, would not that go a considerable way towards answering the justified concerns of those of us who accept the principles on which the CSA was set up ?

Mr. Lilley : We have demonstrated by our speedy response to the Social Security Select Committee report, which we implemented rapidly in February, our willingness to respond where changes are required. The fact that we implemented the bulk of the Committee's recommendations and, in some respects, went further than those recommendations, shows that, as we keep the agency under review, if and when we find that changes are necessary, we shall introduce them. A specific date is not helpful, however. It is important that the agency be allowed to continue to get on with its work and improve its performance, and that those who have been contacted by it respond and pay the money to the parents who, by and large, have been bringing up children on income support.

Social Fund --

9. Mr. Hutton : To ask the Secretary of State for Social Security what assessment he has made of the operation of the social fund.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : Our assessment is that the social fund is working extremelywell in targeting resources on those people most in need of help. Nearly 9 million awards totalling £1.5 billion have been provided from the discretionary fund since the scheme started. Even so, we routinely monitor the operation of the fund and continue to introduce improvements as necessary.

Mr. Hutton : Does the Minister agree with the Social Security Advisory Committee that structural changes are now required in the operation of the social fund ? Will he ensure that if someone satisfies the criteria for the award of a grant or loan, that person will receive help notwithstanding any financial constraints that would otherwise deny it ?

Mr. Scott : We take careful account of the Social Security Advisory Committee's advice. We improved the

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social fund, particularly its management, in April this year. Although it is in the nature of a discretionary fund that not every application can succeed, this system is much better than its predecessor, which was doubling in cost every two years.

Mr. Matthew Banks : How much has the social fund cost to set up and how many millions or billions of pounds have been awarded ? Does my hon. Friend agree that loans rather than grants have been an effective way to provide most where the need is greatest ?

Mr. Scott : As the years of the fund's operation have passed, it has become increasingly clear that loans are an acceptable part of social fund provision. As of the end of last year, £1.5 billion had been expended on the operation of the social fund since its inception.

Mr. Bradley : Is the Minister aware that the social fund is failing homeless people ? Has he read the latest report by citizens advice bureaux in Scotland, which shows that people are locked into hostel accommodation because they are not receiving grants or loans for essential household items such as cookers and bedding ? As that is the only source of help for such homeless people, should not the Minister review the situation urgently so that people can set up home, which is preferable to languishing in hostel accommodation ?

Mr. Scott : It cannot be the sole responsibility of the social fund to accommodate everybody who is rehoused. Social fund loans are available to those who go into unfurnished accommodation. Local authorities can also assist in certain circumstances.

Income Support --

10. Mr. Clifton-Brown : To ask the Secretary of State for Social Security what effect the change in the level of unemployment since November 1993 has had on his Department's estimate of the cost of income support provision for this financial year.

Mr. Lilley : The number of unemployed claimants has dropped by more than 90,000 since November 1993, and we estimate that that has reduced expenditure on income support by £176 million and on unemployment benefit by £90 million.

Mr. Clifton-Brown : Does my right hon. Friend agree that the very welcome news of a year-on-year reduction of nearly 250,000 in unemploymennt has had an extremely beneficial effect on the cost of unemployment-related benefits ? Does he also agree that policies that would introduce a statutory minimum wage and a maximum working week would be liable to increase unemployment, with a consequent increase in the cost of benefits and the likelihood of tax increases to pay for them ?

Mr. Lilley : My hon. Friend makes a strong point. The fall in unemployment does not just reduce my budget ; it is a great boon and benefit to those 250,000 households whose members are now back at work instead of being unemployed. We are doing all that we can to encourage people back into work, not least through benefits such as family credit, which now enables 500,000 people to work who previously might have been tempted to remain unemployed.

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Mr. Madden : Does the Secretary of State recall making a remarkably unpleasant speech at last year's Conservative party conference, and subsequently suggesting the introduction of a so-called habitual residency test ? Have the social security commissioners given any recommendation on that ill-advised proposal ? If the right hon. Gentleman introduces such a test, will he provide an exemption for citizens of the Irish Republic ? Will he be sensible and allow that barmy idea to die a natural death ?

Mr. Lilley : My recollection is of warm support, both then and subsequently, not least for the proposal that we in this country should introduce something that already exists in most continental countries. It would not be possible for someone from this country to go to most continental countries and pick up the equivalent of income support and housing benefit. Why should people from the continent who are here to learn English be entitled to do that ? We are being thoroughly communautaire in adopting similar procedures over here, but we have not yet heard the full results of the consideration being given to the matter by the Social Security Advisory Committee.


Disestablishment --

29. Mr. Thurnham : To ask the right hon. Member for Selby, representing the Church Commissioners, what representations have been received about the financial consequences of disestablishment.

Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners) : None

Mr. Thurnham : Will my right hon. Friend draw to the attention of the Church Commissioners the recent Adam Smith Institute report by Adrian Pepper, entitled "The Consultants' Report on the Church of England", which makes a number of recommendations about how the Church could improve its performance ?

Mr. Alison : I am much obliged to my hon. Friend for his constructive suggestion, and I will certainly pass it on to my colleagues. There is a verse in the book of Proverbs which says : "in the multitude of counsellers there is safety."

We shall bear that in mind as we consider the multitude of counsels that we receive.

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