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Pilot Studies

7. Mr. Barry Field: To ask the Secretary of State for Social Security what plans he has to use the Isle of Wight for one of the pilot studies of new methods being considered by his Department. [19705]

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Mr. Lilley: I believe that it is desirable, where possible, to try out changes to the benefit system on a pilot basis before introducing them nationally and I have obtained increased powers to do so in the social security system. I am grateful for my hon. Friend's interest in this approach. The Isle of Wight is currently being used as a control area in the earnings top-up pilot. I shall certainly consider whether it would be suitable for piloting other schemes.

Mr. Field: Because of its clear boundaries, surely the Isle of Wight is an ideal community for all pilot studies. I feel certain that all my constituents would welcome the Isle of Wight being at the forefront of modernisation of the welfare state, for which the Government have done so much.

Mr. Lilley: I agree with my hon. Friend that the Isle of Wight, because of its island status, might well be a suitable area for future studies. If I were to select places for pilot schemes on the basis of the diligence of the Member of Parliament in pursuing his constituents' interests in social security matters, I would place the Isle of Wight top of the list.

Mortgage Interest

8. Mr. Ainger: To ask the Secretary of State for Social Security how many representations he has received on his changes to the payment of mortgage interest for benefit claimants. [19706]

Mr. Roger Evans: We have received a number of representations.

Mr. Ainger: Is the Minister aware that the application of the standard interest rate to those with a fixed-rate repayment mortgage means that they suffer a significant reduction in benefit because they have to top up their payments, which his Department should be doing, to cover their mortgage? I have corresponded with the Minister about a constituent, Mr. Tickle of Maenclochog. Does the Minister accept that the way the standard rate is applied to people with fixed-rate mortgages means that the promise that his Department gave that no claimant would lose out is not being honoured, and that it is time for a change?

Mr. Evans: The answer, I am happy to say, is no. I have caused further inquiries to be made about Mr. Tickle's case. I am told that he has a variable-rate mortgage, not a fixed-rate mortgage, and it appears that the system of add back is operating perfectly fairly, as we expected it to, to protect Mr. Tickle 100 per cent. I shall write again to the hon. Gentleman. If he wants to see me to discuss Mr. Tickle's case, I shall be happy to do so.

Full and Part-time Employees

9. Mr. MacShane: To ask the Secretary of State for Social Security what is the total amount of benefit paid by his Department to (a) full and (b) part-time employees. [19707]

Mr. Roger Evans: In 1994-95, the amount of benefit paid to employees through in-work benefits--such as

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family credit, housing benefit and council tax benefit--was nearly £2 billion. In addition, of course, employees may benefit, where they satisfy the conditions, from a range of other benefits, such as child benefit or disability living allowance.

Mr. MacShane: If the Minister adds income support--about which he recently gave a parliamentary answer--to the figure, £3 billion is now paid out to people in work through the benefits system, which is double the 1990 figure. While all hon. Members want to protect people in poverty, is not the plain fact that employees in my constituency who are offered jobs at £1.44 or £2 an hour must turn to the benefit system, which acts as a huge subsidy for low-pay employers and distorts the local labour market? I put it to the Minister that, as a Conservative, a taxpayers' subsidy of that order cannot make economic sense.

Mr. Evans: Evidence from research by the Institute of Employment Studies shows that employers do not know whether the family in question is in receipt of family credit because, of course, family credit is ordinarily paid to the woman. The evidence also seems to suggest that that is not having a distorting effect on the labour market. That is the first point.

The second point is that in-work benefits such as family credit are better for people who are in the condition that the hon. Gentleman described, because they are acquiring and using work skills. Such benefits are also better for the taxpayer, because the cost of paying income support on a full means-tested basis would be considerably greater.

Mr. John Marshall: Does my hon. Friend agree that it is more practical and more moral to help low-paid people through family credit than it is to legislate for their unemployment through the national minimum wage and the social chapter?

Mr. Evans: I entirely agree with my hon. Friend's two points. The basic problem with the minimum wage is that, in effect, it prohibits employment below a prescribed level--the effect of which would be to create unemployment, depending on the level of that minimum wage.

Long-term Sick and Disabled People

10. Sir Fergus Montgomery: To ask the Secretary of State for Social Security what is the spending on benefits for long-term sick and disabled people and their carers in 1995-96; and what was the equivalent figure in 1978-79. [19708]

Mr. Burt: Estimated expenditure on benefits for long-term sick and disabled people and their carers has quadrupled in real terms, from £5 billion in 1978-79 to more than £20 billion in 1995-96. With some 6.5 million disabled people, this represents a substantial commitment, and it is almost as great as our commitment to the 345,000 people--I can now provide that figure, as my memory has recovered--who will benefit from family credit extensions.

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Sir Fergus Montgomery: Does my hon. Friend agree that our system of disability benefits is comprehensive and coherent? Does he agree that it promotes independence and integration, and that it focuses extra help on people who are disabled early in life and therefore have the least chance to work and save?

Mr. Burt: Yes. My hon. Friend is correct. The system has for some 25 years tried to recognise the importance that disabled people attach to being independent, and benefits have increased accordingly. Our record on disability has been very good. The scheme recently announced by the NHS to allow access to powered wheelchairs and the Community Care (Direct Payments) Bill, which is currently going through the House, demonstrate that our commitment is undiminished and increasing.

Mr. Alan Howarth: If the Minister wants to achieve value for the money spent on long-term sick and disabled people, will he accept that efficiency will have to be understood in terms of quality of service rather than merely in terms of savings to the Exchequer? Will he concede, particularly in the light of the shambles that has been exposed in the privatisation of other parts of the Benefits Agency, that there is no reason to suppose that privatisation of the Benefits Agency medical service will secure better service or value even in the Treasury's terms, and that, if the Conservative party retains any sense of civic responsibility, it will abandon that project?

Mr. Burt: I do not accept the hon. Gentleman's point. In virtually every case where some form of contractorisation has been introduced, it has provided benefits to the service and the taxpayer, with no diminution in quality whatsoever. I do not consider that the Benefits Agency medical service will be harmed by the process of contractorisation now being considered and we expect an enhanced service to result.

Mr. Harry Greenway: Does my hon. Friend agree that the Government's work for and funding of disabled people is remarkable? The same is true of people in poverty. The hon. Member for Thurrock (Mr. Mackinlay) was not the only Member at Church house this morning; hon. Members in all parts of the House are taking part in that conference on poverty and recognise the importance of the theme. Is it not true that people are properly covered by the benefits system and that nobody needs to be in poverty?

Mr. Burt: A remarkable tone of consensus was adopted on radio and television by some speakers at the conference this morning. My hon. Friend has adopted the same tone, but it has not been adopted by the Opposition. A considerable amount of effort and time is put in by the Government to try to ease the burdens of poverty. We maintain that the most important way to ease people out of poverty is to provide work and the opportunities for work. The success of our efforts in doing so has considerably reduced unemployment in the United Kingdom.

As for our commitment to those in difficulties, expenditure on disabled people has quadrupled in real terms since we have been in office, which is evident manifestation of our commitment. This Government care and can prove that they care.

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Child Support Act

11. Mr. Win Griffiths: To ask the Secretary of State for Social Security how many parents with care have been waiting more than a year to receive money for their children under the Child Support Act 1991. [19709]

Mr. Andrew Mitchell: Currently there are 194,000 parents, out of 1.5 million so far taken on by the agency, who made a maintenance application more than a year ago and have yet to have a maintenance assessment.

I can announce to the House that the Child Support Agency will now be paying interest on maintenance that it has collected which is due for onward payment to the parent with care but has not been passed on within 28 days. That will apply to all payments received since 1 April 1995.

Mr. Griffiths: I welcome the Minister's announcement. Does that not show that the Government have at last recognised that the CSA has been a shambles from the beginning? Would it not have been better if the Minister had announced today either that more staff would be employed to run the system or that the system would be simplified so that parents with care could receive their money more quickly?

Mr. Mitchell: As the ombudsman found, there is no problem with staffing--the CSA has taken on additional staff--and the system is constantly being simplified.

The first part of the hon. Gentleman's question related to a different matter. It is common knowledge across the House that the start of the CSA was "dire", as the Select Committee on Social Security put it. In its recent report, however, the Select Committee said:

We are determined that those improvements should continue in the months ahead, just as they have been evident in the months gone by.

Mr. Robert G. Hughes: Does my hon. Friend share my dismay that the ombudsman's report did not seem to take account of what is happening now in the CSA rather than historically? Can my hon. Friend tell the House the current figure for speed of payment to the parent with care? Will my hon. Friend also note that although the ombudsman criticised the average of 30 weeks taken by the CSA to clear up cases, perhaps we should judge that in the context of the average of 70 weeks that the ombudsman takes to clear up his own cases?

Mr. Mitchell: On the first point, I noted that of the 20 cases the ombudsman looked at, some 14 involved problems which began in 1993. In that sense, his report is historic. As for the length of time it takes to get money from the agency to the parent with care, I was surprised at the ombudsman's criticism. The agency has been set a target to get payments out within 10 days to 90 per cent. of parents with care; this year, it has exceeded that target and managed to reach 97 per cent. of parents. The remaining 3 per cent. includes cheques that bounced. In that respect, I do not consider that the ombudsman's criticisms of the CSA were valid.

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Ms Lynne: In the light of the second critical report by the parliamentary ombudsman into the working of the Child Support Agency, in which he catalogues a series of errors such as the general mishandling of cases, mistaken identity and giving out confidential information, is it not about time that the Minister admitted defeat, scrapped the agency and brought in a fair and workable system?

Mr. Mitchell: The hon. Lady is wrong. First, on the cases which the ombudsman examined, as I said in response to my hon. Friend the Member for Harrow, West (Mr. Hughes), some 14 of those 20 cases referred to events which took place in 1993 when the agency was in a very different condition. The hon. Lady is wrong to suggest scrapping the agency. It is here to stay. There is a wide consensus across Britain--if not among the Liberal Democrats--that the principles behind the CSA are right and proper in the interests of getting maintenance to the children who rightfully deserve it.

The House will have seen that regulations were laid last Monday for the piloting of the departure scheme. That is most important to the development of the CSA as it will enable us to deal with the small minority of cases which cannot be dealt with fairly under the formula.

Sir Donald Thompson: Does my hon. Friend agree that, proportionately, a year is a long time in the life of a child and that interest paid at the end of a year cannot do much to compensate for any deprivation that the child may have suffered? Will he continue with his efforts in nagging, cajoling and persuading the staff of the CSA to improve their performance and thus avoid further criticism?

Mr. Mitchell: I thank my hon. Friend for his comments. The CSA has been set demanding targets for next year to improve its accuracy to 85 per cent. and to increase the maintenance that it arranges and collects. There will be no resting by the CSA in its determination to ensure that there is a proper improvement in its service.

Mr. Wicks: Is the Minister not being complacent and dismissive of the ombudsman's important work and report? Is he not concerned that one third of complaints to the ombudsman involve the Child Support Agency? Why has he not appointed an independent complaints adjudicator, as recommended by the ombudsman a year ago? Why has that appointment not been made? Will he announce that appointment today to bring some much needed fairness into the system?

Mr. Mitchell: In respect of the first part of the hon. Gentleman's question, we are looking at the ombudsman's report with great care. I was responding to a specific question on the time taken to get money through to the parent with care. The hon. Gentleman should bear it in mind that the ombudsman looked at 195 cases. The CSA deals with 1.25 million cases. We are determined--there is certainly no complacency in the agency or among Ministers--to make certain that the CSA's performance improves. The hon. Gentleman's second point about an independent examiner is interesting and helpful. We are nearing the conclusion of our discussions on it and I hope to be able to say something to the House shortly.

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