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House of Lords

Tuesday, 16th May 1995.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chester.

Means-Tested Benefits: Disentitlement

Earl Russell asked Her Majesty's Government:

    Whether they have attempted any cost-benefit analysis of the effects of disentitling people to means-tested social security benefits.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, changes to the provision of means-tested benefits are considered very carefully. Due regard is given to the effect of any change on individuals or groups, on the social security programme as a whole, on other departmental programmes and on any other areas where it is considered that there may be an impact.

Earl Russell: My Lords, the Minister has said that he gives "due regard". He has not said how much regard he thinks is due. Can he tell us what he knows about the costs which are incurred by disentitling people to means-tested benefits? Perhaps I may take one example among many. Can the Minister tell us how many of the 16 and 17 year-olds who committed indictable offences last year were without visible legal means of support and if not, why not?

Lord Mackay of Ardbrecknish: My Lords, "due regard" means just what it says. We look at all the knock-on consequences that may arise and we try to evaluate them as best we can. As regards the specific question, I do not have the answer which the noble Earl seeks. I do not know whether it is available. I do not believe that crime can be so simply put down to those youngsters who have not obeyed the various regulations that would allow them to get training, education or benefit.

Lord Stallard: My Lords, the noble Lord said that some notice has been taken of the effects on groups and individuals. Can he tell us how many people have been evicted or rendered homeless because of reductions in their housing benefit? Will the Minister publish the findings of that research?

Lord Mackay of Ardbrecknish: My Lords, I cannot give an answer about housing benefit and the effect on people losing their homes. A specific Question would have to be put down to get that information. Although the noble Lord seems to think so, I am not a walking encyclopaedia with the answers. I say to the noble Lord that the cost to the taxpayer of the various housing support benefits has increased quite considerably over the past few years, which shows that we are taking account of the problems which people on low incomes have as regards their housing costs.

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Baroness Hollis of Heigham: My Lords, something like half the number of families in Britain now are on means-tested benefit. Can the Minister tell us why?

Lord Mackay of Ardbrecknish: My Lords, I read the statement about that and I shall look into it. One of the problems is many people are considered to be on benefit because they are entitled, for example, to retirement pension or child benefit and the like. But housing and council tax benefits are means tested and come into play when one counts how many people are on some form of means-tested benefit. The fact is that we are very generous in the extension of those means-tested benefits and the noble Baroness's question makes that clear.

Lord Beaumont of Whitley: My Lords, my noble friend did not in any way imply that there was a simple answer to crime. However, it is well known that if you have no resources or money you tend to drift into crime. The Government should have statistics on this subject and will they please furnish them?

Lord Mackay of Ardbrecknish: My Lords, I am always interested in noble Lords who want statistics on more and more things. I shall certainly look into whether there are statistics on this subject. What is certainly true is that crime is at an unacceptably high level. We all believe that. We are very sure, as any reading of the newspapers will clearly illustrate, that there are many reasons for crime, including, for example, lax family discipline, children not going to school and receiving discipline there, and the rise in the drug culture.

Lord Stallard: My Lords, as regards the Minister's reply to the original Question which refers to,

    "cost-benefit analysis of the effects of disentitling people to means-tested ... benefits",

he said that a good deal of scrutiny and research takes place into this matter for individuals and groups. I asked the Minister to publish the results of that kind of research so that we can look at it.

Lord Mackay of Ardbrecknish: My Lords, I do not believe that I said that. I said,

    "Due regard is given to the effect of any change on individuals or groups",

and any changes which may occur across other departmental budgets. I did not specifically mention that we commissioned research or the like, although the Department of Social Security spends a great deal of money undertaking research on a wide range of issues.

Baroness Faithfull: My Lords, does my noble friend agree that many of the homeless children sleeping on the streets of London—admittedly, the number has diminished lately—have nevertheless been in care? Is he aware that they have no home; that they cannot get accommodation and, because they cannot do that, they cannot get a job and, because they cannot get a job, they cannot get accommodation? Is he further aware that, later, they are found to need the health service a great deal because they are not fit and very often they become the permanent unemployed? Would it not be better to help them at this stage with housing benefit?

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Lord Mackay of Ardbrecknish: My Lords, we take into account some of the factors which the noble Baroness mentioned when we look at hardship payments for this specially pressed group of young children coming off local authority care. My noble friend has rightly pointed out that that is a problem area. Perhaps it is a reflection on local authority care as much as anything else.

Earl Russell: My Lords, the Minister has again invoked the interests of taxpayers, but how can he defend the interests of taxpayers unless he knows what his measures cost as well as what his measures say? The Minister clearly does not know the answers. Could he please try to find them out next time?

Lord Mackay of Ardbrecknish: My Lords, I shall certainly look at that point. However, I must advise the noble Earl that even the might of the computer cannot deal with some questions. Indeed, some of the behavioural aspects of the problems that he has raised are among the questions on which it is most difficult to get proper, scientific statistical analysis—I emphasise the word "scientific".

Taxation: Government Policy

2.44 p.m.

Viscount Hanworth asked Her Majesty's Government:

    Whether they consider that any reduction in direct taxation is necessarily accompanied by an increase in indirect taxation; and, if so, whether they are satisfied that this has been clearly explained to the public.

Lord Mackay of Ardbrecknish: My Lords, the Government's clear policy is to reduce the share of national income taken by the public sector, and that means reducing the level of all taxes when it is prudent to do so. However, we have also sought to shift the burden of taxation, over time, from income to spending. This allows people to keep as much of their own money as possible, to spend or save as they choose.

Viscount Hanworth: My Lords, I thank the Minister for that Answer which was nothing like I had expected. I shall leave the matter as it stands.

Lord Barnett: My Lords, as the Minister did not even attempt to reply to the Question, may I try? In fact, what the Government have done is to increase both direct and indirect taxes, so the one does not necessarily accompany the other. Because the Minister did not answer the Question, may I ask him whether he is now saying that the Government will not be increasing indirect taxes at the next Budget in order to cut direct taxes? Is he giving us that assurance?

Lord Mackay of Ardbrecknish: My Lords, I am sorry that the noble Lord thinks that my original Answer did not answer the Question. I thought that it did. The noble Lord knows more than most Members of your Lordships' House that the Chancellor of the Exchequer has to decide every year on what he needs to raise to

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pay for the Government's spending and at the same time has to take into account the need to keep down borrowing. He then decides on the balance of taxation and on whether he has to put up taxes—as we have had to do—in order to retain sound public finances. That is now paying dividends in the growth of our economy.

If the Chancellor is to reduce taxation he has to decide where to do so. I should, of course, point out to the House that the rules of the European Union inhibit one's scope for action on value added tax. However, we are at heart a tax-cutting party and the sooner that we can get back to doing that, the better pleased we shall all be.

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