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Family Income

Volume 979: debated on Tuesday 26 February 1980

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asked the Secretary of State for Social Services if he is satisfied that the indexation of benefits assists in the minimisation of the poverty trap.


asked the Secretary of State for Social Services if, in order not to aggravate the so-called "why work?" problem, he will take steps to ensure that no more child support is given to non-working families than to those who work.

I recognise that the levels of benefit are an important factor in any consideration of work incentives. But if, for example, we were to increase child benefit by £1.70. so as to produce the same level of child support for a person who is at work as one receiving unemploy- ment benefit, the cost would be £950 million a year. Such resources are not available.

Does not that mean that, while there is a powerful case for increasing some of the long-term benefits by an amount equivalent to the rise in the cost of living, there is, equally, a case for increasing such benefits as short term unemployment benefit to a rather lesser extent, so as to act as an incentive to those receiving that benefit to take some of the jobs that continue to be available?

We recognise the importance of the interaction between benefits, tax and low wages. We are keeping these matters under review. I cannot be drawn any further on this subject at present.

Is my right hon. Friend aware that those not in work receive at least £5.70, and in some cases as much as £9.35, for teenage children, while those in work receive only £4? Does he agree that that is one of the principal causes of the "why work?" problem which the Government are pledged to solve? Will he give an assurance that he will institute a uniform child benefit at the earliest possible opportunity?

I cannot anticipate what may happen about child benefit. Clearly, in principle, we all wish to see it raised a good deal. The general problem has to be attacked in several ways. One is the raising of tax thresholds, on which a useful start was made in the Budget last year.

Is not the Minister aware that his Government's refusal to increase child benefit is deplored by the majority in Britain, especially those who are most poor and needy? Will he give an assurance that child benefit will be increased to its true level in real terms?

The hon. Gentleman cannot expect me to anticipate anything that may be announced in a few weeks' time.

Does not my right hon. Friend agree that if, at the next Budget, the Government decide not to index the tax system through implementing the Rooker-Wise amendment, there will be a substantially reduced case for indexing child benefit? If Rooker-Wise is not implemented, and the indexation of child benefit occurs, will not the poverty trap be made worse?

That is an interesting supplementary question. I cannot anticipate the Budget Statement for two reasons. First, I do not know what is in the Budget and, secondly, even if I did know I would not be allowed to say so.

Instead of listening to his hon. Friends behind him calling for a decrease in benefits to alleviate the poverty trap, will the Minister pay attention to the early-day motion sponsored by his hon. Friend the Member for Hornchurch (Mr. Squire) outlining methods to solve the poverty trap?

Does the right hon. Gentleman realise that that motion has been signed by 29 Conservative Members of Parliament and calls for child benefit to be raised?

Every hon. Member is in favour of raising child benefit as fast and as far as resources will allow.