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Social Security

Volume 181: debated on Monday 19 November 1990

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Low-Paid Workers


To ask the Secretary of State for Social Security if he will review the Government's policy towards helping those in low-paid employment.

A range of improvements designed to help the low-paid have been implemented in both the tax and social security systems. As a result of our policies, families now keep more of their earnings. Moreover, family credit now provides considerable extra help to boost the incomes of well over 320,000 working families

Is my right hon. Friend aware that there is often no incentive for single-parent families to go out and earn money, especially in low-wage areas such as south Devon where they are often better off staying at home and doing nothing than going out and finding paid work? Does my right hon. Friend agree that the Government should be encouraging the work ethic and making it more worth while for those who wish to work to help themselves?

Yes, indeed I do. My hon. Friend will be aware that within the past month, or just over a month, we have improved the earnings disregard in respect of in-work benefits—housing benefit and community charge benefit —with an eye on precisely the problem that many lone parents face. My hon. Friend will be aware also that a major ingredient in the child maintenance proposals that we published in the White Paper at the end of last month is directed to the same end

Does the Secretary of State recognise that, while these measures may be welcomed and should be supported, the Government should be doing more to ensure fair pay and perhaps a national minimum wage to help those on low pay? Is not it a fact that low pay does not save jobs and that increases in productivity achieved by farm workers and others on low pay have not saved their jobs?

The most likely result of any minimum wage policy of the kind that the hon. Gentleman appears to be advocating, and that his party is thought to advocate, would be the destruction of a considerable number of jobs. The right course is to concentrate on encouraging employment and on reducing taxation and national insurance contributions so that people can get a good return from their work

May I welcome the Secretary of State to the Government Dispatch Box on the first occasion on which I am asking a question on social security from the Opposition Front Bench? I hope soon to be answering such questions. In view of the right hon. Gentleman's previous answer, will he explain why all other members of the EEC are able to present national minimum wage levels when he says that if we were to do that—the next Labour Government will be doing it—we would be destroying jobs?

Without entirely endorsing all the hopes and aspirations that the hon. Gentleman expressed in his introductory remarks, I welcome him to the Opposition Front Bench. I am sure that we all look forward to his being on the Opposition Front Bench for many happy years.

Perhaps lurking in the hon. Gentleman's supplementary question is the reason why Britain has been more successful than virtually any other country in Europe in creating new jobs.



To ask the Secretary of State for Social Security whether he will reconsider his decision financially to penalise mothers who refuse to name the father of their child

We have no plans to change the proposal that, where a caring parent has no good cause not to claim maintenance for the children but refuses to assist in obtaining it, there should be a power to make a reduction in the income support allowance for her own personal needs. Such a decision would be taken only after full and careful consideration of all the circumstances and would of course be subject to the normal rights of appeal

Does the Secretary of State believe personally that it is right to cut the income of lone mothers living on benefits who, for their own good reasons, refuse to name or pursue for maintenance the fathers of their children? Surely, a much better system is to make it easier to claim maintenance, to create an incentive to do so and then leave it to each individual woman to decide in her own circumstances what is best for herself and her child.

In my view, the Government's proposals are an outrageous invasion of privacy——

I have asked two supplementary questions, and I am making one minor comment.

This is the usual harassment. I started with a supplementary question.

The Government's proposals—[Interruption.]Conservative Members are embarrassed by them and do not wish to hear what I have to say

Order. This is Question Time. Hon. Members must let the hon. Lady finish

Thank you, Mr. Speaker.

The Government's proposals are an outrageous invasion of privacy and have caused real fear among many women who have left difficult relationships. May I ask the right hon. Gentleman——

Order. That is a little unfair. The hon. Lady said that she wanted to ask two questions; she cannot have three bites

Now that the Tory wets are developing some spine, will they stand up for what is right? I have great respect for the Secretary of State and I find it hard to believe that he believes in these outrageous proposals

As I have said on a number of occasions, it is no more right that a caring parent should be able simply to choose not to claim maintenance than it is right for the absent parent to choose not to pay it.

We have put forward a carefully balanced set of proposals, which include incentives. As a result of the mechanisms that we are setting up, it will be much easier to claim maintenance. However, we thought it right to include the possibility of a sanction, with all the usual rights of appeal, if someone unreasonably refuses to co-operate

Can my right hon. Friend confirm that many families who maintain their children find it difficult to makes ends meet and that it is outrageous to expect them to maintain the children of those who simply do not want to name the fathers?

The White Paper acknowledges, as I am sure that the hon. Member for Birmingham, Ladywood (Ms. Short) will acknowledge, that there will be circumstances in which it would not be appropriate to expect a name to be given and we shall set up careful procedures to assess different cases. Nevertheless, my hon. Friend is right to suggest that to permit circumstances in which people could, with no good cause, simply pass on the bill to the taxpayers—including other families with children—would be wrong

The Government's White Paper refers to exemptions for families with previous unhappy experiences—for example, rape or incest—and that is right. Will the right hon. Gentleman go further and help the House to understand what the Government have in mind for such exemptions? For example, would a caring parent who had been granted a divorce on the ground of unreasonable behaviour involving violence have the right to withhold the name of the other parent?

She might. As is the practice in other parts of the social security system, we expect that well-trained officers would give full and careful consideration to all the circumstances. What would not be right, and what few people believe would be right, would be to bring about circumstances in which someone had only to say that she feared violence from the absent father for that absent father to be let off, or for the absent father only to make a threat of violence for that father not to be pursued for maintenance

Does my right hon. Friend agree that the first responsibility for maintaining children lies with the parents, and that the role of the state applies only where parents cannot or will not fulfil their obligations? Is not it remarkable that the hon. Member for Birmingham, Ladywood (Ms. Short) should ask such questions? Does not her failure to acknowledge the principle that I have enunciated show that she has a view of family policy that is unsustainable?

I agree with my hon. Friend about where the basic responsibility lies and the proposals in the White Paper reflect it much more clearly than ever before

According to the Government's figures, 95 per cent. of mothers immediately and voluntarily give information about the father. Why do not the Government do something to get contributions from that group of fathers so that mothers can have some of the freedoms to which the right hon. Gentleman referred?

In the interests of accuracy, I should make it clear that we think that that figure may be a bit on the high side because it is drawn from a particular sample——

Yes, but we think that the sample might have gone a bit astray—[HON. MEMBERS: "Ah!"] I thought that it might be sensible to put that on the record. We think that the proper figure is about 75 per cent. That is based on the best information that we have from our local offices.

Whatever the figure, as I said when I introduced the White Paper, the more that caring parents generally think it right to co-operate, the weaker is the case for ignoring those who choose not to co-operate.

Lone Parents


To ask the Secretary of State for Social Security what was the cost of income-related benefits paid to lone parents and their children in the latest year for which information is available and in 1978–79

Between 1978–79 and 1989–90, the amount of income-related benefits paid to lone parents and their families increased from just under £650 million to nearly £3,000 million

Does my right hon. Friend agree that from any point of view that represents a massive increase? Can he confirm that only three in 10 lone parents currently receive regular maintenance payments from their partners? Does not that indicate that the Government's new proposals for securing more effective maintenance of children should be implemented with the utmost urgency?

I can confirm that only about one third of caring parents receive regular maintenance payments. The proposals in the White Paper, "Children Come First", are directed at increasing that proportion as a matter of urgency

Will the Secretary of State confirm that many lone parents have been widowed or are in families where there has been long-term sickness? Does he agree that next year, one quarter of a million of families will be denied the full value of the extra £1 benefit for the first born? Those families will suffer a net cut in their allowances of 4·7 per cent. by April 1991 compared with April this year. Will not the right hon. Gentleman confess that the changes in child benefit were a cynical attempt by the Government to buy back maximum political benefit at minimum cost? Will he also confess his shame at having cut that money from families most in need—those that have suffered as a result of long-term sickness or bereavement?

I cannot accept phrases such as "a cynical attempt" and "minimum cost" when we are talking about additional expenditure of public money to the extent of well over £250 million. As to the interaction between an increase in child benefit and other benefits, be they national insurance or, more notably, income-related benefits, the policy being pursued is in line with that which has been followed for many years

Does my right hon. Friend agree that the Opposition should speak in support of child benefit rather than disparagingly about the increases that are secured?

Care Homes


To ask the Secretary of State for Social Security what representations he has received regarding the proposed £5 increase in income support payments to care home residents.

A number of bodies and individuals, including the National Federation of Housing Associations, Age Concern, the National Council for Voluntary Organisations and the National Association of Citizens Advice Bureaux, have written to us about the proposed increases

Is the Minister aware that the average increase in private care home fees in the Wakefield district this year is 17 per cent., compared with a 3 per cent. increase in income support payments that the Government announced recently? Has the Minister examined the evidence sent to his Department by Age Concern, showing that a number of elderly retired people are having to return to work, to earn money so that they can contribute towards the care home fees incurred by even more elderly relatives? Is not it scandalous that, in addition, the Government propose to withdraw housing benefit from vast numbers of care home residents?

This year, after a tight survey period, we devoted the largest-ever increase to helping those in residential care and nursing homes. The Government are to be congratulated on that achievement. The limits on residential care homes rose by £45 per week between April 1985 and August of this year—by 41 per cent. against an inflation rate of 35 per cent. As to changes in housing benefit rules for those in residential care homes, they will apply almost overwhelmingly to those who have capital of between £8,000 and £16,000

Would the Minister like to remind the House what these increases are, as the question only mentions £5? Also, will he tell us how many people are benefiting?

Thousands of people will benefit as a result of these increases. The uprating has cost some £230 million and the increases range from £5 per week increase to £45 per week. This year we have rightly devoted the most significant resources to those people in nursing homes who have had the greatest increase in costs

How can the Minister possibly justify a mere £5 per week increase in income support for residents in residential homes when the Price Waterhouse survey shows that the average running and capital costs of such homes are £172 per resident per week, whereas he has increased income support to only £160 a week. How can he justify only increasing income support for nursing homes to £255 per resident per week when Price Waterhouse reveals that the average running and capital costs in those homes is £350 per resident per week? Is not it clear that the haemorrhage of bankruptcies and closures of homes will continue and that the Government, having encouraged homes to be built in the first place, will carry the responsibility for the inevitable eviction of frail and elderly people?

First, the increase of £5 per week this year should be set against an increase of £ 10 per week April and a further £5 per week in August, so the increase in the past year has been of the order of £20. We have produced the largest-ever increase in funds. Expenditure overall, as the hon. Gentleman knows, has increased from £10 million per year, which the Labour Government were spending when they went out of office, to £1·27 billion under this Government. We have shown our care for people in those circumstances and have demonstrated it with cash.

Pensioners (Investment Income)


To ask the Secretary of State for Social Security how much the average pensioner's income from bank and building society deposits has changed since 1979.

The Parliamentary Under-Secretary of State for Social Security
(Mrs. Gillian Shephard)

My hon. Friend will be pleased to hear that the income which pensioners receive from savings more than doubled between 1979 and 1987

Can my hon. Friend say whether there has been a similar encouraging increase in income from occupational pensions in that period? How does this compare with the previous period—1974–79—when we were enjoying a Labour Government?

My hon. Friend will be equally pleased to hear that average incomes from occupational pensions in the same period grew by 77 per cent. His question about the way in which savings and incomes from occupational pensions behaved during the last Labour Government is the most significant, because such income fell by 16 per cent. during that period

Will the Minister balance the selective figures that she has been given by confirming that under the last Labour Government the percentage of pensions rose from 17·5 to 20·5 per cent. of male average earnings, while in the following years under the Conservative Administration they plummeted from 20·5 to a mere 16 per cent. of average male earnings?

What matters to pensioners is the way their average total net income rises. While expressing valedictions and regrets to the hon. Gentleman, I must say that under this Government, from 1979 to 1987 pensioners' average total net income rose by more than 31 per cent. in real terms. That is what the hon. Gentleman should remember.

Arcola Street Office, Hackney


To ask the Secretary of State for Social Security when he next plans to visit Arcola street social security office

My right hon. Friend has no plans to do so, but my noble Friend Lord Henley visited the office on 9 November 1990

Is the Minister aware that if he visited our Hackney social security offices he would see how London claimants continue to receive one of the worst services in the country and how Hackney residents suffer under his Poor Law regime? I draw to his attention the case of Mrs. S. Moore of 156 Evelyn Court, Amhurst road, London E8, who is disabled but was refused a grant for a pair of shoes because they were deemed to be of low priority. What sort of social security regime refuses disabled people money for shoes?

In general, I believe that those within the area of that local office are served well by the staff there. The hon. Lady will not expect me to comment on an individual case that she presents to me across the Floor of the House. The performance targets are being met. I know that the hon. Lady has a harmonious relationship with the management of that office and that the people there do their best to meet the points that she puts to them

There is an Arcola element in my question, Mr. Speaker. Can my right hon. Friend confirm that all benefit claimants at Arcola street and other social security offices will benefit from the work carried out in my constituency by the Information Technology Services Agency, which has been working on a £1·8 billion project to computerise the social security system and thus improve benefits for claimants?

I am sure that Arcola street, where computerisation for the pensions system will come on stream next February and for income support next April, will benefit from the efforts that we have put into operational strategy as a whole.

Pensioners (Mortgages)


To ask the Secretary of State for Social Security what proportion of pensioners make mortgage repayments; and how much of next April's rise in the basic state pension is attributable to rising interest and mortgage rates in the 12 months to September of the current year

As my hon. Friend will be aware, the retirement pension will be increased by 10·9 per cent. from April 1991, once again honouring the Government's commitment to protect fully the value of the state pension against changing prices. The corresponding September figure for the retail prices index less mortgage interest payments was 9·5 per cent. The latest information shows that, in 1987, 49 per cent. of pensioners owned their own homes and 4 per cent. made mortgage repayments

I thank the Minister for that reply. Does she agree that the figures show that about 15 per cent. of this year's substantial increase in the pension reflects rising mortgage costs—an expense which fewer than one in 20 pensioners have to pay? Does not that represent a tremendous bonus for the majority of pensioners in this country?

As rising interest and mortgage rates are a reflection of the Government's economic incompetence and have caused misery to millions, is not it brass neck for the Minister to try to make a virtue out of it by claiming credit for a bigger pension increase, which the Government did their utmost to avoid? If the Government are so solicitous about the welfare of pensioners, why have they blocked a bigger pension rise for pensioners in each of the past 11 years by breaking the uprating link with earnings? Is not it hypocrisy for the Government to try to feed that sort of soft question to Tory Back Benchers so that they can pretend that the Government are generous when, in fact, the Government have taken £22 billion off pensioners by breaking the earnings link?

Conservatives need no lessons in economic competence from the hon. Gentleman. I know that he fully understands that the Government have a dual policy on pensions—fully to uprate the basic pension in line with prices, which his Government were unable to do during their period in office, and to pursue other policies that Opposition Members steadfastly oppose, such as to increase choice in pension provision. It is not the Conservative party which wishes to turn personal pensions on their head.



To ask the Secretary of State for Social Security whether he will meet pensioners' representatives to discuss pensions, standing charges, concessionary fares and other matters; and if he will make a statement

We regularly meet representatives from pensioners' organisations. Most recently, I met a delegation from the National Federation of Retirement Pensions Associations

If the Government meet pensioners' organisations in the next few weeks, they will hear from those representatives that pensioners have been robbed of more than £13 per week as a result of the change in the system in 1979 when the Tory Government came to office. That system allows Ralph Halpern to pick up a pension of £9,000 per week while other pensioners in London, Bolsover and elsewhere do not have two ha'pennies to rub together. Why should those pensioners have to pay for their travel while the Prime Minister gallivants around the world on taxpayers' money? Why should they pay standing charges when the people at No. 10 Downing street do not pay a penny piece? There is one law for Ministers in this Government and another for the old age pensioners throughout Britain—get it changed!

Yet again I remind Opposition Members, in particular the hon. Member for Bolsover (Mr. Skinner), that the Labour Administration most certainly did not honour their promises to pensioners when they were in power. I also remind the hon. Gentleman that during the five years to October 1989, standing charges fell, in real terms, whereas during the previous Labour Government electricity prices rose by 30 per cent. That is a measure of the Opposition's care for pensioners. Under this Government, pensioners' average net income has risen by 31 per cent. in real terms. That is something that the Labour party could never hope to emulate

Does my hon. Friend nevertheless agree that the important point about caring for pensioners is that policies should not stand still and that we should consider all the time how better we can care for them? Will she look at the way in which the Germans and the French are able to provide an enhanced package of concessions for their old people, which makes their quality of life a great deal more agreeable?

I thank my hon. Friend for his question. I remind him and the House of the special help that has been provided by the Government for older and poorer pensioners. In October 1989, there was the special package, and a few weeks ago my right hon. Friend the Secretary of State made his uprating announcement. In Germany, pensioners get what they pay for. Pensions depend entirely on what people have earned during their working lives. There is no basic state retirement pension. Pensioners have to pay for their prescriptions. They also have to make a 6 per cent. contribution towards their health care. Moreover, the pensions choice that we provide in this country is being looked at carefully not only by Germany but by other European Community member states

What are the Government doing for a particular group of pensioners who are casualties of the Thatcher years? I refer to those people who were put out of work in their middle 50s and who have not worked since. When they reach pensionable age, they find that all that they are entitled to is the basic pension; there is no supplement from their earnings, or other employment. They find life extremely difficult, having been on benefit for many years. As those people are supposed to have made a sacrifice so that we could get British industry back on its feet, is not it time that the Government compensated them so that they can enjoy a decent life in retirement, instead of having to struggle on the basic state pension?

The point of the income-related benefits system is that the basic pension can be topped up by income support, community charge benefit and housing benefit. That provides a very good base for all the people described by the hon. Gentleman.

Family Credit


To ask the Secretary of State for Social Security what is the latest estimate of the number of individuals who will benefit from the Government's plans to reduce the number of hours which qualify for family credit from 24 to 15

We estimate that 65,000 families where a parent is currently working between 16 and 24 hours will be better off from being able to qualify for family credit. In the longer term, we also expect the change in the hours rule to encourage more people to take up employment and claim family credit and to be better off as a result

I welcome the extension of family credit to less well-off families. Will not it be of value to parents, particularly mothers, who will be able to go out to work while their children are at school, to the benefit of their families and themselves?

That is precisely the point which we are seeking to meet. We felt that 24 hours was rather a long time for that purpose. I ought to make it clear that, while the change in the benefit rules will be particularly useful to many lone parents, it will also help all families with children.

Does my right hon. Friend agree that this is another important step towards achieving what must eventually be the objective of all those policies: that people should not lose benefit when they behave in exactly the way that the Government seek to encourage? May we be assured that my right hon. Friend will continue to work towards that objective across the whole range of benefits?

That is an aspect of what I call the "children come first" package, to which I attach particular importance. I assure my hon. Friend that I shall continue to do everything that I can in the same direction.

Social Fund


To ask the Secretary of State for Social Security if he will make a statement on the working of social fund loans and grants

The social fund has continued to provide valuable help to a large number of people in greatest need. Since the scheme began almost 2·5 million interest-free loans and over half a million non-repayable community care grants have been awarded at a total value of almost £500 million

The Secretary of State tells the House about his "children come first" policy, but can he explain why my constituents are refused assistance in the form of a grant, for example, when new-born babies come into the family, when people such as the constituents of my hon. Friend the Member for Hackney, North and Stoke Newington (Ms. Abbott) want shoes or when my constituents are moved into unfurnished accommodation and need bedding or beds? Against that background, will the Minister explain through me to my constituents how he can justify the fact that some of the poorest people in Britain are told that they cannot have a grant? They are allowed a loan as long as, with their derisory income support, they can afford to pay it back, which, of course, many simply cannot

As I said, a large number of grants have been given, including on many occasions grants to people who applied for a loan but were awarded a grant instead because it was thought more appropriate. We have increased the maternity payment from £85 to £100 and the capital limit has been raised for people aged 60 and over from £500 to £1,000. From January 1991 that will also apply to exceptional cold weather payments. We have demonstrated the flexibility of the social fund and its ability to react to changing circumstances.

As a matter of urgency, will my right hon. Friend extend the use of the social fund to providing assistance for the families of British hostages held in Iraq and for returning refugees who in many cases come to this country penniless?

With regard to those who come from the Gulf and their relatives, we have liaised carefully with the Gulf support group. The response of the social fund has been first class. All flights from Iraq are met by officials from the Department of Social Security. People are given advice on how to pursue their claims with their local offices. Our officers sit alongside other advisers from the Foreign Office to make sure that the social security system plays its part; it also enables refugees to settle in Britain

Does the Minister recall his reply to my letter about chronically sick and disabled people, among others, who have returned to the United Kingdom from Kuwait and Iraq since the invasion of Kuwait? Can he now update his reply and, in particular, say today whether the total resources of the social fund will be or may be increased to allow for those wholly unexpected new calls on its help?

Of course, we review the budget and the claims on the social fund during the course of the year. There is no reason to suppose that the claims resulting from the crisis in the Gulf will alter the overall level of the budget this year

Will my right hon. Friend the Minister confirm that the former system was a licence to print money, under which youngsters would leave home, obtain a house on demand and present the DSS office with a shopping list of 140 items that were paid for on demand? Now they must have a loan. They must justify it and pay it back interest free. Does my right hon. Friend agree that in return some other people receive benefits of the same amount of money, which is laundered from person to person? That is good news for taxpayers' money, is it not?

I agree with my hon. Friend that the abuse of the single payments scheme and its entirely open-ended growth could not have been afforded by any Government. We took the right steps to alter the system to the new social fund, which is operating fairly, quickly and flexibly.

Social Security Systems


To ask the Secretary of State for Social Security what lessons he estimates may be learned from a study of other countries' systems of social security; and if he will make a statement

We can learn a great deal from a study of each other's systems, but we need to remember that they are set in different societies with different traditions and different economic backgrounds. In the European Community Social Security Ministers have agreed that the exchange of information and discussion of problems should be encouraged. In the wider context, Ministers maintain contacts with many countries—for example, recently my right hon. Friend the Secretary of State visited the United States of America to look at child support arrangements

Has my hon. Friend had an opportunity to study the Swiss system with its much greater emphasis on individual, family and local community responsibility for welfare? May I recommend that she reads "Cradle to Grave" by Ralph Segalman and David Marsland?

I am grateful to my hon. Friend for his kind suggestion. I am not very familiar with the features of the Swiss system that he describes, but comparisons between the British social security system and those of other countries of the European Community conclude with a flattering picture of the United Kingdom

What possible justification can there be for our present social security system, under which those with a small income, in some cases no more than £54 a week to live on, are expected to pay more than £10 a week in rent because of changes in Government regulations? Is not that absolutely disgraceful? I have notified the Minister of many such cases involving my constituents. Is it a wonder that so many pensioners cannot give a damn whether the Prime Minister or the right hon. Member for Henley (Mr. Heseltine) wins? What they want is the defeat of the Tory Government and a Labour Government in office

That is possibly the most ingenious question that we have heard so far this afternoon. Well done to the hon. Gentleman. The safety net that is provided by income support, and which is also supported by housing benefit and community charge benefit, together with the state pension, provides an excellent system of support for pensioners.