HC Deb 27 May 1968 vol 765 cc1206-8
16. Mr. Hooley

asked the Minister of Social Security what effective net benefit does a family wholly dependent on social security benefit derive from the increase in family allowances; and how this compares with the benefit accruing from the allowance to a taxpayer on an income of £1,500 per annum with three dependent children of school age.

Mrs. Hart

The taxpayer with three children and an income of £1,500 a year derives virtually no benefit from the April and October family allowances increases because he was already paying tax at the standard rate before the change. Families on supplementary benefit have been helped if they are subject to the wage-stop. The increase in family allowances in April and October are specifically intended to help the family of the low wage earner in work. National Insurance benefits and supplementary benefits were increased last autumn, and supplementary benefits are to go up again this autumn.

Mr. Hooley

But is it not a fact that families wholly dependent on social security benefits derive no benefit from the increases in family allowances? How is it defensible to increase family allowances for people who are working and have an adequate income, even if it is not £1,500, and give nothing to those on social security benefits?

Mrs. Hart

My hon. Friend will know that we discussed this fully last Thursday. If the kind of family which he mentions, which of course needs our help, has three children, it has been having 14s. a week more since last October. We were seeking then specifically to help the low income family the father of whom is in work and therefore cannot benefit from any social security benefit other than family allowances, and who often has an income, on which to support his family, lower than that guaranteed by supplementary benefits.

Mr. Pardoe

Is the right hon. Lady aware that, from figures given by the Parliamentary Secretary in a Written Answer on 24th May to my hon. Friend the Member for Orpington (Mr. Lubbock), it would appear that the man on £1,500 a year and above will lose more the more children he has? Is this the Government's intention?

Mrs. Hart

I would need to see to what proposal the hon. Gentleman refers, but I doubt whether he has made the right interpretation. The tax adjustments which have been made are such that the full value of the increase in family allowances is not kept by people above a certain level of income and at a certain level only part of the value of the increase is kept. It means nothing more than that.

Mr. Winnick

May I plead with my right hon. Friend to look again at the position of widowed mothers and separated mothers who are drawing supplementary assistance and who, as a result of the family allowance increases, are not receiving one penny more? Is there not a special case for allowing these people to receive more money by not having their supplementary benefits reduced?

Mrs. Hart

My hon. Friend will readily understand that in our somewhat complex social security system it is not possible to help every group at the same time. That trouble has caused some unhappy feelings. The kind of person to whom my hon. Friend is referring got an increase last October. This time we undertook a different exercise and it was specifically designed for a different group of people. In circumstances such as this, we cannot assist everybody simultaneously.

Mr. Worsley

With respect to the right hon. Lady, is she aware that she appeared on Thursday not fully to understand the workings of her own selective scheme? Would she now make it clear —she did not on Thursday and her Answer has not, either—whether or not she is taking into account earned income relief?

Mrs. Hart

I gave the hon. Gentleman a very full statement about this last Thursday and I do not intend to repeat it now. I am sorry if my accusations of his misunderstanding have provoked him today.