§ 10.36 p.m.
§ Miss Joan Lestor (Eton and Slough)When I obtained this Adjournment I was not aware that it would be on the same day as that on which we debated the Housing Finance Bill, but it fits in rather nicely with the Bill because it contains elements of rebate and identification of the poor, and the success of the Measure rests to a large extent on the number of people who are identified and who take up the benefits to which they are entitled.
At least twice during the lifetime of the present Government, since they extended the whole principle of means-tested benefits, I have asked that there should be an inquiry into the eligibility for take-up of the various means-tested benefits, because I believe that as the Government have decided that this is the way to deal with poverty, it is essential, before the principle is extended any further, that we should be made aware whether it has within it the elements of success, whether it will be seen in time to benefit those people who are poor, or whether it will be seen—and I have some evidence of this—to be a failure in not reaching those people most in need of help.
If, for example, we look at what we have been debating today, it follows that a large number of council house tenants will be eligible for rebates and help of various kinds to meet the very high council house rents. I estimate that in my constituency of Eton and Slough, which has a large percentage of council house property, both G.L.C. and borough council property, almost three-quarters of the tenants of those properties will be eligible for financial assistance. Therefore, I am particularly concerned that this principle in relation to family income supplements and other benefits shall be seen to apply to those people, and that those in need will be reached.
It is that matter which I question. That is the reason why I ask that we 178 should have an inquiry into the whole principle, to see how far we have got, to ascertain what has been the eligibility, how this relates to take-up and how it relates to what I believe is the growing gap between the better off and those who have been identified by the Government as poor.
Last April, various schemes were introduced under which, for example, welfare milk was abolished but 150,000 more families became eligible for free milk, eligibility again being based on a test of income, while at the same time prescription charges were increased, again with exemptions for people who, on various grounds, were found to be in need. There were similar increases in respect of ophthalmic services, dental services, and so on. The Government argued that there would be extensive exemptions, and that there would be floods of applications from poor families who were, in addition, claiming family income supplement and other benefits.
To the Government, and to anyone who regards means-tested benefits as a way of solving the problem of poverty, the success of a means-tested benefit must be gauged by the number of eligible people who take it up. When the family income supplement was first announced, several of my hon. Friends and I asked how the Government would ensure that people in need would receive the benefit. To this end, the most comprehensive welfare advertising campaign ever introduced was set in train by the Government. There is no doubt of that. When Questions have been asked about the identification of people in need and about the level of take-up, we have been told about the amount of money which has been spent on trying to identify such people and ensuring that the grounds of eligibility were widely understood.
I gather from the Ministry and other sources that, in the beginning, £180,000 was earmarked for the advertising budget related to the right to exemption from health service charges, as well as a separate sum of £60,000 to advertise the family income supplement. I understand that a letter from the Minister himself was sent out to over 250,000 people and organisations, including doctors, dentists and clergy, asking for help to ensure that every low-income family claimed the relevant benefit.
179 Over 300,000 copies of the handbook "Family Benefits" were made available and distributed free of charge. There were advertisements in the Press and on television. Further, when the take-up of family income supplement was seen to be failing, another £148,000 was used as a boost—that was the Government's phrase—to the original campaign.
About £600,000, including the leaflets and the rest, has been spent on advertising the family income supplement, the various exemptions from increased charges, and other benefits.
When the family income supplement was first announced, the Government said that they wanted an 85 per cent. take-up. So far, according to the last answer which I received from the Department, a week or two ago, the take-up has been 43 per cent. That is a very low take-up in relation to the original expectation. As I calculate it, more has been spent so far on the advertising campaign than has been spent on benefits.
§ The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)indicated dissent.
§ Miss LestorThe Minister shakes his head. If that is not so now, it was until a short time ago. It has been one of the most expensive advertising campaigns ever instituted, and the return for that expenditure has not matched the Minister's high expectations. By no measure can a 43 per cent. response against an expectation of 85 per cent. be said to be a successful result.
True, the response to the exemptions from national health services charges was a great deal better. There is no doubt about that. It could hardly have been otherwise, because claims for free welfare foods, for example, rose from about 32 to 26,000 a week. In other words, the situation at the time of the advertising campaign was so bad—and the previous Administration must bear some responsibility for that—that when the advertising campaign was launched it was obvious that there would be a far better take-up, because more people for the first time became aware of their entitlement. That is something I am very pleased about.
But the Government cannot claim that there has been a spectacular success 180 on free prescriptions, although in a recent parliamentary answer I was told that it is very difficult to make an estimate of those eligible for exemption from charges and those in receipt of them, because many people who are eligible are never sick, and therefore there is no record of their ever claiming.
I contrast that with the situation where there is a non-means-tested benefit, where there is an entitlement as of right, which does not involve people in having to prove their poverty. The success of the pension for the over-80s, which the Government introduced as an across-the-board benefit, is even greater than the Government estimated when they launched the advertising campaign for it. We can appreciate how great a success it was when we remember that the people concerned often have failing faculties and do not have the means of many others to know about their entitlement. The reason for that success is that it was not a means-tested benefit but a benefit as of right. That is why there is an urgent need for a thorough investigation into take-up and entitlement.
One of the main points in the Government's philosophy is a belief in incentives for industry and individuals. Even if I accepted the Government's argument, particularly on individual incentive, I feel it to be wanting when I consider a benefit such as family income supplement. Some benefits operate in such a way that a man becomes worse off if he increases his wages than he would be if he did not bother to obtain an increase. For example, a man earning £17 a week, with a wife and child, would obtain 50p a week family income supplement. If he increases his wages by £1 he loses not only that 50p but the free school meal for his child, which is worth 60p a week, and his entitlement to free prescriptions and dental care, and in some cases to other care. His graduated pension contribution is also increased. Therefore, on the Government's own argument, which I do not necessarily accept, a person can see that by working harder he will be worse off than when he was entitled to benefits under the various welfare schemes.
The Government's switch from favouring the allocation of over £30 million to family allowances, when they were in Opposition, to allocating a much smaller 181 amount to family income supplement, must have been based on the assumption that large numbers of people would not claim their entitlement. If complete success were achieved and every person entitled claimed every means-tested benefit, including the F.I.S., the total bill would be £300 million a year. Clearly, the Treasury must be very pleased with the present situation, which has kept down public expenditure.
A committee is at present inquiring into abuses. I understand that, since the mid-fifties, there has been a 1,000 per cent. increase in the number of people employed to find out who is fiddling. I am not defending those people, but the Government are in danger of erecting a structure so severe and inhibiting that the family in need is going without; we are too anxious to catch the person who is getting something to which he is not entitled. The evidence is that large numbers of those who are eligible are not receiving means-tested benefits. One of the reasons—there are many—is the humiliation and embarrassment of having to prove poverty to receive free school lunches, the family income supplement and other benefits. I find this by discussing the matter with people in my constituency.
But it has been estimated that tax evasion costs £17 million a year. We have been told that an inquiry is not necessary, yet there has been no move to increase the number of people in the Inland Revenue to try to get some of this money. This shows that the poor are suffering more than the better-off. This has been the philosophy and background to the whole argument about means-tested benefits. Many people do not wish to prove their poverty to this extent.
It is a pity that the Government could not remove the F.I.S. and substitute for it an across-the-board increase in family allowances, which could be taken back by tax adjustment from those who do not need them. That would eliminate the means test and would mean that those in need would receive the benefit. That is the principle to follow if we are to tackle poverty.
I am sure that my request for an inquiry will not be satisfied. I am sure that the Government will say that they are increasing the advertising and the effort to reach those in need. This is 182 their intention, but all the evidence suggests that success is very small compared with the need and the eligibility. Tonight we had the Housing Finance Bill, which increases the principle of means testing.
I ask the Minister to try to persuade his colleagues, before they embark further along this road, to examine what has happened. I believe that they will then abandon this principle if they are concerned with abolishing poverty and that they will look to better means of dealing with the problem so as to avoid humiliation.
§ 10.55 p.m.
§ The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)The House will be grateful to the hon. Lady the Member for Eton and Slough (Miss Lestor) for raising this important subject in such a moderate way. I want to give the House some of the latest information on the take-up of these benefits. Before doing so, may I say that this is by no means the only way in which we bring help, through the social services, to those who require it. This is one way, it is an old-established way, used by the previous Government, too. There are many ways in which help is made available. My right hon. Friend explained this in a Written Answer to the hon. Member for Oldham, West (Mr. Meacher) on 5th May when he said:
'There will continue to be scope for a healthy combination of the universal, the selective by category and the selective by means in the development of our social policies."—[OFFICIAL REPORT, 5th May, 1971; Vol. 816, c. 394.]Our measures to help those in need have not been confined to assistance to families with low incomes through a test of their income and their needs. Apart from the substantial up-rating of social security benefits which came into operation in September of this year, there has been special help for widows, for those over 80 and, in the new proposals which came in in September, for the chronic sick and disabled and, through the new attendance allowance, to begin in December, for the very severely disabled. In addition, there is new expenditure in the health and welfare area amounting to £110 million in the years to 1974–75.In the light of those figures it will be seen that, far from there being a cut in 183 expenditure, there has been, and there is planned, a substantial increase in social service expenditure. We have to face the fact that when resources are limited it is impracticable to make universal provision at an adequate level for every contingency. This inevitably means that the butter is spread so thinly that those in real need suffer through not getting enough for their requirements.
The hon. Lady asked for an inquiry into the whole question of means-tested benefits and their take-up. We are conscious of the need to watch the take-up of these benefits, but the figures I am about to give will show clearly that, on this point, the best form of inquiry and the most practical form is the information we are gaining as a result of the substantial increase in take-up in virtually the whole area of these benefits.
In the middle of April the Government launched the largest ever campaign in social service affairs to seek out those who, through lack of knowledge, reluctance, or for other reasons were not claiming the benefits to which they were entitled. The results have been encouraging. For example, before 1st April, 1971, the figure for welfare milk provision was 2,000. By October it had risen to 150,000. In the six months to 19th October, the number of remissions and exemptions for National Health Service charges rose encouragingly compared with the period before the campaign began. Exemptions from prescription charges rose from 8,000 to 63,000, dental charges from 12,000 to 58,000, and optical charges from 23,000 to 100,000. These are substantial increases.
In the case of free school meals, the income scale has been raised twice—in April and September. After the first increase, the take-up went up by 160,000; that is to say, by more than one-fifth of the autumn figure. Figures after the September uprating are not yet available but should show a further substantial increase.
By early November about 60,000 families were receiving family income supplement, and another 25,000 families were getting increased supplementary benefit because of the effect the F.I.S. has on the wage stop. In other words, for an allowance which did not start until August we already have about 85,000 families receiving 184 direct help through this new allowance, and the average weekly payment to those families is about £1.70. One can therefore fairly claim that for a comparatively new benefit, which had to be publicised, this is a very good start.
To summarise the position, the extensive publicity campaign for all these family benefits has resulted in about 750,000 new claims since 1st April for the benefits for which my Department is responsible alone. So far, there have been processed over 400,000 awards to families on low income for the publicised benefits, including, family income supplement. The campaign is a continuing process, and we shall pursue our efforts to improve the take-up figures even further. We are still getting new claims at the rate of 80,000 a month, as compared with 17,000 a month before the campaign began.
Those figures show very clearly the substantial success of the campaign so far, and there is no doubt that as a result of new people receiving these benefits we shall learn a great deal more than any inquiry could tell us about the additional needs of these people and the problems which exist in this approach. I freely admit that there are problems, and we are anxious to iron them out as much as we possibly can. Some of the problems are due to the complexity of the arrangements. We are very conscious of that, and it is our aim to achieve a greater simplicity where-ever possible, but we have at the same time to preserve the flexibility that is always necessary when dealing with the various circumstances of the people we are helping.
One way of doing this is through an extension of passport arrangements. Supplementary benefit has for some time been a passport to a number of other benefits. Entitlement to family income supplement has similarly been made a passport to entitlement to free school meals, free welfare milk and foods, relief from National Health Service charges, and refund of hospital patients' travelling expenses without a further means test.
As for claims in general, my right hon. Friend has announced that we are discussing with the local authority associations the feasibility of using a single 185 claim form for a wide range of benefits administered by both central Government and local authorities. We are anxious, therefore, to deal with the admitted complexities of the present arrangements through an extension of the passport concept which is already working in the areas I have mentioned.
The hon. Lady also mentioned, and very fairly, the disincentive effect which operates in some of these areas. Here, too, this is not a new problem. It is inherent in the scheme of benefits of our predecessors, but that does not say that we are happy about it. We are studying in depth how the best balance can be achieved, combining a decent level of help to those in need while retaining a reasonable level of incentive for those who have the opportunity of improving their earnings.
In the meantime, while this study in depth is going on, we are dealing with the existing situation. For example, the tax threshold has been improved. This was one of the big disincentives. One of the problems we undoubtedly inherited from the previous Administration was a very low tax threshold, and the design of the family income supplement scheme, with its 50 per cent. difference between the amount of payment and the prescribed income levels, is a deliberate compromise 186 between relating the benefits to need and preserving the incentive to work.
I hope, therefore, that the hon. Lady realises that we accept that there are problems and that we are trying to deal with them through the family income supplement, through the passport which I have mentioned and through the long-term studies which are now in operation. We feel that channelling help through those benefits which are based upon the test of need, of the requirements of individual families, is one of the most effective ways of helping those who most require income support or other assistance to bring them up to a reasonable standard.
We accept that there are weaknesses in this approach which we are anxious to iron out, but, equally, there are other ways, through universal benefits, through selectivity by groups, without means tests, by which help may be given. It is through a combination of these arrangements that we shall achieve more effectively the objective which we all seek to achieve, namely, effective help for those sections of the community which most require it and deserve it.
§ Question put and agreed to.
§ Adjourned accordingly at six minutes past Eleven o'clock.