HC Deb 05 August 1975 vol 897 cc220-2
14. Mr. Ovenden

asked the Secretary of State for Social Services if she will reduce for lone parents the weekly number of hours of work required to qualify for family income supplement.

Mr. Meacher

We are still continuing studies to identify, if possible, an acceptable scheme which would benefit lone parents unable to work 30 hours a week.

Mr. Ovenden

Would my hon. Friend accept that that answer will be welcomed? Would he also accept that most people concerned with assisting one-parent families would support the Government's view that a system of child cash allowances to replace means-tested benefits is the best approach? Would he also accept, however, that the introduction of a scheme of that sort with benefits on a scale large enough to meet the aims will be many years delayed? Will he consider carefully whether the FIS can be used to benefit parents who earn too much to benefit from supplementary benefit but who cannot, because of family responsibilities, work long enough to qualify for the FIS? Will he in particular consider whether in those circumstances the hours limit could be reduced to 25 or 20 hours?

Mr. Meacher

I agree that the introduction of a Finer-type guaranteed maintenance allowance, if non-means tested, at a cost of £400 million a year is not possible in the immediate future. As to reducing the number of hours for entitlement to FIS for lone parents, if the number of hours were reduced from 30 to 24—or 25, as my hon. Friend suggests—only about 5,000 families out of more than 600,000 would benefit and double assessment of all families would be required to see whether they would get greater advantage from family income supplement plus rent and rate rebates or from supplementary benefits. Therefore, what we are concerned to do is to devise a scheme which will give extra help to a significant number of extra families but which is also operationally manageable.

Mr. Newton

Is the Under-Secretary aware that one of the problems is that the more people there are in receipt of FIS, the greater the number of people who are liable to get into the poverty trap? Have the Government made any progress in reducing the number of families who are subject to these high marginal tax rates?

Mr. Meacher

One change which reduces liability to the poverty trap is the fact that there is no immediate adjustment of benefits. Therefore, families in receipt of family income supplement and such things as free welfare milk and free school meals now receive those for a period of at least a year before adjustments are made. Although this does not eliminate the poverty trap—the only way to eliminate it is by providing benefits as of right—nevertheless it reduces the liability.