HC Deb 08 February 1977 vol 925 cc1217-9
11. Mr. Sproat

asked the Secretary of State for Social Services how many persons, at the latest available date, are receiving more per week in tax-free social security benefits, including benefits in cash and in kind, than they would receive if they were working for the average taxed wage.

Mr. Orme

It is not possible to give a figure, but the number is certainly very small.

Mr. Sproat

Is not the right hon. Gentleman aware that there is something desperately wrong with a system in which there has been an admission by the Chairman of the Supplementary Benefits Commission that 20 per cent. of workers are better off by not working than by working? Is he not aware that the figure does not include possibly another 20 per cent. who are only marginally better off by working? Will he first introduce legislation, to tax benefits, if the Government seek to tax every other source of income, and, secondly, will he make certain that it is impossible to earn more by not working than by working?

Mr. Orme

It does not advance the hon. Gentleman's case if he misquotes the chairman of the Commission. The figure to which the hon. Gentleman refers involves possibly one in 10 workers. Taking other factors into account, we believe that the figure is much higher when we consider those who are supposed to be defrauding the system. If I may give the hon. Gentleman some information on this matter, a person with average weekly earnings of £67 gross in November 1976, with a wife and four children and paying average rent and rates, would have a net weekly income of £49.54. If he were receiving all benefits, including earning-related sums, he would obtain £46.58. The important thing, however, is that after earnings-related benefit has ceased—and we must remember that the benefit was introduced to shield people during immediate unemployment—the figure would be about £40 per week. Since we are talking about large families with a great number of children, the hon. Gentleman appears to be attacking the children in those families.

Mr. Russell Kerr

Is my right hon. Friend aware that many Labour Members are becoming increasingly irritated by attempts made by the hon. Member for Aberdeen, South (Mr. Sproat) to seek to protect his waning political fortunes by that type of puerile supplementary question? Will my right hon. Friend undertake to the House that if there are any further attempts to ask him such questions they will be given a Bronx cheer?

Mr. Orme

The many complaints and letters which I have received from the hon. Member for Aberdeen, South (Mr. Sproat) have been and are being analysed by my Department. I hope to make an interesting statement to the House in the not-too-distant future.

Mrs. Knight

Does not the right hon. Gentleman accept that it is absurd that people are able to obtain more money from social security benefits when they are not working than they obtain when they are working? Does he agree that the fault lies in the low tax threshold?

Mrs. Renée Short

Low wages.

Mrs. Knight

Will he seek an opportunity to discuss this matter with his right hon. Friend the Chancellor of the Exchequer?

Mr. Orme

My right hon. Friend the Chancellor is aware of the tax threshold and has already informed the House that he is considering that matter. Does not the hon. Lady accept that we are dealing with a very small number of people in the category of large families of whom I spoke earlier?