HC Deb 24 November 1981 vol 13 cc737-8
3. Mr. Winnick

asked the Secretary of State for Social Services whether it is intended to revise the £2,000 ceiling in regard to supplementary benefit payments.

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)

The Supplementary Benefit Policy Inspectorate is reviewing the application of the supplementary benefit capital rule, including the effect of the level of the disregard. Its report will be received shortly by Ministers.

Mr. Winnick

Is the Minister aware of the deep and understandable sense of grievance that is felt by many men in their fifties who, having been made redundant, cannot claim a penny of supplementary benefit because they have saved £2,000 or more during their working lives? In many cases redundancy money has been included in the £2,000. When will the Government drop this penal measure against ordinary people?

Mrs. Chalker

I am aware of the concern expressed by many hon. Members about not only redundancy pay, but other forms of saving. We have asked the inspectorate to take a special look at all those difficult problems. It would be wrong for me to anticipate the report that will shortly be given to Ministers.

Mr. Cormack

How long has it been Government policy to penalise thrift?

Mrs. Chalker

It is not Government policy to penalise thrift. We cannot ignore the fact that some people have amassed considerable amounts of capital. People save for a rainy day and when that day arrives the Government have a right to take some of that capital into account. The £2,000 allowance has been considered to be fair in the majority of applications. People fall outside that limit, and I can go no further than to say that we are well aware of that.

Mr. Andrew F. Bennett

Does the Minister accept that not only the principle is wrong, but the scale was set 12 months ago? As inflation stands at about 12 per cent., surely the Government should increase the uprating by £200 or £300.

Mrs. Chalker

I am aware of the concern felt by the hon. Gentleman and other hon. Members. However, this matter should remain part of the review. It would be wrong to ask for a special inspectorate report to be undertaken on the whole issue and then to prejudge its answers.

Mr. McCrindle

I accept that there probably is a case for maintaining a level of capital above which benefits are affected, but does my hon. Friend accept that, in all conscience, £2,000 is not much in 1981? Will she give an assurance that that figure will be kept constantly under review and that, as soon as it is possible to take account of the changing value of money, some increase in the figure will be forthcoming?

Mrs. Chalker

My hon. Friend and some hon. Members seem to have forgotten that we raised the limit from £1,250 to £2,000. As a result, 44,000 people gained from being allowed to retain more of their savings. We are aware of the problems, but as there was a large increase in November last year, I think that we are right to await the result of the inspectorate's review.

Mr. Rooker

Will the Minister confirm that the £1,250 was not a cut-off limit, equal to the present £2,000 limit, and that it was part of a sliding scale? Will she also confirm that her answer was grossly misleading to the House as well as to those outside? As the House wrote the regulations, why could not the House and the Government take a decision on redundancy payments, savings and life insurance policies? Why should it be left to civil servants in the inspectorate to take such decisions?

Mrs. Chalker

I should state at the outset that I had no intention of misleading the House. Of course the £1,250 was part of a sliding scale, but that does not alter the fact that 44,000 people gained as a result of last November's change. Although 9,000 people initially lost entitlement, some have regained it. The hon. Gentleman mentioned the issues that have been referred to the Supplementary Benefit Policy Inspectorate. The inspectorate will make recommendations and, when those are received, Ministers will consider them and take the decisions.