HC Deb 26 October 1982 vol 29 cc877-8
5. Mr. McCrindle

asked the Secretary of State for Social Services if he will alter the rules on ownership of capital in relation to the granting of supplementary benefit so as to remove the disincentive to saving.

Mr. Fowler

As my hon. Friend will be aware, the Government are increasing from this November the amount of capital that a claimant can have while remaining eligible for supplementary benefit. The amount disregarded is to be increased by 25 per cent. to £2,500. That will fully restore the value that it had when the present arrangements were introduced in November 1980. The Government will continue to keep the operation of the capital rule under review.

Mr. McCrindle

I welcome that improvement, but is it not wrong that the surrender value of a life policy should be taken into account in assessing whether a person owns capital equal to £2,500? Does my right hon. Friend agree that the surrender value of a life policy has no monetary value unless the policy is cancelled? Is he encouraging people to do that?

Mr. Fowler

I have a great deal of sympathy with the point made by my hon. Friend. The review that was carried out for the Supplementary Benefit Policy Inspectorate showed that only 8 per cent. of claimants reviewed had assurance policies and that most were for only a few hundred pounds. Therefore, that made no material difference. I am sympathetic to what my hon. Friend is saying, and the Government will continue to keep that aspect under review.

Mr. John

While the Secretary of State is expending his limited stock of sympathy, will he also look at redundancy payments? Is it not disgraceful that people should be debarred from having supplementary benefit because of the redundancy payments that they have received as casualties of the Government's industrial policy? Will the Secretary of State also look at the ridiculous bar for single payments of £300 of capital, which was not raised this year? That figure is unrealistic, and great hardship is caused to many people.

Mr. Fowler

The inspectorate's report showed that there was not a major problem, which many people thought there was, with regard to redundancy payments. If the hon. Gentleman wants to check that, the report is in the Library. The single payment capital disregard was set in November 1980. I am conscious of the need to keep that under review as well.

Mr. Wigley

Is the Secretary of State aware of the difficulties arising from the capital resource regulations for smallholders who own 2 or 3 acres of land surrounding their family homestead? That is prevalent in the slate quarrying and some of the coal mining areas in Wales. They cannot sell that land without selling their home, yet it has a value of over £2,500, which debars supplementary benefit. Will the Secretary of State consider that matter in comparison with croft owners in Scotland, whose land does not qualify as a capital resource for these purposes?

Mr. Fowler

I give an assurance that I shall consider that matter.

Mr. Marlow

Will my right hon. Friend look into the case of Mr. York of Northampton? He is due for compensation for something that happened to him in the past, which depressed his living standard. If he receives that compensation, he will have to spend it before he is entitled to supplementary benefit. His living standard was depressed in the past. Can he not make up for that depression in his living standard before he is deemed to have capital that disqualifies him?

Mr. Fowler

That comes into the general review that I have already mentioned. [Interruption.] I thought that Opposition Members would be pleased that we were having a general review. I intend to continue with it. I shall also consider my hon. Friend's point.

Mr. Freud

Further to the original answer to the question, are we to take it that the Secretary of State feels that 8 per cent. of humanity is too insignificant a sum to mention? Does he realise that that is one person in 12?

Mr. Fowler

Of course I realise that. That is one of the reasons why I have already said that the Government are continuing to keep that aspect under review. I hope that the House, knowing the form that the review takes, will contain its impatience.

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