HC Deb 15 March 1983 vol 39 cc114-5
2. Mr. Marlow

asked the Secretary of State for Social Services if he will increase the level of surrender value of life insurance polices which is disregarded before payment of supplementary benefit.

Mr. Fowler

We have received a number of representations about wholly or partly disregarding the surrender value of life assurance policies for supplementary benefit purposes. We are keeping this aspect of the capital rule in mind.

Mr. Marlow

Is not my right hon. Friend deeply concerned that those who have saved a nest egg find, when they fall on hard times, that it is addled because they have to spend nearly all of it before they can receive any support from the state, while those who have blown the lot on booze, bingo and the Costa Brava are baled out straight away? Will my right hon. Friend speak to the insurance companies, ensure that people are not penalised and can, at least, obtain the fully paid-up value if they are forced to surrender their policies?

Mr. Fowler

Obviously we shall keep that aspect of the capital rule in mind. I have much sympathy with my hon. Friend's first point.

Mr. Joel Barnett

Is the Secretary of State aware that many elderly people have been paying small sums of money for policies that are intended to meet burial costs, because of the inadequacy of the death grant? Will the right hon. Gentleman at least disregard the smaller elements in those surrender policies?

Mr. Fowler

The Government are actively reviewing that matter. I have great sympathy with the right hon. Gentleman's point, but I am not in a position to make any announcements at present.

Mr. Wrigglesworth

Will the right hon. Gentleman look at the case of one of my constituents and consider disregarding a compensation payment that was paid to someone on supplementary benefit after he had suffered a bad accident? Could the compensation for all the damage caused be disregarded for supplementary benefit purposes?

Mr. Fowler

I shall look at that case.

Mr. Cormack

Is it not entirely incompatible with the philosophy that we seek to advance to penalise thrift in this way? Will my right hon. Friend give us an assurance that at least policies of £5,000 or less will be disregarded?

Mr. Fowler

I have much sympathy with my hon. Friend's point. However, I am not in a position to make an announcement now, although I shall consider what he has said.

Mr. Foster

Why cannot the Government at least be generous to some categories of the poor and unemployed by completely disregarding the surrender values of insurance policies? Has not the DHSS estimated that it would cost less than £250,000 to do so?

Mr. Fowler

I note the pressure on this matter by the Opposition. As I have said, I am not in a position to make an announcement, but, if an announcement is made, I imagine that the Opposition will welcome it.