HC Deb 18 June 1985 vol 81 cc158-60
8. Mr. Patrick Thompson

asked the Secretary of State for Social Services what representations he has received about his proposals in the Green Paper, "Reform of Social Security" to alleviate poverty for low-income families with children.

The Secretary of State for Social Services (Mr. Norman Fowler)

The proposals have attracted widespread attention and debate in the two weeks since the Green Paper was published. The period of consultation will go on until mid-September.

Mr. Thompson

As more than half of those on low incomes are families with children, will my right hon. Friend press on with his proposals, through family credit, to eliminate the poverty trap and to increase incentives to work? This will not only be fairer, but will improve employment prospects.

Mr. Fowler

Family credit is one of the most important proposals in the Green Paper. It will tackle both the poverty trap and the unemployment trap. It will end the situation where people can be better off on benefit than in work, and I think that both sides of the House would want that.

Dr. McDonald

Is the right hon. Gentleman aware that the great mistake with the family credit system is that benefits designed to meet the needs of children will no longer be payable to the mothers? Will the right hon. Gentleman cast his mind back to the 1973 Tory proposals, when women made known their opposition to that proposal in the tax credit scheme? Is he aware that women will oppose this proposal for the family credit scheme and will ensure that benefits designed for children are payable to the mothers? Is the right hon. Gentleman aware that this proposal will fail for that reason once again?

Mr. Fowler

I certainly do not accept that the hon. Lady has a right to speak on behalf of all women. One of the difficulties about family income supplement, which family credit replaces, which both parties have faced, is low take-up. Before the hon. Lady goes off into her essays on what is wrong with family credit, it is incumbent upon her to make proposals that will help low income families.

Mr. Leigh

Will my right hon. Friend explain what rational justification there is for taxing impoverished young people into the poverty trap while subsidising the child bearing of duchesses with universal child benefits, except perhaps the desire to prevent them from falling into the rubbery arms of the Liberal party?

Mr. Fowler

I do not know about the last point. The fact is that child benefit provides the only recognition in the tax or benefit systems of the extra cost of having children. That is a good principle. We would be alone among almost all the countries of western Europe if we turned our backs on child benefit.

Mr. Allan Roberts

Does the right hon. Gentleman agree with the British Association of Social Workers, which says that now that claimants who previously received benefits as of right will have to pass a means test to receive benefits from the social fund, a management review of the decisions that will affect those claimants will be inadequate and that there should be an independent appeals machinery to review the decisions?

Mr. Fowler

The review process will be adequate to check the administration of the social fund, which will provide better help in many areas for whole groups of people, irrespective of whether they are in or out of work.

Sir William Clark

Will my right hon. Friend tell the House how much extra revenue will be raised if child benefit was still paid to mothers but taxed as income?

Mr. Fowler

I do not have the figures, but the effect of my hon. Friend's suggestion would be to reduce the take-home pay of all heads of families throughout the country. We should need to think twice before doing that.

Mr. Meacher

If the figures can be given in November, why can they not be given now? What is it that will be known in November 1985 that is not known in June? Is it not absurd that the figures are to be given only after the consultation period is supposed to have ended? Is it not obvious that a cover-up of this kind can be explained only by the fact that the Government have a great deal to hide?

Mr. Fowler

We have made it absolutely clear from the beginning that we want a debate to take place on the new structure that is set out in the Green Paper. We have also made it clear that when the White Paper is published in the autumn we shall set out a range of illustrative rates. The hon. Gentleman referred to a cover-up. I seem to remember that two months ago the hon. Gentleman put forward proposals on behalf of the Labour party. We have not heard a dicky bird about those proposals since. I challenge the Labour party to publish the hon. Gentleman's proposals.

Mr. Meadowcroft

The Secretary of State gave only a partial response to the question of the hon. Member for Bootle (Mr. Roberts). If there is to be more discretion with the social fund, will he grapple with the fact that it is crucial that decisions should be able to be challenged in a tribunal on the ground of reasonableness?

Mr. Fowler

I shall look at the suggestion that the hon. Members for Leeds, West (Mr. Meadowcroft) and for Bootle (Mr. Roberts) have made on this point. However, I hope that the hon. Member for Leeds, West will accept that we do not want to return to a situation in which inflexibility leads to a decision that is made in one part of the country being applied thoughout the rest of the country. I believe that we want to move away from that unsatisfactory position.

Mr. John Townend

Does my right hon. Friend agree that one of his first priorities should be to deal with the problem of the working poor? If his reforms are to deal with that problem, it is essential that the substantial savings on social security benefits should be used to eliminate taxation on the working poor.

Mr. Fowler

The major problem over the working poor is to define low income families with children. Family credit seeks to deal with that problem.