HC Deb 09 February 1988 vol 127 cc176-7
5. Mr. Hanley

To ask the Secretary of State for Social Services what is his estimate of the cost of the current year's social security uprating.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo)

We estimate that the benefits uprating which takes effect from April 1988 will add more than £1.3 billion to social security expenditure in 1988–89.

Mr. Hanley

While recognising that the uprating represents the most thorough and substantial review of the social security system ever, and that it will make the system simpler to understand, may I ask my hon. Friend to guarantee and confirm to the House that those most in need will be the people targeted by the reforms, and that families with children will benefit even more than they would have done by a simple uprating of child benefit?

Mr. Portillo

My hon. Friend is absolutely right to draw attention to this simplification of the system, which is important, and to the extra money going to families. The sum of £200 million is going to family credit over and above what is available for family income supplement. Another £100 million is going to families on income support, which compares with the £120 million that it would have cost to uprate child benefit.

Mr. Nigel Griffiths

Will the hon. Gentleman confirm that among those losing out will be 100,000 people who will lose housing benefit altogether, 50,000 of whom are pensioners? Six hundred thousand families will also lose out when housing benefit is reviewed downwards in April.

Mr. Portillo

There are some losers from housing benefit, but overall the reforms have produced many more people who gain or suffer no change than people who lose out. The hon. Gentleman makes a mistake to consider housing benefit in isolation.

Mr. Raison

Will my hon. Friend make sure that in the next uprating the capital limits are reconsidered? The present limit of £6,000 bears hardly on a number of people who have been receiving housing benefit. Can we raise that limit next time to at least £10,000?

Mr. Portillo

The £6,000 limit applies across the range of benefits. It is double the present limit for supplementary benefit. Of course the limits can be reviewed, but that would mean that people who were paying taxes and had no savings would be paying tax to pay benefits to people with more than £6,000 in the bank.

Mrs. Beckett

In view of the size of the sums that the Minister has quoted with regard to the uprating, is it not a particularly mean and shoddy trick to cheat pensioners and the disabled out of a fiver a week solely because—often for the convenience of the Department—they have combined payment hooks?

Mr. Portillo

I think that the hon. Lady has misunderstood the position. Many people are overcompensated by the compensation being paid for the RPI error. Only a very small number of people are losing because they are entitled to a benefit on both their order books.

Mrs. Peacock

I welcome the early part of my hon. Friend's reply, but may I ask what representations he has received about the £8 payment that is being made to all who were underpaid last year? Is he aware of the confusion, concern and anguish that that is causing in many areas?

Mr. Portillo

Some of the confusion arises because people have not understood that on some benefits there has been no loss. Due to the way in which the rounding up is calculated there has been no loss for those on lower rate attendance allowance, invalid care allowance, basic retirement pension for married women on their husband's insurance contribution or on severe disablement allowance. In view of all those, some of the claims are exaggerated.