Child Benefit (Hansard, 5 March 1990)

§ 6. Ms. Primarolo
To ask the Secretary of State for Social Security what would be the cost of uprating child benefit to bring it to the same level in real terms as prevailed in 1984.

§ Mr. Newton
About £635 million net in the current financial year.

§ Ms. Primarolo
Is not the Secretary of State ashamed that child benefit, the most efficient way of getting money to families, is worth 19 per cent. less than it was in 1984? As the Government are notorious for leaks, will the Secretary of State confirm the rumour that the Government are to abolish child benefit, and will he make a statement on the matter, either before the Mid-Staffordshire by-election or before the next general election?

§ Mr. Newton
We have no plans to do anything other than what we are committed to do and have been doing, which it to review the rate of child benefit each year in the light of all the circumstances and, of course, to devote considerable resources to assisting the least well-off families, as we have done on a large scale.

§ Mrs. Currie
Does my right hon. Friend agree that it would not be sensible to use the enormous sum that he mentioned—two thirds of £1 billion—to assist not only the poorest families but some of the wealthiest in the country through child benefit uprating? If he wished to help the poorest families, would not it be wiser to make some modest change in the tax rules on benefits in kind to assist members of families who wish to get back to work?

§ Mr. Newton
My hon. Friend, with her characteristic ingenuity, makes a point which I shall need to transmit to my right hon. Friend the Chancellor of the Exchequer. I shall ensure that it is drawn to his attention. In response to the first part of her question, over £1 billion of expenditure on child benefit goes to 1.75 million families whose incomes are over £20,000 a year.

§ Ms. Short
Is not it time that the Government came clean with mothers in Britain about their plans for the future of child benefit—a popular benefit with mothers at all income levels? Will the Secretary of State confirm that the Government's failure to uprate child benefit in line with inflation is depriving every child in Britain of £1.35 per week? Will he admit that the Government have breached their promise to the nation in the previous election manifesto? Does he agree that it would be hypocritical for a Government who have massively cut taxes for the rich to argue that child benefit should be means-tested when the effect of means-testing would be to deepen the poverty trap for women on low incomes wishing to return to work?

§ Mr. Newton
The answer to every part of the hon. Lady's question is no. We have faithfully maintained the commitment in the 1987 manifesto and at the same time directed substantial additional resources to helping the least well-off families with children. As a result of what will happen next month, about 1.5 million families, with one quarter of the nation's children, will do better than if we had uprated child benefit.

§ Mr. Kirkhope
Does my right hon. Friend agree that the extra £70 million that will become available in income-related benefits to a quarter of children will give them substantially more than if there had been a general increase in child benefit, which is surely inequitable now?

§ Mr. Newton
Yes, Sir.