Social Fund (Hansard, 15 October 1990)

§ 1. Mr. Wareing
To ask the Secretary of State for Social Security how many and what percentage of income support claimants aged under 60 years are repaying social fund loans by deductions from their benefit payments.

§ 3. Mr. Watson
To ask the Secretary of State for Social Security how many and what percentage of income support claimants aged under 60 years are repaying social fund loans by deductions from their benefit payments.

§ The Minister for Social Security and Disabled People (Mr. Nicholas Scott)
At the end of August this year 384,207 social fund loans were being recovered from income support recipients aged under 60, representing 13.3 per cent. of income support recipients in that age group.

§ Mr. Wareing
Now that the Government have succeeded in their objective of further impoverishing the poor, is not it time that they began to listen to their Social Security Advisory Committee which, in its seventh report, said that in no way was the social fund curing or assisting in alleviating poverty for the very poorest people? Will the Minister give an assurance that he will immediately implement the recommendation that loans for capital items should not have to be repaid, and that he will take steps to ensure that loans that are provided are repaid at a level at which poor people are not driven to go to commercial moneylenders?

§ Mr. Scott
I would accept neither that there has been an increase in poverty in this country in the past 10 years, nor that the social fund is not doing an important and sensitive job in meeting need where it needs to be met. Some 2.4 million loans are now being given at a cost of about £334 million and half a million grants at a cost of £131 million. They have been targeted on those who need help most.

§ Dame Elaine Kellett-Bowman
Will my right hon. Friend assure me that persons who applied for capital allocations under the single payment scheme year after year are not doing exactly the same for the same items 908 under the present system? Does he recall an occasion when one of my constituents applied for over £600-worth of capital items, which she got, and the following year applied for identical items, which she did not get? What happens now? Can people now get loans for the same items, and is a careful record kept?

§ Mr. Scott
We keep careful records on each claimant's patterns of applications for loans. After a year, there might be a renewed need for a particular item, but we seek to counter abuse as actively as possible.

§ Mr. Sillars
Is the Minister of State aware that people come to my surgery who have been denied a social fund loan, not on the basis that they have no need, but because the Department's calculation is that they could not repay it. The need does not disappear. Those people then have to go to private moneylenders, where the minimum rate at the moment is 75 per cent. How can the right hon. Gentleman justify that?

§ Mr. Scott
I am interested that the hon. Gentleman has a number of constituents in that position, as about 1.6 per cent. of cases are turned down on the basis that the claimant is unable to repay the loan. In those circumstances, it would be wrong for us to give a loan to the applicant. Alternative sources of funds are suggested to those claimants and they are offered advice on how to manage their affairs.

§ Mr. Teddy Taylor
Has the Minister had time to study the case that I sent to the Secretary of State, about a young lady in Southend-on-Sea who applied for a social fund loan because she was allocated a council house in place of bed-and-breakfast accommodation, and was told that that could not be regarded as a priority within the limited budget? When I pointed out that the young lady had just come out of prison, she was given the grant because apparently that is a priority under the guidance given by the Department. While the Secretary of State is considering that case, will the Minister try to ease bureaucracy in the DSS by putting up a notice in every department saying, "If you have been to prison please advise the staff, because that could be to your financial advantage"?

§ Mr. Scott
My hon. Friend will not expect me to comment on the particular case that is being considered by my right hon. Friend the Secretary of State. The guidance that is issued by my right hon. Friend is supplemented by guidance on local needs that may exist in a particular area, but the final decision is made by independent social fund officers who can use their discretion and take account of that guidance as they see fit.

§ Mr. Meacher
How can a person on income support be expected to get by with deductions on social fund repayments when Matthew Parris, a former Tory Member of Parliament, could not get by for one week on income support, even without social fund repayments? Is not it impossibly difficult for the nearly 500,000 poorest families on social fund deductions, not only to repay their social fund loan, but to pay any housing, electricity, gas and water charge arrears and now also poll tax deductions? Have the Government reached the ultimate absurdity of denying loans to the poorest families who need them most because those families are too poor to repay?

§ Mr. Scott
If I may say so without referring back to the alleged experience of our previous colleague, 2.4 million loans have been made at a cost of £334 million. It seems better that that money should go interest free to people who need it than that people should be led into the hands of loan sharks, as was mentioned earlier in this exchange.