HC Deb 04 February 1991 vol 185 cc7-9
9. Mr. Wray

To ask the Secretary of State for Social Security what action Her Majesty's Government are taking to solve problems resulting from the increase of refusals of social fund grants and loans.

Mr. Scott

In the first nine months of this year, 38 per cent. of decisions on applications to the social fund resulted in a refusal. That is the same as the overall rate for last year.

Mr. Wray

I cannot agree with the Minister's figures. The Observer has clearly reported that there has been a 60 per cent. increase in grant refusals and a 50 per cent. increase in loan refusals. Does the Minister agree that that is a shocking state of affairs with regard to the social fund? It has been used and abused for the most vulnerable people in society. There is £3,500 million in the contingency fund. Surely the Government are aware that one in four children in Scotland live in households that depend on income support. Will the Minister persuade the Government to give him more resources? Since 1988, because of social fund refusals they have made a saving of £2.5 million.

Mr. Scott

My experience of the social fund is that it has responded flexibly and fairly to those who need extra help beyond that of the normal provisions of the income support system. The hon. Gentleman's own constituency has the highest social fund allocation per capita—about two and a half times the average for Britain as a whole.

Sir Fergus Montgomery

While I accept that a grant-based system meant runaway costs that no Government could continue, what should I say to an old man in my constituency, with savings of less than £200, who applied to the social fund for a bed and was told to use those savings?

Mr. Scott

Those are matters for social fund officers in the first instance. My hon. Friend will know that there is provision first for an immediate review and then for an appeal to social fund inspectors if people are dissatisfied with individual decisions. I draw my hon. Friend's attention to the fact that, in 1989–90, 35,000 people who applied for loans from the social fund were awarded grants instead.

Mr. Meacher

Is the Minister aware that, under the notorious social fund, 3 million of the poorest pensioners are freezing in the coldest snap for four years? Does he accept that the Government's severe weather payments system is riddled with unfairness because the criteria are far too restrictive, because hundreds of thousands of those on the lowest incomes are excluded, and because it is paid retrospectively so that pensioners dare not spend the money when they really need to? Is not it a shame that the Government can suddenly find £1.5 billion to spend on the Gulf and yet, at the same time, can spend only peanuts to stop old people freezing, in some cases to death?

Mr. Scott

I am not quite sure what to read into the latter part of the hon. Gentleman's comments about what the Labour Front Bench's reaction would be, if it were under the hon. Gentleman's influence, to the crisis that confronts us in the Gulf. I do not accept the description of the social fund as notorious. About 3.3 million grants and loans have been paid out to the most needy people in our society as a result of its operation.

We introduced the cold weather payments system some years ago and we have since developed it in several ways. We have, of course, had some mild winters recently, which may have reduced overall expenditure on cold weather payments, but I am confident that we shall be able to respond to the needs of people on income support who have children in the family or who have pensioners or disabled people within the household. They will be helped by the scheme.

Sir Robert McCrindle

While I accept what my hon. Friend the Minister says about the social fund, is not it a fact that, as grants tend to be replaced by loans and as the same beneficiaries tend to make applications year after year, over a period the cumulative interest which many will find impossible to pay will create a situation to which we shall need to turn our attention?

Mr. Scott

With respect to my hon. Friend, if further loans are made to somebody they are not expected to repay the second loan until the first has been completed. Of course, there is no question of interest being charged on any of the loans—they are all interest-free.

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