Earnings Disregard (Hansard, 24 June 1991)

§ 3. Ms. Short
To ask the Secretary of State for Social Security what plans he has to adjust the earnings disregard for single parents on income support.

§ The Secretary of State for Social Security (Mr. Tony Newton)
We increased the earnings disregard for working lone parents on housing benefit and community charge benefit to £25 per week from last October, but we have no plans at present to change the corresponding £15 income support disregard, which is already £10 higher than that for most other claimants.

§ Ms. Short
As there has been an enormous growth in the proportion of lone parents dependent on income support under the present Government, because various changes have increased the poverty trap, would it not be much better to increase the disregard for income support and maintenance payments so that lone parents can move off benefits into semi-independence and then into work, rather than do as the Government have done and push more and more of them on to benefits, which the Conservatives then bellyache about because of the much bigger poverty trap?

§ Mr. Newton
The hon. Lady, despite her long-standing interest in these matters, has perhaps failed to focus on the fact that simply operating on income support earnings disregards works against the process that she wishes to advance of lone parents moving into what counts as full-time work. Much the more productive approach is to do what we have done, as I said in my first answer, and improve the earnings disregards for the in-work benefits. We shall build on that, in addition to the Child Support Bill proposals, by reducing the number of hours required to qualify a person for family credit and by introducing a maintenance disregard.

§ Mr. Harris
I accept that my right hon. Friend said that and I pay tribute to what the Government have done, but two lone parents who came to see me on Friday at my surgery in Penzance made the point that if the earnings disregard were raised from £15 they would be able to earn more through part-time work and therefore be able to devote more of their income to their children—for example, through school uniforms and school trips. Will my right hon. Friend consider that matter sympathetically?

§ Mr. Newton
To some extent, I am virtually driven to repeat what I said to the hon. Member for Birmingham, Ladywood (Ms. Short). Perhaps some of those people who went to see my hon. Friend the Member for St. Ives (Mr. Harris) did not focus sufficiently on the proposed change that would reduce family credit hours—to use a form of shorthand—from 24 to 16, together with other changes that the Government have already made.

§ Mr. Frank Field
rose—

Hon. Members
Hear, hear!

Mr. Field
Does the Secretary of State accept that his argument in response to my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) was inadequate? My hon. Friend merely asked the Government to continue a policy that they have already begun and to raise the disregard. Does the right hon. Gentleman accept that, as 670 the disregard is increased, more single parents may find an opportunity to find part-time work—and, in the long run, a full-time job—and more single parents may be able to raise the cash to cover child care costs? If it was right in the past to raise the disregard, why is it wrong to raise it in the future?

§ Mr. Newton
First, to advert to the warm murmurs of approval from the House, I should say how delighted we all are, regardless of party, at the hon. Gentleman's success in Birkenhead at the end of last week.
If the hon. Gentleman examines what I said earlier, he will see that I have not ruled out further consideration of disregards in this respect, as in others, but for the past year or two I have thought it right to concentrate on disregards for in-work benefits and on the improvements to family credit to which I referred. Sixteen hours would, in many people's book, count as being closer to part-time than to full-time work, yet above that threshold people will now be able to qualify for family credit. One has only to consider the figures, which show a larger number of people—including lone parents—cm family credit to know how important a benefit it is proving to be.