HC Deb 08 June 1992 vol 209 cc9-10
9. Mr. Hague

To ask the Secretary of State for Social Security how many families are expected to gain from the recent reduction in the number of hours that must be worked in order to qualify for family credit.

Mr. Burt

We expect a substantial number of families to gain from the change to family credit introduced in April. So far, around 35,000 families have claimed it as a result of the Government's reducing the minimum number of hours required to 16 per week.

Mr. Hague

Will my hon. Friend confirm that there have been some 2.5 million successful claims for family credit since its introduction in 1988? Is that not an encouraging statistic? The further improvement will be welcomed, because it opens up the benefit to more families on low incomes, while still not creating a disincentive to work.

Mr. Burt

Yes, the change will be widely welcomed, particularly by lone parents. Many lone parents want to work and the change will make it more worth their while to do so. My hon. Friend is also correct in regard to the number of claims, which has increased from some 243,000—for the equivalent family income supplement—to some 350,000.

Dr. Godman

Will the Minister confirm that the take-up rate for the benefit is only about 50 per cent., although when the benefit was introduced Ministers boasted about a projected 90 per cent. take-up rate? When will the Government improve the rate, or are they content with such an abysmally low figure?

Mr. Burt

In terms of expenditure, the take-up is about 65 per cent. What the Government can boast of is the fact that the amount provided in family credit is about double the amount that was provided in family income supplement. That is all taking place in the context of a social security budget which has increased by 52 per cent. in real terms. That is the extent to which we have improved on anything that the last Labour Government was able to do for people.

Mr. Willetts

Will my hon. Friend confirm that four times more families now receive family credit than received family income supplement in 1979? Does that not represent considerable progress in the reduction of disincentives to work?

Mr. Burt

My hon. Friend makes the point very effectively. Those who receive family credit are paid, on average, about £35 per week, whereas the equivalent family income supplement was about £15 per week. We have a great commitment to low-income working families and family credit is the best-known benefit with which we assist them; the success of the scheme over the years shows how important it is to many families.

Mr. Meacher

The recent change involves a huge disincentive to work, because the loss of income support passported benefit—particularly mortgage interest cover—far outweighs any gain in family credit. Does the Minister really consider this an advance? As a result of the change, 80,000 claimants in need will lose free school meals and access to the social fund, and those without children will receive nothing. Is this not yet another own goal by the Government? Short-sighted cuts in public expenditure will serve only to deepen the dependency culture that the Government are supposed to be against.

Mr. Burt

The own goal has been scored by the hon. Gentleman, who has reminded the House of the success of family credit and the fact that more people have been transferred from income support to family credit as a result of the change. Those who previously gained through income support have not lost, because their position has been protected, and the increase in the number who have come on to family credit over the years—far more people receive it than received support through the Labour Government's schemes—shows how popular and effective our scheme has been.