HC Deb 15 March 1993 vol 221 cc8-9
8. Mr. Lidington

To ask the Secretary of State for Social Security what is the current size of the family credit caseload.

Mr. Lilley

At the end of October 1992, there were 450,000 families receiving family credit.

Mr. Lidington

Will my right hon. Friend confirm that his Department expects to spend more than £850 million on family credit in the forthcoming financial year? Does he agree that that is a sensible way of channelling Government resources to ensure that people are better off in work than out of it and are not caught in a poverty trap when they take on employment?

Mr. Lilley

I confirm my hon. Friend's point. We expect to spend £864 million in 1992–93—13 times the real value of expenditure on family income supplement, which this benefit replaced. It does an excellent job in enabling people to return to work without loss of income.

Mr. Rooney

Does the Secretary of State accept that, in many ways, family credit is a taxpayers' subsidy to the bad employer, and does he recognise the poverty trap in which people on family credit find themselves, with a claw-back rate of 93 per cent?

Mr. Lilley

I do not accept that, because pay levels are set according to a range of people who are in and are seeking employment, not just those with families. It is not surprising that the Opposition try to snipe at this benefit because it was introduced by this Government. The Labour party has never done anything to deal with the problem and it should turn its mind constructively to doing so, not destructively.

Mrs. Angela Knight

Will my right hon. Friend confirm that the number of hours that have to be worked to be eligible for the benefit have recently been reduced from 24 a week to 16? Is not the impact of this change that more families will be eligible and helped by the benefit?

Mr. Lilley

Yes, my hon. Friend points to an important development. As a result of this change in the hours rule, 60,000 extra families are already in receipt of this benefit and it is open to a wider number of people. I am sure that improvement in benefit will be widely welcomed by Conservative Members, even though Opposition Members do not seem to welcome it.

Mr. Bradley

Does the Secretary of State acknowledge that a large proportion of the increase in family credit claimants is due to the change in the definition for income support of full-time work? Is he aware that many people who would have been entitled to income support from April 1992 onwards are now worse off because they cannot get help with their mortgage costs? Will he give an estimate of the number of people who have lost their entitlement to help with their mortgage interest charges as a result of the change in the hours rule, and will he urgently consider helping people on low incomes with their mortgage costs to ensure that no one is disadvantaged from taking up a job because they cannot afford to do so following the change in the hours rule?

Mr. Lilley

The number of people on this benefit has increased by 100,000 over the past year. As I said, about 60,000 of that is due to the improvement of the hours rule in respect of eligibility for the benefit.

I shall look into the hon. Gentleman's question to see whether I can give him figures for the impact on income support and I shall write to him.