HC Deb 17 July 1995 vol 263 cc1297-8
5. Mr. John Marshall

To ask the Secretary of State for Social Security what is the latest estimate of the cost of benefits to single parents in 1995–96. [32767]

Mr. Lilley

It is estimated that total benefit expenditure on lone parents in 1995–96 will reach some £9.5 billion.

Mr. Marshall

My right hon. Friend is known as a supporter of the Institute of Economic Affairs. Would he like to comment on the pamphlet produced by that organisation in which Dr. Morgan says that the tax system penalises those mothers who stay at home while the benefit system helps lone parents? Does he agree that the single parent's premium, which costs taxpayers some £250 million, must be re-examined?

Mr. Lilley

We keep all benefits under review as part of our long-term review of public expenditure. Although we must recognise that some of the £9 billion would go to those parents even if they were not lone parents, the cost of lone parenthood adds about £1,500 a year to the taxes of married couples who are supporting their own children in addition to paying to support others. That is why we have to look rigorously at those benefits. I hope that my hon. Friend welcomes the £10 per week family credit premium that we have announced today for those working more than 30 hours a week. That will be particularly beneficial to married couples, who will constitute some three quarters of the 350,000 receiving that extra help, thus encouraging self-supporting families.

Mr. Wicks

As many lone parents would love to have the independence that a proper job brings, why in the last 16 years has a growing proportion of lone parents had to depend on income support? Why have the Government not taken action through education, training and child care to move people away from dependency, which they do not want, to independence, which they do want?

Mr. Lilley

The hon. Gentleman, who has always taken an informed and intelligent interest in this subject, is right to say that there was a rather disturbing disparity in the trend, with married women going out to work in increasing proportions while lone mothers were increasingly staying at home. That trend reversed about two or three years ago, partly as a result of the measures that we have taken—the introduction of the child care disregard in family credit and increasing efforts to get maintenance from absent parents. Both those measures have helped lone parents to go out to work and an increasing proportion are doing so. I know that the hon. Gentleman will welcome that as much as I do.

Mr. Alan Howarth

We hear much about plans for a crackdown on social security fraud—and no doubt it is right to do that—while the appetites of the affluent are being whetted for future tax cuts. Would it not be at least as attractive for the Government to emphasise their plans for the relief of the unemployment and poverty traps? As my right hon. Friend wishes to see honest work rewarded, will he state his plans to improve the position of lone parents on income support who have benefit deducted pound for pound on earnings above £15 a week? I do not think that that disregard has been uprated for seven years, and there is no allowance for the cost of child care or other work-related expenses.

Mr. Lilley

My hon. Friend is right to say that we have to crack down on fraud, but he is wrong to suggest that the primary support for that comes from the affluent. In my experience, the greatest support for these measures comes from what might be called the hard-working class—people who take home very modest sums as a result of working hard 40 hours a week and who see other people manipulating the system to obtain full benefit while not declaring some earnings. That is greatly resented by the hard-working class. My hon. Friend asks what we are doing to improve incentives to work: I point out to him the new £10 family credit supplement which is being introduced this very day.