HC Deb 20 March 1995 vol 257 cc3-5
4. Mr. Sims

To ask the Secretary of State for Social Security how many families receive family credit; and how many received family income supplement in 1978–79. [12991]

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt)

In July 1994, some 572,000 families were receiving family credit compared with some 78,000 receiving family income supplement in March 1979.

Mr. Sims

Are those figures not a striking demonstration of the success of the Government's policy of directing money to those most in need? My hon. Friend will be aware of my correspondence with his office about a recent decision by a social security commissioner which has had the effect of depriving certain school workers, who work limited hours, of family credit. My constituent was not entitled to income support either. Can my hon. Friend confirm that the Government intend to change the law to correct that anomaly? If so, how soon will the law be changed and will it be retrospective? Can he assure me that people like my constituent will not be out of pocket at the end of the day?

Mr. Burt

To answer the last part of the question first, the original policy intention was that school workers should have their pay averaged over a term rather than over 52 weeks, for obvious reasons. The commissioner's decision put that interpretation at risk. Accordingly, we have already laid regulations, which will take effect on 11 April, giving effect to the original policy intention so that school ancillary workers will not be disadvantaged. The law cannot be retrospective, so it will apply from that date, but the regulations should help my hon. Friend's constituent and others in the future.

On my hon. Friend's first point, the figures are a vindication of our policy of trying to improve the situation for people getting back into work. That is most important and it is one of the reasons why this country has the most successful policies on getting back into work compared with all our European neighbours.

Dr. Godman

Family credit is a social welfare subsidy for those who are paid disgracefully low wages, often by unscrupulous employers. May I urge on the Minister the need to ensure that such credit is paid quickly when claimants make a successful application for it? Too many of my constituents have had to wait far too long for that credit to be paid to them.

Mr. Burt

On the latter point, the present fast-track family credit procedure helps about 75,000 claims a year to be processed very quickly. We are introducing a pilot project intended, over a period, to deal with some 400,000 cases a year in which we expect to see family credit claims cleared extremely quickly. That will help to cover the situation that the hon. Gentleman mentioned.

On the hon. Gentleman's first point, a report in January 1995 from the Institute for Employment Research said that the availability of family credit had no effect whatever on the wages being offered. Family credit is a supplement for those who need it and an encouragement for people to get back into work. I should have thought that the hon. Gentleman and I would share the view that that was an important objective for us all.

Mr. Rowe

Can my hon. Friend give us an idea how much has been spent in total on family credit? From the evidence of my postbag, the number of people who complain that it is not worth their while to get back to work has fallen off very sharply and I seldom receive such letters now. Will my hon. Friend continue to press policy in the direction of eradicating the differential between benefits which are too high and wages which encourage people to go back to work?

Mr. Burt

The total amount of money paid through the family credit policy since 1988 is some £4.5 billion. That reflects payment of some 5.7 million awards as time has gone on. It has been a successful policy. We have increased the number of hours people are able to work. By adding the child care disregard recently, we have further added to the policy.

On my hon. Friend's second question, the whole point is that the best relief of all for poverty is ensuring that people are in employment. Anything which can be done to encourage and support that should be done. The present Government have seen some 600,000 come off the unemployment register in the past two years and family credit has certainly played its part in that.