HL Deb 19 April 1983 vol 441 cc472-4

2.41 p.m.

Lord Monson

My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government why implementation of the proposed rule allowing a family to retain £3,000 rather than £2,500 of their savings without becoming ineligible for supplementary benefit is being delayed until November.

Lord Trefgarne

My Lords, the level of the capital disregard was raised from £2,000 to £2,500 as recently as November last year. It is usual for increases in the supplementary benefit disregards to come into effect at the same time as the uprating of the benefit rates themselves, and we are not persuaded that there are any special reasons for implementing this further substantial increase in the disregard at a date earlier than November 1983.

Lord Monson

My Lords, I thank the noble Lord for his reply, disappointing though it is. Will he agree that the administrative arrangements and the paperwork necessary for putting into effect the increased limit need not take eight days, let alone eight months? Will not the delay cause considerable hardship to many tens of thousands of people who have become unemployed through no fault of their own and who will now have to spend £500 more of their hard-earned savings on supporting their families than would be the case if the changes were implemented with the minimum of delay?

Lord Trefgarne

My Lords, I have no doubt that the noble Lord is right when he says that the administrative arrangements could have been made more quickly than was, in fact, the case. But the fact remains that administrative arrangements are not the only matters we have to see to. There is also the matter of finding the money, and the full year cost of this change is £7 million.

Baroness Jeger

My Lords, when these changes come into effect could the Government look at changing the rule which causes the cashed-in value of life policies to be included in the capital resources of the family? Surely it is only prudent—and I should have thought it would have appealed to the Government—that people should provide for the future, and to include even child endowment policies in the capital sum seems to be very unfair. Secondly, is it a fact that the value of the owner-occupied house is disregarded but that no similar consideration is given to tenants and leaseholders?

Lord Trefgarne

My Lords, the Government announced recently that the first £1,500 of the surrender value of life insurance policies would be disregarded, and that is of course in addition to the £2,500 sum, as it presently is, of capital disregard. As for the home point that the noble Baroness raised, it is the case that the value of an owner-occupied house is disregarded, but so, too, I think, is the rent requirement for a tenant.

Lord Winstanley

My Lords, further to the noble Lord's encouraging answer to the noble Baroness, may I ask whether the noble Lord agrees that if a long-term unemployed person surrenders an insurance policy in order to qualify for supplementary benefit that person may not be able to get that insurance policy reinstated in November, which could in fact be very regrettable? Does the noble Lord agree that the valuation of assets for the purpose of the capital cut-off rule is very much a discretionary matter for supplementary benefit officers, and could those officers not be encouraged to exercise that discretion liberally between now and November?

Lord Trefgarne

My Lords, although it is true that supplementary benefit officers have some discretion in this matter, I think it would be wrong to encourage them to anticipate the wishes of Parliament in relation to the change of regulations, which of course have not yet been expressed. As for the other point raised by the noble Lord, perhaps I may write to him about that.

Lord Wells-Pestell

My Lords, the noble Lord the Minister has mentioned that there will be a saving at the moment of £7 million. How many people does that figure of £7 million represent?

Lord Trefgarne

My Lords, I do not think I said that there would be a saving of £7 million. I said that the total year cost of the change which we are now effecting is about £7 million. That is to say that £7 million more of benefit will be paid because the capital cut-off disregard is higher.

Lord Wells-Pestell

My Lords, surely it can be translated into the number of people who would be able to apply if it was £3,000 and the number of people who are getting it now that it is only £2,500?

Lord Trefgarne

My Lords, I think that about 10,000 to 15,000 people will come into supplementary benefit who were not included before.

Lord Kilmarnock

My Lords, would the noble Lord agree that there is no obvious relation between the capital disregard amount and the normal index-linked uprating which takes place at the end of November?

Lord Trefgarne

My Lords, it is true that the uprating is not precisely linked to the benefit rate uprating, but, nevertheless, as I said, it has been the practice to effect the uprating itself and the raising of the capital cut-off limit at the same time.

Lord Molloy

My Lords, if, as the noble Lord said in answer to the noble Lord, Lord Monson, administrative arrangements can be speeded up and are taking too long, would he try to achieve that in the interests of those who are so concerned in this matter?

Lord Trefgarne

My Lords, as I explained to the noble Lord, Lord Monson, although it would no doubt be possible to speed up the administrative arrangements we would then have to find additional funds for this purpose. I have to say that the calls on our funds are such that we cannot meet them all, and we think it right to meet those in greatest need in the first instance.