Family Credit and Child Benefit (Hansard, 15 December 1988)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale)
Yes, my Lords. An RPI uprating of child benefit would have meant an extra 45p per child. Instead, as I explained to the House on Tuesday, we have more than compensated for the standstill in child benefit by increasing family credit by an extra 95p per child over and above the uprating for prices.

§ The Countess of Mar
My Lords, I thank the noble Lord for that Answer. On Tuesday he made quite clear that the take-up of family credit was not as high as the Government would like it to be. Does he not agree that as well as improving the form, which the noble Baroness, Lady Jeger, clearly pointed out was poorly drafted, there is also a need to overcome the concept that while child benefit is paid to the mother for the children in all families, with no discrimination, family credit tends to put a stigma on the poor and is really only a subsidy to employers for paying low wages?

§ Lord Skelmersdale
My Lords, no. I do not agree that family credit is a stigma on the poor and a subsidy for employers paying low wages. There are and always have been low paid jobs in the economy and it is right that the state should encourage employment in those areas by paying extra state benefits.
As regards take-up, as I said on Tuesday, that is increasing. Indeed, successful claims for November exceed those for April and May put together. We believe that the underlying caseload is now approaching 300,000, which indicates a take-up rate considerably above some figures which are being floated about.

§ Lord Molloy
My Lords, does the Minister not agree that the plight of the very poor families should be the centre of attention of any compassionate, civilised government and that there seems to be a stigma involved in the Government's proposals? Is he not aware that many experts in our universities and those who have made a close study of the social services are somewhat concerned at the Government's proposals? Is it not possible for the Government to examine those concerns and then examine their own proposals?

§ Lord Skelmersdale
My Lords, we are statutorily bound to examine the levels once a year in connection with the uprating statement, as noble Lords will be well aware. Next April's uprating will target help to those most in need. The majority of any child benefit uprating will go to better off families, including the wealthiest. Among families who stand to gain from 1024 an increase in child benefit, 70 per cent. goes to those with above average earnings.

§ Lord Kilmarnock
My Lords, can the noble Lord put a percentage figure on the take-up of family credit, and in so far as there is a shortfall can he say what steps the Government are taking to remedy that?

§ Lord Skelmersdale
My Lords, there is currently a Better Off In Work campaign being conducted through the Department of Employment, and a major exercise began at the end of last month which will run until Christmas boosted by advertising on local radio and taking other local initiatives. Everyone who collects child benefit from the post office will receive a leaflet about family credit.
For the future, we plan to have a further major advertising campaign including advertisements on television around the time of the next uprating. We shall continue to publicise family credit and especially we shall make clear the levels of income at which it can be paid. As regards the current position, the amount of money being paid out in child benefit is currently very close to the estimate we made some 18 months ago.

§ Baroness Seear
My Lords, is it not true that family credit is paid to the man, whereas an enormous advantage of child benefit is that it is the woman who receives it? Unless she receives it, quite a lot of the money will never go to help the children.

§ Lord Skelmersdale
My Lords, families can elect who receives the family credit and I am advised that in most cases it goes direct to the mother, as does child benefit.

§ Baroness Seear
My Lords, does the Minister not agree that it is in the cases where it most needs to go to the mother that it is elected that it should go to the father?

§ Lord Skelmersdale
My Lords, there is absolutely no evidence at all for that statement.

§ Lord Carter
My Lords, is the Minister aware that increases in family credit, income support and housing benefit add up to extra expenditure of £70 million? The failure to increase child benefit produced a saving of £203 million. Can he explain why only one-third of the savings from the failure to increase child benefit was directed to the poorest families?

§ Lord Skelmersdale
My Lords, the noble Lord is quite right. The net annual saving from not uprating child benefit will be around £200 million, but we are making available an extra £70 million to the neediest families over and above the £135 million which the normal uprating of income related child benefit allowances will cost.

§ Lord Diamond
My Lords, is the noble Lord aware that the statement he made that there will always be low wages is reminiscent of the phrase that the poor 1025 will always be with us? Can I take it that the tacit approval which he gave to the continuation of low wages is government policy?

§ Lord Skelmersdale
My Lords, no. It was a recognition of need.

§ Baroness Jeger
My Lords, as it seems that the Government are saving £203 million through their treatment of child benefit but have allocated only just over £70 million to uprate the new benefits, and as only about one-third of the families entitled to family credit are receiving it due to the Government's poor marksmanship and targeting, can the Minister tell the House what is happening to the cash balance which the Government are saving by these new arrangements? Surely that money belongs to the children of this country. What is he doing with it?

§ Lord Skelmersdale
My Lords, the children of this country, especially the poorer children, are benefiting to a considerable degree, as I have made clear in previous answers. As regards the social security budget, that will increase by £2 billion in the next financial year.