HL Deb 03 July 1991 vol 530 cc1082-5

9.9 p.m.

Lord Henley rose to move, That the draft order laid before the House on 7th June be approved [21st Report from the Joint Committee].

The. noble Lord said: My Lords, I beg to move that the draft Child Benefit and Social Security (Fixing and Adjustment of Rates) Amendment No. 2 Regulations 1991 be approved.

In his Budget Statement on 19th March, my right honourable friend the Chancellor of the Exchequer announced that from 7th October child benefit is to rise by £1 a week for the eldest eligible child (that is from £8.25 to £9.25), with an increase to £7.50 for all other children in the family. These draft regulations lay the foundations for those increases, and are the first part of a process which will ensure that every family in the country will gain from the extra money. That will include those on income support, family credit and other income-related benefits and also those in receipt of national insurance benefits with child dependency increases. This will bring our total expenditure on child benefit this year to £5.3 billion.

These increases are on top of the extra £1 a week that each family has been receiving in child benefit since April and, together with our undertaking to index- ink from next April, confirm the Government's commitment to child benefit and underline our pledge that child benefit is, and will remain, a strong element in our policies for family support.

It rimy help to put these proposed increases in context if I remind the House that there are two strands to the Government's support for children through social security. Child benefit goes to all families with children as a recognition of the fact that at all levels of income they face greater expenditure than other families. For those families who need it, this universal provision is supplemented by extra help through income-related benefits.

This recognition of the needs of less well-off families was carried through into our 1988 social security reforms. Against a background of rapidly rising earnings and reductions in income tax and national insurance contributions which the majority of families were enjoying, we recognised that there were some who, through no fault of their own, were not sharing in the country's increasing prosperity. The Government decided that extra help for the least well-off families—those on income-related benefits —should be one of their priorities. Therefore, instead of increasing child benefit, we made substantial extra help available to these families—help over and above the annual increases to maintain the value of their benefits. From October the value of that real terms extra help since 1987–88 will be some £½ billion in a full year. These families are now better off than they would have been had we simply uprated child benefit instead. October's increases will mean that in a full year our total social security spending on families with children will be greater than if we had simply increased child benefit each year in line with inflation.

But our concern for families has not been restricted to families with children. We have also recognised that there are other types of families with needs—families with perhaps an elderly member or with someone who is sick or disabled—and we have taken their needs into account in making our decisions about the best use for the available resources. The House will recall that in 1989, for example, we made an extra £200 million available for older and disabled pensioners and an extra £80 million for 65 to 74 year-olds from April.

This year, after careful consideration, we decided that the time was right to look at families with children generally. Attaching the extra payment to the eldest eligible child in the family, as we have done since April, means that we have been able to give a worthwhile acknowledgement of the additional costs all families incur in having children. It has the advantage too of being transferable to the next child once the original qualifying child is too old for child benefit, so that families will continue to have this additional recognition of the extra expenditure they face so long as they have a child who qualifies for child benefit.

The October increases provided for in these draft regulations build on the April improvements, but we have decided that in fairness the least well off families should benefit as well from these out of course increases, irrespective of any other benefits which might be in payment to them. As I have indicated, we shall therefore be bringing forward regulations to carry the increases through into the benefits system. These further regulations, which will be subject to the negative resolution procedure, are consequential on the regulations we are discussing this evening and can therefore be made and laid only after the present regulations have been approved and made.

The Government's record in providing help for families with children is one of which we can all be proud. I know the concern that has been expressed on previous occasions but I hope that the increases I have outlined amply demonstrate our commitment to child benefit. I commend the regulations to the House.

Moved, That the draft order laid before the House on 7th June be approved [21st Report front the Joint Committee].—(Lord Henley.)

9.15 p.m.

Lord Graham of Edmonton

My Lords, in her unavoidable absence, my noble friend Lady Turner of Camden has asked me to say that from these Benches we support the increases, modest though they are. I have listened to what the Minister said. He acknowledges, as I do, that they are modest. However, he has explained that they form part of the Government's overall policy in respect of child support. I am not in a position—as my colleague might have been—to take issue with the Minister. I know from experience that in general families who benefit will be well pleased. However, the Minister will also be aware that many families who live in wretched circumstances could do with a great deal more money than they will receive. Some families will receive an increase in child benefit of £1 a week in the same week as many well-heeled gentlemen and their families will receive thousands of pounds extra a week by virtue of the position that they hold in previously publicly owned companies. It is that grotesque disparity between the two ends of the spectrum which make my colleagues on this side of the House ask that more beneficial treatment be given to those poorer families.

The Minister has taken care to point out the context in which the increase has been given. On this side of the House, we welcome what he said.

Lord Henley

My Lords, I appreciate the noble Lord's welcome of these regulations. I am rather pleased that his noble friend was unable to be present to give me a slightly tougher grilling on them. I commend the regulations to the House.

On Question, Motion agreed to.