HL Deb 29 October 1992 vol 539 cc1208-11

3.17 p.m.

Baroness Hollis of Heigham asked Her Majesty's Government:

Whether, in the light of the National Children's Home report Deep in Debt, they are satisfied that the levels of income support paid to families arc adequate.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, yes. Most claimants are managing and, moreover, have gained from an uprating last April that was nearly 3 per cent. above RPI.

Baroness Hollis of Heigham

My Lords, the National Children's Home survey shows that families on benefit spent their incomes sensibly. Yet half had to borrow to buy food, and two-thirds, with their children, missed meals because their money had run out. How can the Minister state that income support is adequate when children go hungry?

Lord Henley

My Lords, there is no evidence that people cannot manage on the current levels of income support. We have always recognised that some people may find it difficult, but not impossible, to manage on the current levels. However, merely to suggest increased levels is simplistic and irresponsible. We already have probably the most comprehensive safety net social security system in the whole of Europe, the total cost of which is some £ 70 billion. That averages out at £ 10 per working day for every taxpayer and National Insurance contributor. To suggest that that should be raised still further, increasing the burdens on the economy, is irresponsible.

Lord Ennals

My Lord, will the Minister give an assurance that the rumours that have appeared in the press that the Government intend to cut invalidity benefit are untrue? Will he give that assurance bearing in mind that 16 per cent. of all those on invalidity benefit suffer from mental health problems and that it would be very damaging to the welfare of those people if that threat were to be carried out?

Lord Henley

My Lords, we do not comment on press leaks. Nor do we comment on the level of next year's benefit. The Question relates to income support; the noble Lord asked about invalidity benefit. The noble Lord will have to wait for the up-rating statement to discover what our plans are for next year.

Lord Gisborough

My Lords, can my noble friend say what is done to help people and advise them about how to live on such small amounts when many find it extremely difficult—even if it is possible—to do so?

Lord Henley

My Lords, we accept that it can be difficult to survive on income support but we do not believe that it is impossible. I have the greatest respect for the work performed by bodies such as the National Children's Home, which offer a great deal of help and advice to families who have problems in this area. We hope that those bodies will continue to offer such help and advice.

Earl Russell

My Lords, will my noble kinsman study the report at greater leisure before he is quite so certain of its contents? Will he also take note that the sample families in the survey were going deeper into debt at the rate of £ 8.50 per week and that the average amount spent on food was £ 9.10 per head and on clothing £ 0.62 per head? Does he regard those levels as adequate and will he share that information with his colleagues in the Treasury?

Lord Henley

My Lords, I have the greatest respect for the National Children's Home and its work. However, the report covered only 347 families who had gone to the organisation for help and advice. Obviously, there was a considerable degree of self selection regarding participation in the survey, particularly as it was confined not merely to people who had gone to the organisation but to those who had bothered to respond to the NCH questionnaire.

Lord Murray of Epping Forest

My Lords, does the Minister accept that even allowing for a reasonable margin of error the fact that four out of five parents who were studied—that is,82 per cent.—said that out of their benefit they could not afford to buy the clothes and shoes that their children needed and that they had been forced into debt, some to the extent of £ 1,000, in order to buy those items? Does that not suggest to the Minister that the figures and the situation badly need to be examined?

Lord Henley

My Lords, no. The people who went to the NCH already had problems with debt. The noble Lord will accept that at all levels of income people can get into debt. Simply to suggest that we can resolve such problems by raising the basic level of income support is irresponsible and simplistic.

Baroness David

My Lords, does the Minister realise—his answers do not appear to indicate that he does—that however careful families may be, financial and debt problems are common among those who are in receipt of benefit and that debt-related inquiries to advice centres have more than doubled in the past decade? Has the Money Advice Trust, which was set up by the Government in 1991 and which was designed to raise £ 9 million over three years from consumer credit institutions, raised more than the £ 362,000 which was raised in the first year? Has more been collected since then? Is it not time for a statutory levy on the credit industry in order to resource the necessary money advice work?

Lord Henley

My Lords, the noble Baroness has made an interesting point. I prefer to write to her about the Money Advice Trust. I must repeat that people at all levels of income can get into debt. We greatly welcome the work carried out by the National Children's Home and the advice which is given to some people. However, simply to raise levels of income support would not resolve the problem.

Lord Stoddart of Swindon

My Lords, in reply to my noble friend Lord Ennals the Minister said that we must await the up-rating statement. Some of us are worried that it will be a down-rating statement. Can the Minister assure the House that it will indeed be an up-rating statement?

Lord Henley

My Lords, the noble Lord knows the rules: he will simply have to wait.

Lord Desai

My Lords, is the Minister saying that the results of the NCH survey are false? If so, do the Government intend to present their own results which will cure the problem of self selection and show something better? Does the Minister agree that even if there are some errors the figures are so ghastly that there should exist a primary duty to correct such abysmal levels of poverty in a rich society such as ours?

Lord Henley

My Lords, at no point did I say that the findings in the NCH report were false. I said that they had to be taken with a degree of circumspection bearing in mind that only 347 families were examined. Only 11 families were examined in detail and by definition all were self-selected because they already had problems with debt and had gone to see the NCH about that.

Baroness Hollis of Heigham

My Lords, the National Children's Home works with approximately 16,000 children per year and it was also drawing on that information. DSS research shows that since 1979 the income of the average family with three children has risen in real terms after housing costs by £ 80 per week, or some 30 per cent. However, such a family in receipt of benefit has had its income fall in real terms since 1979 by £ 7 per week, or 6 per cent. Is it not the case that not only have the poorest had no trickle down of wealth but that they are absolutely worse off in real terms than they were in 1979? In the light of today's leaks in the press will the Minister undertake to protect such families in the forthcoming review of public expenditure, which he has so far refused? For once can any cuts in public expenditure be borne by those who are able to pay rather than by those who cannot afford them? For just once?

Lord Henley

My Lords, the noble Baroness has grossly misinterpreted the results of the household below average income survey. If she looks at the expenditure rather than the income of those in the lowest deciles she will find some surprising features. For example, she will find that the expenditure of those in the lowest deciles is often higher than those in the deciles above. That is because those in the lowest deciles include many self-employed people starting in business. There is not a true reflection of declines or increases in income. On average the incomes of most families have increased during the past 10 years.

Earl Russell

My Lords, is not my noble kinsman a little unwise to use expenditure as a measure when the survey indicates that expenditure normally exceeds income?

Lord Henley

My Lords, no. Again my noble kinsman has misunderstood the composition of those in the lowest decile or, for that matter, in any decile. They are in a fluid and not a static group. People are temporarily in the lowest decile when starting a business or whatever but soon they will be in a higher decile. Their expenditure will not necessarily vary a great deal as they move between one group and another.

Lord Tordoff

My Lords, does not the Minister understand that we are not talking about people who can get out of the decile—whatever that is—but about people who are permanently in the decile, are permanently racked by poverty and whom the Government appear to have set their face against helping?

Lord Henley

My Lords, I accept that some people have problems. Throughout the exchanges I have been trying to say that the view that one can increase income support, increase expenditure and increase the burden on the economy thereby taking a large number of people out of that group is simplistic and irresponsible.

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