HL Deb 11 May 1993 vol 545 cc1178-80

2.53 p.m.

Lord Campbell of Croy asked Her Majesty's Government:

Whether self-employed people and owners of small businesses are fully aware of the availability of social security benefits in times of adversity and, if not, whether they will take the necessary steps to make them aware.

Lord Henley

My Lords, a variety of social security benefits are available to the self-employed. The Government are committed to encouraging small businesses, and publicise benefits widely. We are investigating ways in which information for the self-employed might be better targeted.

Lord Campbell of Croy

My Lords, I am grateful to my noble friend for his reply. However, do the Government agree with the National Audit Office that money would have been saved by the Exchequer overall if self-employed people had applied for the help which could have saved their businesses from failure? Is the benefits agency now taking action on that?

Lord Henley

My Lords, I should perhaps be careful about commenting on the findings of the NAO report before any future PAC hearing. It largely concentrated on income support. There is a danger of exaggerating the kind of help that income support can provide for a failing business or the self-employed, particularly because of the entitlement conditions relating to income support and its availability. I should stress that the main in-work benefit is family credit. We have seen a dramatic growth in family credit among the self-employed and would like to see a great deal more. We shall therefore be advertising to that effect.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that the most effective way of saving private businesses from failure is to ensure that the interest rate is as low as possible and that we have less bureaucratic interference in the way that they run their businesses?

Lord Henley

My Lords, again, that is wide of the Question on the Order Paper. However, I note what my noble friend says.

Baroness Hollis of Heigham

My Lords, the Minister will know that 1,300 small businesses fail every week. But is he aware that 75 per cent. of them did not know that under certain circumstances they were entitled to claim income support? Also, 60 per cent. of those failed businesses say that, had they known and claimed income support, they would have kept their businesses alive, even part time.

When the Minister focuses on fraud in his current campaign —on those who claim benefit to which they are not entitled —will he remember that there is an infinitely greater problem of people not claiming the benefits to which they are entitled, as the report from the National Audit Office on the self-employed clearly shows?

Lord Henley

My Lords, again I must repeat the Answer I gave to my noble friend Lord Campbell of Croy. There is a danger of exaggerating the extent to which income support can help the self-employed. I am not sure that a high number of self-employed people would be prepared to comply with the conditions for receipt of income support to help them through difficult stages in their business. We believe that family credit can help a great deal and are doing as much as we can to help people to take it up.

We have seen the case load grow from 50 per cent. to 64 per cent. In terms of expenditure that is a growth up to 71 per cent. In other words, those not claiming tend to be those whose claims are at the margin. We would like to see more people claiming if they have some entitlement. With regard to the level of take-up of income support, my understanding is that 90 per cent. of money available to people on income support is actually taken up.