Benefit Levels (Hansard, 23 March 1994)

The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor)
My Lords, there are many factors to be taken into account in deciding benefit levels, one of which is the earnings of people in work. For young single people, another factor is that a large majority of them do not live independently. It would be wrong if benefit levels could be seen as offering an alternative to work, to training for work or as an incentive to leave home.

§ Earl Russell
My Lords, I hope to discover why the Minister believes that low earnings levels justify low benefit levels. I have been asking the Government that question for three years. How long will it take them to think of an answer?

Viscount Astor
My Lords, the noble Earl will receive exactly the same answer as he received when he previously asked the question. It is that young people receive lower allowances because they reflect their generally lower earnings expectations. The average earnings of 18 to 24 year-olds is less than two-thirds of the average for all adults. Most people earn more in their middle age than they did when they were 18 to 24.

§ Lord Molloy
My Lords, does the Minister agree that the benefits are the equivalent of the earnings of those who are working? That does not appear to be right. Nevertheless, will the Minister urge the British trade union movement to put in for bigger claims so that those who cannot obtain a job will at least be able to receive the reasonable assistance that they are not now receiving?

Viscount Astor
My Lords, we believe that it is wrong for benefit levels to offer an attractive alternative to seeking work or training or to act as an incentive to leave home. The large majority of young people do not live independently and therefore often have fewer financial responsibilities.

§ Lord Boyd-Carpenter
My Lords, is it not perfectly reasonable that where earnings are at a lower level than for other categories of people, benefits should follow suit?

Viscount Astor
My Lords, my noble friend is right, and that is why it is the case. If benefits for 18 to 24 year-olds were up-rated to the over-25 year-old rate, the cost would be £360 million. We believe that the resources should be targeted at those in the most need.

§ Lady Kinloss
My Lords, will the Government ensure that the benefits paid to people under 25 who are householders are the same as those paid to householders over 25?

Viscount Astor
My Lords, we believe that to pay a higher rate to young people who live independently would be a bizarre incentive for young people to leave home. However, if they are unable to live at home, the maximum housing benefit or council tax benefit is available to them if they are on income support.

§ Baroness Fisher of Rednal
My Lords, will the Minister give the House the number of under 25 year-olds who are living independently and the number who are not?

Viscount Astor
My Lords, I cannot give those numbers. However, I can say that only 19 per cent. of under 25 year-olds on income support are receiving housing benefit, which is an indication of the answer.

§ Baroness Fisher of Rednal
My Lords, will the Minister write to me and give me the actual figures?

Viscount Astor
My Lords, those figures are not available. We do not know whether young people are living at home with their parents. We know only whether or not they are claiming housing benefit.

§ Lord Tordoff
My Lords, does the Government's lack of information extend to knowing whether there is likely to be any incentive to young people to leave home because of benefits that they will receive? Are there other reasons why young people leave home?

Viscount Astor
My Lords, there are many reasons why people leave home. However, we do not wish to encourage young people to leave home unnecessarily and, thereby, to break up families.

§ Lord Tordoff
My Lords, the Minister has not answered the question. Do the Government have any information which suggests that young people leave home because of the benefits which are then available to them?

Viscount Astor
My Lords, if we raise benefits, that would be encouraged, and we wish to avoid that effect.

§ Lord Northbourne
My Lords, does the noble Viscount agree that young people aged 16 and 17 who are separated from their families need, in particular, support, encouragement and guidance? Does he agree that the Foyer movement provides support and companionship alongside subsidised accommodation? Does he agree also that that is a much better solution than the provision of cash handouts to people living alone?

Viscount Astor
My Lords, we believe that the Foyer initiative is an important, innovative approach to ending the vicious cycle in which homeless and unemployed young people find themselves. The pilot Foyer schemes are aimed primarily at 18 to 25 year-olds, but some 16 and 17 year-olds have participated. While it would he wrong for Foyers to act as an incentive to leave home, nevertheless, they can provide valuable support for some 16 to 18 year-olds.

§ Baroness Hollis of Heigham
My Lords, perhaps I may refer to a different category which is unlikely to be either earning or training; that is, single, pregnant 669 women. Does the Minister agree that the income support rate for a pregnant women aged 25 is £44 per week—the minimum deemed necessary for her living costs? Will the Minister then tell the House how a pregnant woman aged 24, who faces the same housing and heating costs and the same dietary needs but perhaps different food requirements is expected to live on £9 per week less?

Viscount Astor
My Lords, when the noble Earl asked his question on two occasions previously, the noble Baroness also asked the same two questions. Therefore, she will receive the same two answers now. We see no convincing evidence to suggest that the provisions for pregnant under-25 year-olds are generally inadequate. A maternity payment will normally be available from the Social Fund to help with any additional costs due to the arrival of a baby. Of course, free milk and vitamins are available automatically to income support recipients during pregnancy through the welfare food service.

§ Baroness Hollis of Heigham
My Lords, will the Minister please repeat that reply? He has given it twice and it would be nice on the third occasion to be able to hear it.

Viscount Astor
My Lords, I am sorry if the noble Baroness could not hear. I am sure that she has read it in Hansard twice before and she can do so again today. The important point is that the income support rate for 18 to 24 year-olds reflects the generally lower earnings expectations of that group, whose average earnings are nearly a third less than those of other adults.

§ Baroness Hollis of Heigham
My Lords, how does that apply to a pregnant woman aged 24 who receives £9 per week less than a woman aged 25? Is there not a real risk to the health of her future baby?

Viscount Astor
No, my Lords, there is not. It is not clear that the day-to-day living expenses of pregnant women are significantly different from others in the age band. Therefore, special treatment is not appropriate. As I said earlier, only 19 per cent. of those on income support receive housing benefit.

§ Earl Russell
My Lords, the Minister has not yet responded to the second half of my Question, as to whether the Government plan to extend that principle to other groups. Will he confirm that he is not extending that principle to women or to blacks? Will he confirm also that that either looks as though he has something against young people; or it is because if he did to women or to blacks what he is doing to young people, it would be illegal?

Viscount Astor
My Lords, that is a bizarre argument. If we have any proposals which affect other groups, we shall announce them in Parliament in the usual way. If one follows the logic of the noble Earl, young people would be encouraged to leave home early and it would encourage an early dependency on state benefits. It would act as a disincentive to young people 670 to take up work or training. It would not encourage young people to continue with full-time education. That is what is important.

§ The Countess of Mar
My Lords, when the Government present their proposed legislation to bring together unemployment benefit and income support into a new jobseeker's allowance, will he give an undertaking that there will be no discrimination against the under-25s as they are not discriminated against with regard to unemployment benefit?

Viscount Astor
My Lords, the unified rate provided by the single integrated benefit simplifies the structure and achieves proper targeting of resources. As I said before, in general the younger age group has lower earnings expectations and fewer financial commitments.