HL Deb 14 January 1997 vol 577 cc101-2

3.3 p.m.

Earl Russell asked Her Majesty's Government:

Whether they have any plans to alter the system of direct payment deductions from income support and, if so, which resource implications for other departments they will consider when costing such a proposal.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

My Lords, on 19th July 1996, the Secretary of State for Social Security announced a review of income support direct payments for fuel and water. As part of the review, officials consulted over 50 groups including the industry regulators, utility companies, consumer groups, and relevant other government departments. Ministers have now received a report and will consider carefully all the comments made before reaching any conclusions about the future of the scheme.

Earl Russell

My Lords, I thank the Minister for saying that he has reached no conclusions. Before he reaches conclusions may I ask him which cost implications for other departments he intends to take into account?

Lord Mackay of Ardbrecknish

My Lords, as I said, we have consulted our colleagues in other departments. Ministers have also had an opportunity to comment and we shall be taking what they said into account. I am not prepared to go further and to divulge what they said to us. Ministers in the Department of Social Security have still to meet to consider the issue.

Baroness Hollis of Heigham

My Lords, the third of a million or so people who make direct payments for fuel or water do so because they have difficulty meeting their bills. The Government estimate that if these changes go ahead the Government will save £18 million. What estimate have the Government made of the number of people who will face disconnection of their water and fuel?

Lord Mackay of Ardbrecknish

My Lords, the interrelationship between the existence of direct payments and disconnection is one of the factors we shall be taking into account. However, newly on the scene are different methods of payment to the utilities. There are, for example, weekly and monthly payment facilities at post offices and pre-payment meters. A new system of payment is coming on-stream called "pay point". We have to consider all of those factors when looking at the additional burden which direct payment undoubtedly causes the Department of Social Security. Although we are in no doubt of the importance of direct payment for some of our customers, especially those who get into considerable debt and may be cut off, a considerable number of people on direct payment use it to pay for current consumption because they do not have any outstanding debt.

Lord Skelmersdale

My Lords, my noble friend the Minister gave a list of consultees on the issue. Was that list inclusive or exclusive? I have particularly in mind the need on occasions such as this to consult the Social Security Advisory Committee.

Lord Mackay of Ardbrecknish

My Lords, at this stage I do not think that the Social Security Advisory Committee would be consulted. My recollection is that the regulations governing how we deal with the Social Security Advisory Committee state that we should consult it once we have draft proposals. If we decide to make proposals that require regulation, obviously we shall consult the Social Security Advisory Committee as we are obliged to do.

Baroness Hollis of Heigham

My Lords, will the Minister confirm that the Government's own research in 1994 stated that far from the scheme being cut it should be expanded; otherwise disconnections would mount?

Lord Mackay of Ardbrecknish

My Lords, an interesting point when considering disconnections is that, contrary to many of the stories run by the Opposition at the time of privatisation, the number of disconnections since the privatisation of gas, electricity and water has fallen dramatically as the privatised companies have taken sensible steps to enable people who have difficulty paying their bills to find ways of doing so. It is to the companies' great credit that disconnections in, for example, the electricity industry had by 1995 decreased to only 838 for the whole of that year. The noble Baroness should take that point into account. I shall not go further because, as I said, Ministers have still to meet to decide what steps to take regarding such payments.

Lord Stailard

My Lords, referring back to the original Question, can the Minister say which departments were consulted?

Lord Mackay of Ardbrecknish

My Lords, I am happy to tell the noble Lord that we consulted the Department of Health, the Department of Trade and Industry and the Department of the Environment. From recollection, I think that we also consulted the Scottish and Welsh Offices and probably—but I am not sure— the Northern Ireland Office.