HL Deb 18 October 2001 vol 627 cc706-7

3.17 p.m.

Earl Russell

My Lords, I believe that the Minister will agree—

Noble Lords


Earl Russell

My Lords, the Question is coming. Does the Minister agree—

The Lord Privy Seal (Lord Williams of Mostyn)

My Lords, I believe that the House is being helpful to the noble Earl. He has forgotten to ask the Question standing in his name on the Order Paper.

Earl Russell asked Her Majesty's Government:

What conclusions they have drawn from the level of support being provided to single parents through the Social Fund.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)

My Lords, I am deeply disappointed that the noble Earl was going to ask a supplementary question before he had heard the Answer to the first Question. I am mortified.

The purpose of the Social Fund is to provide access to affordable credit for people on the lowest incomes. Last year, 44 per cent of the total paid from the discretionary Social Fund went to single parents. I believe that that shows that the Social Fund is needed by lone parents and is well used by them.

Earl Russell

My Lords, I thank the House for leave to ask the Question. Is the Minister aware that nearly 50 per cent of the loans budget of the Social Fund now goes to single parents? Does she agree that that shows either that the percentage of those in real need who are single parents is increasing or that the Social Fund is not being allocated according to need? In that context, is she aware of a Written Answer to me from the noble Lord, Lord McIntosh of Haringey, on 24th July last concerning the rate of long-term illness and disability among single parents not in employment? That rate is now 32.1 per cent and has increased by 5.4 per cent since 1998. Has the Minister an explanation for that increase?

Baroness Hollis of Heigham

My Lords, the first question that the noble Earl asked was whether I believe that the use by lone parents of the discretionary Social Fund budgetary loan is an indication of their financial hardship and need. I believe that perhaps the noble Earl is confusing the role of community care grants, which deal with poverty, and crisis loans, which deal with emergency poverty, with budgeting loans, which are meant to provide credit for what we call "lumpy purchases".

Let me give an example. A washing machine in the high street might cost £400. One would get that money interest free from the Social Fund. If one used a mail order over-52-week purchase, it would cost £500. If one went to a licensed credit agency it would cost £700 and if one went to a money lender shark it would cost £2,000. The Social Fund is designed to make available the sort of credit that the noble Lord and I take for granted.

Baroness Noakes

My Lords, does the Minister agree that one reason why discretionary payments are needed from the Social Fund is because of the inadequacies and complexity of housing benefit? The processing of payments is subject to delays, which leads to genuine hardship. All of that was set out in the report of the Better Regulation Task Force. Will the Minister say when the long overdue reform of housing benefit can be expected?

Baroness Hollis of Heigham

My Lords, I begin by welcoming the noble Baroness, who has asked her first question from the Front Bench. I am sure that she will bring her business expertise in particular to bear on our debates.

The noble Baroness's question about the inefficiency of housing benefit may be indicative of where we may be going. I entirely share her concerns—I am sure that they are shared around the House—about the inefficiency of and inadequacies in the current administration of housing benefit by the vast array of local authorities. The situation in Hackney is very much to be deplored. The Social Fund loans—budgetary loans, crisis loans and community care grants—do not come into play in relation to housing benefit; they are not to be used for that purpose. Therefore, although the noble Baroness is right to say that we need to reform housing benefit, that benefit is not part and parcel of our discussion of the Social Fund.

The noble Baroness asked when housing benefit may be reformed. We are currently seeking to improve the administration of housing benefit but the longer-term reform of that benefit clearly has to follow the longer-term reform of social housing sector rents.

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