HC Deb 02 July 1997 vol 297 cc207-9W
Mr. Burgon

To ask the Secretary of State for Social Security if she will make a statement on Her Department's spending plans. [6787]

Ms Harman

My main priorities are to tackle social division and worklessness. Work is the best form of welfare and our New Deal will be an investment in the future of lone mothers, the young jobless and the long-term unemployed. We will also bring forward proposals to extend the New Deal to sick and disabled people. My Department's spending will no longer be used as an alternative to the proper strategy of ensuring that all of our people share in our economic prosperity.

Spending plans for the immediate future, 1997–98 and 1998–99, assume that a number of measures announced in the November 1996 Budget will be taken forward. I have undertaken a rigorous review of this unwelcome legacy and have made some changes. The details of the New Deal for lone mothers and the changes to the proposals I inherited are as follows:

Lone mothers We have today announced our New Deal for Lone Parents to help them take-up work We will offer help and advice on jobsearch, childcare and training to 40,000 lone parents this year and half a million next year.

Childcare The allowance for childcare costs in Family Credit, Housing Benefit, and Council Tax Benefit will be extended and improved to make it easier for lone parents and breadwinners with disabled partners to return to work. From April 1998 the disregard for childcare costs will be increased from a maximum of £60 to £100 a week where there are two or more children in the family and the maximum eligible age will be increased from 11 to 12. These measures will be financed from the windfall levy and will cost some £200 million over this Parliament.

Child Support Agency An additional £15 million a year will be invested from 1998–99 to assist lone mothers. This funding will help them by raising an extra £120 million in maintenance and will ensure that absent parents face up to their obligations.

Housing Benefit The extension of the single room rent to those aged 25 to 59 will not now proceed in October. The cost of this will be met in part by adjusting the level of non-dependent deductions from next April. We intend to protect the position of those in greatest need.

Jobseeker's Allowance The previous Government decided that the waiting days before Jobseeker's Allowance becomes payable will be increased from 3 days to 7 days from April 1999. However, by managing the cycle of Jobseeker's Allowance payments, we will ensure that nobody will have to wait more than the current maximum time before they receive their first payment of benefit. I am committed to keeping my spending within the ceiling for social security expenditure already announced. I am also committed to modernising the social security system. The following measures will ensure that overall spending is contained and represent a step forward in modernising the system. The time limit of three months for claiming social security benefits will be reduced to one month, in line with the current backdating rules where there is a change of circumstances. These limits will apply to Housing Benefit and Council Tax Benefit. The intention is that the new provisions will come into force from June 1998, except for Housing Benefit and Council Tax Benefit which is subject to necessary legislation and has a planned date of introduction from October 1998. The alignment of the time limits will be an integral part of modernising and streamlining the social security system and underlines the importance of people making their claims promptly. In addition improved Social Fund loan recoveries allow for the planned level of gross funding to be delivered with £3 million less net budget, releasing these savings to be used elsewhere. The discretionary Social Fund gross budget for this year remains at £467.5 million, an increase of £27.5 million over 1996–97. Other measures announced in the November 1996 Budget but not implemented by the time of the General Election will go ahead as planned. They are as follows:

  • new arrangements for Compensation Recovery;
  • the abolition of the 50 per cent. top-up which allowed certain rents above the average to be met in Housing Benefit;
  • restricting Council Tax Benefit so that claimants with property in Bands F, G and H, have their Council Tax Benefit restricted to that of Band E;
  • removing the right to claim Disability Living Allowance for those aged between 65 and 66;
  • standardising the date on which child allowances are reviewed in Family Credit and Disability Working Allowance.
Withdrawal of entitlement to Lone Parent Family Premium in Income Support for new claimants will take effect in April 1998. Withdrawal of the lone parent rate of Child Benefit is subject to necessary legislation, and is now expected to come into effect from June 1998.

These measures are necessary to ensure that social security expenditure remains within the previously announced ceilings. The re-prioritising of expenditure in this package is the beginning of an urgent and long overdue reform of the social security system. We have no illusions about the size of the task, but the rewards for getting it right for individuals, for society and for public expenditure are enormous.