Family Support (Hansard, 28 April 1975)

§ Mrs. Castle

Our plans are as follows.

Family Support—I have today introduced a Bill to fulfil our undertaking to provide a cash payment to be known as child benefit to mothers for all children, including the first.

Family allowances, which are not paid for first or only children, will be abolished. As progressively the child benefit scheme replaces income tax child allowances, it will extend to the poorest the help now only given to people whose incomes are large enough to benefit from tax allowances in full. The rate at which child benefit is introduced will be decided nearer the start date. We shall have to accommodate the cost of the scheme within the total which, in the light of future reviews, we decide we can devote to public expenditure from 1977–78 onwards.

The scheme will start in April 1977. We had hoped that we might be able to start a year earlier, but operational difficulties, which always threatened the start, have proved insuperable. The main problem has been accommodation. The introduction of the new scheme is a massive undertaking, involving payment to over 3 million new beneficiaries and doubling the number of children for whom benefit is paid from 7 million to 14 million. To house some 2,000 staff needed to launch the scheme buildings are going up in Washington New Town, Co. Durham. Plans were made in good time, but, unfortunately, we learnt that delays made it impossible to have accommodation ready for a 1976 start. This delay was caused because high alumina cement had been used in the manufacture of precast concrete units which formed part of the construction of the building. The units had. therefore, to be tested before con- 8W struction could continue. We have made every effort to find alternative accommodation in the Newcastle-Washington area but nothing large enough could be found which could be ready on time. We could not go beyond this area in our search because of the scheme's close link with the existing family allowance work which is located in Newcastle and carried out by a staff whose expertise is essential to the launching of the scheme. We have had to face the fact, therefore, that there is just no way in which we could start the full scheme before 1977.

This being so we have sought to find some way of helping poorer families in advance. It has proved practicable, although at short notice, to devise a special scheme to help one-parent families. Since far fewer families are involved, it has been possible to find accommodation for the comparatively few extra staff required. We intend, therefore, to introduce an interim benefit of £1.50 a week which will, in effect, extend family allowances to the first children of one-parent families who do not already receive an equivalent benefit—e.g., in the widowed mother's allowance.

The Child Benefit Bill includes provisions to give legislative effect to this decision, and, subject to its passage, payment of the interim benefit will begin in April 1976. Its life span will be short—one year to April 1977, when it will be subsumed in the main child benefit scheme. The interim benefit will, like family allowances, be taxable and subject only to the existing "claw back" on about 50p of the total sum. Again like family allowances it will be treated as a resource for supplementary benefit and family income supplement purposes. It will, however, bring a measure of help to about 300,000 one-parent families, in particular to those who have title to supplementary benefit or family income supplement but are not claiming it and to those with incomes at about these levels. As announced in the Budget, the cost will be about £23 million.

Family Income Supplement.—Subject to parliamentary approval of the necessary regulations I propose to increase, with effect from 22nd July, the prescribed amounts for entitlement to family income supplement. The prescribed amount for the one-child family will go up by £6.50 9W to £31.50 and for larger families to £31.50 plus £3.50 for each child after the first. The increase in weekly payments from 22nd July will take account of the April 1975 increase in family allowances, under the normal rules applicable to family income supplement.

For families entitled to the maximum weekly payment—at present £5.50 for families with one or two children and for other families £7—I propose to move to a more equitable system under which the maximum increases progressively with each child. The maximum weekly payment for a one-child family will be increased to £7 and that amount will go up by 50p for each additional child. The cost is provided for in my existing programme.

Wage Stop.—The Bill implements my undertaking to abolish the supplementary benefit wage stop. As I have said, my intention is that this should take effect when family income supplement is up-rated. The cost is unlikely to exceed £100,000 per annum.