§ Lord Barnettasked Her Majesty's Government:
When the minimum wage starts; whether cut-off levels of benefits, including council tax and council house rent levels, will be increased correspondingly; and whether they have given consideration to the impact of the minimum wage on welfare to work. [HL2405]
§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)The national minimum wage is a key element in a range of policies introduced by the Government to help make work pay. There are two other main measures in this area:
First, a more generous Working Families Tax Credit will be introduced, subject to the passage of the necessary legislation, to replace Family Credit from October 1999. The Working Families Tax Credit will reduce the rate of benefit withdrawal from 70p in the 109WA pound in Family Credit, to 55p in the pound; and is accompanied by a child care tax credit which provides significant extra help with child care costs for low and middle-income working families with children.
Secondly, the introduction of major changes in the national insurance system from April 1999 will reduce contributions for lower paid workers and simplify the system.
There are no plans to make further changes to the social security system as a consequence of the introduction of the national minimum wage.
Those on the New Deals will be treated in the same way as other workers of a similar age undergoing training. The structure which we are proposing for the minimum wage is consistent with our aim of getting people from welfare to work.