PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Fourth Standing Committee on Statutory Instruments, &c.

DRAFT CHILD BENEFIT AND SOCIAL SECURITY (MISCELLANEOUS AMENDMENTS) REGULATIONS 1993

Thursday 18 March 1993

LONDON: HMSO

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1

The Committee consisted of the following Members:

Chairman: MR. NICHOLAS WINTERTON

Baker, Mr. Nicholas (Lords Commissioner to the Treasury)

Bennett, Mr. Andrew F. (Denton and Reddish)

Bradley, Mr. Keith (Manchester, Withington)

Burt, Mr. Alistair (Parliamentary Under-Secretary of State for Social Security)

Cann, Mr. Jamie (Ipswich)

Coe, Mr. Sebastian (Falmouth and Camborne)

Congdon, Mr. David (Croydon, North-East)

Couchman, Mr. James (Gillingham)

Etherington, Mr. Bill (Sunderland, North)

Evans, Mr. Nigel (Ribble Valley)

Evennett, Mr. David (Erith and Crayford)

Faber, Mr. David (Westbury)

Jackson, Ms Glenda (Hampstead and Highgate)

Kennedy, Mrs. Jane (Liverpool, Broadgreen)

King, Mr. Tom (Bridgwater)

Kirkwood, Mr. Archy (Roxburgh and Berwickshire)

Montgomery, Sir Fergus (Altrincham and Sale)

Raynsford, Mr. Nick (Greenwich)

Mr. R. G. James, Committee Clerk

2
3 Fourth Standing Committee on Statutory Instruments, &c. Thursday 18 March 1993

[MR. NICHOLAS WINTERTON in the Chair]

Draft Child Benefit and Social Security (Miscellaneous Amendments) Regulations 1993

10.30 am

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): I beg to move, That the Committee has considered the draft Child Benefit and Social Security (Miscellaneous Amendments) Regulations 1993. I welcome you to the Chair, Mr. Winterton. This is the first time that I have had the pleasure of your chairmanship. I look forward to spending, perhaps, just a short time with you this morning, but I hope to spend more time on future occasions under your benevolent gaze. In his statement of 12 November 1992 about the uprating of social security benefits, my right hon. Friend the Secretary of State announced that we would be introducing improvements in the benefit arrangements for orphans. That involved two separate measures. Guardian's allowance will be disregarded in the assessment of family credit, housing benefit, council tax benefit and disability working allowance, leading to an increase of up to £11.27 a week in the net income of recipients. That beneficial change has already been dealt with in other regulations. The second measure, the subject of the motion, is principally to ensure that a person bringing up an orphan alone can receive both guardian's allowance and one-parent benefit, increasing gross income by £6.05. At present, only guardian's allowance is paid. From April, therefore, a person responsible for the care of an orphan who benefits from both those measures could find net income increasing by up to £16.41 a week. The regulations also make a minor change to clarify policy following a commissioner's decision. The effect, therefore, of today's regulations will be to give an extra £6 a week in one-parent benefit to about 250 people bringing up an orphan without support from a partner. Some will, of course, also be receiving an income-related benefit and will not benefit in full. Those receiving housing benefit or council tax benefit will receive only a part of the increase in benefit due to the operation of the taper. They will, however, gain from the new disregard of guardian's allowance in those benefits. Those receiving income support will have the full amount of the extra benefit offset according to the normal income support rules. They will gain if, at any time, they cease to need help from that benefit. The net cost of the change is estimated at about £40,000 a year. A further 350 people, at a cost of £150,000, will benefit from the new disregard. The measures will provide a useful extra cash sum to people giving a home to an orphan who might otherwise have had to be looked after by a local authority. Many of those who benefit will be a relative, aunt, uncle, grandparent or, in some tragic cases, an older brother or sister left to bring up the family after the death of both 4 parents. The numbers involved are small because, fortunately, few people are in that tragic position. The improvements will make a real contribution to strengthening family life in often harrowing circumstances. The regulations also deal with one other aspect of one-parent benefit. Benefit is payable in respect of the only, elder or eldest child for whom child benefit is in payment. The draft regulations clarify existing legislation to put that point beyond doubt following a recent commissioner's decision which, in some circumstances, might have permitted payment in respect of younger children in the family. Each family can benefit from one-parent benefit only once. Therefore, regulations 2(2) and 2(3) amend the original legislation so as to make clear the true intention, and in no way change what has, until now, always been understood to be the law. The amendment does not in any way impinge on the other changes to one-parent benefit and guardian's allowance. The new arrangments will benefit the many people that I have mentioned and provide a useful extra source of income to some of those people in the most tragic circumstances. I am sure that the Committee will welcome them.

10.34 am

Mr. Keith Bradley (Manchester, Withington): Thank you, Mr. Winterton. If you could say, "Hear, hear" on behalf of the Opposition, I should be most grateful.

The Chairman: I must be totally impartial.

Mr. Bradley: The Opposition welcome the regulations. I am unable to find the source, but I feel sure that we must have pressed for those changes for some time. I am pleased that the Government have now seen the wisdom of the changes to the regulations. Although the amounts are small, any extra income to families in such circumstances will be welcome. In the current financial climate, any extra Government expenditure is also to be welcomed. The target group, however, needs particular consideration and the regulations must be supported. In the past, we have commented on the interrelationship of the taper in the workings of means-tested benefits. Perhaps the Minister could consider the wider context of that interrelationship, which means that benefits can be withdrawn because of the extra income from other sources. Sometimes that can result in an unacceptable poverty trap that is difficult to justify. The universal child benefit goes to those families but, as the Minister rightly pointed out, other money may be withdrawn. That is an unfortunate consequence of how the plethera of means-tested benefits works in practice. I do not want to delay the Committee, although I am impressed by the assembled company and would not want to short change hon. Members in our short debate. I should like to put the issue of child benefit into the wider context of the regulations. As a result of the Budget statement there is immense concern about the rigour of the scrutiny that will be given to public expenditure over the coming months and years. From the ourcry that we have heard in the past 24 hours, we are well aware of how the Government have reneged on manifesto commitments, 5 particularly with regard to the extension of VAT to fuel and to the increase in national insurance, which will especially impinge on low-income families. Child benefit is another manifesto commitment which has particular significance for the income of low-income families. Will the Minister give a categorical assurance that the Government's manifesto commitment to make no changes to child benefit still applies? Child benefit should remain a universal benefit that is paid to families as of right. It should remain a flat-rate contribution, adjusted to meet the needs of single-parent families or families with a first child or subsequent children. Will he also assure us that, in the Government's vigorous review of expenditure, child benefit will not be curtailed, either by means-testing or by freezing the benefit, as has happened in the past 12 months? I seek assurances that it will be uprated because, although the regulations are welcome, they would be undermined if the public expenditure review recommended a change in how child benefit was assessed and paid. If the Minister can give us those assurances we shall whole-heartedly welcome the regulations.

10.38 am

Mr. Burt: I am grateful to the hon. Gentleman for most of his comments and for the way in which he has approached the regulations. Hand on heart, I do not think that either of us can honestly say where the pressure for change has come from, although for some time the Department has been looking for an opportunity to remove the overlap. The regulations provide that opportunity. I welcome the hon. Gentleman's support for them. Tapers and the effect of the interrelation between one benefit and another are kept under constant review. In recent years we have reduced the incidence of poverty and unemployment traps. One of the aims of the changes towards the end of the 1980s was to deal with the majority of situations in which such traps occurred. They still occur, but to a much lesser extent and we constantly review the position. 6 There is some withdrawal of income-related benefits but that is not new. It has been a feature of the benefit system since its inception that when there is double provision—that is, when two benefits do the same job—someone who qualifies for one of them may find that the other declines. That policy has been followed by successive Governments and there is nothing new in it or in what we are doing today. I shall now deal with the hon. Gentleman's final point on child benefit. Unusually, I do not have my copy of the Conservative party manifesto with me and, again unusually, not all its tenets are fully engraved on my heart, but the Government have already made it clear in relation to the social security review that pledges in the manifesto, including that on child benefit, will be adhered to. I hope that that helps the hon. Gentleman.

Mr. Bradley: I am pleased with the Minister's assurance that those commitments in the manifesto will be honoured. I am sure that they will not be read in the same light as those on VAT extension and increases in taxation.

Mr. Burt: This is not the occasion to debate that. I am not prepared to accept the hon. Gentleman's premise. My right hon. Friends have vigorously defended our position on VAT over the past 24 hours. It ill becomes the member of a party which has already torn up its manifesto for last year to criticise us. We are straying from the regulations and I prefer to return to the spirit of the dreaded "C" word—consensus—with which we began our proceedings this morning. There is agreement on the topic before us. I have replied to the hon. Gentleman's questions and I hope that the regulations will be approved by the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Child Benefit and Social Security (Miscellaneous Amendments) Regulations 1993.

Committee rose at eighteen minutes to Eleven o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Winterton, Mr Nicholas (Chairman)

Baker, Mr. Nicholas

Bradley, Mr.

Burt, Mr.

Congdon, Mr.

Couchman, Mr.

Evans, Mr. Nigel

Evennett, Mr.

King, Mr.

Montgomery, Sir Fergus