Payment and Recovery of Family Credit

Part of Orders of the Day — Clause 19 – in the House of Commons at 9:45 pm on 19 May 1986.

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Photo of Mr Archy Kirkwood Mr Archy Kirkwood , Roxburgh and Berwickshire 9:45, 19 May 1986

I agree with the tone adopted by the hon. Member for Mid-Kent (Mr. Rowe) because I think that hon. Members should pause and consider exactly what is happening to small business men. In Committee the Government relied heavily on the argument that statutory sick pay was a useful model, as was statutory maternity pay. They argued that businesses could cope. with no difficulty.

In my experience, that is wrong. My constituency contains a high proportion of small businesses. There is a fear and misgiving about the administrative burden that the proposal will impose upon their daily lives. Government Members should think carefully before they support the Government on this matter.

I have some sympathy with some of the family credit changes in other directions, but is irrelevant and unneccessary to pay it in the proposed fashion. It is not beyond the wit of man to retain the Government's family credit scheme—if that is what they are minded to do— without this method of payment. That point should be borne in mind by hon. Members opposite when they vote. They are inflicting agony and additional adminstrative burdens on many traditional supporters of the Conservative party, but they are not necessarily striking at the Government's main intention to introduce a family credit system.

My additional fear about the system that the Government propose is that it will necessarily, de facto and in principle, affect the take-up provisions. We were told by the Government that there is a 50 per cent. take-up of family income supplement. Hon. Members on both sides of the House agree that the level of take-up is too low. The Government estimate that family credit will have a take-up rate of 60 per cent. I think that that figure is still too low. The figure of 60 per cent. is an optimistic one.

I endorse what the hon. Member for Oldham, West (Mr. Meacher) has said thus far about the problems of the employee-employer relationship—an employee and an employer discussing intimately the details of family credit —and confidentiality. In my part of the world—I do not know about other Members' areas; the position may be different in their part of the world—it is a anathema for many employees to discuss such details with their employer. Because of their pride they would rather do without. That may be wrong, but it is a fact. We are not talking about substantial sums of money. Often, family credit payments will be only £2·50 or thereabouts.

I ask hon. Members opposite to put themselves in the position of an employee having to approach his employer every 26 weeks and saying, "My assessment unit is so many people and my income is so much," and so on. I do not believe for one moment that take-up will not be affected. History will prove either me or the Government right. The Government will be lucky to achieve their target of 60 per cent. If they do not achieve it, the whole basis of their argument about family credit will be vitiated. Any benefit that the Government wish to accrue from the proposal will go straight out of the window. That is an important argument.

I served on the Standing Committee. I was deeply impressed by the number of organisations which responded to the proposal. The organisations, which included the Salvation Army where not those normally associated with political lobbying. The organisations represented an unholy coalition of all sorts of people— from political lobbyists down, or up, depending on how one looks at it.

If the Conservative party intends to go down that road in the face of such opposition from people who are not necessarily involved in the day-to-day political process, it is making a sad mistake. For those reasons, I think that the Government should be forced to change their position— not that it will result in the Government losing the proposal, because that is not necessary. The Government could change the detail of implementing the proposal in a way that would satisfy everybody by accepting the amendment moved by the hon. Member for Hornchurch (Mr. Squire).