Orders of the Day — Poverty and Low Pay

Part of the debate – in the House of Commons at 3:56 am on 10 March 1988.

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Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate 3:56, 10 March 1988

If I had known that the hon. Lady would be here for this debate, I can assure her that I would have had the figure. I shall be very pleased to supply it to her in due course. There is certainly no political bias, and I stress to the House that the figures that I have given are the amounts of social fund allocation per head of the population on supplementary benefit. They are not figures for the population as a whole. We are simply dividing the number of people on supplementary benefit into the social fund allocation. The House will appreciate that the allocation tends to be very much higher in Scottish cities and, as it happens, in Labour seats. The allegation that there has been any political bias in this matter is absolutely untrue.

We have had an interesting debate that has given us an opportunity to think about the reforms. I believe that the reforms achieve the Government's objective. They provide a much simpler system and one that it will be easier for claimants to understand. It is also a much fairer system. In the past, the additional requirements have been used as sorts of surrogates to help particular groups of people, and the system has depended on individual claimants then making a claim for a dietary, heating or laundry addition, or whatever it might be. In future they will be automatically entitled to the premium that is appropriate to their group. If they are disabled, they will automatically qualify for the disability premium; if they are severely disabled, they will automatically qualify for the severe disability premium. That, I believe, is a great step forward.

It must have been of concern not only to Government Members but to Opposition Members that the single payments regime meant that the way in which need was met was very patchy as between one part of the country and another and one sort of claimant and another, so that only a small minority of claimants were receiving single payments. Those single payments could, of course, be very large sums of money. That also raised a very important point of equity between those people who were on income-related benefits and those who were only a very short way above income-related benefits.

All of that has an effect on the unemployment trap, because the more such very large payments are made available to people on benefit, the more the incentive for people to be in work is removed and the greater the sense of inequity felt by people who are in work and having to make provision for that sort of payment from a budgeted income. One of the strengths of the social fund as it will be introduced is that it will provide greater equity between one sort of claimant and another without in any way removing the support from the most vulnerable groups of people, who will continue to qualify for community care grants, for which there is a budget of £60 million.