News and other Busyness

Benefits To Be Privatised

Squall 14, Autumn 1996, pg. 08.

A GOVERNMENT plot to privatise the benefits system was heralded in July with the announcement that the administration of Child Benefit is to be sold to private industry.

The announcement coincided with a plan to invite private companies to help dole out benefits in three regions - Yorkshire, the West Country and East London, and Anglia - for a 12 month period.

The chiefs of ten leading insurance companies have also been secretly discussing how they could take over the welfare state.

The “Welfare Reform Group”, chaired by Peter Davis of Prudential, was due to hand its findings to the Government in August.

Such a scheme would probably mean people having to buy their own insurance cover - an extension of the private pension principle.

Sally Withcer, of the Child Poverty Action Group, warned that such a proposal would leave “high risk groups” without cover.

“The greater the risk you are, the less likely you are to get cover and the more expensive policies become,” she said.

Duncan Hopper, Managing Director of Legal and General, said: “Could we provide cover for education fees? Yes, we are doing that now. If there is a market we will go after it.”