A Conservative MP has called for the introduction of 'Welfare Cash Cards' on which benefits would be paid, enabling claimants to make only priority purchases such as food, clothing, energy, travel and housing costs.
Alec Shelbrooke, Conservative MP for Elmet and Rothwell, said the cards - which would prevent the purchasing of luxury items like cigarettes, alcohol, sky television and gambling - would support the introduction of Universal Credit.
He said: "The introduction of a Welfare Cash Card on which benefits would be paid would enable claimants to make only priority purchases such as food, clothing, energy, travel and housing. The purchase of luxury goods such as cigarettes, alcohol, Sky television and gambling would be prohibited. When hard-working families up and down the country are forced to cut back on such non-essential, desirable and often damaging items—NEDD items, as I call them—it is right that taxpayer-funded benefits should be used to fund only essential purchases."
Political commentators have warned that the Bill is unlikely to become law, however, the idea of a "welfare card" is gaining support in both central and local government circles. It is understood ministers are looking at prepaid cards for the Government’s troubled families programme. It’s also been reported that they are looking closely at similar schemes in Australia and the US.
With the Government devolving parts of the social fund to councils from next April, local authorities are also looking at using prepaid cards to pay out crisis loans.
Mr Shelbrooke said the cards would support the introduction of Universal Credit and the change from fortnightly to monthly welfare payments. However, he said owing to the differing circumstances involved, the measure would not affect the basic state pension or disability benefits.
Pre-empting criticism from opposition members around the stigma the cards could bring, Mr Shelbrooke said: "I want to discount that argument immediately. If people did not want to be recognised as being unemployed, jobcentres would cease to exist as people would not visit them for fear of being seen in them."
Citing figures from the Office for National Statistics, Mr Shelbrooke said the average household spends £48 a month on cigarettes, alcohol and narcotics. He added that the cards could also help to eradicate child poverty. "Statistics show that over 1.26 million claimants have children," he said. "Prohibiting the purchases of NEDD items such as cigarettes and alcohol would leave more money for priority purchases for children, who should not be the ones to suffer as a result of their parents’ irresponsible spending."
He said the cash card would be a "sensible step forward as we move towards Universal Credit". "The cash card would operate like any other bank card utilising the chip and PIN payment method," he said: "There is also scope to use the cash card to increase the use of public transport, through an integrated travel pass, to assist travel needs.
"This is about benefit distribution and spending, not about benefit allocation."
The Bill is to be read a second time on Friday 25 January 2013.