RATE REBATE (MRS. DOROTHY DEACON) (Hansard, 26 June 1967)

§ Mr. Michael Shaw (Scarborough and Whitby)
I am grateful for the opportunity to bring the House back from the sunny isles of Bermuda to a problem much nearer home in the lovely Yorkshire resort of Whitby. The problem relates to Mrs. Dorothy Deacon, of Ruswarp.
This is a case which must command the sympathy of us all, but it goes wider than being an individual case. I think that there is a general principle involved which can affect many willing and warmhearted people who are prepared to take foster children and give them the love, affection and feeling of security to which all children have a right. In doing this service, Mrs. Deacon and others like her are fulfilling a very worth-while 50 purpose for the community. It is a service which involves in no sense a measure of financial profit, because most local authorities which send children to foster parents make quite sure that the monetary reimbursement is only such as will cover expenses. Were it more than that, there would always be the danger that the wrong type of people would be encouraged to seek foster children. It appears that, far from seeking profit, people like Mrs. Deacon might restrict their right to a rate rebate.
In 1966 the Rating Act was passed under which, in certain circumstances, people with a very small income are entitled to seek a rate rebate from the local authority. Mrs. Deacon is a young widow, living on a small pension. To quote her words, When my husband died I decided that I would like to take in a foster daughter for company as I had no children. I figured she would have a home and a mother and I would have a companion. Since then I have taken two other little girls in as foster daughters. Their ages are now 12, 6 and 2 years. One of them came from the North Riding of Yorkshire and the other two from Dr. Barnardo's.
Last September, Mrs. Deacon applied to the Whitby Urban District Council for a rate rebate because of the smallness of her income. I attach no blame to the Whitby Urban District Council, because it would act, as I have always assumed, on instructions from the Ministry about how it should operate the Act. The urban district council told her that in calculating her personal income for the purposes of rebate she had to include the money which she received for the three children from the North Riding and Dr. Barnardo's as being part of her income.
On 27th October last, I first wrote to the Minister about this problem. Because of the eight months which have elapsed since, and knowing the Joint Parliamentary Secretary to be a man of exceeding good will and that he would be helpful if he could, I felt that as long as I did not have a direct denial I could hold out some hope that Mrs. Deacon's case would be reviewed favourably. Time went on, and I had a feeling, perhaps quote erroneously, that the recess would be with us before I received a positive answer. I therefore put down the matter for debate on the Adjournment.
51 Having put it down on 15th June, I received a very full letter from the Parliamentary Secretary dated 22nd June. I am grateful for that letter—not that it gives me any help or encouragement, but at least it clarifies some of the issues. Having tried to do my homework on the Rating Act and the debate which took place at that time, I came to the conclusion that there were certain passages in the Act which were difficult to interpret. I felt that perhaps the Ministry was also finding some difficulty in interpreting it.
First, there is the problem of the definition of the word "income". The Act does not help us as there is no definition in it. If one goes further into the matter and looks through the debates in Committee, one discovers that this point was debated, and the Minister said that the word "income" come be taken to mean "that which comes in". Therefore, we have to accept that anything which comes in to Mrs. Deacon's household directly must be regarded as income.
But let us consider what the payments from the North Riding consist of. I have a letter from the North Riding County Council, saying: I write to advise you that the boarding out allowances payable to Mrs. Deacon are paid to ensure that the child is fed, clothed and given pocket money". Here we have a widow, living on a very small income, who goes to the local authority to seek a reduction in her rates by way of rebate because of the smallness of her income. Let us assume that she does not have her foster children. She is entitled to such rebate as the Act allows. She takes in foster children from the local authority which gives money to her each week and quarterly to cover the food which the children eat, the clothing which the children use and the pocket money which the children require.
It is to be noted that not a penny is for rent or rates; the money is merely for food, clothing and pocket money. Mrs. Deacon had a certain income for herself and to keep the house going before she took in the foster children, and she still has that same income for herself and the house. Yet, although she is no better off herself, the rebate to which she was formerly entitled is now restricted because she receives money which is spent not on herself but on the foster children for 52 whom she is caring. I believe that that is unjust.
Section 7(3, a) of the Rating Act, 1966 says that: any income by way of payments in respect of living accommodation or board made by any person residing or usually resident in the relevant premises within the meaning of Section 6(4) of this Act … is to be disregarded. I puzzled over that paragraph for a long time. I should have thought that it was open to the interpretation that "within the meaning of Section 6(4)" refers to the relevant premises and not to the person residing there, and that therefore a local authority would be justified in disregarding board and residence in respect of any person.
I am fully aware that Section 6(4) says that persons residing or usually resident in the premises shall include persons: … (apart from any child or children) …". But we are talking about persons living in the relevant premises according to Section 6(4). I therefore believe that it could well have been interpreted as meaning that it was proper to disregard any of the sums paid to Mrs. Deacon in respect of the foster children for their food and lodging.
However, if that is not accepted, we should then consider the size of Mrs. Deacon's allowable income. She is entitled to an increase in the Act of £39 each half year in respect of each child. According to the letter from the Minister, the Ministry regard the children as being in Mrs. Deacon's care and therefore consider that the limit of her allowable income is £208 every six months for Mrs. Deacon herself plus £39 for each child.
It seems to me that if he finds that the present limits are unsatisfactory the Minister could make an order varying the sum of £39. In his letter the Minister said that there is no power to make such an order in relation to foster children only. But I should have thought that it was possible under the terms of the Act to alter the limit to £X, or such sum as may be received in respect of a foster child from a local authority or approved society for the child's maintenance. That puts the matter in a different way, but I believe, subject to correction, that it puts it in such a way as can be regarded as being within the powers of the Act.
This is a matter of wider importance than the case of Mrs. Deacon. People 53 in her circumstances, widowed and needing companionship and a sense of fulfilment, should be encouraged to take on the service of looking after children in this way. Anything that is done to discourage them or make life harder for them, as the Act seems to do in this case, performs a disservice to the community.
I ask the hon. Gentleman to consider every possible aspect of such cases. I understand that, as far as he knows, there are not many. But I have found one, and there may be others. A service such as Mrs. Deacon performs should be encouraged, and I hope that the Minister can find a way round the problem. If that is found impossible, I hope that the the attention of local authorities and organisations such as Dr. Barnardo's will be drawn to this debate and the problem that arises from it, and that as a result they may themselves supply additional funds to people like Mrs. Deacon to offset any disadvantage that may arise because of the working of the Rating Act, 1966.

§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)
The lot of the reformer is very awkward, and his path is very thorny. The hon. Member for Scarborough and Whitby (Mr. Michael Shaw) described the brutal, callous, behaviour of my right hon. Friend in issuing his instructions to the local authority that it was to offer no rebate, and rubbing his hands with glee at the thought that an unfortunate foster mother was to be discouraged from taking a child. Anybody less erudite than yourself, Mr. Deputy Speaker, would have thought that the rate rebate was a privilege which had long been available to ratepayers. Listening to the hon. Member, nobody would have thought that it was introduced by this Government only just over a year ago, and that it was the first time that any kind of rebate and help of this sort had been available.
No instructions are issued from the Ministry. The law is the law, and the Rating Act is to be interpreted by local authorities as they think fit. From time to time we issue suggestions or hints on what we think might be the interpretation. On the whole, they are in the nature of encouraging local authorities to adopt a liberal interpretation towards the 54 Act rather than a very restricted one. But if they do not make such an interpretation, we cannot compel them to do so. Having said that, I should make it clear that the interpretation given by the hon. Member is the correct interpretation as I see it, and I think that in this case the Act was interpreted correctly.
The hon. Member made the very fair point that it took me a long time to answer his letter in a helpful form, and that by an extraordinary coincidence a long answer emerged just as he put down the subject for an Adjournment debate. It is not completely the case that we were sitting on it and trying to avoid answering. We wanted to take the hon. Member's point seriously. Other points have been raised by local authorities in a comparable sphere and we were examining them and having a thorough look at the legal position. That was part of the reason for the delay.
The broad principles of the rebate scheme are that it is meant to be operated in a very simple form, and not to be a complicated exercise like Income Tax, in which there must be a hierarchy of highly technical experts assessing income, appeals made to Income Tax Commissioners, and eventually cases going to the House of Lords.
When we asked local authorities to administer the rebate scheme we were certain that we had to make it simple, so that, in broad terms, people with low incomes got rebates while those with high incomes did not. As the hon. Gentleman said, "income" was not defined, but it is broadly what comes in and it is in that form that the local authorities understand the position.
The hon. Member is an expert in cost accounting. If we had tried to have a complicated system so that every foster mother or other person of that kind with a small undertaking—"business" would be the wrong word—which resulted in money coming in could have that money disregarded, there would have to be accounts and complications about how much money had been spent on the children's clothing and so on, and once we had a system like that, it would not be workable by the local authorities and it would become much more difficult and expensive. We tried to get a system which would be easily understood and simple to administer.
55 It is true that difficulties arise in connection with disregards. The hon. Member said that this was a very good example of an instance in which a disregard ought to apply. However, there have been other similar criticisms and we have had to stick to saying that income of any kind had to be counted before the calculations could be made. A foster child is treated exactly like any other child and the income in respect of that child is added to the parents' income. That means that the 30s. a week allowance for a foster child is credited to the reckonable income.
The fact that rates are paid is a disincentive only at certain points in the calculation. If the income of the foster parents is low, the extra 30s. allowance will not prevent a rebate from being allowed. The trouble arises only where the income before the addition of the allowance is fairly large. In our inquiries to date we have heard of only two county councils which have raised the matter with the C.C.A. This case did not arise through Dr. Barnardo's, but through the hon. Member himself, and as far as I am aware Dr. Barnardo's does not know of any other case. It has not made representations to us about other cases, which seems to imply that this is not a very large problem, or a severe handicap on the boarding-out of children. We have discussed the problem with the Home Office, but it sees no ground for making a change.
The hon. Member fairly argued that the income limits could be altered and he pointed out that that could be done by Order. I am advised that no way could be found to do that piecemeal. The change would have to be made right across the board. We have heard of only three of these cases, which shows that it is a very small problem, and there is no suggestion of hardship. If we started to pick out individual cases, my visits to this Box to explain why one application 56 had been rejected when another had been accepted would become very frequent.
As a result of taking three children, Mrs. Deacon lost the rebate. That means that if Dr. Barnardo's increased her allowance by 2s. 3d. a week in respect of each child, she would be no worse off. That is the size of the problem. Mrs. Deacon clearly does this work because she loves children. She is irritated, as we all would be, by this rebate position and she does not unnecessarily want to lose some rebate. We would all share that view, but I want to make it plain that this is not a matter of a crippling burden which would make one want to abandon the children.

§ Mr. Michael Shaw
I understand that she is getting an increase of 4s. from Dr. Barnardo's, but that is because of the rise in the cost of living.

§ Mr. MacColl
I was not dealing with the cost of living. I was saying that if there were a general feeling among boarding-out authorities that the effect of rates was so high that it was necessary to make a balancing additional payment when the rebate was lost, it would not be a very large amount, because even the highest rebate for an average family in most cases would not be more than £1 a week. We are not dealing with large sums, and when there are several children, the amount involved is very small when spread over each child.
While I appreciate the hon. Member's argument, it would not be possible to pick out these cases for special treatment. We are doing what boarding out is supposed to do, which is for councils to treat the families concerned exactly as other families. Whether a further allowance should be made is a matter for the boarding-out authority and not for the rating authority and not for changes in the legislation.