Supplementary Benefit (Requirements and Resources)

HC Deb 30 June 1981 vol 7 cc824-42 12.51 am

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)

I beg to move, That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1981, which were laid before this House on 15 June, be approved. As hon. Members will have observed, these regulations are rather complex and technical, and it may be for the convenience of the House if I first explain briefly why the amending regulations are necessary and then give some indication of the main matters of substance which they cover.

As the House will recall, last year 13 sets of regulations were made to give effect to the new supplementary benefit scheme, which was designed to ensure that so far as possible entitlements of claimants are prescribed by law, and to reduce the amount of discretion required to administer it. I know that hon. Members on both sides of the House saw that reform as a major advance on the largely discretionary scheme which it replaced, and I am glad to be able to tell the House that the indications are that the new scheme, which has now been in operation for seven months, is settling down satisfactorily, and working well on the whole.

I said last year that I did not regard the enactment of those regulations as the end of the job. Unavoidably, with a change of such size and complexity, some details of the legislative arrangements were not as tightly drafted as would be desirable; and some problems have become apparent in the course of operating the new scheme. In order to clarify and resolve the outstanding issues, we have therefore decided to lay before Parliament two sets of amending regulations—the set which we are debating tonight, which is subject to affirmative resolution, and another set of miscellaneous amendment regulations, which are subject to negative resolution.

The general thrust of both sets of regulations is to give effect to provisions confirming the policy of the former Supplementary Benefits Commission or the established policy of my right hon. Friend the Secretary of State for Social Services, as appropriate. Some provisions clarify the law where doubt has arisen about whether it provides cover for accepted policy. In general, the object of the amendments is to put the regulations into the state in which they should have been if it had been possible to secure everything properly last year. They do not, except in a few instances, make substantive changes in the rules then intended.

It will be apparent to the House that the amendments in the present set of regulations are substantial in number, and that is even more true in the case of the miscellaneous amendment regulations. The job of translating the supplementary benefit scheme into regulations was, however, an enormous task and, if I may say so, a substantial technical and legislative achievement. The scheme itself is complex, despite a measure of simplification and clarification which we introduced last year. It is therefore unsurprising that the settling down of the new machinery has revealed a need for some mechanical adjustment and refinement.

Before I go on to speak about the changes we are making, I should like to make the point that it is in the nature of the scheme that we cannot, and indeed ought not to expect to, take the process of simplification too far. Much of its complexity is due precisely to the fact that it defines peoples' rights and entitlements. It would be possible to devise a much simpler scheme—but, as a result, many would be likely to lose because such a scheme would inevitably be less sensitive to individual need. However, there are other features of the new scheme which, from the point of view of the claimant, work in the direction of clarity.

As the House knows, the object of a scheme in which entitlements are so far as possible prescribed by law, is to enable the claimant, and those who advise him, to know with greater certainty what his entitlements are, and to remove what many regarded as an unacceptable degree of arbitrariness in their administration. Further, the publication of the S manual next winter, which was announced by my right hon. Friend the Secretary of State for Social Services in the debate on 3 February, will provide claimants with yet more guidance as to their entitlements and the way in which those are calculated.

The amendments which we are proposing have resulted from our own experience of the working of the new scheme and from a careful review of the detailed effect of last year's legislation. It would, however, be right at this point also to pay a tribute to the contribution which has been made by others to our understanding of how the scheme operates, including comments from hon. Members, from members of appeal tribunals and from outside commentators.

I wish to pay a tribute to the work of such bodies as the Child Poverty Action Group, whose report was published last week. The CPAG is just one of the outside groups from whom we have commissioned research to advise us on how the new scheme is working. That research complements our departmental studies, statistical evaluation and normal management information. While in some of their comments they are undoubtedly candid friends, I wish to take this opportunity of thanking them for their work and to assure the House that we are indeed studying it carefully. My officials will shortly be meeting them to discuss the work they have done to date.

I turn now to some of the more important features of the amendments to the requirements and resources regulations. I will take the requirements regulations first. Regulation (2) clarifies the definition of a "prisoner", in particular to confirm that people committed for hospital treatment following proceedings are treated as patients—and, therefore, are eligible for benefit—and not as prisoners, who are excluded from benefit.

There are a number of provisions relating to housing requirements. In particular, we have made provision for a boarder's charge to be paid for a full week. We have also increased the maximum amount payable for board and lodging to people suffering from a mental disorder who are living in certain types of accommodation, and to people living in accommodation used for the rehabilitation of alcoholics or drug addicts. We recognise that those people have special needs which may increase the cost of their accommodation. The regulations now cover the retaining fee of boarders who are temporarily in residential accommodation as well as those in hospital.

Mr. Andrew F. Bennett (Stockport, North)

rose—

Mrs Chalker

I should be grateful if the hon. Gentleman would allow me to conclude my remarks, because I wish to say something more about housing. If he wants to intervene later I am sure that he will make his own contribution.

Still on housing, we have also made provision for members of the same household to be allowed their appropriate share of housing costs if, in practice, they are sharing these expenses. It was our intention that people remanded in custody—for example, to await trial—should not be at risk of losing their accommodation. The regulations were, however, defective, and we have amended them to allow weekly housing costs to be paid to people in this situation.

We have also amended the regulations to allow a week's rent to be paid in advance to a local authority. The regulations now provide that a person's benefit should not be reduced if a non-dependant is providing residential assistance, even though an additional requirement for the assistance is not payable because of a trade dispute or because it is being provided by a local authority. We have also made similar provision to ensure that in the majority of cases there is no reduction in housing requirements if a claimant has someone living with him whose usual home is elsewhere.

The special provisions for determining the housing requirements of residents in Abbeyfield Society Homes are no longer necessary and are therefore abolished in these regulations. I should, however, inform the House that this simplification has the full approval of the Abbeyfield Society.

Mr. Bennett

rose—

Mrs. Chalker

I shall give way to the hon. Gentleman if it is on the subject of housing.

Mr. Bennett

My intervention relates to the points that have been made so far. The hon. Lady listed a whole series of people who were unable to get benefits because the original regulations were defective. How many did not receive benefits, and were any provisions made to overcome administratively the problems arising from the first set of regulations?

Mrs. Chalker

I cannot speak globally for all the different items that I have mentioned, but I think I am right in saying that, wherever possible, if there has been a sensible reason, and if someone should have been paid the money and something was in error, it has been looked at sympathetically.

I cannot give the hon. Gentleman the assurance that it has been paid in every case. However, every time something of this nature has been defective, it has been taken to the office of the chief supplementary benefit officer and everything has been recorded most meticulously to make sure that at the earliest opportunity we could start to put right those things that inadvertantly were found to be defective. Where the intention was clear but where the wording was perhaps in doubt, I am sure that in those cases people have received the help that they needed.

We have also made amendments which clarify the interaction between different conditions of entitlement to to heating additions so as to restore the policy of the former Supplementary Benefits Commission, and to treat on the same basis as others with central heating those people paying fixed charges for heating which are based on consumption within their control. Other amendments simplify the legal basis of the calculation—for instance, of the provision for fares to visit people in hospital and to allow public transport costs where a taxi is used for necessary travel.

At present, the provision governing the award for fares to visit people in hospital is complex and in error. In the original regulations it seeks to calculate how much is available from a claimant's scale rates towards the fares, taking into account the reduced cost of maintenance of the patient in hospital. This is presently done by reference to the scale rates applicable at the time, which vary according to the relationship of the patient with the claimant and the length of stay in hospital. The legal expression of these references has been criticised as being too complicated and, therefore, confusing. It is also wrong as it stands.

The proposal in these regulations seeks to short-cut the complex references by specifying the sums which are reached after the calculation mentioned above has been done. The amounts have been rounded to the nearest 25 pence. Although the list of different amounts looks involved, in fact, it makes the calculation of the additional requirement much simpler. The only departure from current practice is the use of rounded as opposed to exact figures.

In the amendments to the resources regulations we have clarified the interpretative provisions relating to students and fostering of children. We have amended the provisions relating to income tax refunds received by people whose employment is temporarily interrupted, whether because of a trade dispute or for some other reason. Such payments are treated as income and hitherto have had to be spread over a forward period equal to the period for which they are payable and could have affected entitlement for several weeks. Under the amendment, any income tax refund, whether it is a regular one or a lump sum for arrears, will be offset against benefit only in the week of receipt.

We have also clarified the circumstances in which payments in consequence of a personal or criminal injury which are held on trust may be temporarily disregarded for the purposes of the supplementary benefits capital rule.

We are also amending the regulation which provides for the treatment of past earnings received from employment at the start of a trade dispute. As the House knows, people who finish work in normal circumstances are expected to manage on their final earnings from the previous employment for a forward period equal to the period for which those earnings are paid, and are disqualified from benefit for this period. Where trade disputes are concerned, however, because these are usually short-lived there has for many years now, under previous Administrations as well as this one, been a slightly tougher rule for strikers. If a striker's final earnings exceed twice the whole family's normal requirements, the excess is regarded as available for living expenses in the first benefit week in which entitlement arises. The present provision, however, does not achieve the desired effect in two ways. First, it relates only to the weekly paid and does not effect those who are paid at more infrequent intervals. Secondly, it enables the rule to be used where the first benefit week in which entitlement arises coincides with the return to work at the end of the dispute. The amendment substitutes a new formula to end confinement of the present provision to the weekly paid, and also limits its application to entitlement which arises during the strike, and not when the striker has returned to work. This provision restores the practice of the former Supplementary Benefits Commission before last November.

In conclusion, I repeat that we are aware that much of the content of these regulations, as of the regulations which they seek to amend, is very detailed and complicated. In introducing the regulations before the House this evening, I have endeavoured to explain the need for them in general terms, and I have drawn attention to those amendments which are among the more significant. While I have sought to reassure the House that the regulations are uncontentious, I shall do my best to assist hon. Members this evening or later if they wish to raise questions on the content of the regulations.

Perhaps I may add that the passage of these regulations by the House, if it accepts them, does not mean that we have reached the end of reviewing progress with the new scheme. The regulations in no way pre-empt the monitoring exercise on which the Social Security Advisory Committee and my Department have now embarked, to which the research I referred to earlier will make an important contribution. We shall, of course, continue also to watch the scheme in operation with great care and we shall be prepared to consider any changes or developments which experience may show to be desirable, although I should make the point that any changes carrying a net benefit or staff cost will have to take their place in the stiff competition for any additional public resources along with all the other deserving objects of Government expenditure.

The regulations are detailed and complex. I hope that I have answered many of the questions that may have been in hon. Members' minds. I shall try to answer any others that may arise.

I commend the regulations to the House.

1.9 am

Mr. J. W. Rooker (Birmingham, Perry Barr)

The Under-Secretary of State was correct to say that the regulations are complex. She said that there were 13 sets of basic regulations for the new supplementary benefit system. There have been three previous sets of amending regulations, two of which were laid before the House before the 13 came into force. We now have this set of amending regulations, plus the miscellaneous amendment regulations. The grand total is 18 sets of regulations, some of which amend previous regulations and some of which amend amendments to previous regulations. Therefore, above all there is a crying need for consolidation.

I hope that we shall not have to wait until the Minister's forecast date of the S manual publication next winter. I should like a commitment from the Government now about consolidating the regulations. We are in a new ball game running the system via regulations. If the Taxes Act can be consolidated each year for the benefit of those people and their lawyers who wish to rip off the tax system, surely the Government can consolidate these regulations so that welfare rights bodies can professionally advise people on their rights, which they cannot do if we keep amending amending regulations.

How many will lose and how many will gain from the regulations? They are based on the working of the scheme so far, so there should be figures available, and the information would be useful.

The regulations are complex, and it would make a charade of our procedures if I were to attempt to go into the mass of detail. Regulation 3(6)(a)(i) relates to the Industrial Injuries and Diseases (Old Cases) Act 1975. The explanatory memorandum that the Government provided to the Select Committee on Statutory Instruments states: Paragraph (6) amends those provisions of regulation 11 which relate to the calculation of income other than earnings and payments made by liable relatives. The effect of the amendment in sub-paragraph (a)(i) is that any payment made by virtue of any scheme made under the Industrial Injuries and Diseases (Old Cases) Act 1975…will be subject to the £4 disregard". It therefore appears that the Government are amending regulation 11 of the original regulations because they did not intend those persons who obtained benefit under that Act not to have the £4 disregard.

However, regulation 11 of the original regulations that the House passed last year—the Supplementary Benefit (Resources) Regulations—made no reference to the 1975 Act. Reference to the Act was in the Supplementary Benefit (Aggregation Requirements and Resources) Amendment Regulations 1980. In fact, the original regulations allowed the £4 disregard for beneficiaries under the 1975 Act, but before they came into force on 24 November, further amendment regulations were made which caught those subject to the benefit and took away the £4 disregard.

It is an error of drafting to mislead the Select Committee about the effect of the amendment. The Government did not come clean and say that the provision was not there to start with, and that they amended the original regulations and are now trying to put right what was a mistake. The Government owe the House an explanation of why they included the Industrial Injuries and Diseases (Old Cases) Act in the amendment regulations.

I turn to regulation 3(4)(a), which seeks to change a definition. It amends the resource regulations—we are dealing with resource and requirement regulations—so that certain benefits that the claimant has not received can be taken into account as part of the claimant's resources. Those benefits are supplementary benefits of one type or another. An explanation is called for. What is the difference between a benefit that is due but has not been paid and a benefit that will become available on application? Why is the rule about a benefit that is due but that has not been paid to continue while the regulation on the rule that covers benefits "that would become available on application" will not continue? What is the purpose of the amendment? Does it simply seek to correct a mistake in the 1980 regulations or does it represent a policy change? That is the crux of the matter. If the Minister says that an error is being corrected, we shall understand that. If there is a policy change, the House should be told of it.

Dependants of claimants could find themselves in the ludicrous position of not being eligible to receive benefits but of being forced to make a claim to satisfy the claim made by the person on whom they are dependent. I may have gone about things in a roundabout way. However, I hope that the Minister will tell us whether the provision seeks to correct a mistake or represents a policy change.

I had intended to raise in detail references to regulation 3(5)(b). The provision is not clear and I am satisfied. It relates to those who lose income because of an industrial dispute. However, I shall leave that matter as I understand that one of my hon. Friends hopes to catch your eye, Mr. Deputy Speaker. Nevertheless, I hope that the Minister will help us with one other point of definition. I refer to regulation 3(6)(b)(v) on page 8, which states that the words "a television licence" are to be removed and substituted by the following words: 'the provision of either a leisure or amenity item or an item for which provision is not made'". What is meant by "amenity item"? I hope that the Minister will explain. As I have said, the position is complicated, because we are amending amending regulations. Therefore, we need guidance as to what the Government mean by that change in definition.

I turn to the subject of access to the regulations. I have not totted up their cost. I have a bundle of the original regulations. They are not cheap and cost between £1.40 and £2.70. The regulations that we are amending cost £1.70. Put together, the regulations must cost several pounds.

Mr. Reg Race (Wood Green)

I understand that the cost of the regulations and the yellow book total £26.50. After the amendment regulations have been accepted, the cost will be about £30.

Mr. Rooker

My hon. Friend is correct. It costs several pounds to buy the regulations, which do not inform the claimant of his rights. I am not suggesting, nor. I think, is my hon. Friend, that claimants should study the yellow book, "The Law relating to Supplementary Benefits and Family Income Supplements." If, however, that publication is purchased, together with the regulations and the amendment regulations, the figure given by my hon. Friend is correct. People would have to fork out £30 or more.

Some of the problems would not arise if the Government were to ensure that the supplementary benefits handbook was re-published. The latest handbook was published last November. It does not contain material relating to the regulations that the House passed last year. The handbook was out of date before it was published. I should have thought that it was reasonable to expect a new publication to be available this November at modest cost. I understand that this will not be the case. The Minister looks surprised. I understand from inquiries made by those who assist the Opposition that it is not proposed that there will be an updated version of the supplementary benefits handbook for this year.

The TUC has recently published a guide to the supplementary benefits system. It is extremely useful and costs a moderate 75p. I ask the Minister and those who control HMSO to bear in mind that the TUC can produce the guide at this price and present it in a manner that is extremely useful to those who advise claimants. I hope therefore that the Government will come forward with an updated version of their handbook.

The Child Poverty Action Group has published material on the disability allowance and also a useful guide that is as up to date as it is possible to achieve, I understand that a new edition of the Penguin guide to supplementary benefits will be published next month. I am told—this is a bit of a plug—that Lord Scarman has described it in a foreword as a modern classic. It is sorely needed by those, including hon. Members, who try to ensure that constituents receive the benefits to which the House has decided they should be entitled.

Why have not the Government taken the opportunity in the amendment regulations to start to deal with the problems that have arisen over regulations 5, 6, 7 and 8 of the resources regulations? I refer to capital resources—basically, the limit of £2,000 for a husband and wife which prevents them from obtaining supplementary benefit. There has been considerable disquiet about the definition of resources, about the sum of money involved and about the fact that it appears that the sum will not be uprated this year. Hon. Members have not yet seen the uprating orders. At the minimum, £2,000 next November will be worth only about £1,800 at last year's prices, even if the Government's forecast of 10 per cent. inflation is met.

The question also arises of the inclusion of the surrender value of life policies about which the Minister has been questioned several times, and the inclusion of all capital, including redundancy payments and ex gratia payments. I should have thought that the Government, in bringing forward these amendment regulations, could have included the results of their initial inquiries.

There is a good deal of confusion. People are sometimes being forced to use up nest-eggs or savings. They can reduce their capital to below £2,000 and can be caught if they are not careful about how they spend the money. By the time that some of those people retire, if they are in later years or have taken an early retirement, instead of being able to retire and manage on State retirement pension alone they will be forced into supplementary pension. Thus, we shall not solve a problem for some people on supplementary pension and supplementary benefit.

I have good evidence about the confusion in the country and in the House about the capital ceiling. The example is in a letter from the hon. Member for Dudley, West (Mr. Blackburn) to one of his constituents. The hon. Member is here because I gave him notice that I would probably refer to him. The constituent to whom the hon. Member wrote was a former Tory supporter and said that he was now ashamed of being a Conservative. I am not surprised about that.

Mr. John Blackburn (Dudley, West)

Has the hon. Gentleman met my constituent?

Mr. Rooker

I met the hon. Gentleman's constituent as an unemployed person at a right-to-work conference recently. The man has real difficulties under the Government, like 2.8 million other people. The hon. Member for Dudley, West wrote to his constituent who had complained about that ceiling, saying: You will note that the position regarding savings has not changed and the original proposals of £2,000 were introduced by the previous Labour Government. That is a distortion of reality. I am not blaming the hon. Member for Dudley, West as he was not a member of the last Parliament. The social security review called "Social Assistance" was published together with all the options—one of which was to have a capital cut-off instead of a sliding scale. The Labour Government did not make any pronouncement on the results of "Social Assistance". It was left to this Government simply because of the general election and the intervening change.

Under the old rules £2,000 would probably have affected a supplementary benefit requirement by about £8 a week. This was not a proposal of the Labour Government and it is not true to say that the position has not changed. The position has changed, because the Government chose an option that was put up for them by a working group of officials within the Department. They took the decision. It was a decision that the Opposition opposed and we would not have chosen that option had we been in Government, as my right hon. Friend the Member for Salford, West (Mr. Orme) made abundantly clear during the passage of the first Social Security Bill.

The confusion is evident in the country and it is shared on the Tory Benches. I was pleased to see that the hon. Member for Dudley, West wrote to his constituent to say that he agreed that the figure was low. He said: I agree that it does place a restriction on those people who not only work hard but equally save well. Naturally, I will be making representations on the broad issue of policy which has been revealed. I await with interest the hon. Gentleman's contribution to the debate.

My last point is brief. I have given the Minister notice of the question because it relates to the other set of amendment regulations which are not available to us at present but they are before the House. I refer to the Supplementary Benefit (Miscellaneous Amendments) Regulations, SI 815. It appears from those regulations that the Government are taking power over the issue of single payments for items of clothing, bedding, and so on, which are laid down in the single payments regulations. The items are set out with a sum of money alongside. It appears that the Government have taken power to enable the officers in the local offices to pay a sum of money if a claim is valid and is less than that laid down in the regulations. The Minister shakes her head. She can say that that is untrue, but it has been worth raising it since it causes concern to those who have read the regulations because of the way they are drafted by the substitution of the word "and" in the old regulations for the word "or" in these regulations. That has caused concern about what the Government might be up to. I should be grateful if the Minister could explain that matter because then the Opposition would perhaps not have to table a prayer and debate the matter again. The main problem could be solved tonight.

1.29 am

Mr. Andrew F. Bennett (Stockport, North)

The regulations are difficult to understand. It is ironic that one of the main reasons for reforming the system was the desire to make them clearer so that claimants would have more benefits as of right instead of discretion being used. If people are to receive benefits as of right it is essential that they and the officials understand the regulations. It is almost impossible to understand the regulations. The regulations amend regulations which amend regulations. That creates chaos.

I hope that the Minister will say how soon we expect a reprint of the regulations so that we do not have to transfer our thoughts from one set to another. I hope that they will be available at a reasonable cost. I hope that the fears expressed by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) will be allayed. It is important that the handbook should be brought up to date.

I intervened earlier because the Minister listed a series of anomalies. The officials decided that they had no power to pay certain benefits. How much discretion has been exercised to ensure that people did not lose benefit, or have people had to wait for these regulations? Will some people receive retrospective payments and some lose payments?

Is the discretion there only because of the transitional regulations, most of which have finished, or will there still be some discretion? It has been said that far less discretion will be possible.

Is the discretion to be exercised in areas where there are still anomalies? The Child Poverty Action Group says that the regulations do not cover all the anomalies. If payments are being denied because of flaws in the regulations, it is time that such payments were made.

The regulations change the rules relating to supplementary benefit for school leavers. Regulation 3(2)(a), on page 6, deals with the definition of a student. A disturbing case was brought to my attention at my advice bureau on Saturday. It involved a constituent who believes that as a result of the change she is £17 a week worse off. Because she lost her entitlement to FIS her son is not entitled to supplementary benefit.

The figures emphasise the problem. The woman has two jobs at the same firm. She works for 25 hours a week in the office for £32. She works a further 6 hours as a cleaner for £7.50. Her total earnings are, therefore, £39.50. It is a sad reflection on the the system that out of that, £6.98 is taken in tax and insurance. She is left with a take-home pay of £32.52. She receives child benefit and with the single parent allowance she receives £7.75. Her total income is £40.27. Until 16 June she was receiving £17 in FIS.

Then this lady applied for a renewal of her family income supplement, which had run out. She was told that she was not eligible for it because her son had left school. Her son had left school, but under the new regulations he cannot draw supplementary benefit, he is unable to get a job and he will not be eligible for supplementary benefit until September. So my constituent still has to keep her son with no income except the family allowance. She feels—and I agree—that she should be eligible to claim family income supplement. If ever there were a case for assistance, that is one.

If the woman's claim for family income supplement had come up for renewal in May, not only would she have received it up to September but she would have received it for the next 12 months. That is a major anomaly, and it is a major loss of income for one of my constituents who clearly has been struggling to work.

One of the most disturbing aspects of the case is that when this lady drew the matter to the attention of the people in the supplementary benefit office in Stockport, first she got a lot of sympathy, but the final comment was "The only thing you can do is to give up your job, draw supplementary benefit in your own right, and you will be better off". Clearly, that is right. However, she wants to maintain herself rather than having to rely totally on the State. Moreover, if she gave up her job between now and September she would probably find it impossible to get her job back.

I hope that the Minister will look into this case. It appears to be a major anomaly. It is possible that my constituent and I have misread the regulations, and that there is some way in which she can continue to claim family income supplement. If there is no way in which she can do that, I hope that the Minister will bring forward amending regulations quickly to solve the problem and will use some of the discretion to which she referred earlier to try to get round the problem.

I come to the £2,000 capital. Again, I have a constituent who is extremely bitter about the matter. He explained that he felt that he was being discriminated against, and he compared his position with that of his brother. His brother had been made redundant, had exhausted his unemployment benefit, and was getting supplementary benefit. His brother had virtually no savings, but when he reached 65, in addition to the State pension he would get a quite generous pension from the company for which he had worked. My constituent, on the other hand, had no pension provision. Because his employer had no pension scheme, he had saved about £3,000. That was his way of making the same provision as his brother had made by way of the company pension scheme. He was told that he was not eligible for supplementary benefit because his money was in the bank and he would have to spend over £2,000 before he was eligible. He felt that that was grossly unfair Many of my hon. Friends will know of other instances in which the £2,000 seems particularly harsh on the individual.

In my constituency—and, I am sure, in many others—there is the problem of the long-term unemployed. The fact that they cannot get on to the long-term supplementary benefit rates is becoming an increasingly difficult problem. Under the old regulations, which applied before the changes last autumn, I believe that there were more areas of discretion where individual benefit officers could make available lump sums to tide over people who were suffering from long periods of low income. Under the new regulations there are far fewer areas of discretion.

I strongly urge the Government, because of the numbers that are involved and the length of time that is involved, to tackle the problem of letting the long-term unemployed get from the short-term supplementary benefit rates to the long-term rates, if they want to alleviate the increasing poverty in this country.

1.40 am

Mr. Reg Race (Wood Green)

I echo the comments of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) about the complexity of the regulations. We are now discussing, in some parts, amendments to amendments to the original regulations. It is clear that even Members of Parliament find it difficult to understand how the regulations affect individual constituency cases. If it is difficult for us, it must be even more difficult for those outside who do not have the benefit of ministerial explanations to understand the regulations.

Therefore, we need a consolidation measure, a statutory instrument that sets out the position clearly for the benefit of the agencies concerned and of the civil servants in the DHSS local offices, who do such an excellent job. It is important for them to get that measure quickly. It is important also because the supplementary benefits handbook, the single most authoritative source of information on the eligibility of claimants to benefit, is, because of the amendments we are discussing this evening, in many respects woefully out of date. Any hon. Member who relies on it may give his or her constituents incorrect advice about their eligibility for benefit.

I was disturbed to hear the comments of my hon. Friend the Member for Perry Barr about the possibility of the Department not issuing a further edition of the handbook this year. I hope that the Minister will firmly discount that and confirm that that is not a part of the Department's economies.

Among a number of other major matters to which I shall refer is the citing of regulations by benefits officers when they explain to claimants why they have been given or refused a benefit. The House will be familiar with the way in which national insurance officers quote the national insurance regulations when they assess and disallow claims. Claimants are told the position by reference to a specified regulation. That is not done on the supplementary benefits side of the DHSS. I had hoped that the regulations would embody a move by the Government to ensure that when a benefits officer disallowed a claim the explanation for the disallowance would be set out clearly so that the claimant or his or her adviser could study the regulations to see precisely what the benefit officer meant.

I turn next to the issues not covered by the regulations. It is appalling that the Government have not used this major opportunity to change the rule on capital allowances for the purposes of claiming supplementary benefit. The £2,000 limit is a major source of friction in the supplementary benefits system. In one constituency case a woman was deserted by her husband who abducted two of her children and cleared out their joint bank account of £26,000. The bank—incorrectly, of course—gave the total sum to the husband and he left the country. After some pressure the bank relented and gave her £13,000, which was almost immediately consumed by the payment of £10,000 to the mortgagees of the house in which she was living to reduce the £20,000 mortgage with which she had been saddled. During that time she was receiving supplementary benefit and the local office of the DHSS was correctly paying her mortgage interest payments.

Once that payment by the bank was made, however, the women possessed capital exceeding £2,000—capital that she would not normally have received. The payment was completely unexpected but was imposed upon her. For two or three weeks benefit was not paid to her and no payment was made of the mortgage interest. That caused hardship for her and great complexity for the local office of the DHSS. It had to make calculations about the time at which the money was paid to her by the bank. She had to divest herself of all moneys over £2,000, which created difficulties. She had to find ways of spending it in order to get back on to benefit and to ensure resumption of the mortgage interest payments by the DHSS.

That is an instance of how this rule seriously affects the rights of claimants to supplementary benefit. I wish that the Government had proposed in these regulations to increase the disregard on capital, if they were to maintain a standard format, or to have a tapering system as applied previously. Under that system, people did not receive benefit one week but not the next because their capital assets had swollen above a certain figure. I hope that the Minister will make the Government's position plain about whether the £2,000 limit is being reviewed and whether they will bring forward new regulations to amend the scheme to deal with the serious problems that have arisen in many individual cases in many parts of the country.

A number of other points arise. One is the question of single payments for clothing and footwear. There have been a number of difficulties in the new supplementary benefits system in regard to those items. Many outside agencies feel that the provision made previous to the new regulations coming into force was more acceptable and generous than the provision made under the regulations that we recently approved. It especially affects the families with a number of growing children with immediate needs who frequently, during the three or four months between the buying of one pair of shoes and another, find themselves in serious difficulty. I had hoped that the Government would recognise that serious problem. It is wrong to expect beneficiaries to pay out from their scale rates of benefit for shoes, clothing and footwear when they have growing families with growing needs, and where previously they could have obtained discretionary payments under the old scheme. Under the new scheme some element of discretion still exists, but the DHSS sends out a standard letter to those who have expressed an interest in obtaining discretionary payments which effectively discourages them from making a claim. I regard that as a serious problem. I had hoped that the Government would come forward with some serious-minded proposals to ease the undoubted difficulties that have arisen in those cases.

There are also the problems of discretion and benefits that are supposed to be adequate, in terms of the scale rates, for the needs of individuals. Following the Government's philosophy that discretion had to be reduced we had the phrase worked into the new regulations that discretionary payments could be made to cover serious damage or serious risk to the health or safety of any person in the assessment unit. That was a catch-all phrase that was intended to cover instances where the regulations had removed discretion but where the benefit officer thought that a payment should be made to ease a serious problem.

What constitutes serious damage or serious risk? There have been proposals from the Child Poverty Action Group and others to include the words "and welfare" so that the benefit officer will have a wider area of discretion than he or she has now. That will enable those who have serious problems to go to the DHSS with more likelihood of obtaining assistance from their local office.

The Minister said that the Government were amending the housing regulations through the regulations so that anyone living jointly in a household and sharing the expenses of the household would have part of the joint expenses set into his benefit requirements. I understand that to mean that anyone who is living, for example, as a tenant in a house where the landlady refuses to give information about the home circumstances of the claimant—at present the local DHSS office would assess that person as part of the household and assess his requirements as being those of a joint householder—will receive an additional sum set into the individual's requirements and that the local office will be able to increase the benefit to take account of the acknowledged joint expenses. I hope that the Minister will clarify the matter.

I have no doubt that difficulties often arise in assessing the position of those in households where the landlord or landlady refuses to divulge important information to the DHSS on the circumstances of a tenant and where the DHSS currently has to make an arbitrary judgment on whether the individual is living in a joint household or whether the relationship is that of landlord and tenant but there is a supposition that they are sharing common goods, common utensils and common facilities. Some clarification would be welcome.

I regret that the Government have not proposed more far-reaching amendments to improve the position on safety, health and welfare, the £2,000 limit, and the single payments for clothing and footwear. I also hope that there will be early action on consolidation.

1.55 am

Mr. Norman Buchan (Renfrewshire, West)

It is late in the day to speak at any length, but some things must be said, in view of the Under-Secretary's comments.

The hon. Lady thanked the Child Poverty Action Group for being a candid friend and offering useful advice. The best way to thank a candid friend is to accept some of his advice. In its latest document commenting on the regulations, the CPAG says: They do nothing to mitigate some of the financially stringent aspects of the new scheme which are causing undue hardship. The group also speaks of the urgent need to consolidate the regulations—a point that others have made.

The hon. Lady said that the regulations were not simple but that if they were too simple some people would lose. However, our experience is that one of the main reasons for people losing benefits to which they are entitled is that regulations are not too simple but too complex. A simplicity of attitude on the part of the Government, backed by consequent simplicity of regulation, might be better for all.

The CPAG has spoken of what is missing from the regulations—above all action on the capital ceiling of £2,000. The regulations have been in operation for sufficiently long for us to know that the hon. Lady was wrong when she said that they were working well. It is clear that they are not, in the sense of justice to many people.

I have an example of an old couple whose main savings, £1,300, are invested in index-linked national savings retirement certificates, which are of little value to them unless they leave the money in. Because they cannot tap it without losing on the retirement issue, they are brought above the £2,000 ceiling. Their total income is £32.74 a week, about £8 of which is an occupational pension. Yet, because of the £2,000 ceiling, the man stopped receiving any supplementary benefit last November.

It is not even as if the matter does not raise an anomaly. The couple tell me that when their borough council works out rent rebates tenants' investments and index-linked national savings of the retirement issue are not taken into account.

This raises another point that was brought up by the CPAG's earlier work. It said that a review was urgently needed to look at the inter-relationship between the provisions of the supplementary benefits regulations particularly the single payment regulations—and other legislation. In other words, the DHSS regulations often exclude grants for certain essential needs, because the Department thinks that other bodies may take account of them. But certain other bodies, in particular local authorities, do not always have a legal duty to ensure that that need is met. Here is an example of a difference of attitude between the local authority and the DHSS not only introducing inequity between two beneficiaries but creating hardship.

We want to know what the effect is of that £2,000 ceiling. All our evidence at our surgeries is that it is harmful. Secondly, we want to know whether the Department is looking at that question of £2,000. We had a taper and that made sense. The Department has no taper but an absolute cut off, which makes no sense. Is the figure remotely adequate? We are told that it will be a 10 per cent. inflation figure. That may lead to many interesting discussions come the autumn. Will the figure be left at £2,000, even with an inflation rate of 10 per cent? That means another cut in people's conditions. We cannot allow that to go past for much longer. The figure is wrong. The fact that it is not related to inflation makes it worse.

I have no quarrel with what is introduced. As far as I can see, some of the amendments are amendments to amendments. One example which I have been given by someone doing work on this matter shows that the original regulations got certain aspects wrong, and they were corrected, and it was then discovered that the consequent amendment was wrong. This time, it seems to be right. There is no guarantee that other sections of the regulations are correct yet.

One regulation has not been looked at while the opportunity was there. That is the single payment regulation raised sharply by my hon. Friend the Member for Wood Green (Mr. Race). Those who used to obtain intermittent assistance for clothing and footwear now do not receive it. That is partly because of the attitudes of the Department and the Minister tonight on the question of what the Minister calls simplicity. Regulation 27 is interpreted along with regulation 30. In a letter to claimants warning them of that regulation, it states: If I do not hear from you within 14 days I will assume that you will not be replying. We know from experience that such a sentence means that a percentage will not reply. Almost by definition, that is cutting the amount of take-up under regulation 27. Regulation 30 says that the single payment can be made in unspecified circumstances but only where the payment is the only means by which serious damage or serious risk to the health or safety of any member of the assessment unit may be prevented. With respect, that sort of formulation—that payment can be made only where there is serious damage or risk—as we know from other discussion on health Bills, almost prevents the application of regulation 27 from being brought into play.

I refer the hon. Lady again to the words of advice of the body which she likes—the candid friend, the CPAG, which says that the measure is too tight, and it would be better to introduce a phrase such as the health welfare or safety of any member That is any member of the unit. That would give better and fairer discretion and more justice.

We are told that we shall receive the S mannual shortly. We also believe that long before that time, the £2,000 will have been overcome by inflationary factors. There are 3 million people who are unemployed and over 2,600,000 people registered for unemployment. Such people are coming to our surgeries weekly and are telling us that a problem is posed by the £2,000 ceiling. In my constituency there is a town with 40 per cent. male unemployment—the town of Linwood. I meet those people. Those who have served the country well over the last 10 or a dozen years have considerably more than £2,000 redundancy payment. They have to eat into that with no hope from the Government of going back into employment over the next two or three years.

The Government who talk about self-help are the Government who are preventing people from standing on their own feet when their savings are of consequence to them. The Government are telling those people to eat into their savings, to use them up and only at that point can they come to the Government for assistance.

The figure must alter when we all know that 2 million, 3 million, and perhaps more, for years to come will be unemployed. The present figure in relation to supplementary benefit is nonsense. It is a cruelty and an injustice, and must go. We bitterly regret that the opportunity was not taken in the regulations to make that necessary change.

2.5 am

Mrs. Chalker

With the leave of the House, Mr. Deputy Speaker, I shall try to answer as briefly as I can the points that have been raised.

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) asked about consolidating regulations. Of course, we need consolidating regulations, and we shall be bringing these forward as soon as we can.

Many Labour Members asked about the capital cut-off. As soon as it became clear that problems arose because of this, we asked for a special inquiry of the Supplementary Benefit Policy Inspectorate into the operation of that capital rule. It has been in effect for just over eight months, and we shall consider the application of the rule, including the level of the disregard, in the light of the inspectorate's report. I shall ensure that we take careful note of what all hon. Members have said this evening.

Mention was also made of regulation 3(6)(a)(i), which refers to the Industrial Injuries and Diseases (Old Cases) Act. In my experience, there was no intention to mislead anyone. The amendment regulation will take the old cases benefit into account in full. It was an error and we are putting it right, but no one should have suffered, because there was an analogous provision that enabled the £4 disregard to be applied all the way through.

The hon. Member for Perry Barr also asked about gainers and losers. While it is impossible to be precise and say that no one has lost anything—obviously Labour Members argue that those with more than £2,000 capital have lost—most of what is being done tonight is beneficial to claimants. It puts right those things that were not correct by virtue of wording or other slips in the preparation of a large amount of entitlement that went on to the statute book.

The hon. Gentleman asked about access to the regulations. He spoke of their cost, and referred to the supplementary benefits handbook. I showed some surprise when he said that because we have yet to make a final decision. We are considering the future of the handbook, and I shall take carefulnote of what he said. The S manual will contain, in an operational mode, even more than the handbook, but we know how useful the handbook has been and, although it is not 100 per cent. up to date because of the passage of time, it is not a definitive statement of entitlement; it is a guide. The definitive decisions can be found with the help of the local offices, when hon. Members, claimants or their advisers feel that these are not clear.

The hon. Gentleman also asked about regulation 3(4)(a), which treated benefits as a resource. I assure him that there is absolutely no change of policy. The amendment in these regulations simply corrects an error.

I shall not refer to the discussion between the hon. Gentleman and my hon. Friend the Member for Dudley, West (Mr. Blackburn). Suffice it to say that many people have discussed the social assistance proposal for a £2,000 cut-off point. I can well understand how the confusion may have arisen.

I turn to the miscellaneous amendments regulations. I hope that you will allow me to answer the hon. Gentleman's point, Mr. Deputy Speaker, although those regulations are not strictly under debate at this moment. Regulation 3(3) of the single payments regulations specifies the amount of payment to be made. The original provision was clarified by the miscellaneous amendments regulations 1980, which spelt out the three types of payment.

First, there is payment where the amount is specified in the appropriate regulation. This will be found in the single payments regulation. Secondly, there is payment where the amount is not specified. This relates to the cost of an item or, alternatively, to the cost of services. Those provisions could not be used as alternatives. Either the amount is specified, in which case the first statement applies, or it is not, in which case it is the cost of the item or the cost of services which is paid over.

It is therefore simply as a matter of clarity that we are replacing the word "and" with the word "or", because that is the way in which it seems to have been interpreted all along. The proposed amendment merely seeks to clear up a minor legal confusion. It certainly has no deeper significance. There is no discretion to use one paragraph in lieu of the other. Either the paragraph applies or it does not. It certainly does not mean less than the amount laid down, which was the assurance that the hon. Gentleman sought.

I turn to a couple of remarks made by the hon. Member for Stockport, North (Mr. Bennett) that I have not so far covered. He spoke of the need for the regulations to be clearer. I, too, wish that they could be clearer. If he does not imagine that I, too, struggle with these things despite the excellent help of our officials, he is much mistaken. What we must be sure about is that the entitlement is unequivocal. That may not mean that the way in which it is worded by the lawyers—he will know that I come from a family of them, although I am not one myself—is always as clear as we lay people might wish it to be, but I agree with him that the entitlement must be unequivocal.

The hon. Gentleman also asked how much discretion had been given during the period when the regulations were perhaps not absolutely correct to the letter. I cannot tell him how many people may not have received their entitlement during that time, but we doubt very much whether anybody has really suffered. If a person feels that his case should be reviewed, he must return to his local office and ask for a review of his case. It is open to such a person to seek that at any time.

Another point raised by the hon. Gentleman is a little outside these regulations, but perhaps I may say to him that the whole question of either a single-parent or a two-parent family whose entitlement to FIS coincides with their only child leaving school is a matter that I should like to look into in greater depth. I cannot answer his point at this moment, but I take it as he put it and I agree with him that we should see whether there is any way to deal with this. I regret that his local office should have given any claimant the advice to give up a job. As he rightly says, it would probably have made the lady's task even more difficult in the future. One aspect that may be able to be considered is that child benefit remains in payment although the youngster is not entitled to supplementary benefit. It may be the interaction of the FIS regulations with the child benefit regulations which needs some adjustment. I assure the hon. Gentleman that I will look into that.

I accept what has been said about the problems of the long-term unemployed. These regulations are not the place to put those matters right, but I note carefully what hon. Members have said.

The hon. Member for Perry Barr asked about the regulation which replaced "television licence" by "leisure or amenity item". That phrase appears in the definition of normal requirements in regulation 4(1) of the requirements regulations. The examples given there are television licence and rental, newspapers, confectionery and tobacco. The list is not exhaustive, but it is important that it should not be restrictive. Replacing the original phrase with "leisure or amenity item", helps to put the matter right.

The hon. Member for Wood Green (Mr. Race) mentioned the complexity in the consolidation, and I have dealt with that. He also mentioned certain regulations being cited either when only a partial entitlement was granted or when no entitlement was granted. When the new scheme was introduced it was intended to follow the national insurance practice of quoting to the claimant the supplementary benefit officer's decision, where that decision was a refusal or a reward of modified benefit, and that the decision quoted should give the regulation on which it was based. I am sorry to say that, because the forms had to go to print very early and before the regulations were published, the references had to be in very general terms. In reprinting the forms the references will be more specific.

However, to give references to all regulations on all decisions would hardly be practicable, so we must aim to give the major regulation that modifies or denies benefit. If further information is required, it is available. It is not simply what is issued on the A124 form. For example, if a weekly payment is awarded it will be based on a range of other individual regulations. It would be better to indicate the overall regulation and, if necessary, give the detail at a subsequent stage, if needed. We are aware of the need to cite the relevant regulations much more clearly than was done at the beginning.

The hon. Members for Wood Green and for Stockport, North commented on single payments. The single payments regulations are not before us tonight, but it would for the convenience of the House if I stated that we are carefully monitoring internally and externally by commissioned research, what is happening with single payments regulations. If the results of the research show substantial areas of need that are not being met by the regulations, we shall consider whether they should be amended.

The hon. Member for Renfrewshire, West (Mr. Buchan) mentioned the interaction of regulations 27 and 30. If I discover something when I read the report, I shall write to him.

We are aware of the complexity of housing benefits, which the hon. Member for Wood Green mentioned. I shall consider what he said about the landlady and the tenant, although the situation is exactly as I stated in my opening remarks. We have made provision for members of the same household to be allowed their appropriate share of housing costs if they are in practice, sharing the expenses, but it is difficult if the landlady will not say what the costs are.

The hon. Member for Renfrewshire, West also mentioned single payments regulations. The Child Poverty Action Group report states that the single payments regulations prevent the Department from making payments in areas where the duties of local authorities are not clear cut, and that leaves the claimant effectively stranded between the two statutory authorities. I should like more information on the example given in the report, which concerned local authority property and repairs. However, through the Supplementary Benefit Policy Inspectorate we are looking at how the regulations are working. If there proves to be a problem, we must take the necessary steps to tackle it sensibly.

Several hon. Members mentioned the adequacy of rates. With the exception of the overall supplementary benefit levels, which were announced in the uprating statement made by my right hon. Friend on 11 March last, we have not gone through all the details. That is for another occasion. However, we are conscious of current—not out-of-date—costs. We are concerned to make the scheme work as smoothly as possible in the interests of claimants and to ensure that as far as possible offices, which often operate in difficult circumstances and which face the complication of all our social security legislation have not only the S manual, but all the aids and helps available. In that way we can ensure that they pay benefits to which people are entitled as quickly and as straightforwardly as possible. We hope that claimants will always claim their entitlements and that hon. Members will encourage them to do so.

I commend the regulations to the House.

Question put and agreed to.

Resolved, That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1981, which were laid before this House on 15 June, be approved.