§ Mr. Brynmor John (Pontypridd)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Claims and Payments) Amendment Regulations 1982 (S.I., 1982, No. 522), dated 6th April 1982, a copy of which was laid before this House on 7th April, be annulled.The prayer relates to the fuel-direct scheme which is operated when a recipient of supplementary benefit is in debt to a fuel board and, with the agreement of the board, a supplementary benefit officer is empowered to determine that part of the claimant's benefit should be paid directly to the board which, in return, agrees not to disconnect the claimant's supply.
The amount deducted from a claimant's benefit for the reduction of the debt owed to the board is equivalent to 5 per cent. of the single householder rate, rounded up to the nearest 5p. That means a maximum of £1.20 at current rates, but a higher amount can be deducted where there is a disregard.
The second part of the deduction is an estimate of the full weekly cost of a claimant's fuel consumption, except when he pays through a prepayment meter. In practice, the supplementary benefit officer accepts the estimate made by the fuel board on the basis of the claimant's past level of consumption.
Taken together, the deductions could amount to a considerable sum and could exceed 25 per cent. of the normal requirements element applicable to the person being assessed. If that happens, the person being charged must consent to such deductions. The person being charged has no right to insist upon this. It is the prerogative of the officer.
The regulations amend regulations which came into force only last November. Even in supplementary benefit terms, those regulations have had a shorter life than most without being amended. The regulations make three changes. First, and most important, they provide that the amount to be deducted to reduce the debt shall be equal not to 5 per cent. as at present, but to 10 per cent. of the single household rate. According to the press handout of the DHSS, that rate is £2.40 a week at the moment.
§ The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)
As a result of an unhappy mathematical error in rounding, that is the wrong figure; it should be £2.35. That should be put on the record.
§ Mr. John
I am delighted that the Under-Secretary of State has done so because the figure before me is £2.35 but as my calculations are so often wrong I hesitated to put them against the press handout of the DHSS. In future, I shall be less timid when crossing swords with the DHSS.
Where deductions are made in respect of more than one fuel—gas and electricity—they are tied to 5 per cent. of the single household rate in respect of each of them.
The second change provides for adjustment of the amount deducted in respect of current consumption if the original estimate either exceeds or falls short of the actual cost. The third change can best be described as a tidying operation. It concerns disregard of either the claimant or his partner.
I wish to deal with a number of points. I shall take them in reverse order of importance, starting with the queries and finishing with the outright opposition to the scheme.
236 First, what effect will the housing benefit scheme have on the new scheme? Housing benefit is being transferred from supplementary benefit and is being made a benefit in its own right. The fuel-direct arrangement can be made only where the amount of the supplementary benefit exceeds the amount to be deducted. For those claimants who are not in debt in respect of housing but are in debt in respect of fuel and paying fuel-direct, the effect of paying housing costs through housing benefit rather than through supplementary benefit may take them outside the ambit of the benefit.
I give as an example a claimant who receives £15 a week supplementary benefit, of which £10 a week is for housing costs and £8 is a fuel-direct deduction. If £10 is deducted from £15 to leave £5 net, no fuel-direct deduction can be made in that case because the amount of deduction exceeds the amount of benefit when the housing element is taken away. That element will be taken away by the Social Security and Housing Benefits Bill, which is now in the other place. What will happen in such a case? Will an alternative arrangement be made? The claimant's financial position will not have altered in any way. If the fuel board does not have the guarantee of repayment, there is a danger that disconnection will loom large in its mind. What system do the Government envisage for that circumstance?
My second point concerns the right to a fuel-direct arrangement which, at the moment, is left to the discretion of the DHSS officer. When claimants are in debt with fuel, they prefer to go on to the direct system but they have no right at the moment to insist. It is a matter for the discretion of the supplementary benefit officer.
There are a few cases, albeit only a few, in which a claimant has made a request for a fuel-direct arrangement, the fuel board has been happy to go along with that request, but the benefit officer has refused the request on the grounds that it is in the interests of the claimant to learn to budget. I accept fully that that is probably the predilection of a couple of antediluvian officers in the Department.
§ Mr. Andrew F. Bennett (Stockport, North)
That may be the attitude of one or two officers. There is also evidence that some officers, because of the manual system that they must use, are reluctant to increase the direct payments beyond a certain level. That has applied on the housing side in the past but it also appears to apply to fuel debts. Officers have said that they will agree to a total of £100 and no more. Will my hon. Friend press the Government to make it clear that they do not subscribe to that principle?
§ Mr. John
I shall press the Government to subscribe to that principle. The Government should either give a right to a fuel-direct arrangement or at the least they should give a right of appeal when there has been a refusal by a supplementary benefit officer.
There is poor liaison at some points between the fuel boards and the DHSS. The Child Poverty Action Group has provided a document called "Fuel Debts and Hardship" in which it talks about thedelays in administration at the beginning and end of 'fuel direct' arrangements.The Department is often late in payment, as a result of which the fuel board threatens disconnection.
The Under-Secretary of State for Energy said that arrangements had been made for improved liaison with the 237 welfare authorities. I hope that the Minister understands that, for reasons that I shall set out in more detail later, that means better staffing at the DHSS offices than in the past.
My next point has been made by the Electricity Consumers Council and the CPAG. When low income consumers appear to incur excessively high fuel costs, there should be some arrangements whereby they are offered energy advice and possibly a home energy audit to see that their fuel expenditure is the most suitable for their needs and means and is the most economic. I hope that the Minister will comment on that.
The House has every right to take the strongest exception to the way in which the Minister once more has waived the requirement of referring the regulations to the Social Security Advisory Committee. I remind the House that under section 10(2)(a) of the Social Security Act 1980 the Secretary of State is permitted to waive the requirement for referral if it appears to himthat by reason of the urgency of the matter it is inexpedient so to refer the proposals".That is what the Secretary of State has done on this occasion.
In a written answer on 7 April the reason given by the Under-Secretary of State was:We are making these regulations now as a matter of urgency to assist in putting the changes into effect as soon as possible so that the new provisions may help with large fuel bills resulting from the past winter."—[Official Report, 7 April 1982; Vol. 21, c. 399.]However, the provision for fuel direct payments already exists. The amending regulations double the rate at which the amount owing is repaid. That does nothing to help those who have accumulated large fuel bills. Therefore, I beg leave to question whether the reason given by the Secretary of State stands up to even the most modest scrutiny. Should not the SSAC have been consulted first about a step that will cause extra hardship to the claimants who have, in any event, on that level of income, to scrape to make ends meet? The urgency of the matter may have been caused by something different. The urgency may have been to get some of the fuel boards to remove the debt ceilings that they have been operating. Whether that was the quid pro quo is open to doubt.
At any rate, we must notice not only the way in which the Secretary of State has dealt with this matter as a non-emergency but the fact that he tacitly admits the total inadequacy of the emergency fuel help that was provided by the Government during the winter.
It would not be so bad, and we might take the Secretary of State's exemption of this at face value, had we not the previous week had the Child Benefit (General) Amendment Regulations about payments for school leavers, which were also laid by the Secretary of State without previous reference to the Social Security Advisory Committee. I wonder whether there is a campaign by the Government deliberately to devalue the Social Security Advisory Committee by constantly circumventing it.
§ Mr. Jim Craigen (Glasgow, Maryhill)
The Minister is probably afraid of the kind of advice and recommendation that it would give.
§ Mr. John
Yes, that is implicit in what I said about the Government trying to devalue the committee. At the very 238 least, if what is intended to be an exceptional course becomes a matter of course, the Act itself is in danger of being devalued.
On debt ceilings, I believe that the doubling of the rate of repayment is the result of a deal done with the electricity supply industry whereby boards which currently operate a debt ceiling, limiting the size of debt for which they are prepared to accept a fuel-direct arrangement as an alternative to connection, will cease to do so. If that is so, a number of points arise.
First, the maintenance of a debt ceiling is in any event totally contrary to the spirit of the code of practice on fuel debts and disconnections agreed in 1976 between the fuel boards and the DHSS. Therefore, it should not have been necessary for the DHSS to "buy" the disappearance of that practice with a measure that will increase hardship for claimants.
Secondly, even if we accept that that was the intention, how good a bargain was achieved by doing it in this way? How many electricity boards were still imposing a fixed debt ceiling at the time when the agreement was reached? I know of only one definite example—the South of Scotland electricity board. If there are more, I hope that the Minister will tell us.
Thirdly, exactly what is the force of the fuel industries' agreement to remove the remaining limits on the size of debt for which they are prepared to consider a fuel-direct arrangement? The practice of some electricity boards has been not to impose a direct ceiling but to consider each case on its merits. In other words, it does not necessarily follow from the removal of a fixed ceiling that the fuel boards will be prepared in every case to allow a fuel-direct arrangement as an alternative to disconnection.
I press the Minister to give an assurance today that when the fuel industries say that they will remove the remaining limits they mean that in every case in which a fuel-direct arrangement is possible it will be permitted as an alternative to disconnection.
The question of two debts instead of one arises when a person consumes both gas and electricity and has a fuel-direct arrangement for one supply. The new arrangements have provided no real disincentive to running up debts as they are repayable by 5 per cent. only.
Will the Minister clarify the intention of new paragraph (2B) of the amending regulations, which provides for adjustments in the amount deducted for current consumption? No doubt the Minister has the text before him. I cannot see why this provision was necessary, as regulation 4 of the Supplementary Benefit (Determination of Claims and Questions) Regulations 1980 already provides for a review of a determination. The new paragraph therefore seems to spell out a power which already exists rather than adding any new power. If that is so, is it wise for the Government constantly to add to their printing costs by printing otiose provisions?
It is important, not that the benefit officer may review the amount deducted for current consumption, but that he should do so at regular intervals. At present, he merely has a permissive power. We would like that power to be mandatory, compelling him to review the arrangement at regular intervals.
We say that for two reasons. They are contradictory, but each is represented among the people whom we are discussing. The first case is where a fuel board overestimates a customer's current consumption. It means that an unnecessarily large amount of money will be 239 deducted from the benefit, and the family will have to suffer unnecessary hardship as a result. Indeed, some people suspect that some fuel boards deliberately overestimate the element for current consumption so that they can more quickly get payment of the debt, which is the first element, not the second, in the deduction. If there were a regular review, the payment could be adjusted downwards if there had been an overestimate. If the power is only permissive, the claimant may endure many months of hardship before the review is carried out. I hope that the Minister will consider the matter, and, if it is necessary, we shall not criticise him for amending the amendments fairly quickly.
§ Mr. Andrew F. Bennett
One problem for my constituents is that they receive a bill and are startled when they see how high it is. They find it difficult to pay, and they have to adjust the amount of gas or electricity that they will use, but the board still insists that the calculations will be based on what they have just used, not on what they will use in the next quarter, taking into account their difficulties in paying the first bill.
§ Mr. John
Certainly. Of course, that is estimated on past performance. I am asking for a mandatory review so that when the pattern of consumption is changed the amounts can also be adjusted and unnecessary hardship avoided.
The second phenomenon that I want to bring to the Minister's attention is the claimant who increases consumption once he is on a fuel-direct payment. The Policy Studies Institute, in its book "Fuel Debts and Hardship", gave examples of that. People are under the impression that the DHSS has taken full responsibility for the fuel bill in return for weekly deductions. Whatever the reason, it is essential that, where actual consumption exceeds the estimate, action should be taken to prevent further debt from accumulating and to avoid the adjustment which my hon. Friend the Member for Stockport, North (Mr. Bennett) has just mentioned.
Whatever the reasons why it should be done, I suspect that the power is permissive because of the problems in the DHSS in dealing with the fuel-direct system. In my view, there has been understaffing in the DHSS offices for this line of work. It has led to poor liaison with the fuel boards and a failure to take action when actual consumption is out of line with the estimate. For example, it is reported that, in some offices in north London, understaffing is so bad that at times every person working on fuel-direct work has been taken off it to attend to the general needs of the office. I hope that the Minister will assure us that, where this scheme is amended, there will be adequate staff to deal with it, and that there will be regular adjustment of deductions for current consumption.
I hope that my hon. Friends will join me in dividing the House on these regulations and thereby show our concern and opposition to the additional hardship for claimants that is involved in this measure.
It is interesting to note that the Department of Health and Social Security has given absolutely no reason for saying that in its opinion the present rate of deduction for repayment of fuel debt is too low. We know that it is tied to the cost of living and is automatically adjusted for inflation. Therefore, the House is entitled to an explanation of why the Secretary of State has decided to double the rate of deduction. The fact is—we all have to 240 face this—that the increased rate of repayment will place an increased strain upon the budgets of claimants who already find it extremely difficult to manage on what is by any standards a very low income. The danger is that a larger deduction in respect of fuel debt may satisfy the fuel boards but will merely transfer the indebtedness away from fuel into other fields in which the recipient of social security is equally obliged to purchase.
All of us who know something about Northern Ireland are concerned about the Payment for Debt Act and we do not want that Act or its equivalent, in whatever guise, to be transferred to the rest of Great Britain, because it has been the cause of great misery and does not serve the purposes for which it was intended.
The root cause of the problem is not how quickly the people who run into debt repay the money; the root cause is that the Government by deliberate policy have raised fuel prices in recent years by far more than the rate of inflation. I need mention only the rise in gas prices, which last year was 26 per cent. and which in each of the past three years has been 10 per cent. above the rate of inflation. I believe that this is something which on any view is misguided but which bears more harshly on low-income families than on the generality of the population.
The family expenditure survey in 1979 showed that the poorest 20 per cent. of households spend about 11½ per cent. of their income on fuel, whilst the richest 20 per cent. spend only 4 per cent. The problems of poor families are exacerbated by the fact that in many cases they cannot afford loft insulation and many other fuel-saving measures. This is compounded by the fact that mans of them live on council estates where in fits of aberration the local councils have had district agreements with the electricity board to install central heating which in many cases nobody can afford to turn on for anything like the period for which they are intended to run to warm the house. It may have been cheap for the council to install but it is a matter of great hardship to run it thereafter.
If the Government are going to pursue the policy of increasing fuel prices artificially in order to get some notional return on capital they really must provide adequate financial help for low-income families who have these fuel problems. This they have signally failed to do and this has meant that in many cases families that are neither profligate nor wasteful have got into debt when they are in receipt of social security because of this Teal and arduous problem of fuel cost. It is essential to tackle the problems of fuel policy and fuel poverty rather than to treat the symptoms of the problem through repayment.
The higher rate of repayment now to be demanded will be a significant extra sum for the family on supplementary benefit to find out of its weekly budget. I believe that it will prove a great social hardship. The Government have given absolutely no reason why it is being imposed. That is why I hope that my hon. Friends will join me in voting against the regulations.
§ 10 pm
§ Mr. Reg Race (Wood Green)
The regulations are deceptive, because, to an untutored eye, all that they apparently do is to increase the deduction for fuel debts from £1 to £2.35. However, there are other principles involved, and what matters to people who have fuel debts is the total amount of deduction from their benefit. The 241 Government are proposing to more or less double the amount that is taken from benefits to pay off an existing debt.
The regulations are silent about something that we must discuss, which is the way in which, in addition to that sum, there is a figure that represents so-called current consumption.
Another problem that arises from the method by which the fuel-direct scheme is operated is the way in which an individual claimant can sign away his or her rights and agree to pay more. Some of the agreements to pay more are staggering in their complexity, as are the amounts that individuals agree to pay off.
I refer the Minister to a case in my constituency, which shows that there is a major problem. It was drawn to the attention of his predecessor, the hon. Member for Wallasey (Mrs. Chalker), in 1981. We exchanged correspondence, but the subject bears repetition.
Ms Burnell Jacobs, a constituent of mine, lives in an all-electric first-floor council flat in Haringey. She ran up a bill of £861.69 with the Eastern electricity board. The board said that it would reconnect her only if a payment of £600 in cash was made to it, plus a payment per week of £21 under the fuel-direct scheme.
Ms Jacobs had two children, one of four years, and one of 15 months who had just come out of hospital with a chest infection. Her electricity supply had been disconnected by the electricity board and the local authority could not provide any form of portable gas heating because it was on the first floor and was regarded as a fire risk. The social services department gave her two gas lights and a single gas burner camping stove. Application was then made to the DHSS local office for a single payment to clear some of the outstanding electricity debt to get her back on to supply. Initially, this was turned down on the ground thatShe had alternative forms of heating and lighting.That was the two gas lights and the single gas burner camping stove provided by the social services department.
The decison was made not by the local office but by the regional office of the DHSS and was appealed against. The Under-Secretary wrote to me on 12 May 1981 about the case, and eventually an appeal tribunal awarded a single payment of £647. With the agreement of my constituent a fuel-direct deduction of £24.10 a week was made from her supplementary benefit to pay for her current consumption and her existing outstanding debt after the single payment had been made.
Of the payment of £24.10 a week that Ms Jacobs had to sign away from her benefit, £23 was for current electricity consumption. When that was investigated by the excellent Tottenham advice bureau, run by the local authority, it was found that the annual consumption rate that that £23 represented was no less than 100 per cent. over the previous two years' consumption. An outrageous amount was being demanded by the electricity board through the local office, and it was agreed to by the claimant because that was the only way that she could get back on supply.
That case outlines some of the worst problems of the fuel-direct scheme. Nevertheless, I applaud the scheme. It is basically a good scheme, but it should be improved drastically, and our job tonight is to see that it is.
§ Mr. Peter Bottomley (Woolwich, West)
Because this is a non-partisan issue—or some elements of it are—can the hon. Member for Wood Green (Mr. Race) say whether what he has reported appears to be a general approach by the board? Is the implication of his figures that this person had not paid for fuel for over a year?
§ Mr. Race
The woman had been paying money to the electricity board. She had run up a debt over a period of time. However, her consumption over the previous 12 months was not excessive for her flat. It was high, but not abnormally so. At that time, what I have said appeared to be the general approach of that electricity board.
We must ask ourselves who is in charge of the fuel-direct scheme on the ground. Is it the local office? I asked the local office that dealt with the case. I have good relations with it, and I think that it does a good job. It did not see itself as being in charge of the fuel-direct scheme. It said that it merely implemented the electricity board's demands. Therefore, I went to see the regional manager of the Eastern electricity board. He is an excellent man and deals well with complaints that I raise with him. He told me that it was not the job of the Eastern electricity board to act as a social service. If there were a problem, he said, the Department of Health and Social Security had to make representations about it.
The difficulty facing claimants under the fuel-direct scheme seems to be that the electricity board may make excessive demands in order to recoup its outstanding amounts from individuals as rapidly as possible, the local office of the DHSS does not see it as being within its powers to make representations to reduce the claims from the board, and the claimants, who may have been disconnected and who want to get back on to supply as quickly as possible, will agree to almost anything to have that supply restored, particularly if they have children or an aged relative in the house.
The House must build into the system a method of overseeing those deductions from benefit to ensure that they are not excessive and to ensure that the total deduction is not excessive.
My hon. Friend the Member for Pontypridd (Mr. John) correctly said that the burden of debt is simply shifted on to somebody else—the rent, the rates or the hire purchase is not paid. We all know that that is true. Therefore, my plea to the Minister tonight is, first, that he should withdraw the regulations, because they increase hardship. The near doubling of deductions for debt payments matters to people who are on a low rate of benefit.
Secondly, for heaven's sake let us have a real look at the fuel-direct scheme to ensure that the policies that I have outlined in this case, which were reflected in others in my locality, do not occur again.
We must have a fuel-direct system which is fair, which can be appealed against, and which reflects the real needs of claimants. If we do that, claimants will have good cause to say that the House of Commons has done a good job and to thank it for that. If the Minister is not prepared to make that kind of investigation, perhaps it should be done by the Social Security Advisory Committee. Here is a classic area in which the SSAC should look at the administration of fuel-direct payments. It can do that if it wishes to do so. Perhaps the Minister ought to encourage it to do so. If we can get some urgency and some action, claimants will get a better deal, and that is what we all want.
§ Mr. Peter Bottomley (Woolwich, West)
Two or three points ought to be made in the debate in the hope that people outside will pay attention to what we say.
I do not disapprove of the regulations. I think that it is reasonable for the weekly amount to go up to 10 per cent. It is important to remember the people who are not covered. When hon. Members talk about the transfer of debts from fuel to some other area, I am reminded of the people who have to rely on paraffin or coal for their heating. There is not the opportunity to build up debts with the coal merchant, because payment has to be made in cash in advance of delivery. That is different from gas and electricity consumption, where the problem arises in having to meet quarterly accounts. There are other occasions when problems arise because of prepayment meters being broken into, either by the family concerned or by people from outside. We are talking about specific fuels, electricity and gas, and almost without exception the problems are concentrated on those two fuels.
I find it worrying that so many families find themselves with over a year's fuel debts before getting help to settle those debts. I should like to think that our fuel boards have the initiative to contact families or to take action which brings matters to a head within, say, a period of a quarter and a half. Families should not be allowed to accumulate debts covering periods exceeding six months.
When people are allowed, as in the example that has been given, to run up debts of over £800, and when the current consumption is about £10 a week, it would appear that about 15 months' debts have accumulated. That is letting a family—especially one on supplementary benefit—get into far more difficulties than it can reasonably be expected to get out of.
I recognise that the fuel boards have difficulties and that many hon. Members take a rather strong line, as I do, over fuel disconnections. They have to try to find the appropriate commercial way, through the two pressures that are being applied. That is their job. They should not expect to get paid and get a round of applause as well.
Whenever I have had to take up fuel problems with the fuel boards or with the Department of Health and Social Security, there has been a good response. One recognises that there may be variations from locality to locality or as between different members of staff. It may be a question of the other pressures on the office at the time, but, even in the most difficult cases, I have found the authorities reasonable, and usually it has been possible to come to some kind of arrangement.
I am concerned about the liaison between the fuel boards and the DHSS office. On occasions I have found that when people have tried to go on to a fuel-direct system, the buck seems to have been passed from the electricity board to the DHSS and vice versa. That often arises when a family has been on the fuel-direct system for two years, has come off it, has not managed to organise its own budgeting, and has then found it difficult to go back on to the fuel-direct system.
I recognise how difficult it is to have arrangements which discourage people from relying unnecessarily on the fuel-direct system. If that happens, the DHSS office becomes rather like a bank running standing orders or regular payments for people on supplementary benefit. It would be preferable to have the system that is operated in Germany and France, where almost every family has a 244 bank or giro account so that there can be automatic payments on the day that the supplementary benefit arrives. That has the same effect as the fuel-direct scheme, but it does not require too much work by the DHSS office. We are obviously a long way from that, because nearly 40 per cent. of British families do not have savings accounts either with the National Girobank or with another bank. We must try to move towards a scheme where families can make their own fuel-direct payments, as long as they make sure that the money leaves their account on the same day that the bill comes in.
We should have more privatisation—I hate the word—in analysing what is happening in this area. We should not always rely upon the Social Security Advisory Committee. We should take a leaf out of the example that was set by the Family Fund, where an independent charity was asked to administer the fund on behalf of the Government. If we wanted an analysis of the position on the ground without relying entirely on the DHSS, we could ask the Child Poverty Action Group to conduct a survey. At the moment it obtains evidence on a limited basis, but it should have Government funding to monitor the effects of changes in such regulations and to check how widespread are the examples given by the hon. Member for Pontypridd (Mr. John). We shall find that there are cheaper ways of conducting surveys which will help both the Government and hon. Members to monitor the effects of regulations.
§ Mr. John
The hon. Member for Woolwich, West (Mr. Bottomley) will recognise that, under section 10, the statutory obligation laid on the Minister to refer such regulations to the Social Security Advisory Committee can be avoided only in certain cases. Does he agree that it is an unhealthy development that the Minister should certify that the latest two cases have a priority which does not match up to the realities of the position? For example, is there anything in the regulation that is so helpful to the beneficiary that it should be laid before the House before the advice of the advisory committee has been obtained?
§ Mr. Bottomley
I do not agree at the moment, but I look forward to my hon. Friend's speech. The point that I was trying to make—which was not the one made adequately by the hon. Gentleman—was that we should use outside experts to monitor the changing effects of regulations on fuel prices. I hope that the Government will consider using outside bodies—not necessarily commercial bodies, although I have no political objection to that—to find out what is going on. Many outside bodies have the sort of expertise that is not only useful in briefing Members of Parliament and the Government, but can be used for following up the effects of the regulations.
A useful point was made about energy advice. I wish that that advice had been available to many local authorities which carried out the wrong form of building, let alone the wrong form of heating. It is acceptable to install electric heating in a house or in a low-level block of flats because it is possible to switch to an alternative form of heating, but in the local authority buildings in my constituency it is impossible to install alternative heating.
I wish to re-emphasise and appeal for early action to help not only the families concerned but those in contact with them, such as the supplementary benefit offices, the fuel boards and the local community networks. The more that they are aware that early action is important and that 245 fuel debts can be kept down by voluntary action by the families and useful intervention—not busybodying—by those who can give them formal or informal advice, the more we can reduce this sort of problem.
The payment of fuel bills is a major problem and will continue to be so. We must ameliorate it as much as possible and take every opportunity to make the lives of those on supplementary benefit with high fuel bills as easy as possible. We should remember that those on supplementary benefit do not have large disposable resources, which is why it is important to ensure that fuel payments are not added to their debts. We must ensure that the level of the fuel-direct scheme is kept as low as possible by trying to reduce the level of debts.
§ Mr. Andrew F. Bennett (Stockport, North)
I support my hon. Friends in their Prayer to have these regulations annulled. They are calledThe Supplementary Benefit (Claims and Payments) Amendment Regulations 1982.That does not tell us much about them. It would have been much better had the Minister arranged for a note to be stuck on the top saying "Stand and deliver, pay up quick regulations." That is what they are about.
The Minister should also look at the back page which gives the price of 75p for a copy of the regulations. I do not expect many claimants to buy a copy, but many welfare rights and other groups will buy an up-to-date set, particularly as the regulations amend earlier regulations that are only six months old. The Government should look at the way in which the price of regulations is imposed on bodies that do not have much in the way of resources to pay for them. This may not be a problem with the general run of regulations which go to public bodies and to solicitors who can afford to pay for them, but a lot of the work in this area is done by organisations that work on a shoestring and to put a price of 75p on these regulations is unfair.
The real problem of fuel debts was brought about by the gas and electricity boards. I am appalled at the amount of time spent trying to solve a problem that the boards created themselves. Thirty or 40 years ago, when people on the whole had lower incomes, very few got into difficulties meeting their fuel bills. That was because a larger proportion paid for their fuel before it was consumed. They used oil, paraffin or coal and bought it as they went along.
In those days, gas or electricity was in most cases paid for through a prepayment meter. It was the enthusiasm with which the gas and electricity boards ripped out prepayment meters that created the problem. The boards did that for two reasons. They wanted to cut down their collection costs and they were worried about the number of meter robberies. I accept that those problems existed, but this enthusiasm for ripping out the meters was the real cause of the present problem. If the boards had retained the meters and converted them to take tokens that could be destroyed as they were inserted in the meter, most of the problems would have been solved and we would not need to spend so much time on this issue.
§ Mr. Race
Is my hon. Friend aware of the recent happy change in policy by some electricity boards? They are 246 bringing back prepayment meters, particularly in households where there has been a history of fuel debt. Does not this show that our pleas for a more rational approach are having some success?
§ Mr. Bennett
Yes. I am willing to pay tribute to some of the boards, certainly in the North-West, that I know have started installing prepayment meters. However, the simple action for the Government is to tell the boards that they have no sympathy for their problems of collecting money until the boards install prepayment meters to the same extent as they did in the 1960s. Only when the boards have played their part by doing that can the Government bring forward these regulations.
I do not believe that the gas or electricity boards have done enough work on the development of destructive tokens and making such tokens available so that they can be purchased at local corner shops and a wide variety of places. If that was done they would solve many of their problems.
The Government are allowing the boards to continue making life difficult for those on low incomes, particularly by allowing them to push forward with standing charges. A section of the regulations should stipulate that people on supplementary benefit should have their standing charges met direct—not from existing benefit but from extra benefit. I can see no justification for the standing charge anyway, but it is extremely harsh for someone on a low income such as supplementary benefit. Quite often, such people make savings, cut back and do without necessary fuel but still find that they are being penalised by the standing charge.
I have constituents who have incurred heavy winter bills because it was necessary and who for the two summer quarters have tried to make do with virtually no heating at all. Even so, they find that a substantial standing charge will be applied by the gas or electricity boards. The Government ought to be doing something about that. If they cannot stop the boards from imposing a standing charge, they ought to provide some money.
It is deplorable that the Government did not put this matter to the Social Security Advisory Committee before they introduced the regulations. It seems that the Government are reluctant to take notice of the advisory committee. The committee made 14 recommendations to the Government in its first annual report, and it looks as though the Government might implement four or five. They have not taken a great deal of notice.
In the new Social Security and Housing Benefits Bill the Government propose a special price index for housing. We now know it as the "Rossi index". They will take that into account in future because they believe that housing costs work differently from general costs in the RPI.
Why do not the Government introduce a special index for fuel costs—perhaps the "Newton index"? Taking into account the standing charge and the extra that the fuel board have had to impose as a result of Government policy, fuel charges in the last two years have gone up catastrophically for most individuals. I therefore believe that the Government ought to consider such a special index.
§ Mr. John
My hon. Friend will remember that we pressed the Government not necessarily for a separate fuel index but for an index covering the lowest 25 per cent. economically so that fuel that accounts for a much higher 247 percentage of a poor family's income should be adequately weighted in the RPI rather than struck as an average as at present.
§ Mr. Bennett
I accept that. The Government ought to introduce this index and give extra money in the supplementary benefit.
In a way, these regulations are almost that sort of index. The Government are really saying "We recognise that, as part of your needs, fuel has doubled from 5 per cent. to 10 per cent. Because of that, we shall allow the boards to recover the money that much sooner". In a sense they are admitting that this is an extra cost in the needs of someone on supplementary benefit. In fact, they ought to increase the benefit to take that into account. It is, therefore, important for the Government to come forward with a positive policy and to put some extra money in people's pockets before finding quicker ways of taking it out of their pockets.
The Government have been warned several times that the Social Security Housing Benefits Bill will reduce flexibility for many claimants. They will not receive their rent money. It will be paid direct. Therefore, the choice of being a week or a fortnight in arrears with one's rent will be removed from many individuals.
When it first talked about that change, the Supplementary Benefits Commission recognised that it would mean a loss of flexibility. It said that it was worth it so long as some extra money was provided. The loss of flexibility to borrow from the housing department means that in order to ensure that their children have clothes to attend school or food to eat, more people will be tempted to dip into the money that should be set aside to pay their fuel bills. As a result of Government policy, and the Social Security and Housing Benefits Bill, the problem of fuel debts will increase. Therefore, the Government must carefully consider the ways in which—within the next 12 months—they can raise the general level of benefit to take into account the loss of flexibility.
Like my hon. Friends on the Front Bench, I believe that people should have the right to insist on fuel-direct and that that should not be left to the discretion of individual offices. I hope that the Minister will make it clear that he does not accept the principle found in some offices that an extra case will not be put on the list for fuel-direct until a case has been taken off it. Such a practice is most unfortunate.
Many of my constituents manage to obtain, in effect, a fuel audit. When the electricity and gas boards are contacted, they will often send someone to advise on what can be done to reduce a high bill. Often I could give that advice. Indeed, a social worker could often give the necessary advice. Often, the individual concerned can work it out. However, because people are caught by the low income from supplementary benefit, they have not got the small capital necessary to improve the situation. They have not got the money for an insulation scheme, and the local authority sometimes will not install one. They sometimes find that they cannot change the heating system because they have not got the capital to buy the appliance necessary for more efficient heating. Often, council tenants cannot move from a high-fuel-cost dwelling to a low-fuel-cost dwelling. The Government should pay more attention to that problem.
The Government should make it possible for people to obtain more capital so that they can change the heating 248 system or install insulation or they should make it easier for them to move out of expensively heated accommodation within a local authority area into cheaper accommodation.
§ Mr. Race
Is not the crux of the matter that it is often not the claimant's fault that he has run up high fuel bills, but that of the construction or design of the dwelling? Presumably such accommodation was designed when energy prices were lower and those responsible did not consider an individual's ability to pay high fuel bills.
§ Mr. Bennett
I agree with my hon. Friend. Tenants often live in blocks of flats built in the late 1960s when it was thought that fuel would be cheap. Such tenants are committed to living in a block of flats when they would prefer to live in a semi-detached house with a garden. They are also committed to a high-cost heating system—often an electric under-floor heating system—and would like to get away into a semi-detached council house with an old-fashioned fireplace. They would prefer to burn coal and know that if they were to run short, there would be much more chance of scrounging something else to burn.
Under this Government, the chances of being able to move from a block of flats into the older type of council houses has been reduced. Instead of encouraging people to move from those older council estates and to buy houses elsewhere, big discounts have encouraged people to buy houses on a council estate. That means that those in the blocks of flats are stuck with accommodation that they do not like and a heating system that they do not like and cannot afford.
We need to make it possible for people to have a fuel audit on their home and if they are advised to move or to change their heating appliances the Government must make that possible and not condemn those people to live in accommodation that they do not like and face bills that they cannot afford. The regulations say "Pay up or else". I beg the Government to take them away and come back with a realistic and helpful policy for those in need.
§ Mr. Jim Craigen (Glasgow, Maryhill)
Like my right hon. and hon. Friends, I hope that the regulations will be turfed out. They do nothing to help those on supplementary benefit; they merely speed up and increase the rate at which fuel boards are paid outstanding debts.
I shall tease the hon. Member for Woolwich, West (Mr. Bottomley). It seemed to me that he suggested that if we all had bank accounts the problem would be solved, because everyone could pay for gas and electricity through standing orders. The hon. Gentleman also referred to the need for outside experts, but the Child Poverty Action Group was worried recently that its funding would be in jeopardy. That is a strange contrast with the hon. Gentleman's call for more outside experts.
Gas and electricity prices have risen considerably during the Government's lifetime, and they are penalising not only those on supplementary benefits, but those on low incomes who have to meet the increased costs.
I accept what the hon. Member for Woolwich, West said about the management procedures of the fuel boards. Some of my colleagues and I raised that matter when we met officials of the South of Scotland electricity board last year. The system for keeping a close watch on the buildup of debts does not always work, and my experience of 249 local DHSS offices convinces me that problems are caused not by a lack of will but by pressures that distract staff from their work on the fuel-direct scheme, especially when a crisis crops up in the office.
I suggested to the SSEB last year that it needed to improve its liaison system with the DHSS local offices. I hope that there have been improvements, because early warning systems are desirable for the fuel boards' accounting procedures and for those on supplementary benefits.
There is a staffing priority that must be borne in mind. I thought about intervening when my hon. Friend the Member for Pontypridd (Mr. John) referred to the need for adequate staffing. The Government are reducing the DHSS staffing complement. Things are moving in the wrong direction.
I understand that home energy advisers are thin on the ground, because the fuel boards do not employ many staff on that work. Such advisers need the judgment of Solomon, because they are dealing with systems that are often inoperable because people cannot afford to run them. Under-floor heating systems in some multi-storey blocks of flats have long been switched off because they are far too expensive. In many modern properties, as well as older houses, the major problem is dampness and the cost of keeping such houses properly heated is considerable.
The regulations do nothing to improve the position of those on supplementary benefit or of meeting the problem of the low paid. The Government must address themselves to minimising, if not reducing, energy costs and increasing the financial support to those on supplementary benefit.
§ The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)
I am aware that this is an important subject. If any further evidence were needed, the past winter would have brought that home not only to the poorly off, about whom we are talking, but even to those of us who are relatively well off who have had a shock when the winter fuel bills arrived. That makes one even more conscious of the problems which have been the subject of the debate. For that reason, if for no other, I welcome the opportunity that the Prayer and the regulations that we have proposed have given us to debate these matters.
The Government are open minded on the subject and genuinely seek ways to bring about further improvements. I am grateful for the constructive suggestions that have come from both sides of the House.
The intention behind the regulations is to bring about a genuine improvement in the arrangements for assisting people on low incomes to cope with the difficult problems that arise when fuel debts are run up. In saying that, I wish to emphasise a point that has been implicit in the debate but has not been brought out as fully as I would have liked. The regulations, which are not just an isolated piece of bright DHSS thinking—an idea on its own—need to be seen in the context of the significant package announced by my hon. Friend the Under-Secretary of State for Energy on 29 March following long discussions with other organisations, including the fuel boards, and arising from the report "Fuel Debts and Hardship."
250 I should like to quote from my hon. Friend's statement in Hansard the details of the changes that were being proposed. He said:"Arrangements for repayment of debt—the industries will now take the initiative"—this fits in with a point made by my hon. Friend the Member for Woolwich, West (Mr. Bottomley)—and offer a repayment arrangement before disconnection. Determined efforts will be made to contact consumers and increase take up of repayment arrangements.Large accumulated debts—arrangements for repayment over a reasonable period will be offered.Prepayment meters"—this point was raised by the hon. Member for Stockport, North (Mr. Bennett)—prepayment meters will be installed on request, where safe and practical. All requests will now be recorded; there will be no arbitrary refusals. The industries will investigate technical alternatives to traditional slot meters.Whatever may be said about the past—many hon. Members on both sides of the House would have reservations about the extent to which policy for a long time moved away from slot meters—that represents a significant move back in the direction which the hon. Gentleman wanted."'Fuel-direct' scheme—the industries have removed all limits on the size of debt accepted for this scheme (except for one board which is about to do so).
§ Mr. Newton
I am quoting from Hansard. The board in question was the South of Scotland electricity board. That matter has now been resolved. From the inspirational nods I see around me, I am persuaded that I have the correct position on that matter.
I return to the quotation:"Welfare authorities—improvements to the 'fuel-direct' scheme have been agreed with DHSS. Subject to Parliamentary approval these should be introduced shortly. Arrangements have been made for improved liaison with the welfare authorities."—[Official Report, 29 March 1982; Vol. 20, c. 25.]There is a final section which deals with disconnection of tenants for landlords' debts which may also help but which I shall not quote.
It is in that context that our proposal needs to be seen. Taken as a whole, not least in the light of the comments that hon. Members have made in calling for some of those steps, I can legitimately claim that, looked at as a whole, it represents a significant step in the right direction.
The regulations are the DHSS's contribution to a wider package. The hon. Member for Pontypridd wondered whether the background was a deal with the electricity boards. When politicians talk about deals, somehow an aura of disapproval is cast over the situation. The electricity and gas boards have certain duties to their consumers at large. The DHSS has clear responsibilities for the interests of less well off people. The word "deal", which I would not want to dispute, shows that we have been party to negotiations and agreements that have produced a more sensible and satisfactory situation for the interests involved.
§ Mr. John
Do I understand the Minister to be assenting to my central proposition that, in order to budge the obduracy of the South of Scotland electricity board, regulations that double the amount that may be deducted from benefit for supplementary benefit beneficiaries have been brought before the House?
§ Mr. Newton
I am not accepting any such tendentious language. I am saying that there has been a process of negotiation and discussion with the fuel boards, which has achieved a sensible and useful package in the interests of consumers at large and of relatively poor consumers.
I should also like to comment on what the hon. Gentleman said about the Social Security Advisory Committee. I have been spending a good deal of time in the last few days looking at one or two other changes that we hope to make to supplementary benefit regulations—not in this context, but in others—against a background of some pressure, because we wish to make sure that the SSAC has the fullest opportunity to consider them. I ask the hon. Gentleman to accept that what has happened in this case, and also in the child benefit case, on which the hon. Gentleman touched, does not in any sense reflect our desire to bypass or undermine the work of the SSAC. On the contrary, we attach great importance to it. We shall look forward to having the SSAC's report on the regulations.
We used the urgent procedure because, against the background of the last winter, the high bills that arose because of it and the SSAC's wish to see the limit on debt ceilings accepted for fuel-direct systems removed, we felt that it was important to get the package as a whole, including the removal of debt ceilings, into force before this winter's fuel bills started to arrive. I put that in the context of what I have said about negotiation and discussion rather than a disreputable deal.
That is the reason for the urgency. Otherwise, there would have been a serious risk of continuing the fuel debt ceilings in circumstances that would have led to more disconnections than we or anyone would wish as this winter's fuel bills began to arrive. That is sensible and right.
§ Mr. Newton
I was coming to the hon. Gentleman's point. I understand that London also had a limit and that other boards had levels that were used as guides to the grade of officer in the fuel boards who considered the cases. However, the result of having that guide was that sometimes it was used as a limit instead as being used as an indication that the case should be referred to the next grade of officer. Therefore, partly for practical reasons and, in the case of some boards, partly for other reasons, the effect of the limit on the debt ceilings accepted for the fuel-direct scheme was still quite substantial.
The abolition of the limits will be embodied clearly in the joint statement of intent agreed between the fuel boards and the DHSS.
The Government attached great importance, genuinely and in no sense as an attempt to dodge the SSAC, to bringing the proposals into effect before the winter's fuel bills arrived.
As the hon. Member for Pontypridd accurately pointed out, there are two elements in the regulations. First, there is the increase in the amount that can be deducted for a single fuel debt from 5 per cent. to 10 per cent. It has not emerged as clearly as I had hoped in the debate that the 10 per cent maximum already applies to cases in which 252 two fuel debts arise, because 5 per cent. can be deducted for each debt. The only change, therefore, is that in future it will be possible for the 10 per cent. maximum to be applied to cases in which there is only one debt instead of only where there are two.
The other changes are relatively limited. I do not wish to underestimate their significance, but it is also possible to overdramatise them. In this context, I emphasise the safeguards that are contained in the regulations.
First, there is no question of this change applying to existing fuel-direct cases, by which I mean those which existed when this provision came into effect on 28 April. For them the position remains the same. The deduction for an existing debt cannot suddenly be raised from 5 per cent. to 10 per cent. Secondly, it is implicit in what I have just said that the maximum deduction for debt remains at 10 per cent. Finally, taking account both of the deduction for debt and of the deductions related to current consumption, to which the hon. Gentleman referred, the maximum total deduction for both purposes remains at 25 per cent. of the claimant's basic benefit unless he agrees to more. It is important to recognise that the principal safeguards on the total amounts that could be taken remain clearly in place under the proposed regulations.
§ Mr. Newton
The hon. Gentleman raised this matter in the context of a particular case on which he apparently corresponded with my predecessor but which I have not had the chance to study. Therefore, I do not feel that it would be sensible to comment on that case. When I return to the Department, which is more likely to be tommorrow than tonight, I shall ask for the correspondence so that the general point arising from it may be examined again. I understand the hon. Gentleman's concern about this matter.
I shall try to deal briefly with the points raised by Opposition Members about housing benefit. It is certainly true that if a person is on supplementary benefit only by virtue of housing costs, the introduction of housing benefit will take that person off supplementary benefit and the question of the fuel-direct scheme will not then arise. Similarly, in the not quite so clear-cut situation that the hon. Member for Pontypridd described, problems could occur. All I can say at this stage is that I note what the hon. Gentleman has said. It will, of course, be necessary to bring in further regulations in relation to the housing benefit scheme in due course, and the House will have the opportunity to consider those regulations when they are introduced.
Many of the points that were raised in the debate—I hope that I shall be forgiven if I do not comment on them individually—related to liaison between local officers and the fuel boards, implicitly to liaison between local officers and welfare rights groups, staffing problems in local offices, administrative delays, and so on. In answer, may I say that part of our purpose in all this, including the changes in the arrangements for deductions in respect of current consumption, is to help to improve the administrative arrangements and the flexibility with which 253 we deal with claimants' cases. I do not say that what we are doing tonight will produce an immediate dramatic improvement. I simply ask right hon. and hon. Members to accept that we are determined to do what we can to improve the situation. We see these regulations as part of the effort to do that, and, in particular, to improve the flexibility with which adjustments are made to cope with the kind of difficulties that several hon. Members have mentioned.
As always, when one presents a limited measure of this kind, which no one pretends is or is intended to be a complete solution to the wider problems which have emerged from speeches, there is a risk that one will convey a sense of complacency. We are in no way complacent about the problem of fuel costs, fuel debts, and the difficulties created for people by the rises in fuel prices. I recognise and, to a significant extent, share some of the anxieties which have been expressed. We shall continue to look for ways in which to help further where we can. Many hon. Members have mentioned the need for review, monitoring and keeping in touch with outside bodies. We shall be very concerned to do that. Indeed, I am having a meeting with some of the main national bodies later this month, when we shall discuss some of these matters.
Ministers in the DHSS have to bear in mind three matters. First, against the background of the general rise in energy costs, there must be a limit to the extent to which any Government can protect any section of the community from some adverse effects. The whole community is suffering from the rise in energy prices, and it would be foolish of me to pretend that it was possible to protect any part of the community completely from those effects, much as we might wish to do that.
Secondly, there is always the question of judging priorities. To extend the generous heating help that we give through additions to many people now on supplementary benefit, amounting from next November to over £300 million a year, to those on rent and rate rebates, for example, would cost another £300 million. That is the amount, if it were available, that one has to weigh against other claims within the sphere of social security, let alone other spheres. We cannot overlook that in our anxiety to help.
Finally, we must be convinced that what we propose is consistent with the general desire to bring about an economy which inflates less fast and produces more national income from which everything else has to come.
§ Mr. John
I have listened to the Minister's moving remarks about not being able to help, but the Government forced the British Gas Corporation and the other fuel boards to raise prices by more than the level of inflation. Do they not recognise that they have a duty to protect the poorest in those circumstances?
§ Mr. Newton
The Government's recognition of the problem is reflected—this is the only figure that I shall use in the rest of my speech—in the increased help with heating additions and fuel schemes generally from £116 million in 1979–80 to more than £300 million in 1982–83. The heating additions have been increased in real terms, not just kept pace with inflation, under the improvements introduced by the Government.
We shall carefully monitor what we are proposing tonight in co-operation with the boards and with other 254 bodies representing claimants, and if we are convinced that there are ways in which we should make further changes to improve things still further, we shall be ready to do so.
I see this as an admittedly modest but undoubtedly useful measure in an attempt to help people trying to cope with the problem of fuel debts. I invite the House to support us. I hope that the Opposition will not, in the context in which I have put these measures tonight, press their Prayer to a vote.
§ Question put:—
§ The House divided: Ayes 41, Noes 109.255
|Division No. 139]||[11.00 pm|
|Archer, Rt Hon Peter||Hoyle,Douglas|
|Berth, A. J.||John,Brynmor|
|Booth, Rt Hon Albert||Lewis,Kenneth(Rutland)|
|Callaghan,Jim(Midd't'n&P)||Lyons, Edward (Bradf'dW)|
|Clark, Dr David (S Shields)||McDonald,DrOonagh|
|Cocks, Rt Hon M.(B'stolS)||Morris, Rt Hon C. (O'shaw)|
|Craigen, J. M. (G'gow, M'hill)||Morton,George|
|Davis,Terry (B'ham, Stechf'd)||Race,Reg|
|Dean,Joseph (Leeds West)||Skinner,Dennis|
|Dubs,Alfred||Walker,Rt Hon H.(D'caster)|
|Hamilton, W.W. (C'tralFife)||Young,David (Bolton E)|
|Haynes,Frank||Tellers for the Ayes:|
|HomeRobertson,John||Mr. Allen McKay and Mr. Lawrence Cunliffe.|
|Brooke,Hon Peter||Lester,Jim (Beeston)|
|Carlisle,RtHon M. (R'c'n)||Major,John|
|Cope,John||Maude,RtHon Sir Angus|
|Faith, MrsSheila||Meyer, SirAnthony|
|Goodlad,Alastair||Morris, M. (N'hamptonS)|
|Rhodes James, Robert||Stevens,Martin|
|Roberts, M. (Cardiff NW)||Stradling Thomas.J.|
|Roberts, Wyn (Conway)||Thatcher, Rt Hon Mrs M.|
|Townsend, Cyril D,(B'heath)||Williams,D.(Montgomery)|
|Watson,John||Tellers for the Noes:|
|Wells, Bowen||Mr. Robert Boscawen and Mr. David Hunt.|
§ Question accordingly negatived.