Supplementary Benefit (Housing) (Hansard, 17 November 1982)

§ The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)
I beg to move, That the draft Supplementary Benefit (Housing Benefits) (Requirements) consequential Amendment Regulations 1982, which were laid before this House on 21st October, in the last Session of Parliament, be approved. Those hon. Members who were present when the first set of housing benefit regulations and consequential amendments to the supplementary benefit regulations were brought before the House a few months ago will remember that I referred to the complexity of those regulations and to the possibility of teething troubles. I fear that tonight we are proving the accuracy of my prophesies on both counts.
I apologise to the House for taking up what I hope will be only a short time with the regulations. Their purpose is solely to correct a technical or drafting defect in the original regulations to avoid double provision for the payment of assistance with heating costs for some of the people who are affected by the transition to housing benefit.
I shall gladly offer further explanation if required to do so, but I understand that it would be for the convenience of the Opposition if I were to speak only briefly. Therefore, I shall simply commend this technical amendment with those words.

§ Mr. Brynmor John (Pontypridd)
The Opposition understand that the regulations remove anomalies that are consequent upon the new housing benefit regulations. When the Under-Secretary referred to teething troubles, he was understanding the massive problems that are now coming to light. If he believes that they are teething troubles, he will discover that they are as nothing to what will descend on us soon.
My right hon. and hon. Friends and I are receiving complaints from all over the country about the effects of the regulations. When I referred to a shambles last week, I was not exaggerating. I should like a promise from the Minister that he will come to the House next Wednesday, following the commencement of the regulations, to report on the benefits. Many complaints are being received by hon. Members about issues such as the rent-free weeks, the losers under the regulations, and also publicity which seems to have been wholly inadequate. Many local authorities seem to have been caught totally unprepared.
A certain category of householder is removed from supplementary benefit and put into the housing benefit where the infamous Rossi price index operates. Despite what the Prime Minister says, a genuine pensioner price index would be rising more than the RPI every year. It would be running 1 or 2 per cent. above the RPI at the moment. According to a parliamentary reply, there has been a rise of 0.3 or 0.4 per cent. above the RPI in the last quarter. The basis upon which this supplementary benefit is being constructed is therefore inadequate.
These are matters to which the Opposition will need to return. I apprehend that it is not appropriate to argue the main points on a set of regulations such as those now before the House. I give the Minister fair warning that we shall return to the regulations and that we shall expect a 365 statement about the operation of the housing benefit so that any necessary corrections can be made before too much harm is caused to people entitled to 100 per cent. benefit.
The 100 per cent. cases were supposed to be the easiest. With the problem that the Minister has experienced, what does he expect will happen next April with the introduction of the partial cases involving the complex calculations that have to be made? The manner in which the benefit regulations have been laid show that the Government have not thought out their position. I hope that they will do so. We shall argue the general principle on a more germane set of regulations.

§ Mr. Newton
In view of the range of the remarks of the hon. Member for Pontypridd (Mr. John), I shall take note of what he says and recognise the force of his arguments rather than attempt to discuss all the points he has raised in detail. I have visited a substantial number of social security offices in the past few weeks. I have spoken in the past two months to well over 100 managers of our local offices. It is fair to say that many of the anxieties expressed about the partial start have diminished rather than increased in the approach to next week's start. The process of moving into the partial start in DHSS offices in general—I do not say that this applies to every one—has been smoother than many people had expected. There remain many anxieties about the move to the full start in the spring of next year. I recognise that the hon. Gentleman will want to raise—

§ Mr. David Penhaligon (Truro)
I hope that the Minister does not under-estimate the problems that are cropping up in some parts of the country in regard to the rent-free weeks. There is clear evidence in my constituency of supplementary benefit claimants losing £15 or perhaps £20, depending upon the calculation one makes, in terms of a rent-free fortnight at Christmas. This penalty on people drawing supplementary benefit at Christmas cannot be satisfactory. What approaches has the Minister received on the rent-free problem? Has he offered any solution to the local authorities which will be implementing the scheme?

§ Mr. Newton
A number of approaches about the problem of rent-free weeks have been received. We issued formal guidance to local authorities two or three weeks ago saying that this was a matter for them to resolve in relation to their rent collection policy. A number of local authorities have responded by bringing forward their rent-free weeks—this course was open to them—before the partial start. As this is a matter for local authorities, I cannot say how many have taken this action or what has influenced those which have decided not to do so. That was open to them, and some of them have done it.

§ Mr. John Golding (Newcastle-under-Lyme)
Would this be possible in places such as Newcastle-under-Lyme where valuable rent-free weeks are being given not only at Christmas but at holiday times?

§ Mr. Newton
It is possible for local authorities to decide when to have rent-free weeks in accordance with what they wish as a matter of policy. The hon. Gentleman has touched on one of the difficulties.
In areas where rent-free weeks occur before the partial start, and certainly if they occur exclusively before the 366 partial start, tenants will gain rather than lose. It is only in those cases where rent-free weeks occur exclusively after the partial start that tenants will lose, and where local authorities have particular problems to face, some of which have been tackled. Even in those areas I hope that the House will bear in mind that the savings arising from that post partial start rent-free week problem have gone to deal with the problem of some tenants who might have lost out at the changeover by having a period during which their rent was effectively not covered at all. We shall plough back the savings so that many tenants will have their rent paid more than once for part of the week of the partial start. In other words, there are significant gainers in the package as a whole, even though some tenants in some authorities may lose as a result of the rent-free week problem.
I accept that this is a complex matter that has led to difficult problems. They are in line with problems associated with the introduction of housing benefit, which, as the Government have always openly recognised, involves some gainers and some losers. Nevertheless, the way that we have tackled it has protected the most needy and improved the position for them, in particular for about 1 million pensioners. On balance, it make good social sense as a package.

§ Dr. David Owen (Plymouth, Devonport)
In cities such as Plymouth, which is refusing to make any change in the system, will the Minister consider instructing social security offices to use some of the savings to give rather greater latitude in dealing with cases of hardship and to discriminate positively in favour of those who are finding it difficult to make ends meet during the transition period? This would alleviate some of the problems that I foresee in Plymouth and elsewhere.

§ Mr. Newton
I respect the right hon. Gentleman's point. However, it is not our business to instruct local authorities on matters within their decision-making capacity.
There are two senses in which the word "saving" is being used here. Government savings have all been ploughed back into the package, as I showed. Local authorities have a degree of discretion not to apply our savings for their purposes, but to apply additional resources if they choose to do so in certain circumstances. That is a matter for local authorities; it is not for the Government to dictate.

§ Dr. Owen
What about social security offices?

§ Mr. Newton
To talk in terms of social security offices is to talk in terms of Government savings. Social security offices cannot spend individually the savings that we have already spent by ploughing them back into other parts of the package. Any discretionary flexibility that remains is a matter for local authorities. It is not for me as a Minister to tell local authorities what to do.

§ Mr. Mike Thomas (Newcastle upon Tyne, East)
Is the Minister saying that these savings accrue in an arbitrary and unfair way?

§ Mr. Newton
The problem of rent-free weeks was touched on, and it was recognised that there would be some difficulties according to where rent-free weeks fell during the year. One of the difficulties is that there are some gainers as well as possible losers, depending on where the rent-free weeks fall. The administrative 367 complexities of attempting to remove all possibility of things moving either way would have been enormous because of the way in which rent-free weeks work. Tenants pay above the rent in the non-rent-free weeks to finance the rent-free weeks. Thus the rent-free weeks are not truly rent-free weeks—they are financed by paying additional rent in the other 48 weeks of the year. To adjust the whole system to cope with that on the basis of one forty-eighth or one fifty-second of the rent for those people through the year would have been an administrative nightmare.

§ Mr. Thomas
That is not what my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) is suggesting. He is suggesting that the Minister uses his power to make sure that social security offices dealing with areas where he knows now that this problem, arbitrary and unreasonable as it is, happens to arise should be given extra budgetary authority to be rather more generous in discretionary payment than they might otherwise be. That is a perfectly simple thing. It is nothing to do with administrative complexities. It is within his power to do that.

§ Mr. Newton
With respect to the hon. Gentleman, my reading of the regulations is that that discretion simply does not exist. All the savings in this package that could be applied to providing additional help have already been applied, including the provision at the changeover point that will be significantly beneficial to a large number of tenants affected by the partial start.
Discretion to deal with the problems mentioned by the hon. Gentleman rests, if it rests anywhere, with local authorities—and that is where it should rest.

§ Mr. Andrew F. Bennett (Stockport, North)
I had hoped not to intervene in this short debate. I hope that the Minister will give an undertaking either to make a statement next week after the scheme has come into operation, or to arrange a debate. He argued that the fears expressed by Opposition Members were ill founded and that there would be no problem. I suspect that there will be no problem with the supplementary benefit offices—the problem will be with the housing departments. On the whole, supplementary offices will do well as they will pass on the major problems to the housing departments.
There will be many problems. It is difficult tonight to go into detail, although we have done fairly well. The Minister should give a guarantee that he will make a statement to the House either next Wednesday, or at some other time within the next fortnight, so that there can be a proper debate on the problems of the introduction of the scheme. There is a great deal of resentment about the rent-free weeks. Some authorities have solved the problem, but others have not. Once the scheme has come into force local authorities cannot do anything about the rent-free weeks.
There is a great deal of concern that during the next two weeks individuals will lose a great deal of flexibility in their budgets. It would be helpful if the Department gave instructions to local offices to be flexible. If people have lost their rent money. It will be a substantial amount out of their budget.
Hon. Members will receive many representations during the next fortnight. We must have an opportunity to debate the matter. The Minister must make a statement so that we can question him, or arrange a proper debate. It is not good procedure for us to amend the regulations at 368 this stage. It is a major change that will affect a large number of people and there must be an opportunity to discuss it in the House. We shall then know whether he is correct in his belief that it will be introduced without major problems, or whether the Opposition are correct in their belief that there will be great problems.

§ Mr. Newton
It might be sensible if I were to treat the hon. Gentleman's remarks as a speech and returned to them later.

§ Mr. Reg Race (Wood Green)
I wish to back my hon. Friend the Member for Stockport, North (Mr. Bennett) in his remarks about the problems of introducing the scheme. From conversations with social security offices in my borough, it is clear that there will be substantial transitional problems in its introduction. People in Tottenham and Wood Green will face difficulties—for example, unemployed people will not receive their Giro payments on time and order books will not be sent out.
Although the problems will be transitional, I have no doubt that other major problems will occur. The Under-Secretary replied to two parliamentary questions on 10 and 16 November about people on fuel direct and their relationship to the housing benefit scheme when they run out of supplementary benefit and do not have enough to continue with the fuel direct payment.
At one social security office alone, the Tottenham office, 1,300 people are on fuel direct. Many of them will be shifted over to housing benefit. Many of them will not have enough supplementary benefit still in payment to maintain themselves with the electricity and gas boards. I appreciate what the Minister has said in reply to my parliamentary questions, but I fear—many of my hon. Friends agree with this point—if there is a problem with the electricity and gas boards, and many problems with the implementation of the scheme.
I very much agree with my hon. Friend the Member for Stockport, North. I hope that the Minister will take the opportunity to make a statement about the implementation of the scheme and about the way in which we can make progress.

§ Mr. Newton
The hon. Members for Stockport, North (Mr. Bennett) and for Wood Green (Mr. Race) will recognise that it is not for me to commit the Government to the making of a statement, but I shall make a note of what has been said and I am sure that my right hon. Friend the Leader of the House will note their points. The other issues range widely beyond the subjects that properly fall within the regulations. We have well ventilated a fair range of issues, but it may be sensible to wait until we are able to have a somewhat wider debate.
We are asking for urgent reports on the partial start which should be available for analysis fairly shortly after the partial start occurs next week. Quite apart from the question whether a statement will be made, we shall consider in what form we can sensibly report to the House. I would not want the hon. Member for Stockport, North or anyone else to think me so complacent as to say that I do not think that there are, or will be, any problems but, from my experience of supplementary benefit and social security offices in recent weeks, the problems have proved rather smaller than he feared some months ago. I draw some encouragement from that, but we shall be keeping a careful eye on what happens.