Supplementary Benefit (Board and Lodging)

HC Deb 29 November 1984 vol 68 cc1098-107

4 pm

The Secretary of State for Social Services (Mr. Norman Fowler)

With permission, Mr. Speaker, I should like to make a statement on changes I am proposing in the system for making board and lodging payments under the supplementary benefit scheme. I have referred these proposals to the Social Security Advisory Committee for it to report its views to me after a process of consultation. Copies of the consultative document are available in the Vote Office.

Supplementary benefit expenditure on board and lodging is escalating. During 1983 it rose from £205 million a year to £380 million a year. My latest information suggests that unless action is taken expenditure will grow by a further 50 per cent. each year during 1984 and 1985. No responsible Government can allow expenditure to increase in this way unchecked. As an immediate measure of cost control, I laid before the House on 22 November regulations which will empower me to impose a temporary freeze on the existing local limits governing board and lodging payments. These regulations will be debated soon. They will be replaced by new arrangements which will come into operation in early 1985, following the consultative process.

There is particular concern about the growing number of young people receiving board and lodging payments, especially those spending long periods on benefit in seaside resorts. The number of such people aged 25 and under went up by 60 per cent. during 1983. The increasing evidence of abuse makes it essential to move quickly to bring ordinary board and lodging expenditure under control.

As far as residential homes and nursing homes are concerned, I welcome the contribution which the many good establishments make. However, the present system of paying for such care under the supplementary benefit scheme does not discriminate adequately between homes for different types of resident or patient. Furthermore, it is difficult to see why the charges for residential care homes for the elderly met for supplementary benefit claimants should vary from £51 a week in one part of the country to £215 a week in another. We must move to a system in which there is less variation throughout the country.

My consultative document proposes several changes. The responsibility for setting the maximum amounts of benefit payable will be transferred to Ministers. For ordinary board and lodging accommodation, the existing locally determined limits will be replaced by two new limits—one for the Greater London area and another for the rest of the country. I am also proposing limiting the eligibility of 16 and 17-year-olds to claim board and lodging payments in their own right. We shall also prevent young people from setting up in long-term board and lodging accommodation, but we shall safeguard the position of the genuine job searcher.

I am proposing a new structure of national limits for payments in the residential care and nursing home sector. These new limits will be designed to reflect the varying cost of providing different types of care. There is no question, however, of elderly, handicapped or disabled people being moved out of their existing accommodation, and their position will be protected. At the same time, I am proposing that attendance allowance should be taken into account in assessing claims for supplementary benefit from people in private and voluntary residential care and nursing homes.

Subject to the process of consultation I have mentioned, I propose bringing regulations before the House in February next year with a view to implementing new arrangements in April 1985. I shall be monitoring the new arrangements closely after implementation and will not hesitate to produce further changes if these seem necessary. I shall be considering also alternative approaches in the light of the current review of the supplementary benefit scheme.

The supplementary benefit scheme is there to help people in need. The Government are committed to that. We are equally committed to our policy of care in the community. So we shall continue to meet the needs of the elderly, handicapped or disabled people, but we are equally determined to make sure that the supplementary benefit scheme is not abused or exploited. I am determined that we should no longer make unjustified board and lodging payments. I therefore give this warning: if claimants do not need board and lodging accommodation, or if the charges are too high, the supplementary benefit scheme will no longer pick up the bill.

Mr. Michael Meacher (Oldham, West)

Is the Secretary of State aware that, although we accept that new consultative proposals are clearly needed, we note that the problems with which they are designed to deal result entirely from the Government's reckless folly in pursuing an orgy of privatisation of residential and nursing care at the taxpayers' expense, which got completely out of hand? Is the right hon. Gentleman aware that a year ago, in November 1983, the Government deliberately opened the floodgates for commercial exploitation by removing the limit then existing on board and lodgings charges and by substituting charges which, according to paragraph 6 of the DHSS supplementary benefit handbook, represent the highest reasonable charge for board and lodging suitable for claimants in the particular type of accommodation in the area"? Will the Secretary of State confirm that as a result of this nod and a wink from his Department private developers cashed in on a building boom which had nothing to do with providing care and attention for those elderly people in greatest need, and everything to do with raking off huge profits, subsidised at the taxpayers' expense through supplementary benefits?

Is the right hon. Gentleman aware that, because of this private development bonanza, total board and lodging charges underwritten by his Department, which were, as he said, £205 million in 1982, have sky-rocketed this year, according to the Government's figures, to about £570 million? Is the right hon. Gentleman aware that this colossal increase of £365 million has largely been pocketed by private operators, who have used every fiddle in the book to push up charges, and that there has been nothing to stop them, because of the laxity of the criteria and, indeed, the open invitation which the right hon. Gentleman gave them a year ago?

Is it not astonishing, after all this, that there is not one word of apology in the statement by the Secretary of State for this enormous and reckless abuse of taxpayers' money? Is it not clear that the Government have panicked, since this is the fourth set of proposals in this area within one year? First, the ceilings on charges were substantially relaxed a year ago; secondly, proposals were made in April about who was classifiable as a boarder, which had to be withdrawn as unworkable; thirdly, the board and lodgings ceiling freeze was jammed on in September; and now, fourthly, we have these proposals. Yet still the Government have not got it right.

Why are the Government refusing claimants benefit and at the same time doing nothing to reduce the numbers forced to be hived off into bed-and-breakfast accommodation and hotels because of the squeeze on local authority budgets? Why will the Government not abolish the supplementary benefit restrictions on furniture grants, such as the iniquitous "suitable alternative furnished accommodation" rule which keeps claimants in bed-and-breakfast accommodation even when cheaper accommodation is available to them?

As to the new restrictions placed on young people under 25 moving into board and lodgings, is not the implication that young people up to the age of 25 will be expected to be kept at home, subsidised by their parents? If they cannot or will not live at home, will they be forced into squatting, into sleeping rough or on to the homeless circuit? Why are the Government so obsessionally worried about the relatively minor amount of abuse when the personal expenses of a person in lodgings are only £9.25 a week and when much vaster sums of public money are lost through tax evasion which, under this Government, regularly goes unchecked?

Mr. Fowler

I am bound to say that the hon. Gentleman came full circle in his argument. He started by agreeing that it was right to issue a consultative document, but by the end he had come to his usual position of opposing anything and everything that the Government propose on this subject. His response, in total, was superficial in the extreme.

The number of young claimants has increased rapidly. The number in board and lodging aged 25 and under has risen by 60 per cent.—from 23,000 to 37,000—during the last 12 months. This compares with an increase of that age group on supplementary benefit of nothing like that amount. All the evidence shows that this growth is continuing rapidly and disproportionately. The hon. Gentleman must make up his mind whether he wants that kind of growth to continue unchecked.

The Government believe that it is sensible to check that growth, not just on financial grounds—goodness knows, those are grave enough—but because I am completely opposed to it. It brings the whole social security system into disrepute when we read reports such as the one published in The Standard this evening, which show the abuse that is taking place. The hon. Gentleman mentioned the maxima which were introduced in 1983. We removed the completely open-ended commitment which the Government previously had. That was plainly sensible. I remind the hon. Gentleman that under the last Labour Government the provision of private voluntary residential care increased substantially. The hon. Gentleman has only to go back to the figures to see that that is the case. I had hoped that it would be common ground that we want to see a good private sector and standards maintained in the private sector, but that none of us in the House wants to see claimants abusing the system.

Mr. Humfrey Malins (Croydon, North-West)

Does my right hon. Friend agree that one of the problems is that landlords who cram families into their hotels and receive large payments from the DHSS as a result make extortionate profits? Another problem is that because there is no requirement on the DHSS or local authorities to inspect these hostels or hotels, landlords often crowd husband, wife and three or four children into rooms 12 or 15 feet square and make life a misery for them? Does my right hon. Friend agree that the Government should act in this matter?

Mr. Fowler

Yes, I agree. That is why the Government are consulting on this issue. I should have thought that would be common ground between the two sides of the House of Commons in seeking to tackle this kind of abuse. I recognise my hon. Friend's interest in the matter. The kind of abuse that has been uncovered makes an unanswerable case for action, and that is what the Government propose. It may be necessary to go even beyond what we are proposing in the consultation document. This takes up my hon. Friend's second point. Under the supplementary benefit review, we shall consider having individual checks, not just on the value of the accommodation and the accommodation provided, but on whether the applicant needs that accommodation.

Mr. Archie Kirkwood (Roxburgh and Berwickshire)

How many people are on the maximum rates on each of the three tiers? The Secretary of State said that there had been an increase in expenditure. Is not some of that increase due to the fact that the system has changed since last November? I hope that the right hon. Gentleman will not over-react and discriminate unfairly against 16 and 17-year olds. I believe he said that the consultation document proposes to limit their eligibility. I hope that he will not add to the increasing problems which we all experience of youngsters leaving home and finding no place to go. In my opinion and experience, the two-tier rate which he seems to be suggesting—one for London and one for the rest of the country— is a little too restrictive, because even in Scotland there are wide disparities of charges from one region to another.

Mr. Fowler

That is precisely why we are having these consultations. We are putting these proposals to the Social Security Advisory Committee, and the public and the political parties will have an opportunity to put forward their proposals. If suggestions are made which will improve the position, I guarantee to consider them seriously. I cannot give the exact numbers that the hon. Gentleman wants. The numbers involved in private voluntary homes and ordinary board and lodging have increased dramatically over the past few years, but they also increased long before the 1983 maximum limits were introduced. There are about 140,000 supplementary benefit claimants in ordinary board and lodging, and about 42,500 residents in private voluntary homes.

Dr. Brian Mawhinney (Peterborough)

Having reported to my right hon. Friend cases in my constituency which helped to promote this benefits review, may I express my appreciation of his decision to limit the abuse of the system by young people, but, at the same time, to protect those young people who are moving around genuinely seeking employment? What does my right hon. Friend intend to do—he did not say in his statement— about those who are on supplementary benefit and in board and lodgings, who can currently receive up to £140 a week without any deductions from their supplementary benefit?

Mr. Fowler

We are considering that last point, and we shall consider it in the consultation exercise. The Peterborough case, which my hon. Friend put forcefully to me, is one which would be caught under the new regulations which we propose. I hope that I can satisfy him on that.

Mr. Frank Field (Birkenhead)

Is the Secretary of State aware that the Department of the Environment puts forward large capital sums for the building of hostels in the voluntary sector, and that those hostels are built only upon the assumption that his Department will cover a large part of the revenue implications? Did he do any research into the number of hostel places that will be cut as a result of his announcement? If he did, will he tell the House the outcome?

Mr. Fowler

There are specific proposals for hostels. We shall be setting national limits within a range which I hope will be satisfactory. Some of the national limits— for example, for residential care homes for the physically handicapped—will be increased rather than decreased. We shall have a much more sophisticated system than we have at present.

Sir Anthony Meyer (Clwyd, North-West)

Is my right hon. Friend aware that his proposals will be warmly welcomed in my constituency not least by those who, over the years, have been operating residential homes without seeking to make exaggerated profits. Is he satisfied that the provisions for ensuring that young people genuinely trying to find work will be exempt from these cuts will be easy to operate?

Mr. Fowler

I entirely agree with my hon. Friend's first point. On his second point, it is our aim to achieve that. If there is any doubt about it, and if there are any proposals which my hon. Friend or the Social Security Advisory Committee wishes to put forward to make it more certain, we shall consider them. We have no intention of interfering with a youngster trying to seek work. I give that assurance.

Mr. Bill Michie (Sheffield, Heeley)

Bearing in mind that the proposals do nothing for the unemployed or the homeless, but sweep the problem under the carpet, does the Secretary of State agree that it would be more sensible to give more financial help to and to co-operate with local authorities on housing stock and to have a more flexible attitude to single payments?

Mr. Fowler

Arguments can be advanced on both those points, but I do not think that that invalidates our action. At the moment the demand and numbers involved have increased drastically, and there is evidence of widespread abuse. In those circumstances, it must be reasonable for the Government to act.

Sir William Clark (Croydon, South)

Is my right hon. Friend aware that his statement that he is determined to cut out the abuse or exploitation of supplementary benefit will be warmly welcomed, not just in the House, but throughout the country?

As we are talking about abuse and exploitation, may I ask whether my right hon. Friend has given any thought to the abuse that occurs when, from taxpayers' money, supplementary benefit is paid to a recipient either for mortgage interest or for rented accommodation, and those two payments are not made in all cases? Why cannot the Supplementary Benefits Commission and the DHSS make such payments direct to those who should receive them? I remind my right hon. Friend that for council accommodation the rent allowance is sent direct to the local council. Why is there this anomaly in the supplementary benefit system? Clearly, it is an abuse.

Mr. Fowler

The matter is under review. We are considering it, and what my hon. Friend has said will be taken into account.

Mr. John Fraser (Norwood)

Does the right hon. Gentleman not recognise that if he depresses, by freezing, the level of support for people in bed-and-breakfast accommodation, without legislating to control houses in multiple occupation, he will merely drive people into possible death traps, as they will have to lower their standards? Will the right hon. Gentleman undertake to introduce legislation to control such premises, and will he recognise the insanity of continuing with a tough furniture grants policy, when a different policy would enable people to go into cheaper accommodation and to enjoy greater stability there?

Mr. Fowler

I apologise to the hon. Member for Oldham, West (Mr. Meacher) for not replying to his point about furniture grants. The furniture grants policy is being considered, not only by the Social Security Advisory Committee, but in the review of supplementary benefit.

I shall consider the hon. Gentleman's first point, but he will surely agree with me that at the moment there are areas of abuse and of over-charging for board and lodging. He must want to see those problems tackled, just as I do.

Several Hon. Members

rose——

Mr. Speaker

Order. The Secretary of State said that there would be a debate on this matter later. I normally allow about half an hour for a statement. I shall allow questions to continue until half past 4, and I hope that in that time I shall be able to call all those hon. Members who wish to ask a question.

Mr. Chris Smith (Islington, South and Finsbury)

Will the right hon. Gentleman now answer the point raised by my hon. Friend the Member for Norwood (Mr. Fraser) about safety standards in board and lodging accommodation? Do the Government have any proposals to bring before the House to try to prevent tragedies such as that which occurred last week in the middle of London, where the deaths were probably the direct result of the inadequate, unsafe and substandard quality of the accommodation?

Mr. Fowler

I recognise the problem, but the hon. Gentleman must recognise that this is a matter for the Department of the Environment and the local authorities. I shall certainly talk to my right hon. Friend about it.

Mr. Michael Howard (Folkestone and Hythe)

Is it not truly astonishing that the hon. Member for Oldham, West (Mr. Meacher) should ask my right hon. Friend to desist from dealing with what the hon. Gentleman himself acknowledges to be an abuse of the system, on the ground that there is a different and unrelated abuse? Is my right hon. Friend aware that his measures will be warmly welcomed, not least in the seaside resorts to which young people travel, not in search of work, but in search of leisure at the expense of the taxpayer?

Mr. Fowler

Yes, I think that that is right. I have been impressed by the number of representations and letters that I have received—from my hon. Friend the Member for Folkestone and Hythe (Mr. Howard) among others—about what is happening in seaside resorts. The Government's action will be welcomed. Many people of all parties are concerned about what is now taking place.

Mr. John Butterfill (Bournemouth, West)

Is my right hon. Friend aware of how especially welcome his statement will be in my constituency, where there has been a positive flood of young people not seeking work into bed-and-breakfast accommodation.

It is estimated that there are now 2,500 young people from the Liverpool area alone in my constituency. Sadly, many of those young people are actively connected with drugs. The situation is most alarming for the resident population.

Is my right hon. Friend also aware that some of the payments made in my constituency for bed-and-breakfast accommodation are paid at a rate which is above the general level paid by the ordinary public for such accommodation?

Mr. Fowler

Yes, all my hon. Friend's points are correct. His comments underline the reason why it is important to act here. We have seen an astonishing growth of provision in this area, with young people taking up residence for three, four, five or six months in some resorts. That is not what the supplementary benefits system was designed for. I hope that the inquiries will recognise that.

Mr. Peter Pike (Burnley)

The right hon. Gentleman's reply to my hon. Friend the Member for Norwood (Mr. Fraser) to the effect that the question of single payments is being reviewed is unsatisfactory. There is a need for greater urgency and for a decision at an early date, because of the problems of board and lodging accommodation. At the present time, because of the Government's policy, people are being forced into such accommodation, when there is spare accommodation available in certain areas. I know of constituents who have recently asked for single payments for cookers and have been told that, for a single person, a cooker is not essential. They have been refused payment. Supplementary benefit is not sufficient to enable them to dine out. How are they supposed to heat a meal? An urgent decision is needed.

Mr. Fowler

With respect to the hon. Gentleman, the review of supplementary benefit is being undertaken urgently. We are now only months away from proposals being put before the House and considered by the Government. It is sensible to wait for those proposals.

One of the general problems of social security over past years has been the willingness to look at everything in an ad hoc way. We are attempting to consider social security as a whole, and in the round.

Mr. David Harris (St. Ives)

My hon. Friend's announcement that there is to be a clampdown on the undoubted scandal of board and lodging payments, especially in seaside towns, will receive a warm welcome in Cornwall, where the invasion this summer was enormous. It is clear that in many cases the young people are not seeking work. They come to have a long holiday at the taxpayers' expense. Will my right hon. Friend speed up the review of the possibility of making payments direct to landlords, because there are many cases of money being paid to individuals but not handed over to the landlord, which means that those concerned chalk up enormous arrears.

Mr. Fowler

I am grateful to my hon. Friend for his comments. I recognise the great concern that has been expressed in his constituency and in neighbouring constituencies in the west. We will certainly do all that we can in the proposed regulations to tackle the abuse. We will also keep the whole situation under review so that no new abuses spring up.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

The Secretary of State spoke of safeguarding the interests of the genuine job seeker. How does he propose to identify the genuine job seeker among the rest of the nation's dispossessed young?

Mr. Fowler

It is a question of fact. If someone arrives in an area and is given, say, two to four weeks to look for a job, that might be a reasonable period in which to find that work. If he is content to stay for month after month, one might reasonably suppose that he has given up looking for a job.

Mr. Roger Gale (Thanet, North)

Will my right hon. Friend accept my thanks, on behalf of my constituents, for taking action to terminate an abuse which has done serious damage to the holiday trade which we are trying to revitalise? Will he, however, accept that the present frozen limits of benefit are based on high-season summer rates? Will he take action to reduce those rates as soon as possible? Will he also reaffirm that those who leave accommodation in other parts of the country for no good reason will not be entitled to benefit at all?

Mr. Fowler

As my hon. Friend knows, two new limits are being introduced. We are seeking to consult on the level of those limits and will listen to the arguments that are put forward. I recognise what my hon. Friend has done in this area and the way in which he has campaigned for change. I hope he will feel that the Government's proposition is some response.

Mr. Jeremy Corbyn (Islington, North)

Does the right hon. Gentleman agree that what he has just said and his statement are a disgraceful attack on the unemployed and are an attempt to blame young people for there not being enough jobs? Does he further agree that the real cause of the problem are voracious private landlords who have made a great deal of money out of the DHSS, the lack of job opportunities in many parts of the country and the way in which the Secretary of State for the Environment has deprived local authorities of sufficient money to build houses or flats for single people in my constituency and others like it? The problem of homelessness among single young people is enormous, is not being dealt with and is not addressed by the statement, which puts the blame where it does not belong. It makes young people scapegoats for the failures of Government policy.

Mr. Fowler

The hon. Gentleman cannot have listened to the statement, or, if he did, he must have listened in a strange way. We want to achieve a good private sector, and most of the private sector, especially in regard to residential homes, is excellent. However, there is abuse which we want to root out. I hope that the hon. Gentleman will want to root out abuses by some of the claimants. It is absurd to describe these proposals as an attack on the unemployed and the young. I put it to the hon. Gentleman that if we do not tackle abuses in the social security system, the system and its reputation will decline.

Several Hon. Members

rose——

Mr. Speaker

Order. I was about to say that in the spirit of Christmas I would call the three hon. Members who have been rising in their places, but I see that there are rather more than three. I shall allow questions on the statement to continue for another five minutes, but then we really must stop.

Mr. Patrick Nicholls (Teignbridge)

If my right hon. Friend recalls my correspondence with him concerning Dawlish, I am sure he will be aware of how welcome this news will be to people in that area. Does he agree that the fact that the system can be abused on isolated occasions means that public money is being wasted, which is bad enough and that people who are genuinely seeking jobs and are travelling around the country to do so are brought into disrepute? My right hon. Friend's proposals are extremely welcome, because that will now stop.

Mr. Fowler

I agree with my hon. Friend and pay tribute to his work in bringing abuses in the system to the attention of the public.

Mr. D. N. Campbell-Savours (Workington)

What net savings are the Government intending to make? What are the employment implications for the private sector? Is it fair to say that when the former Secretary of State for Employment, now the Secretary of State for Trade and Industry, said, "Get on your bike," he did not mean that people should bike to the nearest seaside resort?

Mr. Fowler

I am grateful to the hon. Gentleman for his total support for my proposal, which I assume is what he meant by his final statement. We expect there to be savings of about £70 million in the next financial year.

Mr. Henry Bellingham (Norfolk, North-West)

The residents of Hunstanton in my constituency will welcome today's statement. Is it not time that the DHSS took powers to blacklist certain premises and lodgings?

Mr. Fowler

I know that there has been a case of fraud in my hon. Friend's constituency. We shall examine it in the consultation process. The limits that we have put down will deal with much of the abuse, but if there is fresh abuse we shall act.

Mr. Jonathan Aitken (Thanet, South)

Will my right hon. Friend accept congratulations on taking such swift steps to end a racket—[HON. MEMBERS: "Hear, hear."]— which, even if it is received with laughter on the Opposition Front Bench, is much resented throughout the country, and especially in seaside towns? Will he confirm that no genuine job seeker and no private nursing home owner has anything to fear from the statement?

Mr. Fowler

I know my hon. Friend's interest in this matter. I confirm that genuine job seekers and bona fide owners of nursing homes or residential homes have nothing to fear. We are talking about rooting out abuse in the system, whether by the provider or the user. I find it bewildering that the Opposition should support abuse.

Mr. Peter Bruinvels (Leicester, East)

Will the consultation process include special consideration of the viability of the voucher scheme, as well as cash, because many people in Leicester unfortunately get behind with their payments, so landlords do not get the money back?

Mr. Fowler

I shall certainly examine that matter.