Motion made, and Question proposed,
That an humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment Regulations 1985 (S.I., 1985, No. 368), dated 11th March 1985, a copy of which was laid before this House on 11th March, be annulled. — [Mr. Meacher.]
§ Mr. Speaker
It will be convenient to discuss at the same time the second Prayer:That an humble Address he presented to Her Majesty, praying that the Housing Benefits (Subsidy) Order 1985 (S.I., 1985, No. 440), dated 19th March 1985, a copy of which was laid before this House on 20th March, be annulled.
§ Mrs. Margaret Beckett (Derby, South)
It is right, first, to observe that we are dealing with regulations with which the Department has dealt with its customary efficiency and dispatch. Local authorities have had a clear two weeks to digest the regulations before they come into effect on 1 April. That is contrary to the assurance given by the Department's permanent secretary to the Public Accounts Committee some few months ago, that no further changes in housing benefit would be introduced without plenty of time for the local authorities to digest them, but it is in line with the current practice within the Department.
We are dealing with the end of a rather distasteful process of cuts in housing benefit which followed hard on the heels of the general election, at which the Prime Minister, the Chancellor and all the members of the Government assured us that the country was on the upturn and that economic recovery was around the corner. It was a full month before cuts in housing benefit were announced, on the ground that the country could no longer sustain public expenditure at that level.
We are dealing with the tail end of cuts of £200 million proposed by the Department and by the Government. The first question we must ask the Minister is why we are dealing with the cuts tonight. We are aware that they are the end of the process which has dragged on for over a year. During that year there have been occasions on which Ministers in the Department, in a variety of contexts but usually when they were asked to improve housing benefit, have argued that it was not the right time to make changes as a substantial review was being undertaken which would cover the whole of housing benefit.
Why are the Government bringing in these changes literally on the eve, as we understand it, of the publication of the review? I recognise that the changes have been deferred for up to a year, which is what the Government's Social Security Advisory Committee recommended. Even so, it would surely have made very little difference to defer them for a few more weeks, or perhaps a couple of months, especially as in practice the local authorities have had so little notice of the changes.
It is particularly hard to understand why the Department does not defer the changes if — as the Minister's colleague told us in a parliamentary answer in October — the results of the changes will involve about £6 million in public expenditure. The Department has wasted far more than that in the administrative cock-up of introducing housing benefit. I should have thought that it 1004 could save that sort of sum by administrative changes today, instead of taking the money, as is usually the case, from claimants and those on other benefits.
The time span of the changes involved, of which this is the latter end, is from April 1983 to the present day. All through that period Ministers, the Department, and members of the Government generally have talked up the costs of the housing benefit scheme, as no doubt the Minister will seek to do tonight. They have said how expensive it is and how difficult it is for the country to sustain this burden of expenditure. Yet over that whole period there has been a reduction in overall housing support. Against a background of continuing inflation, the value of housing support overall — housing subsidy, housing benefit, and so on — has certainly fallen. The reason why the value has fallen bears directly on the reason for the changes. The Government have deliberately chosen to switch public expenditure away from subsidy of housing costs and to allow rents to rise. Then they have used rises in rents and consequent rises in housing benefit to justify further cuts. It is a neat device but more than a little dishonest.
The income levels at which members of the public lose all entitlement to housing benefit have fallen by almost: £20 in cash terms since 1983. For example, a single pensioner receives £20 less than would have been the case in 1983, and receives no housing benefit whatever. Yet over that period, when the level of entitlement to housing benefit has fallen, inflation and incomes generally in the community have risen. The convenient cry for the Government is that housing benefit is paid too far up the income scale. Their own answers have revealed that it is impossible to receive housing benefit on average wages if one is paying an average rent. It is only if one is paying substantially above average rent that one can receive housing benefit on average wages.
I understand from the reply that the Minister gave to me last month that the level at which one now loses all entitlement to housing benefit is £136.40 for a two-child family with one earner. As the Minister will recognise, that is substantially below the level of average wages. Therefore, I hope he will not bother to repeat tonight, as his predecessors have so frequently done, the canard that housing benefits are paid too far up the income scale. Many people who have been entitled to housing benefit have lost their entitlement in the past two years. Since April 1983, nearly 1 million people have lost all entitlement to a single penny in housing benefit, and over 200,000 of those have been pensioner households.
One of the questions that we want to ask the Minister is: how many people will lose by that change? We recognise that the Minister may be in some difficulty—judging by his parliamentary answers — in giving a reply. It is sad that as time goes on and as the Department cuts more and more from housing and other benefits, it becomes less and less able to tell us how many people are affected and how much they will lose.
§ Mrs. Beckett
Certainly persistence is strength.
In practice, the instruments that we are discussing tonight allow councils which have above average rents in their area to apply to the Department to have that fact recognised. They can then be allowed to pay above 1005 average housing benefit. We are aware that in the past the level of entitlement was set at 150 per cent., which is higher than the level in the order tonight, although the level in the order tonight is higher than the previous level which it supersedes.
However, that was in what one might, with hindsight, call the good old days, when councils set their own rents, made their own decisions about rates and did not find themselves losing literally thousands of millions of pounds in Government subsidy and being instructed, not advised, to raise their rents. What was acceptable at 150 per cent. in the past cannot be acceptable today when rents have been forced up so much against average wages or, indeed, any wages.
There are several problems, of which I hope the Minister is well aware. The first is that the authority has to apply for authorisation. If one is unfortunate enough, as many individuals are—perhaps some are represented by hon. Members here tonight—to live in an area where the council is not sufficiently concerned about its constituents to apply for authorisation, even if one is entitled to authorisation under the restricted scheme that the Government are introducing, one will not get it. That is a disadvantage of the scheme. I hope that the Minister will explain to us why it is necessary for councils to apply for authorisation rather than to have a national scheme that applies right across the country as is normally the case. Secondly, if one is unfortunate enough to be paying an excessive rent, which is out of the ordinary for the area, again, one will receive no entitlement to above average housing benefit. That, too, is a major disadvantage of the scheme as it now stands.
The scheme has two different thresholds for local authority or private rents. Why? I know of no justification that has been offered for that difference. Perhaps the Minister will be able to give us such justification. Even in areas which, under the order, will lose their authorisation to pay higher housing benefit rebate against their higher rents, those who retain that higher rebate will still get less money after the order becomes law than they did last week or, indeed, today.
I return to the question that I asked the Minister a few moments ago: how many people will lose by the order? We know that the number of people who will lose has risen even since the order was prepared. In October the Minister of State told one of my colleagues that 90,000 people would lose by the implementation of the order. Earlier this month, the Parliamentary Under-Secretary of State told me that 120,000 people would lose by the changes. He could not tell me how much they would lose. The Department does not know. It knows that the average council tenant will lose about 42p a week but cannot tell us what the average loss will be for areas where the entitlement is lost.
Last year the Social Security Advisory Committee suggested that under such proposals an individual on a £35 rent in an area where the authorisation is lost and where no extra housing benefit can be paid will lose £5.74 a week in housing benefit. Those were the figures of a year ago. Perhaps the Minister can tell us whether they are the same today or whether, as one suspects, they are worse.
The Shelter Housing Aid Centre has calculated that, on average, tenants in those areas, apart from those at the high 1006 end who lose almost £6 a week, will lose £2 a week from their housing benefit. Those are the people who can least afford to lose.
The Minister has given us a list of the authorities that will lose their authorisation. Perhaps he can also tell us tonight, or, if he prefers, by way of a written answer in the Official Report, how many authorities that would be entitled to authorisation today will not be under the new regulations. I ask that because I am seeking to inquire which of those authorities, too ill-informed or too uncaring of the electorates to bother to apply for the authorisation, the Minister is relieving of their embarrassment. As most of them seem to be Conservative authorities, he may find it worth his while.
I should like to ask the Minister some questions about the subsidy order. I presume from the way in which it is cast that its intention is to deal with the various questions raised by the councils that have sought — forced by the Department of the Environment—to raise their rents and to deal with the area of entitlement where many of their tenants would get assistance under supplementary benefit regulations, therefore placing the burden of their rent increases in that direction rather than on the tenants as a whole. I realise that the Minister and his colleagues feel strongly about that. Most of the changes in the subsidy order seem to be directed towards that end.
I am not sure whether a change is intended to regulation 22. When I first read the reference, I thought that the Minister was deleting regulation 22. I then came to the conclusion that he was merely confirming that authorities are able to assist tenants in special circumstances under regulation 22 but that they will not receive subsidy to do so. I hope that the Minister will be able to say tonight whether or not that is so, not just because when I first read the reference I was not sure about its effect, but because I understand that after a precisely similar regulation was tabled last year advice bureaux and perhaps even the Department, were inundated by queries from local councils which, like me, were under the initial impression that regulation 22 was being removed from the statute book altogether. Has the Department considered making the change in a different way? If not, why not? Like so much else in housing benefit, it has caused confusion.
Once again, the regulations are designed to remove money from people who are already poor. Most of them are comparatively poor. They are certainly not well-off, whatever the Minister an his colleagues may have sought misleadingly to imply. The regulations are designed to remove from such people yet further entitlement to housing benefit. When the whole package was first proposed, well over a year ago, the Social Security Advisory Committee said that the entire package should be withdrawn. It was not. Nevertheless, this one remaining element of the package should be withdrawn.
One can summarise the package, and much else that the Government have done relative to housing benefit, very simply and accurately. The higher the rent that people pay, the greater their need, and the greater the loss that they will suffer under the order and the regulations. That sentence should be etched on the tombstone of the instruments and of the Government.
§ The Parliamentary Under-Secretary of State (Mr. Ray Whitney)
The hon. Member for Derby, South (Mrs. Beckett) seems to be following the example of her hon. 1007 Friend the Member for Oldham, West (Mr. Meacher). She is indulging in the polemics that we have come to expect from him. I should like to set the record straight about what the Government have done. We have increased spending on the social security programme by about 28 per cent. in real terms since we came to office. Most of that spending has been devoted to maintaining — and indeed increasing above the rate of inflation — all the major benefit rates. We have also paid for increases in the pensions of some 800,000 new pensioners. With our level of housing support, that is a record of which we are justifiably proud.
The hon. Lady claimed that local authorities have not had time to understand and acknowledge the changes that are being introduced, but a circular was issued to local authorities on 3 September 1984, describing the changes. I shall deal with the points made by the hon. Lady, but rather than follow her any further down the highways and byways of polemical temptation, I would prefer to return to the detail of the regulations.
The Housing Benefit Amendment Regulations put into effect the changes to the housing benefits high rent scheme which originally formed part of the package of changes that followed on from the 1983 autumn statement. So much for our giving short notice of them.
These regulations increase the level of average local rents at which a local authority can apply to operate more generous rebates. They increase the thresholds from 120 per cent. of local authority rents to 130 per cent., and from 115 per cent. of private rents again to 130 per cent.
This change in the high rent threshold was one of the measures announced by the Government to control public expenditure. As the House is well aware, the Government lay great emphasis on the control of public spending, despite their achievements in social security spending, because they understand, as the Labour party has always failed to do, the vital importance to us all of reducing inflation. It is one of the Government's greatest achievements that inflation is now down to levels not experienced since the 1960s.
It is important to recognise that about one third of all our public spending goes on the social security budget, so it cannot be ignored that our economic strategy must be based on keeping that spending under control. High inflation is a disaster for us all, especially for those on fixed incomes and pensions for whom the Opposition pretend sympathy. They must understand what runaway inflation caused by their policies in the past means for people in those circumstances.
§ Mrs. Beckett
The Minister has just uttered some impressive words about inflation. Perhaps he will comment on the increase in rents between April 1979 and April 1984 of 123.8 per cent., compared with the increase of 63.3 per cent. in the retail price index — in other words, compared with inflation. It is getting on for twice as much as inflation. I say nothing of the increase in rates of 99.8 per cent. compared with an increase of 63.3 per cent. All have been forced up by the activities of his Government.
§ Mr. Whitney
The hon. Lady should compare those figures with the protection that we have afforded to the poor. She will be aware that housing benefit now helps more than 7 million households — about one in three throughout the country. Currently, it costs the taxpayer 1008 about £4.2 billion a year. By any standard, that is a very large sum of money on a scheme which covers an extremely wide sector.
With this in mind we felt that it was better to seek economies in housing benefits than in the safety net benefits to which I referred earlier. The Social Security Advisory Committee accepts that there are some aspects of the housing benefit scheme which extend financial help further up the income ladder than anywhere else in the social security system and that, if cuts in social security spending are essential, it is reasonable to reduce housing benefits rather than the means-tested safety net benefits.
The basic rationale of the present high rent scheme is that in areas of very high rents tenants have to pay more for comparable accommodation than elsewhere and thus merit more generous assistance. To expect individual local authorities to meet this cost themselves would put a considerable burden on some authorities that was not asked of others. The problem about the high rent schemes is that the qualifying level, at present 115 per cent of private rentals and 120 per cent of local authority rented property, makes no sense of a definition of an area where rents are exceptionally high. Therefore, the change is long overdue. The original thresholds were about 150 per cent. of average rents, but these thresholds have been gradually eroded over the years. The new thresholds are far more realistic, but, at 130 per cent., they are still far short of the original position.
When the change was originally proposed, we estimated that the savings would be about £6 million. Since then, the number of authorities applying to run a high rent scheme has increased and we now estimate that the change will save about £7 million. Nationally, some 120,000 claimants will be affected by the proposed changes to the high rent scheme. Those claimants who live in an area where the authority still retains high rent authorisation will lose an average of only 42p per week. The effect on those claimants who live in an area covered by an authority which loses its high rent authorisation will depend upon the level of rent actually paid.
The changes in the high rent scheme have already been deferred twice. The original intention was to introduce them, with other changes, in April 1984. However, we agreed to defer them until November 1984 in response to comments made by the Social Security Advisory Committee and others. We agreed a further deferment, until April 1985, to ease the position of those claimants who might experience reductions in benefits from other changes introduced in November.
We have always made it clear that we intended to proceed with this change. In a written answer last November we confirmed that we would be going ahead with the high rent scheme changes in April 1985 as already announced. Out intention to make these changes has therefore been widely known for some time both within the local authorities and in the House.
The Housing Benefits (Subsidy) Order 1985 relates to the arrangements for reimbursing local authorities for the costs of administering the housing benefits scheme and for the cost of benefits awarded. There are no changes in the provisions of the order, which remain the same as for 1984–85. On their administration costs, authorities will receive a specific grant on their total administration costs, set at 60 per cent. in England, 65 per cent. in Scotland, and 70 per cent. in Wales, reflecting the different rate support grant arrangements. Authorities' remaining 1009 administration costs will, as before the housing benefits scheme began, be reflected in the block grant arrangements.
§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
Will the Minister clarify the position regarding the remaining deficit, which presumably will have to be borne by the same rent-paying tenants who will already be suffering the cuts that he has announced?
§ Mr. Whitney
If the hon. Gentleman will bear with me, I will come to that point.
It has been suggested that these arrangements are not fair to authorities and that Government commitments to meet the additional costs to authorities arising from the housing benefits scheme are not being met. We have heard those arguments before and they are no more valid now than when we moved to the specific grant arrangement for reimbursing authorities' administration costs last year. The system which operated in the first year of the housing benefits scheme was that authorities separately identified "new" costs, which arose in implementing the new scheme, and "old" costs, which would have occurred under the rebate and allowance schemes that authorities previously ran.
That system could not continue much beyond the start of the scheme as the distinction between old and new costs becomes increasingly artificial. We therefore moved to a system which offers a very fair level of reimbursement to authorities. In broad terms, expenditure in 1983–84 on "new" costs according to authorities' subsidy claims amounted to about 45 per cent. of total costs. To reproduce these arrangements at national level would have implied a specific grant rate of 45 per cent. with costs net of specific grant reflected in block grant. But we recognised that such a rate of grant would have undercompensated authorities with "new" costs higher than this. That is one reason why grant levels were set at the significantly higher levels to which I have referred.
The great majority of authorities received at least as much support in 1984–85 as under the interim arrangements for 1983–84. Of more than 400 authorities which have submitted final subsidy claims for 1983–84, only about 20 have "new" costs above specific grant levels, and these "new" costs may include one-off development costs. We could not have ensured that no authority receives less support than in 1983–84 under the specific grant arrangements without absurdly overcompensating the majority of authorities and it would clearly be bad management and unfair to the taxpayer to do that. I cannot accept, therefore, that there are any grounds for reimbursing authorities' administration costs through higher levels of grant, as has sometimes been suggested.
We have heard a good deal about whether we are being fair to the authorities but much less about the need for authorities to administer housing benefits economically and efficiently. The change in 1984 in the subsidy arrangements for administration costs so that a fixed proportion of authorities total reasonable costs are met gives authorities more incentive to control costs overall. The Department closely monitors authorities' subsidy claims using a microcomputer checking system and asks authorities to explain any items of expenditure that appear to be excessive. We also draw the auditors' attention to points that require examination, including apparently high 1010 costs. However we note the Public Accounts Committee's firm view, expressed in its recent report on the housing benefit scheme, that we should do more to monitor both the economy and efficiency of authorities' procedures and the quality of service that they provide. Of course, the housing benefits review team was asked to consider how administration of the scheme could be improved, and the Government are currently considering its recommendations in this sector.
No changes are proposed in the arrangements for reimbursing authorities for the costs of the benefits that they pay. We have heard suggestions that the rate of reimbursement for certified benefit expenditure is inadequate and again the Government have been accused of not honouring their commitments to meet authorities' additional costs. I should explain, for the benefit of those hon. Members who have not yet come across the term "floaters" other than in reference to voters—a use of the word that may be familiar to some hon. Members—that floaters are a problem that affect this issue.
Authorities receive subsidy on certificated benefit expenditure — that paid to recipients who also get supplementary benefit—at a rate of 100.6 per cent. In 1984–85 this amounted to some £2,670 million of subsidy. The 0.6 per cent. "premium" on certificated expenditure compensates authorities for floaters—people who would have received supplementary benefit but for the introduction of the housing benefits scheme, but who were floated off on to standard benefit. As authorities receive reimbursement of only 90 per cent. of the benefit costs for standard cases, the premium rate on certificated expenditure was introduced to compensate them for the additional costs they bear — 10 per cent. of the benefit costs for floaters. I hope that hon. Members, including the hon. Member for Oldham, West, will have remained with me during that somewhat technical explanation.
The premium rate on certificated expenditure was introduced to honour the Government's pledge to meet additional costs falling on authorities. The rate was based on the best information available at the start of the scheme, but we agreed that we should conduct a validation exercise to assess the accuracy of the rate. The Department carried out a statistical study for this purpose and the results were made available to the associations. The premium rate suggested by the validation exercise was 0.96 per cent.
Here, I should make it clear that neither Ministers nor local authorities agreed to be bound by the results of the validation exercise. Clearly decisions about the appropriate levels of subsidy at a particular time have to be taken in the light of all the circumstances. In our view, fine tuning of the subsidy arrangements, which is what a change from a premium rate of 100.6 per cent. to 100.96 per cent. would be, is inappropriate at a time when important changes to the housing benefits scheme are in prospect following the social security review.
The sums about which we are talking represent fine tuning—we are talking about one third of 1 per cent. of the amount paid in certificated housing benefits. The associations nevertheless complain that we are not meeting all their additional costs to the letter. I must point out that on the other side of the equation, changes in April and November last year reduced the proportion of standard benefit recipients, thus saving authorities money on the 10 per cent. of standard benefit costs which they bear.
Finally, I draw the attention of the House to the fact that article 5 of the subsidy order consolidates the provisions 1011 to prevent the exploitation of the housing benefits subsidy arrangements. It brings together the provisions of the 1984 order and the amendment otder made in July last year.
§ Mr. Kennedy
I have been listening carefully to the hon. Gentleman. Where, in among all that, was the promised answer to my question?
§ Mr. Kennedy
Is it not the case that the deficit from the percentages that the Minister has announced for the subsidy would have to be met in many cases by the same people who, as a result of tonight's order, will be facing higher rents?
§ Mr. Whitney
I have explained that the burden on the individual is small. On average, we are talking about 42p per person. Obviously, I cannot give an average for the whole area. That is simply not measurable. But for those affected the average is 42p.
I stress that the provisions are designed simply to prevent authorities—
§ Mr. Frank Field (Birkenhead)
The Minister keeps saying that the average is 42p. Earlier he said that 120,000 people would be affected and the saving would be £7 million. That is almost an average of £1.
§ Mr. Whitney
Obviously the cash costs are not met by a specific grant from the DHSS. They are reflected in the rate support block grant arrangements.
§ Mr. Field
We are not asking the question put by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) to which the answer is yes. We are looking at the average cost per individual under the instruments that we are supposed to be debating. The Minister keeps saying that on average it is 42p. Earlier he gave us two sets of figures. On the one hand he says that 120,000 people will be affected and that savings will be £7 million. That is almost £1 a week.
§ Mr. Whitney
As I have explained already, it is 42p in those areas where the authority still keeps its high rent authorisation. In the other areas it is obviously a question of estimate, case by case.
The provisions are designed simply to prevent authorities, and only a small number are involved, from gaining extra revenue from the taxpayer via the housing benefit scheme. I hope that there can be no disagreement about that.
The hon. Member for Derby, South asked me about the lists of the authorities affected. I am not in a position to give her that information at the moment, but I shall write to her about that. Finally, the hon. Lady asked why we should not make high rent schemes compulsory. That would be inappropriate since part of the extra cost of operating them falls to be met out of local authorities' funds.
I call upon the House to reject the Opposition's prayer.
§ Mr. Frank Field (Birkenhead)
I leave aside the Government's peculiar logic in saying that one of the main aims of economic policy is to keep down prices, although we are debating increases in rents and decreases in subsidies. If the Minister has a chance to reply, he will no doubt come back to that point.
1012 In my short contribution I want to give a few reasons why we should not proceed with the instrument before us tonight. The first is that the Government already have in hand a major review of the housing benefit scheme. It is completely wrong to be continually bringing to the House changes in housing benefit when the Government have entrusted a group of people with a major review. I am surprised that those individuals continue with the review given the way that the Government treat them.
Secondly, we should not proceed with the instruments tonight for the reasons that my hon. Friend the Member for Derby, South (Mrs. Beckett) put forward. The local authorities have only about two weeks to put them into effect. Even if we regard local authorities as outposts of Government, that is a short time.
Thirdly, the cut of £7 million will be concentrated on a small range of individuals. We learnt from my hon Friend that people earning £130 a week and paying average rents will no longer be eligible for housing benefit. To relate that to a dispute that is going on not a couple of miles away from the House, the postmen on strike at Mount Pleasant earn on average £130 a week and that includes 20 hours' overtime. We are debating a housing benefit scheme which would exclude those groups of people from any help.
The Minister had some difficulty—to put it gently—in explaining what the average loss would be, but we know that some people will face losses of over £5 a week. The losses will be heavily concentrated.
§ Mr. Whitney
The hon. Gentleman quotes unusual cases. Those who lose £5 a week will merely be brought back into the same position as others in similar circumstances, who have already been paying that.
§ Mr. Field
That is almost like saying to my constituents who have not been mugged, "Your neighbour has been mugged. We are going to mug you, so both of you can feel satisfied."
The Minister suggests that the best way to deal with high rent areas is to legislate to say that some are not high rent areas—although high rents will continue to he paid in those areas.
Those are the four main reasons why we should not proceed with these instruments, but I wish to also explain how they will affect the area that I represent. The fine print of the instruments shows that Liverpool will lose its designation as a high rent area for local authority accommodation. That means that Liverpool rents will probably rise by an average of £2 per week. In the Wirral, where my constituency is located—
§ Mr. J. F. Pawsey (Rugby and Kenilworth)
The hon. Gentleman may have inadvertently misled the House over postmen's pay. I have a letter that was sent to all hon. Members by Sir Ronald Dearing, the chairman of the Post Office. He writes:Attention has been drawn to the possible implications of reduced overtime on postmen's earnings and the fact that their basic pay is £101 with postmen higher grade getting £116. But only 4 per cent. of postmen are on this basic grade pay and average earnings in the provinces are £160 for postmen and £202 for postmen higher grade (£190 and £229 in London).It is important to get the true figures on the record.
§ Mr. Field
Another set of true figures has been put on the record. I do not dispute those figures. I was repeating 1013 what I heard on the 9 o'clock news, which goes to show that one should not believe everything that one hears on the 9 o'clock news.
Tenants in Birkenhead and surrounding areas will be affected by the regulations because those in sheltered accommodation will lose the high rent provisions that existed previously and will suffer rent increases, as will their counterparts on the other side of the river in Liverpool. Those are additional reasons why we should not proceed with the instruments.
The Minister brilliantly illustrated one of the difficulties of the scheme — its massive complexity. There is a message to Opposition Members who sometimes fondly think that a way of implementing social security reform is to merge tax and benefits. When we first discussed housing benefit, we were told that it was a simple measure which would be easily understood. For most of us as legislators, it is a mess; for most of our constituents, it is a nightmare.
§ 11.3 pm
§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
I shall follow the example of the hon. Member for Birkenhead (Mr. Field) and be brief and, I hope, to the point. I echo his closing remarks about the administrative nightmare which is the housing benefits system.
I think that Ministers will agree with the hon. Gentleman. If they do, it is all the more unfathomable that they should be making even more changes when they are on the verge of publishing a review that is supposed to be wide ranging and explanatory and which will, we hope, aim at simplifying the entire system. The fact that the Under-Secretary willingly nods in agreement when we say that the system is an administrative nightmare suggests that he is as confused as the rest of us about why he is proposing the regulations. However, he made it clear that the DHSS takes every opportunity, in every ad hoc way, to cut public expenditure at the behest of the Treasury. All too often, the first targets are those least able to bear the brunt of those cuts.
The loss of qualification as a result of this legislation is doubtless damaging. The Minister mentioned 90,000 people at a saving of £7 million. He set the measures within the context of the Government's economic policies, but it must also be set within the context of the erosions in the state housing stock. In recent weeks, Opposition Members and several Conservative Members have voted against various moves by the Goverment to reduce further the revenue that local authorities can, in different ways, pump into their housing stock or use to replace stock that has been sold. But this legislation will damage still further those who are entirely dependent on the state and who, therefore, cannot be overlooked.
The Government do not seem to realise—just as they do not with regard to the Health Service—that there is a conflict that they can never resolve between their economic policies, which make more people poorer, off-load more people on to state benefits and thus drain public expenditure all the more, and their aim to reduce the level of public expenditure. Consequently, nobody will benefit.
We shall certainly oppose the Government on this issue, because it is a morally wrong step to take at the moment. In practical terms it is clearly wrong. The Minister said that he did not want the high rent scheme to 1014 be compulsory because it would put further pressure on the rate support grants of local authorities. But, despite repeated questioning, he could not deny the fact that council tenants would face further penalties and rent increases as a result of this move. That is just as much an economic as a political contradiction.
We shall therefore vote against the legislation and what the Government are doing with regret, but frankly not with surprise. The review of the welfare state is beginning to look more tattered and dubious at the edges with every day that goes by. If this sort of scheme comes out at the eleventh hour, we await the final report with some trepidation.
§ 11.7 pm
§ Mrs. Jill Knight (Birmingham, Edgbaston)
The hon. Member for Birkenhead (Mr. Field) made a very sensible point — as he so often does — when he questioned the timing of this move. We are, after all, awaiting the outcome of the social security review. But, having said that, I have probably ended any unanimity that could exist across the Floor of the House.
The simple basic truth in such a very complicated matter is that we cannot go on making money available to those who do not need it. I was astonished to hear the hon. Member for Derby, South (Mrs. Beckett) say that the higher the rent, the greater the need. It could be said that the wealthier someone is, the better the flat he lives in, and the higher the rent he therefore pays. But in my book that does not mean that he automatically has a greater claim on the rest of society to pay his rent for him.
§ Mrs. Beckett
I am pleased that the hon. Lady listened with such attention. Did she take note of the figures that I gave for the loss of all entitlement to housing benefit for a family paying an average rent? A two-child family paying an average — not a high — rent loses all entitlement to housing benefit on an income of £136.40 per week. Surely the hon. Lady does not consider such a family to be well off. That is about 70 per cent. of the average wage.
§ Mrs. Knight
The hon. Lady must not try to dodge her statement by drawing attention to another of her statements. That is not a fair point of debate.
The whole basis of what the Government are trying to do tonight and in general is to direct scarce public funds to where they are badly needed. It is no use the hon. Lady talking of the greater the need, the greater the entitlement and the greater the rent paid because that does not make sense. The hon. Member for Oldham, West (Mr. Meacher) also did not make sense when he said last week that dental care should be free for all regardless of income. That is the basic difference between the two sides of the House.
As my hon. Friend the Minister said, there is a 28 per cent. increase in expenditure on social needs, and one third of all public expenditure goes on the social security budget. If that is the sign of an uncaring and hard-faced Government, I do not recognise it as such.
However, it is crucial to recognise that the £7 million savings can be, and no doubt will be, directed to those in greater need than some of those currently receiving benefits. That is how I understand the business before us. Although I shall wait until tomorrow to try to follow the rather tortuous speech of my hon. Friend the Minister, I concede that the principle of what he is doing is right and he has my backing.
§ Mr. George Robertson (Hamilton)
When the Minister moved from the Foreign Office, I thought that I might escape his speeches. Now I realise that I cannot escape, and he is not improving. Having listened to his speech, we have one thing in common: neither he nor I knew what he was talking about. He has achieved one thing. Having spent last week listening to the Scottish Office Minister, this Minister has managed the unique achievement of making the Scottish Office Minister sound like an oratorical superstar. That is a real feat indeed.
The instrument directly affects my constituency, because a sheltered housing complex in Fife crescent, Bothwell, will be a recipient of the Government's move. The cut in my constituents' standard of living is not only important to them but has much wider implications for what the Government are trying to do elsewhere. They are trying to achieve niggardly savings at the expense of those who need help most. Those who have already suffered will yet again be hit by housing benefit cuts.
The hon. Member for Birmingham, Edgbaston (Mrs. Knight) made a reasonable speech, especially when she described the Minister's speech. She hoped that the small savings that will be made through the order will be diverted to those most in need. That would fly in the face of all experience of this Government. We know that the main beneficiaries of the Government's economic policies are not the poor and needy, but those in the highest tax brackets. This measure is typical of the mean-minded attitude that has characterised the Government.
We have been told this evening that the savings will be between £6 million and £7 million — the Minister has managed to revise the total upwards, which is represented by cuts in the income of the poorest at a time when the whole system is being reviewed. It is being done in haste in an already complex system — the Minister amply illustrated the complexity of the system — at a time when there is already confusion about the rent and rate increases. That confusion is now at its worst.
The complexity of the scheme is already huge. Even reading the documents relating to the instrument is difficult for hon. Members, and the Minister seemed to find reading the brief with which he had been supplied to introduce it an almost impossible task. What trying to understand it must be like for those concerned — the beneficiaries under the scheme — is beyond belief. It must he a nightmare for them, and I am sure that most of them do not have the slightest idea what the scheme is about.
People simply know that housing benefit helps them. They also now know that what the Government are doing will cost them perhaps £2 a week from their income. Even the Minister's tortured, convoluted calculations showed that in areas which will suffer major cuts people will lose £2 a week, and that certainly applies to the people in my constituency. Yet they are the folk who need help the most. Leaving aside the complexities of and background to, the arguments, they only know that they will experience a loss of money at a time when the Government's figures show that inflation is rising.
This is a narrow, almost spiteful and certainly unnecessary change which will impose more hardship on people who have already been the victims of the Government's policies. It is ill-thought-out and rushed, it has been insufficiently planned and it will be arbitrary in 1016 its impact. Poor, old and vulnerable people will suffer for microscopic savings in a system which is being overhauled, anyway. This is a measure unworthy of the House, and it should be thrown out.
§ Mr. Hugh Brown (Glasgow, Provan)
I shall be brief for the simple reason that I do not understand the regulations, Indeed, even the Minister was unsure of his ground, and he had a brief to assist him.
There must be a better way of considering housing benefit regulations than debating them late at night, especially, as on this occasion, when there cannot be more than a few hon. Members who fully understand the complexities of the housing regulations, let alone the action that we are being asked to take tonight.
§ Mr. Brown
Knowing that my hon. Friend is one of the most expert Members on these Benches on this issue, when he agrees with me I feel somewhat comforted in my lack of expertise.
Am I right in assuming that we are taking away the categorisation of high rented authorities? I was not aware, if that is the case, that a principle was being applied. Are there any such authorities in Scotland?
§ Mr. Robertson
Sheltered housing in Argyll, Bute, Clackmannan, Dumbarton, Dundee and Hamilton districts is categorised under the regulations.
§ Mr. Brown
I am obliged to my hon. Friend for that information, which I recall reading in a document that I obtained from the Library. Nevertheless, it cannot be a major element in the authorities to which my hon. Friend the Member for Hamilton (Mr. Robertson) referred because none of the big authorities, such as Glasgow, seems to be involved. That does not make it any the less important and it would be interesting to know the sums about which we are talking and the amounts that will be saved by the authority mentioned in the regulations being withdrawn.
How much will the cost of the benefit—because we are talking of rent subsidies—be increased by the recent increases in rates in Scotland through revaluation?
Surely that is a pertinent question. There is a lack of liaison over public expenditure. Cuts are being made, which we are resisting, and yet the Government are increasing the burden of public expenditure through some other channel. Apart from the changes in housing benefit, the Government are in difficulty in Scotland because they have not been increasing the level of RSG.
Why are there differences in administrative costs? The Minister has said that there is some relationship between the cost of administration that is being carried by the Government and the level of RSG. If he is saying that he understands rate support grant as well as housing benefit regulations, I refuse to believe him. I do not know anyone who could make that claim. I assume that there is a simple and obvious explanation.
1017 I can understand the position of the new town corporations and the Scottish Special Housing Association. Those bodies are Government funded and all deficits are funded by the Government. In their case there is no rate fund contribution. However, I cannot understand the differences between England, Scotland and Wales. There is something that I have missed or more information should be available. Have these matters already been discussed with the local authority organisations, or with COSLA in Scotland, and is the information already available? The answers to these questions may help me to understand what we are doing tonight.
§ Question put:—
§ The House divided: Ayes 171, Noes 228.1020
|Division No. 177]||[11.30 pm|
|Adams, Allen (Paisley N)||Eastham, Ken|
|Alton, David||Evans, John (St. Helens N)|
|Anderson, Donald||Ewing, Harry|
|Archer, Rt Hon Peter||Fatchett, Derek|
|Ashdown, Paddy||Faulds, Andrew|
|Ashton, Joe||Field, Frank (Birkenhead)|
|Bagier, Gordon A. T.||Fields, T. (L'pool Broad Gn)|
|Banks, Tony (Newham NW)||Fisher, Mark|
|Barnett, Guy||Flannery, Martin|
|Barron, Kevin||Foot, Rt Hon Michael|
|Beckett, Mrs Margaret||Forrester, John|
|Bell, Stuart||Foster, Derek|
|Benn, Tony||Fraser, J. (Norwood)|
|Bennett, A. (Dent'n & Red'sh)||Freeson, Rt Hon Reginald|
|Bermingham, Gerald||Garrett, W. E.|
|Bidwell, Sydney||George, Bruce|
|Bray, Dr Jeremy||Gould, Bryan|
|Brown, Gordon (D'f'mline E)||Hamilton, James (M'well N)|
|Brown, Hugh D. (Provan)||Hardy, Peter|
|Brown, N. (N'c'tle-u-Tyne E)||Harman, Ms Harriet|
|Brown, R. (N'c'tle-u-Tyne N)||Harrison, Rt Hon Walter|
|Brown, Ron (E'burgh, Leith)||Hattersley, Rt Hon Roy|
|Bruce, Malcolm||Healey, Rt Hon Denis|
|Buchan, Norman||Heffer, Eric S.|
|Caborn, Richard||Hogg, N. (C'nauld & Kilsyth)|
|Callaghan, Jim (Heyw'd & M)||Holland, Stuart (Vauxhall)|
|Campbell, Ian||Home Robertson, John|
|Campbell-Savours, Dale||Howells, Geraint|
|Canavan, Dennis||Hoyle, Douglas|
|Cartwright, John||Hughes, Roy (Newport East)|
|Clark, Dr David (S Shields)||Hughes, Sean (Knowsley S)|
|Clarke, Thomas||Janner, Hon Greville|
|Clwyd, Mrs Ann||John, Brynmor|
|Cocks, Rt Hon M. (Bristol S.)||Jones, Barry (Alyn & Deeside)|
|Cohen, Harry||Kaufman, Rt Hon Gerald|
|Coleman, Donald||Kennedy, Charles|
|Concannon, Rt Hon J. D.||Kilroy-Silk, Robert|
|Conlan, Bernard||Kinnock, Rt Hon Neil|
|Cook, Frank (Stockton North)||Kirkwood, Archy|
|Cook, Robin F. (Livingston)||Lambie, David|
|Cowans, Harry||Lamond, James|
|Cox, Thomas (Tooting)||Leadbitter, Ted|
|Craigen, J. M.||Leighton, Ronald|
|Crowther, Stan||Lewis, Ron (Carlisle)|
|Cunliffe, Lawrence||Lewis, Terence (Worsley)|
|Dalyell, Tam||Litherland, Robert|
|Davies, Rt Hon Denzil (L'lli)||Lloyd, Tony (Stretford)|
|Davies, Ronald (Caerphilly)||Loyden, Edward|
|Davis, Terry (B'ham, H'ge H'l)||McCartney, Hugh|
|Deakins, Eric||McDonald, Dr Oonagh|
|Dewar, Donald||McKelvey, William|
|Dixon, Donald||Mackenzie, Rt Hon Gregor|
|Dobson, Frank||McNamara, Kevin|
|Dormand, Jack||McTaggart, Robert|
|Dubs, Alfred||McWilliam, John|
|Dunwoody, Hon Mrs G.||Madden, Max|
|Eadie, Alex||Marek, Dr John|
|Martin, Michael||Sedgemore, Brian|
|Maynard, Miss Joan||Sheerman, Barry|
|Meacher, Michael||Shore, Rt Hon Peter|
|Michie, William||Short, Ms Clare (Ladywood)|
|Mikardo, Ian||Silkin, Rt Hon J.|
|Miller, DrM. S. (E Kilbride)||Skinner, Dennis|
|Mitchell, Austin (G't Grimsby)||Smith, C.(Isl'ton S & F'bury)|
|Morris, Rt Hon A. (W'shawe)||Smith, Rt Hon J. (M'kl'ds E)|
|Morris, Rt Hon J. (Aberavon)||Snape, Peter|
|Nellist, David||Spearing, Nigel|
|Oakes, Rt Hon Gordon||Steel, Rt Hon David|
|O'Brien, William||Straw, Jack|
|O'Neill, Martin||Thomas, Dafydd (Merioneth)|
|Park, George||Thomas, Dr R. (Carmarthen)|
|Parry, Robert||Thompson, J. (Wansbeck)|
|Pavitt, Laurie||Torney, Tom|
|Pendry, Tom||Wallace, James|
|Penhaligon, David||Wardell, Gareth (Gower)|
|Pike, Peter||Wareing, Robert|
|Powell, Raymond (Ogmore)||Weetch, Ken|
|Prescott, John||White, James|
|Randall, Stuart||Williams, Rt Hon A.|
|Redmond, M.||Wilson, Gordon|
|Rees, Rt Hon M. (Leeds S)||Winnick, David|
|Richardson, Ms Jo||Woodall, Alec|
|Roberts, Allan (Bootle)||Young, David (Bolton SE)|
|Roberts, Ernest (Hackney N)|
|Robertson, George||Tellers for the Ayes:|
|Robinson, G. (Coventry NW)||Mr. Frank Haynes and|
|Rooker, J. W.||Mr. John Maxton.|
|Ancram, Michael||Grylls, Michael|
|Baker, Nicholas (N Dorset)||Hamilton, Neil (Tatton)|
|Beaumont-Dark, Anthony||Hampson, Dr Keith|
|Bevan, David Gilroy||Hanley, Jeremy|
|Biggs-Davison, Sir John||Hargreaves, Kenneth|
|Body, Richard||Harris, David|
|Bonsor, Sir Nicholas||Harvey, Robert|
|Boscawen, Hon Robert||Haselhurst, Alan|
|Bottomley, Peter||Hawkins, Sir Paul (SW N'folk)|
|Budgen, Nick||Hawksley, Warren|
|Burt, Alistair||Hayward, Robert|
|Butcher, John||Heathcoat-Amory, David|
|Carlisle, Rt Hon M. (W'ton S)||Heddle, John|
|Channon, Rt Hon Paul||Henderson, Barry|
|Colvin, Michael||Hickmet, Richard|
|Cope, John||Hicks, Robert|
|Corrie, John||Higgins, Rt Hon Terence L.|
|Couchman, James||Hill, James|
|Crouch, David||Hirst, Michael|
|Dorrell, Stephen||Hogg, Hon Douglas (Gr'th'm)|
|Douglas-Hamilton, Lord J.||Holland, Sir Philip (Gedling)|
|Dover, Den||Holt, Richard|
|Durant, Tony||Hordern, Peter|
|Dykes, Hugh||Howard, Michael|
|Emery, Sir Peter||Howarth, Alan (Stratf'd-on-A)|
|Eyre, Sir Reginald||Howarth, Gerald (Cannock)|
|Favell, Anthony||Howell, Ralph (N Norfolk)|
|Fenner, Mrs Peggy||Hunt, David (Wirral)|
|Finsberg, Sir Geoffrey||Hunt, John (Ravensbourne)|
|Fookes, Miss Janet||Hunter, Andrew|
|Forman, Nigel||Jackson, Robert|
|Forth, Eric||Jessel, Toby|
|Fowler, Rt Hon Norman||Johnson Smith, Sir Geoffrey|
|Fox, Marcus||Jones, Gwilym (Cardiff N)|
|Franks, Cecil||Jones, Robert (W Herts)|
|Fraser, Peter (Angus East)||Joseph, Rt Hon Sir Keith|
|Freeman, Roger||Kershaw, Sir Anthony|
|Fry, Peter||Key, Robert|
|Gale, Roger||King, Roger (B'ham N'field)|
|Gardiner, George (Reigate)||King, Rt Hon Tom|
|Garel-Jones, Tristan||Knight, Gregory (Derby N)|
|Gow, Ian||Knight, Mrs Jill (Edgbaston)|
|Grant, Sir Anthony||Knowles, Michael|
|Greenway, Harry||Knox, David|
|Gregory, Conal||Lamont, Norman|
|Griffiths, Peter (Portsm'th N)||Lang, Ian|
|Ground, Patrick||Latham, Michael|
|Lawler, Geoffrey||Nicholls, Patrick|
|Lawrence, Ivan||Oppenheim, Phillip|
|Lee, John (Pendle)||Oppenheim, Rt Hon Mrs S.|
|Lennox-Boyd, Hon Mark||Osborn, Sir John|
|Lester, Jim||Ottaway, Richard|
|Lightbown, David||Page, Richard (Herts SW)|
|Lilley, Peter||Patten, J. (Oxf W & Abdgn)|
|Lloyd, Ian (Havant)||Pawsey, James|
|Lloyd, Peter, (Fareham)||Portillo, Michael|
|Lord, Michael||Powell, William (Corby)|
|Lyell, Nicholas||Powley, John|
|McCurley, Mrs Anna||Prentice, Rt Hon Reg|
|MacKay, Andrew (Berkshire)||Proctor, K. Harvey|
|MacKay, John (Argyll & Bute)||Raison, Rt Hon Timothy|
|Maclean, David John||Rathbone, Tim|
|McNair-Wilson, P. (New F'st)||Rees, Rt Hon Peter (Dover)|
|McQuarrie, Albert||Renton, Tim|
|Major, John||Rhodes James, Robert|
|Malone, Gerald||Rhys Williams, Sir Brandon|
|Marlow, Antony||Ridley, Rt Hon Nicholas|
|Mather, Carol||Rifkind, Malcolm|
|Maude, Hon Francis||Roberts, Wyn (Conwy)|
|Mawhinney, Dr Brian||Roe, Mrs Marion|
|Maxwell-Hyslop, Robin||Rossi, Sir Hugh|
|Mayhew, Sir Patrick||Rost, Peter|
|Mellor, David||Rowe, Andrew|
|Merchant, Piers||Rumbold, Mrs Angela|
|Meyer, Sir Anthony||Ryder, Richard|
|Mills, Iain (Meriden)||Sackville, Hon Thomas|
|Mills, Sir Peter (West Devon)||Sainsbury, Hon Timothy|
|Miscampbell, Norman||Sayeed, Jonathan|
|Moate, Roger||Shaw, Giles (Pudsey)|
|Monro, Sir Hector||Shaw, Sir Michael (Scarb')|
|Morris, M. (N'hampton, S)||Shelton, William (Streatham)|
|Morrison, Hon C. (Devizes)||Shepherd, Richard (Aldridge)|
|Morrison, Hon P. (Chester)||Shersby, Michael|
|Moynihan, Hon C.||Silvester, Fred|
|Murphy, Christopher||Sims, Roger|
|Neale, Gerrard||Skeet, T. H. H.|
|Needham, Richard||Smith, Tim (Beaconsfield)|
|Nelson, Anthony||Soames, Hon Nicholas|
|Newton, Tony||Speller, Tony|
|Spencer, Derek||Waddington, David|
|Squire, Robin||Walden, George|
|Stanbrook, Ivor||Walker, Bill (T'side N)|
|Stanley, John||Walker, Rt Hon P. (W'cester)|
|Stern, Michael||Waller, Gary|
|Stevens, Lewis (Nuneaton)||Ward, John|
|Stevens, Martin (Fulham)||Wardle, C. (Bexhill)|
|Stewart, Allan (Eastwood)||Warren, Kenneth|
|Stewart, Andrew (Sherwood)||Watson, John|
|Stewart, Ian (N Hertf'dshire)||Watts, John|
|Stokes, John||Wells, Bowen (Hertford)|
|Stradling Thomas, J.||Wells, Sir John (Maidstone)|
|Sumberg, David||Wheeler, John|
|Taylor, John (Solihull)||Whitfield, John|
|Taylor, Teddy (S'end E)||Whitney, Raymond|
|Temple-Morris, Peter||Wilkinson, John|
|Terlezki, Stefan||Winterton, Mrs Ann|
|Thomas, Rt Hon Peter||Winterton, Nicholas|
|Thompson, Donald (Calder V)||Wolfson, Mark|
|Thompson, Patrick (N'ich N)||Wood, Timothy|
|Thornton, Malcolm||Yeo, Tim|
|Townend, John (Bridlington)||Young, Sir George (Acton)|
|Townsend, Cyril D. (B'heath)||Younger, Rt Hon George|
|Trippier, David||Tellers for the Noes:|
|Twinn, Dr Ian||Mr. Michael Neubert and|
|Vaughan, Sir Gerard||Mr. Archie Hamilton.|
§ Question accordingly negatived.