HOUSING BENEFITS—SUBSIDY (Hansard, 19 April 1985)

§ The Parliamentary tinder-Secretary of State for Health and Social Security (Mr. Ray Whitney)
I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker
With this it will be convenient to take Government amendment No. 138.

§ Mr. Whitney
The reason for this new clause is very simple: the Secretary of State needs the power to prevent exploitation of the arrangements for and the legislation governing the housing benefit subsidy scheme. It is, of course, regrettable that we should find it necessary to introduce this new clause.
A concerted effort has been made by one local authority, Sheffield, to increase its revenue at the expense of the housing benefit subsidy system. I will not delay the House with the sorry details of the various schemes which the council has devised or the steps the Department has taken to prevent this abuse. But the House will recall from its consideration of the 1984 subsidy order and the subsequent amendment that we had to make to it that Sheffield's various schemes have involved charging higher rents to tenants on housing benefit than are charged to tenants not receiving the benefit. The subsidy implications are obvious. I do not want to comment further on Sheffield's current scheme, because my Department's refusal under the terms of the 1984 subsidy order to pay the additional subsidy claimed by the council is now the subject of legal proceedings.
However, we made it clear when last year's subsidy order was discussed that we are not prepared to tolerate this kind of ploy. I am afraid that the efforts that Sheffield has continued to make to exploit the subsidy system have forced us to conclude that the Secretary of State needs the power to refuse to pay part of a subsidy claim in these 448 circumstances. We really cannot put up with a time-wasting cat-and-mouse game in which an authority tries to find loopholes in the subsidy arrangements in order to exploit them. Nor do we intend to waste the House's time in making and amending subsidy provisions to close each possible loophole.
The new clause will not alter the existing arrangements whereby the Secretary of State will pay benefit subsidy on the basis of rebates and allowances granted by authorities under the housing benefit scheme. We shall continue to list the items that will always be excluded from benefit subsidy—such as rent-free weeks awarded to tenants—in the subsidy order, so that authorities know where they stand. We have, in fact, taken the opportunity to enable the subsidy order to be drafted in a much more straightforward way, so far as these exclusions are concerned, than at present. Although the new power to make an order will have exactly the same effect as the existing power, it should mean that the subsidy order will be more comprehensible. That is certainly to be hoped. However, the amendment will also give the Secretary of State a new power to exclude items which it is clearly not reasonable to meet out of the money voted by Parliament for the housing benefit scheme. I assure the House that this power will not be used lightly, but it will be used to prevent blatant attempts at exploitation of the subsidy arrangements from succeeding.
Amendment No. 138 is consequential.

§ Mrs. Beckett
I listened with interest to what the Minister had to say. We recognise that the Government have been upset by the activities of, in particular, Sheffield. If one wanted to be unkind, one could say that, as in the previous debate, part of what the Minister was suggesting was that it was convenient to be able to do things without the inconvenience of having to keep bringing orders and Bills before the House of Commons.
lthough the Minister identified correctly the fact that there has been a need over the past couple of years to make changes in subsidy orders because of changes which local authorities have made in their schemes, there was, if I heard his remarks correctly, one important omission, and I hope that it was an inadvertent one.
At present, because the changes to which the Minister referred have to be made by subsidy order, the Government are under a statutory duty to consult local authority associations about the ways in which they propose to meet any changes that they might decide needed to be made. But this does not always operate in quite the way that we might hope, to put it mildly.
To take one recent example, when the Housing Benefits Amendment (No. 4) Regulations were brought before the House, the local authority associations were given five days to respond to the regulations without even being sent a draft of them, which might be thought to have made the situation even more difficult. Indeed, they have taken the Government to court about the matter. It is an interesting comparison that the Government were given seven days by the court to respond to the complaint and were unable to do so within that time. Indeed, I understand that they have not responded to it so far and have on a number of occasions sought to have the matter adjourned on the ground that they cannot possibly respond within less than a few weeks to the sort of arguments that they expect local authority associations to respond to within five days.
447 The point I am making is that, even with the statutory duty to consult the local authority associations written into the legislation, the Government manage to honour it more in the breach than in the observance. If it is the case—as it appears to be from this new clause—that, because we are no longer discussing orders but powers which the Secretary of State will have in perpetuity, the associations will not have the benefit even of that statutory duty, ineffective though it may be, that is a matter of very considerable concern to those associations and indeed to the Opposition.
I therefore ask the Minister to give an assurance that it was an inadvertent error on the part of the Government that they omitted from the Bill the statutory duty to consult local authority associations, and that they will seek to amend it at a later stage.

§ Mr. Whitney
The hon. Lady has sought to take the debate a good deal further than it should go. Of course we have followed and will always follow the provisions laid down in the housing benefits regulations and other appropriate regulations relating to consultation with local authorities. I shall certainly not be drawn into the issues that the hon. Lady has sought to raise regarding the Housing Benefits Amendment (No. 4) Regulations, which as she says, have been the subject of judicial action. I emphasise the essential requirement of this measure and I hope that the hon. Lady will feel able to agree that it is in the interest of the House that the housing benefits regulations, as agreed by the House, should not be the subject of the sort of time-wasting cat-and-mouse game which has been inflicted on the taxpayer by the Sheffield council.
I commend the new clause to the House.

§ Mrs. Beckett
With the leave of the House Mr. Deputy Speaker, I may say that this is completely unsatisfactory, and I am quite certain that the local authority associations will not only be dissatisfied but will not let the matter rest there. It would have served the Minister better, if he had been prepared to acknowledge that the local authority associations should be consulted about these matters. If consultations were not necessary, we should not be debating the 50 sets of Government amendments and new clauses that we are debating today.