§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment (No. 4) Regulations 1984 (S.I., 1984, No. 1965), dated 17th December 1984, a copy of which was laid before this House on 18th December, be annulled.Those of us who watch these things with interest have seen a degree of activity by the Opposition, including the Official Opposition. The Minister can take it from that that there is an unusually high degree of interest in these regulations. They have been hurried through, arguably without proper consultation. They are ill-thought-out and will have adverse effects on bona fide claimants.
The DHSS seems to have responded with knee-jerk alacrity to some of the newspaper headlines and articles that were carried late in November 1984. The article carried in The Guardian on 17 November pointed out in its heading that the housing benefit loophole had appeared and could cost the DHSS as much as £190 million according to its estimates.
The Department responded by introducing these regulations. We have only to look at the front of the regulations to see that they were made on 17 December 1984; they were laid before Parliament on 18 December; and they came into operation on 19 December 1984. That was while we were in the course of the housing benefit review. Mr. Jeremy Rowe, CBE, has only just completed his report. I believe that it is in the hands of Ministers. They are in the course of a fundamental, far-reaching review of the system. Therefore, the least that the Government should have done should have been to defer the new regulations until they could have been incorporated into the complete review.
The introduction of the regulations goes against the Government's stated intention. Their circular HB(84)7 dated 20 December 1984 in paragraph 2 states:It is intended to avoid legislative changes wherever possible until decisions have been taken following the report of the Housing Benefit Review.On 16 November, in a written answer, the Minister says much the same. Against that background, and if that is the Government's decision, why did they bring forward these regulations in this spatchcock and over-hasty fashion? The way in which the regulations have been introduced is undesirable. It raises an issue of some importance.
The way that the Department has operated during this Parliament on some of these issues does not bear careful examination. It does it no credit. Five other sets of regulations have attracted allegations of indecent haste. The first one that came to my attention when I became a Member of the House was in November 1983 when the springless mattress case brought forth a commissioner's decision. The timetable then was that the commissioner's decision was made on 2 November, regulations were laid on 4 November, they were in force on 5 November, referred to the social security advisory committee on 28 November, and debated by Parliament on 5 December. There are other such cases which show that the Department has in the past—I accept that the system is complicated—resorted to introducing regulations over-hastily. It has made something of a mockery of the consultation process.
426 As evidence of that, may I adduce the statement made by councillor John Donnelly, who is chairman of the Association of Metropolitan Authorities housing committee? His press release dated 9 January 1985 stated:effectively we were given only six working days to consider extremely complex proposals"—which they are—with wide-ranging implications. It was quite impossible to provide an adequate response in this timescale. To make matters worse, a few days after the original deadline, more changes were proposed. A response was demanded within four days. But this time the DHSS went one worse: they didn't even given us copies of the amendments proposed!Section 36 of the Social Security and Housing Benefits Act 1982—the parent Act of the regulations—makes it mandatory that the Secretary of State:shall consult with organisations appearing to him to be representative of the authorities concerned.The Government are in danger of being charged, legitimately, that they are not proceeding or consulting with the appropriate authorities in good faith. That alone is a matter of concern.
Two regulations concern me in particular—regulations 11(3) and 18(3A), which create the new regulations governing joint tenancies. A joint occupier who, within the eight-week period prior to the creation of a joint tenancy or agreement, was a non-dependant of the other joint occupier or occupiers, will not now be eligible for housing benefit. Instead, he will continue to be treated as a non-dependant. That is unless the authority is satisfied that that joint tenancy or other agreement was not created to take advantage of the housing benefit system.
The other important regulation that I should like to discuss is regulation 23, which concerns so-called contrived tenancies. The regulations show that a person shall not be eligible for housing benefit where "it appears" to an authority that the tenancy was created to take advantage of the scheme, unless in the eight weeks prior to the creation of the tenancy or agreement that person already had a liability to make rent or rate payments in respect of that dwelling. Regulation 23 states that a person will not be eligible for housing benefit when he or sheresides with the person to whom he is liable to pay rent or, as the case may be, to make payments by way of ratesoris a close relative or the tenancy or other agreement between them is other than on a commercial basis.The term "close relative" is defined to include step relatives and in-laws. That is the import of the regulations.
I should like to refer first to the joint tenancy provisions. In my opinion, the new regulation is unnecessary. I should be obliged if the Minister turned his mind to it. Authorities already had the power, before the regulations, to disallow benefit when a tenancy or agreement, or joint tenancy, had been created to take advantage of the housing benefit scheme. I should be obliged if the Minister will confirm that my interpretation of the previous statutes is right. If so, why was it necessary to rush through the provisions on joint tenancies?
We must also deplore the change because it will add to the confusion that already exists between the housing benefit regulations and the Housing Act 1980. An occupier can at one and the same time be a joint owner or a tenant under the Housing Act and a non-dependant under the housing benefit legislation. Moreover, the new power contradicts the Government's Housing Act. On the one hand, in the Act they are actively encouraging council 427 tenants jointly to purchase their homes with their co-occupiers, yet on the other hand the new regulation will discourage council tenants from becoming joint owners.
The new regulation has been framed in such a way that authorities have a duty — as far as I understand the regulations—to refuse benefit unless they are satisfied that the joint tenancy or agreement was not created to take advantage of the scheme. If that is so, claimants are being viewed as guilty until they are proved innocent. That is the wrong way round.
I have looked at the regulation carefully. Neither the regulation nor the official guidance HB(84)7, which accompanies it, provides authorities with any criteria that they should apply to satisfy themselves that a joint tenancy or agreement was or was not created to take advantage ofthe scheme. The Minister will know that the review procedure that is instituted to try to disentangle some of the problems is different from the procedures that apply under the social security scheme. There is a great danger that different councils in different parts of the country will interpret some of the regulations and provisions differently, and we shall end up with a patchwork of different decisions being taken by review panels. It is possible to take decisions to judicial review.
Local housing authorities will be trying to set up housing benefit regulations under the terms of the new order with little guidance and in some instances the Department of Health and Social Security will be saying that if benefit is paid when it does not think that payment is justified the payment will not be reimbursed. There are many problems that still have to be resolved.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
Is my hon. Friend aware that in various parts of the country, including the one that I represent, some local authorities are making back-payments of benefit under the regulations which the ones we are considering supersede? I have in mind especially striking miners who are single men and living at home. Many striking miners sense that the regulations were rushed in to hit them. The inequity between local authorities seems even worse.
§ Mr. Kirkwood
I substantiate entirely that which my hon. Friend has put before the House. He has illustrated the argument that I am advancing. I sense that others may wish to take up the point about the miners because it forms an important part of the background against which the contrived tenancy regulations were introduced, but I do not seek to deal with it. It is true that there is great potential for confusion and differences in interpretation throughout the country.
My interpretation of the regulations leads me to the conclusion that regulation 23 is unnecessary. I think that authorities have sufficient power to disallow benefit where a tenancy agreement has been contrived to take advantage of the housing benefit scheme. I do not see that regulation 23 takes us very much further forward. As I interpret the regulations, they will disallow benefits where tenancy agreements are merely contrived or intended to be so. In some instances they will discourage tenants from renting a dwelling or spare room that they would otherwise wish to rent. If that analysis is right, the regulations will encourage the underuse of accommodation, which is something that I think the Minister would deplore.
428 Paragraph (1) of regulation 23 gives authorities blanket power to disallow benefit where it appears that a tenancy agreement has been created to take advantage of the housing benefit scheme. Neither the new regulations nor the accompanying circular HB(84)7 gives authorities any guidance on the criteria that should be deployed in deciding whether a tenancy has been "contrived". Is a tenancy to be regarded as contrived when the tenant knows, is friendly with, or on close and friendly terms with the landlord before he or she first rents the accommodation? It is clear that there will be great variations between authorities in the way in which that issue is interpreted. Unjustified variations will result in the income maintenance system.
Paragraph (2) of regulation 23 is equally misguided. Many people with a spare room are understandably unwilling to let it to a complete stranger but would be prepared to let it to those with whom they are familiar, such as relatives. The change in the regulations could prevent them from being able to do so. Relatives will be unwilling to rent accommodation when they will be unable to obtain housing benefit. In certain circumstances the regulation will encourage under-occupation, which is to be regretted.
The definition of "close relative" is so wide that it includes those such as step-relatives and in-laws, who may not be at all close. Some of us have in-laws who are close and some of us have in-laws who are not. The definitions as drawn in the regulation will cause many difficulties apart from the definition of "close relative" that is used in respect of non-dependants providing domestic assistance for disabled persons, for example. Why is there this contradiction?
Even more serious is the fact that many tenants of bona fide resident landlords will no longer be able to claim housing benefits. Many resident landlords let spare rooms, not for commercial reasons but to help to repay their mortgages, yet under the new regulations, if a tenancy is on other than a commercial basis, a tenant of a resident landlord will not be eligible for benefit. Again, that will make it more difficult for resident landlords to let spare rooms and will thus encourage under-occupation. It could even make it more difficult for people on low incomes to afford the cost of mortgages.
My complaint is that the regulations are unnecessary. I appreciate that there are many difficulties, and I am sure that other hon. Members will wish to deal with the contrived tenancy as it relates to the National Union of Mineworkers. The Government were ill-advised to introduce the regulations when they did against that background. I do not believe that they did so maliciously, but that they took an adminstrative decision in good faith. However, as politicians, they should have realised that a sensitive issue was involved. Their action served to exacerbate the industrial dispute. By any subjective or objective test, the regulations are unnecessary, premature and ill-advised, and if I have the opportunity later this evening, I shall advise my right hon. and hon. Friends to vote against them.
§ 10.5 pm
§ Mrs. Edwina Currie (Derbyshire, South)
Housing benefit has always had two purposes. The first was to help those in need with their housing costs so that everyone could live in some comfort whether they could afford it or not. The idea was always that we should charge whatever 429 rent was necessary for good management and then subsidise the tenants who were in need. However, in practice, the housing benefits scheme has proved to do rather less and rather more than that. For example, many councils, which are the only bodies to have deregulated rents, do not charge enough rent. The reason why they do not charge enough rent is that they have the misguided idea that their tenants are paying the rent when in fact they are not. Many councils do not spend those rents wisely. They tend to spend the money, for example, on neighbourhood centres instead of on repairs. That is why there is such poor accommodation in many of our cities. Many councils now make a profit on their housing revenue accounts, which is one reason why public expenditure always increases. The DHSS is now subsidising the Department of the Environment, as I am sure my right hon. and hon. Friends on the Front Bench realise.
The secondary objective of housing benefits was to introduce some efficiency into the muddle of the different systems of rebates and to reduce the misappropriation of funds whereby tenants received rent moneys, but did not pay them over. But given the history of housing benefits since their inception nearly two years ago, perhaps the less said about their contribution to efficiency, the better.
In publishing the orders the Government have acted correctly to preserve the spirit of housing benefit as I have tried to enunciate it—to help those in housing need, with the better and more efficient use of public money.
A family claiming housing benefit is subject to deductions for each working non-dependant at home. In my view, that is right. We should expect such people, if they are working, to make a contribution. But if they became joint tenants, they could all claim housing benefit. The Guardian on 17 November 1984 estimated that about 700,000 households could do that, and so gain up to £500 a year at a cost of about £190 million a year to the DHSS. In addition, we have heard references tonight to striking miners. A person not eligible for supplementary benefit, such as a young miner on strike who lives at home with his parents—in other words, a non-householder would still be eligible for housing benefit if the rules were not changed, provided that he is paying some form of board and lodging. Therefore, either as joint tenants or as spurious sub-tenants, people would become eligible for housing benefit.
It is interesting to see the example that was quoted in The Guardian, which relates to the Newton family. They had a single tenancy. The husband and wife are low-paid workers earning £110 a week!—I thought we paid our Ministers rather better than that. They have an 18-year-old apprentice son earning £50 a week and a 14-year-old daughter at school. They pay £18 a week in rent and £6 a week in rates. Perhaps the changes that were introduced in a written answer last week by my right hon. Friend the Leader of the House would encourage the Newton family to buy a second home and to claim mortgage interest relief from the parliamentary allowance. As a result, the Newton family is not entitled to claim housing benefit under the rules as they have been interpreted until recently. However, if the Newton family decide to have a joint tenancy instead and they split the rent into two-thirds parents and one-third son, they will then be entitled to receive £2.08 per week housing benefit for the parents and the son will receive £8 per week benefit. The total benefit is £10.08 per week, a gain of over £500 a year. That is a loophole of a very large kind and of a very expensive kind.
430 A question was asked a moment or so ago about why they should not be able to claim that money. In my view, it is inappropriate that £190 million of public money should be pirated in this way. I can think of much better ways of spending it — for example, on the National Health Service—and I can think of no good reason why the working miners of south Derbyshire should have to dig deeper into their pockets for the taxation which they worked so hard to earn in order to provide housing benefit for strikers in Yorkshire and one or two other places, whose main activity seems to have been to come and cause mayhem in my constituency.
But it was the headline of the Guardian article which caught my eye. It is called, "Yes please, Minister." That is exactly what is going on here, in my view. There is an entire industry of people in organisations like SHAC, Shelter and one or two others — which often do extremely good work in housing and look after people in housing need extremely well—scouring the thousands of pages of DHSS regulations and examining in detail the loosely knitted and ill fitting garment that is the housing benefit scheme looking for loopholes and gaps.
§ Mrs. Margaret Beckett (Derby, South)
Does the hon. Lady recognise that if her Government restored the duty that DHSS officers once served under but which was removed by this Government, namely, to remind claimants of their rights, it might not be necessary for such an industry to exist?
§ Mrs. Currie
I have no doubt that however many DHSS officers we had there would be a number of highly competent people in voluntary organisations reading between the lines and trying to figure out whether they could encourage people to claim things which the scheme was never intended to give and which it is not funded to give at all. In my view, housing benefit has become a raiment which keeps out the cold only in isolated places. It has got holes all over it that are big enough to let the most unattractive of creatures get inside. The trouble is that it is the people in need who suffer and the people quids in who tend to clean up.
A large number of people are now dependent upon housing benefit. We spend over £4 billion a year on it and we aid something like 7 million households. Without meaning to we have created a major support for some of the most disadvantaged people in our society and a large number of others. It is a support which I suspect cannot now easily be abolished — all the more reason for ensuring that the system is sound and defensible. What Shelter and the other organisations were doing was contrived and exploitative and had nothing whatever to do with housing need. The Government were timely and correct to act as they did.
§ Mr. Robin Cook (Livingston)
Having heard the speech of the hon. Member for Derbyshire, South (Mrs. Currie), I am almost tempted to have sympathy for the Minister because of the impossible pressures he faces from his own Back Benchers.
As you will be aware, Mr. Deputy Speaker, my speeches in the House are nowadays rare. There is as yet no Government Department to which I can relate. However, I speak on this occasion specifically because of the representations I have received from my own local 431 authority. During the past year it has been alarmed at the growing number of households who find themselves increasingly in arrears following the dramatic rise a year ago in the non-dependant deductions. However, it discovered to its great delight at the end of November 1984 that it was legally possible for it to pay benefit to non-dependants who were making that deduction. But only three weeks later it found that this Government, having discovered that it was assisting those who were in arrears, were taking specific and speedy action to block up that loophole.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the miners who are claiming benefit by means of this loophole. The National Union of Mineworkers is relevant to this debate if only because the NUM showed ingenuity not previously shown by Shelter, CPAG or Temple Bar in discovering this loophole. It is to their credit that it did. I suspect that the miners are also relevant to the debate because of the remarkable speed with which the Government have acted.
Reference has already been made to the short period for consultation: six days for consultation on first appearance and four days for consultation with the amendments. Only the NUM could prompt the Government to act with such speed.
But at that point the miners and the NUM cease to be relevant to the regulations before us, because the regulations hit not just the miners but every family which finds itself in the same position. The regulations do not say specifically that they will deny benefit to miners who are non-dependants. Even the Government have not got to the stage of introducing a specific statutory restraint on miners which would take us back to the 16th century and the days of colliery serfs. The regulations will stop anybody in that position receiving benefit.
Let me draw the attention of the House to the lack of logic behind what is being proposed. On the one hand, the Government recognise that there are non-dependants who are close relatives and who are paying rent and rates charges to the chief tenant. The Government could hardly do other, having so increased the deductions from the benefit received by the chief tenants in respect of those non-dependants. Indeed, the Government now base their assumptions about the housing benefit that they will pay on the clear understanding that those non-dependants, those close relatives, are paying rent and rates.
Since April 1984, the charges that the Government have assumed are being paid by those non-dependants have more or less doubled. For an 18 to 20-year-old in work the charge went up from £4.55 in April 1983 to £8.80 in November last year. The reason for that dramatic rise in non-dependant deductions was not the sudden discovery by the Government of the importance of the filial duty of the son or daughter towards the chief tenant, but was purely and simply financial. The Secretary of State had to find £200 million in savings and he found half that sum by obliging non-dependants to pay an increased deduction towards the housing benefit of their parents.
The regulations rub salt into that wound. Having required those non-dependants, those close relatives, to pay rent and rates on a considerable sum to their parents, the chief tenants, they now prevent those non-dependants from getting housing benefit in their own right. It should 432 be noted that on strict financial grounds, on the income criteria, the great majority of those non-dependants would qualify for housing benefit.
The income of teenagers has never been high. The Government have taken many measures to make sure that it goes down rather than increases. The general level of teenage wages in the population as a whole has declined under the Government. Indeed, the Government have introduced a system by which they will subsidise employers if they will pay teenagers £50 or less—the youth workers scheme. It is an interesting comment that tonight we are debating the Government's anxiety to avoid subsidising the teenager in meeting his housing costs, while on the other hand they are perfectly willing to subsidise an employer who will exploit that teenager's work.
The Child Poverty Action Group has carried out a survey of 111 households which are in a band relevant to these regulations. That survey of households which responded to a letter from the CPAG in the Daily Star discovered that the highest wage received by the non-dependants was £85 a week. That is below half average earnings. Most of those involved were well below that figure. Indeed, most of them were earning only about half that figure.
Many of those caught in those households, were it not for the regulations before us, could qualify for full rebate on the non-dependant deduction which the Government assume that they pay as a rent and rates charge to the chief tenant. Some of them have barely £8.80 a week left to give after they have paid for their food, heating and fares from their wage.
Hon. Members may accept, as the hon. Member for Derbyshire, South did so clearly and unequivocally, the principle of such a deduction, but there are strong grounds for challenging such a principle and it is interesting that that principle is applied in our law only to the poorest and most vulnerable families in Britain. I often have it brought home to me just how inequitable the Government are by how decently, nicely and sweetly they treat me. When my children reach the age of 18 and proceed to earn an income, even if they succeed in earning an income that rivals that of the Secretary of State for Social Services, not a penny will be wiped off the tax relief on my mortgage interest. It is only those who are the most vulnerable to whom the principle is applied.
Even if we accept the principle, there can be no doubt that the figures involved are exorbitant in relation to the wages of teenagers or to the rent charge on the house. For a chief tenant with a couple of teenagers who are working, the non-dependant deduction made in respect of those two teenagers may well equal the weekly rent and rates charges. Such a tenant will therefore be liable to pay full rent and rates, in effect, to have the full rent and rates charge met by the two sons or daughters in the household, although patently they are not occupying the full house, thus leaving the chief tenant in the undignified position of having the full rent and rates on his house met by his children.
The Government cannot have it both ways. They cannot deny housing benefit to the parents on the grounds that the children should pay rent and then deny those children the right to apply for housing benefit.
There is at least one element of logic in what the Government propose. They say that the housing benefit should be denied to non-dependants in these circumstances 433 because there is no commercial contract for the payment of rent. In that at least the Government are correct. Most parents do not seek a commercial contract for the payment of rent in these circumstances, and many of those who try are unable to get one.
The survey of the Child Poverty Action Group found that, of the 111 households that contacted it, 79 tenants would not approach their teenage sons or daughters for the non-dependant deduction because they viewed it with repugnance. Of that 79, one was a widow living on the state pension of £33.10 per week. On that amount she was liable to a weekly rent and rates charge of £8.20 attributable solely to the fact that she had a son.still living with her. She would not ask him to contribute to the rent because he was her son, he had always lived with her and he was saving for his marriage; nor would she put him out of the house.
§ Mr. Cook
The hon. Lady's question betrays the lack of her imagination, understanding and compassion. One reason why the widow was reluctant to do this — a reason cited by many others in similar circumstances—is the fear that her son would leave. Those who are widowed or single parents are reluctant to speed the day when teenagers leave the house. They are therefore reluctant to ask for what is now a large sum—indeed, it equals what many teenagers would have to pay to rent a single room. [Laughter.]
The hilarity of Conservative Members demonstrates their incomprehension and their total inability to understand what the sum of £8.20 can mean to ordinary people. It may be difficult for the hon. Member for Derbyshire, South to understand what that amount means in a household of this kind. I say to the hon. Lady that there is no reason why her constituents or the House should forgive her refusal to try to understand what this might mean in such cases.
434 We face double standards and hypocrisy in this measure. Conservative Members claim to be the party of the family. This measure which they have boosted to such an exorbitant level of income in the last 18 months has without doubt broken up families. There are recorded cases of non-dependants being obliged to leave the house because of this measure. In many more cases where a break-up of a family has not occurred there have been rows, tensions and deterioration of family life because of the non-dependant deduction. To compound all that evil, this petty measure is laid before the House to block up the one chink of light that had been offered to these households.
I mentioned earlier that my local authority has noticed a significant increase in rent arrears since the increase in the non-dependant deduction was introduced. My local authority is not alone in that. The Association of Metropolitan Authorities and the Convention of Scottish Local Authorities have called for the deduction to be abolished. The Association of District Councils has called for it to be reviewed in the interests of natural justice. The Institute of Housing Officers and the Society of Local Authority Chief Executives have argued that the present deduction is far to high. The Social Security Advisory Committee has expressed grave concern.
No one involved in the implementation of the non-dependant deduction is prepared to defend the principle and the level of deduction. It is a measure of the deafness and stubbornness of the Government that, faced with that consensus of alarm and criticism and the pleas for a review, they take this mean and petty action to block a loophole.
The measure is illogical, irrational, mean and spiteful and motivated by the Government animus against the miners. It will cause hardship to families who, at the end of November, were encouraged to hope that there might be relief from the problems caused to them by the Government's previous actions.