HC Deb 21 March 1985 vol 75 cc1004-12 4.39 pm
The Minister for Social Security (Mr. Tony Newton)

With permission, Mr. Speaker, I should like to make a statement on proposed new arrangements for supplementary benefit payments towards board and lodging charges.

The House will recall that consultative proposals were referred to the Social Security Advisory Committee in November 1984. We are today laying before the House the committee's report, together with the Government's response to its recommendations. We are grateful to the committee for the constructive approach it has brought to its task, and have taken its views fully into account in framing the regulations which are also laid before the House today. Subject to the approval of Parliament, the new arrangements will come into operation on 29 April 1985.

The maximum weekly amount payable for ordinary board and lodging, which is at present set locally for each DHSS office and varies from £40 to £110, will be set for each area at one of six standard amounts ranging from £45 to £70 per week. For this purpose, DHSS local offices will be grouped, taking account of Department of Employment travel-to-work areas so as to reflect so far as possible established patterns of employment and job seeking.

Subject to these limits, there will be no restriction on access to board and lodging accommodation for people aged 26 or over, or for those of any age who come within defined categories such as those who are chronically sick or disabled, those who have a dependent child, and those who have been in the same accommodation while in employment. For unemployed claimants aged 25 or under, unless they are in an exempted category, each area will have a limit of two, four or eight weeks on the period for which board and lodging payments will be made.

Hostels—I know that this is a subject to which the House attaches importance—which have hitherto been subject to the normal board and lodging rules, will be treated as a separate category, reflecting the importance which the Government attach to them. They will have a higher limit—set at £70 a week nationally—than most ordinary board and lodging accommodation; and there will be no restrictions on the length of stay for hostels.

For residential care and nursing homes the Government intend to set new limits at a level which they believe will allow reasonable charges to be met in homes meeting the new registration arrangements under the Registered Homes Act 1984. At present, local limits vary from £51 to £215 per week for residential care homes and from £80 to £295 per week for nursing homes. The limits for residential care homes will be £110 a week for the elderly, £120 a week for the mentally ill and for drug and alcohol misusers, £140 a week for the mentally handicapped, and £170 a week for those who became physically disabled below pension age. A sum equivalent to the higher rate of attendance allowance—currently £28.60 a week—will be added to these limits for people in nursing homes. There will be an additional hospice category, with a limit of £198.60 a week.

In future, "topping-up" payments by local authorities towards the cost of younger people in residential care homes will not reduce the payment of supplementary benefit; but attendance allowance will be taken into account in full in assessing supplementary benefit entitlement for those in private and voluntary residential care and nursing homes. The rate of personal expenses allowances for people in these homes will be set at £8.50 a week — 30p a week higher than proposed in the consultative document.

Existing claimants will, of course, need a period to adjust to these changes. Those over pension age in residential care and nursing homes can continue for life to have their charges met at the level of payment in force when the new limits are introduced. Those under pension age in residential homes, hostels or boarded out by local authorities can continue for a year to have their charges met at their current levels. Those in ordinary board and lodging will have between four and 13 weeks to find alternative accommodation if their current accommodation is more expensive than the new limits.

The Government accept that, following the standstill on existing local limits in recent months, it would be appropriate to review the proposed new limits earlier than November 1986, as envisaged in the consultative document. They will therefore be reviewed within 12 months of coming into operation.

There can be no doubt that action is needed to control this form of social security expenditure, whose increase has gone far beyond what can be justified by sensible social priorities. We believe that our proposals, modified in the light of advice from the Social Security Advisory Committee, will enable real needs to be properly met while avoiding unacceptable waste and abuse. But we shall monitor carefully the effects of the changes, and be ready, if necessary, to make further changes.

Mr. Michael Meacher (Oldham, West)

Is the Minister aware that this statement makes a farce of the consultation process since it almost completely dismisses the overwhelming evidence put before him, severely criticising his proposals, in more than 500 submissions, four times more than the DHSS has ever received on any other issue? Is he aware that this is yet another case where the Government have themselves created the social casualties and are now punishing those casualties by withholding necessary expenditure, so that people forced into homelessness by Government housing cuts are now being forced to meet the cost of that homelessness themselves?

Is he aware that board and lodging payments have been rising, not because of increased charges, as he claims, since last year's rise in charges was the lowest for five years, but because of the huge increase in the number of claimants brought about by the Government's policies—by the more than doubling of youth unemployment, by the halving of housing investment and the drastic shortage of housing, by the failure to tackle homelessness and by the iniquitous rule restricting supplementary benefit single payments for furniture, which prevents claimants moving into unfurnished, cheaper accommodation.

On the specifics of the Minister's statement, is it not clear that these new board and lodging limits, starting even lower than proposed in the consultative document, are too low when in many cases they are actually below the market rates charged for board and lodging accommodation, so that more people will be forced on to the streets? Even if the £70 maximum limit is adopted for London, is he aware, for example, that Paddington DHSS office reassessed board and lodging costs in August last year at £110 per week in that area?

Is he aware that the two, four or eight-week rule to be used against unemployed single claimants under 25 is harsh and unfair discrimination against those genuinely seeking work when, under regulation 9 of the requirement regulations, the DHSS already has powers to stop young people and others taking holidays by the sea, if there is abuse? The next question is just as important. By what justification is he now extending these restrictions to those aged 18–25 in their home areas, which was never mentioned in the consultation document?

Regarding residential care, nursing homes and hostels, is it not obvious that his proposals for a single, nationally-fixed scale are far too rigid and unrealistic since they take no account of substantially differing capital and labour costs between different areas? Again, are these national limits not being fixed too low when they are only half the level of local limits currently existing in some places?

The Minister preens himself on the fact that the personal expenses allowance for pensioners in these homes is being set at 30p a week more than was proposed in the consultation document. Is he aware that what he is not saying is that that is still £1.80 a week less than they now receive? How does he justify pensioners having to take a cut of £1.80 a week in their allowances when two days ago the Chancellor gave away £155 million to the rich through capital gains tax concessions and another £50 million through the abolition of development land tax?

Is the Minister aware that the real answer to the whole problem is that it is not only better but in the long run much cheaper to allow councils and other socially responsible agencies to build and convert homes for rent rather than to pay commercial landlords what are often exorbitant rents for substandard and sometimes dangerous board and lodging accommodation? Until that is done, we strongly reject these harsh and discriminatory measures as yet another attack by the Government on the living standards of some of the poorest and most vulnerable members of our society.

Mr. Newton

On the so-called "farce of consultation", the hon. Gentleman has only to read the Government's response to recognise that we have responded in many ways to the suggestions of the Social Security Advisory Committee. If the hon. Gentleman wishes me to do so, I shall list at least eight ways in which we have significantly responded to the committee's suggestions. I completely reject the suggestion that the problem has arisen solely because of unemployment and the other aspects to which the hon. Gentleman referred — unhappy though those problems are. Our response to the committee sets out clearly the fact that the number of boarders who are 25 and under increased by 60 per cent. in 1982–83 and by an estimated further 51 per cent. in 1983–84 and, other things being equal, will increase by a further 52 per cent. in 1984–85. That is greater than any percentage increase in unemployment among that age group that the hon. Gentleman could possibly find.

On market rates and the policies of local authorities towards housing, I have no doubt that the operation of these regulations has been driving up what are seen as the market rates to the detriment of those who are paying their own bills, whether in board and lodging or in residential care and nursing homes. Equally, I have no doubt that the regulations have been creating an incentive for councils to place homeless people in the most expensive board and lodging accommodation rather than to exercise their proper responsibilities and powers under housing legislation. I believe that this measure will give councils a significant encouragement to act more responsibly.

We shall certainly not rule out further consideration of the suitable alternative furnished accommodation rule in the light of the reports that we expect from the inspectorate and from the Social Security Advisory Committee and the work of the social security review. The operation of the rule will be modified by the fact that this type of furnished accommodation will, by definition, not be available to those denied board and lodging payments under the new rules.

We have sought to judge the limits of two, four or eight weeks according to the nature of the areas to allow what we believe to be a reasonable time for the sort of job search which all of us are anxious to encourage. I believe that we have accurately judged the limits, but they can, of course, be examined if the need is shown.

On limits for residential care and nursing homes, we concluded, having studied the figures carefully, that at this stage there was no proper basis for drawing the type of distinction which the hon. Gentleman seeks to draw. The capital costs of nursing homes will not vary regionally but will vary according to other factors. We propose to commission further work on this subject with a view to refining the system if a need is shown, and we shall certainly keep a careful eye on it. At present, we think that the limits are correct.

The hon. Member for Oldham, West (Mr. Meacher) drew attention to the fact that the personal expenses allowance is lower than the rate currently paid in private and voluntary homes. I accept that, but I point out that it is higher than the rate paid to those in local authority homes. We are seeking to bring about a fairer situation.

Several Hon. Members


Mr. Speaker

Order. I have an obligation to protect subsequent business. I have already said that a large number of right hon. and hon. Members seek to take part, so I shall allow questions on this statement to continue until 5.10 pm.

Mr. William Cash (Stafford)

Does my hon. Friend agree that it is essential to prevent the abuses in the system that have been developing during the past few years and at the same time ensure that those who will be affected by the announcement will suffer no unnecessary or unreasonable hardship?

Mr. Newton

That is why we have placed alongside these proposals what the Social Security Advisory Committee described as generous transitional arrangements.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

What was the nature of the representations received by the DHSS from Scottish Office Ministers, given the stress that they have recently placed on youth homelessness in Scotland? Is the Minister aware that his decision on the national limit for hostel provision will seriously discriminate against the large number of homeless Scots in London, and that the figure he suggests comes nowhere 67 near the figures produced by those who work with the homeless, such as the Centrepoint service? Will the hon. Gentleman admit that the use of the travel-to-work designation areas, especially those in Scotland, is extremely dubious as they were greatly discredited in the regional aid survey that was carried through by the Government?

Mr. Newton

If evidence can be produced to show that the existing pattern of travel-to-work areas, which we have used loosely to group DHSS local office areas, is wrong in a particular case, we can examine that aspect. The hon. Gentleman will understand that it is not the custom to reveal interdepartmental discussion of this kind, but he may know from hearing some Opposition colleagues that my hon. Friend the Scottish Office Minister with particular responsibility for this matter was present with me at a meeting last week with Scottish Members of Parliament.

Sir Geoffrey Finsberg (Hampstead and Highgate)

Does my hon. Friend accept that the representations made to him about hostels and the security offered to elderly people over 65 who are now in this type of accommodation clearly demonstrate the rubbish coming from the hon. Member for Oldham, West (Mr. Meacher)? Does my hon. Friend accept that this measure proves that my hon. Friends have taken great care to listen to and accept good advice?

Mr. Newton

I think that I can content myself with an expression of gratitude to my hon. Friend.

Mr. Frank Field (Birkenhead)

Will the Minister give a categorical assurance that no one currently covered by board and lodging allowances will be made homeless because of these changes?

Mr. Newton

Clearly, I cannot give that kind of categorical assurance. I can say, however, that the transitional provisions which we have made, the alternative provision that exists within the social security system and the exemption categories which we have carefully worked out, modified and extended considerably because of the work of the Social Security Advisory Committee, enables me to be confident that we shall not experience the type of hardship that some of the more extravagant allegations suggested during the consultation period.

Sir Kenneth Lewis (Stamford and Spalding)

Is my hon. Friend aware that many of us believe that the statement is long overdue? There have been far too many rackets in providing accommodation and accepting it involving landlords and those seeking accommodation. These measures might stabilise the market, because stating the prices and charges will mean that more people will know that they can build this accommodation and find people wishing to use it. Will my hon. Friend examine the matter in six months to ensure whether regional variations need protection?

Mr. Newton

Our formal response to the Social Security Advisory Committee's suggestions has made it clear that we shall commission further work and monitor the changes carefully in a number of ways. As I have said a number of times, if the need for further change is shown, we shall be ready to make that change.

Mr. Gerald Bermingham (St. Helens, South)

Will the Minister confirm or, if he cannot do so, undertake to ensure that nothing in these regulations will in any way worsen the position of those spouses who have cause to leave the matrimonial home with or without their children because of a court order or the conduct of the other spouse?

Mr. Newton

In creating the new hostel category and giving it the highest level of the limits that we propose for other forms of board and lodging, we had in mind in part hostels for battered wives.

Mr. Gerrard Neale (Cornwall, North)

Few hon. Members can feel no sympathy for those who are genuinely homeless, but no sympathy should be shown to those people, especially the young, who move from one area of high unemployment to another merely to receive higher benefit. I broadly welcome my hon. Friend's measures, particularly the differential benefits. Will my hon. Friend reconsider whether there should be an imposition on those wishing to move from one area of high unemployment to check that jobs are registered in the area to which they move? Will my hon. Friend confirm that he will carefully examine the whole range of proposals that he is introducing to ensure that the system is working? Will he consider this to be an interim step along with the other review of social security benefits?

Mr. Newton

I give my hon. Friend the assurance that we shall bear his suggestion in mind in considering any further refinement of the system and, as we have already said, we shall have in mind whether additional improvements can be made within the context of the review of social security.

Mr. Hugh Brown (Glasgow, Provan)

What evidence does the Minister have of housing authorities in Scotland not fulfilling their obligations in providing accommodation? Does he not realise that, with housing cuts, cities such as Glasgow are desperately anxious to provide suitable accommodation, particularly for young people, and there will be great resentment about the exploitation of some limited abuses in some other parts of the country, which will be seen as an attack on young people?

Mr. Newton

I have already said that one of the problems with the system that we have been operating is the incentives for many local authorities to place people in expensive board and lodging accommodation rather than meeting their needs in other ways. One of the puzzles is the amount of empty council property that exists, and I am told that that is as true of Glasgow as elsewhere. It is necessary that councils should look more carefully at the alternative options for providing more effectively for the needs of this group. We should then not have the suggestions about homelessness that we have had from the hon. Member.

Mr. Roger Gale (Thanet, North)

Will my hon. Friend accept my thanks and those of many hon. Members who represent seaside constituencies for the steps that he has announced this afternoon to terminate the exploitation and abuse of the social services system and of young people? However, will he give an undertaking that the measures that he has announced this afternoon will not lead to a two, four or eight week shuffle of young people between unscrupulous hoteliers? Will he also take steps to ensure that the steps that he has announced will not lead to a plethora of sudden registration of seaside hotels as hostels?

Mr. Newton

The provisions for defining hostels should prevent the risk to which my hon. Friend has referred. I pay tribute to the work that he has done in exposing some of the worst abuses that have taken place. As to people moving around, young people would be able to re-qualify for further periods of board and lodging in another area, but that is part and parcel of the search for jobs, which we are not anxious to inhibit. It will not be possible for them to engage in successive periods of two, four or eight weeks in the same board and lodging area, where they will be disqualified for a further six months.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Has the Minister estimated how many hostels could close because of the restrictive limits that he has imposed, or of the cost that could accrue to his Department as a result of the limitations?

Mr. Newton

I have made it clear that our special provisions for hostels are intended to avoid any hostels closing, and we have their interests particularly in mind in what we propose.

Mr. Harry Greenway (Ealing, North)

I welcome my hon. Friend's announcement that payments will be made only to proprietors of residential and nursing homes that are up to standard. Is he aware that some are up to standard but require structural changes to come within the new guidelines? Will he take that into account in making any final decision about such establishments?

Mr. Newton

I cannot take that into account in making a final decision on these regulations, but if evidence that that is a significant problem is produced, we can look at that at the appropriate time.

Mr. Max Madden (Bradford, West)

What is being done to make furniture grants easier to obtain? What new money is being made available to local authorities to inspect these premises? Does the Minister not understand that local authorities are faced with great difficulties in meeting their obligations because of Government policies of rate capping, imposing penalties and making massive reductions in rate support grant?

Mr. Newton

Nevertheless, the fact remains that I am advised that some 50 local authorities already run registration schemes for houses in multiple occupation and a number of others are considering it. What some local authorities can do satisfactorily, other local authorities should be able to do.

Mr. Steve Norris (Oxford, East)

I accept the need for a review of the present system. However, will my hon. Friend bear in mind that there are areas, such as the city of Oxford, where there are genuine pressures as a result of accommodation for students and tourists, which produce a real level of cost of board and lodging above the limit that my hon. Friend has announced? In the past, that problem has been met by the discretion available to the local DHSS office. Does my hon. Friend have any plans to allow such discretion to continue at local offices where it is clear that there is a special case that drives up the real cost of board and lodging beyond the limit?

Mr. Newton

We do not have plans for discretion, which is how we got into the position of the absurdly wide range of limits. If my hon. Friend can produce evidence that makes us think that we should look at the limit for Oxford, I am willing to look at it. However, part of our thinking in this is that it is right for Ministers to set levels of supplementary benefit that it is reasonable to expect the taxpayer to meet. There will be some areas in which it is too expensive for people on supplementary benefit to live.

Mr. Allen McKay (Barnsley, West and Penistone)

Will the Minister consider some form of appeal? I have been in touch with the citizens advice bureaux in the Barnsley area, which are concerned that the limit will be inadequate there. At the moment, it is on an average of £60 and rising, and they can see problems. Is the hon. Gentleman willing to meet such people to discuss these problems, because the travel-to-work area in my constituency will cause many discrepancies?

Mr. Newton

I should want some experience of how the system is working before giving too many undertakings to meet delegations from all quarters. However, as I have already said to other hon. Members, if a case is made for looking at part of the provisions, we should be prepared to examine it.

Mrs. Edwina Currie (Derbyshire, South)

I welcome my hon. Friend's wise and careful statement. Does he agree that the rate of increase of expenditure on these payments has gone up 10 times in five years, and last year reached £570 million? How many hundreds of millions of pounds will it cost in 1985, and when may we expect to see an end to this wasteful and damaging haemorrhage of public money?

Mr. Newton

My hon. Friend is right to refer to the escalation of expenditure in this sector. Expenditure has risen from £100 million in 1980 to an estimated nearly £600 million last year. I cannot give my hon. Friend a figure for what the cost will be in 1985, given the changes that have already been made, the psychological change that has occurred as a result of the Government's announcement of their intentions, and the proposal that we are announcing today. As a rough estimate, we would expect benefit payments to be £70 million lower in 1985–86 than would otherwise have been the case.

Mr. Gordon Wilson (Dundee, East)

Does the Minister realise that, after this announcement, he will have on his conscience the fact that a number of people, perhaps a large number, will be driven to sleep rough, with all that that entails? Will he look at one of the reasons why there has been an upsurge in board and lodging accommodation demand? One reason concerns housing benefit deductions which make it difficult for some youngsters to stay with their parents. There is also the absence of, or difficulty in getting, the single payments for furnishings, which prevents younger people in particular, but sometimes families, from getting housing of their own from local authorities where housing exists.

Mr. Newton

We do not rule out some consideration about the rules on single payments for furniture, in the light of various current studies. The operation of the rule will be altered by the application of these regulations. As I hope that I have already made plain, I see no reason to believe that people need be made homeless by these provisions, in view of the transitional arrangements, the exemption provisions and the alternatives that exist for many of them. I am satisfied for the moment that we have our limits about right to meet the aims that we have set out.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

How will the Minister's statement affect worthwhile voluntary projects, such as the Stepping Stones project in Newcastle? They aim to provide a form of sheltered accommodation for the young homeless and provide standards and quality of accommodation for them that is well in excess of board and lodging that would be provided if they were cast into the private sector. However, they rely on his Department to pay some money to those who live in the project.

Mr. Newton

The hon. Gentleman will realise that I cannot make an off-the-cuff comment on a specific case, but from what he says it sounds as if that project would be likely to qualify as a hostel, in which case it will come within the hostel provisions.

Sir Ian Gilmour (Chesham and Amersham)

May I give my hon. Friend the opportunity to correct one of his answers, which I do not think he meant? He said that it was too expensive for people on supplementary benefit to live in some parts of the country. I do not think that he meant that.

Mr. Newton

What I meant was that there may be parts of the country in which the costs of, for example, board and lodging accommodation are above those that we think it reasonable to meet out of the supplementary benefit system. I think that that is absolutely clear.