Board and Lodging Payments

HC Deb 21 October 1985 vol 84 cc47-54

5.3 pm

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

With permission, Mr. Speaker, I should like to make a statement about supplementary benefit board and lodging payments.

In April the Government took action to control rapidly increasing expenditure and to help curb abuse. Between December 1982 and December 1984 spending rose from £166 million a year to £380 million a year. At the same time, the number of boarders under 26 had more than trebled from 23,000 to around 85,000.

Regulations were introduced which provided for the maximum weekly amounts for board and lodging to be determined by Ministers, rather than by local offices. In addition, the regulations limited the period during which certain unemployed people under 26 could be paid as boarders. There was a wide range of exemptions to protect the most vulnerable who needed to be boarders, such as families with children. The regulations were scrutinised by the Joint Committee on Statutory Instruments and debated and passed by both Houses of Parliament.

On 31 July, after Parliament had risen, the High Court decided an application for judicial review on the regulations. Mr. Justice Mann rejected the argument that we had failed properly to consult the Social Security Advisory Committee, and he also rejected the argument that the time limit of four weeks applied in this case was unreasonable. The judge did, however, find that the powers in the Supplementary Benefits Act 1976 were insufficient to make regulations enabling Ministers to determine board and lodging areas and limits. In other words, the judge's view was that the regulations would have been in order if they had themselves contained the board and lodging areas and limits. Mr. Justice Mann declined to make a formal order, on our undertaking not to apply the time limits pending the making of new regulations or the outcome of any appeal. Immediate action was taken to put this undertaking into effect and I should like to pay tribute to the efforts of our local office staff in carrying out this work.

We have lodged an appeal against the judgment and arrangements have been made for an early hearing in the Court of Appeal. This will take place at the end of November. However, as Mr. Justice Mann specifically recognised, there is a need for a sensible interim operation. It is in the general interest that there should be stability during which the outcome of the appeal can be given proper consideration and the review, which we are committed to carrying out, completed.

I have accordingly laid draft regulations today. They include temporary provisions—which will expire at the end of April 1986—to meet the judge's points. There are two important differences from the regulations passed by the House in April. First, time limits will not apply to existing boarders on benefit. They will apply only to new claimants.

The second important difference is that I am also taking powers, in addition to the exemptions in the previous regulations, to exempt from the time limits claimants who would otherwise suffer exceptional hardship.

The House will appreciate, in view of what I have said, the need to clarify the position. The regulations achieve this without in any way prejudicing the outcome of the appeal. The House will have the opportunity to discuss the new regulations when they are debated next week.

We hope in this way to restrain spending, tackle abuse, but at the same time protect the interests of genuine claimants.

Mr. Michael Meacher (Oldham. West)

Is the Secretary of State aware that in the past three months he has twice been found by the courts to have acted illegally in cutting board and lodging payments? On the issue of obedience to the law, about which the Government talk so much, the right hon. Gentleman has been found to have laid illegal regulations which have led to the deaths of at least three young people and have caused public outrage because of the untold hardship and distress inflicted unnecessarily and wrongly, as it turns out, on thousands of others.

Is the right hon. Gentleman aware that. following the two legal decisions, only one of which he referred to today, the board and lodging regulations are in a shambles? After the second case on 18 September. Mr. John Laws, the Treasury counsel, conceded that the previous High Court hearing had effectively quashed the cash limits as well as the time limits in the regulations. How can the Secretary of State claim today that he is regularising the position when his new draft regulations affect only the time limits and do not touch the illegality of cash limits, especially given that it was on that latter point that the social security appeal tribunal found against the Department on 18 September?

More significantly, is the Secretary of State aware that my initial legal advice is that there may be grounds for holding that the new draft regulations are also illegal, because, contrary to the Minister's statement, they still do not address a main reason why Mr. Justice Mann ruled in the High Court on 4 August that the original regulations were illegal? Mr. Justice Mann said: Those questions he was referring the grounds on which regulations 2(1)(a) applies— are questions in regard to individual cases and are not questions as to the entitlement to benefit of a class of claimant which are answerable in terms of rules of general application. In other words, the judge concluded that the regulations were illegal, not simply because, as the Minister said, they did not contain the board and lodging areas and limits, but because they were applied to classes of individuals, and the Secretary of State had no power to do that. Is the Secretary of State aware that, on that basis, we shall be taking legal advice before next week's debate about whether the new draft regulations may also be ruled to be illegal and invalid?

As the new regulations are clearly still shot through with legal flaws as well as—more importantly—being morally and socially indefensible, will the right hon. Gentleman accept that the only honourable course for the Government is to withdraw the regulations in full and to replace them by the alternative remedies recommended by the Government's own Social Security Advisory Committee? How many times must the Government be told that the reason why total board and lodging payments have grown so sharply in years is no fault of individual claimants, but is almost entirely due to the huge increase in unemployment, especially youth unemployment, and the almost complete collapse of the housebuilding programme, especially flats for single people to rent?

Will the Minister accept that the new, revised regulations are still not in any way addressed to the root causes of the problem, but simply twist the knife in those who have already been victimised? Will he therefore take the only proper and honourable course available to him and suspend these cruel and unreasonable regulations straightaway?

Mr. Fowler

I will not, and I am sorry that the long lay-off has not made the hon. Gentleman's judgment any better than it was before. The Cotton case resulted from the regulations which were passed by both Houses of Parliament and were scrutinised by the Joint Committee. Three issues were raised—consultation with the Social Security Advisory Committee, the unreasonable time limit and the fact that my own powers are not of a general nature so that I could lay down time limits and board and lodging areas. It was only in the last case that Mr. Justice Mann found for Mr. Cotton. That position is covered by the new regulations which specify the areas and the limits.

I hear what the hon. Gentleman says about what he terms his initial legal advice. We will obviously want to study what that initial legal advice amounts to. However, there is absolutely no question of our wanting or seeking to withdraw these regulations for the very good reason that the position before we acted was quite insupportable. Payments had increased out of all proportion. When the hon. Gentleman says that the number of boarders, for example, under 26 had trebled, that is far more than can be explained by housing problems or unemployment. We had a situation where the maximum amounts payable were determined by local offices, charges were being pushed up, and there was fraud and abuse. In other words, there was a case for action, and the Government have taken it. We shall seek to protect the interests of claimants, but the hon. Gentleman's basic case is insupportable.

Sir Hugh Rossi (Hornsey and Wood Green)

As the regulations also cover payments for people in residential homes, does my right hon. Friend agree that part of the problem relating to abuse arises from overcharging, very often for extremely substandard services and accommodation for elderly people? Does he agree also that the answer is not a standard payment, which can disadvantage genuine charities which are struggling to provide a good service but are unable to do so within the standards laid down, but rather a form of investigation or inquiry into the different homes and laying down perhaps what each home should be able to charge for the service that it provides?

Mr. Fowler

Yes. I have a great deal of sympathy with that point, and that is the position to which I should like to move, but my hon. Friend, whose knowledge of these matters is substantial, will understand that it is not possible to move to that in one step. Nevertheless, there is a great deal in what he says and it is part of the review that we are conducting. I am sure my hon. Friend will also agree that one of the permanent parts of these regulations is the new increased financial limits. They will apply to residential homes and to nursing homes, and they will, I think, be welcomed by the voluntary bodies.

Mr. Simon Hughes (Southwark and Bermondsey)

Will the Secretary of State take the opportunity that the court case now gives him to reconsider the whole question of time limits, particularly as before the reshuffle one Department told people to get on their bikes, and his Department then told them that they could not stay where they had arrived, thus showing some inconsistency in Government policy?

In the new draft regulations the right hon. Gentleman took on board one of the points made by my colleague the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) about extending the regulations to youngsters on bail. Will he tell us whether exceptional hardship cases will cover young people who find either a job or a home, but cannot take up either until after the time limit, so that they can be counted as being in exceptional hardship for the continuing period, which may well exceed the time limit which the regulations would otherwise lay down?

Mr. Fowler

I considered the last point that the hon. Gentleman makes, but the purpose of having an exceptional hardship clause is to give even more discretion to the exemption classes which already exist, and that is the spirit in which they have been introduced. However, I shall give further consideration to that.

As the hon. Gentleman will know, the time limits are currently suspended. Under the new regulations, the time limits will remain suspended for existing boarders. The difference is that new boarders — those who become boarders after the regulations come into force, if passed by Parliament on 4 November—will be subject to time limits unless they are exempt. Financial limits have never been suspended, and of course they continue to apply.

Mr. Roger Sims (Chislehurst)

Can my right hon. Friend confirm that the reason why he brought in the regulations is that there was ample evidence of abuse? If the regulations are technically defective, surely the answer is not to withdraw them, as the Opposition suggest, but to bring them into line with legal requirements, which is exactly what he is proposing.

Mr. Fowler

Yes, I think that that is the position. There is, as we all know, evidence of abuse——

Mr. Meacher

By landlords.

Mr. Fowler

The hon. Gentleman speaks of abuse by landlords, and that, of course, is correct. We all know of the advertisements that have been placed. However, l have to tell the hon. Gentleman that there is clear evidence of abuse by claimants as well. I shall give one example. [Interruption.] If the hon. Gentleman will listen, he may learn something. A special fraud investigation earlier this year in Euston showed that about half of those claiming to be resident at particular hotels were no longer there—about 600 cases out of 1,200. As a result, we have asked for other checks to be carried out in all regions. So the hon. Gentleman's immediate and superficial response, that claimants are not abusing the system, is shown, I fear, to be totally wrong.

Mr. Andrew F. Bennett (Denton and Reddish)

Will the Secretary of State give very careful consideration to the way in which he is attempting to railroad these regulations through the House this week and next? He prayed in aid the Joint Committee on Statutory Instruments to suggest that he got them right last time round. He is now placing on that Committee an extremely heavy burden in carrying out its duty to scrutinise the regulations properly. As the Committee meets tomorrow, it will be very difficult for it to consider all the points put to it as a result of the right hon. Gentleman laying the regulations today, and if the Committee waits until next Tuesday it will be difficult to produce an accurate report to enable the House to have an informed debate. Will the Secretary of State therefore consider delaying the introduction of the regulations until the House returns in the new Session?

Mr. Fowler

There is no question of my seeking to railroad this through. The Court of Appeal will be looking at the position since April. There is nothing in any action that I am proposing that will affect that, or any rights that might result from that, but it is clearly in everyone's interest to have as much certainty in the matter as possible, and the new regulations are designed to take us through the period of appeal. That avoids the prospect of confusion. It allows the Government, Parliament and the public to consider the next step, and it also avoids what could be the absurd position of going back to the situation prior to April 1985, which would mean a reduction in some of the limits — for example, in the nursing and residential homes referred to by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi).

Mr. T. H. H. Skeet (Bedfordshire, North)

Whilst appreciating that the matter is to be settled by appeal in November, and also appreciating the extent of the abuse, may I ask my right hon. Friend to bear in mind the totally unsatisfactory background to this problem, which is that mobility will never give a young man of 26 or under the opportunity to be in a place long enough to secure a job? This is a very real problem which my constituents face.

Mr. Fowler

That is certainly not the intention of the regulations. We have to strike a balance between allowing young people the opportunity to find a job—something which we aim to do, and will obviously encourage them to do—and avoiding a situation where, as has been shown, some have turned to a permanent way of life in which, if they find a job, they will not be able to sustain the standard of living which they have been enjoying.

Mr. Harry Cohen (Leyton)

Was not the Prime Minister most unwise, and characteristically inflexible, to say within days of the court decision that the regulations would be reintroduced? Are they not a source of great fear for the young homeless, and are they not detested by all the organisations that seek to help them? Are they not a recipe for more homelessness, vagrancy and crime among young people?

Mr. Fowler

For the second time this afternoon, the hon. Gentleman is exaggerating the position. It is absurd to believe that there is no problem or that things could be kept as they were, because that is clearly not the case. I think that that is recognised, perhaps even on both sides of the House. The hon. Gentleman claims that hardship has been caused. The early results of our monitoring do not show evidence of general hardship being caused by the policy. The survey in southern England showed that a quarter of claimants were covered by exemptions and that over one third, approximately, continued to live in the same accommodation. Therefore, it is not anything like the picture that the hon. Gentleman is painting.

Mr. Richard Holt (Langbaurgh)

My right hon. Friend knows that many of us will support the general thrust of the new regulations, but when examining the detail, not only the time limits but the geographical definition of areas should be looked at. I am sure my right hon. Friend will agree that one can hardly regard the north-east coast of England as a seaside resort in its historical context, so the four-week limit will have to be changed. Will my right hon. Friend also examine cases of people being disadvantaged when they have to leave the homes where they have been raised because of the brutality and ignorance of their parents? They will be forced to move away from all their friends, relations, churches, clubs and everything else as a result of what is liable to happen under the regulations.

Mr. Fowler

The final point raised by my hon. Friend might be dealt with under the existing exemption policy, but if it is not, that is the point of adding to the exemptions a provision whereby such exceptional hardship can be dealt with.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

Will the Secretary of State explain how he can argue, as he did this afternoon, that he is trying to represent and "protect"—to use his word—the interests of claimants when the only reason why he is here making a statement is that it is the courts that are representing the interests of claimants against his intentions?

Mr. Fowler

That is not the position. Mr. Justice Mann envisaged the possibility of amending regulations, and he framed his judgment accordingly. It is in no one's interest that there should be uncertainty over the next months. The new regulations that I am proposing will expire after six months. That is the period in which the Court of Appeal will decide, and the parties can decide on further action. The regulations will not affect those living in board and lodging accommodation at the time they come into force.

Dr. Brian Mawhinney (Peterborough)

Bearing in mind the extra work that the regulations have generated, will my right hon. Friend pay special tribute to the officers in Department of Health and Social Security offices around the country who, at least in my constituency, have handled the extra work with professionalism and good grace? Will my right hon. Friend explain who will have the right of judgment in cases of exceptional hardship?

Mr. Fowler

I shall have the residual discretion on exceptional hardship. I should like to underline what my hon. Friend said about the staff. The staff in the DHSS have worked magnificently to deal with the situation.

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

How much will this reversal in the courts cost the Government? Where will the money come from within the right hon. Gentleman's budget? What is happening in DHSS offices? Is it true that in many offices staff are working day and night to clear the backlog of cases that have come forward?

Mr. Fowler

I have no evidence of the final point raised by the hon. Gentleman. With regard to what he said at the beginning of his question, I should tell him that the matter is the subject of an appeal. We are appealing to the Court of Appeal, so before the hon. Gentleman tries to count the cost the ultimate decision must be made.

Mr. Jonathan Aitken (Thanet, South)

Will my right hon. Friend ignore the shrill and exaggerated barrack room legalisms that we have heard from the Opposition Front Bench and accept congratulations on what is a sensible, interim, tidying-up measure? From now on, will my right hon. Friend concentrate on a point that is worrying many in the communities most affected—the much suspected incidence of fraud and abuse? My right hon. Friend has said that he has positive proof of such fraud. Will he say a little more about that and what he will do about it in south coast seaside towns, such as my constituency, which have been affected by it?

Mr. Fowler

I am grateful to my hon. Friend. As I said, we have conducted a special fraud investigation in Euston, which showed, by any measure, a totally unsatisfactory position. The result is that I have asked for other checks to be carried out in all the regions. We would be failing totally in our responsibility if we did any less than that. In addition, there is evidence of different charges being made, with DHSS claimants being charged a higher rate than ordinary residents. That all adds up to the fact that it is not enough to say that the existing situation can be preserved, because the position before we took action was totally unsatisfactory.

Mr. John Butterfill (Bournemouth, West)

I should like to be associated with the representations made to my right hon. Friend by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) on residential rest homes. I congratulate my right hon. Friend on what he is doing for cases of exceptional hardship. However, representing as I do a seaside town, I should like to say that we still have a considerable problem which is not entirely solved by my right hon. Friend's statement today.

I was in my local DHSS office in Poole only on Friday, and the staff were not, as was suggested by Opposition Members, inundated with a backlog, but they do have a considerable problem. There are still thousands of claimants in my constituency, many of whom have no intention of seeking work. That is evidenced by what my local DHSS office tells me. It also told me on Friday that there is no doubt that charges by boarding houses in my constituency were put up substantially, to the maximum level. In fact, that became the minimum level. Therefore, we have an acute problem, and I urge my right hon. Friend to deal with it as quickly as possible.

Mr. Fowler

I hear what my hon. Friend says, that a balance must be held, but the evidence that the Department and I are receiving is that some of the major problems, particularly in some of the seaside resorts, have become considerably easier over the past month. However, I shall look further at the point raised by my hon. Friend.

Mr. Meacher

May I ask three questions arising from earlier questions? How will the Secretary of State seriously exercise the discretionary exemption himself? Did I hear him say that he would reserve that power to himself? How will that operate in any widespread way? Secondly, does the right hon. Gentleman really believe that two, four or even eight weeks is enough time for a young person to get a job, when no fewer than a quarter of young people leaving school are unemployed? Thirdly, will the right hon. Gentleman tell us how many young people have been forced out of their bed and breakfast accommodation, or board and lodgings, since 29 April as a result of the regulations'?

Mr. Fowler

On the last point, we have only the early results of our own monitoring at present, but I shall try to make the evidence that we have available to the House before the order is debated next week. For example, as I have said, our monitoring in southern England showed that one quarter of claimants were covered by exemptions, and that more than one third continued to live in the same accommodation. It has also shown that no general hardship is being caused by the policy.

The time limits, again, are a matter of judgment. We have debated this time and again and my hon. Friend the Minister for Social Security has gone over this on countless occasions. I believe that reasonable time is allowed for people to look for jobs in a particular area.

On the question of discretion, the exemption policy already covers a wide range of situations, and probably about one quarter of all cases are covered by the existing exemption policy. In addition, I shall now have discretion to exempt cases of exceptional hardship. Clearly. such exemption will be exercised through the DHSS, and particularly through the headquarters division of the DHSS.