Supplementary Benefit

HC Deb 16 December 1986 vol 107 cc1125-56 8.23 pm

The Minister for Social Security and the Disabled (Mr. John Major)

I beg to move,

That the draft Supplementary Benefit (Housing Requirements and Resources) Amendment Regulations 1986, which were laid before this House on 10th December, be approved. I understand it may be for the convenience of the House if we take at this time the prayer in the name of the Leader of the Opposition— That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Claims and Payments) Amendment (No. 2) Regulations 1986 (S.I., 1986, No. 2154), dated 8th December 1986, a copy of which was laid before this House on 10th December, be annulled. These regulations are the product of a long consultative process that began 18 months ago in the Green Paper "Reform of Social Security". The Government declared their intention then of discussing with buildng societies and others

arrangements whereby less emphasis—particularly for claimants on benefits for short periods—would be placed on help through the social security system". We confirmed that those discussions were continuing when we published the White Paper last December. We said then that these would include the possibility of a limit on the proportion of mortgage interest which would be met during the initial period in receipt of benefit". These regulations are not, therefore, novel or surprising.

In May this year, draft regulations incorporating the Government's proposals were referred to the Social Security Advisory Committee for consultation. The main proposal was to limit the amount of mortgage interest eligible for reimbursement through supplementary benefit to one half of the interest payment during the first six months on benefit. This was to be applied only to claimants under 60. After the six-months period, it was proposed that interest would be met in full together with extra help with interest on any arrears arising from the restriction.

A number of protective measures were also included with the main proposal. These included a new linking rule between claims, to avoid penalising short breaks in benefit entitlement. This is self-evidently important. We proposed also a special disregard of income from mortgage protection policies to encourage people to protect themselves against short-term inability to meet their mortgage commitments, and to help them when they did so.

Other changes were proposed which were designed to ensure that supplementary benefit was used specifically to help claimants with accommodation costs rather than with business-related costs as well.

The Government received the advisory committee's report in August. We gave it very careful consideration before we decided that it was right in principle to limit supplementary benefit assistance with mortgage interest. I announced this conclusion to the House last Wednesday, together with two important modifications to our original proposals. These are both incorporated in the regulations before the House tonight.

First, the restriction period has been reduced from six months—literally, 26 weeks—to 16 weeks only. This change not only materially reduces the impact on individuals but also concentrates the change, rather more so than previously, on shorter-term claimants. It also reduces the savings from £30 million, under the original proposal to £23 million. An estimated 75,000 claimants are likely to be affected at any one time. In the average case, if a claim runs for the full 16 weeks, then up to £170 less benefit may be payable. Most claims do not last this long, as about half those unemployed leave the register within three months and their loss of benefit is correspondingly smaller.

Secondly, we have accepted entirely the advisory committee's recommendation that action should be taken to avoid creating a mortgage interest trap and the regulations provide for this. Consequently, if a claim results in a nil award solely because the assessment was based on half the mortgage interest payments the claimant will be eligible—when he claims again after 16 weeks—to have the full interest payment taken into account. He will in effect be treated as if the 16 weeks restriction period had been served, and we shall advise all claimants refused benefits on the initial claim to reclaim again after 16 weeks. The purpose of this change is to help claimants who might otherwise not have been eligible for benefit at all and we hope that it will do so.

We have also decided to carry forward all the other proposed changes which were referred to the advisory committee. These were supported without exception by the committee in its report, which we laid before the House on 10 December, together with the Government's detailed response.

The main reason for the Government's action in this area is our wish to strike a fairer and more reasonable balance between the borrower, the lender and the taxpayer.

Mr. David Winnick (Walsall, North)

Squalid and rotten.

Mr. Major

The hon. Member for Walsall, North (Mr. Winnick) is once again gracing us with his presence. It is always a delight to see him here. The other week, he gave us his celebrated impersonation of a mixture of Uriah Heep and Jaws, and I see that he is intending to do the same thing again. I forget who it was said of whom that he greeted every problem with an open mouth and a closed mind, but it applies well to the hon. Gentleman.

The House was treated, if that is the correct word, to the full galaxy of thespian histrionics when I announced the Government's decision the other day. Lord Olivier would have eaten his heart out had he heard the hon. Members for Walsall, North, and for Oldham, West (Mr. Meacher). The hon. Member for Oldham, West led the charge at some length, as I recall, but he should reflect on what he says before he says it. That would be an improvement.

Mr. Winnick

Squalid and rotten.

Mr. Major

The hon. Gentleman may be squalid and rotten, but I do not point it out to him more often than is necessary.

Last week, the hon. Member for Oldham, West painted a picture of unimaginable horrors, widespread evictions, marital breakdowns and homelessness. The trouble with the hon. Gentleman is that his instincts tend to run away with his judgment. He presented himself in the unlikely guise of the home-owners' champion which, in view of his record during the past few years, is brazen in the extreme.

Mr. Michael Meacher (Oldham, West)

Does the Minister deny that there have been evictions?

Mr. Major

I am coming to that. The hon. Gentleman got it wholly out of proportion.

I shall remind the House of some facts about the main change. The 16 weeks restriction will not apply to anybody who is aged 60 or over. [Laughter.] Hon. Members might not think that that is favourable. Perhaps they will say so if they catch your eye, Mr. Deputy Speaker. After 16 weeks, every penny of mortgage interest will be eligible for help. In addition, any extra interest which is due on arrears that arise from the restrictions will also be eligible for help. That provides guaranteed assistance for everybody whose claim proves to be longer lasting.

There is now an eight-week linking rule to ensure that people are not discouraged from taking up a job. There is a special disregard of income from mortgage protection policies to allow claimants to benefit from such policies and thus to cover their mortgage interest payments fully. The main change will affect mostly short-term claimants, as half of those who are on the unemployment register go off it within three months. I repeat those points to illustrate our anxiety to produce a fair and reasonable approach. I believe that we have succeeded.

Mr. Tony Baldry (Banbury)

My hon. Friend talked about striking a balance between the borrower, the lender and the taxpayer. A home is an asset and its ownership is aided by tax incentives. Surely it would be cheap and easy for people to insure against the eventuality of their not being able to pay the mortgage for 16 weeks. Many people do just that and I do not understand what the drama is about. Most prudent people insure against unemployment, sickness and death. Does my hon. Friend have any idea what the actuarial cost of a commercial insurance policy covering somebody who is unable to pay a mortgage for 16 weeks might be?

Mr. Major

My hon. Friend has made a valuable observation and I wholeheartedly agree with him. The insurance that he has in mind might vary in cost according to a variety of factors, but is unlikely to exceed £10 per year, which is not an especially onerous proposition. I hope that the House will note what my hon. Friend has said.

I remind the House of what the Social Security Advisory Committee and the Building Societies Association have said. The committee said, in paragraph 54 of its report: For the majority of claimants the proposals should not bring significant financial hardship. That, of course, was in the context of the original six months' limitation, not the much shorter 16 weeks now envisaged. Therefore, its comment is even more apt in regard to the shorter period. The Building Societies Association has given assurances that it would respond to these changes sympathetically and reasonably. Its press statement last week said that it saw no reason to expect that people will lose their homes as a result". Those statements put the change into proper perspective. I look forward to Opposition Members acknowledging these points and admitting that their forebodings last week were substantially overcooked.

Mr. Frank Field (Birkenhead)

I hope that the assurance that the Minister is giving on behalf of the building societies will be met. Will he say a little more about his discussions with the Building Societies Association because, at the beginning of his speech, one could have concluded that there has been continuous negotiations ever since the Green Paper was published? One of the groups about whom hon. Members on both sides of the House are concerned is people who become unemployed but already have arrears because, before becoming unemployed, they were on short-time working. In his negotiations with the building societies has the Minister received an assurance that they will look and act sympathetically towards that group.

Mr. Major

These proposals change nothing in regard to arrears. I should correct the hon. Gentleman on one point — we were not negotiating with the Building Societies Association. There have been discussions with it at official level — not with me — in advance of the reference to the Social Security Advisory Committee for consultation. Any subsequent consultation was undertaken by the SSAC before it produced its report to the House.

Mr. Frank Field

I am grateful to the Minister for giving way again. He has brushed aside a matter that is important for many of our constituents. There is all the difference in the world between falling into mortgage arrears because one is on short-time working and going on to the dole when one has no money to put towards the mortgage, whereupon arrears will mount quickly, even if that happens for 16 weeks. If the Minister cannot assure the House that he has followed that matter up with the building societies himself or at official level, will he undertake to follow it up after this debate?

Mr. Major

Like the hon. Gentleman, I do not want people who fall into arrears to find themselves in undue difficulties. People often fall into arrears through no fault of their own. That was not a subject for discussion with local authorities because it was not directly related to the proposals before us. I shall bear in mind what the hon. Gentleman has said about arrears as I share his anxiety that people who have ventured into home ownership should remain in home ownership. That is in their interests and in the interests of their families and everybody else.

The third reason why Opposition Members were mistaken in their strictures of the Government last week is that they forgot, or in some cases chose to ignore, the experience of a very long miners' strike and how mortgage lenders reacted to it.

Mr. Winnick

That was completely different.

Mr. Major

Perhaps the hon. Gentleman will have an opportunity to explain why if he catches the Chair's eye.

I should like to say why I think that the miners' strike is not completely different. Building societies and other lenders did not foreclose during that very long strike. They did not seek repossession and they did not force miners to become homeless. They did none of those things, despite the length of the strike, which was far longer than 16 weeks, and the fact that supplementary benefit for full mortgage interest was not being paid in many cases. So why do the Opposition assume that building societies and local authorities will react any less generously now, especially when full interest will be eligible after 16 weeks and extra help will be available for extra interest as I have explained? There is no reason, and it will not happen. The Building Societies Association does not expect it, I do not expect it and nor, in reality, do Opposition Members.

Mr. Meacher

Perhaps I can answer that question. It was, perhaps, unwise from the Minister's point of view for him to ask it. The answer is given by the Building Societies Association. It says that the comparison is not a proper one, for four reasons. First, it was clear that, eventually, the miners would return to work, whereas many of those who become unemployed have little prospect of finding employment. Secondly, miners are generally well paid in comparison with their housing costs. Thirdly, the large majority of miners probably have substantial equity in their properties because they purchased them some time ago or because they purchased council or former National Coal Board houses at substantial discounts. Finally, in areas where there are substantial concentrations of miners, there was little point in a building society trying to protect its security by taking possession of a property because it would have been almost impossible to sell. I hope that the Minister will accept that, for all of those reasons, the comparison that he is trying to draw is utterly invalid.

Mr. Major

I do not accept that in any respect.

Mr. Winnick

The Minister has egg all over his face now.

Mr. Major

It is equally clear that people who are unemployed, irrespective of whether they return to work—most of them do within three months, as the hon. Gentleman knows—are certain to return to benefit after 16 weeks, which is a far shorter time than it was envisaged the miners would take to return to work. The facade that the hon. Gentleman tried to construct can be shown to be collapsing. There is also the question of equity between low income families in and out of work. That point cannot be lightly brushed aside.

Mortgage interest tax relief is available to all families whether in or out of work, but social security help applies only to those without jobs. There is an imbalance in support there. The present supplementary benefit guarantee of 100 per cent. help with mortgage interest payments from the first day on benefit is much more than a family in work can expect through mortgage interest tax relief. Obviously, the present guarantee includes meeting domestic rates in full. These are generous arrangements and, indeed, as the Building Societies Association in its publication in January said:

they are almost certainly the most generous in the world with respect to borrowers who are unemployed. Opposition Members will undoubtedly be pleased to know that. The change we are making does not significantly alter that position, but it removes some of the present imbalance in state help available during the relatively short initial 16 weeks period covered by these regulations. I emphasise that it is a short 16-week period.

Mr. Nick Raynsford (Fulham)

The Minister spoke about equity between the unemployed and low-income home owners with mortgages. Does he accept that the Government's benefits review team recommended that mortgage interest payments should become eligible for housing benefit to overcome that inequity? The Government rejected that recommendation. Does the Minister further accept that progressive cuts in rates assistance through housing benefit have penalised precisely the people about whom he is talking—low-income home owners? They are getting less and less help with their rates because of the three successive cuts in housing benefit on rates. It is completely fraudulent and hypocritical to talk about favouring equity between the group whom the Government have disadvantaged and the unemployed.

Mr. Major

The hon. Gentleman is rehearsing arguments which we may deal with on Thursday when we discuss uprating and contributions. We shall undoubtedly discuss such matters when we deal with the regulations that will be taken at that time.

The cost implications of the housing benefit review team report render it wholly out of court for us or any other likely Government on the horizon. The hon. Gentleman will know better than most for a variety of reasons — some understandable and some less understandable — of the substantial demand pull on expenditure that has been wrought on housing benefit over the past few years. It is now a substantial burden on the Exchequer and taxpayers. When one reaches the point where one in every three families is subsidised in housing benefit by the other two—this is not the subject of tonight's debate—one wonders whether the system is proper and sustainable. I do not believe that it is. [Interruption.]

If the hon. Gentleman wishes to return to mortgage interest and the subject of tonight's debate, I shall happily give him the floor, but I suspect that he proposes to stray on to Thursday's debate. I undertake that I shall give him an opportunity on Thursday to make those points, if he wishes to do so.

Mr. Meacher

To return to tonight's debate, the Minister quoted the BSA view that mortgage interest payments to the unemployed are the most generous in the world. How can he continue to support that view and use it to support his tottering case when in answer to me he said: We have no detailed comprehensive information about the assistance with mortgage interest payments given to persons receiving social assistance in all European Community and Organisation for Economic Co-operation and Development countries."—[Official Report, 26 June 1986; Vol. 100, c. 293.]

Mr. Major

The hon. Gentleman mistakes the sense of my words. I was destroying his tottering case, rather than supporting mine. Anybody listening to the debate would have been aware that that was what I had in mind.

It is worth while to emphasise that the Building Societies Association has also said—this is relevant—that it will continue to help as many people into home ownership as possible. It will not hold off helping low-income families and nor will this Government, through mortgage interest tax relief, which we, at least, will keep, and through the right-to-buy schemes, which have assisted hundreds of thousands of people to own their homes, despite the blatant and continuing opposition of the Labour party. The short limitation in supplementary benefit help with mortgage interest will not impair that, and I invite Opposition Members to continue to watch with envy the progress we shall continue to make in further extending home ownership. We genuinely believe in it and will continue to promote and sustain it.

I should draw the attention of the House to five other changes incorporated in the regulations. I referred to these only briefly earlier, since they are unrelated to the main contentious change.

We do not propose to carry forward the present practice whereby interest on a loan for business purposes, which is secured on the home, can be paid for up to six months. This applies where the claimant is intending to sell the home and requires time for it to be sold. In future, help with mortgage interest will be restricted to housing-related loans only. Also, where a home includes a business, for example a guest house, interest will be met only on the part of the house used for living accommodation, where the home is treated as a mixed hereditament for rating purposes.

The third change is that powers are being taken to allow the adjudication officer to restrict benefit where the home is unreasonably expensive in relation to other suitable accommodation in the area. Benefits can be restricted already where a house is in an unreasonably expensive area or is unnecessarily large. This additional power is taken to bring supplementary benefit into line with housing benefit practice.

Powers are also being taken to enable a second or subsequent loan to be treated in the same way as the loan it replaces. This readmits people with replacement loans to benefit, following a commissioner's decision to the contrary and is wholly beneficial. I am sure that the House will welcome that.

Mr. Dafydd Wigley (Caernarfon)

That is an important point and relates to the difficult case that was adjudicated on recently. Will that provision be retrospective for individuals who are caught as a result of that decision?

Mr. Major

It is probably effective from the date on which the regulations become effective, but I shall ensure that my hon. Friend the Minister touches on that specific point when he replies.

The four changes that I have just mentioned were also referred to the Social Security Advisory Committee and were unreservedly supported by it. The committee also agreed that a fifth minor change need not be referred to it for consultation as it, too, was entirely beneficial. This change is to enable foster children to be taken into account when an adjudication officer decides whether or not a home is too large.

The Opposition also prayed against the associated regulations — the Supplementary Benefit (Claims and Payments) Amendment (No. 2) Regulations 1986. This must have been a reflex action. Those regulations simply ensure that the existing arrangements for instituting the direct payment of mortgage interest to the lender will continue unchanged. Without them, claimants could face the prospect of having their payments made direct, even where they had paid over the full amount of the interest included in their benefit. That would be a tighter regime than we want since we believe that claimants should generally be responsible themselves for their dealings with their lenders and for their mortgage interest repayments. Therefore, I suspect that the Opposition may not wish to press that prayer to a Division.

Mr. Jeff Rooker (Birmingham, Perry Barr)

Will the Minister confirm that there is nothing in the regulations that distinguishes between different types of mortgages? I am thinking of the insurance endowment mortgage, where all payments are made on interest, and ordinary repayment mortgages. Will everybody be treated in the same way as they are now?

Mr. Major

There is no distinction.

I believe that the draft regulations represent a package of limited measures that will have a limited effect and, in the case of the main changes, for a limited period only. They will not have the dire consequences predicted by Labour Members, but they will achieve a fairer and more reasonable balance of responsibility between borrowers, lenders and taxpayers. I commend the draft regulations to the House.

8.48 pm

Mr. Michael Meacher

The Opposition have already made clear their unequivocal repudiation of the regulations, on the ground that they victimise the unemployed by threatening them with the loss of their home, on top of the loss of their job. Nothing that the Minister said tonight has altered that central fact.

Last week some of my hon. Friends and I said that the measure would cause evictions and family break-ups for the unemployed. Significantly, the Minister was unable to deny it. I do not believe that he could deny that tonight either. We find it almost inconceivable that the Government should insist on going to such lengths to hound the unemployed in order to save £23 million. That is a drop in the ocean compared with the £4.75 billion of mortgage interest tax relief that is handed out unconditionally each year to owner-occupiers, however well off they are.

The regulations will come into effect on 26 January next year. The new year message of this kick in the face for the unemployed is that the Government's discrimination against the unemployed seems to know no end. The unemployed have had their benefit cut by this Government, and it has also been taxed for the first time. Some £3 billion has been clawed back in tax off unemployed benefit since 1982. The unemployed have had their entitlement to earnings-related supplement abolished and under the proposed Fowler Social Security Act they will be forced to pay 20 per cent. of their rates out of supplementary benefit reserved for food, clothing and daily necessities. They now face the risk of eviction and being made homeless.

Mr. Winnick

Apart from the repeated lie that the Labour party is against owner-occupation, whereas Labour Governments have successfully taken measures to increase people's opportunities of owning their own homes—[HON. MEMBERS: "When?"] During the 1960s, under the option mortgage scheme, and other schemes, which made it easier for people on limited means to buy homes which they could not have afforded before.

Mr. Wigley

And build houses.

Mr. Winnick

As the hon. Gentleman has rightly said, we also built houses.

Does my hon. Friend agree it is unfortunate, sordid and disgusting that the measure—which the Secretary of State was not willing to introduce personally this evening—hits people who need every form of income that they can possibly have when they become unemployed, when they are most vulnerable and when they desperately need to retain as much income as they can out of their limited benefit? The Government are hitting and penalising people who are made redundant through no fault of their own.

Mr. Meacher

That is entirely true. That is the main thrust of the Opposition's rejection of the regulations. Compared with the Minister's extremely bland glossing over of the effect of the regulations as a minor measure that will have hardly any effect, I suggest that the regulations will have a devastating effect on many ordinary families.

Let us consider two examples. First, a family consisting of husband, wife and two children with a £16,000 mortgage, at present makes interest-only payments of £26 a week. Its supplementary benefit is just under £69 a week. As a result of the regulations that family will have to find an extra £13 a week to pay the building society. That is nearly one fifth of its weekly income.

My second example is that of a couple with a baby and a £30,000 mortgage. Such a case is quite common in the south-east. At present that family makes interest-only payments of £49 a week. If the payments were halved, the family would have to find £25 a week extra for the building society, which would amount to two fifths of its weekly income. If the capital repayment element is also included—as it must be—the family would need to pay the building society more than £32 a week. That works out at more than half its income having to be paid to prevent its falling into arrears. I wonder how many Conservative Members who will no doubt obediently follow the Whip tonight, would impose such punitive sanctions on their married children and families if they became unemployed and had no other source of income.

It is clear from those examples that it is highly unlikely that unemployed families affected by the cut will be able to make the payments from the weekly benefits. Cuts of a quarter to a half of income will clearly make it impossible for people already on the poverty line to manage.

In his statement last week the Minister repeated—and he repeated it again tonight, because I suspect that he has precious little else to fall back on—that the Building Societies Association will respond to changes "sympathetically and responsibly". We may be forgiven for thinking—and I believe that my hon. Friend the Member for Birkenhead (Mr. Field) is of this opinion—that such assurances have been given to the Government by the Building Societies Association regarding the proposed changes. In fact—and perhaps the Minister will correct me if I am wrong, because this is a serious matter—I understand that there has been no formal contact between the Government and the Building Societies Association about the proposals. The assurances that have been referred to appear to have been lifted by Ministers from the BSA's response to the Green Paper "Reform of Social Security" published more than a year ago.

I fear that the Minister may have misled the House by suggesting that specific assurances about the operation of the proposals had been given by the Building Societies Association. From my information, it appears that no such assurances have been given. If the Minister wishes to intervene to deny that, I would be glad to give way, because that is a significant and important point.

Mr. Major

Perhaps I can put the hon. Gentleman's mind at rest. I need do no more than quote from the Building Societies Association's press statement, which is a public document. It states: Societies will do all they can—

Mr. Meacher

When was the statement dated?

Mr. Major

It is dated after my statement last week. It claims: Societies will do all they can to help people where benefit is restricted, and there is no reason to expect that people will lose their homes as a result of this measure. That was the Building Societies Association statement on the mortgage interest decision, published last week.

Mr. Meacher

That does not involve any formal contacts or detailed discussion between the building societies and the Government.

Mr. Major

rose—

Mr. Meacher

I should like to finish. We are simply considering a statement made by the BSA. I should like to know what evidence exists that the building societies will be able to carry out the Government's wish. Frankly—I shall quote the evidence shortly—I do not believe that will happen.

Mr. Major

The statement from which I quoted a moment ago was supplied by the Building Societies Association's head of external relations, with specific authority to be quoted. I have quoted it with that authority and it has been published. Meetings took place between the Secretary of State and the chairman of the Building Societies Association some time ago. Subsequent meetings were held in August, November and December 1985, and there was informal contact prior to the SSAC consultation in May 1986. Over a substantial period there have been a series of discussions about this and related matters. I have quoted from the press statement issued by the BSA, and that is clear and unequivocal. I hope that the hon. Gentleman will accept that.

Mr. Meacher

I shall also provide my quotation from the BSA. The real attitude of the building societies is different from that which the Government have described. In its recent report on mortgage arrears the BSA said about the present mortgage interest payment system: If this benefit had not existed"— and it is this benefit that the Government are proposing to cut— the rise in unemployment would have led to a much greater increase in arrears and possessions and this would have led to a slump in property prices locally and possibly nationally as well. The Government are whistling in the wind when they claim that lenders will cast a blind eye or readily accommodate reductions in payments.

I want to cite two reasons for that which I believe convincingly refute the Government's facade of optimism. One of the Government's own social security policy inspectorate, which found that even under the present rules only two thirds of claimants who had asked for a temporary reduction in their mortgage interest had been granted one. One third had not. The other is the recent Shelter survey, which found that nearly 60 per cent. of local authorities explicitly ruled out a temporary suspension of payments. If local authorities adopt such attitudes, I am sure that other lenders will certainly take an even less charitable view, especially the finance and loan houses that operate on the fringe of the mortgage market.

What is most worrying is the fact that mortgage arrears are already rising steeply. In 1979 there were 8,000 loans in arrears over six months. The number is already, even before these regulations, over 60,000 a year. Similarly, properties taken into possession by building societies as a result of arrears have already risen eightfold since 1979. The number is now over 20,000 a year. In the past year it has risen by 50 per cent. and in the next year it can be expected, as a result of the measure, to grow by a further 100 per cent. It is impossible for the Government to lay claim to the idea of a property-owning democracy or to belief in family life when they allow those trends to continue, let alone exacerbate them. These regulations make nonsense of such claims.

Hon. Members will have seen the briefing from the National Council For One Parent Families, which details the cases where single parents will suffer drastically from the measure. The briefing concludes: We cannot believe that the Government could have intended to jeopardise family stability and add more separated, deserted, divorced and widowed mothers and their children to the ever-lengthening list of those who are homeless and forced into unsanitary, temporary accommodation for indefinite periods. That is exactly the effect that this measure will have.

It is not only that. What is so harsh about the measure is that it is so discriminatory. At present, those with incomes around £100 a week get only about £3 a week in mortgage interest tax relief. Those with incomes over £30,000 a year, which includes members of the Cabinet, get 10 times as much in mortgage tax relief. It is already an excessively unfair system, and the Government are now proposing to compound the unfairness by cutting, on their own admission, about £7 a week on average from the income of families on the official poverty line. A Government who do that while at the same time allowing payment of £30 a week to people with incomes of over £600 a week cannot be said to understand the meaning of the word "fairness", let alone use it to defend their proposal.

There is no conceivable justification for this measure. In saving terms it is piffling, and in principle it is monstrous. The sole defence put up by the Government, which the Minister mentioned again tonight, is that the present system places the low-paid family at a disadvantage compared with the unemployed. The answer to that is not to cripple the unemployed, but to increase the pittance received by the low-paid family. One way to finance that, as the Labour party proposes, is to limit mortgage interest tax relief to the basic rate of income tax and redistribute the saving of £320 million, which is at present devoted exclusively to those on the highest income.

The Social Security Advisory Committee was singularly unimpressed by the Government's case on that point, although it is the only point that the Government have. In paragraph 53 of its report it states: We are not convinced by the arguments relating to equity between owner-occupiers on benefit and those in low-paid work. One of the bizarre aspects of last week's exchanges after the Minister's statement was that the Minister kept calling in aid the SSAC report as if it supported his case. In fact, it does the exact opposite. The conclusion of the report, in paragraph 54, states:

The borrower with a 100 per cent. mortgage, or with little equity in the property, may find his lender is unwilling to accept interest-only payments, let alone half of the interest payment. The deserted wife may find that there were arrears on the mortgage before she came on to benefit and her lender is unwilling to allow further arrears to accumulate. For claimants like these in a period of trauma and stress the restrictions may be the straw that breaks the camel's back, tilting them so far into debt that eviction and repossession are inevitable. Those are not the words of the Opposition seeking to stir up political strife. Those are the considered words of a very careful and relatively modest body, the Social Security Advisory Committee. It is the Government's own advisory body. Nothing could be clearer than what the SSAC says there. It reinforces its earlier judgment in the fourth report last year, when it said: We do not think that a scheme of this kind could be justified at all, unless the building societies and other mortgage-giving bodies were prepared to give comprehensive assurances about the availability of rescheduling". Not only have they not been prepared to give comprehensive assurances, but they have not been consulted to any significant extent during the last year, presumably because their hostility was already well known.

Nobody supports this measure. The building societies do not support it, nor do the independent Institute of Housing, the local authorities, the National Consumer Council, or the SSAC. It may scarcely fulfil its minimum objective of making savings, since the cost of mortgage repossession often falls indirectly on the public purse, and homeless families are then allocated local authority housing under the Housing (Homeless Persons) Act 1976. The average saving of £170 per claimant will then be swallowed up by the hotel bill for the first week.

This measure may not even achieve its purpose of increasing the incentives for the unemployed to return to work. If the loan were rescheduled at a higher rate when the four-month period was over, the rescheduled payments could rise to a level which those on low wages would have difficulty in paying. The claimant would then have less incentive, not more, to return to work.

This is a nasty and vindictive measure that will cause intense hardship for 75,000 families, including eviction for many of them. It will generate insecurity among hundreds of thousands of low-paid workers facing the threat of unemployment and all that might follow. It will make building societies less willing to lend to low-paid and single parent families, and it will greatly worsen the discrimination and unfairness of mortgage aid as between the favoured rich and those on the poverty line. Savings amounting to mere £23 million cannot possibly justify such consequences or such suffering. These regulations should be immediately and unreservedly withdrawn.

9.7 pm

Mr. Peter Fry (Wellingborough)

I do not intend to emulate the lurid language of the spokesman for the Official Opposition, but I think that I should express the degree of disquiet that is felt by some Conservative Members about the proposed changes to the regulations.

When the changes were announced earlier this year it was my misfortune to appear that day on a television panel programme. The first questioner asked the panel what it thought about the changes. After I had listened with growing incredulity to what was said about them, I said that I could not vote for the changes. The response to what I said then was remarkable. Not one person had a good word to say for the proposed changes.

Why should that be? Most people are genuinely concerned about the effects of unemployment and the problems that it creates. Millions of people also fear that they will be make redundant. The last few years have shown that very few sections of our society are immune from the threat of unemployment. Buying a home is the largest single purchase that most people make. I accept that very few people will lose their homes, but the proposals present a considerable threat to every homeowner. They cause additional worry at a time when the Government ought to be trying to reduce worries rather than to add to them.

I am sorry that I have to be so critical. My hon. Friend the Minister for Social Security and the Disabled knows that I hold him in high regard. I am also aware that he had to pick up this issue and carry it when he gained his well merited promotion. I appreciate that the Government have made some changes which they genuinely believe have improved the original proposals. But I want to deal with some of the points made specifically by my hon. Friend the Minister in his statement on 10 December.

First, he asserted that the change would affect only new cases. None the less, if it comes into effect on 26 January 1987 as proposed, a considerable number of mortgagors who have no protection against unemployment will be affected. It is clear—as was mentioned earlier in the debate—that many will have no insurance policy to protect them. Perhaps they should have such a policy. Indeed, I would always advise it, but the fact remains that many borrowers will still find themselves without any protection perhaps because they are already fully stretched by their mortgage payments.

If my hon. Friend had reported to the House that he had been in contact with the building societies and the banks and that they had agreed to insist on some sort of insurance cover as a prerequisite of a loan, the regulations that he has suggested could apply to all new loans from January next year, but not to existing loans. I for one would have accepted such a change as it would not have been retrospective. I have no doubt at all that many of the people who will be affected by the changes are those who have not taken advantage of any insurance scheme.

Secondly, my hon. Friend mentioned that many of the claimants would be unemployed for only a short time. None the less, even on his own figures, they amounted to about 75,000. Any period of unemployment of more than a few weeks is bound to have a drastic effect on a family's net income. In any event, the 50 per cent. of the unemployed who do not leave the register within three months will suffer the most, not only as a result of this measure but because of their longer-term unemployment.

However one considers it, the change will hurt people who are already vulnerable and who may well have to sell their homes. If the solution to the problem raised by the changes is to add the unpaid interest to the outstanding debt, those unfortunate people will find that when the home is eventually sold any balance left over will be that much less, thus worsening their financial plight.

Thirdly, my hon. Friend mentioned the improvements that have been made to the original proposals. By and large, I welcome these. He mentioned, for example, the safeguard for those over the age of 60. I acknowledged that that is helpful, but how realistic is it? Alas, we all know that most people over 50 who lose their jobs are unlikely to find another job that will pay as well as the one that they have lost. We must recognise that. If my hon. Friend were to say that wherever one draws the line, someone will be hurt, I would say that it might have been better not to have proceeded with such ideas in the first instance.

Fourthly, my hon. Friend referred to the savings that will be made—now about £23 million as opposed to the £30 million that was originally considered. Miraculously, £7 million has already disappeared. If £7 million can go so quickly why cause so much fuss over the remaining £23 million because, after all, that £23 million will cause considerable suffering? Why should my hon. Friend and the Government give such ammunition to Opposition Members on such a tender issue, when the Conservative party believes passionately in home ownership? This has been a tactical error on the part of my right hon. and hon. Friends because it has distorted what in so many other areas is a first-class record of caring for people. Indeed, our record in expenditure is one of which we can be truly proud. That is why I am all the more sad that the proposals have been brought forward.

Fifthly, my hon. Friend said that the building societies will be concerned and will treat those who are unfortunate with special regard. It is clear that Her Majesty's Government expect the building societies to pick up part of the responsibility that the Government have had hitherto. The most likely outcome is that the unpaid interest will be added to their capital debt. That may or may not happen. Any change in the payments of the unemployed to their lenders automatically breaks the existing agreements on mortgage repayments. There is no guarantee that the lender will necessarily agree.

I also noted that my hon. Friend said that advice would be given to borrowers who might find themselves in trouble. I do not know what he finds, but in my constituency I find that those who get into the most trouble are those who do not immediately ask for help. They get into a terrible mess and it is in such cases that eviction often takes place. Therefore, it will not be possible to cover all those cases with the kind of assurances that my hon. Friend gave.

It is not always the friendly building society that is the lender. It could be a Japanese bank, and what assurances have we had from foreign banks which have given loans to people in Britain that they will behave in the same way as the building societies? My hon. Friend said that he was hopeful that the building societies would act in the right way. He should be using the word "helpful" rather than "hopeful", because help is what people who are unemployed want.

Despite all those points which arise from what my hon. Friend had to say, my main objection is one of principle. I hope that when my hon. and learned Friend the Under-Secretary replies he will tell me why, if I pay rent, no matter how long I have been out of work, no matter whether I have never bothered to find work, that rent will be paid. But if I have done what the Government have asked me to do and become part of the property-owning democracy, I shall suffer as a result of the proposal before the House tonight. There is a matter of principle there and it is on that question of principle that I feel strongly.

The answer that my hon. Friend the Minister has previously given on that point is that the home buyer shares in the capital increase in the value of his home. All I can say to him is that if he goes to Aberdeen or Merseyside he will discover houses which have dropped in value over the past few years. The owners of such houses will feel pretty sick if they become unemployed and suffer as a result of this proposal.

No, I cannot believe that the measure is essential or necessary. It saves little money. My hon. Friend used the word "limited" on at least three occasions—a limited measure for a limited period affecting a limited number of people. If it is that limited, why have we got it at all? It is unnecessary and the amount that we are saving is insignificant. It will cause additional problems for thousands of home buyers who have been doing what the country wanted them to do. It will offend even more. It will offend all those who fear unemployment and it will reinforce those who accuse the Government of being uncaring. This is an unnecessary and unwise change in the regulations. The Government's attitude will not be understood and as a result there will be considerable political damage. Therefore, despite my high regard for my hon. Friend, if he is determined to press ahead, I for one shall be in the other Lobby tonight.

9.19 pm

Mr. Nick Raynsford (Fulham)

By no means is this the first debate on this subject, because it comes at the end of a long and rather sorry series of debates based on the Government's plan to change assistance with mortgage interest for people on supplementary benefit. It was heralded in a social security Green Paper published more than 18 months ago, and at that time the measure was universally condemned. It was repeated in a slightly more restricted form in a White Paper published about a year ago and once again it was condemned, even though by that stage the measure had been rather watered down.

Last summer there was a debate in the House in which the watered-down measure was again universally condemned by hon. Members in all parts of the House. Now we are presented with a further watered-down proposal and once again it is receiving widespread condemnation. Surely the Minister must be aware that he has made a mistake—or, to be fair to him, that his predecessor made a mistake in proposing this in the first place.

It is a bad proposal and it should be withdrawn. There should be no more watering down in an attempt to save face. Despite that watering down, the measure is still very damaging. It will create increased debt problems and adversely affect the unemployed. Not only will they suffer the shock of job loss: they will also face the shock of having to meet their mortgage repayments. Although the Minister will argue that after 16 weeks mortgage payments can be made, there is, firstly, the problem of that 16 weeks to get through; during that time many people will feel deeply worried about going increasingly into debt and having no means of covering it.

Secondly, some people will never be able to recover. As an example, let us look at the single parent left alone after a marriage breakdown, which is one of the main causes of mortgage difficulties. Where the partner also has a share in the equity of the house, the financial arrangement necessary to ensure that the woman can remortgage the property in order to keep herself and her children in the matrimonial home is often a finely balanced financial judgment. If it succeeds, it may avert the problem of homelessness, the loss of the home and all the traumas associated with that, and the consequence of a local authority having to pick up the family as homeless. In present conditions that family would probably be put in a bed and breakfast hotel at vastly greater cost to the state than the cost of meeting the mortgage interest in the meantime.

It is in that area that the measure is so foolish, shortsighted and damaging. It is precisely in such marginal cases that the absence of 16 weeks of benefit could well tip the balance between keeping a family together, thereby avoiding homelessness and keeping them in the matrimonial home, or losing the home and going through the horrid, traumatic experience of being homeless. As I have already said, that costs the state rather more than the mortgage interest payments. By itself that is a strong enough reason for the Government to reconsider.

Why are they pursuing this damaging proposal? The argument put forward in the past and advanced in this debate by the Minister is that it has to do with equity and with home owners on low income in work who do not get the same assistance. For that reason, say the Government, there might be some unfairness. As I implied in an intervention from which the Minister did not take my point, this argument is unconvincing, because it comes from a Government who have cut housing benefit assistance on rates to home owners three times in the last three years. There were cuts in 1983, increasing the taper, and cuts in 1984 and in 1985. Three successive cuts affecting home owners receiving assistance through housing benefit show the Government's lack of concern for people on low income in work who are trying to cope.

The Government refuse to accept the recommendation of their own independent housing benefit review body which argued precisely on this ground of equity that mortgage interest payments should qualify for assistance as part of the housing benefit scheme. The Government claim to be concerned about equity for low income home owners, but rejected that sensible proposal which would have given extra assistance to precisely the group of people about whom the Minister is trying to shed crocodile tears. The Government's case is false and fraudulent. It is about cuts, not equity. It is yet a further example of social security cuts, and this time they bear on home owners who are in difficulty. It is a regrettable and deplorable measure. It would be bad at any time, but it is especially bad now, given the trend in mortgage arrears, foreclosures and repossessions.

My hon. Friend the Member for Oldham, West (Mr. Meacher) referred to the dramatic increase in the number of home owners who are six months or more in arrears with their mortgage. There has been an increase from about 8,000 in 1979 to over 66,000 now. The number of home owners whose homes are being repossessed because they could not maintain their mortgage payments has increased from about 2,500 in 1979 to 20,000 in the last 12 months for which figures are available. It is all very well for the Government to say what they have done to promote home ownership, but they have presided over an unprecedented increase in the number of home owners who are getting into serious debt and losing their homes. They should be paying attention to the problem and doing something to tackle it.

Instead, the Government are introducing a measure that will make things worse for low-income home owners on supplementary benefit. To take away assistance from these people at this time is crass, mean-spirited and entirely untimely. If the Government intended to tackle the problem of equity between low-income home owners in work and those on supplementary benefit protection, which is an important safety net to prevent homelessness, and seek to improve the position for low-income home owners in work, perhaps by making mortgage interest payments eligible for housing benefit, they would pay for that and make a saving by the simple expedient of restricting mortgage interest tax relief to the standard rate of income tax, which would hurt no one on an income below £20,000 a year. Savings could be made, the poor could be protected and no one on a low income would suffer.

That is the way in which the Government could proceed if they wanted to act in the interests of equity. Unfortunately, they do not want to do that. The Government are interested only in imposing cuts. These are damaging cuts and I fear that they will exacerbate the rising tide of homelessness among home owners over which the Government have presided.

9.27 pm

Mr. Eric Forth (Mid-Worcestershire)

I apologise for not being in the Chamber throughout the opening speeches. I was detained elsewhere, but I came into the Chamber as soon as I could.

I welcome the measure and I welcome also the way in which my hon. Friend the Minister has introduced it. It is a signal of the Government's recognition of the balance that has always to be struck between the responsibilities of taxpayers and those who are in receipt of benefits. No responsible Government can avoid or evade that responsibility.

There is no point in any of us pretending that everyone can always be a recipient of unlimited largesse. We must recognise always that the resources that are available to any Government are inevitably limited. The art is to balance what is fair and reasonable with what can be made available to those most in need and those who are less in need.

We are talking about those who have undertaken the responsibility of home ownership. I stress "responsibility" because embarking on home ownership, which we have rightly encouraged and in which we have been greatly successful, involves much responsibility. Anyone who undertakes home ownership stands to realise a capital gain. He stands to make a profit, which I welcome and applaud, and he will be given tax relief on his mortgage payments, which I applaud also, but he must accept the responsibilities that go with that.

I do not believe that anyone in this place would expect to take the responsibility of home ownership without taking on the reasonable responsibility of insuring against misfortune. One example would be to insure the building and another would be to insure the contents. Everyone must face the requirement of taking every reasonable precaution against loss of employment or loss of income.

Mrs. Margaret Beckett (Derby, South)

I have been listening with fascination to the hon. Gentleman's remarks. Can he tell me where attention was drawn in Conservative party election leaflets or in his manifesto for the 1983 general election to the risks that are involved in home ownership as against the advantages?

Mr. Forth

I shall not be drawn into the old red herring of what is or is not in the manifesto. It must be perfectly self-evident that, when one undertakes the challenge and opportunity of home ownership, certain responsibilities go with it. Nothing in this life—in spite of how Opposition Members might wish to kid themselves and, more important, other people—is without risk or responsibility. Home ownership comes into that category.

One must take reasonable measures to protect oneself and one's family. A range of insurance policies and opportunities are available to provide protection against precisely, for example, the loss of employment. I see no reason at all why anyone who is prepared to take on home ownership, accept the mortgage tax relief that goes with it, and accept the possibility of tax-free capital gains on their home, should not at the same time take on the responsibility of providing adequate and reasonable protection for themselves and their families against whatever misfortune may befall them. There is nothing wrong with that. It must be encouraged.

We cannot allow people who take on home ownership to look to the taxpayers, through the benefit system, to cover them in any or all circumstances. My hon. Friend the Member for Wellingborough (Mr. Fry) asked why people who rent their homes are not provided with the same sort of opportunity. It is precisely because people who rent do not stand to gain from the capital appreciation of property and do not enjoy the benefits of home ownership, whereas those who involve themselves in home ownership do so. That is why there is an important distinction. It is one that, regrettably, my hon. Friend failed to make.

The role of building societies has been mentioned at several points during the debate. Surely it is important that people understand the role and relationship of building societies with whom they undertake a contract. It is important that we understand the responsibility that building societies have within society, not only to have a commercial and contractual relationship with the people who come to them for loans, but to expect that, if misfortune befalls them, they will take a reasonable attitude. There is every evidence that responsible building societies have undertaken this attitude and have been able to help those who have fallen into misfortune.

No building society gains by peremptorily dispossessing someone of their home should they encounter misfortune after a short time. It is perfectly reasonable for the Government and for my hon. Friend to look, first, to the home owner to provide for his own future and, secondly, to expect building societies to have a reasonable relationship with those who accept loans from them. Only in the last resort should the taxpayer be expected to stand behind these people and provide them with protection.

The measure that my hon. Friend has brought before the House today provides a correct and reasonable balance between the responsibilities of home owners and taxpayers. That is why I welcome and support this move.

9.32 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

The hon. Member for Mid-Worcestershire (Mr. Forth) suffers from what I would describe as an extreme case of Joan Collins's disease—uttter, abject divorce from reality. Little in the hon. Gentleman's comments suggests any sympathy for or comprehension of either the philosophy that his own Government have preached since 1979 or the reality of those who find themselves unemployed and who, under the strictures of this measure, as from next month will be considerably worse off.

I have great sympathy with the hon. Member for Oldham, West (Mr. Meacher), who described this measure as shabby and squalid. Although I do not wish to make personal remarks about the Minister, I can hardly think that he is particulary proud of the task that he has to perform tonight in the name of Her Majesty's Government. The best that can be said about the Minister, his performance and his case is that his heart is not in it. That is the charitable interpretation. I hope that, before the Division, he will have the courage to discover the convictions that were expressed by his hon. Friend the Member for Wellingborough (Mr. Fry).

Why is there so much against the philosophy of the Government? It should not be lost on Conservative Members, especially the hon. Member for Mid-Worcestershire, that a Government who spend so much time rightly encouraging and rightly giving people opportunities to enjoy home ownership and responsibilities must themselves carry certain responsibilities. In any proper society that operates, such as this one does, under the theory of contract, responsibility has to be a two-way process. The Government have led the horse to water, but instead of enabling it to drink they have cut the rope and let the cask fall into the well. That is not fair on those who are in a vulnerable position and who are unlikely to be able to support themselves as a result.

Why is it so wrong for the Government to encourage home ownership and then to introduce this measure? I refer to a report of April this year by the Association of Metropolitan Authorities, entitled: Mortgage Arrears: Owner Occupiers at Risk ". The report made this important point: Local authority borrowers have lower incomes than borrowers from banks or building societies. Low income has been shown to be closely associated with repayment difficulties. If building societies continue to have plenty of funds for lending 'downmarket'"— I do not like that phrase; I should prefer "on the financial margins"—

and to right-to-buy purchasers, local authorities will find themselves even more in the position of lenders of last resort, with a higher proportion of high-risk borrowers than formerly. This will tend to exacerbate their arrears problems. That is precisely what is happening. As a result of the measure, local authorities, under the right-to-buy legislation, will be faced either with heavier arrears on their own account, which is bad enough, which will show up in their spending programme and, in turn, will feed through to the Government's controls on local authority expenditure, or there will have to be more repossessions. If there are more repossessions, local authorities will still have to pick up the tab to a greater extent, because they will have to add those same people to already stretched waiting lists.

Mr. James Lamond (Oldham, Central and Royton)

Does the hon. Gentleman recall that the Conservative party has been trying to run a campaign against councils which have not been so harsh in collecting rents as it would like and have allowed those who cannot pay to run up arrears? Will the councils which have allowed owner-occupiers who borrowed from them to run up arrears of interest charges be subject to the same attack? Will they be attacked as loonies of the Left?

Mr. Kennedy

Far be it from me to come to the defence of the loonies of the Left, to use the hon. Gentleman's phrase. The illogicality of what the Government are doing, in introducing the principle of the right to buy and then this measure, inevitably will lead them to introduce further measures later or take legislative steps along the lines suggested by the hon. Gentleman. I suspect that he is foreshadowing something that will come in due course, although I hope that that will not happen, as he hopes it will not. That is the illogicality of the Government's position in a nutshell. I am grateful to the hon. Gentleman.

I refer to a point made by the Minister. Nobody denies that there is a responsibility to take on home ownership. We hear that more efforts should be made with mortgage insurance arrangements. It is an easy, throw-away phrase to say that all prudent people would take such steps. However, let us look at what the Institute of Housing has to say. It has considered that aspect carefully. It asks that

assistance with interest payments be continued at the same level for the meantime. It considers it unlikely that mortgage insurance arrangements, in their present form and premium level, could fill the gap provided by supplementary benefit for either the long-term unemployed or low-income owner occupiers. The Minister is putting much stock on people taking out private insurance schemes. What does he say to the Institute of Housing, which I assume he accepts speaks with authority? It says that in that respect the Government do not have a leg to stand on.

My next point has been alluded to already and I shall not dwell on it. In regard to single parents, we are talking not just about those who become unemployed and who will have to experience the effects of the regulations in the first 16 weeks, but about the large group of people who are not in employment but are not, perhaps, technically registered as unemployed, such as many categories of single parents. The Social Security Advisory Committee said: The deserted wife may find there were arrears on the mortgage before she came onto benefit and her lender is unwilling to allow further arrears to accummulate. For claimants like these in a period of trauma and stress the restrictions may be the straw that breaks the camel's back, tilting them so far into debt that eviction and repossession are inevitable. The National Consumer Council said: The safety net provided by mortgage interest payments to those owners faced with unemployment or relationship breakdown is crucial in avoiding repossession and homelessness during the early stages of default when financial problems may escalate to such a level that it becomes impossible to recover from them". All those points made by a wide range of organisations run completely against the Government's arguments and make nonsense of the points which the Government have been trying to drum up to support their view.

I wish to raise a point about the part of Britain that I represent. I think that my experience is not dissimilar from that of other hon. Members. In the Grampian area in Aberdeen and in the Highlands, which are heavily dependent on the oil industry's fortunes, there has been a considerable boom in the property market and escalating property prices as a result of first, the high salaries which have been paid in oil-related activities and, secondly, the influx of people associated with such activities. The dramatic slump in oil-related activities has resulted in the property market being in a state of complete collapse and, therefore, building societies repossessing in considerable numbers and tremendous financial difficulties being encountered by many people.

Although salaries for many categories have been higher than the national average, many people on average salaries have become unemployed, without the benefit of golden handshakes to tide them over the 16-week period which the regulations will affect. They are suffering genuine hardship. Several sources in my part of the country confirmed today that the number of repossessions in the Highlands—where repossession is less of a problem than in the Grampian region and Aberdeen—has increased considerably. This measure will greatly exacerbate that trend. It is not in any way sensitive to the peculiar problems of a region which is heavily dependent upon the fortunes of one industry, which, because of the slump, is suffering considerable difficulties.

Among those bodies prominent in submitting evidence to the Social Security Advisory Committee were the city of Aberdeen housing department, the Grampian welfare rights project, the Grampian regional social work department and Scottish Women's Aid. The slump in the oil industry is a large part of the reason for those submissions. I should be grateful if the Minister would announce what flexibility there is in the regulations to take account of that part of Britain.

The Government argue that the measure will increase incentives to assist people in becoming re-employed. The SSAC makes it clear that that is unlikely to happen. It has pointed out: If mortgage interest is not met for an initial period on benefit, but instead an arrangement is made to reschedule the loan at a higher amount once the period is over, an owner-occupier claimant could well have less incentive to return to work. Again, the SSAC has contradicted many of the Government's points.

I echo the general points made in the debate. The bigger the mortgage, the bigger the tax contribution and the greater the relief to those in work. That sits oddly with encouraging those at the top in order to hit hardest those at the bottom. That is why my colleagues and I agree that tax relief on mortgage interest should be restricted to the basic rate. That view is based on the very principle of equity that the Government make so much play of in these regulations. Consequently, we utterly oppose what the Government are doing. The regulations are wrong in principle and, moreover, they are even worse in practice. If the Minister and his colleagues had any sense of governmental decency or felt for the human dignity of those affected, they would withdraw them tonight.

9.45 pm

Mr. Gwilym Jones (Cardiff, North)

The regulations involve the sum total of £23 million per year, and it is legitimate to consider how that money could be used elsewhere within the social security budget. After all, great strides have been made within the DHSS, most obviously in the improvements made to the NHS.

We all recognise that there are many other facilities that could fairly lay claim to the £23 million that is available per year. It is certainly not irrelevant to remember that when considering our spending priorities. It is traditionally difficult for hon. Members to hold a rational debate on social security. However, for once the hon. Member for Oldham, West (Mr. Meacher) made a comparatively restrained speech from the Labour Front Bench although it was, in its way, the traditional over-the-top performance that we are used to from him. Indeed, I sometimes think that he does more to underline how much the Government care than any other hon. Member.

I welcome some of the features of the regulations. It is now to be 16 weeks before the cut-off, as opposed to the previous proposal of six months. There is now some recognition of the mortgage trap that the SSAC pointed to. Provision has been made for intermittent claims and a special disregard was announced for mortgage protection policies. It is right to expect and encourage people to make provision against the possibility of becoming unemployed. But we should not get carried away and regard mortgage protection policies as a total solution.

In my experience, such policies are usually not long-term, not cheap and not even easily available. If they were widely issued, they would probably represent a crude application of the actuarial science and might be little different from having old-fashioned savings as a protection against the possibility of unemployment. Perhaps I should declare an interest, as I am the director of an insurance broking company. However, to my knowledge, I do not think that we have ever sold such policies, or are likely to sell many of them.

Thus, I welcome some features of the regulations and I appreciate that it is legitimate to examine how the money now spent could be better employed. But we should also have regard for the immediate consequences for those who become unemployed after the rules have changed. Several hon. Members have stressed the findings of the SSAC. One of my constituents, Mrs. Lysaght, was until recently a member of the committee and she has told me of some of her contributions towards its conclusions. The committee's report examined the earlier proposals put before it. As has been said more than once, they would not have led to any significant financial hardship. However, I tend to feel that the conclusion was rather academic, and that the SSAC was looking at the total cost of a 50 per cent. reduction during a six-month period compared with the total cost of a mortgage over 300 months of the life of a 25-year mortgage. Instead, the cost within a six-month period, or now within a sixteen-week period is significant.

In the committee's report, the example often used is of a mortgage of £16,000. I estimate that that means now a reduction in assistance of some £16.50 a week. Is that example most relevant? It does not cover every case, for the average mortgage now being taken out is significantly higher than that. Consider instead a new mortgage of £30,000, where the loss in assistance would be more like £34.50 a week which, however we describe it, will be lost for 16 weeks and never made up.

Instead of dwelling on an academic point, it might be more appropriate to look at part of the conclusions of the SSAC. Paragraph 54 refers to the position of young families with large mortgages, borrowers with high mortgages and deserted wives are quoted as an example. That paragraph has been quoted in part before, but I shall quote more of it, for completeness. It says:

For claimants like these in a period of trauma and stress the restrictions may be the straw that breaks the camel's back, tilting them so far into debt that eviction and repossession are inevitable. Others may struggle to continue paying the full amount of interest during the first six months causing hardship to the family. The use of that word "hardship" can be compared against other quotations about "no significant financial consequences".

It is argued that these are short-term effects, but this is a continuation of the academic argument. Beyond the 16-week period, it is envisaged that the interest is rolled up and capitalised against the debt and those still claiming beyond 16 weeks will be assisted in full. Part of paragraph 53 is relevant to set against that proposal. It says: We regret that, as in other areas of supplementary benefit, the claimant who gets into debt may be entitled to extra assistance while the claimant who cuts down on other areas of expenditure to avoid going into arrears in the mortgage will gain nothing for his pain. This must be true, for in arriving at the calculation of £23 million available for reallocation, allowance has had to be made for the effect of roll-up beyond the 16-week period.

The regulations are now to provide for housing-related loans only, excluding business use, whether for separate business premises or business premises within the house. This may be simple to operate, but it may not. The new restrictions where housing costs are unreasonably high in comparison to similar suitable accommodation in the area worries me. I readily recognise that there is the opportunity to appeal against the decision on either or both of these points. I suggest that we should be concerned about the element of hardship here, particularly in an area of high unemployment. That high unemployment may have come about suddenly, resulting in an inability to sell because of the lack of purchasers. The use of the words "in comparison to" similar suitable accommodation will have to be taken into account in any determination of claims under the latter headings.

My hon. Friend the Minister has rightly had regard to equality of treatment between those in and those out of work, but that is not the only comparison that can be made. I see in the SSCA's report that supplementary benefit claimants in rented homes will continue to have their housing costs met in full. Is that fair or equal? I think not, but I am not advocating a change for rented accommodation

Above all, I am concerned about the anxiety and trauma of unemployment. In every other way, the Government are doing all that is possible to encourage and facilitate a return to employment. This change is bad psychology. It is no exaggeration to say that it places a sword of Damocles over the family home. That fact is accentuated by this being a change in the rules. If there were no provision in force, we might have to consider comparisons as to the generosity of the arrangements.

Somebody who is trying to promote a new invention and wants to set up with some colleagues who have already invested quite a substantial amount of money, visited my surgery on Saturday morning. It is an interesting product called Safetyflec. It is a marvellous product which will make an excellent contribution to motoring safety. All Government Departments should consider it for their cars. My constituent said that he and his colleagues had "put our houses on the line." I should have thought that all of us would want such an endeavour to succeed, but what a demotivating factor these proposals are.

The Government's proposal is not the right psychology and it is wrong for a variety of reasons. I wish that there was an opportunity to change minds, but if the die is cast, I am afraid that I will not be able to support my hon. Friend the Minister on this one.

9.56 pm

Mr. Dafydd Wigley (Caernarfon)

I hope that the hon. Member for Cardiff, North (Mr. Jones) will have the courage of his convictions and not just refrain from voting with the Government. I hope that he will vote against them.

It is difficult to believe that this is our last week before Christmas, because there is very little of the Christmas spirit about the regulations. For a mere £23 million, we are screwing some of the most vulnerable people in society.

The hon. Member for Mid-Worcestershire (Mr. Forth) said that it was the responsibility of individuals to take out insurance policies to protect themselves in the event of unemployment. No doubt he advances the same argument in regard to ill health and other misfortunes that can hit people. I shall enjoy using his speech in the general election campaign and telling poor people who are out of work and scraping together every penny to pay the mortgage because they are in fear of losing their home that the answer of Conservative Members is, "Tough. You should have taken out an insurance policy." There is a charitable spirit for people who are suffering! They are often the very people who followed the Government's advice and bought their own homes. I support home ownership, but we must also have policies which underpin people when they lose their income and are unable to pay the mortgage.

We have 20 per cent. unemployment in my constituency. Major capital construction schemes ended, and young people who followed the Government's advice and bought homes are now out of work. They cannot sell because their mortgage is higher than what they can get for their home. One building society out of eight in Caernarfon has 50 people who are caught in that trap.

So dire are the circumstances that, on 19 November, I wrote to the Prime Minister drawing her attention to this serious difficulty. In her reply, which I received today, she said: Building Societies are well aware of the need to maintain the prudence they have traditionally shown in their lending policies. I do not remember her telling people that when she urged them a few years ago to buy their homes. The letter continues: Recent speeches by the Governor of the Bank of England, the Chairman of the Building Societies Association, and the Economic Secretary to the Treasury have reinforced the message that over-generous lending criteria are not necessarily in the best interests of the lender or the borrower. No doubt that is right, but it is not very good saying it now to people who are out of work, own a house, have high mortgages and are unable to pay. They will be much worse off as a result of the proposed change.

A married couple with two children who have a £15,000 mortgage will lose about £12.50 a week in interest payments. That, together with a £3.50 repayment, makes a burden of some £16 a week on that family. The long-term supplementary benefit rate is £48 a week plus £10 for each child, which makes a total of £68. The burden placed on such families is £16 out of that £68. Moreover, many of them are young people who do not have resources behind them and have high mortgages.

One of the industries in my constituency where the Government urge people to work is the tourist industry. Those who work there often do so for three or four months a year. Because of the regulations that relate to seasonal workers, those people will not receive unemployment benefit, but will depend on supplementary benefit. On a cyclical basis for four months every year they will lose out on part of their supplementary benefit. In other words, this is a positive disincentive to working in the tourist industry. Let that message go home in my area and elsewhere where there are many people on low incomes and the areas depend on tourism.

We have many people who depend on Manpower Services Commission schemes. We know that when they come out after a year they will rapidly face supplementary benefit after a period on unemployment benefit. Single parents are in a most invidious position.

The regulations should be rejected by the House tonight. I hope that the Minister will have the decency to withdraw them. If not, I hope that Conservative Members will stand up for those people whom they have urged to be home owners and ensure that they are not trampled on by this measure.

10.1 pm

Mr. Peter Bruinvels (Leicester, East)

I am unhappy with these proposals, but for a different reason from that of the hon. Member for Caernarfon (Mr. Wigley). I do not consider them to be particularly fair or reasonable in view of the fact that the Conservative party and Government have always encouraged people to buy their own home. As those who bought their homes were given no warning that this might happen, and as they were not encouraged to take out a mortgage insurance protection plan, this seems unjustifiably hard and mean.

This morning I heard the Minister on "Breakfast Television" making a clear case, but many people who become unemployed do so through no fault of their own. I can speak from personal experience. I found myself redundant at two days notice when I had a brand-new house and had just entered into a mortgage arrangement. Without the help of my parents and wife who was working—no thanks to Robert Maxwell, who was my employer—I would have been in grave difficulties.

Robert Maxwell may be known for many reasons, but he certainly did not pay us as and when required. I had to sue to get my redundancy pay and there was no money coming into our household. I urge my hon. and learned Friend the Minister to remember that being unemployed is not always a self-created state. In some case it takes a long time to get the money through and while waiting for it, the last thing one wants to worry about is finding additional funds.

I appreciate that the Exchequer will pay 50 per cent. of mortgage payments, but that is to address the problem from the wrong side. My hon. Friend the Minister should consider that, as some of the funds paid in supplementary benefit have been abused, the money should be paid directly to the supplementary benefit claimant's building society. That would ensure that there would be no abuse of that money.

We must give great consideration to those who may, justifiably, feel let down. I acknowledge that the concession made from 6 months to 16 weeks is a step in the right direction. The regulations will cause trouble outside the House and several of my constituents have already expressed concern, as has my Conservative association, that something should be done to ensure that in future when people buy their houses they will not face any disincentive.

We are still trying to encourage people to buy their homes, but this will deter people from doing so. While the building societies will never repossess, I am particularly worried that people who believe in a property-owning society—those in the Conservative party and in government—will feel particularly discouraged if these regulations are passed. I urged my hon. Friend to reconsider. I regret to have to inform him that I cannot support the Government tonight.

10.4 pm

Mrs. Margaret Beckett (Derby, South)

This has been a most constructive and interesting debate. I concur with the hon. Member for Caernarfon (Mr. Wigley) in asking what it is about the festive season that brings out the worst in the Government. Perhaps they think that most people will be too busy celebrating to notice what they are doing.

According to the Government's own figures, the average cost to the families affected by the proposals will be a loss of more than £10.50 a week. Even those proposals show that either the Government miscalculated the effect and the figures that they first gave or they misinformed the Social Security Advisory Committee because the figures are higher than those upon which the committee's remarks were based.

The Government have argued that the proposals are necessary because people need an incentive to return to work. As the advisory committee stated, if it is believed—many of us do not believe this—that it is an incentive that is lacking rather than the opportunity for work, that incentive exists because only interest, not capital, payments have been met from supplementary benefits. There is no necessity to increase that so-called incentive. In fact, the way in which the regulations are likely to work suggests that there will still be an incentive to stay out of work if that work is low paid, because otherwise people affected by the regulations are likely to lose.

The reasoning and the timing of the proposals are extraordinary. They come at a time when figures for the number of people losing their homes through defaulting on mortgages doubled last year. The targeting is even more extraordinary. It is bad enough to save £23 million at the expense of the unemployed but to save it also at the expense of single parents, the sick and disabled is the action of a Government bereft of reason.

The few Conservative Members who spoke in favour of the proposals suggested that there was no problem because mortgage protection policies are available. The hon. Member for Mid-Worcestershire (Mr. Forth), whom I am glad to see in his place, raised that point, as did the hon. Member for Banbury (Mr. Baldry), who is no longer with us. Both hon. Members have their facts and figures wrong.

A survey of building societies has shown that less than 10 offer mortgage protection policies of the kind quoted by the hon. Member for Mid-Worcestershire. They are offered only with restrictions, such as no payments whatsoever for the first nine weeks of redundancy. The Minister's figures were also wrong, because he quoted premiums for a policy such as I described of £10 a year whereas the figure given by the Building Societies Association is £10 a month. That may not seem much to hon. Members but it is a substantial sum to many individuals.

Both Conservative Members to whom I have referred ought to have the wit to realise that the people who most need these policies are those least likely to be able to obtain or afford them. Perhaps the Minister could tell us what he expects the cost of the special disregard of income from these policies to be which the Government have written into the regulations. That will give us some idea how widespread the Government expect these policies to be.

There have been a number of very courageous speeches from the Tory Benches. The hon. Member for Wellingborough (Mr. Fry) quoted the fact that it is during the early stages of redundancy that financial help is most vital because that is the stage at which problems escalate to a point from which it is impossible for families to recover. That point is endorsed by the National Consumer Council.

The hon. Members for Cardiff, North (Mr. Jones) and for Leicester, East (Mr. Bruinvels) said that the Government have consistently claimed to be the friend of the home owner. That claim needs to be amended. The Government are now the friend only of the home owner with secure employment. Under this Government, that is a small and diminishing group.

The Social Security Advisory Committee has been much quoted this evening. I should like to make one last quotation from it: while we are not convinced by the arguments on equity and incentives which have been advanced in support of these proposals, we acknowledge that the Government is desirous of making savings. The only reason for the changes is the wish to save £23 million. It is impossible to call that a justification, because injustice runs through every line of the proposals.

10.9 pm

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell)

The opening words of the debate for the Opposition contained the usual gross exaggeration from the hon. Member for Oldham, West (Mr. Meacher) and were followed quite soon by the usual special pleading by the hon. Member for Fulham (Mr. Raynsford). As one would expect from the Social Democratic party there was much talk of rights and responsibilities, with a keenness for rights, but very little keenness for responsibility. All that was in marked contrast to the excellent speech of my hon. Friend the Member for Mid-Worcestershire (Mr. Forth). When one comes to serious discussions of the issues one has to look to the speeches made by my hon. Friends the Members for Cardiff, North (Mr. Jones), Wellingborough (Mr. Fry) and for Leicester, East (Mr. Bruinvels).

There are three true issues. There is the question of fairness between lender, borrower and taxpayer, the question of hardship and homelessness, so grotesquely exaggerated by the hon. Member for Oldham, West and the so-called question of the paltry £23 million, as if £23 million grows on trees. It does for the Opposition and the pseudo-Opposition who seem to spread the mortgage tax relief about 10 times over.

I shall first deal with the fairness between lender, borrower and tax payer. I commend to my hon. Friends the fact that if someone on average earnings were to go out of work for a short term—just three months, that is what this measure is about — and one compared his position with someone on three quarters of average earnings, his net earnings for the year would be exactly the same. However, the person who had been toiling on and whose taxes would be paying the benefit would be £1,000 —to be strictly accurate, £988—worse off than the person getting the benefit. It is not fair to the low income taxpayer in work.

On the question of hardship and homelessness, I simply remind Opposition Members of what has been said by the Social Security Advisory Committee. It said that in most cases there was no reason to expect any significant hardship. It said that when the figure was six months, and before we secured the mortgage interest trap point. It is now four months. When one talks of evictions it is flying in the face of what is said by the building societies. They have made it entirely clear in their recent quotable statement that they will do all they can to help and there is no reason to expect that people will lose their homes as a result of this measure. There is also no reason to expect that local authorities will behave any less responsibly.

On the matter of the "paltry" £23 million, I ask my hon. Friends to consider the good measures we are taking or proposing to take. For example we are easing the capital rule to encourage thrift and raising it by a sliding scale from £3,000 to £6,000. There is the increased help we announced in the summer for the elderly in nursing homes and residential care homes and the increased help we are giving to the severly disabled by the severe disablement premium. Those measures cost respectively £10 million, £20 million and £10 million. It is that sort of priority we are freer to deal with.

This is a fair and reasonable measure. The regulations will not cause significant hardship and will not cause eviction or homelessness. The building societies have made their position clear on that. The regulations achieve a fairer balance between lender, borrower and taxpayer and they yield worthwhile savings, helping this Government, who have increased social security benefit spending by no less than 35 per cent. in real terms — £4 billion on increased benefits, £4 billion for more payments to the elderly, long-term sick and disabled and low-income families in work — to target help where it is most needed. I commend the regulations to the House.

Question put:—

The House divided: Ayes 221, Noes 193.

Division No. 43]	[10.14 pm
AYES
Aitken, Jonathan	Brown, M. (Brigg & Cl'thpes)
Alexander, Richard	Bryan, Sir Paul
Alison, Rt Hon Michael	Budgen, Nick
Ancram, Michael	Bulmer, Esmond
Arnold, Tom	Burt, Alistair
Ashby, David	Butcher, John
Atkins, Rt Hon Sir H.	Butler, Rt Hon Sir Adam
Atkins, Robert (South Ribble)	Butterfill, John
Atkinson, David (B'm'th E)	Carlisle, John (Luton N)
Baker, Rt Hon K. (Mole Vall'y)	Carlisle, Kenneth (Lincoln)
Baker, Nicholas (Dorset N)	Carlisle, Rt Hon M. (W'ton S)
Baldry, Tony	Carttiss, Michael
Banks, Robert (Harrogate)	Cash, William
Bellingham, Henry	Chapman, Sydney
Bendall, Vivian	Chope, Christopher
Biffen, Rt Hon John	Clark, Dr Michael (Rochford)
Blackburn, John	Clark, Sir W. (Croydon S)
Blaker, Rt Hon Sir Peter	Clarke, Rt Hon K. (Rushcliffe)
Bonsor, Sir Nicholas	Colvin, Michael
Boscawen, Hon Robert	Conway, Derek
Bottomley, Peter	Coombs, Simon
Bowden, Gerald (Dulwich)	Cope, John
Boyson, Dr Rhodes	Corrie, John
Brandon-Bravo, Martin	Couchman, James
Bright, Graham	Crouch, David
Brinton, Tim	Currie, Mrs Edwina
Brittan, Rt Hon Leon	Dickens, Geoffrey

Douglas-Hamilton, Lord J.	Lloyd, Peter (Fareham)
Dunn, Robert	Lord, Michael
Durant, Tony	Luce, Rt Hon Richard
Edwards, Rt Hon N. (P'broke)	Lyell, Nicholas
Eggar, Tim	McCurley, Mrs Anna
Evennett, David	Macfarlane, Neil
Eyre, Sir Reginald	MacGregor, Rt Hon John
Farr, Sir John	MacKay, Andrew (Berkshire)
Favell, Anthony	MacKay, John (Argyll & Bute)
Fenner, Dame Peggy	McLoughlin, Patrick
Fletcher, Alexander	McNair-Wilson, M. (N'bury)
Fookes, Miss Janet	McQuarrie, Albert
Forman, Nigel	Major, John
Forsyth, Michael (Stirling)	Malins, Humfrey
Forth, Eric	Malone, Gerald
Fowler, Rt Hon Norman	Maples, John
Fox, Sir Marcus	Marland, Paul
Fraser, Peter (Angus East)	Marlow, Antony
Freeman, Roger	Marshall, Michael (Arundel)
Gale, Roger	Mates, Michael
Gardiner, George (Reigate)	Mather, Carol
Gardner, Sir Edward (Fylde)	Mawhinney, Dr Brian
Glyn, Dr Alan	Maxwell-Hyslop, Robin
Goodhart, Sir Philip	Mayhew, Sir Patrick
Goodlad, Alastair	Mellor, David
Gow, Ian	Merchant, Piers
Greenway, Harry	Meyer, Sir Anthony
Griffiths, Peter (Portsm'th N)	Miller, Hal (B'grove)
Ground, Patrick	Mills, Iain (Meriden)
Gummer, Rt Hon John S	Mitchell, David (Hants NW)
Hamilton, Neil (Tatton)	Moate, Roger
Hampson, Dr Keith	Monro, Sir Hector
Hanley, Jeremy	Morris, M. (N'hampton S)
Hannam, John	Morrison, Hon C. (Devizes)
Hargreaves, Kenneth	Morrison, Hon P. (Chester)
Harris, David	Moynihan, Hon C.
Haselhurst, Alan	Neale, Gerrard
Havers, Rt Hon Sir Michael	Nelson, Anthony
Hawkins, C. (High Peak)	Neubert, Michael
Hawkins, Sir Paul (N'folk SW)	Newton, Tony
Hayhoe, Rt Hon Barney	Norris, Steven
Hayward, Robert	Onslow, Cranley
Heathcoat-Amory, David	Oppenheim, Phillip
Henderson, Barry	Ottaway, Richard
Hickmet, Richard	Page, Richard (Herts SW)
Higgins, Rt Hon Terence L.	Patten, J. (Oxf W & Abgdn)
Hind, Kenneth	Pawsey, James
Hogg, Hon Douglas (Gr'th'm)	Peacock, Mrs Elizabeth
Hordern, Sir Peter	Percival, Rt Hon Sir Ian
Howard, Michael	Pollock, Alexander
Howarth, Alan (Stratf'd-on-A)	Portillo, Michael
Howarth, Gerald (Cannock)	Powell, William (Corby)
Howe, Rt Hon Sir Geoffrey	Price, Sir David
Howell, Rt Hon D. (G'ldford)	Proctor, K. Harvey
Howell, Ralph (Norfolk, N)	Rathbone, Tim
Hubbard-Miles, Peter	Rees, Rt Hon Peter (Dover)
Hunt, David (Wirral W)	Rhodes James, Robert
Hunter, Andrew	Rhys Williams, Sir Brandon
Hurd, Rt Hon Douglas	Ridley, Rt Hon Nicholas
Irving, Charles	Ridsdale, Sir Julian
Jackson, Robert	Roe, Mrs Marion
Jenkin, Rt Hon Patrick	Sainsbury, Hon Timothy
Johnson Smith, Sir Geoffrey	Scott, Nicholas
Jones, Robert (Herts W)	Shaw, Giles (Pudsey)
Joseph, Rt Hon Sir Keith	Shepherd, Richard (Aldridge)
Kellett-Bowman, Mrs Elaine	Shersby, Michael
Key, Robert	Skeet, Sir Trevor
Knight, Greg (Derby N)	Smith, Tim (Beaconsfield)
Knight, Dame Jill (Edgbaston)	Speed, Keith
Knowles, Michael	Speller, Tony
Lamont, Rt Hon Norman	Stewart, Allan (Eastwood)
Latham, Michael	Stewart, Andrew (Sherwood)
Lawler, Geoffrey	Thomas, Rt Hon Peter
Lawrence, Ivan	Thompson, Donald (Calder V)
Lee, John (Pendle)	Thompson, Patrick (N'ich N)
Leigh, Edward (Gainsbor'gh)	Thornton, Malcolm
Lennox-Boyd, Hon Mark	Tracey, Richard
Lewis, Sir Kenneth (Stamf'd)	Twinn, Dr Ian
Lilley, Peter	Wakeham, Rt Hon John
Lloyd, Sir Ian (Havant)	Waller, Gary

Warren, Kenneth	Young, Sir George (Acton)
Wells, Bowen (Hertford)
Wells, Sir John (Maidstone)	Tellers for the Ayes:
Wheeler, John	Mr. Francis Maude and
Whitney, Raymond	Mr. David Lightbown.
Wood, Timothy

NOES
Abse, Leo	Foot, Rt Hon Michael
Adams, Allen (Paisley N)	Forrester, John
Alton, David	Foster, Derek
Anderson, Donald	Foulkes, George
Archer, Rt Hon Peter	Fraser, J. (Norwood)
Ashton, Joe	Freeson, Rt Hon Reginald
Atkinson, N. (Tottenham)	Freud, Clement
Banks, Tony (Newham NW)	Fry, Peter
Barron, Kevin	Garrett, W. E.
Beckett, Mrs Margaret	George, Bruce
Beith, A. J.	Godman, Dr Norman
Bell, Stuart	Golding, Mrs Llin
Benn, Rt Hon Tony	Gould, Bryan
Bennett, A. (Dent'n & Red'sh)	Hamilton, James (M'well N)
Bermingham, Gerald	Hamilton, W. W. (Fife Central)
Bidwell, Sydney	Hancock, Michael
Blair, Anthony	Hardy, Peter
Boothroyd, Miss Betty	Harrison, Rt Hon Walter
Boyes, Roland	Hart, Rt Hon Dame Judith
Bray, Dr Jeremy	Heffer, Eric S.
Brown, Gordon (D'f'mline E)	Hogg, N. (C'nauld & Kilsyth)
Brown, Hugh D. (Provan)	Holland, Stuart (Vauxhall)
Brown, N. (N'c'tle-u-Tyne E)	Home Robertson, John
Brown, R. (N'c'tle-u-Tyne N)	Howells, Geraint
Brown, Ron (E'burgh, Leith)	Hoyle, Douglas
Bruce, Malcolm	Hughes, Robert (Aberdeen N)
Buchan, Norman	Hughes, Roy (Newport East)
Caborn, Richard	Hughes, Sean (Knowsley S)
Callaghan, Jim (Heyw'd & M)	Janner, Hon Greville
Campbell, Ian	John, Brynmor
Campbell-Savours, Dale	Jones, Barry (Alyn & Deeside)
Carlile, Alexander (Montg'y)	Kaufman, Rt Hon Gerald
Carter-Jones, Lewis	Kennedy, Charles
Clark, Dr David (S Shields)	Kirkwood, Archy
Clarke, Thomas	Lambie, David
Clay, Robert	Lamond, James
Clelland, David Gordon	Leadbitter, Ted
Clwyd, Mrs Ann	Leighton, Ronald
Cocks, Rt Hon M. (Bristol S)	Lewis, Ron (Carlisle)
Cohen, Harry	Lewis, Terence (Worsley)
Coleman, Donald	Litherland, Robert
Conlan, Bernard	Lloyd, Tony (Stretford)
Cook, Frank (Stockton North)	Lofthouse, Geoffrey
Cook, Robin F. (Livingston)	Loyden, Edward
Corbett, Robin	McCartney, Hugh
Corbyn, Jeremy	McDonald, Dr Oonagh
Craigen, J. M.	McGuire, Michael
Crowther, Stan	McKelvey, William
Cunliffe, Lawrence	MacKenzie, Rt Hon Gregor
Dalyell, Tam	Maclennan, Robert
Davies, Rt Hon Denzil (L'lli)	McNamara, Kevin
Davies, Ronald (Caerphilly)	McTaggart, Robert
Davis, Terry (B'ham, H'ge H'l)	Madden, Max
Deakins, Eric	Mallon, Seamus
Dixon, Donald	Marek, Dr John
Dobson, Frank	Martin, Michael
Dormand, Jack	Mason, Rt Hon Roy
Douglas, Dick	Maxton, John
Dover, Den	Maynard, Miss Joan
Dubs, Alfred	Meacher, Michael
Duffy, A. E. P.	Meadowcroft, Michael
Dunwoody, Hon Mrs G.	Michie, William
Eadie, Alex	Morris, Rt Hon A. (W'shawe)
Eastham, Ken	Morris, Rt Hon J. (Aberavon)
Edwards, Bob (W'h'mpt'n SE)	Nellist, David
Evans, John (St. Helens N)	Oakes, Rt Hon Gordon
Fatchett, Derek	O'Brien, William
Faulds, Andrew	O'Neill, Martin
Field, Frank (Birkenhead)	Orme, Rt Hon Stanley
Fields, T. (L'pool Broad Gn)	Owen, Rt Hon Dr David
Fisher, Mark	Park, George
Flannery, Martin	Parry, Robert

Patchett, Terry	Ross, Stephen (Isle of Wight)
Pavitt, Laurie	Rowlands, Ted
Pendry, Tom	Sedgemore, Brian
Penhaligon, David	Sheerman, Barry
Pike, Peter	Sheldon, Rt Hon R.
Powell, Raymond (Ogmore)	Shields, Mrs Elizabeth
Prescott, John	Shore, Rt Hon Peter
Radice, Giles	Short, Ms Clare (Ladywood)
Randall, Stuart	Short, Mrs R.(W'hampt'n NE)
Raynsford, Nick	Skinner, Dennis
Rees, Rt Hon M. (Leeds S)	Smith, Rt Hon J. (M'ds E)
Richardson, Ms Jo	Snape, Peter
Roberts, Allan (Bootle)	Soley, Clive
Roberts, Ernest (Hackney N)	Spearing, Nigel
Robertson, George	Stott, Roger
Robinson, G. (Coventry NW)	Straw, Jack
Rogers, Allan	Thomas, Dafydd (Merioneth)
Rooker, J. W.	Thomas, Dr R. (Carmarthen)
Ross, Ernest (Dundee W)	Thompson, J. (Wansbeck)

Thorne, Stan (Preston)	Woodall, Alec
Wallace, James	Wrigglesworth, Ian
Wareing, Robert	Young, David (Bolton SE)
Welsh, Michael
White, James	Tellers for the Noes:
Wigley, Dafydd	Mr. Allen McKay and
Wilson, Gordon	Mr. Chris Smith.
Winnick, David

Question accordingly agreed to.

Resolved, That the draft Supplementary Benefit (Housing Requirements and Resources) Amendment Regulations 1986, which were laid before this House on 10th December, be approved.

Mr. Speaker

I understand that it is not desired to proceed with the prayer.