§ The Minister for Social Security and the Disabled (Mr. John Major)
I beg to moveThat the draft Supplementary Benefit (Resources) Amendment Regulations 1987, which were laid before this House on 16th March, be approved.
§ Mr. Speaker
With this it will be convenient to take the following motions:That an humble Address be presented to Her Majesty, praying that the Child Benefit (General) Amendment Regulations 1987 (S.I. 1987, No. 357), dated 5th March 1987, a copy of which was laid before this House on 16th March, be annulled.That an humble Address be presented to Her Majesty, praying that the Social Security Benefit (Dependency) Amendment Regulations 1987 (S.I. 1987, No. 355), dated 5th March 1987, a copy of which was laid before this House on 16th March, be annulled.That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Conditions of Entitlement) Amendment Regulations 1987 (S.I. 1987, No. 358), dated 5th March 1987, a copy of which was laid before this House on 16th March, be annulled.That the draft Social Security (Class 1 Contributions—Contracted-out Percentages) Order 1987, which was laid before this House on 30th March, be approved.That the draft State Scheme Premiums (Actuarial Tables) Regulations 1987, which were laid before this House on 30th March, he approved.That the draft State Scheme Premiums (Actuarial Tables— Transitional Provisions) Regulations 1987, which were laid before this House on 30th March, he approved.That the draft Supplementary Benefit (Requirements and Resources) Amendment and Uprating Regulations 1987, which were laid before this House on 16th March, be approved.That an humble Address be presented to Her Majesty, praying that the Social Security (Unemployment, Sickness and Invalidity Benefit) Amendment Regulations 1987 (S.I. 1987, No. 317), dated 3rd March 1987, a copy of which was laid before this House on 3rd March, he annulled.That an humble Address be presented to Her Majesty, praying that the Social Fund Maternity and Funeral Expenses (General) Regulations 1987 (S.I. 1987, No. 481), dated 19th March 1987, a copy of which was laid before this House on 19th March, be annulled.
§ Mr. Major
Even the most casual observer of the Order Paper will note that we are this afternoon debating a wide range of social security matters. Some are technical; others will generally be regarded as benevolent and some may conceivably be regarded as mildly contentious. A number are familiar old friends. I will deal with them as briefly as possible— confident that my hon. and learned Friend the Under-Secretary of State will pick up any outstanding matters with his usual skill.
It might be helpful at the outset if I refer to the three statutory instruments which deal with the terms of contracting out of the state earnings-related pension scheme. My right hon. Friend the Secretary of State has a statutory duty to review those terms at least every five years. His report and that of the Government Actuary were laid with the statutory instruments, and they reveal how technically complex this subject is. Widespread consultation took place on those terms in 1986 following the preparation of memoranda by the Government Actuary. His formal report took into account comments that were received.
Since 1978 schemes have been able to contract-out if they guarantee to provide a pension which is broadly 1251 equivalent to the state additional pension. In return a reduction, which is known in common parlance as the rebate, is made to the national insurance contributions for contracted-out employments. Since 1978 the rebate has included a contingency margin. The purpose of that is to allow for uncertainty caused by accrued right to benefit being related to future earnings trends and future returns from investments. Safeguards also exist when schemes have to buy back into the state scheme. The assurance given to schemes has meant that 90 per cent. of the 11 million members of occupational pension schemes have been contracted out.
It is the Government's intention to increase the spread of occupational and personal pensions coverage, and the 1986 Act will provide an impetus for that. We expect most people to retire in the future with a pension of their own, and to help them do so we have introduced contracted-out personal pensions and money purchase occupational schemes. The minimum amount to be paid to such schemes is equal to the amount of the rebate that will apply to salary related schemes.
The Government Actuary reports that the cost of providing guaranteed minimum pensions has been decreasing as the average rate of accrual of guaranteed minimum pensions declines. That is because those who were in the scheme from 1978 enjoyed a faster rate of accrual than those joining later. The cost is calculated currently at 6.25 per cent and from 1988 to 1993 it will be 5.4 per cent. of reckonable earnings. These figures include a contingency margin of 7.5 per cent. My right hon. Friend has decided that from 1988 and 1993 the rebate should be 5.8 per cent. That will include a small additional margin to provide a further safeguard against any additional costs arising from the implementation of the 1986 Act.
We wish to see existing contracted-out schemes continue to flourish alongside new personal pension and money purchase schemes. The amount of the rebate will, in our judgment, assist in that aim. The additional margin will apply from 1988–93 only. The 5.8 per cent. rebate will be shared so that employers receive 3.8 per cent. and employees 2 per cent. That reflects the current apportionment between employers and employees.
In some circumstances contracted-out schemes may transfer their liabilities for guaranteed minimum pensions to the state scheme. This buying-back is achieved by paying premiums. Actuarial tables represent the average cost of providing guaranteed minimum pensions. That cost is adjusted— to allow for investment yields at the time of the buy-back— by a device called the market level indicator. That is to prevent schemes being in difficulty in paying the premiums if there is a fall in the market level of their investments. The new market level indicators will provide for this, but will reduce the scope of profits to be made from ceasing to contract-out.
New personal pensions will be introduced in January 1988, so we must provide for premiums in the event of schemes ceasing to be approved as appropriate by the Occupational Pensions Board before April 1988. Although this is extremely unlikely the necessary legislative cover against that contingency has been provided by the transitional regulations.
From what I have said, hon. Members will see not only how complex this subject is but how these three statutory instruments fit in to the Government's broader pension strategy.
1252 With a small measure of relief, which may be shared by hon. Members, I shall move from the intricate world of pensions to regulation No. 1 and related regulations on the Order Paper. Those regulations, together with those which are for negative resolutions, put into effect a number of changes which mainly affect benefits for children and young people and for people in residential care homes. The changes are, without exception, are consistent with established policy. We believe that children, properly supported within the family, should be encouraged to complete their education and not to slip early into the "benefit culture". We accept our duty to help the young who are deprived of family support and the sick and elderly who need to be cared for in a home. We wish to ensure that children with no parents to care for them should, wherever possible, be absorbed into normal family life. Those aims are reflected clearly in the regulations now before the House.
As the House will know, as a result of a commissioners' decision in 1985, some Easter school leavers with school examinations still to take were able to obtain supplementary benefit as unemployed. We take the view that that is wrong and that those young people should be regarded as remaining in full-time education until they have completed their examinations. The regulations before the House will restore this traditional intention, so that these young people will become entitled to benefit at the same time as summer school leavers. Child benefit, and dependency additions to other benefits, will, in these circumstances, remain payable to the parents. We are also ensuring that children who leave school before they are legally entitled so to do will not, as a result, be able to obtain benefit earlier than they would otherwise have done.
§ Mr. Archie Kirkwood (Roxburgh and Berwickshire)
It would be helpful to the House if, in the course of discussing each of the statutory instrument changes that the Government are bringing forward in these regulations, the Minister will give us some estimates of the savings. I do not want to put that pejoratively, I could call them cuts—[Interruption.]— the hon. Member for Birkenhead (Mr. Field) does so. It would be helpful if the Minister could give even a ball park figure of the amount of money about which we are talking in the course of the changes that the Government are making.
§ Mr. Major
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) proceeds on an assumption— the reason for which I cannot imagine— that each matter that I have mentioned is necessarily related to savings. A good many of them may not be related to savings, and as we proceed the hon. Gentleman may see that that is clear.
The regulations that we are discussing re-establish another policy intention following a commissioners' decision which held that entitlement to child benefit remains even though it is not payable. Consequently, child dependency additions and guardians' allowance, which depend on entitlement to child benefit, can continue to be payable when child benefit stops. The hon. Member for Roxburgh and Berwickshire may have noted that point; I see clearly that he did not. The need for child dependency additions, as well as the need for child benefit, is removed when a young person works.
Finally, among the changes affecting young people in education, we are expanding the categories of youngsters 1253 —the hon. Member for Roxburgh and Berwickshire may care to note this— who can receive supplementary benefit even though they are continuing in full-time non-advanced education. [Interruption.] I cannot give the hon. Member for Roxburgh and Berwickshire the increased cost for that, because it is not in front of me.
§ Mr. Kirkwood
I am perfectly prepared to be even-handed about this. If it is costing the Government money I am happy to discuss that as well, but may we have both sets of figures because I think that that is important?
§ Mr. Major
The hon. Member for Roxburgh and Berwickshire will know, if he heard what I said at the outset of my remarks, that a large number of these matter; are familiar old friends and we have discussed the additional costings and savings on a number of occasions. [Interruption.] The hon. Member for Birkenhead (Mr. Field) has lately appeared in the Chamber from I know not where—
§ Mr. Major
—with a will o' the wisp air and that mischievous expression that we have come to know and enjoy so much in social security debates during recent months.
We propose to include among those who may receive supplementary benefit, even though they are continuing in full-time non-advanced education, young people who do not live with their parents, and who cannot be supported by them because their parents are sick, disabled, in prison or unable to enter the country.
There are some further benevolent changes affecting children without parental care. The main change is to introduce special provision for the treatment, for supplementary benefit purposes, of local authority custodianship allowances. The intention is to ensure that no family will have its supplementary benefit entitlement unduly reduced. Hon. Members may be aware that courts can award the custody of a child to a caring family where there is still contact with the natural parent, so adoption is not appropriate. Local authorities can pay custodianship allowances to such families and may do so particularly where the child was previously boarded-out with the family. A child taken into custodianship—like an adopted child— is part of the family and so supplementary benefit will be payable. An allowance from the local authority will be treated in the same way as an adoption allowance. The amount of the allowance which is over and above the child's supplementary benefit requirements will be disregarded..
The other amendment corrects an unforeseen interaction between two sets of regulations which permitted child benefit to be paid when a child maintained by the local authority is placed with a family for adoption. That has never been the intention and the amendment restores the former position. Any families already receiving child benefit in those unusual circumstances will of course, have their entitlement protected.
We are also making other minor and technical changes on which, in the interest of brevity, I shall not eleborate.
Two further provisions, which, on reflection, I shall mention, affect people in education and training. The 1254 supplementary [...] fit regulations currently provide for all students to be treated as having a grant. Students who are in fact not entitled to an award may have a parental covenant treated as the equivalent of a grant. In a small number of cases, usually where a non-grant-aided student is being supported by a working partner who becomes unemployed, those rules have the unintended result of reducing the couple's joint benefit entitlement. We have no wish to penalise claimants in those circumstances, so the draft regulations provide instead that the students should be assumed to receive only the assessed parental contribution to an actual award. In considering a covenant made to a non grant-aided student, we shall treat it as if it were a award—an amount—equal to the appropriate standard rate of grant.
I come now to the changes that we propose in board and lodging and the regulations which deal with supplementary benefit paid to people in residential care homes and nursing homes. There has been some criticism that the limits are too low and that people without means can no longer obtain places in homes. That is not a general criticism that I am inclined to accept.
New figures have just become available which show quite clearly that that is not the case. The provisional results of the quarterly statistical inquiry, reveal that in February 1986 there were 90,000 people in residential care and nursing homes being helped by supplementary benefit; that is twice the 1984 figure. That hardly supports the contention of many of our critics.
One concern shared by all hon. Members is whether the availability of supplementary benefit to help with fees for homes has led to people going into residential care when that may not be the most appropriate form of care for them. I understand that concern. Preliminary results of a survey by the social policy research unit of York university, which has a high reputation, clearly reveal that 93 per cent. of supplementary benefit claimants in residential care homes were assessed as needing such care. That matter will be of some interest to several hon. Members, and my hon. and learned Friend the Under-Secretary will seek to elaborate upon that survey later if he is fortunate enough to catch your eye, Mr. Deputy Speaker.
§ Dr. Alan Glyn (Windsor and Maidenhead)
Is my hon. Friend aware that in counties such as Berkshire the cost of residential accommodation is extremely high because of the capital values of property?
§ Mr. Major
My hon. Friend points up a problem that we know exists in various parts of Britain. There is a distinct difficulty from time to time when someone seeks to establish a home in an area where property has a high capital cost and I entirely understand the difficulty to which that gives rise. My hon. Friend may know that we are reviewing various aspects of residential care policy, and I shall bear in mind my hon. Friend's observations on that point.
In the regulations before us today we are providing extra help for people in four specific areas. First, the limit will rise in residential care homes for elderly people—by far the majority of homes—by £5 to £130 a week. Secondly, the special limit of £140 for very dependent or blind elderly people will be increased by £5 to £145.
Both the evidence of the review and other evidence convinced us that the limit for younger physically 1255 handicapped people should he raised. It will rise by £ 10 to £190 a week. Extra help will also be given to people in nursing homes. The basic limit, which applies to most, but not all elderly people, will be increased by £5 to £175 a week.
There are some other changes affecting people in homes. We have always assumed that charges should cover the full range of personal services and amenities. Indeed, that has been a general assumption. However, it seems that the current regulations permit additional weekly amounts to be claimed for items such as heating and laundry, which should, in our view, be provided and charged for by homes as part of their normal service. It was our understanding that they were being so treated. Therefore, the regulations restore our intention that such expenses should not qualify for additional payments. However, those separate charges can be included as part of the home's charge and met in full as long as the total charge falls within the appropriate limit for the area of home and care provided. Claimants already receiving the additional amounts will have their total entitlement protected at the point of change.
Let me deal now with some miscellaneous changes within the regulations. First, the draft regulations ensure that a person can be treated as available for work if he is already working fewer than 30 hours a week but is available to take additional work to bring himself up to the full required number of hours. Secondly, we are providing that statutory maternity pay, when it is introduced on 6 April, will he treated as an income that is taken fully into account for supplementary benefit purposes.
Thirdly, we are making certain that extra-statutory payments, which are made from time to time by the Secretary of State for Social Services to compensate for defects in regulations until the law can be changed to achieve the policy intention, will be treated for supplementary benefit purposes in exactly the same way as the benefit that they replace.
Finally, we are correcting an error in regulations which means that at present the whole of the income from a mortgage protection insurance policy for mortgage interest payments is disregarded during the first 16 weeks of a claim. We always intended that only 50 per cent. should be disregarded, because only 50 per cent. of the mortgage interest payment is included in the supplementary benefit assessment. This unusual lapse in our regulations was spotted by the eagle eye of the hon. Member for Derby, South (Mrs. Beckett) and, fortunately, also by our lawyers, for I would not wish her to bear the sole blame for having uncovered that mistake.
In addition to all the changes I have described, there are a number of small clarificatory and technical amendments that are not contentious, of which I shall spare the House a detailed description.
Let me deal now with the Social Fund Maternity and Funeral Expenses (General) Regulations— item No. 10 on the Order Paper. The regulations give power to prescribe the amounts which can be paid to people with low incomes for maternity expenses, and the circumstances in which both maternity and funeral expenses payments may be made. The House will be familiar with them and they probably require no further explanation from me at this stage. Indeed, I suspect that many people may consider that we have debated those at substantial length over the past few weeks, as indeed we have on earlier occasions.
1256 The final regulations that we are debating this afternoon relate to the entitlement to unemployment benefit of people working on the community programme. I set out the rationale for those fully in my statement to the House on 3 March and I see no particular need to reiterate those points today. However, if the hon. Member for Birkenhead wishes to raise any matter relating to it, I shall either be happy to deal with it now, or my hon. and learned Friend the Under-Secretary will seek to do so when he replies.
This is an omnibus collection of orders with a miscellaneous content. I commend the affirmative regulations to the House and invite my hon. Friends to reject the Opposition's prayers if they are pressed to a Division. We would be well advised to accept the regulations, and I hope that it will be generally recognised that they will be better on than off the statute book.
§ Mrs. Margaret Beckett (Derby, South)
I shall attempt to follow the pattern established by the Minister and deal first with the pensions regulations.
I agree with the Minister that the background documents are long, and I suspect that most hon. Members would find them rather tedious—although I, of course, found them fascinating. A couple of general points arise in connection with the background to the pension provisions, which the regulations highlight.
The Minister knows—and. I hope the House knows, too— that Labour Members are extremely unhappy about the Government's decision to lower the standards of provision both in occupational pension schemes and in the state earnings-related scheme. We particularly deplore the Government's intention to encourage people to take out so-called personal pensions because, in doing so, they will be encouraging people to put the whole, or a very large part, of their pension provision at risk, with no underpinning or guarantee.
I note that the background document confirms our view. First, it states that it will be assumed that, in return for contributions paid into a personal scheme, people will receive some sort of guaranteed minimum pension and that that assumed sum will be deducted from their entitlement, whether or not the investment made actually provides such a sum.
Secondly, the document states that, in some circumstances, premiums— in particular a protected rights premium for personal pensions—can be paid back into the state scheme to give protection to benefits. The document suggests that even if the sum is more than enough to secure the minimum rights in the state scheme the balance will not be refundable, and, furthermore, that no extra entitlement will be offered in consideration of the extra moneys paid in. That strikes me as an example of the "Heads I win, tails you lose" approach, which is fairly typical of the Government's approach on many social security matters.
The resources regulations have been described as "tidying up" regulations, although it seems to us that the tidying up may result in more restrictive legislation. I listened to the Minister's remarks about the effects on students of the changed parental contributions, but I should like him to answer three points. First, on Manpower Services Commission allowances, I reiterate the remarks of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that it would be helpful to 1257 know the number of people involved and the financial consequences, in this case I think that savings would result.
Secondly, with regard to students, it appears to us that the change in the treatment of covenants may be more restrictive than the existing regulations, as only a small group of cohabiting students seem to be affected, whereas at present any student who is married or cohabiting is affected.
I am more concerned about a third matter. We are not sure whether the regulation that extends the deeming provision to the summer vacation is defective. I note that the definition of a student includes someone who was a student immediately before the first day of his normal summer vacation. Under the provision as drafted, there is thus no termination date; someone could technically remain a student for 50 or 60 years. I am sure that that is not what the Government intend, and I hope that the regulation will not have that effect. I shall be interested to hear the Minister's observations on that.
How many people will be affected by the dependency regulations and, in particular, by the extension of the possible reduction of dependency additions to invalid care allowances? Will the Minister give us an estimate of the number of people likely to be affected and of what the savings will be?
I shall consider the child benefit regulations and the conditions of entitlement regulations together. I shall press the Under-Secretary of State on the Minister's remarks about people being available for a 30-hour week. Perhaps he will cast some light on the reason why it is necessary to make the change.
Our main worry about the regulations is that they will interact to debar some school leavers from claiming benefit. The Minister will not be surprised to learn that we do not think the Government have behaved well in this matter. At present, school leavers have the right to draw benefit.
I understand that the Government took a test case to a tribunal of commissioners who most unkindly let them down by ruling that each case should be dealt with on its merits. One can imagine the wave of horror that must have crossed the Department at that terrible suggestion. The Government then had to fall back on the ignorance of potential claimants about their rights and about the benefits available— an ignorance which they hoped would be long-lasting. Now, thanks to Youth Aid and my hon. Friend the Member for Birkenhead (Mr. Field), much has been done to overcome that ignorance, and the Government have been forced to change the regulations and claw back the £2 million that the provision cost them last year. I am not so much concerned with the £2 million that the Government may have lost as with the fact that school leavers could lose £350 as a result of the changes.
The Minister' referred— I hope ironically— to the Government's wish not to allow school leavers to become part of an unemployment culture. Sadly, well over 1 million young people are now unemployed—a fact that has done far more to put that idea into the heads of people on the verge of leaving school than could possibly be done by changing the benefits regulations. Like the Social Security Advisory Committee, the Government's own committee, we believe that there is a danger that, as a 1258 result of the changes, young people will choose to leave school before they take their examinations, and that that could disadvantage them even more.
We are worried, not only about the principle of the regulations, but about their practicability. For example, the cut-off point in the child benefit regulations is the time at which a pupil is entered on the list for a public examination. I do not know whether the Department consulted the Department of Education and Science before coming up with that bright idea. It did not consult the examinations boards, which are independent of the Department of Education and Science. As any ex-Minister from the Department knows, they go their own sweet way.
It appears that the proposal hit on by the Department of Health and Social Security is impracticable. Almost invariably, it is the head teacher, or another senior teacher in a school, who decides whether to enter pupils for examinations—frequently without consultation. They do so if they think that a pupil has a chance of passing those examinations. However, if—as is presumably intended by the regulations—a pupil discovers that he has been entered for the examinations and wants to withdraw because he will lose £350 if he does not, he may not be able to do so. He would almost certainly not be able to do so this year because we are so near to the examinations season.
Arrangements differ from one board to another. Some boards allow a student to withdraw up to a certain date, some allow students to withdraw up to a certain date but keep the fees, and some do not allow withdrawal after a final date. In other words, a pupil may be deprived of benefit through a decision of which he is completely unaware and which he is not in a position to alter, especially when a school may lose its fees. In such circumstances, I can well imagine a head teacher insisting that a pupil's name remains on the list of entrants..
§ Mr. Major
The matter has been around for a considerable time. Our original proposals were announced as long ago as 17 October last year. I have before me a list of responses to the draft proposals, including one from the Secondary Heads Association. It can hardly be said, therefore, that the educational establishment was unaware of the proposals.
§ Mrs. Beckett
I take the point, but I am not so much concerned about the Secondary Heads Association, or with head teachers generally. They may, indeed, have known the effect of the proposals. However, I wonder how many pupils the Minister thinks were apprised of the implications for their benefit entitlement— if, that is, they were consulted at all about their names being entered. I imagine that the answer is "Few, if any." The Government are setting an unusual— I hope unique— and dangerous precedent if they deny benefit on the ground of action not taken by the people involved, and possibly outwith their control.
§ Mr. Andrew F. Bennett (Denton and Reddish)
Because of the dates involved, the regulations are particularly unfair on pupils who have taken a practical examination as part of the syllabus, but still have every intention of leaving at Easter. If they have taken part of a practical examination, under the board's regulations they cannot withdraw from the examination, so they are caught. As my hon. Friend has pointed out, very few pupils are aware that when they enter such courses they might lose benefit.
§ Mrs. Beckett
I am sure that my hon. Friend is right. It is all the more unfortunate that the Government did not take the advice of the SSAC and, if they had to set a terminal date, set it after the examinations, rather than at the end of the Easter term.
§ Mrs. Beckett
Indeed. It is undesirable in itself, but it is even more so when it is a result of someone else's decision, which the claimant cannot alter.
Let me now turn to the requirements and resources regulations. We are pleased that the Government have seen fit to increase some of the limits for board and lodging, but we strongly deplore their refusal to re-examine all the limits for ordinary board and lodging payments and other allowances, such as meals allowances. The limits on benefits payable for ordinary board and lodging have not been changed since April 1985. Before that, they were frozen, although the courts recently ruled that that was illegal. Meals allowances, for example, have been frozen since 1984, although there have been substantial increases in costs since that date. It is particularly deplorable that the Minister has chosen not to increase those limits. Young people, often homeless, will be the hardest hit.
Even where the limits have been increased, there is still cause for concern. The increases that have been made up to now do not necessarily make up for the Government's earlier decision to include tenants' allowances within the sums to be paid, instead of paying such allowances in addition to the board and lodging allowances.
We are also concerned about the decision to abolish the additional requirements claim for special diets, baths and a range of other costs applying to those in residential nursing homes. The Minister said that such claims could still be made, but they must be within the maximum limits. As the Minister knows perfectly well, there is a widespread view that the maximum limits are insufficient, even before additional costs are added. That strikes me as casuistry, to say the least.
I had occasion today to look at the press release announcing the increased allowances for those in residential homes. Although the press release was self-congratulatory about the wonderful job that the Government were doing, I saw no mention of their proposal to abolish the additional requirements allowances. I should like to hear from the Under-Secretary of State how many people are affected, and how much will be saved at the expense of people who must be among the poorest and most disadvantaged in the community, or they would not he claimants in the first place.
I should also like to hear from the Under-Secretary of State about the reduction in transitional protection included in the regulations. I do not recall hearing the Minister mention that, although one of my hon. Friends may have been addressing me at the time. When the regulations were introduced, the Minister and the Secretary of State made much of the fact that those already in receipt of payments would be protected; that they would continue to receive the same allowance and would not suffer. It now appears, however, that the Government are seeking to reduce that protection. It seems, from the items that the Government have included, that all claimants now receiving transitional protection may be affected. The sums now paid may be frozen at the present level.
1260 The Minister mentioned that the regulations contain a correcting provision to bring what the law says into line with the Department's advice to its officers on the treatment of mortgage insurance. We note with regret that that will put claimants in an even worse position. It makes even more irrelevant the weasel words uttered in the Chamber when we debated the principle of taking the responsibility for mortgage interest payments off the unemployed for the first 16 weeks of payment, and the protection that would nevertheless be available to them through mortgage insurance policies. Opposition Members pointed out—and the matter was even touched on, most unusually. by Conservative Members—that mortgage insurance policies were not all that marvellous, that they frequently did not offer any money for the initial period of unemployment, when the Government were cutting their support, and that in any case such assistance was least likely to be available to those most in need of it.
However, those words—and the criticisms made in the Consumers Association magazine Which? this week about the value of mortgage protection policies—pale into insignificance when we learn that the Government propose to penalise even those who have had the opportunity to take out such policies. It is particularly unfortunate that the Government should take such a step when we realise that 70 per cent. of those who will lose part of their allowances against mortgage interest are likely to be sick or elderly. The Government try to justify their action by talking about the work incentive, but those people will not be affected in the slightest by the work incentive. They will, however, be affected by the cuts in their benefits. All the comments made in our last debate on this issue apply with even more force when we realise that the Government intend to deprive those who have policies of part of their benefit.
The changes in maternity and death grants have been debated fairly recently—owing, of course, to the Government's incompetence in being unable to get their legislation right. They intend to allow a potentially wider group to claim sums towards funeral costs, for example, by the extension to people who draw housing benefit. However, since the decision is accompanied by a steady and wide-sweeping reduction in the number of people entitled to draw such benefit—through other changes that the Government are making—it is not so much a cause for congratulation as they seem to think. It should go on record that the Government are halving the maternity grant available to the poorest mothers. a step that can only enforce the divisions in health identified in recent Health Education Council reports.
Last, but by no means least, let me deal with the provisions for the community programme. The programme was set up in specific terms which made it likely that about 70 per cent. of those involved would be in part-time work. However, the Government have decided to deem it full-time work, although the courts have ruled otherwise. This is a particularly mean-minded saving. It flies in the face of all that is said about the need for training and the Government's wish to reduce unemployment. That applies both to this provision and to the provision on child benefit. The main purpose is to keep school leavers, and those involved in this change, off the unemployment register until the end of September, presumably in the hope that school leavers, at least, will not show up in the figures until after the general election.
1261 The Chancellor of the Duchy of Lancaser was foolish enough to say when he was Secretary of State for Employment that the Government would not be worth reelecting if the unemployment figure was still 3 million at the time of the next general election. I must at least give the Government credit for putting every effort into reducing unemployment, at least on paper, but the reality is very different.
The feature that concerns me most—this is apart from the impact on those on the community programme in terms of loss of hope and depriving them of benefits that they can now draw—is that claimants with families may suffer especially. Many of these claimants will be entitled only to the community programme part-time income of about £67 a week, which is less than their supplementary benefit entitlement would be. That is the result if the Department does not rule that they are in full-time work. It is less also than they would be entitled to receive should they be eligible for family income supplement. As those in part-time work, as I understand it, are not entitled to family income supplement, and as the Government have ruled that in effect those in part-time work on the community programme are in full-time work, will there now be an entitlement to claim the family income supplement? It seems that that would be entirely logical and would help to reduce the charge that could otherwise be made against the Government that they are deliberately reducing the standard of living of low-paid families in work to keep them off the unemployment register.
We shall certainly vote against these regulations. There are others that we would have voted against had they not been part of a package of 10. We do not wish to keep the House sitting for a considerable period and doing nothing more useful than registering time after time the size of the Government's majority. We shall vote against the regulations that make changes in the community programme, which are a further development of the policy to keep people trapped in unemployment and poverty, with consequences for themselves, their families and the country that could be dire. They are a step along the road which the Government seem to be pursuing of introducing American-style workfare policies. It has been confirmed that there are jobs that need to be done, and the Chancellor of the Exchequer has made it clear that it is no longer true, if it ever was—we would argue that it has not been true for a long time, if at all—that the money is not available adequately to pay people to undertake them. Instead, the Government choose to divert the money by introducing tax cuts, for example.
There is abundant evidence that the Government's policy towards the unemployed is callous and cruel, as well as dangerous, given the likely social and health consequences. The Government should be bitterly ashamed of their policy towards the unemployed, and they are clearly somewhat ashamed because they are so much keener to talk about our intentions than about their policies. As only self-interest seems to motivate Conservative Members, I remind them that many of them may be unemployed after the next general election.
§ Mr. Roy Galley (Halifax)
This package of measures is to be welcomed as a rational and sensible response to a 1262 series of social security problems and anomalies. It is not worthy of the usual tirade that we have heard from the hon. Member for Derby, South (Mrs. Beckett).
The increases in the residential care allowances are to be much welcomed, and may be slightly overdue. The comments that my hon. Friend the Minister for Social Security made about the York study are important. It appears that one of the serious concerns about residential care policy has been removed. The emphasis now has to be upon the methods and types of inspection and whether any homes should not be liable to inspection, for example. This may not be entirely within my hon. Friend's purview, but it is something that I hope he will be considering in somewhat greater detail.
The hon. Member for Derby, South was withering about statutory instrument No. 317, but her response did not take into account the fact that it has been a fundamental principle of benefit entitlement that those who work part-time on a regular basis are not entitled to unemployment benefit on the days when they do not normally work. That rule has applied until the recent commissioners' decision in respect of those on the community programme. That decision overturned the practice for four decades while affecting only one programme. It seems to be anomalous to argue against the practice when it has been operated as a principle by Governments of both parties over a long period.
§ Mr. Galley
I hope that the hon. Lady will not mind too much and will not shed too many tears if I do not give way to allow her to intervene. I have only a few minutes in which to elaborate my arguments, and I would like to make progress.
It would be nonsense if someone receiving earnings from a state-funded employment scheme was able also to claim unemployment benefit from the state as well. It would be especially wrong when the majority of community programme workers are already earning in excess of any unemployment benefit entitlement that they may have. It would be wrong also for someone employed part time on the community programme to be treated rather more favourably than someone employed part time in the private sector. If that were the position, it would in some instances be a serious disincentive for people to seek and take jobs that are available.
I am grateful to my hon. Friend the Minister for taking speedy and effective action. I reiterate the hope that I have expressed previously that the regulations are legally watertight and that there will be no further difficulties with them.
§ Mr. Galley
I have great confidence in my hon. Friend. Now we have an eminent lawyer as a DHSS Under-Secretary of State— I refer to my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell)—I have particular cause for confidence.
§ Mr. Galley
No, I shall not give way. I have only a short time available to me and I must get on.
Statutory instrument No. 358, which deals with entitlement to benefit during the final summer term prior to examinations, is contentious. It is encouraging and 1263 interesting that the Social Security Advisory Committee's report on this issue has been broadly supportive of the Government. There is a clear statement in the report, as follows:It is a basic principle of supplementary benefit, and one which we accept, that supplementary benefit is not an appropriate means of supporting those in full-time education.
The debate has centred upon the determination of full-time education, and if students are undertaking study as part of or as a corollary to full-time education with a view to taking examinations within a few weeks' time, it would seem axiomatic that they continue in full-time education. The situation which arose after the commissioners' decision in 1985 led to a complex and nonsensical result, and that was obvious from the forms that officials had to operate at the time. Fortunately, the regulations that are before us will remedy the nonsense.
Those who are not attending school during their final summer term prior to examinations but are studying at home are usually expected to remain in contact with their school. I should be happier if there were greater supervision and clearer distinction between employment and education. If pupils are able to undertake a YTS scheme or work during their summer term, that may detract from their studies and be to their disadvantage. To allow them to receive supplementary benefit when others are taking examinations and still attending school, and therefore not entitled to benefit, is an anomaly that it is right to correct.
There are many who argue that when young people in the circumstances that I have described are not entitled to benefit—the hon. Member for Derby, South advanced this argument—they may be discouraged from taking examinations. It is said that they might seek employment instead or go for benefit. That would be a policy of short-term financial gain and I do not believe that many would sacrifice their longer-term enhanced employment prospects for that sort of immediate gain. It would be a foolish policy to which only a few would be attracted.
The regulations set out clearly the need for a comprehensive review of the benefit position for those aged between 16 and 19 years.
The regulations tidy up and improve the position. There is a series of relationships between grant, benefit, YTS and work, which we have not yet fully tackled. In view of the guaranteed place on a youth training scheme for two years, that is now available to everyone, and in view of the fact that they have a choice of work, education, or a youth training scheme—society has provided that range of options—I cannot see any reason to refuse one of those options. There is no need in general circumstances for people between the ages of 16 and 18 to receive benefit, because society had given them perfectly acceptable alternatives for income and training.
There will, of course, be circumstances in which teenagers find themselves in difficulties because they are severely disabled, orphaned or estranged from their parents—not to mention other circumstances. Those problems are taken into account in the regulations, and I am pleased to note that my hon. Friend the Minister is extending the benefit entitlement to young people whose parents cannot maintain them for reasons that are beyond their control.
1264 I welcome the regulations and I hope that those to which I have referred are but the first step in a greater programme of reform.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I feel that I am back in familiar social security territory, from which I have been recently diverted to other pastures. I have a warm glow of familiarity as I slot temporarily back into the old routine of debates on social security regulations.
It is also a pleasure to speak again after the hon. Member for Halifax (Mr. Galley). I notice that his views have not become much more progressive in my absence. At the end of his speech, he said that there was a need for rationalisation of the system as it applies to 16 to 19-year-olds in terms of the differing levels of income that they can derive from their status as students, schoolchildren or trainees. The hon. Gentleman was absolutely right about that, but I do not agree with his conclusions.
We must not give young people in this age group a positive financial incentive to stop education and training. There are anomalies in the present system that allow such a position to occur, and I have experienced them in my constituency case work. In the course of the comprehensive review that the hon. Gentleman rightly called for, that should be the principal guiding light in achieving a watertight system that makes sense. The piecemeal amendments to the system that are made in the regulations do not achieve that.
Statutory instrument No. 358 deals with school leavers. No doubt the Minister will put me right if I am wrong, but, as I understand it, the instrument will delay the entitlement of schoolleavers to supplementary benefit in two ways. School leavers who return to school to take examinations will now be entitled to supplementary benefit only from the first Monday following the school holidays after the term in which they sit their examinations.
§ Mr. Kirkwood
The Minister suggests that the delay is not a disincentive, but I say to him, candidly and bluntly, that the child benefit that is available to a pupil who is enlisted for an examination will be about £200 or £300 less than the supplementary benefit that can be claimed by a person as benefit during the same period. That is a clear example of how the present system acts as a disincentive.
The other change that the regulations make is that school leavers who leave school before the legal school-leaving age, despite being 16 years old, will now have to wait for a further term before getting benefit. That is a retrograde step, and I cannot for the life of me understand why it needs to be taken. There is no good reason why the school-leaving date should affect the right of 16-year-old Easter school leavers to obtain benefit from the first Monday after Easter Monday, whether or not they were 16 years old before the legal school-leaving date.
§ Mr. Kirkwood
I am saying that it is wholly wrong that they should benefit financially from stopping their studies. That is the point at issue, and that is why I believe that the 1265 comprehensive review that I mentioned earlier is necessary. The proposed delay of payment of benefit has severe financial consequences, as the SSAC report clearly shows. Although the total income of families on supplementary benefit may not be much different, the continuing dependence of a young person on the family during that period is a problem, and causes increasing homelessness. I am sure that the Minister recognises the difficulty of looking after such young people, and the aggravation that can be caused in the assessment unit during that period.
In any case, Easter is a difficult date. It is not a fixed calendar date: one has to know the date of the equinox in a given year, or however Easter is calculated. It is not a set date for the diary every year, unlike I April or 1 May. That complicates matters for claimants. I would have been happier, too, if the Minister had responded by telling us the costs in terms of benefit forgone and the numbers of claimants involved. Perhaps he will arrange to inform us of those figures when his hon. Friend replies. The costs and numbers are certainly important. Perhaps some of the figures have been released in earlier debates and are familiar—the hon. Member for Birkenhead (Mr. Field) said that they were on the tip of his tongue. They should therefore not be difficult to produce.
Another important matter of concern is that, although the reduction in the figures may not be dramatic, the regulations will have an impact on the unemployment figures between now and September. That, too, should be considered.
I want to ask the Minister about what happens when a school leaver starts by registering for an exam. I understand that there has not been much consultation with the examination boards about schools, which usually automatically register students for examinations. If a pupil who has been thus registered thereafter leaves school, and the school does not have the time or resources to get round to deregistering that pupil's application for an examination, what will happen to his application for benefit? If the fact that the pupil has left school has not been recorded with the examination board, how will that affect the process of appeal for an application for supplementary benefit? There are administrative difficulties in this area and perhaps I have not gone into it in enough detail to appreciate what the Government's intention is. I therefore seek clarification about it.
I repeat that the Government do not have a coherent policy on income support for the 16 to 19-year-old group. Responsibility for it is still split between the Department of Education and Science, the DHSS and the Department of Employment. I agree that the DHSS should not be the principal support for young people in education—that does not make any sense—but the present position, in which local authorities are also involved, lacks co-ordination on student grants and seems to be forcing students to rely more heavily on benefits. At the same time, the DHSS is announcing its intention to move students from social security. It is hardly surprising, therefore, that chaos has resulted. Young people will suffer.
How many people apply for unemployment benefit while on the community programme? How much money is involved? The full extent rule, as it is known, was established to prevent well-paid, part-time workers choosing to use national insurance benefits to supplement 1266 their weekly income. Obviously, against that background, it was sensible to introduce the rule. In the past couple of years, the groups who are most likely to be affected are those who are unemployed and under the community programme and others in low-paid, part-time work.
These regulations seem to overrule the recent Court of Appeal decision. As a consequence, all those on CP programmes who are working part time will be subject to the full extent normal rule and will therefore not be able to get their community programme wage topped up with unemployment benefit. That will have an adverse financial impact on people who are married and have children. At the conjunction of the two existing rules, there is a ceiling of payments of £67 per person, plus the requirement that a person should be paid the proper rate for a job. The hon. Member for Derby, South referred to this matter. About 70 to 75 per cent. of places are part time. Denying benefit in this way, as we would if we passed these regulations, is a serious matter.
An income of £67 without an unemployment benefit addition compares extremely unfavourably with supplementary benefit, particularly for a family of two adults and two children under 11. They would get a minimum of £59.75, plus housing costs, while on supplementary benefit. Although families will be hardest hit, single claimants will also suffer. That will also have an effect—it may be a small effect—on unemployment figures. That charge is also regrettable.
Arguments have already been advanced about the supplementary benefit requirements and the resources amendment regulations. The ordinary board and lodging and homeless persons' rate are unchanged. The House should view with concern the fact that the rates for those living in ordinary board and lodgings have not been increased since April 1985. Prior to that date, the maximum board and lodging allowances were frozen. That has now been ruled invalid by the Court of Appeal. Meal allowances have also been frozen since the end of 1984. That has the effect of freezing the rates for those who are homeless. There has been a recent reduction in the rate of acceleration of inflation, but it is still going up rather than down and the allowances for those in board and lodgings and for the homeless take no account of increased costs. Since December 1984, the RPI has gone up 10 per cent.
Families classed as deliberately homeless are not eligible for the topping up of the board and lodging allowance paid by local authorities, with the result that they may be using some of their personal allowance and/or the allocation for meals to cover lodging costs. That, too, is serious. I hope that the Government will seek to remedy that defect at an early opportunity.
The changes relating to the additional requirements in residential care and nursing homes are mean and retrograde. What are claimants who suffer as a result of the changes expected to do? If they are unable to pay for special diets or additional baths, for example, are they simply to go without, have a totally unsuitable diet, or be forced to move to cheaper, perhaps less suitable, homes which offer less care?
There are some real problems. I accept that the Minister said that there were some beneficial changes which would increase the cost to the Exchequer, but, on balance, if figures were available they would clearly show that these 1267 regulations will simply impose a further series of unkind cuts that will bring misery to many citizens who already are disadvantaged.
§ Mr. Andrew F. Bennett (Denton and Reddish)
I realise that the House wants to reach a rapid decision, but I wish to press the Minister on one or two points. The effect of the regulations on school leavers is mean and vindictive. I realise that the Government are desperate to massage unemployment figures down, but it is tragic that they should do so at the expense of that age group.
What is the position for those who were entered for CSE exams, had every intention of leaving at Easter, and now, because of the regulation changes, will ask to withdraw from the exams to qualify for benefit although they have already done the practical work for those exams? They are in a difficult position. What will happen to those who, having got jobs, leave school at Easter and have an agreement that their employers—unlike the Department of Health and Social Security—will be generous enough to let them have time off work to sit exams? If any young people lose their jobs through no fault of their own between now and the summer, will they be denied benefit because they sat the examinations? In the past, they were able to qualify for benefit because they had left school and started work. As I understand it, the fact that they have sat the exams will penalise them. That is another example of the Government's meanness and vindictiveness. The Minister should look carefully at the regulations with a view to the implications for next year.
The new GCSE examination will involve considerable continual assessment. In the circumstances, it is extremely difficult to decide at what point someone enters for an examination. Do we commit him to an examination from the first continual assessment or only at the end of the course, when a formal application with his name on it goes to the Department? I hope that the Minister can answer my questions. I stress that the regulations are mean. The Minister would do a lot better by taking them away and examining the major problem among young people who are denied education because of their poverty.
§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell)
This has been an interesting debate, based on 10 technical sets of regulations. It has quite rightly concentrated not so much on technicalities as on the policy underlying them. It covers four matters that rightly interest the House. The first concerns those who leave school at Easter and the question whether they should move into the benefit system and be entitled to supplementary benefit. The second matter relates to residential care and nursing homes, about which some significant comments are to be made. The third matter concerns the community programme and whether those who are working in jobs under the community programme should also be entitled to unemployment benefit, something to which they were not entitled, of course, until the operation of what is known as the full extent normal rule was deemed not to apply in certain circumstances. That matter is still subject to appeal, and it may turn out to be reversed, but it is not acceptable to the Government in any event. Fourthly, we 1268 have dealt with a large number of detailed matters on pensions, although they have not raised questions in the House.
The hon. Member for Derby, South (Mrs. Beckett) asked an impressive list of questions. I say that with all proper respect. I was impressed by the number of questions that she managed to pack into her speech. I cannot answer every one, but I shall try to answer those which are of particular importance. My hon. Friend the Member for Halifax (Mr. Galley) and the hon. Members for Roxburgh and Berwickshire (Mr. Kirkwood) and for Denton and Reddish (Mr. Bennett) raised many interesting questions. I shall do my best to deal with at least some significant ones.
As my hon. Friend the Minister made clear, we know the increase in the number of people who have had the benefit of the provision in respect of residential care and nursing homes. One says with confidence and some little pride that the numbers have risen steeply. This has been a source of implied criticism from some areas because the provision comes from private homes. It has been suggested that perhaps these people ought not to be in these homes. The whole House would wish that those who are elderly and in need of residential care should have it.
We now know from the quarterly statistical inquiry of February 1986 that the total number of people in private and voluntary residential care and nursing homes who are being helped by supplementary benefit has increased to about 90,000 compared with about 42,000 in December 1984. The question was asked whether they were rightly there. That is being looked into under the auspices of the social policy research unit at the university of York. As my hon. Friend the Minister for Social Security said, the unit found that the vast majority—93 per cent.—were assessed as needing residential care at the time of admission to the home.
I draw to the attention of the House two refinements of that. The assessors were also asked to consider whether residents would have needed residential care if additional services had been available. They considered that if additional ordinary services such as sheltered housing or day care had been available—some people say that this might be a more sensible use for the money, and the Government will look at that with an open mind—even then 90 per cent. would have needed residential care. Even if more intensive services such as a full-time companion or night sitting services had been available, residential care would have been needed in 83 per cent. of cases. That is of some significance.
The results of the pilot studies need to be used carefully. They are being considered by the joint central and local government working party that is currently looking at the question of harmonisation of financial support for people in these residential care and nursing homes. They are relevant to the overall review of community care being carried out by Sir Roy Griffiths. They present a background to the questions asked by the hon. Member for Derby, South and by other hon. Members about additional requirements.
The broad and intelligent answer about additional requirements is that we expect things like baths, which can engender additional requirement payments, to be part of the proper service provided by the home for the ordinary fee. It is not a matter of depriving a resident of a residential care home of a bath. No care home worthy of its salt would say that if it did not get some extra money residents 1269 would not get a bath. Bathing and other additional requirements should be part of the normal service, and that is the case in the overwhelming majority of homes.
The hon. Member for Derby, South asked some pertinent questions about the community programme change and how it affects supplementary benefit. I can assure the hon. Lady that the change does not apply to supplementary benefit. That benefit is paid and will continue to be paid to part-timers on the community programme where that is appropriate. The regulation does not imply that the community programme is full-time work. The question about family income supplement was also pertinent. That is payable to those who participate in the community programme and who are in full-time work, that is to say, 30 hours or more.
A formidable number of questions were asked and I do not have time to deal with them all. [Interruption.] I know that the hon. Member for Denton and Reddish is happy to sit here listening to me answering. I say that with admiration and with respect to him, but I am not sure that doing that would enthuse every hon. Member to the same degree.
I deal now with some of the points raised about Easter leavers. The hon. Member for Roxburgh and Berwickshire asked a number of questions about the costing. I have a large number of detailed answers about that. I can tell him that some of the aspects give rise to small costs and others give rise to small savings. I have not been able to do an exact balance of the two, and in view of the time, I shall not reiterate exactly how they balance out. Initially, the changes retrieve the costs which resulted from the commissioner's decision in 1985.
The important point to make about Easter school leavers is that, under the previous Government and under this Government up to 1985 and the time of the commissioner's decision, the whole system worked perfectly well. It was not until the commissioner's decision arose and placed a temptation in the path of school leavers, which we do not think appropriate and I do not think that even the hon. Member for Birkenhead (Mr. Field) thinks is appropriate to tempt them into benefit, that they were liable to be tempted into benefit.
§ Mr. Frank Field
Given the number of social security Bills that we have had, why did not the Minister move primary legislation so that we could get all of this?
§ Mr. Lyell
My hon. Friend knows something about the ways of this House and can give good advice to the hon. Gentleman. It can best be done by regulation. [Interruption.] I have many questions to answer and I am trying to find the one which is of greatest interest to the House.
The hon. Member for Denton and Reddish asked about people in work whose employers let them take examinations. He asked, if they were to lose their jobs, would they be disqualified from benefit if they were taking an examination? If they were entered for exams when they 1270 left school they would not be entitled to benefit until the terminal date following the examination. I agree that at that stage in their lives young people may be in a variety of circumstances. We have endeavoured to establish rules that are as clear cut and consistent as possible, given that wide variety of circumstances.—[Interruption.] I am glad to see many hon. Members returning to the House. They are probably anxious to listen to the detail of the debate. One hon. Gentleman is clutching one of his hon. Friends.
This is part of a broad structure of social security. One understands the usual practice of Opposition Members to try to find out which parts of comprehensive changes reduce Government expenditure and which parts increase it. I have no hesitation in explaining the Government's position. Under this Government, expenditure on social security benefits generally has gone up, not in hundreds of thousands or in tens of millions but by no less than £11 billion in real terms. The House should bear that in mind. I think I am right in saying that that formidable and impressive increase not merely outstrips but outstrips by several times anything that was returned, happily, to the taxpayer in the Budget. I confidently commend the regulations to the House.
§ Question put and agreed to.
That the draft Supplementary Benefit (Resources) Amendment Regulations 1987, which were laid before this House on 16th March, be approved.