Youth Training (Income Support)

HC Deb 22 December 1988 vol 144 cc616-23

12 noon

Mr. Chris Mullin (Sunderland, South)

I regard this as not so much a debate as a story for Christmas which illuminates a small corner of life in Tory Britain in 1988.

Earlier this year, the House passed the Social Security Bill, clause 4 of which raised to 18 the minimum age for income support in return for a guaranteed place on a youth training scheme. There were exceptions in prescribed cases of severe hardship. The Act is one of a range of measures that Conservative Members dream up between the coffee and the port around their dinner tables in Knightsbridge and Belgravia to make life difficult for the lower orders—on second thoughts, perhaps not Belgravia, but Surbiton and Grantham.

The purpose of section 4 of the Social Security Act 1988 was to deal with that well-known Conservative bogy, the feckless youth who prefers to lie in bed in the morning rather than do a good day's work. The proposal met with many objections, not least from the Manpower Services Commission, which did not want its training programme clogged up with sullen youngsters dragooned on to inappropriate schemes. It met with objections also from those who argued, as my hon. Friend the Member for Cunninghame, North (Mr. Wilson) did in an Adjournment debate on 5 December, that there would not be enough YTS places for all those affected.

When the Social Security Bill had its Second Reading on 2 November last year, the Secretary of State for Social Services said: the training allowances for those on YTS have been set at a rate well above the basic … rates for most young people. The key words in that statement are "basic" and "most". There are some serious exceptions, which were expected by the Secretary of State. He said: orphans and youngsters who are necessarily living away from home because of a risk of physical or sexual abuse will be able to … secure a training place which will carry with it payment of the training allowance at a higher rate than their benefit, so enabling them to continue to live independently. My hon. Friend the Member for Livingston (Mr. Cook), who replied for the Opposition, made it clear that those proposals were not adequate. He said: A growing number of teenagers are homeless. In the main they do not leave home for flippant or trivial reasons but because of intolerable tension at home."—[Official Report, 2 November 1987; Vol. 121, c. 655-67.] I should like to deal with just one such case, a young woman in my constituency who left home because of intolerable tension. I shall not go into the details of why she left home, except to say that I am satisfied that she had good reason for living independently. She had a troubled family history. Her mother and stepfather have moved away and she has had no contact with them for the best part of a year. She is a responsible young woman who, with the help of a local advice centre, the borough council and the local office of the Department of Social Security, has made every effort to live within her meagre means. She has done everything that the Secretary of State has asked of her. She has joined a training scheme but, as a result, is not better off—as the Secretary of State alleged—but considerably worse off. She is threatened with destitution. I do not allege that this case is typical, but it is by no means unique.

My hon. Friend the Member for Sunderland, North (Mr. Clay) has a case in his constituency of a 17-year-old boy whose parents are separated. He has not seen his mother for many years and his father died earlier this year. Suddenly, he found himself alone in the world, having to pay his rent out of his training allowance, which is not possible. No doubt some of the growing army of homeless young people seen around London's railway stations have similar stories.

In parts of Sunderland—including Thorney close in which Deborah Hall lives—there are whole streets in which almost no one is working. They live in a land of the permanent training scheme. In many cases, they have the "pretend jobs" of the kind to which the Prime Minister used to refer when in opposition. About 4,000 people in Sunderland are on such schemes, and registered youth vacancies rarely exceed 20. We have some of the highest unemployment in mainland Britain, which has been greatly added to recently by the closure of the shipyards.

During the general election, I and my hon. Friend the Member for Sunderland, North addressed youth trainees on some successful schemes. I was struck by their limited horizons. They talked about adding £1 here or 50p there to their allowances and saw stretching ahead of them a world alternating between the dole and training schemes. That is the culture which this Government have, to a large measure, been responsible for creating.

On 10 October, I received a letter from a diligent advice worker in my constituency, Mrs. Flo Watt, which sets out graphically the mathematics of life in the twilight zone I have just described: Deborah is 17 years of age … Relationships within her family have been under stress for some time. When her mother and stepfather moved to Cumbria, Deborah stayed behind in Sunderland … She was given a one bedroomed council flat on May 23. She applied to the Social Fund for a budgeting loan for furniture and was given £226 for a cooker, bed and bedding. This is to be repaid at £2.91 over 78 weeks. Her benefit prior to September 11"— the cut-off point for benefit for those under 18— was £32.84. This included a Transitional Addition of £13.44. That was awarded to enable her to live independently in the light of her circumstances.

Out of that, Deborah paid water charges, plus 20 per cent. of her rates—another recent innovation—which amounted to £2.50 a week. She was a responsible person and organised her finances carefully. She paid £4 a week for her electricity as part of the advanced payment scheme operated by the electricity board. Under a similar operation, she paid £5 a week for gas. She was repaying £2.91 a week for her social fund loan, which was retained from her benefit. She was also buying clothes through a mail order catalogue and paid £3.50 a week for that. That came to a total of £17.91. Her rent was paid at that time since she was in receipt of benefit. Therefore, £17.91 out of £32.84 went towards those costs. She could survive by using the remaining money for food and other essentials.

Her entitlement to income support ceased on 11 September, under the new regulations governing 16 and 17-year-olds. She received a £3 bridging allowance, followed by a further £30 bridging allowance. She started a YTS placement on 26 September with an allowance of £29.50 a week, which replaced her benefit. She received her first allowance on 30 September. As soon has her income support ended, Deborah's financial difficulties began. She has not made any payments to the social fund and, as of 10 October, was £17 behind in her gas payments. Out of her training allowance of £29.50, her budget is as follows: water charges, rates and rent £10.75, electricity £4, gas £5, mail order catalogue £3.50, social fund loan repayment £2.91 and her bus pass to get to and from the training scheme costs £5.80, £2.80 of which can be reclaimed. Those sums, including the sum that could have been reclaimed, amounted to £29.16, leaving Deborah with only 36p for food and other necessities.

The letter from Mrs. Watt continues: She has already had letters from the Social Fund Officer stating that she must begin making payments or face possible court action. The Gas Board have told me that they will not disconnect for the amount of £17.90, but they are obviously looking towards payments being resumed. As she did not have a guarantor or pay a security deposit to the electricity board of £100 as a new consumer, she faces immediate disconnection if she defaults on the advance payments scheme. The reason she now has to pay towards the rent is that her applicable amount under income support is only £19.40, and every pound over and above this amount means that approximately 85p is payable towards the rent. Deborah was educated at Felstead Special School and until September 11 was successfully looking after herself and her finances. She managed to pay her commitments every week without fail. She has managed by buying second-hand furniture to make her flat quite comfortable. It is not feasible for Deborah to return to her family and she has no other relatives in the town apart from an aunt who is herself in receipt of benefit. The big difference in Deborah's life came when she lost the transitional protection of £13.44. She had the bad luck that her training scheme did not start until two weeks after 12 September. As a result, she was no longer on income support, which meant the automatic loss of transitional protection. I understand that, once lost, it can never be reinstated.

It seems that the Secretary of State did not anticipate the situation which I have described. If he did, he did not let on when he addressed the House on Second Reading of the Social Security Bill, as it then was.

I wrote to the Minister and summarised Deborah's position. I sent a copy of my letter to all Conservative: Members because I felt so strongly about the matter. I sent also a copy of Mrs. Watts's letter, which sets out the two budgets that I have outlined to the House. In my letter to Conservative Members I wrote: Please note that her budget includes no allowance for food and that she can only eat by defaulting on one of her other commitments … Although she could just about get by on Income Support, where her rent is paid, she has not the slightest chance of doing so on her training allowance, out of which she must, of course, find her rent. So by the age of 17 this young woman is already locked into a cycle of debt from which—in an area like Sunderland —she has little prospect of escaping. She has no horizons beyond the next training scheme. Every few months the screw —in the form of new benefit or training regulations—tightens, limiting still further her already limited range of possibilities. I appreciate that many of you will not be moved by the plight of someone in Deborah's situation. I also know however that, despite the ideological gulf that divides us, many Conservative Members do care about the human consequences of the measures that your Government is so determined to introduce. It is to these Members that this letter is addressed. Finally, I would be glad to hear from any Conservative Member who can suggest to Deborah how she can make ends meet by any means short of turning to crime. I received many replies, most of which were courteous. Some Conservative Members merely acknowledged my letter while others offered helpful suggestions. However, there were some rather less helpful replies from some of the backwoods. For example, the hon. Member for Thanet, North (Mr. Gale) wrote: I don't wish to sound hardhearted—it is very often the case, and seems to be in this case, that many of the difficulties spring from actions taken by the young people themselves. So far as I can see in Deborah's case, she had the opportunity to travel to Cumbria with her parents and preferred not to do so. The hon. Member for Thanet, North asks for the opportunity to meet the girl. I do not think that I shall add to her difficulties by introducing her to the hon. Gentleman.

I had a letter from the hon. Member for Reigate (Mr. Gardiner), who represents a constituency where circumstances are slightly different from those that prevail in Sunderland: Whilst I have some sympathy, I must say her case illustrates the utter folly of leaving home at the age of 16 or 17 and expecting the State to pick up all one's living costs. The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) also wrote: Incidentally, I notice that at the end of your letter you refer to the possibility of the lady in question turning to crime. I do hope I can assume that you have not been putting such ideas into her head. That would be a most irresponsible thing to do. On 7 November, I received a reply from the Minister of State, which he also copied and sent to all Conservative Members. At that stage, it was not a helpful letter. It was clearly drafted by a civil servant living an index-linked existence and it was a bald statement of the dilemma in which Deborah found herself, but it offered no solutions.

On 17 November, I wrote again, in an attempt to breach the wall of complacency that, I felt, existed in the case. I wrote to the Minister of State: I regret that I have failed to convey to you the sense of urgency, nay desperation, which I and everyone else concerned with this case feel. Your letter of November 7 badly sets out the trap that your Government has devised for persons in Deborah's situation, but it does not address the consequences. Let me spell them out: She has had to default on her repayments to the Social Fund. She is now £93.87 in arrears of rent and the debt is accumulating with every passing week. It is only a question of time before one of her creditors takes her to Court in pursuit of debts she cannot possibly repay. Since we no longer put debtors in prison (although perhaps you have this in mind for the Queen's speech on Tuesday) there is a serious possibility that she will end up on the streets. Please do not advise me as some of your colleagues have done, that she ought to return to her mother, since her family circumstances are so unhappy that, faced with a choice between going home and sleeping rough she would probably choose the latter … knowing as I do that you are a humane man, I cannot believe that it was ever your intention to drive young people on to the streets in this case (although I am not so sure about some of your colleagues). I ask again, is there anything you or your department can suggest to help this young woman avoid destitution. That led to a helpful intervention—prompted by the Minister of State—by the local Department of Social Security office, which has been very helpful. It ingeniously trawled back through the records and discovered that Deborah was owed £152 in arrears of supplementary benefit, which it paid to her swiftly.

It proposed at first to offset that against repayments due on the social fund, which would not have been helpful, but the matter is now sorted out. The DSS has also agreed to suspend repayments of £2.91 a week, so I am grateful to the manager, Mr. Hutton, and his staff, whom I have found helpful in the case.

A new crisis now looms because of rent arrears. Deborah has received a notice of eviction. I have received great help from the borough council and she is not going to be evicted in the foreseeable future. It probably has a duty anyway under the Child Care Act 1980, and it might mean more public money being spent if she was evicted.

On 13 December, I received a further letter from the Minister of State in response to mine of 17 November, saying: Young people who are lone parents or who are disabled benefit from special premiums introduced in the new scheme, but those young people who are not in special categories cannot be considered a priority for resources. The letter mentions that Deborah failed to turn up to collect the special arrears of benefit. I put it to the Minister that it is not likely that a young woman in those circumstances who was offered £152 would not turn up to collect it. The reason was that the letter from the DSS was sent to the wrong address and she knew nothing about it. The Minister's letter also states: You will be pleased to learn that action to recover the social fund loan has been suspended until April when Deborah reaches the age of 18. That is something for her to look forward to on her 18th birthday.

There are no villains in this case. Deborah is not responsible for the situation. She is a responsible, thrifty young woman who managed until 11 September by allocating her meagre resources carefully. The DSS in Sunderland has been extremely helpful; it is not the villain. The housing authority is doing its best to avoid eviction and it is not the villain. I would not suggest for one moment that the Minister and the Department are the villains, because they have attempted to help within the strict rules by which they are bound. They have all been victims of machinery which, once in motion, grinds inexorably on and which appears to be targeted against some of the poorest and least fortunate people in the land.

Surely Ministers have better things to do than to make life unbearable for a 17-year-old from a broken family who is doing her utmost to make ends meet in the face of great odds. The obvious solution is work—a job—but, in the land of more than 20 per cent. unemployment, that is not a realistic solution at the moment.

I have told the story of Deborah in the perhaps forlorn hope that it will arouse some twinges of conscience in Tory party supporters as they tuck into their Christmas dinners. Perhaps Tory Members will think more carefully before filing through the Lobby in support of the next turn of the screw; who knows?

What does the Minister think Deborah should do? She had 36p for food. Now that she does not have to repay the £2.91 a week that amount has increased to about £3.30. But how can she survive? I am sure that the Minister will want to join me in wishing Deborah a happy Christmas and a prosperous new year. I shall wish the Minister a happy Christmas, but I do not think that I need wish him a prosperous new year.

12.21 pm

The Parliamentary Under-Secretary of State for Social Security (Mr. Peter Lloyd)

I am grateful to the hon. Member for Sunderland, South (Mr. Mullin) for initiating this Adjournment debate, and I begin by paying tribute to him for the assiduous way in which he has represented the interests of his constituent in this matter.

It may help if I recapitulate the facts of the case before us. Deborah is 17, and was in receipt of income support until 11 September this year. On that date, as the House will know, the Government withdrew entitlement to income support for those 16 to 17-year-olds not in an exempt category. Those exemptions covered, for example, the disabled and single parents. We made available instead a bridging allowance of £15 per week, payable for a maximum of eight weeks in any 12 months. Bridging allowance is paid by the Department of Employment on condition that a young person is registered for and is awaiting a YTS place.

The changes that we made to the income support entitlement of 16 and 17-year-olds are, of course, linked to our guarantee of the offer of a YTS place to all in the age group who want one. Deborah Hall claimed bridging allowance and this was paid, but on 19 September she started a YTS place with the springboard media project and qualified for the YTS training allowance of £29.50 a week.

It is gratifying to note that Deborah is on YTS. YTS offers the young people of this country a real chance to make a good start in life and to get training for skills and a recognised qualification that should stand them in good stead for the future. It is a voluntary scheme in that young people can choose whether to take up a training place, a job or stay on at school or further education. Only the option of living off the state is not available to those who are capable of work and training, as this is not an option that we believe is in the longer-term interests of anyone, especially young people.

There are 428,000 16 and 17-year-olds currently taking advantage of the opportunities that YTS offers. Leaving aside the advantages for the future, which I have already mentioned, the great majority of those on such schemes are considerably better off financially, as the training allowance of £29.50 a week in the first year and £35 in the second is much higher than the appropriate income support rate in the age group, which is £19.40.

It is also worth mentioning that the decision to remove general benefit entitlement from 16 and 17-year-olds was not a cost-cutting measure. DSS savings are offset by an increase in expenditure on the YTS programme, and the overall effect is an increase in expenditure on the youth of this country—an investment with which I am sure the hon. Gentleman would agree.

Although Deborah would have received the maximum housing benefit available—that is, 100 per cent. help with rent and 80 per cent. help with rates—when she was on income support and on the bridging allowance, when she obtained the YTS place, her housing benefit will have been recalculated to take into account her increased income. Under the new housing benefit system, the vast majority of the rules for calculating entitlement are common to income support and housing benefit.

The housing benefit system is designed to leave all tenants with at least their income support level to live on after meeting their eligible rent and rates. So Deborah's housing benefit will have been assessed by comparing her income with the basic personal allowance for a 16 or 17-year-old of £19.40 per week. This rate is common to both income support and housing benefit. The assessment is done using the standard housing benefit tapers of 65 per cent. for rent and 20 per cent. for rates. Therefore, Deborah receives housing benefit of £7.18 for rent and £1.65 for rates.

Before I make some general remarks about the system, I want to refer briefly to one further aspect of Deborah's case which the hon. Gentleman mentioned. Deborah's mother applied for a single payment on her behalf last January. It was for towels, bedding and pots and pans, because Deborah had only recently obtained her tenancy and did not have those items. Unfortunately, the local office at the time had a very substantial backlog of cases to deal with because of a locally organised take-up campaign and her case was not dealt with until June. A single payment of £152 was then authorised.

Unfortunately—due, I think, to a misunderstanding between Deborah and the local office—it was never issued. That was not discovered until September, when the local office was considering the rescheduling of repayments on a subsequent loan from the social fund. Deborah has now received the single payment, and the local office has decided to defer, as the hon. Gentleman rightly said, any further recovery of the loan until April, when Deborah reaches the age of 18.

I would be the first to acknowledge that the benefit system, especially as it affects young people living away from their family, does not give them a great deal to live on. However, it is important to explain why the system is structured as it is. The House will be aware, as I have already mentioned, that the new housing benefit system is essentially aligned with that for income support. The change was widely welcomed by outside commentators and results in a fairer and simpler structure. For the first time, all housing benefit cases are assessed on the basis of the same maximum entitlement to meet housing costs, so there is no need to introduce complexities into the scheme, such as the old housing benefit supplement.

The effect of the universal 100 per cent. start point for rent is to give more help where rents are unavoidably high, and, for the first time, full protection against reasonable rent rises for all those on benefit. Those changes, together with the fact that we now assess on net, not gross, income, justify the fact that we now withdraw help with rent faster as income rises.

I acknowledge that the fundamental reform of the system will have caused considerable differences in housing benefit entitlement at the point of change, because the payments were arbitrarily different before. That is why transitional payments were made available for those in vulnerable groups. I also acknowledge that the changes especially affect young householders. The reason is simply that, with the alignment of income support, and with the abolition of householder status within income support, both income support and housing benefit rates must reflect the characteristics of young people as a whole rather than differentiate between householders and non-householders.

The essential characteristic of young people, especially in the 16 to 17-year age group, is that they live at home with their parents. Therefore, the only way to help people like Deborah who live away from their parents would also be to give an incentive generally for people to move away from home. We recognise that there are circumstances in which people do have to move out, but we would not want to create such an incentive. Moreover, it is a basic principle of the benefit system that help should be targeted accurately on those who need it most. That means the old, the disabled, and families with children. That means also that young fit people without dependants have to be lower down our list of priorities.

I conclude by reiterating that we do have a real concern for this particular group of young people who, for one reason or another, cannot live at home. The Government have given a commitment to monitoring the effects of the reforms and we shall of course be looking at the effect the changes are having on this group as well as others. If changes are necessary, and if changes are sensible within the basic simpler structure, the Government will make them.