§ The Minister for Social Security and the Disabled (Mr. Nicholas Scott)
I beg to move,That the draft Housing Benefit (Supply of Information) Regulations 1988, which were laid before this House on 14th March, be approved.I understand that it will be for the convenience of the House at the same time to discuss the following motion:That the draft Housing Benefit (General) Amendment Regulations 1988, which were laid before this House on 14th March, be approved.Both are relatively detailed and small pieces of legislation which none the less make an important contribution to the housing benefit scheme as a whole.
In presenting the Housing Benefit (Supply of Information) Regulations to the House, the essential point is that the procedures which they contain in the main do no more than confirm liaison practices between local authority housing benefit offices and DHSS local offices which have existed since 1983. The current arrangements are based on the certification of housing benefit. This is a process whereby householders in receipt of supplementary benefit are automatically entitled to housing benefit through the issue of a certificate to the local authority. With the advent of income support, the distinction between householders and non-householders will disappear along with certification, and it is therefore necessary to ensure that certain information regarding benefit claimants can continue to be exchanged.
These arrangements will reduce duplication of effort both for claimants and for staff in verifying entitlement to income support and housing benefit, and at the same time ensure that in the majority of cases a local authority will be able to determine housing benefit entitlement without further contact with the claimant. These are sensible administrative arrangements which are supported entirely by the representatives of local authorities and should be approved by the whole House.
The majority of the provisions of the Housing Benefit (General) Amendment Regulations relate to the treatment of income and capital payments from the Macfarlane trust to recipients of housing benefit. The House will recall that following a powerful case put to us by the Haemophiliac Society we accepted that the position of HIV-infected haemophiliacs was wholly exceptional. Accordingly, over £10 million has been set aside for these tragic cases and this money will be paid to them through the Macfarlane trust which has now been established.
The first payments from the trust will be made on 11 April and, as my right hon. Friend the Minister for Health announced last week, all payments from the trust shall be wholly disregarded in assessments of income-related benefits. Indeed, we have gone beyond this by ensuring that haemophiliacs need not even declare receipt of payments from the trust to either DHSS local offices or local authorities, so their position will remain entirely confidential. These regulations achieve both these effects for housing benefit, and yesterday similar regulations were debated in this House which achieved the same effect for both income support and family credit.
The remaining provisions in the Housing Benefit (General) Amendment Regulations will enable local authorities for three months—that is, until 30 June—to make payments on account of housing benefit where they 465 are unable to assess claims properly under the new scheme after 1 April. These regulations also enable them to issue short-form notices of determination for the same three month period.
Before explaining in detail how these payments will be calculated and reconciled, I would like to point out that I expect only a tiny minority of local authorities actually to need to resort to these temporary easements, particularly the payment on account facility. Indeed, it may help to put these regulations in context if I set out the results of a questionnaire on implementation progress which my Department issued to all local authorities in January this year.
By 4 March, some 315 authorities out of a total of 479 had responded. Of the 315 replying, 209 have confirmed that they expect to implement fully on time and a further 54 were awaiting confirmation that they will implement. Although some 52 have indicated they will not do so, we have reason to believe that this will prove in the end to be a considerable overestimate; I believe it paints much too gloomy a picture.
My senior officials have recently undertaken a significant programme of visits up and down the country; it was clear that, of those who said that they would not be in a position to implement on 1 April, many had erred on the side of caution and will have converted all existing claims to the new scheme and will be ready to assess properly all such claims by the relevant date.
§ Mr. Simon Hughes (Southwark and Bermondsey)
Has the Minister seen the representations from the Chartered Institute of Public Finance and Accountancy on behalf of member authorities and from large authorities like Leeds which argued as recently as last week that it would have great difficulty in being ready for next month and asked if he would consider making the implementation date two months later?
§ Mr. Scott
The hon. Gentleman will have a chance to intervene in the debate. It might be better if he were to listen to what I shall say. Of course, I shall respond in due course to the debate. As I say, I think that the vast majority of local authorities will implement on the appropriate day. There may be a small minority who feel at the moment that they cannot do so. In practice, many of those will do so by the due date. I recognise that there may be a small minority who may not be able to implement.
§ Mr. Alex Salmond (Banff and Buchan)
Does the Minister agree that the "small minority" about which he speaks is some 17 per cent. of local authorities and that the relevant caseload on housing benefit may be as many as 1 million? Those are covered by local authorities which say that they will not be in a position to implement at the required date.
§ Mr. Scott
The hon. Gentleman will know that I am always prepared to give way. However, since I will respond to the debate, I think it might be better if he were to keep his questions and comments until I have had a chance to set out what the Government intend to do. The hon. Gentleman may then seek to catch your eye, Mr. Speaker. At the end I will respond to the points which have been made.
466 A great deal of effort has been put into this by local authorities to achieve the result which would be in the interests of the Government, local authorities and those who are entitled to housing benefit. Although the timetable has been demanding, as I acknowledge, local authorities have responded positively. I should like to place on record my recognition of the part which they have played in achieving the results which will make possible the implementation of the new housing benefit rules.
A minority of authorities, for a variety of reasons, may face difficulties on 1 April. My Department has been asked to ease the transition to the new scheme for this group. The regulations which we are debating will achieve this. We will not postpone the implementation of the new scheme but we will produce regulations which will ease the position for local authorities which, for one reason or another, are unable to meet the target date. The regulations will provide those local authorities with an alternative method of assessment and a reduced form of notification to be sent to claimants—the latter being an easement specifically requested by the local authority associations.
We shall issue guidance to the authorities about the calculation of those payments on account of housing benefit so as to avoid the risk of large-scale overpayments. The regulations will ensure that payments that are made under the provisions are clearly identified and that subsequent overpayments and, indeed, underpayments will be fully recovered and refunded.
I trust that hon. Members will see the regulations for what they are — practical easements for the small number of local authorities that might otherwise be in difficulty on 1 April.
§ Mr. Robin Cook (Livingston)
Will the Minister elucidate the Government's thinking on one consequential effect of the regulations? Their effect is to extend to the public sector the arrangements for payment on account that are currently available to the private sector. As the Minister will appreciate, the subsidy provided by the Government for payments on account in the private sector is 97 per cent. of total expenditure. Will he confirm that the Government intend to extend that percentage to the public sector just as the regulations extend the arrangements for payment on account?
§ Mr. Scott
Despite the problems of many local authorities, which I understand relate to the computer software programmes that they have commissioned, they have available straightforward and simple arrangements to enable them to calculate closely the payments that they should make. I expect local authorities to implement the regulations either properly or at least closely in accordance with the proper methods, and that no special arrangements will have to be made.
In those circumstances, I believe that the regulations, which provide for contingency plans, should be acceptable to the House.
§ Mr. Robin Cook (Livingston)
I can find nothing sensible to say about the regulations dealing with rating and valuation, so I propose to say nothing on them.
The other regulations before the House amend the housing benefit rules. I welcome the exemption of payments under the Macfarlane trust. The matter caused 467 concern to hon. Members when the Minister made his statement, and I welcome the fact that the Government have responded to that anxiety by exempting payments from the trust from calculation for housing benefit.
But I flag that welcome with a reservation. The more beneficial we make the Macfarlane trust and the treatment of payments to haemophiliacs, the more it begs the question about the other citizens who have been infected by HIV-positive blood products in the Health Service who are not haemophiliacs and who do not qualify for payments from the trust. The Secretary of State will be aware that I have been in communication with his Department and with his office on the matter.
As with this measure, the more that we extend the unique prerogatives and privileges of the trust — to which I do not object—the more we bring into question the fact that, outside the ambit of the trust, a few citizens have, entirely innocently, been infected at the hands of the NHS. In all fairness, they should have the same recognition and treatment as the House has decided to extend to haemophiliacs.
The thrust of the regulations is the Government's recognition that many local authorities will be unable fully to implement the housing benefit rules on 1 April. The regulations offer them a rough and ready calculation by which they may proceed on 1 April. Therefore, I do not propose to oppose the regulations. They are necessary, given the hole in which the Government now find themselves.
However, this does not diminish their importance as an admission of failure, in that a number of local authorities cannot get the system up and running by 1 April. That is not their failure: it is the Government's. Those same local authorities were promised 12 months' clear notice of the details of the housing benefit regulations. They got five.
The regulations that we debated last November were laid in the first week of November. The guidance manual to local authorities, advising then how to interpret those regulations, were not issued to local authorities until January, three months before the implementation date. It is a remarkable piece of effrontery on the part of the Government to take two years in which to decide what the regulations should be and then to give the local authorities five months in which to put them into practice.
The Minister referred to the survey carried out by the Government on the state of readiness of the DHSS—[Interruption.] I crave your assistance, Mr. Deputy Speaker. Would you advise those hon. Members who find that they have important things to discuss to hold their conversations in the Tea Room? The Chamber was not provided as a place for them to gossip in, but for official speeches in the House.
§ Mr. Deputy Speaker (Mr. Harold Walker)
I hope the House has heard what the hon. Gentleman has said.
§ Mr. Cook
I am obliged, Mr. Deputy Speaker.
The Institute of Housing has today issued a quite different interpretation of the Government's survey of local authorities. It issued a press release this morning under the heading:Time Running Out for Crisis-Hit Councils".According to the figures in that press statement, the survey to which the Minister referred contains replies from 281 councils, of which 101 are not in a position to implement the scheme fully on 1 April.
468 I have been carrying out my own survey of local authorities' state of readiness. It is a pity that the Government did not inform me that the DHSS was carrying out theirs; that would have saved me a lot of postage. The picture that emerges from my survey is markedly worse even than that which appears in the Institute of Housing's gloss on the Minister's study. I have, to date, received 119 replies from authorities, of which only 59 are confident that they can implement the scheme in full on 1 April. The other half—almost precisely—state either that they will have no scheme in operation by 1 April or that they will have only part of one. One authority, which will not be assisted by tonight's regulation, does not anticipate having a full scheme in operation until 31 December.
I stress that the replies from local authorities in difficulties cross all party lines. Among those that have informed me that they will have no scheme in operation on 1 April are Cherwell, Havant and Merton. These are not Labour-controlled, or even Liberal-controlled councils. Nor is it surprising that they find themselves in that difficulty, because the blame does not lie with them. It is impossible for them to perform better than the software with which they are supplied. Some software suppliers have now advised local authorities that they cannot deliver in time for implementation on 1 April.
The most conspicuous case of this — the Minister managed to avoid mentioning it, but let us have it out in the open—is ICL, which is servicing 90 local authorities. It is advising them that the first tranche of software will be available on 27 March, which, even if there are no snags in the software, and no additional training is required for staff, leaves those 90 authorities precisely four days, of which two are a weekend, to key in all the details of their cases.
There will be no facility for revision of the scheme until a further software package is provided on 24 April, and the software package will not be completed until June. I presume that that is the significance of the date of 30 June in the regulations.
As this is a non-controversial measure, we shall not divide the House, and I have no wish to score points at the expense of the private sector. In fairness to that great computer company ICL, I must say that the major task of putting on to computer the 105 paragraphs of the housing regulations was rendered impossible by the short time scale and the complexity of those 105 paragraphs.
Among the replies that I received from local authorities, I have a number of obiter dicta from the chairmen of the housing committees, who stress that point. The chairman of Merton council—not a Labour council —observed:There is no doubt that the late laying of the regulations made the job of producing software almost impossible within the timescale allowed.The chairman of the Derby housing committee—my hon. Friend the Member for Derby, South (Mrs. Beckett) is with me on the Front Bench tonight—said:Our experience has confirmed all our fears that the timetable has been totally unrealistic. Even if we are operating in April, we will not be giving a proper service.By far the most stark comment came from the chairman of the Birmingham housing committee, who said:It does appear that deadlines were set with the sole aim of seeing how many could be broken.I hope that the Minister will not deny the difficulty of that tight deadline; his predecessor had the grace to admit it.
469 I have the minutes of a meeting between the DHSS Ministers and the Association of Metropolitan Authorities on 12 May 1987—a date that is engraved on the hearts of many hon. Members. The minutes state:The Minister apologised for the delay and assured the Associations that 'the regulations were not very far away' … The Minister would give no specific assurances as to the date of the regulations and said we would not 'necessarily have to wait until after June 11th'"—a date that is engraved even larger on the hearts of many hon. Members.
The minutes continued:In fact he hoped 'to deliver within the next few days'.That was 12 May. The final version of the regulations were not laid within the next few days, nor the next few weeks, nor the next few months. They were not laid until the first week of November, a full six months later. The interval between that meeting with the Minister, at which he promised that they would be laid within the next few days, and the publication of the final version of the regulations was actually longer than the local authorities were allowed for implementation of the scheme after they were published.
There is another area in which the DHSS must accept responsibility for the position that we find ourselves discussing tonight. It is the quite clear and deliberate underfunding of the cost of the transfer to the new scheme. The local authorities estimate that the national expenditure by local authorities on transition to the new scheme will be £46 million. The Government grant to assist with the hardware for the transition is only £25 million —about half the total expenditure. From the evidence that I have received from individual local authorities, I believe that that estimate is correct.
In case I am accused of being partial and citing evidence only from Labour heartlands, I shall give the figures for East Sussex, an area in which the merits of Labour representations have not yet been adequately recognised. There are seven district councils in East Sussex, whose total expenditure on transition to the new system is £796,000. The total grant from the Government is £426,000—barely 55 per cent. of the total.
I cannot resist rubbing home the extent to which Labour councils have attempted to achieve this as efficiently and cost-effectively as possible by mentioning that only one of the seven is a Labour council —Brighton. Brighton managed to keep its expenditure nearer to the Government grant than any of the other six councils, yet, despite the competence and efficiency of its housing committee, it failed to achieve that level and is therefore left with a net expenditure on the scheme.
The conclusions are clear. The Government have sought to introduce this major change on the cheap, shuffling half the cost on to local authorities. They have introduced the scheme in a hurried and impossible time scale. It has baffled the brains of the top computer firms which have had to turn it into a software package within the available time. In the 59th minute of the 11th hour, at the last gasp, the House funds itself debating these regulations which attempt to retrieve the situation.
It is characteristic of the Government's meanness of spirit that everyone but themselves will have to pay for their delays and errors. The regulations that the House approved only last November provided that local authorities could not recover an overpayment where it 470 occurred through official error and where the claimant had no way of knowing that he or she had been overpaid. The regulations consolidated what had been the existing position on housing benefit for quite some time.
The effect of the regulations which we are now considering is that, if a local authority commits an official error during the transitional period to 30 June, it will have the power to recover that overpayment from the claimant, even though the claimant may have had no reasonable way of knowing that he or she had been overpaid. In view of the complexity of the regulations, it is hardly surprising that many claimants will be wholly innocent of the knowledge that they have been overpaid.
As the Minister said, there may well be some underpayments, but the overpayments are much more likely to exceed the underpayments because the new scheme that takes effect on 1 April is less generous than the current scheme. It is likely that errors will err on the side of overpayment rather than underpayment. One can only conclude that there will be hardship when the new scheme is put in place—as we have always known—but it will be all the greater if the new, correct calculation arrives after three months of overpayments which the claimant is now expected to repay. That is wholly unjust.
I asked the Minister about subsidy arrangements. I confess that, although I attended closely to his response, I am not sure that he entirely answered my point. Perhaps, during the debate, the hon. Gentleman will have a greater opportunity to reflect and take advice and so give a more complete reply when he responds. I shall put my query to the Minister in greater detail than I could in an intervention.
There are no regulations before the House on the subsidy arrangements for the new housing benefit system. I understand that such regulations are yet to come before us. It is yet another entertaining comment on the extent to which the Government are behind schedule with the scheme that at this stage, only a fortnight before implementation, we still do not have before the House the regulations providing for the subsidy of that scheme.
I am advised that 1 April has particular significance in terms of the procedures of the House. If the regulations on the subsidy arrangements are published before 1 April, they are subject to affirmative proceedings. If they are published after 1 April, they are subject only to negative proceedings. Having made that discovery, I suspect that we can be confident that the regulations will be published after rather than before 1 April. I can only wonder in retrospect how we let this slip through in the Social Security Act 1986.
As the regulations are not published, there is evidently time for the Minister to reflect on how he will integrate these provisions into the general subsidy arrangements. In general, the subsidy under housing benefit is 97 per cent. of all expenditure, with the exception of subsidy for overpayments in the public sector, which is only 15 per cent. The device under discussion extends to the public sector the system of payments on account, which are currently available for private tenants, for which the subsidy is, and always has been, 97 per cent.
I therefore put it to the Minister—I hope to carry at least my hon. Friends on this, if not the whole House—that if he is to extend the device to the public sector, he must extend to public sector tenants the same basis of subsidy and pay 97 per cent. for any overpayments that cannot be recovered by the local authorities.
471 Opposition Members strongly object to the new housing benefit scheme. I shall not weary the House by detailing all the objections that we made when we debated the parent regulations on 19 November. Suffice it to remind the House that the regulations will leave 6 million claimants worse off and 1 million claimants deprived of housing benefit altogether. Among those 1 million will be several hundred thousand who will lose their entire benefit as a result of the new rules on capital savings.
I am very sorry that the hon. Member for Stockport (Mr. Fayell) is not with us tonight, because last night he made a remarkable and memorable intervention in our debate. He said that the new system of benefit was needed to ensure that those who were out of work did not succeed in getting benefits that compared with those of people in work. The effect of the housing benefit regulations —particularly in relation to the capital savings rule—is to penalise precisely those who have taken the Government at their word by being prudent and thrifty and putting by a modest nest egg for their retirement. They now find that that deprives them of any right to housing benefit.
472 We condemn and reject the system that will be in place on 1 April, and we cannot but contrast it with the largesse offered in the Budget only last week, which gave sums well in excess of the savings from this mean and nasty measure to a mere 3 per cent. of the population. The least that we might have expected is that the Government, in introducing the new scheme, would not have displayed incompetence to pile even greater hardship on those hit by the changes in the benefit system. The regulations confirm that the Government have been incompetent in their introduction of the new scheme and that they are determined that the price of that incompetence will he paid by the victims in restoring any overpayment in the early period of shambles that will follow 1 April.
We cannot oppose these regulations, because they are a makeshift measure made necessary by the Government's own failure, but we thoroughly condemn the measure that gave birth to them. In a sense, we almost welcome tonight's regulations, as they are an early and damning admission of the pain and hardship that will break above the heads of so many claimants when the scheme is implemented in the coming weeks.
§ Mr. Simon Hughes (Southwark and Bermondsey)
The position of my hon. Friends and myself is very similar to that of the hon. Member for Livingston (Mr. Cook). We share his concern and fear about, and his opposition to, the substantive changes, which may well affect two thirds of the families in my constituency — the number that depend on some form of supplementary benefit.
We will not oppose either of the sets of regulations. The first is a necessary administrative measure that was foreshadowed earlier and the second, as the Minister said, is necessary, given that the system would otherwise not have been able to operate as was originally envisaged. The regulations will improve arrangements that would otherwise have been very unmanageable. Therefore, I shall limit my remarks to a couple of questions about the Housing Benefit (Supply of Information) Regulations, and to some points about the general regulations, which are obviously of greater substance.
Obviously, I appreciate that the supply of information regulations relate, as the Minister fairly said, to the transfer of information between agencies. However, there are two practical matters that may arise in relation to the need for information by people who will be affected by these regulations and by the Social Security Act 1986. Both matters were put to me by my local authority, which is not one of the authorities anticipating great difficulties on 1 April. Therefore, my authority was not simply complaining about the date of implementation. However, that is a problem that faces other authorities and they make that complaint justifiably.
It looks as if there will be a problem because people who will receive less or no housing benefit and who will have to pay some or all of their rent will not realise that. That will come about as the result of a change in the level of payment coming through the housing benefit system. I know from constituency experience, as I expect the Minister does, that the result will be that people will begin to accrue rent arrears. Those arrears will initially be unseen because they will go on paying the same amount without realising that they have to make an additional contribution. At the moment, those most likely to be affected are those who have all their rent paid but who, after 1 April, will have to pay some or all of it.
I am concerned about how the process of supplying information will be subsidised and financed so that the people affected can be informed, particularly if the changes affect them adversely, and so that they will not find themselves with increasing rent arrears.
The second and linked issue is that one of the consequences of the regulations is that people may have to make a 20 per cent. rate contribution. People may think that they do not have to pay and, therefore, they will not pay. The concern of the officers in Southwark—it is a point of general importance, and I make it because I believe that it will be generally useful—is that the cost of chasing up those who will have to make that 20 per cent. contribution but do not do so, because they are not aware that they should, could be more than the revenue that would be raised for the local authority in question. That could be dealt with by supplying information. The Government should ensure that local authorities are given 474 the financial wherewithal to provide that information so that people will not face rent or rate arrears from the beginning of next month.
On the general regulations, I join the hon. Member for Livingston in welcoming the provision in the regulations excluding payments made to haemophiliacs and the Macfarlane Trust. The Minister has traced the history of that change and the representations made from the Haemophilia Society, whose offices I pass every day on my way home just over Westminster bridge in that little strip of Lambeth between here and Southwark. It is a welcome move and the Haemophilia Society is grateful for it, as are we.
In relation to the general matters—these are perhaps the most substantial issues that we are debating—there will be a substantial delay in some authorities implementing the scheme. I do not know—and I do not think that the Minister knows—the exact figure. I know that research has been carried out about what it is likely to be. I also know the figure that was given to the Department in January. Of the 312 authorities that responded, 66 per cent. said that they expected to be ready on time and 54 per cent. said they hoped to be ready but were not sure. Clearly, many authorities will not be ready.
§ Mr. David Lightbown (Lord Commissioner of the Treasury)
That is 120 per cent.
§ Mr. Hughes
Seventeen per cent. hoped to be ready but were not sure, and another 17 per cent. were certain that they would not be ready. Thirty four per cent. told the Department that they would definitely not be ready or might not be ready. That is just over one third of the authorities. I accept that as the day draws nearer authorities will speed up, because that is in the nature of things.
There are certainly specific problems and I hope that the Minister will have the grace to admit that these problems are not of the local authorities' making. As the Chartered Institute of Public Finance and Accountancy and authorities of all persuasions have made clear, the fault lies with the Government because of the delay in the regulations and the delay in implementing them. The Minister shakes his head as if to say that that is not the case. Looked at objectively, it will be seen that the delay was caused by the Government because they produced the regulations just 10 days before the date of implementation.
The professional agencies and the Chartered Institute of Public Finance and Accountancy are not accused by the Government or by anybody else of being partisan in these matters, and they make it clear that the delay should be accepted by the Government as their fault. Originally, this was to be implemented a year ago, but it was put back. It is very unfair for any blame to be attributed to local authorities.
I made inquiries of colleagues. One of them, Councillor Maggie Clay of Leeds, passed me a letter sent by Leeds city council to colleagues in Leeds and all Leeds councillors. That made it clear that in Leeds the delay was caused by the delay in the regulations. Because of that, the guidance circulars were not received until February, and the two that most affected software were not received until August 1987 and November 1987.
Leeds contracted with a software supplier in September 1986 and the software was to be in two parts. One part allowed preparatory work to be undertaken and the other 475 was the housing benefit software for implementation in April. Obviously, time must be allowed for manufacturers to produce that software and the planned date for ADC software was October 1988, while the main software was to be released in January to February. Once released to the city or local authority, it has to be tested, staff have to be trained, and it has to be integrated into in-house systems. For all those things three or four months is quite reasonable.
The ADC software for Leeds was delivered a month behind schedule because of the lateness of the regulations. Since then, the council has met the supplier's managing director and everybody has worked closely, and regular monitoring has taken place. The supplier announced on 3 March, just 20 days ago, that the software could be released only on a phased basis between 11 March and 28 April. That means that in some cases it will be released after the regulations are in force.
I hope that the Minister will accept that the delay was caused by the delay in the regulations, which is the fault of Government, and that he will not blame local authorities. The regulations will be some help to local authorities, but I hope that the Government will help them more so that they can get out of a mess that is not of their making. Can the Minister tell the House over what period repayment will be permitted? One of my hon. Friends asked about that in Committee when the parallel statutory instruments were debated last week.
If the Government provide all the necessary publicity and information about why repayments are necessary, what will that mean in practice for local authorities and people? Money will be needed to ensure that those who depend on benefit, and the local authorities who are affected by the regulations, are not harmfully affected.
It is far too late for us to be debating the regulations. Regulations coming into effect in 10 days' time should have been debated a long time ago. We have no option but to let them through, but I hope that the Minister will admit culpability on behalf of his Department and come to the rescue of local authorities, who will need help if they are not to be further disadvantaged by housing benefit changes that, for many people, will be extremely adverse.
§ 11 pm
§ Mr. Tony Banks (Newham, North-West)
I am delighted to see that the Chamber is looking considerably tidier than it was last night, when we discussed the social security regulations. Last night, I raised a point of order about the state of the Chamber, but clearly the Prime Minister must have whisked through here with her spike and her black bag followed by the Secretary of State for the Environment. We must be eternally grateful to them for the fact that the Chamber is so clean. It is a pity that she did not collect all the Housing Benefit (General) Amendment Regulations on her way through.
It is a pity that, at this time of night, we are debating something of such significance to so many people in so many constituencies. I look forward to the day when Parliament's proceedings are televised, because unfortunately, although these regulations will affect many people, I doubt whether the newspapers tomorrow will report anything of the deliberations on these regulations. That is a sad commentary on journalists, the press and the media. I suspect that I know what the headline political 476 stories will be tomorrow, but they will have nothing to do with the Housing Benefit (General) Amendment Regulations or the Education Reform Bill.
I commend to the House a page that appeared in today's Daily Mirror, which is headed,Now it's Thatcher, Thatcher, benefit-snatcher".It is further headed, "Penny pinching the poor". I shall read the article for the benefit of those who do not take the Daily Mirror. It says:There will be some really nasty news for Britain's worst-off families in a couple of weeks.They're most of the seven million who get help with their rent and rates. Next month they'll find out how they will fare under the new Housing Benefit scheme.More than a million will lose all the help they've been getting. Five million will have their payments cut, including 2½ million pensioners. And it's all because penny-pinching Mrs. Thatcher wants to cut the cost of housing benefit by £500 million.As my hon. Friend the Member for Livingston (Mr. Cook) said, compare that with the largesse that was handed out to the richest of our society the other week.
Late at night, we are debating regulations that will affect some of the poorest people of our country. Yet only the other week we were hearing about the massive tax handouts that were being given to the richest. That is the contrast that makes the policies and priorities of the Government so obscene and so unacceptable to the majority of people in this country.
Regulation 8 deals with the payment of benefit on account when a full assessment cannot be carried out. As we know, normally, housing benefit should be paid by a local authority within 14 days after it has received all the information relevant to the claim such as rent book or bank statement. Where the authority has been unable to make the payment, not because of any delay by the claimant in providing information, the local authority can make a payment on account, which is an estimated payment.
Under the current regulations, if a local authority makes an overpayment, and it is its fault, the local authority can recover only the first four weeks of overpayment. If it is an overpayment made because of a claimant's error, existing regulations allow that to be recovered in full.
It has become clear that a number of local authorities are not yet fully prepared for the implementation of the regulations. New regulation 91A states that up to 30 June 1988 payments on account may be made by a local authority ofsuch amount as it considers reasonable".That is to allow authorities more time to get their systems in operation to make accurate assessments.
The benefit is fully recoverable from the claimant so long as the housing benefit staff inform the claimant that it can be recovered. That is clearly unfair, because it could lead to considerable amounts of money being recovered by the local authority when it eventually makes the correct assessment. The claimant will have budgeted on the basis of the income that he or she has been receiving to date. It may come as a surprise to Conservative Members to know that housing benefit claimants are not well off. The 46,000 who receive housing benefit in Newham are certainly not well off, and they will not be in a position to put money aside in case they have to repay some of it later.
If repayment is by deductions from future benefit, as it usually is, the claimant will be expected to live on a severely restricted income. What experience have 477 Conservative Members of living on supplementary benefit or the incomes of people on housing benefit? I see the Government Whip, the hon. Member for Staffordshire, South-East (Mr. Lightbown), sprawled in his usual recumbent position and smiling. Given the capacious size of his belly, he would find it difficult to survive on the benefit levels that people in my borough have to put up with. Shame on you, Sir!
§ Mr. David Winnick (Walsall, North)
I share my hon. Friend's sentiments in every respect. Does he agree that it is good news that the Under-Secretary of State who replied for the Government yesterday—the hon. Member for Enfield, Southgate (Mr. Portillo) — has apparently resigned and is now sitting on the Conservative Back Benches? Could it be that he has resigned in protest at the meanness of the housing benefit cuts and the way in which millions of our fellow citizens will be penalised from next month?
§ Mr. Banks
It must be a very long one, as he has been scribbling away all evening. I suspect that he is filling in his multiple share applications.
If a claimant is in no way responsible for overclaiming, it seems extremely harsh to penalise the claimant in the way that the Government propose.
The second important issue that I wish to raise is that of subsidy arrangements. The draft regulations contain no information as to how overpayments will be treated for subsidy purposes. Local authority associations have made strenuous representations to the DHSS that provisional payments should attract the full subsidy of 97 per cent. If no special arrangements are made, are we to assume that overpayments of this kind will be treated in the same way as ordinary miscalculations? If overpayment is due to an official error, it attracts only 15 per cent. subsidy. The Minister will doubtless wish to return to that. No doubt the Government will argue that overpayments of this kind are fully recoverable, so local authorities should not receive the full subsidy, because they can get their money back.
First, speaking on behalf of the London borough of Newham, I believe that it is unfair that the money should be recovered from the claimant, because the fault does not lie with the claimant. Secondly, we are talking about a crisis, certainly in my borough. Many local authorities are not ready to deal with the thousands of claims that they will have to process. One has only to recall the fiasco in November 1983 and in April 1984 and remember what happened to millions of claimants when they were first transferred to housing benefit. We do not want a repetition of that chaos.
As I said yesterday to the young gentleman then speaking on behalf of the Government but now retreating across the Back Benches, many people in my part of London do not even know their present entitlements, let alone what is to hit them on 1 April. As a Member of Parliament who has weekly advice surgeries, I know how 478 many people already come to me not fully understanding how their social security entitlement is worked out, and I know what it will be like in my office in Stratford come 1 April.
Again I ask the Minister precisely what I asked yesterday: what are the Government doing to inform people in areas such as the London borough of Newham precisely what changes will be made and how they will be effected?
The regulations are difficult enough for Members of Parliament to understand, and there is nothing especially intelligent about the average Member of Parliament in comparison with the average citizen of this country, but at least we have good advisers to tell us what the regulations mean. They are difficult to understand and God knows how many people in my part of east London will make sense of the regulations that will affect them so sorely.
If local authorities are not ready to administer the regulations, the Government may ask, "Whose fault is that? The regulations were published a year ago. What have local authorities been doing since then?". I give it to the Minister that he did actually say that local authorities have made the most strenuous efforts to get themselves ready for the changes.
In my borough of Newham, the local authority general purposes committee debated the new regulations as long ago as April 1987, and took a decision to purchase the ICL assessment package, known as housing benefit information system, which was mentioned by the hon. Member for Southwark and Bermondsey (Mr. Hughes) and by my hon. Friend the Member for Livingston. The preparatory work has been done by Newham council staff. However, in February 1988, ICL informed all its local authority HBIS users—about 90 in all—that the schedule for live releases of HBIS software had slipped to the extent that significant parts of the system—that is the capacity to amend or cancel weekly benefit entitlement, and to input manual adjustments—will not be released until 24 April 1988. As we know, the scheme is due to be implemented at the beginning of April this year.
For that reason, which is totally outside the control of the local authority, my borough will be forced to make payments based on assessments under the current scheme, and estimated payments under the new scheme for new claimants. I am advised that the borough's only alternative is to make manual assessments of its 46,000 claimants. The cost of estimated payments could be as much as £50,000 per week. As I told the Minister's colleagues yesterday, that is a dreadful burden for us to meet in Newham, which is the second most deprived local authority area in England and Wales.
It is not the fault of Newham that we may be obliged to make use of the power to make interim payments, nor, I imagine, is it the fault of those other 90 local authorities which are also customers of the ICL HBIS programme. For that reason, I ask the Minister to consider seriously, first, that overpayments made as a result of delays in implementing the new housing benefit scheme should not be recoverable from the claimant; and, secondly, that full subsidy — that is 97 per cent. — should be made on overpayments made as a result of interim payments on account paid between the beginning of April and the end of June 1988. People should be able to reclaim the full payment.
479 I hope that the Minister will be able to answer those points. Then I can at least go back and say that being here at this time of night to debate with this soulless and heartless Government was not altogether wasted and that we were able to get a small crumb of comfort for the people of Newham, who desperately need everything that they can get, even from this ruthless and heartless Government.
§ 11 13 pm
§ Mr. Scott
I congratulate Opposition Members on being able to sustain this brief debate despite the fact that they could not keep their troops here to vote against the regulations. Indeed, they have very little quarrel with the totally beneficial effects of the regulations and I am slightly astonished that they did not allow them to go through virtually on the nod.
On the history of these reforms, some Opposition Members seemed to suggest that there was great surprise about the regulations, that somehow they had been sprung upon the House. Their outline has been known for many months, if not years. Reviews have been set up, and the whole system has been debated more than once in the House, not least towards the end of last year, when the whole body of regulations affecting housing benefit were debated at length and approved by the House by a majority of 125. These are tidying-up regulations to deal with two minor matters—
§ Mr. Winnick
The Minister should be grateful that he is able to respond to the debate sooner than he would have done had I made a speech.
Does he not recognise that the Opposition have consistently opposed the housing benefit regulations? Does he not recognise now that it is all the more obscene that those who have lifetime savings of over £6,000 will receive no housing benefit at all, and those with savings of between £3,000 and £6,000 will lose part of their housing benefit after a Budget that ensured that the richest 5 per cent. got 40 per cent. of all the tax cuts and concessions? There was once an hon. Member for Chelsea who was highly critical of the Government's economic policy. Had he remained on the Back Benches, he would probably have shared, if only privately, the views that I have just expressed.
§ Mr. Scott
I do not want to tease the hon. Gentleman too much. He had every opportunity to make a speech during the debate. The word "obscene" seems to spring to his lips with relentless regularity these days. We have debated the principle of housing benefit many times. The regulations are nothing to do with that. To be fair to most Opposition Members, they have not concentrated on the broad principle of their objection to the housing benefit system that we are introducing. Some of their speeches have been pretty peripheral to the impact of the regulations, but they have concentrated on them. But I understand the self-indulgence of the hon. Gentleman, who always likes to allow himself to revert on such occasions to more general principles, as it is obviously too demanding to concentrate on the detail.
This is a storm in a teacup—
§ Mr. Scott
Perhaps a squall would be a more appropriate description.
The debate has constituted an effort to make something out of what is really nothing. These are beneficial arrangements to provide for two things, the first of which is Macfarlane trust payments. The House understands that that is a sensible and compassionate way in which to deal with that circumstance. We are left with the single remaining issue, which is the arrangements that are being made for that small number of local authorities—
§ Mr. Scott
Perhaps the hon. Gentleman will contain himself for a moment.
It is a small number of local authorities which, for one reason or another, will be unable, when the system comes into operation, fully to implement the system of housing benefit.
Many of those that have said that they will not be able fully to implement the system will be able to make payments to housing benefit claimants which are close, if not precisely very close indeed, to the entitlements. They may have to refine some of the marginal elements, but it will be difficult for any local authority to say that it is not possible now, after the notice that has been given and the time that local authorities have had to make the arrangements, to get close to being able to assess the entitlements of housing benefit claimants.
§ Mr. Tony Banks
I accept what the Minister is saying, but he would hardly notice a quid, and most hon. Members would not be too bothered about whether they had £1 less or more in their pocket, but to the people we are talking about it is crucial. Therefore, will the Minister say that, even if it is only a small amount, those people will not be required to pay it back, through no fault of their own?
§ Mr. Scott
I cannot say that to the hon. Gentleman. It will be for the local authorities to try to calculate the payments that are made to claimants as accurately as possible. They will be responsible for reclaiming any overpayments. The Government and local authorities have made arrangements to ensure that the claimants are well aware of the situation that will face them as the new system is introduced. In fact, many local authorities have tended to err on the conservative side to ensure that, if any error is made, it will not lead to any recoupment of benefit from claimants, but rather a payment to top up what they have been paid following the calculations.
The hon. Member for Livingston (Mr. Cook) took me to task on a number of issues and perhaps some were more justified than others. One of his complaints was that we promised to deliver the regulations in May 1987 but that they were not delivered until November. The hon. Gentleman knows as well as I do that the regulations could not be laid fully until the uprating statement had been made last year. Of course the final draft regulations were laid in May 1987 as promised, but the proper regulations could not be put before the House until the uprating statement had been made.
The idea that local authorities have been given insufficient time to prepare for the reforms is a difficult argument to sustain.
§ Mr. John Battle (Leeds, West)
The Minister appears to be making light of the problems faced by local authorities. Is it not correct that some 90 local authorities, including Leeds, which is one of the largest, have contracts with a computer company that has been unable to deliver the systems? Why should the local authorities be penalised when it is patently not their fault?
§ Mr. Scott
It is for local authorities to make arrangements with such companies as can deliver the sort of software facilities that are needed to implement the reforms. The vast majority of the authorities have been able to make such arrangements. There may be a minority that will be unable for one reason or another — I acknowledge the great efforts that have been made to deliver the whole exercise on time—fully to implement the new system for a few weeks. I do not blame local authorities for that. We are introducing the regulations to provide an easement in the position in which local authorities might otherwise find themselves. I had hoped that the House would be in the mood to accept that that is a sensible and wise thing for which we should provide.
Everyone knew what the position would be upon implementation. I should draw the attention of the hon. Member for Livingston to the fact that the two largest housing benefit authorities in Scotland are Glasgow and Edinburgh. The hon. Gentleman will be particularly familiar with those authorities.
When circulating his slightly unsophisticated questionnaire, I do not know whether he bothered to ask Glasgow and Edinburgh how they were placed regarding the implementation of the housing benefit system. In the past week, after a visit from senior officials from the DHSS, I asked for a report to see how those authorities were preparing. Despite the fact that Glasgow has the largest housing benefit caseload in the country, it has achieved the implementation of the housing benefit system on time. If Glasgow and Edinburgh can achieve the system on time, I cannot believe that there has been insufficient time for other smaller housing authorities with smaller caseloads.
The hon. Gentleman also mentioned that Birmingham had criticised the delay in the regulations and the guidance that had been issued. Birmingham has now confirmed that it is expecting to make all the payments under the new rules well in time for full implementation.
During the debate, it has been alleged that claimants will be unaware that benefit may be overpaid and that recovery will be sought. The regulations and guidance issued to local authorities have ensured that payments on account must be identified as such to claimants. At the time of any payment, claimants must be told that, if there are errors and if overpayment is ever incurred, they will be expected to repay any such payment and that any underpayment will be reimbursed. There is no earthly reason why any claimant should be unaware of the terms upon which any contingency payment may be made.
§ Mr. Robin Cook
It is the case that the regulations provide that those who are assessed under the regulations will be served with, as it were, a public health warning that this is an interim assessment. But that provides no guidance to the claimants whether they have been overpaid or underpaid and if so by how much. It makes it impossible for them to budget against the time when they are served with the correct assessment. If a tenant were 482 capable of working out whether he was overpaid or underpaid, why would a local authority serve him with a rough calculation in the first place?
§ Mr. Scott
Even if a local authority cannot get its full computer programme in operation, it should be able to calculate these sums. In practice—the hon. Gentleman must know this as he is broadly familiar with the terms of the housing benefit system—it will be possible for local authorities using simple methods of calculation to get close to the precise benefit that is available to any claimant. Some fine tuning may have to be introduced in the subsequent week or two before full implementation is possible, but I do not believe that any claimant will face a substantial burden of under or overpayment.
We have taken a great deal of trouble to ensure that claimants are told through leaflets and advertising, in the press and elsewhere, and that they are aware that a new system is coming into operation. The vast majority of local authorities will be able fully to implement the system on the date of implementation, and those that cannot will have only a marginal error involved in the payments they make.
This debate has been sustained with great difficulty. I well understand that any mention of housing benefit and, indeed, of social security reforms is bound to provoke the Opposition to some discussion, but—
§ Mr. Simon Hughes
It sounds as if the Minister is coming to the end of his remarks. I asked a couple of specific questions which he certainly has not dealt with, and I should be grateful for answers. He says that we are extending the debate artificially, but there have been some genuine questions. One was: how long will people have to repay? Another was: will local authorities have their money reimbursed for their expenditure on explaining what is going on?
§ Mr. Scott
I do not believe that there is any case for the Government providing extra funds to local authorities for administrative costs. The vast majority of local authorities have already implemented this system fully on time. The costs that would be involved in advising claimants of over or underpayments and the handling of that would be so minuscule that it would not contribute to the proper administration of the system to provide small sums. It is for local authorities to decide with claimants who may have been under or overpaid the arrangements whereby that can be adjusted in future. The sums involved will be small compared with the weekly benefits that will be available to claimants. I should not have thought that any great trouble would be involved in arranging either the reimbursing of an underpayment or the recoupment of an overpayment.
§ Mr. Tony Banks
I am primarily interested in my borough of Newham. I am advised that, because of ICL's failure to deliver the contract, Newham has problems. I want to hear from the Minister how we can deal with that. What will he do so that Newham can ensure that people are not penalised for a mistake that is not theirs, and at least advise everybody fully? What extra resources will the Minister make available to Newham so that we can advise the 46,150 claimants of housing benefit exactly what the regulations mean?
§ Mr. Scott
The hon. Gentleman has had as much notice of the arrangements for housing benefit as the housing 483 authorities in Edinburgh, Glasgow and elsewhere. They decided to place a contract with a company which could provide them with the software to enable them to deliver. It is for them and the contractor to arrange these matters.
The vast majority of local authorities have managed to do this in the interests of their claimants, and the vast majority of people entitled to housing benefit will get their proper entitlement when we implement the new system. I do not believe that I have any duty to stand at this Dispatch Box and provide extra resources for Newham to dig it out of a hole because it is incapable of managing.
§ Mr. Thomas Graham (Renfrew, West and Inverclyde)
If the sum of money will be so marginal, why does not the Minister wipe it off and let the overpayments remain? Would not that be the best way forward?
§ Mr. Scott
Local authorities should be given every incentive to manage properly the sums of public money that are at their disposal. I can think of many local authorities, many represented by Opposition Members, which would be totally irresponsible in the way that they handle public money. I commend the regulations to the House.
§ Question put and agreed to.
That the draft Housing Benefit (Supply of Information) Regulations 1988, which were laid before this House on 14th March, be approved.
That the draft Housing Benefit (General) Amendment Regulations 1988, which were laid before this House on 14th March, be approved—[Mr. Dorrell.]