ADMINISTRATION OF HOUSING BENEFIT, &C (Hansard, 30 April 1996)

§ Mr. Betts
I beg to move amendment No. 143, in page 159, line 24, at end insert— '(4A) For subsection (8) substitute— (8) An authority shall disregard, in determining a person's income (whether he is the occupier of a dwelling or any other person whose income falls to be aggregated with that of the occupier of a dwelling), the whole of any war disablement pension or war widows pension payable to that person. (8A) An authority may modify the housing benefit scheme administered by the authority to such an extent as may be prescribed and any such modification may be adopted by resolution of the authority.".'.

§ Madam Deputy Speaker (Dame Janet Fookes)
With this, it will be convenient to discuss also the following amendments: No. 144, in page 160, line 2, at end insert— '(lA) For subsection (6) substitute— (6) An authority shall disregard, in determining a person's income (whether he is the occupier of a dwelling or any other person whose income falls to be aggregated with that of the occupier of a dwelling), the whole of any war disablement pension or war widows pension payable to that person. (6A) An authority may modify the council tax benefit scheme administered by the authority to such an extent as may be prescribed and any such modification may be adopted by resolution of the authority.".'. No. 145, in page 160, line 2, at end insert— 1000 '(1B) In subsection (7), for the words "(6)(a) ", there shall be substituted the words "(6) and (6A)".'.

§ Mr. Betts
The amendments address a problem in the current legislation concerning the disregard of war pensions. An injustice is being perpetrated on many war pensioners and their widows up and down the country.
At present, the first £10 of any war disablement pension or war widow's pension is disregarded mandatorily in the benefit calculations of local authorities for both housing and council tax purposes. Local authorities then have the discretion to extend the disregard to the maximum total pension. In doing so, they must pay for any additional disregard out of their resources.
I do not think that it is fair to complain that some local councils choose not to extend the disregard. After all, it is the Government who lay down the national benefit guidelines. It is they who determine what is included mandatorily in the benefit policies applied by local authorities and it is the Government who have chosen not to extend the disregard to all pensions. The Government decided that the mandatory allowance should be only £10.
Because of the local structure, local authorities must weigh the cost of any additional disregard against total expenditure on other services—given that they are almost universally capped by central Government—and against the cost of extending the benefit system to any other case of hardship. I believe that it is an anomaly that the only extension of disregard in the benefit system that is incorporated in legislation applies to war disablement pensions and war widows' pensions. That is the only issue mentioned in addition to the statutory scheme, where local authorities have the right to extend the statutory scheme and to pay for the extension out of their resources.
The issue is very simple. We examined the matter in Committee, but it is important to raise it again in the House. We shall continue to raise it until either we persuade the Government to change the legislation or there is a new Government.

§ Mr. Peter L. Pike (Burnley)
My hon. Friend will recognise that the councils that have chosen to include war pensions in the disregard face extreme financial difficulties. We should recognise our debt to the people who served this country in the world wars and accept the principle espoused in the amendments.

§ Mr. Betts
My hon. Friend is absolutely right: it is a national issue. War pensions are paid to ex-service men and their widows in recognition of the service that they gave to the whole country. People did not fight in wars for Sheffield, Burnley or for any other city: they fought for our country. As such, they receive a national pension which should be disregarded as part of the national benefit scheme. The cost should be met by the nation out of national taxation. That is the principle.
It is wrong that people who have fought in a war for their country and who receive a disability pension should be treated differently from others who fought alongside them but who come from a different part of the country. That is an unjustifiable anomaly. I move the amendment in an attempt to ensure that there is coverage under a national scheme, that costs are borne nationally and that all pensioners, wherever they live, are treated in the same way.
1001 The Government said in Committee that they could not meet the £75 million cost. However, when I inquired again recently, the cost had reduced to £60 million. We owe a debt to those who fought for our country. Surely we can manage to find £60 million in order to rectify an anomaly and to remove a gross injustice perpetrated on many people who do not receive the full benefit of the pension that they earned in fighting for their country.

§ Mr. Simon Hughes
I support the amendment moved by the hon. Member for Sheffield, Attercliffe (Mr. Betts). He will know that there has been a succession of campaigns on the issue. I have introduced two ten-minute Bills that were supported on both sides of the House and I have also led an all-party delegation to the Department. Amendments were tabled in the past and there is an early-day motion on the subject which has been signed by about 140 Members of Parliament.
I do not want to duplicate the hon. Gentleman's comments, but, according to my figures, 60 per cent. of local authorities currently operate the full disregard. Some 79 per cent. of local authorities in England and Wales operate a total disregard on war disability and war widows' pensions. The reality is not as the Government have stated. The Government's figures are misleading: they overestimate the numbers, as they have not caught up with all the responses from local authorities. I am informed that only 4 per cent. of authorities—18 in total—refuse to give any further concessions.
I make two more points. The hon. Gentleman is absolutely correct: simply by accident of residence—a factor over which people may have no control—pensioners may be treated entirely differently. The right hon. Member for Lagan Valley (Sir J. Molyneaux) has been a strong advocate in this place of the war pensions issue. People receive war pensions as a reward or recompense for national service. It is not a local authority matter; it is a Government matter and a state matter. Therefore, it should be treated in a similar way throughout the United Kingdom. The Royal British Legion has advised some war pensioners not to claim their entitlement to war pension, as it would be financially disadvantageous to them.
We are not satisfied that the Government understand that equity is worth far more than relatively small sums of public money. I hope that the Minister will respond positively to the amendment. If he does not, a diminishing number of those affected will consider the Government to be unnecessarily inflexible. Having celebrated VE day, VJ day and all the other commemorations, we should now be generous. The Government waste money on many things; this should not be one of them. I hope that they respond positively to the amendment.

§ The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans)
The Government recognise that war disabled and war widows are a special case. I should stress that all war pensions and the wide ranges of associated allowances that are paid on top of the basic war pension are now completely tax free. Those pensions and allowances are paid at a much higher rate compared with their social security counterparts.
1002 We are debating not whether those pensions and allowances should be tax free but whether, regardless of their means, those who enjoy tax-free pensions and allowances should also be eligible for income-related benefits. The Government believe that there should be a £10 mandatory disregard in respect of housing benefit and council tax benefit, but the provision goes further than the hon. Member for Sheffield, Attercliffe (Mr. Betts) suggests: 80 per cent. of war widows also receive the pre-1973 allowance of £51.71 a week. That is also a mandatory disregard for the purposes of housing benefit and council tax.
Although considerable generosity is being shown, the hon. Member for Attercliffe is suggesting that, in respect of income-related benefits that are designed to help those most in need, a total disregard of all such income should be introduced nationally. [Interruption.] The hon. Member for Greenwich (Mr. Raynsford) laughs. I take that to be in dissent, but let me give him an example that is rather surprising in terms of social security. It is a example of the anomalies that would arise if the hon. Member for Attercliffe succeeded in his campaign.
A 75-year-old war widow may have a total weekly income made up of two parts, the first of which is her tax-free war widow's pension of a little over £148 a week. She may also have a second income comprising her state retirement pension or private means of up to £70 a week. Therefore, she would have a total income of £220 a week, get her rent paid by housing benefit and her council tax paid in full. In social security terms, that would be extraordinarily generous and we suggest that it would be going too far.
At present, local authorities have discretion as to whether to meet those costs. Some exercise it and some do not. The hon. Member for Attercliffe said bluntly that he wanted it paid centrally. His amendments are defective, however. They do not achieve that. If they were passed, their only effect would be to require Sheffield city council to meet those costs when it has chosen not to do so. On that basis, I cannot believe that the hon. Gentleman will wish to press the amendments.

§ Sir James Molyneaux (Lagan Valley)
I do not dispute the generosity of present and past Governments in this matter, but as we recently discussed issuing fairly stringent guidelines to local authorities, would it not be possible to issue similar guidelines to the defaulting councils, many of which, unfortunately, are dominated by the same party?

§ Mr. Evans
The right hon. Gentleman is correct. It is for local authorities to determine such matters and for their electors to form a judgment. A national scheme would involve extra public expenditure. According to our lowest estimate, it would cost an extra £30 million a year in housing benefit and an extra £10 million in council tax benefit. Local authority returns suggest that it could cost as much as £60 million a year. That is a considerable sum, given that it would be in addition to the £20 million already incurred through mandatory disregards.

§ Mr. Pike
Does the Minister not understand that those of us who are arguing the case and the nation believe that we owe such people the greatest possible debt for our freedom and our society and that is why we support the amendment?

§ Mr. Evans
Of course we owe them everything, but it is for local authorities to decide how much weight to attach to that debt.
I cannot accept the amendment. I suggest that it is technically defective and that, given the totality of existing provision, it is reasonable in all the circumstances.

§ Mr. Betts
I was interested to hear the Minister's explanations. We shall send a copy of his speech to the Royal British Legion, whose members will be interested in the Government's attitude in these matters.
The Minister claimed that the amendment was technically defective. I was surprised that his colleagues did not make that assessment in Committee. I also refer him to the comments of the Secretary of State in another Committee that was considering the same issues. He said that Committees and the Government should not hide behind technicalities on matters of principle, but should face up to them.

§ Mr. Roy Beggs (East Antrim)
Does the hon. Gentleman agree that it might be necessary to embarrass those councils by listing them? That might encourage them to provide the same benefits as 60 per cent. of councils are affording in due respect to the war service of their residents.

§ Mr. Betts
The Royal British Legion has already listed councils according to their response on this issue. The purpose of the amendment is that individual councils should not be creating a patchwork quilt of policy across the country. It is a national issue that should be tackled by the Government and incorporated into a national benefits system.
The Minister referred to technical deficiencies. In my view, his entire speech was deficient and some of his comments were disgraceful. He said that the Government had dealt with taxation issues by making war disability pensions and war widows' pensions tax exempt. That would benefit those on high incomes who receive a war disability pension or a war widow's pension, while those on lower incomes would have some of their benefit clawed back. So Government policies hit poorer war pensioners and widows.
The Minister quoted the case of a war widow who received a war widow's pension of £148. He asked why she should have that pension disregarded. However, he then said that local authorities already had that discretion. If the Government do not believe that such a person should have her pension disregarded, why do they allow that discretion to operate as part of the current scheme? I do not accept the Government's arguments or their logic, but, because of time pressure, I shall ask leave to withdraw the amendment.
The Government are wrong in principle. Their treatment of war pensioners is little short of disgraceful. It should be a national issue dealt with by central Government and paid for out of national taxation. We shall continue to support the campaign of the Royal British Legion until this Government—or a future Government—recognise it and put it into legislation. I beg to ask leave to withdraw the amendment.