HC Deb 13 May 1998 vol 312 cc411-7

Lords amendment: No. 38, in page 24, line 12, after ("relates") insert— ("(aa) may review such a determination on the ground that the person who applied for the payment to which the determination relates misrepresented, or failed to disclose, any material fact;")

Mr. Denham

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker

With this, it will be convenient to discuss Lords amendments Nos. 39 to 43, 79, 80 and 92.

Mr. Denham

These are technical amendments to clauses 38 and 73, which deal with the social fund. Although they are essentially drafting changes to clarify matters that the House has already discussed, it may assist the House if I briefly remind hon. Members how the social fund measures in the Bill fit together to form a coherent package of improvements.

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The simplification of budgeting loans in clause 69, the ability to recover social fund overpayments in clause 73, and their associated review procedures in clause 38 all represent further significant steps towards our goal of achieving an active, modern service. Their combined effect will be to make the social fund system more user friendly for the customer, more efficient for staff to administer and more secure for the taxpayer.

Amendments Nos. 38, 39 and 41 to clause 38 clarify the review procedure for dealing with discretionary social fund overpayments. Amendments Nos. 40, 42 and 43 are consequential technical changes, which again ensure that "appropriate officers" and social fund inspectors need only follow the special review procedures when they are reviewing determinations on the grounds that the applicant misrepresented or failed to disclose information. I should make it clear that nothing in these amendments affects the applicant's right to apply for a review, either of the original determination in his case or of the determination that there has been an overpayment.

Amendments Nos. 79 and 80 are technical amendments to clause 73. Amendment No. 80 tidies up the legislation, and amendment No. 92 ensures that the new discretionary social fund review procedures to support the budgeting loans scheme and the recovery of overpayments can be operated by social fund officers before the introduction of appropriate officers under part I of the Bill.

As a result of the measures in the Bill and of the amendments before the House, the social fund will in future be simpler to understand and more cost-effective to administer; it will also be seen actively to support people back into work, and be based on integrity and honesty.

I commend the amendment to the House.

Mr. Letwin

I shall attempt to remember that you are in the Chair, Mr. Deputy Speaker, and that I begin my remarks with you in the Chair, rather than in the presence of Madam Speaker.

This set of amendments constitutes a set of dogs that have not barked or a set of Ministers who have not listened—an extreme example of the latter phenomenon, I fear. Clause 38 was much debated in Committee. It was perhaps not as well debated by the Opposition as it should have been because it was I who spoke. However, having read my remarks, I find that although they were not as elegant or eloquent as perhaps they should have been, they had the great merit of being true. They remain true, alas, because nothing has been done to remedy the great deficiencies that were then observed in clause 38, which are indeed symptomatic of the deficiencies that run through the Bill, to which attention was also drawn many times by my colleagues and which were also highlighted in another place.

Let us first consider clause 38(1)(a). It states that a review of a social fund determination shall be made within such time and in such form and manner as may be prescribed". The Minister may recall that, with some assistance from the hon. Member for Newbury (Mr. Rendel), we drew attention to the question whether there ought to be a time limit which, as the Minister made clear, would have affected the length of time that the Government could take before they instituted a review without an application from a customer.

On that occasion, the Minister took no heed of the request. We are told that this is a listening and pragmatic Government, so one would have expected that between the time of our debates in Committee and the Bill entering another place, Ministers would have had time to reconsider and would have seen the justice of a 28-day time limit, in those circumstances at least. No such luck—unless my eyes deceive me, there is not the slightest reference to a time limit in the multitude of amendments to clause 38. No luck, no listening, no pragmatism. That will affect individuals who will find themselves being reviewed, perhaps long after the fact, without any means of responding—unless the Government do exactly what the Minister said they would do when the issue was raised in Committee.

The Minister said: We have made clear our intentions in Committee". By that he meant: In the majority of cases, 28 days will give claimants ample time".— [Official Report, Standing Committee B, 18 November 1997; c. 367.] He made it clear that he intended to introduce regulations that would set a 28-day limit.

We are now in an extraordinary situation. The Minister accepted the justice of the claim that there ought to be a time limit and said that he would bring forward regulations to deal with it, but, in the intervening months, he has not put before this House or their lordships a draft—

Mr. Deputy Speaker

Order. What the Minister has failed to do is not the matter before us. The hon. Gentleman is bringing to the debate matters that have nothing to do with the amendments.

Mr. Letwin

Clearly, I would not wish to challenge your ruling, Mr. Deputy Speaker, but I think it is material to the amendments before us to say that they fail to have the effects that they could and should have had if the Minister were the representative of a listening Government. However, I move on in order to avoid—

Mr. Deputy Speaker

Order. I like to be helpful to hon. Members. When making his case, the hon. Gentleman should make a connection with the Lords amendments. If he ties the amendments into his argument, it will be all right.

Mr. Letwin

I am very grateful to you, Mr. Deputy Speaker. As a relatively new Member, and as someone who is very new to a brief sojourn on the Front Bench, I shall pay great attention to your suggestions and requirements.

I deal now specifically with amendment No. 38. Clause 38(1)(b) states that a Minister may review a social fund determination in such other circumstances as he thinks fit. It was not quite with the "wild surmise" of Cortez that I came across amendment No. 38, but it was with a slight beating of the heart in anticipation of finding that, after long rehearsals in Committee, the Minister would indeed bring forward in amendment No. 38 an answer to precisely the terrible problems caused by that part of the clause. In Committee, I said: What an extraordinary concept in such a context—the power is completely unconstrained."—[Official Report, Standing Committee B, 18 November 1997; c. 365.] We went on to observe that we could very well have had before us a Bill that simply said that the Minister may do anything in such circumstances as he thinks fit, and that it would have been a very much shorter Bill than this extremely long one and could have saved us from much further consideration, but it would not have been in accordance with the way things are done under the British constitution.

I came to amendment No. 38 thinking that it would solve the problem because it adds to the clause a precise provision relating to the review. It allows a review to take place on the ground that the person who applied for the payment to which the determination relates misrepresented, or failed to disclose, any material fact". The problem is that amendment No. 38 in no sense replaces clause 38(1)(b). Unless I am much mistaken, it adds still further licence—and that is an extraordinary thing to do.

Clause 38 provides an unconstrained power of review—without the constraint of circumstances or even an objective test of the constraint of circumstances. The Minister said in Committee: we cannot achieve the degree of flexibility that we want when detailed provisions are set out in primary legislation".— [Official Report, Standing Committee B, 18 November 1997: c. 367.] In pursuit of that flexibility, the Minister drafted clause 38(1)(b), giving himself an absolutely open field. Then, presumably, one of his officials—I cannot imagine that he dreamt it up himself—suggested that there might be just a scintilla of doubt about whether at some time it might be necessary to do something that the wholly unconstrained power provided in clause 38 might not allow in an iron-cladded way without challenge from judicial review. I can only imagine that some brilliant, imaginative, ingenious lawyer in his Department suggested the possibility that some judge might be so steeped in the arcana imperii that he could find the basis for judicial review of a Minister's review of a determination in circumstances that he thought fit, but somehow avoided falling within the letter of the law. As a result, we have a majestic additional provision that the Secretary of State may review such a determination on the ground that the person who applied for the payment to which the determination relates misrepresented, or failed to disclose, any material fact". To any ordinary layman, amendment No. 38 is wholly unnecessary. It expands what is already astonishingly wide licence. However, when one considers it further, the position gets worse. We have failed utterly in our repeated efforts to understand what concrete circumstances the amendment addresses that are not addressed by clause 38(1). We continue to wrestle with the problem, but we are utterly defeated.

If a determination had been made and the applicant had misrepresented or failed to disclose a material fact, any rational Minister would think it fit to review the determination. I cannot imagine any circumstances on the face of the earth that would make it more plausible for a Minister to think it fit to review a determination than if someone had made an application and then failed to disclose or misrepresented a material fact. I bow to the Minister's immense imagination, of which I have had personal experience on numerous occasions in the House and outside, and ask him whether he has been able to dream up a circumstance in which he would not think it fit to review a determination if the applicant had failed to disclose or misrepresented a material fact. I do not anticipate his being able to provide such an explanation, because I do not believe that an ordinary human being can furnish one—not even someone as brilliantly imaginative as the Minister.

We have to ask why the amendment was introduced in another place. I was defeated by that, so I spent some time investigating the Official Report there. Earnestly, as a seeker after truth, I tried to find out from the Official Report in another place what was the logic that underlay this wholly mysterious clause. Perhaps there was a completely different logic, which revealed a vast new array of concerns that did not arise in Standing Committee. After all, the Minister had plenty of opportunities to introduce such an amendment in Committee. Surely something must have happened in the intervening period that revealed to the Minister the necessity for such a bizarre amendment. Astonishingly, the Official Report in another place does not reveal the slightest trace of an explanation for the amendment. It is most puzzling.

Unlike our previous debate about phoenix companies and their directors, where a gross abuse of constitutional and jurisprudential precedent has been perpetrated and the House will have cause to be ashamed of itself, amendment No. 38 does not matter in that human sense—at least, I hope not. It is simply a case of bad legislation that provides belt and braces and will probably undo itself in the process. Probably what will happen is that some lawyer, perhaps looking back at our debates, but perhaps not, will struggle desperately to find out how clause 38(1)(b) relates to what will become clause 38(1)(c) and make sense of it and, as a consequence, the full force of the clause will be modified in court.

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If the right hon. Member for Llanelli (Mr. Davies) were here, I am certain that he would be able to offer us guidance as he has done previously in Welsh debates. However, I cannot speculate about that. If we have what appears to be a very bad overlap—an unnecessary paragraph—the Minister should offer to remove subsection (1)(b)—that would be marvellous—or, which would be less good, not to insert amendment No. 38. The two together certainly make no sense whatever.

Finally, I refer briefly to amendment No. 41. The Minister has described it as a technical amendment; in a sense, it is. It tells us that, in making a determination, an inspector shall act in accordance with any general directions…and…take account of any general guidance". I am not suggesting that all hell will break loose as a result of amendment No. 41—manifestly not. Probably the great majority of people will never hear of amendment No. 41. I suppose, alas, that most people will never hear of amendment No. 38 or clause 38 or indeed of me or my speech.

Mr. Burns

Nor will most people here.

Mr. Letwin

Indeed, as my hon. Friend points out, nor will many hon. Members. Yet amendment No. 41 enshrines rather a horrible principle that is all too familiar to those of us who sat through the interminable hours of debate in Committee. My hon. Friend described them as pleasurable, and they were from time to time, but only due to the charm of the Ministers and not to the charm of the legislation. We frequently found an extreme predisposition towards generality in respect of regulation-making powers and powers of review and determination. Here we find that generality in the very language of the Bill.

Amendment No. 41 refers to "general directions" and "general guidance". I do not know why the word "general" is included. I do not know what the Minister and his officials think would have been lost in the drafting of the amendment had it stated that "an appropriate officer or social fund inspector shall act in accordance with any directions issued by the Secretary of State and take account of any guidance issued by the Secretary of State." However, I know that words are not included in legislation introduced by any Government without a particular purpose. As the meaning does not require the term "general", it must have been included for a particular purpose. I take it that it is there to allow the Secretary of State to give guidance or direction on topics wholly unrelated to the determination of a review and to allow an appropriate officer or social fund inspector to have regard to a variety of issues that the applicant might have considered wholly irrelevant. If that is the purpose—the Minister is more than welcome to clarify the issue in an intervention or in his reply to the debate—it is quite sinister. I am sure that the Minister does not intend any ill to befall people.

Ministers will be aware, from many cases before the Benefits Agency, that citizens advice bureaux repeatedly find that, because of the bewildering array of other regulations, directions and guidance, innocent, ill-informed applicants experience treatment that they had not anticipated. If the inclusion of the word "general" is to permit exactly that kind of articulation, it is, to put it mildly, regrettable.

I have laboured—undoubtedly, looking at the faces of Labour Members—

Mr. Keith Bradley

Look at the Opposition Benches.

Mr. Letwin

I assure the Minister that I would be amazed if I found a great army behind me.

I have laboured mightily over the amendments, but I believe, difficult as Ministers may find it to credit, that it matters how legislation is worded. It matters whether the general power given to the Secretary of State by legislation has been appropriately constrained. It matters whether the clauses overlap. It matters whether individuals, when they apply for benefits, are clobbered by provisions that they have never heard of because a clause they have never heard of gives the Secretary of State a power that no rational human being would want included in a Bill, which got through the House of Commons because nobody mentioned it.

I hope that this listening, pragmatic Government will now see fit to make minor adjustments, to bring the Bill back into line with common sense.

Mr. Denham

There are several reasons why I hope that the hon. Member for West Dorset (Mr. Letwin) never becomes a Social Security Minister, one of which is the danger that he would face of having so many of his speeches on this matter read back to him.

Amendment No. 41 has been drafted to be consistent with the wording and construction of the legislation introduced by the Conservative Government in 1986 and consolidated in 1992. I accept that the hon. Gentleman has sincere reservations about the way in which regulations are drafted, but the form and wording of the amendments are consistent with previous practice, which was followed by Conservative Governments.

Mr. Letwin

I thank the Minister for his characteristic patience in giving way. First, I do not take responsibility for previous practice, which is long running and dates back to earlier Governments than the previous one. Secondly, I hope that the Minister will not advance the argument that this matter is like public expenditure: the Government can do anything wrong as long as the practice is consistent with that of a previous Government.

Mr. Denham

I shall cover the other substantive points—

Mr. Burns

Answer this point first.

Mr. Denham

It is fair to say that the drafting of legislation should—unless we can find reason to change it—reflect existing legislation on the issue. When considering the Bill, we found no reason to change the form of wording used in the Act.

In his second set of questions, the hon. Member for West Dorset asked me to explain the purpose of the group of amendments. We are dealing with reviews that are necessary because there has been misrepresentation or failure to disclose a material fact. The current position in law is that if a discretionary social fund overpayment results from misrepresentation or failure to disclose a material fact, the amount cannot be recovered unless the customer voluntarily agrees to repay it or civil action is taken against him. Discretionary social fund overpayments are often relatively small sums, and civil action is not always cost-effective. That means that overpayments are being written off, which allows people to profit from fraud. The intention of clause 73 is to close the loophole in the primary legislation.

We want to amend clause 73 because, although it introduces the express provision to allow the Secretary of State to recover such overpayments when a determination has been made, it does not provide the power to determine that an overpayment has occurred or to quantify it. The intention is to amend clause 38 to make it explicit that appropriate officers will determine that an overpayment has occurred and decide the amount to be recovered.

If I understood the hon. Gentleman correctly, he seeks clarification on why the amendments are necessary. They are necessary to enable the Bill's purpose—which we discussed in Committee—to be carried out.

Lords amendment agreed to.

Lords amendments Nos. 39 to 44 agreed to.

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