Housing Benefits (Northern Ireland) Order 1983

HL Deb 26 July 1983 vol 443 cc1466-72

5.52 p.m.

The Minister of State, Northern Ireland Office (The Earl of Mansfield)

My Lords, I beg to move that the draft Housing Benefits (Northern Ireland) Order 1983, which was laid before this House on 7th July last, be approved.

The purpose of the order is to enable the housing benefits schemes in Northern Ireland to be reformed from November 1983. The reasons for the proposed reform are the same as they were for the reform of housing benefits in Great Britain. At the present there are two separate systems for assisting householders on low income with their housing costs, the first being supplementary benefit and the other the rent and rate rebate and rent allowance schemes. This means that claimants have to choose between the two systems, which creates the problem of deciding under which system they would be better off. They also have to look to different agencies for assistance with their housing costs, depending on whether or not they are on supplementary benefit. Another problem is that a considerable number of people who receive supplementary benefit for their housing costs fail to pay them, and this in turn leads to administratively expensive direct payment arrangements.

The proposed reform tackles these two problems. First, the main cause of the "better-off" problem will disappear because claimants will no longer have to make the difficult choice between receiving either supplementary benefit or a rebate. Instead they will be able to claim both and, where appropriate, will be advised to do so by the bodies responsible for operating the schemes. Secondly, most householders on supplementary benefit would have their rent and rates rebated at source, and this is likely to lead to a reduction in default amounting to well over £600,000 a year. I am sure that the House will agree that it makes sense to extend the practice of rebating to people on supplementary benefit as well as to those who are not. It will be a more economical way of doing things and will eliminate much of the present wasteful duplication of administrative effort by the DHSS in recording, verifying and paying money for rent and rates which in turn has to be paid over to the Housing Executive or rates office. However, the reform is not confined to dealing with these particular difficulties. For the first time, for example, claimants will be able to have their housing benefit determinations reviewed by independent review boards.

As in Great Britain, the underlying basis of the proposed reform in Northern Ireland is that overall it will cost roughly the same as the present arrangements. This will mean some redistribution of available resources from the relatively better-off to the poorest group of beneficiaries. In general the gainers will be pensioners on relatively low incomes, claimants with dependent children and householders with non-dependants under 21 or over pension age. Some people not on supplementary benefit will receive less help with their housing costs than at present because of changes in the taper percentages and non-dependant deductions. In the main, the changes will affect those whose incomes are above their needs allowances or who have non-dependants living with them; for example. grown-up sons and daughters.

During consultation on the proposed reform, particular concern was voiced by the Northern Ireland Assembly and others about the number of existing beneficiaries who would receive less than at present. I am pleased to say that the Government are prepared to modify their original proposals in two ways to protect losers. First, it is proposed to allow more generous protection against losses arising from changes in the taper percentages which, as your Lordships may know, are used to calculate housing benefit awards. Originally, it was the intention to limit such losses to 60p a week for roughly four months and to £1.20 a week for the remainder of the first year of the reformed schemes. Instead, the Government now propose to protect beneficiaries against losses in excess of 50p a week from November 1983 to November 1984, and in excess of £1 a week from November 1984 to November 1985.

Secondly, the housing benefit child's needs allowance will be increased by £1.50 from November 1983. This is £1 more than will apply under the Great Britain schemes from November 1983 to April 1984. The net result of these changes is that some 32,000 beneficiaries will gain from the reform; the number of losers will be reduced to some 20,000; and the amount of individual losses will be substantially reduced in some 5,000 cases. Those who will gain will be pensioners at the lower end of the income scale and families with children. The additional cost of these enhancements—amounting to some half a million pounds over three financial years—will be met from within existing Northern Ireland resources.

I should add that as a result of representations from the Assembly a number of other changes are proposed in the administration of the reformed schemes. These will provide for greater equity between different categories of claimant and for earlier payment of housing benefits following a claim.

I shall deal very briefly with the substance of the main articles in the order. Article 3 empowers the Department of Health and Social Services and the Department of the Environment, acting jointly, to make regulations governing the rebate and allowance schemes. The schemes will be operated by the Department of the Environment for owner-occupiers and by the Northern Ireland Housing Executive for tenants in both public and private sectors. The proposed uses of regulatory powers are described in considerable detail in the explanatory document which accompanied the proposal, although some of the original provisions will be modified in the light of representations received during the consultative period.

Article 4 provides for uprating, and Article 5 requires the bodies operating the schemes to take appropriate steps to publicise them. There will be extensive publicity both in the period leading up to November 1983 and thereafter. Article 6 contains financial provisions; Article 7 deals with regulatory matters; and there are supplementary provisions in Article 8.

The general effect of the order will be to rationalise the present schemes of assistance with housing costs, thereby removing anomalies and dealing with the long-standing problem of people not knowing whether they would be better-off claiming a rebate or supplementary benefit. The concept of unifying the present dual system has received general support. It was endorsed by this House when a Bill providing for corresponding changes in Great Britain was approved following debate by your Lordships in 1982. I commend the order to the House.

Moved, That the draft order laid before the House on 7th July be approved.—(The Earl of Mansfield.)

6 p.m.

Lord Underhill

My Lords, I am grateful to the noble Earl for explaining the provisions of this draft order. In effect, it seems to me that the order is an enabling provision in so far as it needs to be considered with the proposed regulations. The regulations comprise a massive document of nine Parts—51 regulations and four schedules—and your Lordships will be pleased to know that I do not propose to cover them, except to say that the Explanatory Note about the proposed regulations is rather limited.

First, would the Minister elaborate a little upon Article 7 of the order? Does it mean that the regulations have to be laid before the Assembly and also approved? If that is so, how does that relate to paragraph (5), which says that regulations shall be subject to the negative resolution? I am certain that, with his legal knowledge, the noble Earl will be able to satisfy me on that point.

I note that detailed consideration was given to this order by the Health and Social Services Committee of the Assembly, and that consideration wa given by the Assembly to that committee's report. I also note that the main recommendation of the Assembly in their report was that the revised scheme should not be introduced. In other words, they rejected the proposal for the order. We on these Benches can see the advantage of dispensing with the dual system, but Ministers have argued—and the noble Earl has argued tonight—that one of the main causes of complainants' difficulties will disappear; they will no longer need to make the difficult choice as to which system will be better for them. That sounds reasonable, but Ministers in the other place and the noble Earl tonight have said that some beneficiaries will be better off under the proposals and some will be worse off.

We heard today the net result after making some changes as a result of the criticisms made in the Assembly, and I would comment that the Assembly seems to have proved its value, if only in the way in which it has discussed this and the next order. The Minister has said that the net result is that some 32,000 will gain from the changes and the losers will he reduced to about 20,000. I ask, why should there be any losers? I note that on 20th July the Secretary of State said at column 517 of Hansard of another place: Bringing the two separate schemes together in a unified scheme makes it unavoidable that some people will gain and others lose if the books are to be balanced". The last few words seem to indicate, as the Government have already made clear in the other place, that no more money will be available to allow a "no loser" scheme.

The Assembly urged that the Government should introduce a "no loser" scheme, and they considered a statement that the estimate in Great Britain for the cost of a "no loser" package would be £70 million—2½ per cent. of total housing benefit payments. The Under-Secretary of State said in evidence to the Assembly that the estimated cost of a "no loser" package in Northern Ireland would be £1.9 million; that is, 3 per cent. of the cost of housing benefit payments. The Government have made it clear that they are not prepared to meet £1.9 million in order that there shall be a "no loser" package.

I note that the Assembly considered the argument that the poorer recipients are being shielded from losses and even enabled to gain under the proposals, but it expressed concern that to permit this the paymasters will be other low income households. This is something at which I hope the Government will take a serious look. People who are already on low incomes are the people who are to be the paymasters in order to permit other persons to gain. That seems to be a competely wrong principle, and it may be linked to the debate on the Finance Bill, of which I heard a part when I listened to my noble friend Lord Bruce.

Persons would not at present be in receipt of rebates unless they were already adjudged to be sufficiently impoverished to be a recognised need for state financial assistance. The committee expressed concern to the Assembly—and I do so tonight—that under the proposals some persons will be caught in the poverty trap. The Under-Secretary of State (and again I quote from column 517 of Hansard of another place for 20th July) said that the vast majority—that is, 97 per cent.—of supplementary benefit beneficiaries will be unaffected, but: The remaining 3,000 or so claimants who transfer completely to housing benefit will gain from the reform but lose their automatic entitlement to passported benefits". This refers to additional benefits available to those who are on supplementary benefit. That is a very important consideration which has not been fully dealt with by the regulations.

The Government say that another important aspect of the changes is that, in order to avoid default on arrears, rebates will in future be paid direct to the landlord. I recognise that this will save administrative costs, but I must echo what Members said in the other place and in the Assembly. Is it desirable that persons should no longer be personally responsible for paying their own rent direct? The implication is that persons in receipt of supplementary benefit are to he considered incapable of running their own affairs. On this I should like to refer to paragraph 5.5, which the Assembly approved. It says: The Committee are very concerned at the erosion of individual liberty which rebating at source implies and we regard the Government's intention to deprive individuals of an important responsibility as both demeaning and insulting". That is a decision of the Assembly. They were not condoning defaults, but they were stressing—and I stress it tonight—that there are adequate legal and administrative arrangements to deal with that problem.

I am pleased to note that, although determination of a claim for benefit will be considered by the appropriate authority—that is, the DoE or the Housing Executive—the person involved will be entitled to a further review board which will be appointed by the DoE and set up on an independent basis, as provided in Schedule 4. The Minister has said, and Ministers in the other place have said, that the new scheme should result in more householders taking up their full entitlement. It has been pointed out in the other place that some 20 per cent. who are entitled to claim do not claim. I hope that the Government's intention to publicise the new arrangements will be carried through thoroughly, so that that 20 per cent. can be considerably reduced and so that all those entitled to claim will do so. As one will see, there are aspects of the order with which we are not happy, but as it has been approved by the other place we shall not resist it.

6.9 p.m.

Lord Hampton

My Lords, I too thank the noble Earl for his introduction of this order but, although we shall not oppose it, my party also is certainly not altogether happy about its introduction at this time. I understand that it has been held in some quarters—and I quote from the News of the World of 10th July—that: hundreds of thousands of Britain's poorest families are suffering even more appalling hardship because of a botched Government plan to help them"; and that the Northern Ireland Assembly put forward quite a number of criticisms in debate earlier this year (as has already been mentioned) which have been ignored, although the Minister did state that the Government would concede some points.

We have the impression that, instead of taking stock and learning from experience on the mainland, this order will now impose essentially the same scheme on Northern Ireland with all its attendant problems of complexity—and it is very complicated in parts—losses to individuals (and we have heard something said about this) and rushed implementation. I ask the Minister therefore whether he considers that the introduction of this order may be premature and carried out really for cosmetic purposes.

6.11 p.m.

The Earl of Mansfield

My Lords, I thank both noble Lords for their welcome—if that is the right word—to this particular order. The noble Lord, Lord Underhill, first asked me about Article 7. So far as the Assembly is concerned, one has to realise that Article 7 of the order does not refer to the present Assembly, which has absolutely no legislative powers at all. It is a consultative Assembly in the full meaning of the word. The article looks ahead to the days when power may be devolved to the Assembly and the Assembly will have the powers which Article 7 contains.

The next matter the noble Lord mentioned was the question of a "no loser" scheme. The cost of the elimination of all losses would he somewhere in the region of £1.9 million in a full year, and I have to say to the noble Lord that that sum is just not available. The fact that it represents only a small proportion—I think 3 per cent.—of the total expenditure on housing benefits is really neither here nor there. The resources are not available. The reason why some people will receive less is that resources are being redistributed, within the group of benefit recipients, to those who are on the very lowest incomes. I quite appreciate that those who are in comfortable circumstances will not fall within the scope of this order at all, but nevertheless we should seek to maximise equity within the available resources. This order seems to be the fairest and most logical way of doing so.

Then the noble Lord alleged—and I hope I am doing justice to what he said—that the rebating of rent and rates is in some way a rather insulting method of helping people because it interferes with their right to organise their own financial affairs, and furthermore, that it may be offensive to people who have succeeded perfectly well up until now in meeting their various financial obligations; but there is, in fact, no evidence to suggest that beneficiaries under the existing rebate schemes dislike this method of payment.

As I have said to the House, one advantage of the new arrangements is that people entitled to full rebates do not suffer the inconvenience of having to make periodical payments to the Housing Executive in the rates office, and so will be saved a certain amount of trouble. The order's arrangements are a much more efficient method of administering schemes such as this. The scope for abuse of public money is limited and, above all, it saves a great deal of money which would be much better spent in helping people.

The noble Lord, Lord Hampton, said that really this was not the moment to be producing an order such as this. We have to acknowledge that the Northern Ireland departments and the Housing Executive have had the benefit of seeing what has happened since this scheme was implemented in Great Britain. What we have seen so far as the Government are concerned is that the reform will bring significant improvements, some of which I have touched on. There is really no justifiable reason for postponing the introduction of these improvements which will make procedures much more logical and fair and will bring gains for poorer households. That. in short, is why the order is brought forward in the way that it has been at this time.

Lord Donaldson of Kingsbridge

My Lords, this is the first opportunity I have had to address the noble Earl when he is moving an order from the Front Bench on the other side. It gives me the chance to congratulate him on joining that nearly round dozen now of noble Lords on both sides of the House who have served over there, and lately our group has been distinguished by the arrival of the noble Viscount the Leader of the House.

Viscount Long

My Lords, I wonder whether I might intervene? My noble friend has already replied to the order and I do not think he can reply to the noble Lord speaking now. I think that the noble Lord is slightly out of order.

Lord Donaldson of Kingsbridge

My Lords, the custom in this House over the last three years has been that the two first speakers are replied to, and that we were discouraged from getting up before the noble Lord had replied to them. Therefore, I am somewhat disturbed to be told that I am in the wrong when I am clear that this is the course of action that we have employed.

I have nothing of importance to say except that I welcome the noble Earl, and that from these Benches we shall continue to carry out our bipartisan policy with the Government so long as it remains more or less the policy that it is now. I should like the noble Viscount the Whip to look this up. He will find that what I say is correct. We have been asked not to make a third speech before the noble Lord has replied, and therefore to say anything we have to say afterwards.

The Earl of Mansfield

My Lords, with the leave of the House, I think I am allowed to thank the noble Lord, Lord Donaldson, for his kind remarks about me personally. He and I share many interests and this is a new one. I have been slightly thrown, since the noble Lord was good enough to write to me saying that he was not going to attend the debate. Nevertheless, his appearance may be surprising but it is welcome. There may be a little confusion in the difference between a Government Statement and a Motion. I shall certainly cause the procedures to be looked up.

On Question, Motion agreed to.