HL Deb 18 June 1986 vol 476 cc896-902

5.36 p.m.

Baroness Trumpington

My Lords, with the leave of the House I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Health and Social Security. The Statement reads as follows:

"With permission I would like to make a Statement about social security benefits and students.

"In January the Government published proposals which were a first step to channelling support for students more through the educational maintenance system rather than the social security system. I referred these proposals to the Social Security Advisory Committee and I am today publishing the committee's report together with the Government's response to it. I am also laying before the House amended regulations which take account of their views and those of the local authorities' associations and others expressed during the consultation period.

"Mr. Speaker, it remains the Government's view that in the long term it cannot be sensible that students should be subject to two separate but intertwined systems of support. It cannot be satisfactory to have students permanently dependent upon a system which is primarily designed for those who for various reasons cannot work rather than for those who have withdrawn voluntarily from the labour market to study. The vast majority of comments to the Social Security Advisory Committee supported the principle of rationalising student support. But at the same time three main concerns were expressed.

"First, there was concern that the major change proposed to housing benefit—whereby the accommodation element in the grant would be taken fully into account when assessing housing benefit entitlement—would cause a wide range of losses. The Social Security Advisory Committee shared this concern while at the same time recognising the case in principle for the change. Although there is no doubt that the present rules treat students more favourably than other claimants, the Government are prepared to withdraw this proposal.

"Second, there was concern that in relation to the withdrawal of housing benefit for accommodation left unoccupied in the summer vacation some students would not have time to change existing plans and commitments. We recognise their concern and therefore this measure will not take effect until the summer of 1987 as we accept that students who have already entered into rent commitments for this summer could face difficulties.

"Third, there was concern about the position of students without an award who have begun their studies on the assumption that they would continue to draw benefit at the current level. We accept that we should protect the most vulnerable of these—existing students living away from their parents' homes. Those students will be treated as now for housing benefit—in respect of private rented accommodation in term time and the short vacations—up to 1st April 1988 or when their present course ends.

"The remainder of the Government's proposals are largely unchanged. We shall remove entitlement to unemployment benefit and supplementary benefit in the short vacations when students are already provided for through the grant. We shall simplify housing benefit administration by averaging grant income for the whole of the grant-assisted period. Students in halls of residence will in future be able to claim housing benefit only during the long vacation for which there is no provision in the grant.

"Our proposal to make a £36 additional increase in the grant still stands and is an important step to the long-term aim of shifting student support away from the social security system. Nevertheless the Government recognise that there are important issues to be discussed before making further progress towards this aim. This raises a question of a wider review of student support and this will be dealt with by my right honourable friend the Secretary of State for Education in his Statement shortly.

"Our other proposals have been widely welcomed and will go forward. We shall extend help under the students dependants' hardship scheme to cover the full year for two-parent families, as well as single parents. We shall disregard for housing benefit those parts of the grant which cover books and travelling expenses. This change will now take effect for the academic year 1987–88. We shall provide a firm legal basis for treating students' income from parental covenants so that it does not affect their claims to benefit during the summer vacation.

"Mr. Speaker, the Government's long-term aim of removing students from the benefit system has been widely welcomed and accepted in principle. It cannot be right that generations of students should be encouraged to depend on social security. We set out our proposals five months ago and we have responded carefully and constructively to the comments made upon them. I believe the proposals I have described today represent sensible steps towards rationalising provision for students, and reducing their dependence on benefits".

That, my Lords, concludes the Statement.

Lord Ennals

My Lords, may I first thank the noble Baroness for repeating the Statement made by her right honourable friend the Secretary of State in another place. Of course we must be thankful for small mercies in terms of grants this summer and in terms of the £36 additional increase in the grant; £36 goes a long way over a year, I have to admit.

While I accept the principle that student support should primarily be a responsibility of the Department of Education and Science, is it not apparent that the Government have created great concern and uncertainty among students as a result of this long delay? The right honourable gentleman's Statement referred to the January proposals which were referred to the Social Security Advisory Committee, and the report of the Social Security Advisory Committee was received in March this year. That is three months ago.

Why was there this inexcusable delay? Is the noble Baroness not aware that her right honourable friend has postponed his Statement until many university students have left for the summer vacation, thus causing great uncertainty and consternation? Is she not aware of the confusion that her right honourable friend has generated among students, parents, advisers, and even his own administrators?

Welcome as the proposals for changes in the system of assessing students' covenanted income must be, is the noble Baroness's right honourable friend not embarrassed to be bringing these proposals to the House only now, having promised them as long ago as last August? Will she concede that her right honourable friend's claim to have been motivated by the desire to rationalise the system seems to be somewhat in shreds? In the face of the report by the Social Security Advisory Committee will the noble Baroness acknowledge that her right honourable friend's original proposals were hasty, ill-considered, and, some would say, vindictive? Will she also admit that his promise of a review proclaims the measure of the haste and lack of consideration which applied at that time?

We are glad that there now is to be a review; that is to be welcomed. But will she accept that it seems quite wrong to take action which, in many cases, will cut student benefits before a new system is instituted? Surely the idea of a review is to produce a new scheme, and would it not seem unwise to start taking some action on it before the scheme has been worked out and announced?

Will the noble Baroness accept that students and their parents are being squeezed as a result of the conflict between the DHSS and the Department of Education and Science? How many students will lose and how many will gain from the announcement made in another place today? What is to be the saving to the DHSS as a result of the measures that her right honourable friend has announced?

Does the noble Baroness accept that the students who will suffer most are the poorest students, and especially those living in areas where summer jobs are virtually impossible to find because of the high level of unemployment? Will she accept that we shall want to discuss this Statement, the regulations, and the Social Security Advisory Committee's report after we have had time to read them carefully?

5.45 p.m.

Lord Kilmarnock

My Lords, we, too, on these Benches should like to thank the noble Baroness for repeating this Statement. We accept in principle that it is not sensible to have two separate but intertwined systems of student support, and it is the case that students have been bandied about between two departments for long enough; so we welcome the move towards a single system of support.

As the noble Lord, Lord Ennals, has just said, this Statement has come in the nick of time. I believe that the Government have been brooding on the Social Security Advisory Committee's report for five months, and in the meantime students have been in an agony of uncertainty about their future.

The Statement says that the Social Security Advisory Committee supported the principle of rationalising student support. Can the noble Baroness say whether the Government will publish these comments in full? I forget whether or not they are obliged to; the noble Lord, Lord Banks, would know. I should be grateful if the noble Baroness would tell me. It would be interesting to see the Social Security Advisory Committee's full report.

We welcome the withdrawal by the Government of the proposal to take the accommodation element of grant into account for housing benefit. That is correct, because of the wide regional variations. The withdrawal of housing benefit for accommodation left unoccupied in the summer vacation has been deferred until 1987, and we certainly welcome that as students will indeed, as the Statement says, "have already entered into rent commitments for" their accommodation. It is the case that they have to pay for the vacation period if they are not to lose their accommodation and become homeless. But what about the future? This just takes us until 1987. Students without grant will be protected for housing benefit up to 1st April 1988, or the end of their course, and we welcome that.

These are all holding measures which will relieve immediate hardship, but they do not provide a longterm solution. The removal of unemployment benefit and supplementary benefit for the Christmas and Easter vacations we cannot welcome. The removal of these entitlements is another indication of the Government's lack of sympathy for those students whose studies are blighted by constant worry over finance. This entitlement should have remained in place pending new arrangements, as the noble Lord, Lord Ennals, has said.

The initial savings rumoured in the press from the original proposals were said to be in the region of £20 million to £25 million. Can the Government say what savings are now envisaged after these revised measures?

The additional £36 of the grant is held in the Statement to be, an important step to the long-term aim of shifting student support away from the social security system. It is an extremely inefficient one. It gives each student a lump sum, regardless of the regional variants and his costs; also, routing this compensation via the grants system presumably means that it will be liable to parental contribution. Can the noble Baroness say whether that is the case?

These are all short-term measures. We are glad the Secretary of State has drawn back from some of his predecessor's more draconian and punitive measures, but for a real solution we await the next Statement.

Baroness Trumpington

My Lords, I am grateful to the noble Lord, Lord Ennals, for his welcome for the £36 grant. Both the noble Lords, Lord Ennals and Lord Kilmarnock, spoke about lengthy delays. They must remember that there was a need to consider the SSAC report and comments with great care. They must also remember that students will not suffer any losses of benefit this summer. The noble Lord, Lord Ennals, will understand that I cannot comment on the review about which I understand a Statement will follow. Furthermore, any discussion on this whole matter would have to be referred through the usual channels.

The noble Lord, Lord Ennals, remarked that these were ill-considered, hasty proposals. I suggest to him that all proposals were supported in principle by SSAC. The concern was about the practical consequences. The Government accept this concern and have made, as noble Lords will know, considerable concessions. The proposals will reduce some wasteful and unjustifiable expenditure and the review will carefully consider options for the future.

The noble Lord, Lord Ennals, asked me for the numbers of losers. One hundred and forty thousand gain the full £36 per annum; 260,000 other students will find varying effects, according to their individual circumstances and which of the particular measures apply to them. Most will lose from only one source. The effects of the measures do not in general overlap. If the noble Lord, Lord Ennals, requires any further figures I should be only too happy to write to him.

The noble Lord, Lord Kilmarnock, asked me about the publication of the SSAC comments in full. He should be aware that the SSAC report and the Government's response were published today and laid with the regulations.

The noble Lord, Lord Kilmarnock, raised a question on unemployment benefit. As for supplementary benefit, we consider that students' availability for work is slightly dubious. In a way they are rather like seasonal workers who cannot be working at certain periods without being considered to be unemployed in the proper sense. Students have provision for the short vacations in their grant, but despite this unemployment benefit is paid in full so students are getting double provision from public funds in the form of two separate income replacements at the same time; in other words, the grant and unemployment benefit.

Halls of residence are required to be self-supporting and receive no subsidy from the Department of Education, but housing benefit in effect has been providing an alternative subsidy. Moreover, it does this by paying usually small amounts of benefit at a disproportionate administrative cost. Hall charges should not in general need to be as high as private rents and we see no justification for bolstering them through housing benefits. We shall ensure that the exclusion does not affect schemes whereby the education institutions act as an intermediary between students and private landlords. Also, it must not be forgotten that where a student needs to stay in hall during a long vacation (when of course he is not supported by a grant) we shall allow him to claim housing benefit.

The noble Lord, Lord Kilmarnock, also mentioned non-grant-aided students. I should like to say in reply that at the outset we do not and never have considered it appropriate for social security to provide support for the maintenance of full-time students where the award system does not, for whatever reason, make provision for them. Our proposals therefore provide equally for all students whether grant-aided or not, but we recognise the impact this will have on students who have already begun their courses. That is why we are making a concession whereby these students will not lose help with their housing costs. The concession will last until the introduction of the new scheme in April 1988 or until the end of the student's course if that is sooner. This will mean that the most vulnerable nongrant-aided students, those who are away from the parental home, will not be disproportionately adversely affected.

The noble Lord, Lord Kilmarnock, also asked me about the net saving and the parental contributions. The net savings will be £8½ million in 1986–87 and £16 million in 1987–88. With regard to parental contributions, all students will receive the £36 in full except those whose parents have to contribute all the maintenance grant. Those parents will he expected to contribute the £36 also. If I have omitted to answer any questions, I shall write to noble Lords.

Lord Ennals

My Lords, I am most grateful to the noble Baroness for her helpful reply. I shall not ask her for any more factual information. There was one point that I wanted to ask and I put it in my first intervention. I do not understand—perhaps it can be explained to me—why the Secretary of State for Social Services and the Secretary of State for Education and Science decided to have their review after the Secretary of State for Social Services reached his conclusions in January, rather than having the review before. It seems a most peculiar way to come to policy decisions.

Baroness Trumpington

My Lords, the noble Lord, Lord Ennals, will understand that I cannot answer for my right honourable friends in another place who make these decisions.