§ 7.8 p.m.
§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale) rose to move, That the draft regulations laid before the House on 18th November be approved. [7th Report from the Joint Committee.]
§ The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. These regulations were laid before the House on 18th November. This amendment introduces a small change in the supplementary benefit regulations governing help with the cost of water rates during the final weeks before those regulations cease to exist. Its effect is that in the last few weeks before the implementation of the social security reforms next April increases in water charges will not be taken into account in the assessment of supplementary benefit.
§ I shall explain why this change is necessary and why, indeed, it would be irresponsible for us not to make it. One of the complications of the supplementary benefit scheme which is to be removed under the social security reforms is the inclusion in benefit assessments of individual amounts for water charges. Under the new income support scheme, water charges will be subsumed into the general applicable amount—separate individual amounts 373 will not be included in the assessment. The need for these administratively costly reassessments which provide only small increases in benefit will no longer exist. At present the entitlement of 3½ million supplementary benefit claimants includes an amount for their individual water charges liability. For 2 million of these the money is paid under an administrative arrangement by local authorities. This administrative arrangement with local authorities will stop one week before the housing benefit reforms take effect, and so local offices will pay the final week's payment in all cases. Every time there is a change in the amount of water charge the entitlement of each claimant has to be reassessed to take account of that change and his benefit payments adjusted accordingly. Water charges are reviewed annually, usually in April. For about 1.5 per cent. of people there are two reviews; the water rate element is reviewed in January, and the sewerage and environmental services in April, meaning two separate reassessments.
§ Within two weeks of the start of income support, water charges are due to increase because of the main, April, review of charges. Precise details of the April increases in water charges are not generally known until March. Without this amendment, local offices will need to reassess 3½ million cases again normally for just the last week or two of the present scheme. Trying to handle this at a time when all efforts will be directed at completing the change to income support would have a significantly disruptive effect in local offices. Before income support can begin, more than 5 million supplementary benefit cases need to be converted from supplementary benefit. A task of this size has to be spread over several months, and the exercise, which has already started, will not finish until next April.
§ To put the amendment into perspective, assuming that water charges increase by 6½ per cent. (which was about the increase for this year) the average increase overall for a supplementary benefit claimant will be less than 10 pence a week. For those whose water rate and environmental services charges increase together on 1st April, the average amount of total extra benefit payable if cases were reassessed would be 20 pence. Even for the small minority whose water rate increases in January, the average extra benefit would be a total of just over 85 pence spread over three months.
§ Against this background the proposed amendment is both logical and responsible. We do not think it would be defensible to impose on our local offices the additional burden of reassessing some 3½ million claims in the crucial last weeks before the implementation of major reforms and when the sums involved are so modest. It would not be in the interests of claimants, including those affected by this change, to risk unnecessarily delays in the assessment of their income support. I beg to move.
§ Moved, That the draft regulations laid before the House on 18th November be approved. [7th Report from the Joint Committee]—(Lord Skelmersdale.)
§ Baroness Jeger
My Lords, there is no opposition on this side of the House to the regulations. However, 374 I must ask why this problem was not foreseen. We are getting too many amendments from the DHSS on matters which are totally foreseeable. Now we have another this evening. Surely this problem of the water rates and the cost must have been known. The time of the House should not be taken up by matters which should have been dealt with in the earlier regulations.
I have to ask a few questions. Will the water rates after 11th April be fully covered by income support? Will it be a differentiated item so that people on income support will know what element of water charges is involved in their benefits? This is an important matter because with the privatisation of the water authorities there are likely to be big changes. Many people fear increases in water charges. One has to look ahead and beyond what is before us tonight as regards water charges for people on benefits.
I do not want to delay the House. I want only to know whether the water rates will be different after 11th April and how much we are going to help people through housing benefit to deal with what could be a serious problem.
§ Lord Kilmarnock
My Lords, from these Benches we should also like to thank the noble Lord for his lucid explanation of the amendment regulations. We entirely take the point that this applies to a short period from the end of this year until the coming into effect of the new income support arrangements.
The noble Lord has explained that a reassessment of 3½ million cases in that time would impose an excessive burden on local offices. We accept that point. I should like to ask two questions. Does this mean that Regulation 21 of the original 1983 regulations on restrictions where amounts are excessive is overridden? It is not mentioned in this amendment but I should have thought that it would need to be overridden to bring into effect what the noble Lord wishes to achieve.
My final point is the same as that made by the noble Baroness, Lady Jeger. Can the Minister throw a little light on what the arrangements will be under the new income support scheme? I think he mentioned that water would be subsumed. Perhaps he could expand a little on that.
§ Lord Skelmersdale
My Lords, I am grateful to the noble Lord and the noble Baroness for their reception of the order. I was asked why the problem was not foreseen. It was foreseen. I was not around at the time of your Lordships' discussions of the Social Security Bill in 1985 and 1986, but I understand that this matter was referred to then by my noble predecessor. I too regret that we could not encompass this order with the orders we debated the other night. Unfortunately, as I understand the matter, there were drafting problems, because it could quite easily have been subsumed—that is rather a useful word for this evening—into the housing benefit regulations.
I was also asked about transitional protection and whether the 1988–89 water rate figures will be used for transitional protection assessments. The answer must 375 clearly be no, because we will not know in time what the new water rates and water charges will be. Transitional protection will be based on the 1987–88 water charges amounts but the income support levels—and this is the important part—take account of the estimated amounts for 1988–89. I think that remark also answers one of the questions of the noble Lord, Lord Kilmarnock. As with many of the miscellaneous identifiable benefits of the past, we have rolled them up into a global total. This was one of the objectives of the reforms under the Bill, and now the Act, to which I referred.
This amendment has no effect on Regulation 21 of the requirements regulations, which provides for restrictions when housing costs in general are high. I think I have answered all the points. I commend the regulations to the House.
§ On Question, Motion agreed to.
§ The Earl of Arran
My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The sitting was suspended from 7.29 to 8 p.m.]