HL Deb 20 October 1994 vol 558 cc384-98

7 p.m.

Earl Russell rose to move to resolve, That this House takes note of the report of the Social Security Advisory Committee (Cm. 2609), and calls on Her Majesty's Government not to proceed with the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 and to lay amended regulations which neither penalise British subjects returning to their own country, nor infringe European law.

The noble Earl said

My Lords, I am sorry to take up your Lordships' time once again. I have said that the body of legislation is increasing and is being used for more and more important matters. I am sorry that it has to be me who brings that to your Lordships' attention.

The regulations to which I am calling our attention originate from a speech by the Secretary of State at the Conservative Party Conference in 1993 directed to the phenomenon of what has come to be known as benefit tourism —people from other countries within the European Union coming here and taking advantage of the benefit system, in effect, it is alleged, to have a free holiday. The language of that speech is something that it is not necessary for me to touch upon now; but I will say that it is agreed that the content needs to be taken seriously. If such a thing is taking place, we are prepared to agree that it is a mischief and that appropriate steps, if possible, should be taken to relieve it. But the tests that those steps should pass are that they should be practically workable and should not create a mischief worse than that which they prevent.

The difficulty which immediately faced the Government when they contemplated taking action to implement the Secretary of State's speech was the basic principle of European law: that we cannot introduce a measure that legally discriminates among the countries of the European Union. So whatever was done to French and German nationals would have to be done also to British nationals. That produced an original set of proposals which were referred to the Social Security Advisory Committee, which recommended, most unusually, that they be not proceeded with. That is a strong recommendation.

The Social Security Advisory Committee made three major criticisms: first, on the application to the Irish, upon which the Government have changed their mind, and I congratulate them on doing so; secondly, on refugees, upon which the Government have also changed their mind, and I congratulate them on doing so. But because of that principle of European law the Government felt themselves quite unable to retreat on the application of the proposal to British nationals.

The proposals are intended to introduce a test of habitual residence for eligibility for all the main means-tested benefit. income support, housing benefit and council tax benefit. Habitual residence is a difficult concept in law. There are a great many tests to be applied, and some of them are tests of intention. Well, everyone who has tried to test intention in court knows that it can be tricky, and if one has to test it by several different tests which may provide contrary indications it becomes even more complicated.

We just do not know—and this, I believe, the Government do not dispute—whether British subjects who have been many years abroad, when they come home, perhaps in misfortune, perhaps having lost their jobs, will be found to be habitually resident and eligible for benefit or whether they will be found to be resident somewhere else and therefore not eligible for benefit.

So there is a major uncertainty in the heart of the system, and it is even worse than that, because it is not necessary in law that one should be habitually resident anywhere. I think that everyone has an entitlement to one country which they can call their own, where they can go back and feel that they are entitled to relief, help and support in an emergency. But if you are found to be habitually resident nowhere, you do not have that right anywhere. You are put in a position like a stateless person where you are sent, like the Flying Dutchman, around the world for ever and ever —and, incidentally, the KLM captain who christened his plane "The Flying Dutchman", I think, did not know what he had done.

I should like to ask the Minister, granted that there is a mischief here, why it was not possible to proceed by the use of the actively-seeking-work test, because it seems to me that that would have met the mischief fairly exactly, the mischief being that people were claiming benefit here who were not seeking work in this country. So if the appropriate remedy already existed, as I believe it did, why not use it?

This is not the first time that this type of proposal has been introduced in Parliament. It was introduced as an amendment to the Social Security Bill 1986 by Mr. Roy Galley, when it was defeated in Committee in another place by 23 votes to two, the other vote in favour being that of Mr. Harvey Proctor. The Minister on that occasion happened to be Mr. John Major, who said that the Government had considered such a proposal but that they had modified it; That is to say, we dropped it". He said that if put into effect the proposal was capable of being extremely cumbersome and an administrative nightmare. He said that it would affect many British subjects who had a valid and understandable expectation that they would receive assistance from our social security system and who might have been excluded from that test. He further said: Upon reflection, we decided that it would be too rigid and too cumbersome and … would have enormously disproportionate administrative costs".—[Official Report, Commons, Standing Committee B, 27/2/86; col. 536.] That is a point that the Government might well bear in mind.

British subjects, for good or ill—I think more often for good—have for a long time had a habit of travelling about the globe and involving themselves in business in other countries. That is likely to become more frequent because in the global market which is now developing, and in an increasingly deregulated labour market, it is increasingly likely that many people will be employed— perhaps by British companies—working abroad on contracts which last for several years and may be out of a job at the end of it.

The CBI has authorised me to say that, if the regulations should make it harder to achieve the mobility of labour which that demands, it would be extremely worried. I cannot see how it could be otherwise. If you are going to work for many years abroad, losing contacts, in a job which may not be permanent, I cannot see how you can regard that as tempting unless you know that there is behind you a home to which you can return and where you can rely on support. It will also affect people who marry foreigners, as many do, and who find that they are unable to come back.

Let us take, for example, a case which has arisen since the regulations came in: a woman of 63 has returned from the United States. Her marriage has broken up. She is suffering from a terminal illness. She cannot afford American health care and she no longer wishes to live in the country she associates with her estranged husband. She returned to Britain. She was found not to be habitually resident and was refused income support. That is an injustice. It is an injustice which under the regulations might have happened to any of your Lordships' sisters.

The regulations may also work unjustly for members of ethnic minorities who often belong to extended families, divided between different countries. Let us take for example a case that I remember my noble friend Lady Seear telling me about: a woman born in this country who was brought up by her grandmother in Nigeria. When she came back to this country it was a toss up as to whether she was going to be found to be habitually resident.

Let us take the effect of the regulations upon children taken abroad by their parents in circumstances for which they can take no responsibility who try to return to their own country looking for jobs and are found ineligible for benefit. I was telephoned a few hours ago by someone in that position. His step-father took him to New Zealand when he was 10. The family has now ceased to be employed in New Zealand and has come home. He wants income support while he looks for work. He has two job interviews next week, so he is looking for work. He has been found not to be habitually resident and therefore ineligible for benefit. Those cases are an injustice. The injustice will extend to certain professions which habitually travel around the world— aid workers and missionaries—and perhaps the Minister will enlighten us as to the effect of the regulations on members of the Armed Forces.

Also there is considerable ambiguity in the regulations as to whether they will apply only to the claimant or whether they will apply also to the claimant's partner and children. All those are mischiefs. I do not usually shout about my attachment to my own country. Between friends, I hope that that is unnecessary. But it does not mean that that attachment is any less intense. A sense of having one's own country and a home to which one can return, to be entitled, as one's passport says, to the protection of Her Britannic Majesty, is something of very great importance. If we are seeing that devalued, as I believe we are, under these regulations, I regret that very deeply indeed.

We have a mischief created by the regulations and we have a mischief which was to be avoided by the regulations. Therefore, we must address the question of priorities. That necessarily raises the scale of the problem.

Officials of the Department of Social Security have told me many times that the department would never introduce a policy based on anecdotal evidence. It ought to have made the Gilbertian qualification because this is the second time that I know it to have done so. The department told the Social Security Advisory Committee that it had no idea of the number of people involved in the mischief that it wished to remedy. But it said that Home Office figures "suggested" that it might be about 5,000. That is a very shaky foundation on which to rest policy.

In 1986 Mr. Major was slightly more certain about it. He said that "the problem is minute". I am inclined to the view that Mr. Major was right.

What will happen to those people who return to what they believe to be their own country? They cannot obtain work instantly and yet they will receive no benefit. The likeliest outcome is that they will do what they did before the benefit system existed: they will beg. That is not something that I wish to see and it is not something which the Prime Minister wants to see. What are we going to do to the people who have no means of support because of it?

I quote again from Mr. Major in 1986: What is clear from all our habits and history is that when people are in desperate need it has never been the fashion in this country— nor would it be the wish of my hon Friends—not to provide assistance that is sorely needed". —[Official Report, Commons, Standing Committee B, 27/2/86; col. 537.] In the light of those words, I ask the Minister whether he will consider in urgent cases in need of relief making income support available to people caught by that trap or whether he will, even at this late stage, consider withdrawing the regulations altogether. There is a possibility that they might be struck down by the European Court and it would be much better to withdraw them ourselves before that happened. I beg to move.

Moved to resolve, That this House takes note of the report of the Social Security Advisory Committee (Cm. 2609), and calls on Her Majesty's Government not to proceed with the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 3) Regulations 1994 and to lay amended regulations which neither penalise British subjects returning to their own country, nor infringe European law.—(Earl Russell.)

7.13 p.m.

Lord Carter

My Lords, the House is very grateful to the noble Earl, Lord Russell, for bringing to its attention what we feel to be a serious injustice. His speech has covered extremely comprehensively matters in hand and he has our full support from these Benches.

The noble Earl referred to the speech of Mr. Peter Lilley at the Conservative Party conference in 1993. I would only say that the juvenile xenophobia of that speech has unfortunately clouded discussion of a serious issue which should receive proper consideration. From these Benches we share the view of the noble Earl, Lord Russell, that the regulations that we are discussing do not deal with the problem in an effective, just and efficient way.

The noble Earl has covered the ground well, so I can be brief. As he said, we know that the Social Security Advisory Committee has recommended that in their present form the regulations should not have been laid. He referred to the words of Mr. John Major when he was speaking as Social Security Minister in the other place on 27th February 1986. I should like to quote some other sentences from the same speech which the noble Earl did not quote. Mr. Major said: We dropped the proposal because we decided that a blanket test would be too rigid, too cumbersome, and perhaps too unfair for the purposes we had in mind … It could have excluded people such as refugees, British citizens returning from abroad, United Kingdom citizens on work contracts returning home, and missionaries who may have had a long connection with this country but who have been abroad for a long time". As the noble Earl said, Mr. Major went on to say: There is also a practical problem. The administrative burden of establishing status alone would be onerous, and if we refined the blanket test to exempt certain groups or in the light of our international commitments, it could become an administrative nightmare".—[Official Report, Commons, Standing Committee B, 27/2/86; col. 537.] We have heard from Prisoners Abroad, which is a reputable charity. It has pointed out that the regulations are likely to cause considerable difficulties for a number of British ex-offenders who have returned from overseas having been released from detention. It goes on to say that the people for whom it cares are a particularly disadvantaged group. All are British nationals with British passports, but they face being denied benefit because they are regarded as not being habitually resident in the UK.

I hope that when the Minister replies he will deal in terms with the very powerful legal arguments which have been produced about this matter. The arguments are: the decision of the Secretary of State in this matter is unlawful because Regulation 4 of the Income-related Benefits Scheme (Miscellaneous Amendments) (No. 3) Regulations 1994 discriminate on the grounds of nationality, which is contrary to Article 6 of the EC Treaty; applicants have a right to an injunction to require the Secretary of State to afford to them the same facilities for free movement as are afforded to Irish nationals; decisions of the Secretary of State in this matter are in breach of natural justice; applicants have a right to damages for failure to implement Article 6 of the EC Treaty or, in the alternative, for breach of statutory duty.

Those arguments flow from considerations of natural justice, UK law and European law. I hope that when the Minister replies, he will not just brush them aside. Only today I received a letter addressed to my honourable friend in the other place, Mr. Frank Dobson, MP, from the Kentish Town Citizens Advice Bureau. It quotes from a reply which that bureau received from the Glasgow Benefits Centre about the habitual residence test. In the single month of September of this year 934 habitual residence test interviews took place in one district with the following results: of the UK nationals, 143 passed and 130 failed; of the European Economic Area nationals, 77 passed and 141 failed; of the other nationals, 76 passed and 367 failed.

It points out that local officers have been given no extra staffing to administer the new rules. In view of the fact that there wen; 934 cases in one month alone, does the Minister think it is satisfactory that no extra staff have been made available to deal with that?

The letter states—and it is extremely worrying—that, we understand that new instructions were issued last week that officers should interview all people who have entered the U.K. in the last 5 years including people previously treated as not affected, such as E.C. workers and people with exceptional leave to remain". I hope that the Minister will be able to deal with that when he replies.

The letter also quotes the Glasgow Benefits Centre as saying that asylum seekers will also be given a "less wide-ranging interview". There is anxiety that people who are already going through the process of having their asylum application determined by the Home Office should have to be interviewed also about their always extremely distressing circumstances by other staff. The letter adds that it is extremely concerned that the new test: legitimises and institutionalises racism in the delivery of benefits.

Why have the Government changed their stance from that adopted by Mr. Major in 1986? If the Government insist on having their way in this matter, Mr. Peter Lilley may find, as Mr. Michael Howard has found, that making policy at the Conservative Party conference represents a singular lack of duty on the part of the Minister of the Crown. My party is as anxious as any other to prevent abuse of the benefits system. However, unlike the Government, we have an equal anxiety to prevent injustice.

7.20 p.m.

Lord Mackay of Ardbrecknish (The Minister of State, Department of Social Security)

My Lords, I am grateful for the opportunity to explain the regulations and the problem that they address. While I may not be entirely able to convince the two speakers who have spoken, I hope that I shall be able to explain to them what lies behind the regulations and, perhaps, allay some of their fears.

I shall begin by pointing out that the problem with which we are faced is, to a certain extent, of our own making. Our benefits system is extremely accessible, and we have spent much effort in making it so. The rules are the same wherever one goes and are applied consistently. We have made it our business to simplify and to make the system transparent. We have no wish to put up barriers to our benefits.

Our desire to be straightforward has, unfortunately, led to some abuses which have been rather graphically described in press reports. For example—and this will perhaps explain to noble Lords the background to the regulations—I have with me an extract from the magazine Time Out of March 16th this year. It gives a number of examples under its headline "Continental Drift". At the risk of boring your Lordships, I should just like to read out the quote from Frederic, a 28 year-old Frenchman, who is described in the article as, the stuff of which Peter Lilley's nightmares are made". To be fair, I think that I should read the whole quote from Frederic: I have been working since the age of 14. I have no training whatsoever and came to Britain in July 1993 to learn English and find a job. I am fed up with doing short-term dead-end work. I am on Income Support—£44 per week—and get my rent—£48 per week—paid by Housing Benefit. I also work on the side to get enough to make a decent living. I know it is absolutely illegal. Not only that but I also get French unemployment and housing benefit. It takes a lot of concentration to do both systems at the same time. I am now a specialist and it is almost a full-time activity". The article continues to say that Frederic is well aware of the argument going on about "benefit tourism" and frauds committed by British nationals. He also says: I am well placed to compare both systems: the British system is far easier to defraud". That is an example of why we have arrived at the present position. However, it is not only the press that have given such examples. I also have with me a copy of an article from a Spanish magazine called Tribuna of 25th July. The article is of course in Spanish, but I shall spare your Lordships my Spanish which just about rises to a, Gin and tonic, por favor! Translated, the headline of the article reads: Youth: A summer holiday with money, but without working". It also has a subtitle which reads, "In England"—the Spanish have obviously not heard of Scotland— thousands of Spaniards are pretending to be poor in order to scrounge a living". The article goes on to describe the many and varied ways in which young Spaniards and nationals from other European Community states cheat the British taxpayer through abuse of the income support and housing benefit system. For example, while large numbers of students at language schools learning English—

Earl Russell

My Lords, has the Department of Social Security finally abandoned its objections to anecdotal evidence?

Lord Mackay of Ardbrecknish

My Lords, I am attempting to give the background to what goes on. In fact, we have evidence from our benefit offices as regards what happens and I shall deal with that in a moment.

As I was saying, there are large numbers of students at language schools, many of whom unscrupulously take advantage of the safety net which we provide for people in this country. Moreover, the article to which I referred also advises potential claimants of the pitfalls to avoid when claiming such benefits. There is mention of young Luis from Madrid who says: It was just like living on 'Lucky Street', a madhouse, everyone having a good time all day long and without any financial problems". I am perfectly sure—indeed, I am sure that the noble Earl, Lord Russell, conceded the fact—that that cannot be right. It is an abuse of our social security system. We need to protect the British taxpayer from paying income-related benefits to all-comers—I believe that the noble Lord, Lord Carter, will agree with that— especially when citizens of our own country would get fairly short shrift if they tried to carry out the same sort of operation elsewhere in Europe. I am sure that we are all at one in that respect.

The story elsewhere in Europe is quite different. The rights to safety net benefits, if they exist at all, often depend on holding a residence permit. Not unreasonably, one has to have lived and, in most cases, paid taxes in the country before one can claim benefits. Moreover, residence permits are normally granted only if one does not claim benefit. I suspect that that is pretty much a catch-22 situation. For example, in Luxembourg a residence permit cannot be obtained if one goes there looking for a job and social assistance is given only after one has been holding a permit for 10 years. Incidentally, one has to be over 30 years of age.

Similarly in France, getting a dole-out from the state depends on having a permit. The authorities there are not as strict as those in Luxembourg, because you can get a temporary permit after three years. The list is long and there are two countries which stand out as having very open systems; namely, ourselves and the Republic of Ireland. I hope that I have persuaded noble Lords that, so far as concerns the European scene, we are in many ways coming into line with the sort of rules and regulations, though not exactly, which apply in other countries.

I turn now to the regulations which are being prayed against this evening. The noble Earl is concentrating our attention on a particular issue involved in the regulations. The regulations provide that a person who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland has a nil applicable amount for the purposes of income support and is not entitled to council tax benefit and housing benefit. The noble Earl was kind enough to say that the Government had taken on board the point about the Republic of Ireland.

The regulations also make other exceptions. The main ones are as follows: EEA nationals who have the right to reside in the UK because of their "worker" status must have done significant work in the United Kingdom before claiming; people recognised as refugees under the United Nations Convention on Refugees by the immigration authorities—and I trust that that assists the noble Earl; people given exceptional leave to remain in the United Kingdom by the immigration authorities; and a person given limited leave to be in the UK by the immigration authorities whose funds from abroad have been temporarily interrupted. The regulations also provide protection for existing claimants.

The test itself is one that is fairly well known in European circles: the habitual residence test to determine entitlement to some government services; for example, education grants. Case-law is well established: a person's place of residence is where he has his centre of interest. The adjudication authorities will be responsible for determining where that centre of interest is. They will want to know, for instance, where a person's stable employment has been and where are his ties, such as a family or a house; why has he come to the UK, how long has he been here, and his intentions; does he have a genuine commitment to living and working here, or are his established links and commitment to some other place?

All claimants need to be habitually resident, although in practice only those who come to the UK and claim benefit within five years of arrival will be tested. They will normally be asked to attend an interview to establish whether they are habitually resident in this country, or, if they are claiming because of their worker's rights, whether that work has been genuine and effective. Any decision to refuse benefit remains subject to appeal through the existing channels.

The noble Earl asked me a number of specific questions with which I shall try to deal briefly. Both the noble Earl and the noble Lord, Lord Carter, made a little play of some of the quotes from a speech made by my right honourable friend the Prime Minister when he was the junior Social Security Minister in 1986.I believe it is fair to say that the test referred to in that debate was, in fact, a test of immediate past residence and was very much tougher than the measures proposed in the regulations before us. Indeed, the Social Security Advisory Committee concluded that the 12 months' past residence test proposed in 1986 bears no resemblance to the new test. That conclusion is set out in paragraph 22 of the report.

The number of people involved has increased greatly since 1986. The chances are that with increased mobility around the world that figure could continue to increase. The noble Earl mentioned the figure of 5,000, which is the Home Office estimate. Evidence from our district offices shows that this problem is growing, and with the expansion of the EEA I think it is important that we have similar regulations in place to those in place in our fellow member states to prevent this kind of thing.

I do not believe the regulations are ambiguous. They apply only to the person claiming the benefit and I am satisfied that they are clear in that respect. That is also made perfectly clear in the guidance issued to local social security offices and local authorities, and our monitoring has revealed nothing to date to cause us concern in that regard. The noble Earl of course concentrated on the problem of returning UK nationals and quite rightly identified the difficulty we have, because of the impact of European law, in differentiating between fellow members of the European Union, and the European Economic Area in fact, and other people. We have to be on all fours, so to speak, or else we will fall foul of our obligations under the European Union.

These new regulations which we are discussing will change the arrangements for returning British citizens; there is little doubt about that. British citizens coming to the UK for the first time, and those returning home after residing abroad, will be affected. I think I indicated the way the regulations would operate and how that means that any British citizen who has come here to live within five years of claiming will have to show that he is habitually resident in order to be entitled to the benefits. As I said a few moments ago, I am afraid that the provision whereby the regulations could be changed so as not to penalise returning British citizens would conflict with European legislation and that is one of the reasons why we have to broaden it to encompass everyone who is coming into this country from overseas. I believe the noble Earl accepts that.

The noble Earl asked me about Armed Forces personnel. I find it hard to answer this question because if a member of the Armed Forces is returning home from a tour of duty, I do not believe he will be eligible for income support because he will be in remunerative work. Therefore, I do not think that situation will occur and the question is a totally fictitious one. Members of the Armed Forces would not be eligible for income support for entirely different reasons; but perhaps the noble Earl has a more fertile imagination—

Earl Russell

My Lords, did the noble Lord see the cartoon in the Independent recently showing the troops in Bosnia ducking as planes flew over them and saying, "Here come the P45s"?

Lord Mackay of Ardbrecknish

My Lords, the Government do not make policy as a result of cartoons, even cartoons in the Independent. Noble Lords: It was in Time Out!

Lord Mackay of Ardbrecknish

My Lords, it was not a cartoon in Time Out; it was an article. I must take the noble Earl on a little. If he listened, as I am sure he did, to the point I made about the tests (I shall come to employment in a minute), he would appreciate that the fact that Armed Forces personnel were employed by the British Government would quite clearly mean they would pass the test with—dare I say it?—flying colours.

People have also been concerned about charity and voluntary workers. These people, like Armed Forces personnel, and indeed other people who work abroad for United Kingdom firms can, I believe, be swept up in the one answer. These people would remain liable for national insurance contributions, as are many workers who are posted abroad. This means that they should pay Class 1 contributions for the first 52 weeks of absence and then can pay either Class 2 or Class 3 contributions voluntarily in order to protect their pension position. A worker who has paid 52 weeks Class 1 contributions and who becomes unemployed or sick on return to the UK will be treated as having paid Class 1 contributions throughout his absence abroad and will therefore become entitled to unemployment or sickness benefit. Thus these people are protected.

Youngsters who, for example, give their services as volunteer development workers and people who go to work in a developing country for a voluntary organisation should pay Class 1 contributions for the first 52 weeks of absence if their earnings exceed the lower earnings limit which is currently £57 per week. If they are less, or the workers remain abroad after 52 weeks, they can pay voluntary Class 2 contributions which are set at a special low rate, currently £3.19 a week. If they pay these contributions, they protect their entitlement to all contributory benefits on return to the United Kingdom. This provision was introduced in 1986 following requests from individuals and in particular from the voluntary organisation, Voluntary Service Overseas.

We have been monitoring the cases of returning British citizens found by the adjudication authorities not to be habitually resident for income support purposes. I can tell your Lordships that in the first month of the test 144 cases have been identified and this compares to 790 cases found to be habitually resident. I can assure your Lordships that none of them were businessmen returning from short-term contracts, none of them were former members of the Armed Forces or charity workers or people who had been away caring for sick relatives or the like. These people were strangers to this country and were certainly strangers to the Pay-As-You-Earn system, the tax system or the national insurance system. They are people who were born in Commonwealth countries of British parents some 20 or more years ago and who have not set foot in this country until now. They are people who left this country many years ago to make a new life in another country and who now return because the economic climate in that country has deteriorated. They are people who have settled elsewhere, have married citizens of that country and who come here either for medical treatment or for the birth of their child.

Some of these people were taken abroad when quite young and have grown up in another society and who now come here many years later to further their education, visit relatives, or because they allege their marriage has broken down. I shall give your Lordships a few examples. I could detain your Lordships for some time with examples of these cases. I have not picked my examples deliberately but rather quite at random. There is the case of a man aged 23 who was taken abroad to the Yemen by his parents when he was under two years of age who is now making his first visit since then to the United Kingdom. He has failed the habitual residence test. There is the case of a woman aged 17 who has been given a one-way ticket to the UK by her parents. She was born and brought up in Nigeria, has not worked here and has made no arrangements as to what she was to do when she arrived here.

There is the case of a man aged 19 who has spent the past 11 years with his parents in Australia. He arrived in the UK in June 1993 and by October had received an 18 month prison sentence. Surprisingly his parents want him to return home; but clearly he does not pass the habitual residence test. There is the case of a woman aged 23 who spent 17 years in Pakistan before coming to the UK in 1989. She was here for a couple of years before leaving for Pakistan again where she married. She is now pregnant and has returned to avail herself of the NHS before returning to her husband in Pakistan. These are just a few examples of the claims that have been made for income support and have been refused on the grounds that the claimants have not passed the habitual residence test.

Lord Carter

My Lords, I am extremely grateful to the noble Lord for giving way. I think he said that in the first month there were 1,100 cases that were tested. I have the figures from just one district which show that Glasgow alone had 934 cases in one month. It could be that the figures I have were not collected on the same basis as those of the noble Lord but it certainly seems rather odd.

Lord Mackay of Ardbrecknish

My Lords, I suspect that we are talking about two different sets of figures. I am talking about the cases of returning British citizens. I do not have the figure to hand which would include the kind of people who were mentioned in the Time Out article for example. I am concentrating on the point which I believe has caused noble Lords concern, and that is returning British citizens. Of course there may be teething troubles and that is why we are monitoring the cases which have been turned down for the habitual residence qualification. We accept that this is a new test, that it is complex and that in some cases it could be difficult to operate. We are taking care to monitor what happens.

Of course I understand that claimants who have come to this country will be extremely disappointed that they no longer have unrestricted access to these income-related benefits and find that they have to support themselves from their own financial resources. Although we have introduced the new test we have not removed the appeal procedure and the appeal system. The right of an appeal to an independent tribunal for people who are dissatisfied with the adjudication officer's decision is still there. The right to take one's case on a point of law to the Social Security Commissioner is still there. I know this right of appeal is being exercised by some people who the adjudication officer has decided are not habitually resident. A similar right of appeal exists in relation to housing benefit.

We cannot go back to where we were. I do not believe that further stories like those appearing in Time Out and foreign newspapers are acceptable to the British taxpayer. We as a Government—and the noble Lord, Lord Carter, indicated agreement—are committed to reducing abuse of the benefit system. I think that all Members of the House will agree with that objective.

Nor, as I have already indicated and as I believe the noble Earl accepts, can we construct the regulations differently. Our European obligations require us to face up to our responsibilities for equal treatment. To nod through returning UK nationals, no matter how tenuous their links with this country may be, but to apply the residence test to other European Community nationals who come here to look for work would put us in breach of those obligations and would lead to an early challenge through the courts.

I can guarantee to noble Lords who are concerned that we shall continue to monitor the policy. Case law will develop, and we shall monitor that too. We shall do all that we can to ensure that the regulations will disrupt as little as possible all those whose centre of interest does indeed lie in this country and to whom we should all be quite happy to see income support and housing benefit paid.

I commend the regulations to the House as a means of preventing a small but annoying abuse of our income support system in this country.

7.40 p.m.

Earl Russell

My Lords, I have no wish to take issue with the Minister personally. He delivered his response very well, but it was not a reply to the argument of the Motion. Since the arguments of the Social Security Advisory Committee have been available to the Government for a good many weeks they cannot plead ignorance of the likely lines of attack.

When the Minister said that he was going to explain the situation I had an uncomfortable double take of a story of my great grandfather, which turned out, I fear, to be all too apt. My great grandfather was once at a reception and was chatting to the Duchess of A when he suddenly leapt out of his seat and rushed across the room and began to talk to the Duchess of B. His wife said to him afterwards, "Look, Johnny, why did you get out of your seat and rush across from the Duchess of A and begin to talk to the Duchess of B?". "Did I? Oh yes, I remember. It was too hot where the Duchess of A was sitting". "I hope you explained that to the Duchess of A". "What? Explain? No. But I explained to the Duchess of B".

It is in that sense that the Minister has explained the regulations to the House. He has given us a vast body of anecdotal evidence which is directed to a point which is not at issue. It has never been argued that if these things are taking place they are an abuse. He has not addressed the point of the scale of the phenomenon. He has not addressed the point of whether the problem could be tackled under existing powers. In particular, he has not said why it is not possible to use the actively seeking work regulations. Most crucially, he has not addressed the question of priorities which is at the heart of the debate.

The Minister says that there may be teething troubles and there may be adaptation. There cannot be too much adaptation, because if the Government enforce the regulations on British nationals in a more lenient manner than on European Union nationals they infringe European law and the regulations fall.

The Minister tried to make out that the people he mentioned had nothing to do with this country. He cited the case of a person who was taken abroad at the age of three and brought back a good many years later. That is a situation in which I have been myself. I would take it most amiss if it were argued that therefore I had no connection with this country. My father had a six-month contract in America which expired in September 1939. In the autumn of 1939 transporting elderly civilians was not the top priority for such merchant shipping as we had available. There will be other cases which will be caught in that situation.

I believe that this is a fundamental failure in our obligation to give protection to British subjects. I believe that the Minister altogether failed to address that point. Therefore I commend the Motion to the House.

7.44 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 23; Not-Contents, 64.

Division No. 1
Addington, L. Haskel, L. [Teller.]
Airedale, L. Holme of Cheltenham, L.
Avebury, L. Lester of Herne Hill, L.
Carter, L. McIntosh of Haringey, L.
Donaldson of Kingsbridge, L. McNair, L.
Meston, L.
Falkland, V. Monkswell, L.
Farrington of Ribbleton, B. Morris of Castle Morris, L.
Foot, L. Russell, E. [Teller.]
Gladwyn, L. Seear, B.
Hamwee, B. Tordoff, L.
Harris of Greenwich, L. Young of Dartington, L.
Abinger, L. Inglewood, L.
Annaly, L. Kimball, L
Arran, E.[Teller.] Lane of Horsell, L.
Astor, V. Long, V.
Balfour, E. Lucas, L.
Blatch, B. Lyell, L.
Brabazon of Tara, L. Mackay of Ardbrecknish, L.
Brougham and Vaux, L. Mackay of Clashfern, L. [Lord
Butterworth, L. Chancellor.]
Cadman, L. McColl of Dulwich, L.
Carnegy of Lour, B. Miller of Hendon, B.
Carnock, L. Monk Bretton, L.
Northbrook, L.
Chalker of Wallasey, B. Oxfuird, V.
Colwyn, L. Park of Monmouth, B.
Cox, B. Pender, L.
Prentice, L.
Cumberlege, B. Rankeillour, L.
Deedes, L. Renton, L.
Denton of Wakefield, B. Rodger of Earlsferry, L.
Dixon-Smith, L. Rodney, L.
Elles, B. Seccombe, B.
Elphinstone, L. Shaw of Northstead, L.
Feversham, L. Skelmersdale, L.
Finsberg, L. Stewartby, L.
Fraser of Carmyllie, L. Strathclyde, L. [Teller.]
Goschen, V. Strathmore and Kinghorne, E.
Griffiths of Fforestfach, L. Swinton, E.
Harding of Petherton, L. Tebbit, L.
Henley, L. Thomas of Gwydir, L.
HolmPatrick, L. Torrington, V.
Hood, V. Trumpington, B.
Howe, E. Vivian, L.

Resolved in the negative, and Motion disagreed to accordingly.

House adjourned at seven minutes before eight o'clock.