Habitual Residence Test

HL Deb 30 April 1996 vol 571 cc1544-58

7.29 p.m.

Earl Russell rose to ask Her Majesty's Government, in the light of the report of the National Association of Citizens' Advice Bureaux, Failing the Test—CAB clients' experience of the habitual residence test in social security, what have been the results of any government monitoring of the effects of the habitual residence test.

The noble Earl said: My Lords, the Minister will remember, I think quite well, a debate we had on the habitual residence test which denies means-tested benefits to people believed not to be habitually resident in this country when the test was introduced. I am now offering the Minister a sporting chance for a return match.

On that occasion each of us had our assessment of what the test was likely to involve. The Minister will take it for granted that his was slightly more optimistic than mine. We now have a body of evidence available. I have the report from the National Association of Citizens' Advice Bureaux, Failing the Test. In that context I would like to say that I have found it by far the most reliable, non-partisan and helpful organisation that regularly briefs this House.

Doubtless, the Minister will have his own monitoring. As is well known, the Department of Social Security will always monitor any of the measures that it brings in. So I am asking the Minister to compare his monitoring with mine to see what happens. I now turn to some figures. Until the end of last year, 25,754 had failed the test and lost means-tested benefit. I understand that that figure can now be updated. There were over 5,000 British nationals in that figure and now, I understand, there are over 9,000.

The percentage of British nationals at the end of 1995 was 21 per cent. and rising. I do not know whether that figure is still rising. Anyone who has been in the Chamber this afternoon will appreciate that I am concerned about the rights of those who are not British nationals. But on this occasion I am going to dwell, first, on the rights of those who are British nationals because to be denied a claim to benefit in your own country when you have no other country to go to, seems to me to be peculiarly wrong. I also believe that it illustrates some of the poor logic in the test.

The Minister himself said on 20th October 1994 that those who were affected, even if they were British nationals, would be, "strangers to this country". I believe that it has not turned out as he hoped. I quote first a case that he has heard me quote before; namely, the niece of our former Leader on these Benches, my late friend Lord Byers. She had gone to Brussels to nurse a sick mother. We all know about the problems of carers, but I believe that it compounds them infinitely if they come home, their caring concluded, and find that they are denied benefit in their own country. Under the new law she is now entitled to benefit in France, but she is not entitled to it in this country and she is North Oxford born and bred. Believe me, I can recognise North Oxford when I meet it! That seems to me to be a little cock-eyed.

Another person with whom I have been in contact—again, not in the citizens' advice bureau sample—had been engaged teaching in France for a number of years. The venture folded and he returned home. He was found not to be habitually resident. So far from the family being strangers to this country, I knew, although he did not, that in the reign of Henry VIII his ancestors had been the biggest taxpayers in England. So much for "strangers to this country"! There are plenty more such cases in the report. I hope the Minister will forgive me if I am a little confused in sorting my papers because, as he knows, I have been otherwise occupied during the afternoon.

There is the case of a man aged 47 who worked in Britain all his life. He went to France to help a friend run a holiday home. After five years the arrangement broke down. We know that that sort of thing happens in small businesses. He returned home and was held not to be habitually resident on the grounds that he had no fixed address and no job. Of course one does not when one returns from running a business abroad. So he was refused benefit. I simply do not see the logic or the sense in that decision.

The test is adversely affecting those who exercise their right to mobility of labour under EU law. There is the case of a scaffolder who spent six months working in Holland. Work in the construction business is short in this country at the moment. After six months he returned to this country and he was told that he was no longer habitually resident and benefit was refused. There is a carpenter in the building industry who lived and worked in the UK all his life. Because of the recession he was out of work. He was told that there was work available in Germany and he landed up with one of those employers who do not pay. After six weeks he gave it up and came back. He fell foul of the habitual residence test as well. He told the CAB that he was now very worried that if he applied for a building job in Europe again and then at some future point he needed benefit, he might be refused. So he drew the lesson, with apologies to Noel Coward, "Don't put your bike on the Shuttle, Mr. Tebbit".

I remind the Minister that this is not only an interference with people's rights under EU law; it is also a strain on the British Treasury. If people who would otherwise have gone abroad in Europe and worked there during a recession and are prevented from doing it, they remain in this country and they are a charge on the British benefit system. Perhaps for a second I may revert to this afternoon's Question. That seems to me to be the sort of secondary consequence which the Department of Social Security would be very wise to take into account if it genuinely wishes to save money because here, I believe, it is wasted.

A good many people are affected if they return home because of misfortune. For example, a woman went to live in South Africa when she got married and, after a number of years, the marriage broke up. Those of us who sat through the Family Law Bill know that that happens. She came home. She was entitled to a pension of £25 a year because that was under the contributory principle which is not affected. She was not entitled to any top-up from income support. The Minister himself said that people who are British and who were affected, would be strangers to pay-as-you-earn and to tax and national insurance.

I offer the Minister an alternative to eating his words because they are very indigestible. I offer him the alternative of introducing a change in the law that those who are entitled to benefit under the contributory principle shall be found to be habitually resident. I cannot see any inequity in that; it is perfectly possible to do.

There is also a great deal of hardship for anyone who marries abroad. A woman in Spain was the victim of domestic violence. She tried to come home, but could not get benefit. An 18 year-old on a summer contract in Greece, believe it or not, who was injured in a car accident, was flown home and found not to be habitually resident and he was denied any benefit. That might happen to any of your Lordships' grandchildren. It is rather extraordinary. So, first, one does not work abroad; secondly, one does not marry abroad.

The test has worked peculiarly harshly on British people taken abroad while they were children. Before the Minister waxes too clever about that, I warn him that that is my own case. I am prepared to take offence at anything that casts doubt on my Britishness. There is the example of two British people living in Zambia who were born in Britain. One of them wanted to come back and join the British Army. He could not join by post because the Zambian post is not very good. He was found not to be habitually resident. Another example is that of parents working in the Gulf with children at boarding school in England. When they came of age they were found not to be habitually resident. I am surprised that the oil companies have not protested at that.

I now turn to people who are found in effect to be stateless. A British subject living in Nigeria wanted to be a doctor. She duly qualified, but could not do that in Nigeria because she was foreign. She could not come to look for a job in Britain because she was not habitually resident. Those people really are shunted from pillar to post. That causes considerable hardship and puts yet another burden on local authorities under Section 17 of the Children Act. With all that we have heard today about what is happening with regard to asylum seekers, it seems grossly unfair to put further burdens on local authorities.

During the county council elections of 1993, when the results came through I am afraid that I murmured the old anarchists' slogan, "If voting changed anything, they'd abolish it". I am afraid that I was not mistaken. We find the case of a couple living for a whole week on six pints of milk and one loaf. If that is not gross hardship, I do not know what is. We find the case of a woman who had been living on bread rolls from the Salvation Army, who fainted in the CAB office as she tried to explain her case. I cannot see any useful principle that justifies inflicting that sort of hardship on people who have done absolutely nothing wrong—and I entirely agree with the Government that under EU law they cannot, and should not, discriminate between British nationals and others, which is why I think that they should not do it at all.

The Minister also gave us some assurances on the case law. He said—I regret that I do not have his words to hand, but they are buried somewhere beneath this mountain of evidence—that the Government were not using the test that the House of Commons discussed in 1986—that is, the test of being settled here. He said that they were using something a great deal less onerous. However, as a result of a ruling by Commissioner Howell in 1995, the ground of case law has become something very like what the Minister assured us it was not. Claimants now have to be settled here for a considerable period of time.

As the Minister admitted when we last discussed this, habitual residence is a very vague concept. One set of cases in EU employment law tends to gravitate towards the last place of employment. Another is based on citizenship. That is the line that led to what had previously been thought to be standard precedent. I refer to the case in the House of Lords of ex parte Shah, in which my noble friend Lord Lester of Herne Hill was the successful advocate. In that case the noble and learned Lord, Lord Scarman, made it perfectly plain that a settled period of residence was not necessary; it was a test of intention.

In my view, there is the plainest possible conflict between Commissioner Howell's ruling on the one hand and the judgment of the noble and learned Lord, Lord Scarman, on the other. The noble and learned Lord's judgment is in line with the assurances that the Minister gave us in October 1994. It is also the higher judicial authority. For both those reasons, I suggest that the Department of Social Security should follow that judgment rather than the ruling of Commissioner Howell—that is, if we must have the test at all. Indeed, in the view of these Benches, the test serves no useful purpose. It does not even do very much to achieve the objective which the Government set for it. Like so many things that we have been discussing, it says, "If any are guilty, sweep up the innocent with them", along the lines of Sherlock Holmes' Inspector Athelney Jones, who arrested everyone in the house to make sure that he had got the right person.

If we were in a position to do so, we on these Benches would repeal the test. I hope that the Government, when they ultimately go before the electorate, will tell the people that they will do likewise.

7.44 p.m.

Baroness Hollis of Heigham

My Lords, I am grateful to the noble Earl, Lord Russell, for tabling this Unstarred Question. It is important that we are reminded that the issue of refusing benefit is not a matter of concern only to those who are asylum seekers; there is also the problem of the habitual residence test. Like the noble Earl, I shall draw extensively on the important CAB document, Failing the Test.

The habitual residence test was devised at an exceedingly unpleasant Tory Party Conference to give the Secretary of State a two-minute ovation and a three-minute soundbite. He succeeded in both of those, but failed entirely to consider the effects of what he was proposing.

As we all know, social security benefits come in two packages: insurance-based benefits and means-tested benefits. Insurance-based benefits, such as unemployment benefit, are earned through work and are therefore portable abroad. Means-tested benefits, which test destitution, are not. I accept that those benefits are problematic and they are the benefits that are affected by the habitual residence test. The Government claimed that what they were seeking to do at that Tory Party Conference was to exclude from means-tested benefits those EU nationals, mainly Spaniards advertising in Time Out, who, according to Mr. Lilley, were coming to Britain as tourists for the good life and British social security. The Secretary of State could thus portray himself as simultaneously anti-fraud and anti-European. I wonder whether the Tory Party Conference would have been quite so jubilant if those present had realised just how many other people would be hit by those provisions.

No one—and certainly not these Benches—defends fraud. I do not doubt that when he replies the Minister will quote the figures used last night in the other place by Mr. Evans to show that British nationals are affected less by the provisions than, say, European nationals. Nonetheless, as the noble Earl said, three groups of people are affected by the habitual residence test: EU nationals, British citizens and what the CAB calls "others".

I turn first to the EU nationals, the group that Mr. Lilley was aiming to hit. Only about half of those who have come through the system have lost their benefit. Why?—because if they are in work or have worked, they are entitled to unemployment benefit on a reciprocal basis; and if they are not in work, they should not have been admitted unless they could show sufficient resources for self-support. When the JSA test is introduced in October, it will apply a tough, actively-seeking-work test for British and EC nationals alike. In so far as there are any additional problems—I accept that there are some—surely the statesmanlike response is to negotiate appropriate reciprocal arrangements and not play the chauvinistic chorus at the Tory Party Conference.

So, the test is not particularly reaching the targeted group, as Mr. Lilley promised at that Tory Party Conference; instead the provisions have reached two other groups who were not originally targeted and about which Mr. Lilley was extremely quiet at that conference. As the noble Earl rightly said, the second of those groups comprises British citizens. Nearly one person in three denied benefit under the habitual residence test is a British citizen whose home country this is. According to the figures that were given last night, that group numbers 9,000.

Perhaps I may give an example from the Independent of 14th February 1996. I refer to the case of Mr. Hugh Sweeney, 39, a sheet-metal worker who, given his trade, was unable to find work in the UK and moved to Australia two-and-a-half years ago looking for work, while continuing to keep his home in Newport Pagnell, on which he paid mortgage, council tax, insurance and water rates. He had a neck injury and came back from Australia. His wife was not very happy there and she came home as well. They have used up all their savings and are living on handouts from his 70 year-old mother-in-law and his brother. He was told that, although he had kept his home here and paid taxes on it and although he is a British citizen, this is not his habitual residence. He is now penniless and has no access to income support.

What about the missionary doctor, returning home after 10 years abroad? As the noble Earl said, what about British building workers? Given the state of our construction industry today, most construction work is to be found on the Continent. The noble Earl referred to the scaffolding worker who went to work in Holland for six months. Building workers often go to Germany for, say, 12 months, doing what the noble Lord, Lord Tebbit, would recommend. On returning home to their permanent address—the very address here that they left—they find that they are ineligible for all benefits.

What about British women who marry foreign or EU nationals and whose marriages break down? They return home to find that they are ineligible for benefit. What about the young woman of Pakistani origin who at 17 went to Pakistan for an arranged marriage and returned home, pregnant within eight months to find that she had lost her habitual residence qualification? She had no money and was supported by parents who were themselves on income support. When she gave birth to her baby five months later, it was found to be seriously and worryingly under weight because of the mother's malnutrition. What about the British citizen, originally from Nigeria, who had worked for the National Health Service since 1965, and who was refused benefit to top up a retirement pension after a three-month visit, following retirement, to Nigeria to see former members of the extended family? As the CAB has said, under the habitual residence rule there are two classes of British citizen: a first class, who firmly hug our shores, and a second class, who may seek temporary work abroad and are rewarded for their initiative in coming off benefit by being denied benefit when they return home.

It is even worse than that. I believe that British citizens who return home after working abroad for six or 12 months are in a worse position that EU nationals. If an EU national has worked in Britain for just 12 months and lived in the UK for three years, he or she can travel abroad for six months and keep his benefit. But if he is British and has lived and worked in this country for 30 years and then goes abroad, not for 12 but for three months, he can lose his entire benefit. What is he supposed to do? Where is he to go? On what is he supposed to live? Who is supposed to take him in? Would the Tory Party conference have cheered quite so enthusiastically if Mr. Lilley had said that these were the people that his proposals would hit? One may be talking of one's son or daughter. The noble Earl quoted the niece of Lord Byers. It appears that a measure designed to stop European benefit holidays has given EU nationals a more privileged status vis-à-vis means-tested benefits than British citizens.

I come finally to the "others" category, which interlocks with the immigration and asylum-seeking rules. Few foreign nationals are eligible for means-tested benefits unless they have been admitted by the immigration authorities and settled or they are deemed asylum seekers at the port of entry. People who are legally settled here, after a visit abroad, find on their return that they have lost their benefit. They may travel to see relatives. For example, a Nigerian man, who had lived in Britain for 20 years and recently become unemployed, travelled to Nigeria for two and a half months to attend to his sick father. On his return he was refused benefit on the ground that he was not habitually resident. I refer to a lone parent who was officially recognised as settled in Britain. She went abroad after 11 years in this country to attempt to negotiate the release of her husband from a Middle East country of origin where he was detained. She had a child at school here and was a school governor. She was refused benefit on her return on the basis that she was not habitually resident.

Mr. Lilley wrapped himself in a patriotic flag at the Tory Party conference. He was worried on behalf of British citizens and taxpayers. We, too, are worried about British citizens and taxpayers—that is, those who live and work and pay taxes in this country and who briefly leave this country—perhaps for six months or a year—to find work. On their return, perhaps after a marriage breakdown, they find that they have lost all their rights to means-tested benefits. Is our citizenship so fragile or tenuous that it is broken by working for six months as a scaffolder in Holland, by a visit to Pakistan for eight months, or a visit to Nigeria for two months? As for European nationals whom Mr. Lilley was so anxious to exclude, they continue to come and be housed and to claim benefit because that is required under European law.

7.55 p.m.

Lord Mackay of Ardbrecknish

My Lords, at least one matter has been made clear by this short debate. Both parties opposite wish to abolish the habitual residence test and go back to the position before when people could come to this country and immediately claim income-related benefits at a cost to the British taxpayer currently estimated to be £30 million.

Baroness Hollis of Heigham

My Lords, if I may correct the noble Lord, I did not say that we would or would not abolish it. That question did not arise in my speech. However, we shall certainly review it to overcome the difficulties that have been highlighted.

Lord Mackay of Ardbrecknish

My Lords, "review" seems to be the favourite word. I do not know whether I conclude from that that the noble Baroness says on behalf of the party opposite that it may not abolish it but keep it. Having listened to her words, I would not be drawn to that conclusion.

Earl Russell

My Lords, I should like to ask the Minister, in answering a question from the Liberal Democrat Benches not to use the expression "the party opposite".

Lord Mackay of Ardbrecknish

My Lords, I take the reprimand from the noble Earl. I believe that his party is clear on this issue, as is it on the general question of increasing taxation. It stands fairly honestly on the issue, if I may so describe it. The noble Earl clearly wishes to abolish the habitual residence test and accepts that it is an obligation on the British taxpayer to pay the £30 million that I have mentioned. I hope that I am not being unkind to the position of the noble Earl.

Earl Russell

My Lords, since the Minister has introduced the issue of cost, I should like to ask whether he has costed the charge to the British benefits system of people who refrain from using their right to go abroad and work in the EU.

Lord Mackay of Ardbrecknish

My Lords, that is a bit like the question that the noble Earl posed to the House—

Baroness Hollis of Heigham

Exactly!

Lord Mackay of Ardbrecknish

My Lords, I do not know how the noble Baroness can say that from a sedentary position when she has not heard my response. A little patience may be required. If she knows what I am about to say, she may intervene and tell your Lordships. I was about to remind your Lordships and the noble Earl of the question that the noble Earl posed last week on the first day of the Committee stage of this Bill. He said that it was a question that he had posed to his father who had been greatly worried by it. As the light from the sun takes seven minutes to get to the earth, how do we know that the sun has not exploded six minutes ago? The question that the noble Earl has just posed is perhaps in that category.

This is an important debate which is about the habitual residence test that applies to income support, housing benefit and council tax benefit schemes. It is concerned with the question whether people who come to this country from abroad, whether they are European Union nationals or British citizens returning from residence abroad, have an immediate right to turn up at the local benefit agency office and say, "Please, kind British taxpayer, will you give us income-related benefits?" We decided that this was a loophole in the system that ought to be closed. In my last speech to your Lordships on this subject, I gave examples of how, certainly in European terms, people were abusing the system. The ways in which it was being abused were given fairly reasonable coverage in Time Out and a Spanish newspaper. People had been advised that Britain was a pretty soft touch so far as concerned what my right honourable friend the Secretary of State, Peter Lilley, called benefit tourism.

This debate has been brought about by the report from the citizen advice bureaux on the subject. I am afraid that we cannot accept any of the recommendations of that report. I should like to explain some of the points that I believe defend our position and make the position of the CAB and that of both parties opposite indefensible, at least concerning the British taxpayer. Until the test was introduced in August 1994, nationals of other European economic area countries could come to this country to look for work and claim income support, housing benefit and council tax benefit for up to six months. At the time we estimated that some 5,000 European economic area nationals did exactly that.

There was considerable anxiety about that state of affairs. Ministerial postbags, stories in the newspapers, and articles in foreign newspapers, indicated that the position was being abused, as I have already said. Investigations revealed that Britons going to another EEA country did not have the same freedom of access to the benefits which are available there. There was, in fact, a one-way traffic which put British taxpayers at a disadvantage.

The noble Baroness, the noble Earl, and the CAB suggested that we should try to persuade our European partners that we should renegotiate the agreement that we have with them so that their systems come more into line with what ours used to be, and allow our nationals to go abroad and immediately to be able to receive income-related benefits in the countries of our European partners. The UK system is not comparable with the social assistance schemes of most of our European partners. We have a legal rights-based system founded on a national scheme. Most of our European partners run a much more discretionary scheme which is much more locally based. In the countries of most of our European partners, residence permits are required. It is those residence permits which exclude UK nationals from their benefits. The habitual residence test reciprocates the residence permits required in those countries. I doubt whether any progress can be made in that regard.

Most of our European friends would tell us, as they do on so many other things, that we should put our own house in order rather than ask them to make changes. In this case, we have put our own house in order. We have put ourselves much more in line with the way these matters are dealt with in the EU. I should have thought that the parties opposite might welcome that piece of European integration on social security.

We decided that we had to take action. How we took action is of course through the habitual residence test, for the reasons that I mentioned. A person is entitled to income support if he satisfies the conditions of that entitlement. Income support followed the history and methods of supplementary benefit introduced by the Labour Government back in 1966. That legal entitlement, as I said, contrasts with similar benefits in other European countries. We could not go down the same line as them without a dramatic change to the basis upon which we pay out social security to all our citizens. Our solution had to be consistent with Article 6 of the Treaty of Rome which prevents discrimination on the grounds of nationality. That is how we came to the habitual residence test. That is why it has to be a test for everyone and not just for the citizens of our fellow European countries. It is a test which has to be applied also to returning citizens of the UK. I made that point firmly last time we debated the subject: if it were not for that European dimension, we could probably find a way of preventing Europeans from coming here and keep the door open, so to speak, for any British citizen, no matter how tenuous their links with this country, to come here and receive benefit immediately. We could not design a system which did that, because that would be in breach of Article 6 of the Treaty of Rome, which is why the habitual residence test touches both.

Baroness Hollis of Heigham

My Lords, would the Minister care to confirm that at the Tory Party conference Mr. Peter Lilley did not mention that the scaffolder, the building worker, or the missionary doctor—British citizens—would be denied benefit; and that that would be the implication of the habitual residence test?

Lord Mackay of Ardbrecknish

My Lords, I shall come to the issue of British citizens affected by the test in a moment. As I recall the speech, my right honourable friend was turning his attention to the problem coming from the Continent. I know that the noble Baroness is a fully paid up member of the European Union movement—those who support being in Europe—as I do. We have to pay regard to the articles of the treaty and ensure that we obey them, and treat citizens of our fellow EU member states in the same way as we treat our own.

As I have said previously, I accept that the noble Earl does not believe that we should have attempted to address the problem. He believes that we should not have tried to introduce the test; but we did so. That is why some British citizens are caught by the test.

Earl Russell

My Lords, if I may be permitted a clarification, I did not say we should address it at all. I said in October 1994—and I say again—that we should address it through the availability for work and seeking work rules. That seems to me to be properly attuned to the individual case in the way that this blunt instrument is not.

Lord Mackay of Ardbrecknish

My Lords, I understand the point that the noble Earl is making. I am glad to hear that he approves of the test that we are going to apply in JSA to actively seeking work, and so on. But of course those tests, where they deprive someone of benefit, do so for a short time only. It is not the same as the situation at which we are looking, where people come from abroad and expect to be given benefits for 13 weeks in the case of someone from Europe, and 26 weeks in the case of a British citizen coming from outside Europe.

The position about the tests is that in European terms many more people were, so to speak, caught by the test than we first thought. There are more people coming from the Continent to this country and claiming benefit. Of the people who come from other states of the EEA and take the test, some 50 per cent. pass and some 50 per cent. fail (some 14,000 each of the 28,000 who have taken the test). In the case of UK nationals, the figures are much more favourable regarding passing the test. Of the 105,000 who have taken the test, 91 per cent. passed; and 9,700 failed.

A great deal has been made about the people who failed. Perhaps I might say a few words about them; but let us remember that over 90 per cent. passed the test. The test, I believe, is fair. A reading of Commissioner Howell's view, which was referred to by the noble Earl, gives a reasoned view of the test and gives in a clear way the parameters that we should apply. I appreciate that the noble Earl disagrees with Commissioner Howell. He took into account the Shah case. In paragraph 22 he refers to it in particular. He refers to it elsewhere, also. He said: In my judgment this factual approach to the meaning of habitual residence is not in any way inconsistent with anything said by Lord Scarman in Shah's case". I believe that Commissioner Howell did take into account Shah's case. The test of course does not discriminate on grounds of nationality. It enables British citizens who have established habitual residence in this country to have short absences abroad without terminating their habitual residence and losing benefit. Commissioner Howell's judgment makes clear the parameters that adjudicators should take into account.

Some anecdotal evidence of cases has been given. We could swap cases across the Floor of the House; but I shall take the first lady quoted by the noble Earl. I do not want to get into the detail of people's circumstances, because, as your Lordships know, one of the difficulties that Ministers in the Department of Social Security have is that they have an obligation of confidence to those people who make application. It is pretty common knowledge, and is reported, that the person to whom the noble Earl referred lived in Belgium for 10 years. I believe that it is reasonable to suggest that her home was, and she intended her home to be, in Belgium. She was not, by any common person's definition of the words, habitually resident in the UK.

Earl Russell

My Lords, is it not a common experience that caring for an elderly parent may be a long-term operation but it is not normally a life sentence?

Lord Mackay of Ardbrecknish

My Lords, I believe that there is a little more to it than that, but I do not wish to go into the case because it is confidential. However, for whatever reason, the lady lived for 10 years in Belgium. That is a long time by anyone's definition of where one is habitually resident. I do not believe that she could be described as being habitually resident in the United Kingdom.

Perhaps we may take the case of the 63 year-old Scotsman and his German-born wife who have lived in Germany for the past 22 years. They returned on holiday to see the husband's mother and to assess whether to come here to retire. By no stretch of the imagination could they be described as habitually resident in the UK. There is the case of the 22 year-old woman now living in Turkey, having married a Turkish citizen three years ago. She returned to the UK to take advantage of the National Health Service because she was pregnant, and would be returning to Turkey. There is no justification for her asking the British taxpayer to keep her while she is here. A woman aged 17 was given a one-way ticket to the UK by her parents. She was born and brought up in Nigeria, had not worked here and had made no arrangement as to what she would do when she arrived.

A 26 year-old woman lived in Pakistan for the first 11 years of her life and came to the UK for eight years in 1987. She returned to Pakistan to get married, spent one month in the UK in 1992 and returned with two small children in June 1994. She hopes that her husband will be able to join her when he gets a visa. I do not believe that that person can be described by the ordinary use of English words as habitually resident in the United Kingdom.

A woman aged 28 was born in London and taken to Nigeria by her parents when she was eight. She was educated in that country, worked there, was married and came to the UK on 19th August with her eight month-old child. On 23rd August she claimed income support as a lone parent separated from her husband who had remained in Nigeria. There is no way she can be described as being habitually resident in this country.

Those are all UK citizens and the kind of people whom the noble Earl is honest enough to say, having come into the United Kingdom—there is no dispute that they are allowed into the United Kingdom—he would allow them to turn up at the benefits agency and ask, "Please may we have money from the British taxpayers?". They are British citizens who failed the test; and of course on the borderline of any test there will be difficult cases. The appeal system exists to try to resolve such cases. Decisions such as that by Commissioner Howell help the adjudicator to decide and the appeal system to resolve the matter.

The fact is that as regards a few people on that borderline who perhaps could argue one way or another, 90 per cent. clearly passed the test and were habitually resident in this country. They are given the benefits that they seek. Only 9 per cent. failed the test. That in no way downgrades British citizenship or is unfair to people who really do have a close link with this country. A few of the examples that I have given suggest that they do not have a close relationship. Of course they can come here and as British citizens they have a right of abode here, but I do not believe that that necessarily gives them the right immediately to be supported by United Kingdom taxpayers.

I have instanced the cases of a few people who were born here perhaps a long time ago, brought up in another country and left the UK many years ago for a new life. For a variety of reasons they wish to return here now. The Government have no objection to them returning; they have every right to do so. However, to suggest that they have an immediate right to social security is quite another step and we believe that a line must be drawn. Of course it is unfortunate that some people decide to return here and are penniless. They should have given that some thought before they left the country in which they lived and in many cases worked, in which they were married and in which they had children. They should not decide, "Well, if we go back to dear old Britain they won't bother. There taxpayers will pay us whatever we are due from the social security system, regardless of whether we have many links of the habitual residence kind with the United Kingdom".

That test is the first test of residence in the income-related benefit schemes for at least 50 years. Of course it was a radical decision to start the test and there have been and are bound to be teething troubles. We recognise that that is the case. We have trained the officials who deal with the cases and we shall gain experience with the passage of time. We recognise that there was not case law which specifically addressed the habitual residence test in relation to income support, although comprehensive guidance was provided. The Social Security Commissioner dealt with the case of a British citizen late last year. Commissioner Howell's decision identifies a number of points which have been in dispute. Some half-a-dozen cases will come before the commissioner in the next few months which will further clarify the interpretation and operation of the test. We recognise that there have been delays in the appeal procedure, but these delays have been reducing and appeals take, on average, 21 weeks to be heard. Obviously, some are heard more quickly than others, but that is no different from United Kingdom citizens totally resident in this country who are also appealing against social security decisions—

Baroness Hollis of Heigham

My Lords, I realise that the Minister has been generous in giving way as often as he has. But how comfortable is he with the fact that as regards the appeals ratio the appeals are heavily in favour of those who claim and that a number of those who are winning their appeals are British citizens? What on earth are they supposed to live on during the 21 weeks when the appeal is heard?

Lord Mackay of Ardbrecknish

My Lords, we have dealt with the question previously as regards asylum seekers. They are in no different a position from United Kingdom citizens who have never been further than this country, have paid their taxes and so forth and have decided to appeal against a decision not to give them benefit. They do not receive benefit while they are appealing. I cannot believe that it would be right to say that people whose residence here is doubtful as regards claiming the benefit ought to be given the benefit while they appeal, while United Kingdom citizens who have stayed here and about whose habitual residence there is no doubt should be denied benefit while they appeal. I find the position that we are taking perfectly and absolutely logical.

If the noble Baroness is suggesting that the party opposite will change that system and allow people to receive benefit while they appeal, that is fine. That is at least one commitment that has not been reviewed and that is definite in the social security system which the party opposite would like to see in place. But I have to tell the noble Baroness that she may find it expensive.

Earl Russell

My Lords, I beg the Minister's pardon. He again referred to "the" party opposite. That is inaccurate.

Lord Mackay of Ardbrecknish

My Lords, I apologise again to the noble Earl. I must try to remember that there are two parties opposite. If it in any way helps the noble Earl and defends myself, perhaps I may say that sometimes when I look at his party I see a clearer view of its policy on taxes and spending than I see when I look at the party directly opposite me. It is pretty hedgy about whether it will increase spending. In fact, only the other day Mr. Gordon Brown stated clearly, as seen in a newspaper headline: Labour may freeze public spending at present levels". Obviously, that includes the saving of £30 million we are making from the habitual residence test. I am not surprised that the noble Baroness is thinking about reviewing the test; that makes no commitment to increase public spending by the £30 million we have saved.

In conclusion, I believe that there was an abuse. There can be no argument about that. There certainly was an abuse of our social security system. We had to act to combat that abuse. Our action had to be within European law. That is why we introduced the habitual residence test. We believed that it was the best solution. It quite clearly enables the great majority of British citizens to continue to receive benefit even when they have been out of the country for a while. We believe that those people who are not habitually resident should not be supported by the British taxpayer. That includes those who are pursuing an appeal.

In short, we were faced with a problem. It may not have been the biggest problem in social security history but, as I have explained to your Lordships before in that old Scottish phrase, many a mieckle makes a muckle, and £30 million is a fairly substantial "mieckle" (which is a little bit). All those little bits add up to a great deal of money in relation to social security and one must look at them all.

We believed that this was a problem which had to be tackled. We tackled it. Of course, it is always easy to decline to tackle difficult problems and to allow taxpayers' money to be spent even when you feel that there is no justification for it. We have not taken that route. We have tackled that difficult problem. I believe that we have tackled it sensibly and sensitively. As the system evolves and the decisions of the commissioners and so on come clearer into case law, even the CAB may see that the system defends the rights of taxpayers who are also citizens of this country and may also have something to do with the CAB. It defends their position from those people who have no justifiable right to receive benefits from the said British taxpayer.

Lord Lucas

My Lords, I beg to move that the House do now adjourn during pleasure until half-past eight.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.21 to 8.30 p.m.]