HL Deb 20 July 1999 vol 604 cc864-71

(" . In section 137(2)(a) of the Contributions and Benefits Act, at the end insert "so however that regulations may not treat a person who is in Great Britain and who has the right to live in Great Britain for the time being without immigration leave as not being in Great Britain irrespective of where he is habitually or ordinarily resident."")

The noble Earl said: This amendment seeks to abolish the habitual residence test instead of merely modifying it in response to the judgment of the European Court of Justice in the Swaddling case that it is illegal. The habitual residence test since 1994 has been supported by the Court and Treasury Party and opposed by the Country Party, no matter which type of political clothing those parties might wear for the time being. I do not intend to make anything of that but it is my contention, and has always been my contention, that, on this particular point, the Court and Treasury Party happens to be mistaken.

The habitual residence test was introduced as a centrepiece for a party conference speech in order to deal with the dangers of what is described as benefit tourism. If benefit tourism is a term of art, it is very definitely a term of modern art. It has a distinctly abstract quality. I remember the Minister at the time outlining the case in the form of a long series of quotations from an article in Time Out. I asked whether that was still the policy of the Department of Social Security, that it did not base its policy on anecdotal evidence. I have as yet received no answer to that question and I would tonight like to repeat it because no other evidence has yet been put before us on this allegedly mischievous phenomenon. As with other sins, we do not know exactly what it is, but we all know that we are against it.

Anyone who was in the House at midnight last night dealing with the Immigration and Asylum Bill will know that getting through our immigration laws is not particularly easy. Anyone who has dealt with debates on the actively seeking work rules will also know that the application of those can be extremely stringent. Where we have one test for entry and another test for life after entry, I have never been convinced that there is any need for a further test.

The test says that you should not receive means-tested benefits if you are not habitually resident in this country. If benefit tourism is a term of modern art, habitual residence is not a term of art or even of law; it is a term of literature. It has no precise legal meaning. That is why, throughout the history of the test, there has been a great deal of difficulty in defining it. It is why the rates of failure in the test, with almost identical pools of applicants, have sometimes been as high as 80 per cent in one place and 20 per cent next door dealing with very similar applicants. Where the test is that wide open, where the legal concepts are that undeveloped, the scope for subjective judgment is very high indeed, which shows up both on the particularly high rate of success in appeals and in the fact that a very high proportion of those who have failed the habitual residence test have been from ethnic minorities.

All our information on this is from sources such as the National Association of Citizens Advice Bureaux. Governments have been particularly careful not to compile statistics on institutional discrimination within the administration of the habitual residence test. But after the Lawrence case, we should think carefully about this, especially since one of the places where the test bites most severely, which in my understanding is not addressed by the new changes in the guidelines, is in extended families from the British Asian community. In cases where an arranged marriage is in prospect, very often there is an extended visit—of many months in some cases—to the family of the prospective in-laws. People regularly return from such visits and are told that they are not habitually resident, which sets a great many marriages off on the wrong foot. I do not think that that does any good.

The lack of a precise legal definition is one of the problems. It was that hurdle over which the Government fell in the case in the European Court of Justice. The court held that the Government had altogether misdefined "habitual residence". The Government—I welcome what they have done as far as it goes—have changed the test in response to the European Court of Justice in order to say that anyone who has lived in this country and anyone who was born in this country and has a continuing connection should be treated with favour. That does not go all the way. Someone who is taken out of the country as a young child and comes back a number of years later may be held not to be habitually resident. That answer was given by Mr Timms to my honourable friend Mr Rendell. I see that the Minister shakes her head. When two Ministers disagree, I venture to doubt. I hope that that is not improper.

I declare an interest in this case because many years ago it happened to be my own. I have therefore always felt particularly strongly about it. Because the legal concept is so uncertain and because there are so many minefields, what the Government have done will not be enough to keep them out of further legal trouble. I am glad that people who are clearly British, including the niece of a former Leader of the House who was caught by the test, will now be able to pass it. That is a very necessary mercy and I welcome it. On the other hand, this must increase the risk that what is done may discriminate between British and other European Union nationals and may therefore fall foul of the Treaty of Rome. There is also the risk that it might be held to discriminate on grounds of race, which is equally illegal in this country. In any case, if people have passed our immigration requirements, and if they actively seek work, do we really need another test? At present it saves the Government only £18 million. Is it really worth all the hardship, all the aggravation and all the legal confusion and danger which it causes? I beg to move.

Baroness Hollis of Heigham

This amendment seeks to remove the need for people to meet a residence requirement in order to receive income-related benefits. It may be helpful if I explain that the purpose of the habitual residence test and ordinarily resident test is to ensure that income-related benefits—we are not talking about contributory benefits: the right to reside, the right to work and the right to build up contributory benefits are not affected by the habitual residence test—are paid to people with reasonably close ties to the UK and an intention to settle here. Its underlying principle is that UK taxpayers should not have to subsidise through income related benefits people with a very tenuous link, if any, with the UK. What they earn in their own right through work and contributions is a different matter.

In considering whether a person is habitually resident or ordinarily resident, the adjudicating authorities consider a number of factors, including the claimant's attachment to the UK, the reasons for coming to the UK, his employment record and the length and continuity of residence in another country. In most cases it is easy to determine whether someone is habitually resident. In practice, only a small proportion of people need a full examination to establish whether they are habitually resident. The majority of those are able to confirm that they are. That is shown by the figures: 84 per cent of those who take the test pass it; 88 per cent of all UK nationals taking the test pass it.

However, we understood and shared the concerns that have been expressed about the way the test worked in the past. That is why we decided to review it. We, too, had particular concerns about the impact of the test on returning UK nationals—the classic example being the missionary working abroad and coming home. To date, the majority of all people adversely affected by the test have been UK nationals.

On 14th June we announced our plans for reforming the habitual residence test. UK and other nationals returning to this country from any country overseas who are re-establishing their ties here can now be accepted as habitually resident immediately upon their return. The period in which habitual residence inquiries are made will be reduced from five years to two years. Legislation will be introduced automatically to treat as habitually resident in the UK people brought here from an area of civil unrest or deported to the UK, and improvements will be made to the administrative process. Typical examples would include UK nationals working abroad—the Swaddling case that went to the European Court. It would help UK nationals with overseas links; notably people from black and ethnic minority communities.

I should add that we have advised staff to extend the effect of the Swaddling judgment so that it applies to people returning to the UK from outside Europe. People from ethnic minority backgrounds who travel overseas—for example, to maintain family and cultural links, as referred to by the noble Earl—will therefore immediately be able to re-establish habitual residence upon their return. I hope that that will allay the noble Earl's anxieties. United Kingdom nationals returning due to misfortune, marital breakdown or ill health will be helped by this judgment and UK nationals taken abroad as children.

I am not sure about the noble Earl's reference to the response of Mr Timms. However, my honourable friend made the following statement: The tricky task is to ensure that such abuse is excluded through regulation, without preventing those who should have access to the benefits system from having such access".—[Official Report, Commons, Standing Committee D, 27/4/99; col. 1037.] I am not sure that specific reference was made to children, but I may be wrong.

Although these cases are not always clear cut, UK nationals taken abroad as children would normally be covered by the judgment. Taken together, we believe that our reforms strike the right balance between allowing ready access to income-related benefits to those with genuine links with the UK and protecting the social security system from possible abuse by those who do not so qualify. I hope that in my reply I have addressed the concerns of the noble Earl and that, as a result, he will feel able to withdraw his amendment.

6.30 p.m.

Earl Russell

Before the Minister sits down, perhaps I may ask her one question that I should have asked in my speech. It arises from a Written Answer by the Minister: We also propose to legislate to add to the categories of people who are to be treated as habitually resident those people who are brought here from an area of civil unrest or who are deported to the UK". Is such legislation in prospect either in this Bill or in the Immigration and Asylum Bill which is also before this House?

Baroness Hollis of Heigham

I do not know when the legislation is in prospect. I shall write to the noble Earl and let him know. We propose automatically to treat as habitually resident in the UK people who are brought here from an area of civil unrest or who are deported to the UK. It may be that this can be done through secondary legislation since primary legislation is not specified. I shall check and write to the noble Earl, but certainly what I have said is the Government's stated intent.

Earl Russell

I am grateful to the Minister. I apologise for the rather ham-handed way in which I raised the matter. Should the information reach the Minister I shall be extremely happy to give way.

Baroness Hollis of Heigham

I am glad to confirm that we expect to table regulations—as I said, primary legislation is not required—early next year. Therefore, they are not part of either this Bill or any other Bill.

Earl Russell

I am most grateful to the Minister. I shall look at those regulations with very great interest.

I said earlier this afternoon that the Minister was an optimist. She has been so again. She said that the concept of habitual residence was easy to apply. If it were so it would not be applied with such different success rates in such different places. When referring to the definition of habitual residence, the Minister described a number of different tests. I accept that those are the tests, but I am sure that equally she accepts that they may give different answers, one from the other, when all are applied to the same person.

I am also aware that when the previous government were pressed for roughly the concession that the present Government announced on 14th June they regularly replied that under European law they were unable to discriminate between British nationals and others in this way because Article 7 of the Treaty of Rome forbade it. If that was the advice given to the previous government I presume that the legal advice given to the present Government has been different. I would be very interested to know in what respect it is different, or on what ground. Where there are two different sets of legal advice I remain in doubt as to which is correct. I still remain suspicious that perhaps the advice given to the previous government on this subject was correct, and therefore the Government may face another hostile judgment in the European Court of Justice. I warned them that the last one was coming and received the reply, "The Government are confident". They always are. I look forward to the next instalment. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 128YA and 128ZA not moved.]

Clause 66 [Sharing of functions as regards claims and information]:

Baroness Hollis of Heigham moved Amendment No. 128A:

Page 72, leave out line 37 and insert ("the Child Support Act 1991 for a maintenance assessment)")

The noble Baroness said: This is a drafting amendment. However, it may be helpful if I first explain the purpose of this clause. It provides an important step towards modernising the social security system, and it is about providing a streamlined service. The powers in this clause pave the way for an integrated claims service and provide new functions for local authorities. Our aim is that claimants should be able to access the system at any point and transact a range of business at that single point. As the Committee may be aware, at present local authorities may deal only with claims for housing benefit and council tax benefit. This clause enables them to handle claims and information relating to a wider range of social security benefits, as well as war pensions and applications for child support. It also provides for other partners in joint working arrangements to provide the same customer service in respect of claims for HB and CTB.

The Committee will understand that the provisions in this clause, therefore, support the introduction of the "one" service—the single work-focused gateway to the benefit system—that we have already discussed. We have given local authorities the power to do what we have already discussed fairly fully in this Chamber. We intend that regulations made under this clause should specify the social security benefits to which the new integrated service will apply. There will be provision for dealing with claims and the collection of supporting evidence, as well as the handling of more routine social security business that claimants wish to transact, such as reporting changes in circumstances.

Local authorities will be full partners in delivering the customer-focused, integrated service that we envisage. Part of that service will include dealing with child support applications. For example, we have already successfully introduced changes in the way that lone parents' claims for income support are handled. The Benefits Agency now helps customers to complete an application for maintenance at the time they first claim benefit. We want those who approach their local authority to make a claim to be offered the same level of service.

However, the reference in this clause to applications under the Child Support Act is currently too narrow to achieve that aim. It relates only to what are called "private cases", or applications from lone parents who are not claiming benefits. This amendment puts matters right and underpins what we are doing with the "one" service and makes it possible to extend the service offered to people who are non-private cases within the CSA. As a result, we hope that the Committee will accept the amendment.

Lord Higgins

The noble Baroness said that this was a drafting amendment. A number of years ago I read out exactly those words on a ministerial brief only to discover some weeks later that I had made a large number of people criminals retrospectively. I always view such remarks with the slightest suspicion. None the less, I believe that the noble Baroness is correct in saying that this is a drafting amendment. The original draft appeared to stop earlier than it should have; a few crucial words were not added on the end.

Having said that—I shall resist the temptation to deal with the Child Support Agency more generally—as I understand it, this amendment is concerned with the sharing of functions as regards claims and information. Am I wrong in thinking that the effect of this wording is to enable local authorities to share information with the Child Support Agency? If so, the noble Baroness will not be surprised to hear me ask, yet again: at what level will that information be shared? But perhaps I have totally misunderstood the amendment.

Baroness Hollis of Heigham

The amendment is required because the current clause defines a claim in relation to child support as an application for maintenance assessment under Section 4 of the Child Support Act. Section 4 relates only to private cases, and the amendment ensures that all child support applications are covered. That is the reason for the amendment. Under the "one" system that we discussed recently, if someone comes out of a relationship and becomes effectively a lone parent with a child, he or she goes to the "one" service in order to claim his or her income support. The "one" service will simultaneously deal with income support, housing benefit and, in the case of a lone parent, automatically encourages him or her to put in a claim for maintenance.

As was clear when we discussed the "one" service, fully trained staff—I refer to 300-plus hours of training—in local authorities (in the pilot schemes) will be able to handle that claim. But in order to do that, and to share the information, we have to legitimise local authorities' roles. That is the point of the amendment.

Lord Higgins

I understand that. However, am I right in thinking that the local authority will suggest that he or she should make a claim for maintenance, but will it then receive that information in the light of the Child Support Agency transaction? If so, is there a substantial increase in the extent to which information is transferred between one government agency and local authorities?

Baroness Hollis of Heigham

Yes, but not long ago the noble Lord pressed me for shared information on a common basis between public authorities so that the claimant was not forced to put in several complicated applications which, if there were one minor error in one, might trigger a fraud inquiry.

With due respect, the noble Lord cannot have it both ways. He cannot want common sharing of information to obviate fraud and to make life easier for the claimant, and then object if we seek to introduce that. That is indeed the path down which we are going: that where we deal with benefits we seek an integrated service, an integrated approach. That requires in the long term a common spine of information based on sound, robust information technology—I touch wood—in which case we should be able to provide a more efficient and effective service for our claimants.

Lord Higgins

The Minister is light to say that I suggested that only a few days ago, I think at Question Time. At that time, the noble Baroness rightly pointed out that that would involve transfer. Will that be done at very low levels in local authorities?

Baroness Hollis of Heigham

I could not swear to the grade. The local authority will take the information. The CSA will continue as now to sort out the claim. That is done by the appropriately trained staff. But from my experience in the local authority world, there are not appropriate grades to make an analogy with Civil Service grades. The decision makers would be the equivalent of EOs. Any such staff—they tend to be senior clerical officers and the like—would have been fully trained through the "one" training process, which is the most elaborate investment in training of which I am aware.

I cannot help the noble Lord because every local authority has different grading structures and different staff. The important thing is that staff will be empowered to do this work only if they have gone through the training process and will therefore be of an appropriate and suitable skill and calibre.

On Question, amendment agreed to.

Clause 66, as amended, agreed to.

Clause 67 agreed to.

Lord Morris of Manchester moved Amendment No. 128B: After Clause 67, insert the following new clause—