§ The Minister for Social Security (Mr. Tony Newton)
I beg to move,That the draft Supplementary Benefit (Requirements and Resources) Miscellaneous Amendment Regulations 1986, which were laid before this House on 18th June, be approved.
§ Mr. Deputy Speaker (Sir Paul Dean)
With this, I understand that it will be convenient to discuss the following:That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1986, which were laid before this House on 26th June, be approved.That an humble Address be presented to Her Majesty, praying that the Social Security (Unemployment, Sickness and Invalidity Benefit) Amendment (No. 2) Regulations 1986 (S.I., 1986, No. 1011), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Conditions of Entitlement) Amendment Regulations 1986 (S.I., 1986, No. 1010), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.That an humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment (No. 3) Regulation 1986 (S.I., 1986, No. 1009), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.
§ Mr. Newton
It must be acknowledged that any link, other than for debating purposes, between some of these regulations is somewhat tenuous. The regulations refer to two particular aspects of the benefit system, and so my speech will correspondingly fall into two halves. I shall discuss first those parts of the regulations that concern the position of students in relation to social security.
As the House knows, the background to the proposals can be found in the view expressed now for a long time by the Government, which is reflected in the social security Green Paper of 1985 and in the social security White Paper of December 1985, and which has been clearly stated by my right hon. Friend the Secretary of State and myself several times in the House. In the long term, it cannot he sensible that students be subject to two separate but related systems of support. It cannot be satisfactory to have students permanently dependent on a system—the social security system—that is principally designed for those who, for various reasons, cannot work, rather than for those who have withdrawn voluntarily from the labour market in order to study.
That general view is not confined to the Government. As the Opposition and others have fairly made clear, it also has their broad assent. The same is true of the Social Security Advisory Committee and of many students. The issue in relation to students is perhaps not one of principle, but of how we can return to a situation that almost everyone really wants.
In January, the Government published a set of proposals concerning social security benefits for students and associated proposals concerning the grant for students living away from home. Those were put to the Social Security Advisory Committee for consultation. I pay tribute to the committee. It engaged in a substantial and thorough consultation exercise. We are grateful to the committee for its work.
I met the National Union of Students in what I felt, and I hope it felt, was a useful and constructive meeting. I need 1024 hardly say that Ministers and officials received a substantial stream of representations from Members of Parliament and others about the consultative proposals.
It is fair to say that the consultation revealed a view that, while some steps on social security were generally thought to be appropriate, others went somewhat further than was generally felt right at that stage. It was felt that some of the proposals needed further consideration in conjunction with a review of the main system of student support.
The Government have responded considerably to both those lines of concern. The social security proposals have been modified significantly. However, they maintain the proposed £36 additional grant increase to students living away from home. As my right hon. Friend the Secretary of State for Education and Science said in a statement to the House on 18 June, the Government havedecided to institute a comprehensive review of all aspects of financial support for students"—[Official Report, 18 June 1986; Vol. 99, c. 1046 ]The debate is concerned with the modified social security proposals. It may be easier if I deal with them in terms of comparison with the proposals originally put forward in January. Essentially, we are proceeding with four of the original changes in the forthcoming academic year — 1986–87. First, supplementary benefit and unemployment benefit will be removed in short vacations. I emphasise the word "short" because there was some initial misunderstanding. It was never proposed that the measure should apply to long vacations. The benefits will be removed in short vacations. Support is provided in the grant for short vacations. That points to the fact that students are indeed students at such times, and not unemployed people.
We know that many students have course work to do in short vacations. They may even have to get their tutors' permission to do any paid work. In future, we shall treat them as being on their courses for the whole of the grant-aided period. There is also an administrative consideration. I think the House knows that we are in the somewhat absurd position whereby it costs £1 to deliver every £3 of unemployment benefit. The position is even more absurd with supplementary benefit when small sums of money are often involved.
Secondly, housing benefit will be removed for halls of residence. In general, hall fees need not be as high as private rents since the aim is simply to cover their costs. Therefore, we see no justification for bolstering hall fees via a kind of alternative housing benefit subsidy, especially since that entails wholly disproportionate administrative costs in which £5 of benefit paid out costs £3 to administer. I stress that there is one significant, and I hope helpful, modification to the proposal concerning halls of residence in that the exclusion will not apply where the education institutions are acting simply as intermediaries between students and private landlords. Using the jargon of the trade, the problem is known as head leases. I pay tribute to my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) for the part he played in bringing the problem to our attention.
Thirdly, students' income will be averaged across the whole grant-aided period, instead of them being treated as having different amounts of grant available in the term time and in short vacations. That logical proposal has been widely welcomed. It is, again, something which is sensible not least for its administrative advantages. The change will 1025 prevent the need for local authorities to undertake up to six reassessments of housing benefit and will help to reduce delays in processing claims both for students and other claimants, especially those in university towns.
Fourthly, the regulations will restore our policy on the treatment of students' income from deeds of covenant. Some hon. Members will be aware, especially those representing university towns, that a commissioners' decision last year led to a position in which students would have had the parental contribution to the grant taken into account during the summer, which the grant is not intended to cover. As soon as that came to my notice during last year's summer parliamentary recess, I initiated urgent extra-statutory action to overcome the injustice involved. Since then, we have made extra-statutory payments to prevent losses to individual students.
The regulations will restore our policy that the assessed contribution to the grant should not be taken into account outside the grant-aided period. Should a parent choose to be generous and give his student son or daughter covenanted money in excess of the contribution to the grant, we shall take the excess into account over 52 weeks, subject to the usual disregard.
Those are the four social security proposals from the original package that are going ahead, broadly as originally proposed, but with some modification. Alongside those proposals, we are proceeding with the extension of the students' dependants' hardship scheme to cover two-parent families as well as single-parent families for the full year which is the position at present.
We shall continue to make two changes contained in the original package a year later than we originally intended. One concerns the proposal that housing benefit should no longer be payable to students who take accommodation specifically to study and then leave it empty in the long vacation for more than a brief period. We have made no secret of our view that it cannot be right that housing benefit should pay large numbers of students for accommodation in which they do not live—perhaps for over three months. The measure does not affect accommodation in which students actually live. It only affects accommodation in which they do not live.
§ Mr. David Alton (Liverpool, Mossley Hill)
What happens to property which is not occupied by students during the summer? Is it relet to someone else? Does the hon. Gentleman understand that enormous turmoil is caused in a student's life when he returns at the end of a vacation and someone else has taken the property?
§ Mr. Newton
Historically, students have managed to overcome the problem. It is only in recent years that students have received housing benefit on any significant scale. I acknowledge, in part, the point that the hon. Gentleman made. That is why the proposal was deferred. Our original intention was to implement it effectively from this month. We have deferred that until next year, because we have listened to the view that to have introduced the change this summer would have caused undue difficulty for students who would already have entered into commitments for the current year. To ease the problem, we deferred the proposal for a full year, until the long summer vacation of 1987.
It seemed right to us to defer the proposed improvement in the disregards for housing benefit — a disregard of the amounts in the grant for books and 1026 travelling costs. It must be right to bring housing benefit in line with supplementary benefit. That is what we intend to do. That is a helpful move. Alongside the deferment of the measure to which I have just referred, we are also deferring the proposal until the academic year 1987–88.
Apart from deferring the long vacation changes until next year, we propose to make a concession which will modify the effects of the proposal for existing non-grant-aided students. Those who do not live in their parents' home but have to rent accommodation are clearly the most vulnerable group. One effect of the fact that the regulations treat all students in the same way would have been a reduction in housing benefit entitlement for non-grant-aided students. To protect those already on their courses, who would have made certain assumptions about their income and the benefit they were likely to get, we shall allow them to carry on claiming on the same basis as before, so that they do not lose benefit. That concession will last until April 1988 and the introduction of the new housing benefit scheme. By that time, we expect that the vast majority of non-grant-aided students will have finished or be about to finish their courses.
Those are the two proposals which we have deferred rather than dropped.
Lastly, there is one proposal which we have withdrawn. It would have changed the method of calculating housing benefit for students, and would have taken the grant accommodation element fully into account instead of only partially. Although this can be seen as doing no more than putting students on the same footing as other claimants, it was clearly felt in the consulation process that it could cause disproportionate difficulty, perhaps particularly in London. We have, therefore, withdrawn that proposal. I think that is widely seen to have been an appropriate action.
On a number of occasions, when my right hon. Friend the Secretary of State made his statement and since, hon. Members have made it clear that they wish to know what the practical effects will be for students. More than 400,000 in all will be affected, and we estimate that some 140,000 of them will gain the full value of the £36 increase in the grant for students living away from home. The effect on the rest will vary, depending on their particular circumstances. I reaffirm what my right hon. Friend said at the time of his statement, that it is not possible to make generalisations beyond the 140,000 about the numbers and levels of the losses because students' circumstances vary so much, especially their housing benefit entitlements. Some students will gain less than £36; some will come out with more or less a neutral effect; and some will have a measure of reduced entitlement overall. Taken as a whole, it is now widely accepted that our proposed steps are a sensible move to simplify and rationalise the present system and to remove some of the worst anomalies and complications, while making some contribution towards the longer-term aim, which is generally accepted by both sides of the House.
§ Mr. Newton
Without the details of the particular calculation in front of me, it is obviously difficult to 1027 comment in detail, but that cannot be conceivably true of the general number of students affected by these proposals. The precise effect on any given student depends on his particular circumstances. It will vary according to those circumstances. For example, a student whose only benefit entitlement is a modest amount of supplementary benefit in the short vacations would not suffer a loss on anything like that scale. It would obviously be much tidier and neater for me if I could generalise. Points of the kind which the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has reported were made in other quarters simply cannot be made to stand up as generalisations. It is grossly misleading to suggest that that represents the general pattern of the effect on students of these proposals.
§ Mr. Nick Raynsford (Fulham)
Given the Minister's reticence in giving us figures on the impact of these changes on students, will he at least inform us of the number of students currently receiving housing benefit in respect of halls of residence who will cease to be eligible to receive that benefit as a result of his proposed changes?
§ Mr. Newton
From memory — I shall ask my hon. Friend the Under-Secretary of State to correct this later if I am wrong — about 80,000 students are receiving housing benefit in halls of residence. I want to emphasise that most of the amounts are very small.
The student benefit regulations represent a sensible, limited step towards simplification and rationalisation and towards removal of anomalies. They are a step in the appropriate long-term direction and I commend them to the House.
I come now to the other set of regulations concerning board and lodging. Although their main subject is board and lodging, I should make it clear that the new regulations also cover a change announced by my right hon. Friend the Secretary of State in his uprating statement in February. The Supplementary Benefit (Requirements and Resources) Amendment Regulations make provision for changes in non-householder contribution and non-dependant deductions made from supplementary benefit. From 28 July no new awards of the non-householder contribution will be made to non-householders aged 21 to 24. Equally, no deductions will be made from the householder's supplementary benefit or housing benefit in respect of such non-dependants in that age group, so the poorest householders will therefore remain fully protected. This change is consistent with bringing the current supplementary benefit scheme into line with the proposed income support arrangements. The regulations provide only for changes in the supplementary benefit provisions. Regulations providing for changes in non-dependant deductions from housing benefit will be made shortly.
I come now to the main purpose of these regulations which concerns the board and lodging limits, both financial and other. As the House is aware, the draft regulations give effect to the outcome of the Government's proposed review of the financial limits from 28 July, the date of the supplementary benefit uprating. As I said in my statement on 18 June, we undertook to monitor carefully the operation of the revised arrangements introduced last year. We have now placed in the Library copies of the extensive—I might almost say voluminous—monitoring 1028 and statistical surveys which have been undertaken by us or for us, including the report by the consultants Ernst and Whinney on residential and nursing homes.
As I told the House on 18 June in respect of our concern about the growth in ordinary board and lodging payments, our latest figures show that the position at the time we acted was significantly worse than we had realised even then. In 1984, expenditure on ordinary board and lodging rose not to £380 million, as we thought earlier, but to more than £500 million, representing an increase of no less than 80 per cent. in a single year. At the same time, there was a 45 per cent. increase in the number of boarders, to more than 160,000.
As I said at the time of my statement, our monitoring fully confirms the existence of the accommodation market, heavily influenced by the available benefit rather than by normal commercial considerations, with widespread advertising to attract payments. In the light of our concern and the outcome of the monitoring, the House will be aware that one thing these regulations do not include is a general increase in the financial limits for ordinary board and lodging or in the related meals allowance. On our evidence, we did not believe that such increases were justified at the present time, and we felt that the evidence showed no case either for an increase in the hostel limits.
There is, however, one change in the shape of the regulations to which I should draw attention. We have taken the opportunity to incorporate in the regulations the main details of the ordinary board and lodging areas, the financial limits and the time limits by including them as a schedule. A number of representations were made to us that this would be more convenient than having them available only in a separate HMSO booklet, although that separate booklet containing maps and details of relevant DHSS local offices will continue to be available for the convenience of those who prefer to have it in that form.
There are two principal changes in the regulations in relation to ordinary board and lodging. The first is relatively limited and important and the other is of perhaps rather wider significance. The first is, of course, our decision that the ordinary board and lodging limit for couples without young children, which is currently one and three quarter times the single adult limit, should be increased to twice the single limit to avoid some of the difficulties about which representations were made to us. I hope that that will be thought helpful. The other, which has certainly gained wider notice and is of much greater general significance, is that the regulations incorporate the necessary provisions to prevent time limits being reapplied to claimants who were in board and lodging before November 1985, as had been intended on 28 July 1986.
The new regulations extend indefinitely the exemption that operated until 28 July 1986, which was included in the previous regulations, for those being paid as boarders on 24 November 1985. New boarders aged under 26 will continue to be subject to the existing time limits unless they come within the extensive range of exemption categories designed to protect those in need of board and lodging.
The limits for residential care and nursing homes were the subject of a good deal of that monitoring and research, including the study by Ernst and Whinney to which I have already referred. Following the significant increases of £10 a week in the residential care limits and £31.40 a week in the nursing home limits in November 1985, the evidence 1029 is that, in general, the average costs in homes fall within the benefit limits and in several categories it falls well within.
As I said to the House on 18 June, we concluded that no general increase in those limits was justified, but, on looking at the point at which the fit was tightest, if I may put it that way, we felt that there was a reasonable case for some further increase in the residential care limit for the elderly. Therefore, the regulations incorporate a further increase of £5 in that limit from £120 to £125, which makes a total increase of some £15 a week in just over a year. I should emphasise that the ordinary residential care home for the elderly caters for by far the largest number of claimants in homes.
Apart from that, on the evidence that had come to us, we felt that the appropriate course was to concentrate on some more specific problems that had emerged. I should like to pay tribute to the work of a number of groups within and outside the House — the Social Security Advisory Committee, the all-party group on social services, ably chaired by my hon. Friend the Member for Mid-Kent (Mr. Rowe), and the National Council for Voluntary Organisations which, among other things, held a useful conference a few weeks ago which I was able to attend. Having listened and sought to respond to the representations that had come from those and other quarters, we felt it particularly important to make some improvement in the limits for those very dependent elderly people in residential care homes, for whom there are clearly additional costs. For elderly people in residential care homes who are very dependent and who are, in most cases, at present limited to £120 a week we have put a new limit of £140 a week in the regulations where they qualify for the higher rate of attendance allowance, which seems to be the best available indicator of the degree of dependence which is the cause of concern.
§ Mr. Harry Greenway (Ealing, North)
I have a smallish number of constituents whose income from all sources, including the benefits that my hon. Friend has been discussing, does not quite match the charges of the home in which they are staying. That must be common across the land. I should be grateful for some sort of slightly more elastic procedure whereby there can be some adjudication process between what is available to the resident and the charge of the owner of the home so that some means of producing a match can be achieved. Perhaps it cannot be done. Perhaps the proprietor must be told that no more money is available. However, maybe the charge is legitimate and some more money should be made available somehow. Can anything be done?
§ Mr. Newton
I understand and appreciate my hon. Friend's concern in this matter. I should like to make two comments. The first is that the proposals I was outlining to the House are clearly and specifically designed to introduce a greater degree of flexibility into the limits to meet the sort of problem my hon. Friend has in mind. The second is that, as some hon. Members who are present will know, we have been actively pursuing discussions with the local authority associations through two working parties to see whether we can move towards a system in which there can be more individual assessment in relation to the needs of an individual claimant and in relation to the costs and charges of individual voluntary or private homes. Clearly the expertise involved in operating such a system 1030 significantly resides in local authority social services departments rather than in local DHSS benefit offices. That is why we have put so much emphasis on seeking to develop and carry forward this endeavour to work more closely with the local authority associations. We are actively seeking to pursue that and I can only hope, as my hon. Friend the Member for Ealing, North (Mr. Greenway) hopes, that it will bear fruit.
As part of that effort to work more closely with the local authority associations we are intending later this year to mount some pilot studies to test possible assessment procedures within that sort of framework. Although I cannot give my hon. Friend the Member for Ealing, North immediate satisfaction, I hope that he will accept that we recognise the importance of the point he has raised, and, far from being one we are ignoring or neglecting, we are actively exploring whether it is possible to move closer to the sort of policy which my hon. Friend has said he would like to see.
I have referred to the severely dependent elderly in ordinary residential care homes and our concern to give additional help to them through the device involving the use of attendance allowance as an indicator of the need for a somewhat greater payment. We are putting forward in the regulations similar proposals in respect of those who are blind, especially those who became blind in old age, but are in ordinary residential care homes. There, too, we are proposing a new limit of £140 for blind people over pensionable age where it is more advantageous than their present limit.
The other significant change, which I outlined in my statement and which is contained in the regulations, is the introduction of, effectively, a higher limit for residential care and nursing homes in London. Since my hon. Friend the Member for Ealing, North counts as being within Greater London, I hope that this will be of some help to him. We are proposing to increase the limits by a special extension of up to £17.50 a week. As I said to the House on 18 June, when taken altogether these proposals would mean, for example, that a severely disabled or a blind elderly person in a residential care home in Greater London could get extra help of up to £37.50 a week. That is a significant improvement.
One of the other concerns that emerged from our work and from the representations made to us by many hon. Members was about claimants who entered residential care or nursing homes before April 1985 when the revised structure of limits was introduced. We made what the Social Security Advisory Committee called generous transitional arrangements ensuring that benefit continued at protected levels, in most cases for life. We are now proposing, exceptionally in terms of the conventions that normally govern transitional protection, an addition of up to £10 a week above the protected rate for those transitionally protected at July who have had no extra help towards fees increases since April 1985. That has undoubtedly been welcomed by both sides of the House. There is another provision that has undoubtedly been welcomed, in respect of which I pay a special compliment to my hon. Friend the Parliamentary Under-Secretary of State who took a particular interest in it. We are proposing new provisions to help meet retaining fees for those who are away from home for a short period such as a holiday with their family.
Apart from those main changes, the regulations contain some clarificatory amendments of a beneficial nature, and 1031 change to restore the original policy intention concerning the treatment of attendance allowance in relation to the transitional protection provision.
As I said in response to the intervention of my hon. Friend the Member for Ealing, North, the regulations, with the specific and well-targeted changes that we have proposed, introduce greater flexibility, which is welcome, while maintaining a firm framework for that part of the benefit system, which is undoubtedly needed. The regulations as a whole rest on our determination to see that help is given as effectively as possible to the many people who need such help, but in a way that can be justified as compatible with the sensible administration of the benefit system as a whole. I believe that what we have proposed has been widely welcomed, and I commend the regulations to the House.
§ 5 pm
§ Mr. Michael Meacher (Oldham, West)
On one point at least, I am glad to say, the Minister and I are agreed. That is that there should be a single channel of support for students, and that that channel should operate through the education rather than the social security system. However, that is about as far as agreement can readily go, because beyond that point the story of how that principle is being applied by the Government has been one of muddle and mishandling. It is our strong contention that, despite the Government's concessions, they are still far from getting it right.
The Rowe report on housing benefit and the Social Security Advisory Committee both insisted that a complete overhaul of the student grant system was necessary before benefit could be withdrawn from students. That fundamental principle is still being breached by the Government. Indeed, neither the Secretary of State, when he made his statement on 18 June, nor the Minister for Social Security today has answered the basic question why it is necessary to make changes, except, perhaps, for those involving short-term vacation claims, in advance of the new review of student support.
In effect, students are being asked to take losses in benefit now in exchange for some vague, uncertain IOU, cashable at some unspecified time in the future. For students this summer, the question is not so much whether they would buy a second-hand car from the Government as whether they would part with money for a third-hand review of student grants—not a very enticing prospect in view of the aborting of the first two.
Secondly, we question whether it is warranted to carry through that upheaval when it will now produce such relatively small savings while generating major inequities among students. The original proposals would have saved about £40 million to £45 million gross, according to the Government. That is before the compensating increase in student grants and housing benefit disregards. The net figure, after compensation, is £20 million to £25 million. It is now stated by the Secretary of State that the "overall saving"—that was his phrase—will be £8–5 million this financial year and £16 million next year. Presumably that includes the extra expenditure on grants and disregards. If not, the savings would be piffling and not worth all the confusion. Even if those savings are net of the extra 1032 expenditure, the gain to the Government is still small and is certainly obtained at disproportionate cost in increased hardship to students.
The SSAC concluded in paragraph 64 of its statement:While students paying the highest rents—and London-based students in particular—will sustain significant losses, up to 140,000 students will receive a windfall of £36 unrelated to their needs.The SSAC goes on in paragraph 65:The proposal to switch some of the specifically targeted benefit savings to an indiscriminate increase in student grants does not, in our view, make sense, and would produce major inequity within the student population.Our third major objection is that, even despite the concessions that the Government have made, the cuts that are retained, especially those on halls of residence and unoccupied property in the long vacation, remain unfair. I accept that the Government have adopted, in their statement on the SSAC report, a number of the protective measures suggested by the SSAC for the so-called "problem groups"—not a happy phrase. Examples are transitional protection for students without awards, head leasing—I did not know what that meant until I read that paragraph—of accommodation and short absences during the summer vacation. Nevertheless, there remains a core of inequity in the cuts on which the Government are still insisting.
The Government still intend to withdraw housing benefit for students in halls of residence, without compensation, as the Minister made clear today. The SSAC recommended that that was warrantable only on the basis of three conditions. I quote paragraph 41 of the SSAC's report:We recommend that the funds currently devoted to housing benefit for students in halls of residence should be transferred to the University Grants Committee and used to subsidise university accommodation; the Government should consider the problems of vacation occupancy; and steps should be taken to ensure that only halls of residence and similar accommodation and not other types of tenancy areThe Government's answer to those points, such as it is, is partial and unconvincing. The Minister hardly touched on it today. One feels when one reads the answer that the Government, having retreated a little, for which we are grateful, are still determined to have their pound of flesh, whatever the logic. That retained cut is one of the victims of that determination.
Another example is the retained housing benefit exclusion from unoccupied property in the long vacation. In paragraph 47 of its report, the SSAC said:we are seriously concerned about the possible short-term effects of the proposed change. Even if the student housing market responds in the desired manner students may suffer stress and hardship during the period of transition. We suggest that the results of the change should be monitored carefully so that if there is evidence of serious hardship appropriate steps can he taken.The Government argue that by deferring the change for a year they are meeting the SSAC's objection. They are not. The same problems of uncertainty, confusion and loss will simply recur, but a year later.
More generally, the SSAC argues that students have little choice in their housing. The growth in student numbers has not been matched, in general, by the growth in the provision of university accommodation. Moreover, it is true that students are forced to compete at a considerable disadvantage in a shrinking private rented sector. They require only a short tenancy and they possess fairly low income, in general. Therefore, the effect of the regulations where there is a shortage of accommodation — I take the point made by the hon. Member for 1033 Liverpool, Mossley Hill Mr. Alton)—will be to force students to take a 12-months lease without housing benefit cover for the summer months. That is the only way in which they can protect their housing when there is a shortage. That is scarcely fair or right. Like the iniquitous 20 per cent. cut in housing benefit for supplementary benefit claimants in the Social Security Bill, which is now rightly being struck out in another place, that is a straightforward, downright cut in benefit for which the Government have provided no adequate justification. For that reason, it remains as objectionable today as it was when the Government first announced it in December.
The Minister seemed coy about his mathematics on the housing benefit cuts. He said that 400,000 students will be affected, of whom 140,000 will gain. My arithmetic suggests that about 260,000 will be either in the same position or will lose. If he wishes to clarify that, I should be grateful.
§ Mr. Newton
I offer only a modest qualification. There is the possibility — I cannot put numbers on it — that some people who receive less than £36 a year in social security benefits, which may include those small sums charged by some halls of residence, will also be net gainers.
§ Mr. Newton
The 140,000 are those whom we estimate to be living away from home but not receiving any social security benefits. Therefore, they will gain overall by the full extent of the £36 grant increase
§ Mr. Meacher
I understand that point. However, it would be a reasonable generalisation to assume that from 200,000 to 250,000 will lose, albeit some by only fairly small amounts.
What makes the housing benefit cuts all the more objectionable in principle is that, contrary to the Government's protestations that they are simply transferring support from social security to the education system, they are cutting both. We have been told that, even after concessions, the housing benefit cuts for students will amount to about £16 million in a full year. On the other side of the coin, student grants have fallen in real value by 20 per cent. while the Government have been in office. In terms of the current grant, that is a cut of £360 in purchasing power today compared with seven years ago.
I repeat that, although we accept in principle a transfer to a single channel of support via the education system, that is not what is proposed in the orders. The orders will bring about major cuts in housing benefit on top of the major cuts in the real value of the grant that have already occurred. To make, as Ministers have, meretricious noises about the possible conclusion of a future review of educational support which reopens the prospect of student loans is scarcely reassuring and does not begin to compensate for the reality of financial losses for students across a wide spectrum.
The other issue in today's batch of orders is the unrelated issue — I am not sure why they were all thrown together — of board and lodging. My hon. Friend the Member for Derby, South (Mrs. Beckett) will concentrate on that when she replies, but I wish to make a few general observations in the light of the new information available from the social security policy 1034 inspectorate surveys. I appreciate that they are voluminous, but they are also informative and I am glad that we have that information.
Perhaps the most significant finding from the inspectorate's interviews with 272 board and lodging claimants, in what it says is a representative sample of areas, is that one third of claimants pay a board and lodging charge which exceeds the financial limit laid down by the DHSS. The amount by which the supplementary benefit fell short of their accommodation costs varied from a few pence to no less than £45 a week. Leaving aside those two extremes, it is especially disturbing that one in eight of all board and lodging claimants was paid as much as £10 to £25 a week less than his accommodation cost. If the sample is representative, as we are told it is, that must reflect the experience of between 12,000 and 13,000 claimants today. That shows that in a significant minority of cases, the board and lodging regulations are still producing serious hardships.
Of the claimants whose supplementary benefit did not cover their accommodation costs, one third told the DHSS inspectorate that they could stay in the lodgings only by meeting the excess charge out of their meals allowance, personal expenses or, in a few cases, their savings. In addition, as many as one in eight said that they were in arrears with the payment of board and lodging payments to their landlords and that the arrears ranged from £10 to £400. Furthermore, others in the sample have already been forced to leave their accommodation because they were in arrears. That is a serious and worrying problem.
Another worrying finding which emerges from this material is that, contrary to the Government's complacent belief that landlords would rapidly adjust their board and lodging charges to the new financial limits, it appears that the opposite has happened in almost as many cases. The policy inspectorate found that, although 8 per cent had their board and lodging charges reduced by between £5 and £30 a week, 6 per cent.—nearly as many—had them increased by similar amounts.
There is evidence that Ministers' claims about the extent of available accommodation which is within the financial limits is either exaggerated or fanciful. I see from today's copy of The Guardian—I do not know whether the Minister will wish to deny that it is his favourite newspaper —that the Minister rejected a claim bythe Central London Social Security Advisory Forum … that 90 per cent. of over 700 hotels in London charged more than the DHSS limit.That point was made in another context by the hon. Member for Ealing, North (Mr. Greenway). The Minister claimed that his officials have located at least 20 cheap hotels that are within the limit. When the forum checked his list, it discovered that the Minister's claim was not substantiated in three quarters of the cases. I hope that the Minister will accept the validity of the serious comments made by the forum that almost all hotels in London now charge above the DHSS limit.
§ Mr. Newton
I intervene simply to say that, as a result of some discrepancies between the way in which the details were put in the CLSSAF's document and our report of this dipstick survey, there was an overlap of four or five cases. Nevertheless, our small survey—there was also a wider survey—showed 14 to 15 additional hotels. I emphasise that that was just the result of DHSS officials telephoning, on a one-off basis, in response to some advertisements that they found in the local newspapers. There is no attempt to 1035 suggest that the 20 hotels formed a great, comprehensive survey, simply that DHSS officials picked out 20 advertisements, telephoned and identified — we can haggle about the exact figures—14 or 15 of which were not within the limits. While we are on this track, I should say that one further address, which was said to be unobtainable despite continuous ringing, was contacted by my officials at 9 am today and it was confirmed that the accommodation was within the limit.
§ Mr. Meacher
The Minister is a little less genuinely contrite than he normally is. I accept his latter point as that reflects one case. The truth is that, of the other 14 or 15 hotels, six were already on the list. I accept that those 20 hotels were taken at random, but the randomness makes it significant. Two more hotels were unobtainable —although the Minister now says that one is obtainable—one would not take claimants and four would take people within the DHSS limits only at three to a room. To suggest that that is readily available accommodation for unemployed, homeless people is a disgrace. One hotel had no telephone number or full address, so it would be difficult for claimants to contact. That left five which were correct. I accept that perhaps there are six. Out of the Minister's random list, only six out of 20 were available. The forum admitted that 10 per cent. were available within the limits, but that means that roughly 90 per cent. are not.
§ Mr. Raynsford
Will my hon. Friend confirm that, compared with the random sample of 20 hotels from which the DHSS drew its conclusions, the survey of the Central London Social Security Advisers Forum and other voluntary organisations was based on a sample of 710 hotels and might therefore be expected to give a more representative picture of what is happening in London?
§ Mr. Meacher
I am getting in the way of a significant dialogue. Perhaps the Minister wishes to intervene, because my hon. Friend's question was directed more at him than at me.
§ Mr. Newton
I am prepared to be a little contrite if the CLSSAF or the housing advisory service feel that I have been unfair to them—I have considerable respect for the activities of both, and was not seeking to attack them—but I merely question whether their list is as comprehensive and up-to-date as they claim.
I make it clear that to call the smaller of the DHSS's samples a random survey is to over-dignify it. An adventurous DHSS official simply thought that he would see what would happen if he picked out 20 hotels and telephoned them.
We also conducted a more properly structured sample survey which showed that, in addition to those reported by pressure groups, more than 350 boarding establishments in London were within the limits. Unfortunately, we cannot pass the details of the hotels in our sample to the pressure groups because, in common with other such survey information, we do not have the permission of those included in the sample to do so. By definition, the information given in the smaller survey was publicly available as my Department simply responded to advertisements in newspapers.
§ Mr. Meacher
I am grateful to have regained my speech. I thought that the Minister was about to make a second speech.
1036 The key point is not the status of the 20 hotels that were telephoned; it is that an overwhelming number of hotels in London which provide bed and breakfast accommodation are charging significantly more for it than the DHSS financial limits provide. That fact is based on a detailed and comprehensive survey.
If the Minister wishes to challenge that fact he should produce detailed information and present it formally. Until that happens, the position in central London is as I have described and it is grossly unfair to subject homeless unemployed people to it. Simply providing sufficient money for their landlords will cut into the rest of their allowances. That is all that we are saying, but we are saying it strongly.
Another disturbing conclusion drawn by the policy inspectorate was that the overwhelming majority of boarders, including those in private households, have no alternative accommodation. One in seven of them could find some temporary accommodation, mostly with parents or relatives, but only one in 25 had access to alternative permanent accommodation.
That fact decisively rebuts one of the Minister's key arguments: that young people were leaving home unnecessarily to live in board and lodging accommodation. The main reasons revealed as to why those people became boarders were disputes with parents or relatives, the break-up of their marriages, or being forced to leave their previous accommodation. That shows clearly that they are simply people who have nowhere else to go.
That background calls into question the purpose of the board and lodging regulations. Are they designed simply to save money or to pressurise people into moving on to find jobs? If the latter, the board and lodging regulations have been a failure.
A DHSS document published last month, entitled "Monitoring the Impact of the 1985 Changes", stated:"There was no evidence to suggest significant moving between board and lodging areas.More explicitly, the evidence shows that the number of people who cease to claim supplementary benefit because they have found work is tiny. To that extent, it has not been a job-finding exercise. The Opposition are not surprised because no jobs are available.
If the purpose of the board and lodging regulations is to save money, two other questions immediately arise. Is it reasonable to save money at the expense of people who have been forced by personal misfortune into board and lodging accommodation because they have nowhere else to go, and who are then forced to cut food or other essentials to pay the accommodation charge? Even more importantly, is it fair to penalise the homeless unemployed in general when they are hapless victims of policies beyond their control which have led to soaring youth unemployment and almost the collapse of the local authority house building programme?
Since we believe that the answer to both those questions is a resounding no, we continue to oppose the principle of the board and lodging regulations. At the same time we strongly oppose, and shall certainly vote against, the major cuts in housing benefit for students, which are matched by inadequate grant compensation and aggravated by the huge fall in the real value of student grants under this Government.
§ Mr. Robert McCrindle (Brentwood and Ongar)
As a fairly frequent participant in debates on social security, I have listened to the hon. Member for Oldham, West (Mr. Meacher) many times. I am always struck by the stridency that he seems to bring to debates on social security. I pay him the tribute of equating that with a deep-seated opposition to whatever may be before the House at that moment.
This afternoon I was struck by the low level of stridency in the hon. Gentleman's speech. On some occasions, he has been guilty of detaining the House overlong, but on this occasion he managed to make his point in no more than 24 minutes, which is probably a record for him. From that the hon. Gentleman's opposition to the regulations, against which he will vote, is somewhat less than he would have had the House believe. The Government can take some comfort from the knowledge that, although there will be opposition, they should not become over-excited about it.
The hon. Gentleman returned to form by quoting extensively from The Guardian. Sometimes I think that, if that were not his principal source of information, his speeches would be appreciably shorter, if not non-existent. Some Conservative Members treat what is said in The Guardian with considerable interest, if also with a touch of circumspection. We read it avidly to establish the extremity of the position from which we can work back to the true facts.
I extend a general welcome to the regulations. I appreciate the fact that the Minister is prepared to listen to reasonable objections, whether from the Government Benches, the Opposition or from outside interests. There is no doubt that the regulations are much more acceptable to many Conservative Members than would have been the case had the Minister proceeded with his original intention. While listening to the difficulties that may have been encountered had we proceeded as intended, he kept in mind the balance which any Minister in his position must keep before him—that is the balance between the taxpayer, who has to pay the bill, and the beneficiary, to whom one wishes to extend all possible consideration.
I have had the temerity to press the view upon my hon. Friend the Minister of State when we have discussed these matters that housing benefits—a relatively new system of social security — were never intended to prop up students in the way that has become familiar in the recent past. I welcomed the introduction of housing benefits and I continue to believe that they make a major contribution to our social security system. I do not believe, however, that they are structured in such a way as to be able to provide for students the type of assistance which they can reasonably be expected to provide for others in rented accommodation. Having taken that line, I have been pressing on my hon. Friend and my right hon. Friend the Secretary of State for some time that it is correct to phase out the reliance on housing benefits which students have adopted over the past year or two.
I have drawn to the attention of my right hon. and hon. Friends that moving towards a phasing out of housing benefits for students in a year when the student grant increase is being restricted to 2 per cent. could be seen as moving too fast and an attempt to obtain advantage from each direction. There is a strong argument for more phasing and more understanding.
1038 The regulations show that we remain, as my hon. Friend the Minister of State has said, dedicated to moving away from student reliance on housing benefits, but we recognise that the only way in which to proceed is in a progressive fashion. I must welcome what I hope we are about to agree when the Question is put.
This is not the occasion to spend very much time on the wider issue of students' grants or loans. I hope that I shall be forgiven if I say in passing that I have long taken the view that student support — it is sometimes forgotten that it is at a higher level in this country than in most other countries of western Europe or the United States —should be seen as a partnership between the taxpayer, who shoulders a large part of the burden, the parent, who according to his means is asked to make a contribution to the education of his children — in my judgment, he should continue to be asked so to do—and the student himself. I welcome the fact that there is to be an inquiry into student support, no doubt taking account of the social security considerations that we are discussing and exploring.
What have we to fear from an exploration of students" loans? My view, for what it is worth, is to be chary of moving in that direction. There are quite sufficient thoughts in a student's mind without adding to them the matter of his creditworthiness. On the other hand, I do not have a closed mind. If we were able to take forward the partnership between the taxpayer, the parent and the student, that would be a good thing. In the meantime, we must take it that in whichever direction we move, and at whatever pace, housing benefits for students were never designed to achieve the purpose for which progressively they have been used. To that extent, I welcome the fact that the Government have moved in the direction that I prefer.
§ Mr. Raynsford
The hon. Gentleman will recall that the Government introduced with their housing benefits scheme an entitlement to students in halls of residence to claim the benefits, a right which previously did not exist. There was some logic and reason behind that. We know that housing benefits were designed to reflect the wide differences in housing costs which can apply in different circumstances, unlike other social security payments, that are designed to meet basic needs. If we are to treat students on a par with others, there should he a means of giving them assistance when, through no fault of their own, they have to meet exceptional housing costs. That circumstance continues and the removal of entitlement to claim will lead to hardship.
§ Mr. McCrindle
I understand that. The only reply which I wish to make immediately is that the housing benefits system is still, in my judgment, far from being effective. We have been taking stock of how the system is working out in practice and introducing such changes as become necessary. In working up to what the final shape of housing benefits should be, it is not surprising that student support should be included within their ambit. I am saying that it would make no sense to have permanently two parallel systems of support for one section of the community. Instead, each section of the community that needs support should rely on housing benefits per se or on a grant system such as the student grant system.
§ Mr. McCrindle
I shall not give way to the hon. Gentleman again. There is a confusion between these systems of support. We have seen the creation of a dual system for students—on this ground they have stood almost alone—and this has flown in the face of the intention behind student grants and housing benefits.
I shall say something about housing benefits more generally before moving on to the issue of board and lodging. I was struck by an early-day motion in the name of the hon. Member for Liverpool, Mossley Hill (Mr. Alton). The motion is headed "Abuses of the Housing Benefit System". It draws attention to the serious concern that is being expressed in some quarters at the "extensive abuse" of the system. It expresses the belief thata number of private landlords are acting in an unscrupulous and profiteering manner".It states:unemployed people are encouraged to apply for tenancies and … landlords subsequently charge extortionate rents well above the levels approved by the rent officer".That goes somewhat beyond the discussion in which we are engaging this afternoon, but I draw attention to it in passing because it is a fact that that abuse of the housing system is known to have taken place. There is a suspicion that collusion takes place from time to time between beneficary and landlord. To that extent, it seems that we cannot consider board-and-lodging regulations without taking account of the wider operation of the housing benefits system.
We should pay attention to the early-day motion No.1031 which is supported by Liberal, SDP and Labour Members. At the end of the day, we are all taxpayers. I hope that we are all compassionate and that we all wish to direct social benefits to where they are needed. If there are examples that show that that is not happening, the conclusion of the motion — that there should be an inquiry established into these abuses — will have my support.
§ Mr. Alton
I am grateful to the hon. Gentleman for referring to my early-day motion and for offering his support for the call for a inquiry. Will he support the principle that, wherever rent is being paid directly through the housing benefits system to a claimant, the rent should be registered with the rent officer?
§ Mr. McCrindle
I am not an expert in this area and I should need some opportunity to study whether that is the best or only way to achieve the objective that probably unites the hon. Gentleman and myself. I hope that he will forgive me if I do not give him an immediate answer off the top of my head. I do not exclude the possibility that his suggestion is the solution.
There is no question in my mind but that a good deal of heartache has been created as a result of the operation of the board-and-lodging regulations. There is equally no doubt that there were abuses of the system which led to the Government feeling that it was necessary to introduce the regulations. In introducing amendments to the regulations, we should be ensuring that genuine social security needs are effectively met, while taking every opportunity to curb the abuses, of which, I suspect, every hon. Member has some first-hand knowledge.
I welcome the Government's decision to increase by a further £5, to £125 a week, the payment to people in residential care homes. I note with approval that there has been an increase of £15 a week overall since April 1985. 1040 That underlines the fact that the Government have clearly listened to the representations made by some of us who felt that £110 a week was cutting it very fine indeed and that, while some homes could survive on that, it would be extremely difficult in some parts of the country.
Mentioning that geographical distinction leads me to make a mild criticism of the Government, and, in the process, to declare an interest. I am pleased to note that, in addition to the overall increase of £15 a week, there is to be a further increase in the London area of £17.50 a week. There can be no doubt that costs in the London area, be they transport or labour costs, are higher, and it is justifiable that the amount paid to residents in homes in the Greater London area should benefit in the way that the Government propose.
However, as the Member of Parliament for the first constituency over the Greater London boundary to the north-east of the city, I shall find it difficult to explain to those who run residential homes in my constituency that, whereas £142.50 is a reasonable figure to pay for a residential home in the London borough of Havering, it is reasonable to pay £17.50 less than that in my constituency. I should have preferred, and I urge the Minister to consider, some form of tapering. It will always be difficult to draw a boundary, but if this payment had been tapered it would have been seen as fairer. My constituents view this as the thin end of the wedge because their costs are not materially different from those of people in Greater London next door.
Having said all that, let me express my appreciation to the Government and to Ministers for having listened to the various representations that have been made. What we are being asked to support this evening is a considerable improvement on the earlier regulations. With the one or two minor qualifications that I have felt it necessary to express, the Government can rest assured that they will have my support in the Lobby tonight.
§ Mr. David Alton (Liverpool, Mossley Hill)
It is a pleasure to listen to the hon. Member for Brentwood and Ongar (Mr. McCrindle), although I disagree with his ultimate conclusion. I would find it difficult to vote in favour of the regulations tonight because of the qualifications and caveats that I want to enter during my contribution to the debate. I was glad that the hon. Gentleman raised the question of abuses of housing benefits and I shall return to that later.
I endorse what the hon. Gentleman said about student loans. I, too, oppose the introduction of student loans. In reality they are already being introduced by the back door. With the fall in the value of the student grant, by about 20 per cent. in real terms in the past seven years, many students are being forced to go to their bank manager to borrow money. They then find themselves taking large overdrafts which put them into penury for long periods.
The hon. Member for Oldham, West (Mr. Meacher) also talked about the position of students and I concur with everything that he said. The clock is being turned back to before the Education Act 1944, with less and less opportunity, particularly for young people from underprivileged and poorer backgrounds, to enter higher education because of the financial penalties which are involved. Hall fees are one example of that. The Minister talked about that but he failed to mention that between 1979 and now hall fees have gone up by 77 per cent.
§ Mr. Martin Brandon-Bravo (Nottingham, South)
I hope that the hon. Gentleman will clarify the remarks that he has just made. He seems to be saying that it is the people at the bottom of the income scale who are being denied access to higher education. But surely it is precisely that group who get the full grant. They are not adversely affected. It is the so-called middle-class students who are sometimes in trouble. I hope that the hon. Gentleman will clarify his position.
§ Mr. Alton
The hon. Gentleman will be aware that whether students come from the poorest background or from the middle hand, to which he has rightly referred, the costs involved in trying to sustain oneself through the vacations, in trying to buy the necessary books and in trying to cope with all the everyday living costs are so enormous that many students are finding it more and more difficult to cope. That has led many young people, for whom it may not be the normal course to go on to higher education, to simply opt out. I see plenty of evidence of that in my constituency.
The Minister said that the proposals that we are considering today are well targeted. I do not agree with that. They are a pot pourri of proposals which attempt to spatchcock together a wholly unsatisfactory package. The Minister mentioned several times during his speech how students will receive a £36 a week increase, but he did not mention what reduction there would be for students who would lose their benefit entitlement during vacations. When I challenged him on that, he was unable to give the House a figure. The National Union of Students estimates that as much as £16 million will he withdrawn from the benefits system. Supplementary benefit and employment benefit will disappear for short vacations. The Minister drew comfort from the fact that that did not apply to the long vacations but I regret that it is happening at all.
From student entitlement to welfare benefits, it is extraordinary that the Department is pre-empting the Department of Education and Science whose Secretary of State said only in the last few days that he wanted to have a longer-term look at student financing. It would have been far better to wait and see what conclusions he arrived at before bringing forward these proposals tonight.
The Government's proposal that students should give up their accommodation during vacations when they will be denied housing places them in an impossible position. They will have to start the search for new accommodation all over again at the end of a vacation. In cities such as my own, a property that is left vacant while a student is away will almost certainly be vandalised and that will cost dearly.
§ Mr. Nicholas Lyell (Mid-Bedfordshire)
What the hon. Gentleman has just said about students having to start again to find new accommodation flies in the face of my experience when I was a student, and, I suspect, when he was a student, when we made arrangements with our landladies which lasted through to the end of the summer term, gave up the accommodation in the interim and then made fresh arrangements from the autumn.
But will the hon. Gentleman comment on a wider point? He says that the provisions will damage the opportunity of poorer students to take part in higher education. How is that consistent with the fact that today 13.8 per cent. of the available group — the highest proportion ever—are already taking part? That does not seem to support his contention.
§ Mr. Alton
I am not sure where the hon. and learned Member for Mid-Bedfordshire (Mr. Lyell) gets his figures. After 14 years representing people in the inner city of Liverpool, first as a councillor, now as a Member, my experience is that fewer people are availing themselves of the opportunity to go into higher education. More and more people are saying to me that they would find it increasingly difficult if they had around their necks the albatross of loans that they will have to pay back to the banks. They say that the burden of the repayment of those loans would prevent them from going into higher education. It is certainly a major disincentive.
Times are changing. I agree with the hon. and learned Member for Mid-Bedfordshire that in the 1960s it was easy to leave a property that one might take for a brief period and then it could be let to someone else during the vacation. In my city of Liverpool there are currently 6,000 empty public sector properties and 3,000 private sector properties. That is a disgrace. Given that situation, it is unlikely that anyone would take those vacancies which, on the whole, are not in the houses of landladies but are in properties which students tend to rent in groups of two or three. Those properties will be left empty during vacations and I suspect that they will be subjected to vandalism.
These regulations also cover claimants in common lodging houses. The Government are trying to paint far too rosy a picture and to demonstrate that I should like to deal with part of the report by the social security inspectorate. The report shows that of those surveyed 34 per cent. were in bed and breakfast hostels and lodgings while 53 per cent. were in private or local authority accommodation. The most striking feature is that very few of those surveyed had alternative accommodation to which they could go.
Of the 228 claimants who were interviewed, only 12 had access to alternative permanent accommodation and only 43 to temporary accommodation. That bears out what the hon. Member for Oldham, West said in his speech, that there is no route home for many young homeless people who have the misfortune to find themselves in common lodging houses or in hostel accommodation.
I am a trustee of Crisis at Christmas. Several other hon. Members are also trustees of that organisation. It helps fund projects for homeless people, many of whom are young and single. We have found that the situation is getting worse. Many young people arrive in London believing that the streets are paved with jobs. When they arrive they are disappointed because they can find neither a job nor accommodation. 'Many of them have nowhere to which they can return.
Conditions in the common lodging houses and hostels are pretty awful. The House does not have to believe me, because recently in the Reading Evening Post a Government Whip, the hon. Member for Reading, West (Mr. Durant), said:The main problem is the single persons who are homeless. They have very little hope and some of the bed and breakfast accommodation is appalling. The landlords in some cases treat them badly. In many areas claimants are being forced to pay sums well above the DHSS limit.In Reading, for instance, it is about 82 per cent. above the limit. In Swansea it is 79 per cent. above the limit, and in Canterbury, Folkestone and Dover it is 75 per cent. above the limit.
1043 There is also the issue of inequitable treatment. It is scandalous that claimants who were caught in the post-November 1985 time warp of DHSS limits receive less than those who applied before the regulations were altered. That is grossly unfair. Despite the fact that the Government are hitting vulnerable people, they will not allow local authorities that have sold off council houses to reinvest that money.
I have no point to make about whether councils should sell houses because that should be a matter for local authorities, but having received money from such sales surely the authorities should have the right to invest that money to provide housing. To prevent councils from using capital receipts for the provision of decent bed and breakfast, hostel or sheltered accommodation for vulnerable people is deplorable.
Next I should like to deal with housing benefits. One aspect of these regulations particularly gives me cause for concern. It is the failure of the Government to insist that any tenant, student or otherwise who is in receipt of housing benefit should automatically have his rent registered with the rent officer. As I said in an intervention during the speech of the hon. Member for Brentwood and Ongar, that is the only way in which widespread abuses involving the loss of millions of pounds of taxpayers' money can be ended.
The Government cannot pretend that the news of the abuses comes as a surprise to them. Ever since the time when housing benefits were introduced Opposition Members have warned that the system was unnecessarily complex, ill-conceived and a potential gold mine for a new generation of Rachman landlords. In July 1982, four years ago this month, I warned the House that housing benefit regulations were:Byzantine in their complexity and bewildering to the average person.I said that the schemes were "cumbersome and confusing."
I also said that:The regulations serve to reinforce poverty, with the poor paying for the even poorer." — [Official Report, 26 July 1982; Vol. 28, c. 784.]In March 1983 I complained again that the local authorities had not been properly consulted and that private tenants' rights were not being safeguarded. I said that the scheme was half-baked and not capable of being implemented.
Four years after its implementation the housing benefits system has become a nightmare. Government Ministers are being complacent and lethargic about tackling the mess that they have created. I was surprised when on 14 April, in answer to a parliamentary question that I tabled, the Parliamentary Under-Secretary, who I am glad to see in the House, said that no information was available about the number of tenants in receipt of housing benefit whose rents were registered.
Last year some £4.2 billion was paid out in housing benefit and in the year ending 31 March 1986 £4.6 billion had been paid out. Given those figures, the Government's approach seems to be remarkably cavalier. In failing to act they are behaving quite irresponsibly. What happens is that an advertisement will appear in a local newspaper suggesting that bedsits are to let and that people who are unemployed or in receipt of DHSS benefits are welcome to apply. The landlord then gets the tenant to fill in an application for housing benefit. I highlighted in an 1044 example in the early-day motion about which the hon. Member for Brentwood and Ongar spoke the case of a Mr. Caulfield who owns nine properties in a place called Denman drive in Newsham Park, Liverpool.
In one property alone there are 16 different bedsits and from those bedsits the landlord receives some £524 a week in rent and rates. That is claimed back through housing benefit. Of the nine properties that he owns in that road, a total of £ 120,000 a year is being collected through money paid via housing benefit. If those rents had been registered with the rent officer the landlord's entitlement would have been closer to £50,000. That is a rip-off of taxpayers' money.
§ Mr. Major
I am aware of the case to which the hon. Gentleman refers. I have signed a letter that I hope he will shortly receive about this matter. As the hon. Gentleman knows, the administration of the housing benefits scheme is a matter for local authorities. If he feels that there is abuse, I hope that he will make the details of that abuse available to local authorities so that they may take appropriate action. The review team on housing benefit specifically examined the question whether local authorities should be required to seek registration of rents paid by tenants who receive housing benefit. It concluded, and we accepted its advice, that indiscriminate use of that provision would adversely affect the supply of privately rented accommodation. Neither the hon. Gentleman nor the Government would wish to see that.
§ Mr. Alton
The Minister is wrong to associate me with the Government's philosophy of trying to create more private rented property. The way that shorthold was introduced and the way that housing benefits have been used are simply devices to try to increase the number of properties in the private sector. I should like to see an increase of rented property through housing co-operatives and housing associations rather than a growth in the number of private landlords.
I disagree with the Minister's final point about the review team and its recommendations. We need to look again at this matter. In the same area of Liverpool that I spoke about a few moments ago there are properties owned by housing associations. They have registered rents of as little as £10 a week. That compares with £35 a week being paid out in housing benefit directly to the private landlord that I mentioned. That discrepancy deserves to be investigated.
The Minister also said that it was the responsibility of the local authority to act and not his. Three parties can ask for rents to be registered. First, there is the tenant, but he has no incentive to do so because, it makes no difference to him what rent is being paid as it is being paid directly over his head. Secondly, there is the landlord, but he obviously has no financial incentive to do that. Thirdly, there is the local authority, but it has neither the financial incentive nor the staff to do so. The Minister was right to say that a local authority could seek registrations, but local authorities throughout the land are not doing so.
§ Mr. Newton
I am sorry about this excessive enthusiasm of Ministers to get at the hon. Gentleman. With the erudition that he is displaying, I must assume that he has 1045 read the social security White Paper and studied the proposals and the proceedings of the Social Security Bill. He will know that among the proposals which have proved somewhat controversial with the local authority associations are those designed precisely to create a greater incentive for local authorities to use their powers. I would welcome an assurance from the hon. Gentleman on behalf of the Liberal party, which has so far shown singularly little enthusiasm for any aspect of the Social Security Bill, that this is one proposal which it will support.
§ Mr. Alton
I was much impressed by the enthusiasm of the two Ministers, trying to jump to the Dispatch Box at once. It is a case of a two-headed monster, and I assume that their arguments are much the same. But I do not want to be unkind because I am grateful for their enthusiasm.
I cannot give the Minister that assurance because if local authorities are not given the resources required to do the policing job that we should like to see introduced, it would be absolutely impossible for them to ensure that the registrations go ahead. That cannot be done without personnel. If the Minister says that resources will be found for local councils to carry out that job, obviously I shall be happy to give him my support.
I can give the Minister an example from another part of the country because this is not an exclusively Liverpudlian problem. Earlier this week I spoke to Mr. Roy Murphy of Shelter in Manchester. He told me of a bedsit in a condemned property which has a compulsory purchase order on it, for which £65 a week is being charged. That rent is being paid through housing benefit direct to the landlord. On 14 April when I asked the Minister for Housing, Urban Affairs and Construction whether he would introduce new regulations to require local authorities to register rents like this one he simply said no. I hope that the Government will take this issue seriously, study the terms of the early-day motion which I mentioned, and recognise that the problem is a nationwide one.
Another illustration came in a letter I received this morning from a lady in Bolton who said:Whilst unemployed I moved into a flat in October 1984 … This is a large detached house which has been made into 8 flats and bedsits: on the ground floor there were 3 flats, on the first floor there were 4 bedsits, and on the second floor there was one flat … Outside the kitchen back door was a dilapidated outside toilet. Upstairs on the first floor was the communal bathroom and toilet. The toilet was often in a very unhygienic condition, and the bath had no hot running water … For all this I was charged £30 per week, which the Housing Department was obliged to pay. The landlord's wife (who dealt with the collection of rent) had falsely assured me that the rent had been registered with the Fair Rent Officer.That pattern is repeated throughout the United Kingdom and it is part of a multi-million pound rip-off.
Homelessness has become a boom industry and housing benefits a licence for landlords to print money. In the face of that, we in the Liberal party believe that the statutory instruments and regulations before us today fail to address themselves to those fundamental issues. Indeed, they make matters worse.
At present 340,000 multi-occupied properties exist in England and Wales, of which 53 per cent. fall below even minimum housing and fire safety standards; 38 per cent. have no proper means of escape from fire; 33 per cent. are in a serious state of disrepair with leaking roofs, severe damp and crumbling walls; 28 per cent. lack essential amenities such as toilets, bathrooms or cookers; and 23 1046 per cent. are wretchedly managed by landlords. Sixteen per cent. of tenants live and sleep in overcrowded conditions, often with no privacy. Some 2 million people live in multi-occupied bedsits, lodgings, hostels and bed and breakfast hotels in England and Wales. Tonight's debate takes little account of their needs. Nothing is being done to end the abuses of existing arrangements, or to tackle those fundamental problems, and for those reasons we shall vote against the Government tonight.
§ 6.4 pm
§ Mr. Nicholas Lyell (Mid-Bedfordshire)
None of the Opposition Members who have spoken in the debate has made clear the principles on which they would spend public money in any of these areas. The principles which our Government should follow are that we should set out to help people to help themselves, and to concentrate our state help where it is needed and where it will help people. In my short speech I shall try to apply those principles to three areas under discussion: board and lodgings, the care of the elderly, and student support and the benefits system.
We have seen a phenomenal increase in public expenditure on board and lodgings which is doing nobody any good because the expenditure is benefit-led. Young people move away from home, whether it be London, Bedford or wherever, into board and lodging accommodation in small hotels and hostels, and in rooms from landlords and landladies because they receive large benefits for doing so. Then they do not find a job. Over the past few years the sums spent on board and lodgings have increased from about £50 million a year to £500 million a year. Yet the hon. Member for Oldham, West (Mr. Meacher) said that only one in 28 of such young people find a job when they move from home into bed and breakfast accommodation. What earthly good does it do anybody to encourage young people to leave home and their roots and to go into bed and breakfast accommodation Only to be unemployed, and to waste about £500 million a year in doing so? My right hon. and hon. Friends were right to look at the matter, to call a halt and to ask whether we can direct the money more effectively so that it will assist the young unemployed.
§ Mr. Raynsford
If I am allowed to speak later, I shall tackle the principle of public expenditure in this area. Is the hon. and learned Gentleman aware of the Department's social security policy inspectorate's report on the reasons why people live in board and lodging accommodation? It reveals that only 2.8 per cent. live in such accommodation because they are financially better off, as opposed to 27 per cent. who are there following a dispute with parents or relatives, 14 per cent. on the breakup of a marriage, 11 per cent. because they are seeking a job and, perhaps, taking the advice to get on their bikes and look for one, and 11 per cent. because they have been evicted and have nowhere else to live.
§ Mr. Lyell
I can see that the hon. Gentleman has great knowledge in one sense in this area and will be misled by that report. It will be interesting to see how he develops his speech. Whatever answers one receives to that type of questionnaire, the fact is that a young person who comes to London and lives in board and lodging accommodation will be paid about £70 a week. If one is young and not well qualified, one is extremely unlikely to find a job which can possibly substitute or fund that £70 a week. Consequently, 1047 we are kidding our youth. We are giving them a benefit-led opportunity which leads them away from the real chances to better themselves. We ought to be spending this money on better training—I am glad to say that we are, and we all heard the statement today—on improvements and developments in the youth training scheme, on better opportunities for work through the community programme, on teaching people how to present themselves for work in their own areas and on enabling them to release their own energies.
I have seen this happening in Bedford, and we shall hear how it has happened in London. In Bedford, people are taking short-term or long-term bed and breakfast accommodation. If they are unable to find jobs, it is not that there are no jobs available, but that those jobs do not pay a sum that is equivalent to the amount that they formerly received from social security for that kind of board and lodging payment.
The way to tackle the problems of these young people is to help them to help themselves and to release the energies of the individual and the private sector by opening up the inner cities. In many Socialist-controlled areas—I hope that we shall never cease to concentrate on this, and I suspect that it is true of Liverpool, however small the opportunities may be in other respects—if people wish to buy their house or premises for business purposes, or if they wish to do anything in the private sector, they are not allowed to do so. That is true of Southwark. Those local authorities will do anything they possibly can to place difficulties in one's way.
As for long-term care for the elderly, we are seeing a phenomenon that is both encouraging and has warning signals. It is encouraging in that there is a lot of provision for the elderly—a growing section of our society—from the private sector, but we must be careful that it is not benefit-led, in the sense that the benefits made available are so high that people simply go into this as a business for its own sake rather than because there is a demand from elderly people for the particular services.
If we wish to care effectively for our own families and the families of others, we should design the system so that we encourage people to remain in their own homes. We should support those who care for them, and we should provide support, for example, to encourage people to be cared for short-term during holidays while home carers have the rest that they so badly need. We should also encourage the wonderful and new phenomenon that we have seen over the past five years in the hospice movement. That would mean that, having lived out one's life at home with support from the family and the state, properly directed, and having become so feeble and ill, a person could move to a hospice or be cared for at home as in a hospice, and he able to die in dignity.
Those are proper fulfilments of the principles in which we as Conservatives believe. We must be careful not to be led astray, as we undoubtedly have been, by the fact that we are paying people to live in unsuitable places. To some extent we are over-subsidising the development of residential homes, as the Ernst and Whinney report has suggested.
We must concentrate our public moneys on releasing private energies and other private moneys which will not only target themselves much more effectively but also produce far more for the state input involved.
1048 As for student support, I am convinced that the Government are right when they say that it is not proper that those in our higher education system should be encouraged to look either to social security or to housing benefit for their support. We well understand why they do so to some extent at present — because supplementary benefit and housing benefit are available. When we announced that they would not be available, much anxiety was caused, but in most cases that anxiety was quickly allayed when the parents and students realised that for this year at least we would not remove those benefits during the long vacation if the students in question could not obtain work. We made it clear that if they had to keep on such accommodation and live in it during the long vacation, they would continue to get housing benefit.
Once my hon. Friend the Under-Secretary had answered our letters with a number of long and complicated replies—for which I thank him very much indeed — my constituents who had been considerably alarmed had their alarms almost entirely allayed.
My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) rightly said that much of the problem of student support comes not from those in the lowest income groups but from the middle income groups from those whose family income is £12,000, £15,000 or £20,000 a year. That income is usually heavily committed, be it on a mortgage, bringing up other children or maintaining a standard of living that cannot easily be adjusted. In those circumstances, an extra £400 or £500 a year can make as much difference as the extra sixpence made to Mr. Micawber. Consequently, the changes that we are bringing about are entirely right in principle, but they must not be brought forward too quickly or unthinkingly in practice. From the responses that we had earlier this year, I believe that the Government are sensitive to those views.
However, on all occasions we should remind ourselves to stick to our principles of helping people to help themselves and of concentrating state help where it is really needed and where it can do most good.
§ Mr. Nick Raynsford (Fulham)
I regret that the hon. Member for Brentwood and Ongar (Mr. McCrindle) is no longer with us. He referred to the tone of the Opposition and the way in which our criticisms of the Minister were perhaps voiced less stridently than they might have been on previous occasions. The hon. Gentleman drew one conclusion from that, but I draw a different one.
This is the third time in as many weeks that we have debated social security issues. Those who read the Daily Telegraph — which I do not always read — will have noticed that the Minister has not altogether got a good press. Indeed, the sad, heart-wringing story of the poor treatment afforded to Brer Newton last week has undoubtedly influenced Opposition Members to be terribly nice today. However, in no way will that change the strident criticisms that we shall make about the content of these measures.
The first issue on which I wish to speak relates to students. All of us agree in principle that it cannot be sensible in the long term for students to depend on income support, but the House is making a mistake if it concludes that all forms of assistance, including assistance with housing costs, should be treated in the same way.
1049 The point that I tried to make earlier was that one of the reasons for having a housing benefits system is that there are wide variations in housing costs — far wider than in the costs of other things for which income support is designed to apply. The accommodation element contained in the student grant cannot possibly cover the wide variations in costs that students must meet in different circumstances. Those in certain areas or in different tenures or types of accommodation often have to meet housing costs that are two or three times the level that other students have to meet.
Therefore, short of having a very complex grants system that attempts to take these variations into account, it is sensible to allow housing costs—where they exceed the amount provided for in the grant—to qualify for some assistance through a housing benefits scheme. That was my understanding of the reasons for extending housing benefit to cover most students. That was a correct decision, and that is why I regard the Government U-turn on this issue as misconceived.
It is all the more misconceived because it comes, as everyone knows, at a time when students are trying to cope with a grant that has been reduced dramatically in real terms by this Government. The Government have cut away assistance towards housing costs, especially for those meeting high housing costs, while the grant is inadequate; that is grossly unfair to students.
We must consider the Government's justification for doing that. The argument was advanced by the Minister for Social Security that the costs of administering benefits to students were disproportionate to the benefit. Many Opposition Members were surprised to hear that argument advanced on this occasion when we did not hear the same argument advanced with respect to the 20 per cent. of rates contribution which the Government are still —if we believe reports in the press—eager to bring back despite the House of Lords' correct decision that that was an objectionable proposal which should be dropped. In that case, the cost of administering and collecting 20 per cent. of rates was thought by many authorities to exceed the value of the money that would be collected. That is clearly a nonsensical arrangement.
The Government are prepared to stomach that administrative nonsense, yet they are now using the same argument to say that it is not worth paying the benefits to students. The truth is that streamlining the procedure—I welcome the proposal to get away from the need to reassess benefit six times during the academic year by averaging income over the short term and short vacation period—will reduce administration costs and that will result in greater value for money. That is the right and sensible approach. The Government should not deny students benefit on spurious grounds.
We should also be very wary about the argument on the withdrawal of entitlement to benefit in respect of accommodation which students cannot occupy during the summer vacation. Students are often required to continue to pay rent for that accommodation if they want to return to it the following term.
It ill behoves the Government, who have denied students the opportunity to pay retainers, which are generally rather less than the full rent, to have housing benefit on that—which would have been the sensible way to cope with the problem— now to state that the benefit will be removed entirely on the rent elements which have had to be paid by students who want to keep their 1050 accommodation for the following term. That is unfair to students and the fact that the proposal is being postponed for a year does not make it any more justifiable.
The issue of non-householder addition has not attracted much comment so far. However, we must be aware that that represents a further cut. Once again the Minister for Social Security was rather coy about the figures. We have not had many figures from him. When the Under-Secretary of State replies, will he tell us how many claimants aged 21 to 24, who currently receive non-householder additions, will lose that benefit? To be fair in this matter, will he also tell us how many non-dependants in that age bracket, for whom a non-dependant deduction is currently made, will no longer be subject to that deduction? How many will lose benefit and in how many households will there be a compensatory offsetting of the non-dependant deduction?
We should remember that this is not the first time but the third time that there have been adjustments to non-householder additions designed to achieve cuts. The first removed non-householder additions for 16 to 17-year-olds in 1983. The second, two years ago, took them away from 18 to 21-year-olds. And the Government now propose to remove them from 21 to 24-year-olds. These are a series of measures designed to cut expenditure and that is not justifiable.
I would like to focus on the board and lodging issue which has aroused a great deal of anxiety throughout the country. The Government have placed a great deal of emphasis on the increasing cost of payments for board and lodging payments to justify the steps that they have taken. However, they have not looked behind the increase to see why costs have increased. That is where the nub of the problem lies.
The increase in costs simply reflects the fact that there has been a continuing and rapid increase in homelessness under this Government because insufficient homes are available for people to rent at reasonable prices. The problem is not simply an increase in payments to people receiving board and lodging payments from the DHSS. There is a parallel increase in terms of local authorities placing homeless families, to whom they have rehousing responsibilities under what used to be the Housing (Homeless Persons) Act 1977 but which is now covered in the Housing Act 1985, but they cannot provide homes because there are not sufficient homes. The authorities are forced to place people in bed and breakfast hotels.
The two phenomena go hand in hand and are witnesses to the terrible lack of accommodation for people who need rented accommodation at reasonable prices. They are the direct result of Government policies. To be fair, they are not policies originating from the Department of Health and Social Security. These problems are the consequence of decisions taken in the Treasury and the Department of the Environment. These decisions are having a knock-on effect, because increased homelessness and a lack of alternative housing mean that more and more people have to resort to unsatisfactory and grossly expensive bed and breakfast or board and lodging accommodation for lack of an alternative.
The fundamental problem is the growth in homelessness and the lack of alternative accommodation. It does us no service to attempt—as the Government do—to tackle that problem by attacking the symptom. The Government are attacking the cost rather than the cause, which is the shortage of housing. The Government would 1051 have been advised to have considered the advice of the Social Security Advisory Committee which commented succinctly and appropriately on the issue recently. In relation to the Government's first proposal to impose restrictions on board and lodging payments, the committee said:The assumption that some other form of accommodation is available for young claimants currently in board and lodging accommodation seems to us particularly questionable in the light of the known scarcity of public and private rented accommodation accessible to single people, especially those dependent on social security benefits.The committee continued:To a very large extent, we believe a long-term solution has to lie in housing policy, not merely to develop a greater range of accommodation available to single people, whether individually or in shared housing, but also to improve the quality and value for money of existing lodging accommodation.How true! The Government's advisory committee has hit the nail on the head, yet the Government have not accepted the recommendations.
§ Mr. Raynsford
I believe that all agencies capable of providing accommodation available to rent at a reasonable price should be encouraged. The experience of the past 80 years is that private landlords have been taking properties off the market because the rate of return from renting is less than they could receive by investing their money elsewhere. There is a fundamental problem. High capital costs are involved and house prices are high in areas such as London. The returns which a landlord would receive from renting to relatively poor people, without receiving massive subsidies, would be insufficient to justify investment of large sums of money in that property. That is why we should consider other sources of accommodation, such as the public sector, housing associations and bodies which have proved themselves able to provide rented housing for people in need.
The problem is therefore fundamentally a housing one. If the Government are looking for savings, they will find it easier to make them by providing new homes to rent through councils and housing associations rather than depending on board and lodging. Ministerial answers over the past six months have stated that it is cheaper for the state to pay for people to occupy new council housing than to pay the vast costs of keeping them in board and lodging. It makes social and economic sense to put people in council housing. Sadly, the Government do not appear to have learned that lesson.
The Government are desperately trying to make savings and they are penalising claimants as a result. I will not examine the Minister's arguments in detail as time is short. After a careful scrutiny of the detailed reports tom which the Minister referred—which are in the House of Commons Library—about the surveys carried out on people in board and lodging, it is abundantly clear that many people are not able to meet the costs of their board and lodging as a result of the Government limits.
According to the Government's own figures, some 47 per cent. of board and lodging charges are above the limit and 34 per cent. are more than £5 above the limit. Those are national figures. In London, to the south of London 1052 and in the south-west, the discrepancy is likely to be far greater. Details are not available in the report, but those are the areas with the largest number of claimants whose board and lodging costs are above the limit.
As a result of Government policies, grotesque overcrowding has developed. Young single people are sharing three or more to a room. Yet the Government have taken no action to attack and improve bad standards. I absolve DHSS Ministers in this regard as it is the responsibility of the Department of the Environment. People have been forced to leave their accommodation and become homeless. I very much regret the Government's failure to recognise that they have made a disastrous mistake. Ministers at the DHSS should withdraw the board and lodging regulations and discuss with their colleagues at the Department of the Environment ways to get a better housing programme going so that people can live in decent homes and have a choice in housing rather than being left in highly unsatisfactory and overcrowded board and lodging accommodation, trying desperately to stay there by sharing because the limits make it impossible for them to meet the costs or, worst of all, forced to become homeless and in some extreme cases driven to suicide by the despair engendered by this grossly unfair and inhumane policy.
§ Mr. Martin M. Brandon-Bravo (Nottingham, South)
As the House knows, I have a particular interest in student support as Nottingham university, which happily falls in the upper half of the current merit league, and the equally excellent Trent polytechnic mean that our city has many thousands of students. The case for reform in this regard has not been challenged by anyone, even the hon. Member for Fulham (Mr. Raynsford). A proper balance of grants, family contributions, vacation earnings and, I believe, student loans is clearly the right way forward. Our target is therefore to remove the social security element of that support in a reasonably phased manner because the social security system was not basically intended for student support.
In taking that view, I have substantial support within the student body although there is no doubt also much opposition. On the new register, the number of votes in my constituency has leapt upwards by 3,000 persons. I am told that this is due to the registration of students who had not previously bothered to register. Whether their motive is to compliment me in due time on my efforts on their behalf or the reverse, time alone will tell. Having a constituency with a large number of students, however, does not detract from the duty to do what is right. It is all too easy to make electorally convenient noises, but some of us like to be able to sleep with our consciences.
I am sure that no one really challenges the loss of short vacation benefit as there was never any real case for it. As I said in an earlier debate, students who go home for Christmas cannot claim that they are going home to look for work. They go home for Christmas and they have probably earned the break. With regard to the long vacation, I am grateful to my hon. Friend the Minister for allowing time to phase the problem out. Although we are taking something away from students, and there are many of them in my constituency, it seems wrong that they should claim housing benefit for one address while living and claiming supplementary benefit at another address. That simply cannot be right. The hon. Member for 1053 Liverpool, Mossley Hill (Mr. Alton)—sadly, he has left the Chamber—destroyed his own case when he spoke of people paying rent for only nine months and of the risks in the remaining three months. If there are so many empty properties in his city, I cannot believe that the annual rent paid by students is so very high.
As I have said, I believe that I have substantial support from within the student body. Members of the Trent Polytechnic Conservative Association have no reason to tell me what I want to hear just because they are Conservative students. They are perfectly entitled to say what they want as students and I am happy to support them. They firmly believe that Government spending must be kept under tight control, they recognise the link between high public spending and inflation and they are therefore quite content for their support to be discussed in that atmosphere. They recognise, too, that the grants and support for students in this country are better than in any other western nation. Moreover—my hon. Friend the Minister will correct me if I am wrong—I believe that the number of grant-aided students has quadrupled in the past 20 years. So not all students oppose the Government's approach.
I should like briefly to describe the situation of four students. One had no grant and lived on parental contributions, rent rebate, supplementary benefit and—a bloated capitalist! — £80 in building society interest, making a total income of £2,760. After listing all his outgoings, he refers to savings of £160 a year—probably to be generous to me as no doubt that sum is spent on leading the life of Riley. The second student has the £1,800 grant. I do not have time to go through all the expenses listed, but there is £600 left for travel and leisure.
I see my hon. Friend the Whip signalling that I have taken too much time, so I conclude with just one question about the board and lodging proposals which has recently been brought to my attention. I understand that residents in care homes at present receive no supplementary benefit if they leave the residential care home for a short period, for example, for a holiday, but I am told that under the new regulations that benefit will be paid. Perhaps my hon. Friend the Minister will confirm that. On that note, I bring my greatly truncated remarks to an end.
§ Mrs. Margaret Beckett (Derby, South)
This has been an interesting debate. Like my hon. Friend the Member for Fulham (Mr. Raynsford), I was somewhat surprised at the tone adopted by the hon. Member for Brentwood and Ongar (Mr. McCrindle), unusually for him, in his comments on the speech of my hon. Friend the Member for Oldham, West (Mr. Meacher). I understand the hon. Gentleman's wish to welcome the postponement of some of the major effects of the changes, but I was surprised at the extent of that welcome. The hon. Gentleman seemed to imagine that my hon. Friend the Member for Oldham, West had taken most of his observations from The Guardian. Much as I admire that newspaper, I should point out gently to the hon. Member for Brentwood and Ongar that the evidence adduced by my hon. Friend actually came from the large pile of documents accompanying the regulations.
There is no question but that the Minister glossed over the problems that will be caused for students. As so many hon. Members have pointed out, many students will lose substantially and will be forced into debt. Inevitably, this 1054 will be a further discouragement to students from poorer homes and perhaps especially to mature students. A constituent of mine has come to me over the years as the Government have steadily reduced her housing benefit. As a divorced lady with two small children, she has naturally faced increasing problems. She has now taken a great step for one in her circumstances and established herself as a mature student, only to find that the Government are still pursuing her and propose to reduce the benefit entitlement on which some of her financial calculations must have been based. Like so many others, she will no doubt find it hard to agree that the Government's position is justified.
It is especially difficult to justify the Government's refusal to allow students in halls of residence to claim benefit on the ground that the accommodation costs should not be so high in the first place. The National Union of Students would wholeheartedly concur with that view and has, indeed, been urging it on the Minister's colleagues at the Department of Education and Science for a considerable period—only to be told that keeping hall fees artificially low "would not be businesslike".
Perhaps, therefore, in view of the observations that have been made on the purpose of the regulations, the Minister would have a quiet word with his colleagues at the Department of Education and Science and tell them that if they cannot get on speedily with the third review of student grants in recent years they should examine again the charges that students are forced to meet. We hope that this time the review of student grants will be concluded, although presumably it will not be before the general election and certainly not before the regulations come into effect.
As to the board and lodging regulations, again we are dealing with a set of regulations which, as has been said many times in the House, have been from their inception completely discredited. The rationale of the changes is that under 26-year-olds could go home because most of them had left home frivolously anyway because they thought that it would be nice to live in seedy board and lodging accommodation. That seems to have been the argument for imposing the limits on the sums of money that they were allowed to draw. The hon. and learned Member for Mid-Bedfordshire (Mr. Lyell), who sadly is not with us at the moment, seemed not to be aware that students actually pay the money to the landlords in whose premises they live. They are not entitled to use that money to live on the fat of the land.
When the regulations were made, attention was drawn to the fact that they had been drawn up without evidence to support them. The Minister will recall that the Social Security Advisory Committee described such evidence as was quoted as anecdotal at best. The Minister has told us today that the evidence is now available. Certainly it is available in quantity although the quality may be questionable.
When we read the Government's own evidence and any independent evidence it is still not easy to see how it justifies the Government's claims. The Government have quoted some who, in the surveys that were done, indicated that they were satisfied with the accommodation that they were living in and thought that it was good value for money. What comes through clearly is that these people are in a different category from those with whom generally we are concerned when we debate the regulations. They are people who are living in reasonably satisfactory private accommodation. They are not the potentially homeless, 1055 the people who have quarrelled with their parents, the people who have no parents, the people who have been thrown out of their homes or the people who have nowhere else to go. The people who are vulnerable will remain vulnerable to the provisions of the regulations.
The Minister has tried to indicate that the reports that he has laid before the House show that the Government limits are adequate. The reports show that in 58 out of 134 offices where inquiries were made, the staff knew of at least one establishment where charges had, they believed, been reduced since the new reduced limits were introduced by the Government, something that the Government said would happen on a widespread basis. That is not the same as indicating that in the vast majority of cases charges would be reduced, as the Government appeared to imagine would happen.
It also remains a fact, again from the Government's own evidence, that in 76 out of 134 local offices surveyed not one establishment could be found where charges had been reduced. The Government's own evidence shows that about 60,000, or 47 per cent., of those involved have to pay sums that bring them above the Government's limits. Since these charges are and remain frozen, the number must steadily be rising, even though, as has already been quoted in the debate by the hon. Member for Liverpool, Mossley Hill (Mr. Alton) among others, 70 to 80 per cent. of claimants in some areas are paying above the limits as they now stand.
If we consider the independent evidence that is coming forward and do not rely merely on the Government's evidence, the picture is even bleaker. Reference has been made in the debate to the fact that only 60 hotels could be found by an independent survey in London that were below the Government's limits, and that there were vacancies in only 22 of them. We are talking about a potential market of 10,000 claimants, so only a tiny percentage of the people who want accommodation can possibly find it at charges that are below the limit. To keep below the limit in that accommodation, on average four people have to share a room, and in some cases the number expected to share a room is as high as 12.
In Preston an independent survey has been carried out, first covering the bed and breakfast establishments and hotels listed in yellow pages. None of them was within the allowance and only one had ever taken people who were unemployed. The list provided by Preston housing advice centre gave a slightly better picture. All of its accommodation was within the maximum limit, but only one had vacancies. Again at all the establishments residents were expected to share rooms with strangers.
A similar picture emerges from an independent survey in Ipswich where no bed and breakfast accommodation within the cash limits was found and just one that purported to offer full board. Here again it is apparent that in order to meet their bills claimants have to use their meals allowance.
That brings me to the meals allowances themselves. The allowance is not over-generous, being £4.20 per day, and not having been increased for two years. Presumably that means that the Government now think that two years ago the sum of £4.20 was grossly over-generous since they have chosen not to increase it, although in that period not only have the costs of food risen by 12 per cent. but VAT has 1056 been imposed on take-away food, which must mean that the charges that people are expected to meet from the meals allowance have risen considerably.
Of course, we are glad that the Government have decided to allow couples to receive twice the rate of benefit for a single person since that is what landlords have always charged. There at least there is some recognition of reality, but is it still the case that no money is payable towards hotel charges that may be imposed for children under the age of 11 even though in London, for example, every hotel in which charges are below the limit makes a charge for such children?
In relation to under 26-year-olds, I want to draw attention to the implications of the non-householder addition which is being abolished by the regulations. The Government have argued in much of their evidence, and say that the supporting evidence is justification for their view, that people are being allowed to remain in accommodation at reduced payments on the basis that they may draw the non-householder addition. It is not clear from the evidence how justified the Government are in that claim. The surveys may have been carried out shortly after the limits were imposed. If the surveys had been done after a longer period, that might not have been a valid contention.
Even if the Government's contention that people are being allowed to retain the award of the non-householder addition is valid, what do the Government expect to happen when that addition is abolished, as will happen to under 25-year-olds under the regulations? In regard to the limits for board and lodging for bed and breakfast accommodation, the Government have relied on the argument that people can get the non-householder addition and that that will be sufficient. But when they do not get that addition, what do the Government expect them to do—to starve or to turn to crime?
In regard to residential homes, the Ernst and Whinney survey has been drawn on and emphasised by the Government even though it had only a 28 per cent. response rate. What did it cost the Department to obtain a survey of such unparalleled dimensions? Although the survey claimed that the limits that the Government had imposed were adequate, it collected costs at the start of 1985 and compared them with the limits that were established by the end of 1985, by which time the costs had probably risen. There is a rise for London but not for anywhere else because the Ernst and Whinney report says that the response rate was too low.
If limits are completely inadequate elsewhere, the Government do not know because the survey does not tell them. The table of average costs, on which it is claimed that the limits are adequate, is again based on shared rooms despite the fact that the Government's own code of practice advises that residents in such accommodation should preferably have single rooms. Yet when it comes to deciding whether the money is adequate, the Government make the decision on shared rooms rather than single rooms. Again, what the Government say conflicts with all the evidence.
The survey of the National Council for Voluntary Organisations, which was published in February 1986, showed that average charges for voluntary homes were between £130 and £180, yet the Government are patting themselves on the back for having increased the limit to £125. In May, the Council for Care of the Elderly showed that even inexpensive, voluntary, non-profit making 1057 homes in London charged about £189, while many charged £220. Thus there is a deficit of at least £50 on the sum that the Government are allowing.
As people cannot meet those charges, about one third of the more than 50,000 people in geriatric wards, who would like to leave, are stuck there, even though it costs the taxpayer at least £300 to £320 to keep them in unsuitable accommodation, It is not clear from what has been said, although I thought that we had got things clear at Question Time yesterday, whether people who become blind or otherwise incapacitated and who are over pension age will continue to receive only the lower rate of benefit. I thought that we had clarified that point, but it seemed less clear from what the Minister said.
I shall repeat a point that he put when the statement was first made. If, as the Government argue, the general limits that they are imposing are adequate, why increase the transitional protection? What is the argument for that? The transitional protection applies only to limits that are already above the figure that the Government are giving. If it has to be increased, the limits must be inadequate. That seems to follow logically.
I am sorry to say that, once again, in these regulations the Government are attacking the victims rather than the problem. They have carried out research and surveys, not in order to establish what the problem is, or to find out how to solve it, but to justify what they did, and were overturned in the courts for doing three times during the past year. Once again this Government are flying in the face of all independent evidence, of much of their own evidence. Once again, unfortunately, it is the vulnerable, elderly, young and handicapped who are suffering.
§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major)
We have had an interesting and wide-ranging debate, and in the few minutes left to me I shall endeavour to answer as many of the important matters raised as possible.
Throughout the debate I have been particularly struck by the fact that, with the possible exception of the reservations expressed by the hon. Member for Fulham (Mr. Raynsford), there seems to be general concurrence with the basic principle that benefits are an inappropriate way of supporting students. My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) made that point, as did other hon. Members, and the hon. Member for Oldham, West (Mr. Meacher) certainly conceded more than a general nod in that direction. I am delighted that on that point, at least, there seems to be an element of near consensus.
There can, of course, be very severe and legitimate conflict about the nature and extent of student support through the grants system. But the fact that there is a broad consensus about how the assistance can be delivered gives us a worthwhile and useful backcloth to the inquiries established by my right hon. Friend the Secretary of State for Education and Science. I shall, in particular, draw his attention to the blandishments of the hon. Member for Derby, South (Mrs. Beckett) about what may or may not be in his report. I am sure that he will give that due care and consideration.
The original package of measures that we put to the SSAC and the local authority associations was designed primarily to tackle those aspects of the present arrangements that we felt could not be justified either in 1058 principle—I have in mind the double provision of grants and unemployment benefit during the short vacations—or in administrative terms— I have in mind the need to reassess housing benefit by up to six times a year under the present system. The advisory committee and the local authority associations had little to quarrel with in principle. But they of course had some concerns about the practical effects.
In these regulations we have sought as far as we think proper to respond to those concerns. The result is the revised package before the House today, which still tackles the most wasteful aspects of the system, but which has been very considerably modified to reduce its impact on students, and I am grateful to those hon. Members who made that point today.
At the beginning of his speech, the hon. Member for Oldham, West asked what might be thought to be the fundamental question. He referred to the student changes and asked why we should cause this upheaval when there appeared to be only small savings. He correctly quoted the figures, and asked why we should cause what he saw as major inequities between students. There are several observations to make about that, as it is an important point.
I am not sure that I accept—and if the hon. Member for Oldham, West was standing at this Dispatch Box, I am not sure that he would accept it either—that a saving of £16 million in a full year is an insignificant sum, particularly bearing in mind, say, the double provision of grants and unemployment benefit during the short vacations. My hon. Friend the Minister has already pointed out the wholly disproportionate administrative costs of delivering very small amounts of benefit. It is absurd to have a £1 million administrative cost for delivering £3 million of unemployment benefit and to have a £3 million administrative cost for delivering £5 million of housing benefit for halls of residence. That is not a worthwhile use of the limited resources that any Secretary of State has to hand. I think that the hon. Gentleman would recognise that if he was in charge of these regulations—[Interruption.]
The hon. Members for Derby, South and for Oldham, West spoke about the failure, as they saw it, to control prices in the context of the social security policy inspectorate study. They clearly felt that the proposals had failed to control prices and that landlords had not dropped them. However, we have very firm indications from our local offices throughout the country that landlords have held, and in other places dropped, their prices significantly. More than 85 per cent. of our local offices are known to have experienced charges being maintained at the same levels when price rises would have been automatic if limits had been increased after November 1984.
In the south London and south-west regions—two regions with a high number of boarders and incidences of reported abuse — more than 90 per cent. of offices confirmed that charges had been pegged. That is an important point.
I should tell the hon. Member for Derby, South, that, if I remember correctly, the cost of Ernst and Whinney was approximately £110,000. However, if that is inaccurate I shall write to tell her.
I was asked about help for families with children. Children aged over 11, who would normally be expected to occupy a separate room, are eligible for the adult rate, 1059 whereas younger children receive one and a half times the normal scale rate, with an amount for personal expenses on top.
My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) felt that housing benefit should be withdrawn more gradually. The changes that we are making do not affect the greater part of housing benefit expenditure on students. Entitlement remains for those in private accommodation, and for any student who stays in his accommodation in the summer when he has no grant resource, even if he is in a hall of residence. We are therefore seeking to meet the point that concerns my hon. Friend, and, time permitting, I shall return to some of his other comments later.
The hon. Member for Fulham referred to the non-householder contribution, and asked how many non-householders currently receiving the non-householder contribution would cease to receive it. The answer is none. We have ensured in the regulations that all existing recipients of the contribution will not be affected by the changes. There will, therefore, be no cash losers. Similarly, where a non-dependant deduction is made in respect of a 21 to 24-year-old on supplementary benefit, it will continue to be made.
I was also asked how many students in halls of residence received housing benefit. Our estimate is that there are between 80,000 and 85,000 students in halls of residence who claim housing benefit currently, but that in many cases the weekly entitlement is very small indeed.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) spoke about the abuse of housing benefit by landlords. I responded substantially to his point in my intervention, as did my hon. Friend the Minister, but I have also written to him on that point and I hope that he will receive the letter within a day or so.
My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) raised a specific point about another area requiring reform which was forcibly brought to my attention by my hon. Friend the Member for South Ribble (Mr. Atkins). That was the need for retaining fees for temporary absence from care. That was a sensitive and acute problem. As the House will be aware, residential care and nursing homes are increasingly the permanent home for elderly and disabled people. I am glad that the changes we have made to retaining fees will enable many elderly people to take a holiday from such homes without an unfortunate effect on them or the home that is now their permanent home.
We have received a substantial amount of support for the regulations on housing benefit for students. I believe that the regulations are defendable in principle, defendable in logic, and defendable in equity. I commend them to the House.
§ It being Seven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to the Order [27 June].
§ Question agreed to.
That the draft Supplementary Benefit (Requirements and Resources) Miscellaneous Amendment Regulations 1986, which were laid before this House on 18th June, be approved.
§ MR. DEPUTY SPEAKER proceeded, pursuant to the Order [27 June], to put forthwith the Question on the remaining motion.