§ 6.45 p.m.
§ Lord Denham
My Lords, I have it in command from Her Majesty, the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Social Security Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
§ Read a third time.861
§ Schedule 3 [The Social Fund.]:
§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale) moved Amendment No. 1:
Page 17, line 11, at end insert—
("3A. The following subsections shall be inserted after subsection (7)—
(7A The Secretary of State shall prepare an annual report on the social fund
(7B) A copy of every report prepared under subsection (7A) above shall be laid before each House of Parliament.".").
§ The noble Lord said: My Lords, I indicated on Report that we would be bringing forward an amendment which provided that Parliament should receive an annual report on the operation of the social fund. The government amendment on this subject achieves that aim and I trust it will meet with the approval of noble Lords.
§ I accept that the amendment does not specify the content of the report, but I am happy to give your Lordships an undertaking today that the information specified in Amendment No. 2, tabled by the noble Lord, Lord Banks, will be included in such reports. But I would go rather further than that. The information required in the noble Lord's amendment is—I hope he will forgive me for saying so—rather limited in scope.
§ Any annual report prepared by my right honourable friend the Secretary of State would give details of the types of applicants who received or were refused social fund grants and loans, as well as the numbers of payments and refusals and the purposes for which payments were or were not made. There will be information on the operation of the review process: numbers of applications, numbers of successful local office reviews, numbers of reviews referred to social fund inspectors, and so on; bearing in mind of course that the social fund commissioner will be preparing her own report and that we should aim to avoid duplication. The report will certainly include financial information and it is clearly necessary to have information provided on a regional basis rather than on a purely national basis. Finally, I would expect to see some general commentary on the operation of the scheme.
§ I hope that I have said enough to reassure your Lordships that the Government fully intend to meet the spirit of the amendment put down by the noble Lord, Lord Banks, and, indeed, to go well beyond that amendment. In the interests of legislative tidiness, I ask the noble Lord to accept my undertakings on this point and not to move his amendment. I beg to move.
§ Lord Banks
My Lords, I should like to speak to this amendment and with the leave of the House to Amendment No. 2, which is in my name. The House will recall that at Committee stage I tabled an amendment which would have obliged the Government to prepare a report on the social fund every year and to list the refusals from grant or loan and summarise the reasons. The noble Lord, Lord Skelmersdale, said on that occasion that he thought that was unbalanced as it did not deal with the acceptances. Therefore, at Report stage I tabled an 862 amendment which dealt with both; it is Amendment No. 2 on the Marshalled List today.
The noble Lord, Lord Skelmersdale, said that he had sympathy with the general intent and the feeling expressed in the House and that he would table an amendment at Third Reading on behalf of the Government, which he has done; it is Amendment No. 1. I am grateful to the noble Lord for doing that and I welcome the amendment he has tabled. As he said, it does not specifically refer to the acceptances and refusals, but he has made it clear that it nevertheless deal with that aspect. He has made it clear also that it will be wider than that and bring into its scope other matters relating to the social fund. I welcome that.
Therefore, in view of Amendment No. 1 and what the noble Lord said about it, I am happy to express my support for the government amendment and I shall not move my own amendment.
§ Baroness Faithfull
My Lords, while welcoming this amendment I should nevertheless like to ask my noble friend the Minister whether he does not agree that a more global view should be taken of the situation. If the report is made within the social security framework it might look quite different from a report that is made in conjunction with other departments, notably the social services.
If a case is refused under the social fund, the applicant will go to the social services. A child might suffer as a result of being refused a grant from the social fund. For example, a family moving into accommodation, perhaps a council house, might be unable to afford to buy a cooker. They are not going to be able to look after the child properly. After a period of time that child will be neglected, and that will be picked up by the health visitors and by the social services.
For a child to come into care costs the local authority £3,000 or £4,000 a year. Therefore, while welcoming the amendments tabled by the Minister and the noble Lord, Lord Banks, I make a plea that a more global view should be taken of the social fund. How will it affect the social services? How will it affect the local charities? I should be grateful to hear from my noble friend the Minister whether the social services and the charities in local areas will be taken into account when bringing forward the report.
§ Lord Ennals
My Lords, from these Benches I warmly thank the Minister for this amendment. It is good that he has made a commitment, and it is good that he has stood by that commitment. From our side we warmly welcome this. I very much support what has been said by the noble Baroness, Lady Faithfull. We recognise as I said at Report stage, that the social fund is a completely new type of animal. We do not know how successful it is going to be. There have been very many concerns and criticisms expressed from the Minister's own advisory committee as well as from very many voluntary organisations. I shall refer to some of those when moving the next amendment.
Later on I shall be dealing with the question of cash limits and budgets. It is very important that in the report to which the Minister has referred the 863 whole question of the adequacy of the funds and the effect of the imposition of budgets or cash limits should be dealt with. Social fund officers are going to have at their disposal very substantially less amounts of money to assist needy people who require one-off payments or the kind of support that loans and grants provide. I believe it is important that there should be some analysis of the effects of moving from the old system to the new. When the Minister says that he is going to take a wider view, I hope that that wider view will not only cover the extent to which the money, as allocated, is or is not adequate—I suspect that it will not be adequate—but also their assessment of the social effects of the system of making mainly loans as opposed to grants.
I have expressed from these Benches on two occasions our concern if the issuing of loans as opposed to grants is going to lead to considerable problems for very poor people whose income support is going to be reduced in order that they can repay a loan. Many of those people may already be in debt. At the Report stage I gave some examples. I gave some examples of the extent of debt in our society at the present time. I referred to the number of people who have had their electricity and gas cut off; who have not been able to fulfil their mortgage payments and who are behind with their rents. These are very serious problems for probably as many as a million people in our society.
I hope the Minister can confirm that the annual report will look in some depth at the social consequences of what the Government have decided to do in establishing their social fund. As the noble Baroness has said, that must reflect the concerns or the views of the social service departments and the voluntary organisations. The Minister will recall that I moved an amendment concerning the effect on voluntary organisations and charities of the obligation that will be placed upon social fund officers at a certain stage in the process to see whether additional assistance or assistance in place of the social fund allocation can be made by voluntary organisations.
I said to the Minister that many of the charitable organisations are themselves deeply concerned. He knows that that is so. It should be very reassuring to them as well as to social service departments to know that in the annual review which the Minister is to present these social factors affecting social workers, voluntary organisations and social service departments, will be taken fully into consideration. I hope that the report will cover those issues as well as the statistical issues. For example, the amounts paid in grants and loans; the number of applications accepted; the number refused and the kinds of issues included in the amendment in the name of the noble Lord, Lord Banks, and my noble friend Lady Jeger. Those kinds of reassurances about the contents of the report might be very important at this stage.
§ Lord Moyne
My Lords, I should like to say how much I welcome this amendment. I have come across great anxiety in charitable organisations about how the fund is to function. The proof of the pudding is in the eating, and after a year's operation everyone will know where they are and the anxiety which 864 people have will be set at rest in advance knowing that there will be a report.
§ Lord Skelmersdale
My Lords, I am very grateful to all noble Lords who have welcomed this amendment, especially the noble Lord, Lord Banks, and my noble friend Lord Moyne, who has shown great interest (going back very many years) in charitable matters.
I confirm what I said in my opening remarks that I expect to see a general commentary on the operation of the scheme in the annual report. What should that commentary contain? My noble friend Lady Faithfull and the noble Lord, Lord Ennals, have given clear guidelines this evening as to what that commentary should contain. I am sure all noble Lords will agree with me that if the money is inadequate that fact will leap off the very pages of the report. I do not think it is possible to avoid that situation. I go further and remind the House that we shall be commissioning independent research into the social fund starting at the end of the first year of operation in April 1989. That will tell us of the social consequences of the social fund, otherwise there is no point in having the research. That will be side by side with this report laid on the Table of the House.
We are aware that other studies will look at the effect of the social fund on social services departments. We shall all be looking at the results with interest. Having said that I beg to move.
§ On Question, amendment agreed to.
§ [Amendment No. 2 not moved.]
Lord Ennals moved Amendment No. 3:
Page 17, line 16, at end insert ("but such allocation shall be subject to review in the light of prevailing needs").
§ The noble Lord said: My Lords, the Minister and noble Lords will recall the exchanges that we had on 3rd March on the amendment which was tabled in my name and that of the noble Lord, Lord Henderson, whom I am delighted to see has just resumed his place. In the Official Report at col. 343 of 3rd March, there appears a substantial exchange between, on the one hand, the Minister and his noble friend Lord Trafford, and on the other hand, the noble Lords, Lord Henderson, Lord Banks and myself on the question of the difference between a cash limit and a budget as described by the Minister.
§ I have read very carefully all that was said, and I must say to the Minister that it makes no more sense to me now, having read it carefully, than it did when I first heard it. I am even more delighted to see the Minister the noble Baroness, Lady Trumpington, who we were so freely quoting. I say "freely quoting", but I should say "exactly quoting" what she had said. She gained great credit by what she had said, whereas the Minister did not get as much credit as she did. He was saying that what he was saying was really just the same as what she had said. It was that that did not make sense.
§ I find that the difference does not make sense to other people whom I have consulted. I am fortunate in having one of my sons who is a welfare rights' officer in one of the major cities of our country. One of my daughters is part of a welfare rights' team with 865 another local authority. I have sought to get from them an understanding of their understanding of the difference between the budget as described by the Minister, and the cash limit which they understood was to control the social fund. They have been unable to understand and they have seen the text of what the Minister said. Both of them are conducting courses for social workers and others in relation to the social fund, an understanding of which people desperately need to have. It does not seem to me that it is very clear to some of the social fund officers who will have to administer the scheme from next month.
I should like to refer to paragraphs 32 and 33 of the statement to the Government of the Social Security Advisory Committee of June 1987. Paragraph 32 states:
From the draft manual the budget seems to amount to a cash limit in all but name. Without a greater degree of flexibility, it will be difficult for the social fund officers to meet genuine need or to work constructively with other agencies such as local authorities and welfare rights' organisations. A budget dominated approach, particularly in the first year of operation, will simply confirm the hostility to the fund of these agencies. As part of our approach, therefore, we believe that there needs to be a more flexible attitude to the budget particularly in the first year of operation".
Paragraph 33 states:
The manual as a whole puts more emphasis on keeping within the budget than on meeting need. Indeed it puts more emphasis on the budget than is justified by law. As several commentators have pointed out, the 1986 Act merely requires social fund officers 'to have regard to the budget' not, as the manual suggests, under no circumstances to make an award which would result in overspending against the local office budget".
In a letter dated 15th October to the Minister, Mr. Nicholas Scott, Mr. Barclay, the chairman said:
The Government's decision to proceed with the social fund substantially as planned is without our support".
The reason was largely the tight financial control reflected either by the budget or by the cash limit. The final version of the social fund manual does not say that the law requires social fund officers not to overspend the budget. Instead it says:
The local office budget is strictly limited to the allocations which have been made to it. There is no provision for making payments which exceed that budget. Social fund officers should therefore under no circumstances make an award which cannot be paid from the local office budget".
The Minister claimed that there is a difference between the position described in the manual and a cash limit. He said during the Report stage of the Social Security Bill at col. 342 of the Official Report for 3rd March 1988:
What I am saying in a nutshell is that there is a difference between a cash limit and a budget".
Referring to his noble friend Lady Trumpington, he said:
My noble friend's assurance was that the formal cash limit related to the national allocation for the social fund".
He went on to say:
The cash limit in the technical definition I have given is not set today".
But the budget was set that day. He did not doubt the figure, so it is difficult to know what is the difference between the budget figure which had been set and announced and the cash limit which the noble Lord said had not been set. The Minister said:
It will not be set on 1st April or 11th April. What has been set is a budget for financial management purposes by which each local office has to be constrained".—-[Official Report, 3/3/88: col. 342.]
§ Therefore, together with my noble friends, I have tabled the amendment in order that the Minister, having had time for his own reflections, can actually explain the difference between his own concept and mine. Will he now explain what the difference is? He said that there is a difference, but I cannot find anyone, except his noble friend Lord Trafford, who accepts the difference. Is a formal cash limit likely to be more or less restrictive in its effect on the attitude of social fund officers? Will there be more money or less when the cash limit is set? Will the allocation be on an office-by-office basis, as now? Will it be on a monthly basis, as now'?
What is the meaning of the manual's wording:
should therefore under no circumstances make an award which cannot be paid from the local office budget"?
Does that mean that it would be an offence for officers to do so? Does it mean that officers would lose their jobs if for one moment they contemplated the question of need as opposed to the money available? If that is the case they are not there to meet need but only to live within some formally defined budgets. If there is a sudden urgent need at the end of the month, is the social fund officer to take no notice of need? Must he or she automatically say "no" regardless of need? How can this be presented as some kind of concession? When the noble Baroness made her intervention in the debate back in 1986 she certainly thought that it was a concession. Had she not thought so we would not have reacted as we did by the withdrawal of the amendment in the name of the noble Lord, Lord Banks.
§ This is not just a matter of words. It is about meeting the needs of people. In my view it is a harsh, inhuman provision, not worthy of a government who claim to be a caring government. The Minister ought not to play with words. If there is some distinction between the proposed position and a formal cash limit I should be grateful if he would explain to us, to the social fund officers who will have to administer the Act and the decision of Ministers, to the inspectors who will need to know and to the Social Security Advisory Committee which needs to know. By withdrawing the amendment I had tabled on 3rd March and by tabling a different amendment for today I have given the Minister plenty of time to prepare his case and to explain to me and to all those who need to know the difference between the circumstances of a budget which he has described and the cash limit which we have discussed.
§ Lord Boyd-Carpenter
My Lords, I listened carefully to the debate at the Report stage to which the noble Lord, Lord Ennals, has just referred, though with my habitual diffidence I did not intervene. We have had this evening very much a repetition of that debate, and a largely semantic repetition at that.
The terms "budget" and "cash limit" which seem so to frustrate and puzzle the noble Lord, Lord Ennals, are very clearly comprehensible, particularly to someone who like himself has served in government. A "budget" is the amount that on your 867 original plan you intend to spend. The budget is the figure on which you obtain Treasury approval for your proposals. That is your genuine, planned, anticipated expenditure. However, everybody knows, particularly those of us who have served in the Treasury, that budgets are often exceeded, and there is nothing in the nature of the animal which prevents them from being exceeded if there is good and proper cause for it. On the other hand, cash limits are, as the name suggests, a fixed amount of cash that may be expended. They are two totally different concepts. I find it difficult to understand why that simple contrast is not apparent to a noble Lord with as much ministerial experience as the noble Lord, Lord Ennals.
§ Lord Banks
My Lords, there are two matters which we particularly want to get clear. It is difficult to get them clear from the discussion we have had so far. First, will a cash limit be applied from the outset? On a previous occasion the Minister told us that that was not so, but at some point at a later stage than when the fund actually commences, when it had been seen how things were working out, a cash limit would be imposed. I am not clear when that point will come.
Following the statement which led me to withdraw the amendment originally we thought that there would be no cash limit during the first year. However, I rather gathered from the Minister last time that it would be imposed at some point during the first year. I should be most grateful if he could clarify that point.
The second point that we are not very clear about—this is not a new point but it is one that we have been discussing since the social fund was first mooted—is just how a cash limit will operate as against need. If we apply the cash limit it would seem to mean that some unlucky people, in need, will not receive any assistance because the money will have run out. Perhaps the noble Lord would say a word more about that issue, as it has been referred to by the noble Lord, Lord Ennals, so that we can see what will happen to people who may approach the social fund officer for assistance at a time when funds are low or have run out. If the noble Lord could clarify those two points it would certainly help me a great deal.
§ Baroness Faithfull
My Lords, I had intended to speak to Amendment No. 4, but perhaps it would be relevant to the present issue if I spoke now. I should like to pursue a point that I raised earlier. If the fund does run out, or if the case is turned down—even if funds have not run out—will the social fund officer be working closely with the social services and the charities so that a person does not suffer and redound on to the budget of some other organisaton? That question is worrying me a great deal and I think it must also be worrying the social services who, at present, are in effect cash limited. I should be most grateful if my noble friend the Minister could assist me in this respect. I think the question really arises under Amendment No. 4 but it also features in this one.
§ Lord Henderson of Brompton
My Lords, I should like to add just one word. I think that the noble Lord, 868 Lord Ennals, made the position so plain that there is no need for me to expand on what he said, except to say this. I believe we all understand the difference between a budget and a cash limit. It is, however, helpful to have the additional explanation which has been given by the noble Lord, Lord Boyd-Carpenter. We really want to know what the distinction is between the total sum of the budgets in the first year of the operation of the social fund, which is not to be cash limited, and what it would be if it were cash limited? That is the distinction.
We were given to understand by the noble Baroness that a concession had been made and that that concession was that there would not be a cash limit. Therefore, if the total sum of the budgets for the social fund needs to be exceeded on the grounds of need, then it could be; whereas, if there is a cash limit of course it could not be. That is the distinction which I, in my simplicity and with no experience of the Treasury like the noble Lord, Lord Boyd-Carpenter, wish the Minister would explain to me. That is what I am really after. What is the nature of the concession? Furthermore, could the social fund with those budgets, in its first year, be granted a supplementary estimate which could not be granted if it was cash limited? It is that flexibility in the first year of the operation of the social fund that we want to be assured about. It was something that we all thought was promised by the noble Baroness.
§ 7.15 p.m.
§ Lord Skelmersdale
My Lords, the noble Lord, Lord Ennals, is still trying to visit the sins not of the fathers but of the mothers on to the sons. I can only repeat what I have already said and what I thought I had already made clear. My noble friend Lady Trumpington was not in error in what she said during the passage of the 1986 Act. Noble Lords will find the relevant passage in the Official Report, cols. 847–850 for 15th July 1986. My noble friend said:The social fund will not at first be subject to a formal cash limit on its introduction, and I said that a decision on what will be the normal cash limiting arrangement will be taken when we have sufficient experience of the operation of the fund".The cash limit, when introduced—not in 1988–89 but in 1989–90, which is a point raised by the noble Lord, Lord Banks—will apply to the money voted by Parliament into the fund effectively constraining the resources of the fund in the course of the year. While the cash limit will not technically apply in the first year of the operation of the fund, the Government have always made clear that the fund will operate from the start to strict budgets at local office level. Additional contingency allocations will only be made to meet unforeseeable additional demands. I hope that what I have just said will help the noble Lord, Lord Ennals. There are no—
§ Lord Skelmersdale
My Lords, yes, of course I will. Additional contingency allocations will only be made to meet unforeseeable additional demands.
In order to help the noble Lord, Lord Ennals further, I should say that there are no monthly 869 budgets. Annual allocations will be profiled over the year on a monthly basis to help with planning. If a high priority application is received at the end of the month there is no reason why the social fund officer should not make a payment.
As my noble friend Lord Boyd-Carpenter, to whom I am most grateful, pointed out, the argument really comes down to this: what is the difference between a cash limit and a budget? I have looked up the word "budget" in the Oxford English Dictionary. It says:A budget is a statement of probable revenue and expenditure for the ensuing year, with financial proposals founded thereon".I stress the word "probable". I also turned up the new Collins Thesaurus and one of the synonyms of the word "budget", when used as a noun, is "fiscal estimate"; on the other hand, when used as a verb one of the synonyms is "estimate". I submit therefore that the word "budget" is quite different from cash limits.
Perhaps I may paraphrase my noble friend Lord Boyd-Carpenter and say that a cash limit is when the Treasury axe comes down and says, "You shall spend no more". I think that that situation is something that the noble Lord, Lord Ennals, is well aware of because it was him—as we were reminded by my noble friend Lord Trafford at the previous stage of the Bill—who introduced cash limits to the National Health Service. Therefore the noble Lord knows full well what a cash limit is. I stress again that it is quite different from a budget.
As I am sure the House will understand, all the public expenditure has to be planned, including demand-led expenditure. In any sensible financial management system there must always be a judgment on how much it is right to spend in a particular area. The rules and regulations of social security benefits serve as a form of rationing device; they set dividing lines between who can and who cannot receive help. Entitlement based rules exclude as well as give rights. When the rules are set they are linked to an assessment of what the financial and operational implications will be. Again, they cannot be divorced from judgment about priorities of expenditure. Handling special needs can only be done successfully, including proper assessment of individual circumstances, if there is a limit to the rule.
One of the particular problems of the 1970s would seem to be the exercise of open-ended discretion on a mass scale. If one is going to have a considerable element of discretion one has to provide an alternative means of financial control; hence the budget. Open-ended discretion without the budget would simply mean a return to the problems of the 1970s.
We recognise that the introduction of direct budgetary control to the social fund in this way is new to social security. This is perhaps where the mix-up occurs. If that is so, it will take time for people to become accustomed to the system. It must therefore be operated flexibly in its early stages. Therefore, we have decided that at the beginning of the scheme it should not, I repeat "not", be subject to a formal cash limit. However, that does not mean that the social fund expenditure will be demand-led. I have 870 explained that discretion without some form of direct financial control would be irresponsible. It means that we have to set budgets at local level.
This particular amendment is distinctly unhelpful to the operation of the social fund. Essentially, the difficulty arises because of the use of the words "shall" and "prevailing" in the same sentence; "prevailing" does not encompass future or anticipated needs. Under the terms of this amendment we could not issue additional allocations in anticipation of expected or predictable future needs. That is surely contrary to that which the noble Lord, Lord Ennals, and his twin supporters—if I may so describe them—intend. It would be like saying: "We can picnic on the railway track but we shall not move out of the way until we see a train coming round the bend". Surely that is not logical for the operation of the social fund.
I have been asked one or two specific questions to which I have not yet referred. The noble Lord, Lord Banks, asked how a cash limit operates when need is still apparent but the money has run out. Social fund officers are required to make awards to meet high priority needs throughout the year. It is true that sometimes awards of lesser priority will not be made, having regard to the total money available. But as I have explained, social fund officers should target payments for loans or grants where the needs are greatest.
As I made clear earlier, we shall be monitoring budgets as the financial year progresses. Overspending will be identified early and appropriate action taken. One way is to have in our back pockets, as it were, a central contingency reserve of £2 million, held back nationally in order to be able to respond to such changing circumstances.
For all those reasons the noble Lord's amendment is inappropriate, although I fully understand the concerns that gave rise to it. I hope that on this occasion at least I have given the noble Lord satisfaction in explaining the difference between a cash limit and a budget.
§ Lord Ennals
My Lords, I am most grateful to the noble Lord. As to the wording of my own amendment, I have no pride of authorship and agree that it could have been better. It is not my intention to press my amendment, partly because it is defective and partly because of the very important statements that the Minister has now made.
The reason why there was clearly a misunderstanding is that in the previous debate I put a series of questions to the Minister, which I shall reiterate so that the House may understand, to which he did not make a response. That is the reason I withdrew my original amendment and tabled another for today.
I refer to the Official Report, which states that I asked:Is it true that cash limits have been set right down to local offices? If that is true—and I know it is true that it has gone right down to local offices—I do not see how the Minister can say that that is not a formal cash limit."—[Official Report, 3/3/88: col. 341.]In col. 343, I stated:That figure is divided on a monthly basis"—871 and I have seen the figures set out on a monthly basis to local offices. I went on:They are told that, if during the course of any month there is a claim which would take them beyond the figure that has been set, they cannot pay that money. If that is not a cash limit. I do not know what a cash limit is.Perhaps the Minister, who will be a little more up to date, can tell the House how strict cash limits can be.
In making his replies, the Minister did not move from the position he had previsouly taken, that there was a difference, but now he has explained it. I am enormously grateful for the statements he has just made.
The Minister has referred to "probable" expenditure. That touches on the point made by the noble Lord, Lord Boyd-Carpenter, whose mind is usually very clear on these issues. When he intervened a moment ago he drew a distinction between a cash limit and a budget that a government prepare in advance, saying, "This is how much we expect to spend"—but he went on to say that it was sometimes exceeded.
The Minister did not give any indication that in the current situation there is any possibility that the sum of £203 million will be exceeded. Now he has done so. He said that additional contingency allocations will be made only to meet high priority needs, or words to that effect. That is very good; it is quite important. It means that the figure of £203 million set down in the budget is not a forever figure. It is one that can be adjusted in the light of demands made on the social fund. He said that it is not subject to a formal cash limit. If he had made that statement on the last occasion I should have welcomed it, as I am welcoming it now, and should not have tabled this amendment.
One thing that the Minister needs to do is satisfy me that he has in fact explained that a cash limit is much tighter and leaves no room for manoeuvre, whereas a budget is something that does offer room to manoeuvre. It is stated in the social fund manual that:That local office budget is strictly limited to the allocations that have been made to it".That does not foresee the possibility of some additional contingency allocation. It goes on:There is no provision for making payments that exceed that limit. Social fund officers should therefore under no circumstances make an award that cannot be paid from the local office budget".That point is expressed in the manual in words that are quite different from the concessions that the Minister made in his statement just now. It would be wrong for this House to proceed with a situation in which once again, 18 months later, a ministerial explanation, which we on this side of the House had warmly welcomed, runs alongside an instruction in the social fund manual to those who administer the money that is absolutely unbending in its language. I hope the Minister will confirm that it is not the language in the manual I have just quoted but that which he used himself which will apply—because the words he used I warmly welcome.
§ Lord Skelmersdale
My Lords, with the leave of the House, I hope that there is no misunderstanding. I 872 referred to "back pockets" and the contingency reserve of £2 million. That sum comes out of the £203 million that comprises the social fund. It is not allocated in the first instance on premier loss to the individual local offices. It is held back so that we may have movement where the crisis point occurs.
The other point on which the noble Lord, Lord Ennals, has just zeroed in concerns the difference between the Bill and the social fund manual. The reason the manual is written in that way is that there is no Act of Parliament that empowers a social fund officer to make a payment that takes him beyond budget for his local office. So although extra money could be available in certain circumstances which I outlined earlier, it is necessary to make the point very firmly to the various social fund officers that they have no such power.
§ Lord Ennals
My Lords, the noble Lord gives with one hand and takes away with the other. The statement he made that I welcomed, he has now withdrawn. He said previously that there was a contingency fund; an additional allocation. I naturally assumed that it was additional to the sum of money that he mentioned. On 3rd March he stated in col. 343:Therefore I am able to confirm that the £203 million is a budget and not a cash limit".That is the figure I used. The Minister did not explain, either on that occasion or in his earlier explanation today, that he intended to tuck away £2 million of that £203 million, to make available only £201 million to social fund officers and keep £2 million to distribute either at the end of the month or the end of the year. I had warmly welcomed what he said, but now that he has reiterated the wording in the social fund manual I am sorry to say that he has taken us not one stage further.
I shall not press the amendment to a vote. I had hoped we had achieved something, but social fund officers, who have an obligation to consider need—one would normally expect that to be their duty—are now absolutely screwed down to the figures and words in the social fund manual that I have quoted. I think that is very sad. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 7.30 p.m.
§ Lord Skelmersdale moved Amendment No. 4:
Page 17, line 31, at end insert—
("5A. The following subsections shall be inserted after subsection (9)—
§ The noble Lord said: My Lords, I am sorry that it was not possible to give advance notice of the laying of the amendment in the way that I was able to do in relation to the provision about the annual report. This is another amendment identified in the process of consultation with independent counsel giving rise to the amendment that I brought forward in Committee.
§ As part of the process, we were advised that it would be helpful for social fund officials to have guidance to which they could turn making specific reference to the conditions and circumstances prevailing in their own local office and helping to establish the framework within which they made their decisions. This is likely to be particularly important in offices with a significant number of social fund officers. The guidance is obviously best prepared by a senior official working in the local office. We shall therefore be requiring local office managers to consult both their staff and interested outside organisations in order to draw up guidance on the different priorities of various types of applications to their local office.
§ My noble friend Lady Faithfull asked on an earlier amendment about the inter-relationship between social fund officers, officers of the various charities and social services officers. The social fund manual does not instruct social fund officers to advise applicants routinely to seek other sources of help such as charities or a relative before an award is considered. For crisis loans only, social fund officers are asked to have regard to any help that may be available from any other source. To have that information in order to evaluate it, the social fund officer will need to have a working knowledge of what is going on in the various charities and the social services departments. Before making any such referral, the social fund officer must be satisfied that there is a realistic expectation that help would be available, and in time. Applicants will certainly not be advised to seek charitable help from another agency or relative on the offchance that the required help may be available.
§ I return to the amendment. For the sake of consistency, social fund inspectors clearly also need to take account of such local guidance. It is worth reiterating that nothing that we propose here will limit the discretion of social fund officers. The amendment is aimed at being helpful to social fund officers in their determination of applications and to support them in the exercise of their discretion. I beg to move.
§ Lord Ennals
My Lords, I welcome the amendment as far as it goes. I welcome any opportunity for additional guidance to social fund officers to help in the course of what will be a very difficult task for them. I note that the amendment refers to:general guidance to … social fund officers about such matters … relating to the social fund as the Secretary of State may specify".Can the Minister explain what that means? If he is to appoint a social fund officer on an area basis, I shall be interested to know what the area is. Is it a 874 DHSS area, or a health service area, and how big is the area to be? If social fund officers are to issue guidance, presumably they can do this only as specified by the Secretary of State. Do they therefore repeat what the Secretary of State has said? What discretion do they have? Are they able to take into account that social problems differ from area to area? Are they able to take into consideration different weather conditions in different areas of the country, different unemployment conditions in different parts of the country and the variations in numbers of elderly people in different parts of the country?
Can social fund officers take into account such regional differences? I should have thought that those would be helpful and would form the basis of guidance to area officers. Will those differences fall within the term "the Secretary of State may specify"?
Are any powers given to the special fund officers? Are they able to offer guidance on how a social fund officer might manage a budget and a cash limit and what he may do when a request is made at a time when no more money is available? Are special social fund officers able to make demands or calls on the modest contingency reserve of £2 million? What financial scope is available for them?
Will there be any national guidance about area guidance? Is all the national guidance contained in the social fund manual or does any other national guidance exist within which one would expect special social fund officers to operate? Will the social security advisory committee have any advisory role in respect of social fund officers? Perhaps the Minister can answer those questions.
§ Lord Skelmersdale
My Lords, the social fund officer referred to in the amendment would be the local office manager of the social security office. In a large office there may well be two social fund officers, with junior officers operating the budget of the office in question. It may well be necessary for somebody to knock heads together, for want of a better expression.
The amendment authorises the delegation of the Secretary of State's power. The noble Lord asked whether there would be a role for the social security advisory committee in all that. The answer is, no. He asked also what the Secretary of State may specify. An example would be a statement of relative priorities in a given area for an award of loans and grants. He asked what would happen if no more money was available. I do not think that this is relevant under the amendment. We have had a long discussion about the money and where it comes from.
Perhaps I may repeat something that I said on Report, which I thought was not relevant to the last amendment. We are taking a general power in the Bill to allocate additional sums to offices and to reallocate the funds between offices. There will therefore be a considerable amount of movement of funds. There must be some control and prior agreement over the need for them and their use.
The noble Lord asked whether there would be national guidance over and above the social fund manual. The answer is, no. The noble Baroness, Lady Jeger, complained earlier that her weekend was ruined some time ago by her study of the social fund 875 manual. Therefore I suggest that there is quite a lot in the manual already and that there does not need to be any more.
§ On Question, amendment agreed to.
§ Schedule 4 [Minor and Consequential Amendments]:
§ Lord Skelmersdale moved Amendments Nos. 5 and 6:
§ Page 19, line 31, after ("earnings") insert ("exceed the amount so specified").
§ Page 19, line 32, at end insert ("exceed the amount so specified").
§ The noble Lord said: My Lords, I beg to move Amendments Nos. 5 and 6 en bloc. These amendments are technical ones made necessary by the repeal of a provision of the Social Security Act 1980. That provision inserted new words in the section of the Social Security Act 1975 dealing with an increase of a short-term benefit such as sickness benefit or unemployment benefit for a wife. The amendments now proposed correct a technical anomaly and do not alter the effect of Clause 10 in any way. I commend them to the House. I beg to move.
§ On Question, amendments agreed to.
§ Lord Skelmersdale
My Lords, I beg to move. That the Bill do now pass.
It seems an awful long time ago that I said in my opening remarks on Second Reading that this is a short but important Bill. We have had many hours of debate and I should like to thank particularly the noble Lord, Lord Banks, for his very ready acceptance of the amendment that we considered first thing this afternoon. I am also indebted to my noble friend Lord Elliott of Morpeth for drawing my attention to the lacuna in the occupational pensions legislation which would have deprived employees in the water industry of the right to have the occupational pension scheme of their choice.
I also wish to express my gratitude to my noble friend Lord Boyd-Carpenter for his characteristically wise speeches on many of the subjects that we have debated, to my noble friend Lord Strathclyde for his first of what I hope will be many speeches on the subject of social security, and to my noble friends Lord Trafford, Lady Gardner of Parkes and Lady Carnegy of Lour for their interesting and valuable contributions.
Finally, I should like to pay a very special tribute to my noble friend Lord Arran who, during the passage of this Bill through your Lordships' House, has taken on the temporary role of Mercury. I am very much indebted to him for his invaluable assistance.
§ Moved, That the Bill do now pass.—(Lord Skelmersdale.)
§ 7.45 p.m.
§ Baroness Jeger
My Lords, I pay a slight tribute to the noble Lord opposite because I do think that we have received from him a great deal of sympathy and 876 understanding about the complexities of this Bill. I sometimes think that he has not been totally happy about the briefs that he has had to read out, especially when they came in joined-up writing and were a little complicated. However, basically I must say that this is a bad Bill. It is rooted in a philosophy of social policy which is unkind, reproving and abrasive. There are many reasons why I say that.
The Opposition have been accused of causing anxiety but it is not we who have caused anxiety about this Bill. Nor has anxiety been caused by political mischiefmakers. It has been caused by immense correspondence from voluntary organisations, from people who work at the coalface of social problems, people who try to help the homeless, especially young people, and from people who help the disabled. Many of us must have received letters from the Spastics Society and other organisations which are concerned about the Bill. We have received letters from Age Concern and from others who try to help the indigent, from the citizens' advice bureaux and even from staff of the DHSS. We also know that the Social Security Advisory Committee cannot support many things in this Bill.
I want to refer only to one or two points. The individual points are not important. The important thing is the philosophy and the politics that underline this Bill. I thought that the whole basis of this Bill was spelt out by the noble Lord, Lord Young of Graffham, who recently urged, according to The Times of 3rd March 1988, that there should be:an end to 'dependency', which he said had blunted individual initiative, and called for a return to enterprise.Lord Young told a London School of Economics industrial policy seminar: 'The real danger is of killing individual responsibility through care. I believe that, over the decades, government has gradually set up a culture of dependency which has displaced individuals' responsibilities'".I believe that that is the creed of this Government and that is why this Bill is so unacceptable.
I was looking through the compost heap of my library recently. I know that there have been many references to Beveridge while we have been having these discussions. I have said, and I know that other noble Lords agree, that the Beveridge Report was set in a context of full employment. Beveridge often said that the welfare state must exist in the context of full employment and that people should be working. On 10th December 1942—that shows how old am—The Times reported that Beveridge was asked whether the scheme for welfare "would sap individuality and adventure." Beveridge replied:No. I do not think that adventure comes from a starving people. The adventurous people are those who are properly fed".We may not think that there are many people who are actually starving, but in agreeing with Beveridge I am trying to say to your Lordships that the people who are impoverished and who are destroyed by disappointment, by unemployment and by bad housing will not be Lord Young's highflyers in society. One cannot expect that a family living in bed and breakfast accommodation in some rotten lodging house will really fly off and accomplish something great for themselves.
If one screwed an eagle's feet to the floor he would not fly very high. What philosophically is so wrong 877 about this Bill is that it seems to be suggesting that everyone should make something of themselves and should do well. I have to say that there is not a springboard for many people. There is not a springboard for young people who are sleeping out in the streets tonight. There is not a springboard of endeavour for older men and women who have applied time and time again for jobs and who are told that they will never get a job again because they are over 40 or over 50. That seems to be the underlying thought behind this Bill and that is why we believe that it is so wrong.
I want to make one special point about young people. All through the recent social security legislation the Government seem to have been somewhat spiteful towards young people. They are not to be given benefit if they are between 16 and 18 years of age. They are not supposed to be homeless. They are supposed to go back to their families—or they are not supposed to. Perhaps I may give one example of that confusing situation.
We were discussing recently the question of unemployment benefit which would be denied to people who voluntarily left jobs. When I subsequently looked at the Official Report of another place for 1st March 1988 (col. 868), I found that the Minister had said:'Claimants aged over 18 who leave jobs because their parents are moving will, in general, only avoid disqualification if they, or their parents, can show that there is a strong reason why they should continue to live with them'".Then I looked at another set of regulations concerning board and lodging, housing benefit and income support which stated that young people are expected to live with their families. That seems to me to be an unfair contradiction which is also quite incomprehensible.
I read patronising reports which say that young people are not behaving very well. I must tell your Lordships that if we undervalue young people, they will undervalue themselves. That is the problem which we have not faced.
We on these Benches have made many points in the course of our consideration of the Bill. I only say that we shall never get anything sensible concerning social security until we have a totally different attitude towards the needs of people in this country who are not idle or feckless but who have had to go through a great deal of deprivation. Many people—particularly the elderly—will now have to face a reduction in housing benefit. People who have been so rash as to follow the instructions of the Prime Minister to save and have dared to collect £6,000 as their life savings—that is not very much to save over a lifetime —will be deprived totally of housing benefit. People who have £3,000 will have that benefit diminished.
Contrast that with the business of targeting, which I think is rubbish. A couple of rich yuppies, living in what was called sin when I was a girl, can get Mortgage tax relief up to £60,000. But a married man is only allowed such relief up to £30,000. What is the situation on targeting when it comes to a Christmas bonus? Perhaps some of your Lordships collect the 878 £10 Christmas bonus without being targeted. I am waiting to find out what targeting the Chancellor of the Exchequer will do next Tuesday when he decides who will benefit as a result of changes in income tax. Will that be targeted on the poorest and the most needy in our society? I shall wait and see.
Those are only a few of our criticisms of the Bill. We are sorry that the Bill will pass. We shall do our best to make sure that before too long everything in it is altered.
§ Lord Banks
My Lords, I should like to congratulate the noble Lord, Lord Skelmersdale, on the way in which he has presented the Government's case throughout our discussions. He has done so with good humour, patience and, if I may say so, a considerable mastery of his brief, even if it has been a brief with which I have often disagreed. I also appreciate the co-operation which has been possible between this Bench and the Opposition Front Bench, as well as with noble Lords in all parts of the House. I recall the part played with regard to the review of child benefit by the noble Lord, Lord Seebohm, and the noble Baroness, Lady Faithful!.
I made it clear at Second Reading that we do not care for the Bill very much. We see it as a series of unconnected measures aimed mainly at reducing costs. The most prominent feature of the Bill is the intention to remove income support from 16 and 17 year-olds, thus making YTS compulsory for those not continuing in education and not lucky enough to get a job. I regret that that provision remains part of the Bill, in spite of the strenuous efforts which we made to remove it.
In fact, the Bill is not much changed as a result of its passage through the House. I regret that the amendment which I moved to provide a disregard of child care expenses for a single parent was defeated by seven votes. However, I believe that the case for that disregard is unanswerable. The noble Lord, Lord Skelmersdale, has not taken fully into account the effect of housing benefit cuts and how they can offset the advantages which may be given by family credit and the increase in family credit over family income supplement. That was a significant feature in the case which I put to the House at the Report stage.
I am delighted that the amendment which I moved with all-party support to ensure that the Government review child benefit every year was passed by the House, indicating the opinion of the House that child benefit should be uprated every year. I hope that that will remain part of the Bill and I hope that the Government will uprate child benefit accordingly in future years.
I welcome again the amendment which the noble Lord introduced to the House earlier this evening to ensure that there is an annual report relating to the social fund. Many noble Lords have said, and it has been generally agreed, that there is a great deal of apprehension in many quarters as to how that fund will work in practice. It is essential that it should be thoroughly monitored. I am glad that I was able to point the Government in the direction of presenting to the House every year a report on the working of the fund.
879 There will have to be monitoring on a wider scale of the new system which is coming into operation next month and particularly a check on the gainers and losers under the new regime. I am bound to say that the Bill, if it contributes to the new regime at all, does so in an entirely negative way.
§ Lord Boyd-Carpenter
My Lords, it is just 32 years since I was first involved in social security legislation. That experience gives me some idea of the immense feeling of relief that my noble friend Lord Skelmersdale must feel at having reached the final stage of this legislation in this House. I see that the noble Lord, Lord Ennals, agrees with me. No one who has not had the experience of piloting measures of that sort through either House of Parliament can possibly understand the great feeling of relief and happiness which must be felt by a Minister when the last lap is all but finished.
I do not intend to follow the noble Baroness, Lady Jeger, in her somewhat bitter attack on the Bill. I know that she has strong feelings on certain aspects of the matter, and she understandably wishes to express them. However, I for one do not recognise in this Bill the suggestion of hostility to young people. Indeed, my noble friend Lord Young, whom she quoted, has probably done more for the younger generation than any statesman since the war. He has provided them with the certainty of employment, which for a young person is the most important thing of all. Therefore I find myself looking at the Bill in a totally different way from the noble Baroness.
The noble Baroness will understand that social security, being one of the major responsibilities of a British government, has a major effect on the whole of our society and our community. As such it has to alter with the changing political and social philosophy of the passing years. This Bill—and particularly some of those parts that the noble Baroness appears to dislike—reflects a change in emphasis since the days of Lord Beveridge and indeed since the days when I had certain responsibility in this area. That is right. One cannot freeze this immensely important national activity in its old pattern. It has to adapt and adjust to varying needs and demands and the different prevailing ideas of our society in a changing world.
Although there are parts of this Bill about which I admit that I do not necessarily feel enthusiastic, I very much feel that it is proper to amend our system, as the Bill does, in order to bring it into line with generally prevailing thought and, to use the noble Baroness's phrase, the philosophy of our society today. I know that even she will agree with me in hoping that this effort to adjust the social security system in this way will contribute to the wellbeing of our society and of those people in particular who are dependent upon social security. In the influence that it exercises on the tone and feeling of life in this country the Bill will help to support the excellent work being done in this respect by our present administration. Therefore I wish the Bill well.
The only additional point that I should like to make is to pay my tribute to the noble Lord, Lord Skelmersdale, whose patience, endurance, vitality 880 and good will have been remarkable. To see him standing at the Dispatch Box dealing with a flow of paper with total calmness has been a most impressive sight. I think all quarters of the House will agree that he has helped your Lordships in the very important duty of considering this measure. I should like to pay my tribute to him and to wish the Bill all success.
§ Lord Skelmersdale
My Lords, after that I almost do not know where to put myself. I should like to make two brief points. Nobody receives benefits from income tax changes. Any changes of the kind envisaged by the noble Baroness will have one object only, and that is to allow people to keep more of their own money.
I can advise the noble Lord, Lord Banks, that I fully understand the effects of the housing benefit changes. It was quite indefensible that every third household in any street was subsidised by families on either side.
Finally, I agree with my noble friend Lord Boyd-Carpenter. This Bill channels our young people of 16 and 17 years old who do not have a job to go to into the right direction of further education or a guaranteed training place on the youth training scheme and removes from them the option of idleness and dependence on benefit. This is a government objective and has been for nine years. I agree with the noble Lord that it is right and proper that we should continue with it.
In contrast to the suggestions from the noble Baroness, Lady Jeger, we have made it absolutely clear that the vulnerable will be specially protected. The Bill ensures that benefits are targeted on those most in need of them and that the reformed schemes of social security benefits which are due to begin next month get off to a smooth start and operate as planned. In essence it ensures that our social security system is appropriate to the late 1980s and 1990s. I am proud of this Bill.
§ On Question, Bill passed, and returned to the Commons with amendments.