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10.36 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): I congratulate the hon. Member for Newham, North-East (Mr. Timms) on obtaining, for the second time in just over a year, an Adjournment debate to discuss this subject. It is a matter of considerable concern, and of general importance.
I was pleased to hear the hon. Gentleman say that my right hon. Friend the Secretary of State, in identifying the problem of benefit tourists, had identified a problem that
required a solution. The question he asked was whether the solution implemented was the right one. The hon. Gentleman mentioned a number of percentages; it would perhaps assist the House if I gave the up-to-date absolute figures since August 1990, when the new arrangements came in. Sometimes absolute figures give a better impression than percentages.
These figures are to 31 March; answering oral questions on the last occasion, I gave figures to the end of February. Fourteen thousand European Economic Area nationals have passed, while 14,032 have failed. Of British citizens, 95,973 have passed; 9,738 have failed. I cite those figures because it appears, by a factor of nine to one, that British citizens succeed--as one might have expected--in establishing themselves as habitually resident in Great Britain more easily than do people from other European countries.
It is not contested that the drawing up of a test to prevent benefit tourism was a very difficult task. The treaty of Rome obliges us not to discriminate on grounds of nationality. At first blush it might seem enormously attractive to the man in the street to give residents of several years in this country favoured status under some arrangement. Under European law, however, we simply cannot do that.
We picked on habitual residence, because it is a test embodied in the relevant European directive: 1408/71. It is a concept of European law that we are entitled--we believe, and so far we have been vindicated by the courts--to apply for the present purpose.
The hon. Member has not suggested how we should replace the test. He has rightly and properly said that there are some very hard and difficult examples of its application. They are bound to be sad and cause considerable anguish. The NACAB report--which, of course, I have read carefully, and which Ministers and officials have studied carefully--gives several detailed examples. I cannot comment upon the three specific cases in the hon. Member's constituency, for which he did not give names, because I do not have particulars. No doubt there are circumstances in which the test is not a happy test to apply.
Nevertheless, we are not prepared to entertain the situation that obtained in summer 1994, when larger and growing numbers of Europeans--Spaniards, especially, were cited by my right hon. Friend the Secretary of State for Social Security--were coming to this country on holiday and claiming income support, housing benefit and council tax benefit. The news had got around in Europe, and more and more were coming. Unless and until something was done, the problem would not have diminished or remained static, but would have grown.
The NACAB report primarily--as the hon. Member for Newham, North-East emphasised--recommends rejection simpliciter of the habitual residence test, and I think that that is what the hon. Member would like to see. The report argues that labour market conditions, such as the tightening up of the availability test and the requirement actively to seek work--which will apply when the Jobseekers Act 1995 comes into force--would be sufficient. We are not satisfied that labour market conditions would be sufficient at all.
Some people came to this country for relatively short periods, and they enjoyed all the benefits that our welfare state provides. That was one-way traffic, because, when British nationals visited France or other European countries, they did not have the same kind of entitlement. The equivalent social assistance benefits in those countries are usually locally administered and highly discretionary.
The unique British feature, which the Labour Government introduced in 1966, was that supplementary benefit--later income support--was a matter of legal entitlement, provided that a person was in the United Kingdom and met the other conditions. Until we imposed habitual residence as an additional requirement, everyone was entitled to the benefit as a matter of right; that was what was so attractive about coming to this country, and it did not apply in reverse.
NACAB argues that we should simply abolish the test. We are not so persuaded. As for NACAB's secondary recommendations, which are designed as an alternative, we regret that either the totality of them is not sufficient or there are problems in some of them.
The first recommendation to which the hon. Member referred was the suggestion that people from third countries--that is, non-European Economic Area nationals or British citizens--recognised for settlement purposes in the United Kingdom for immigration status, should be treated automatically as habitually resident. On the face of it, that sounds plausible, until one realises that the recommendation would involve putting that category of persons in a better position than British citizens. I do not believe that that is likely to be generally acceptable.
The second proposal is to create a special class of appeal on such cases which must be heard within four weeks. I readily accept, and Ministers are concerned, that the independent tribunal service should dispose of appeals as quickly as may practically and properly be done. We wish to see the time taken from beginning to end of appeals speeded up, but whether a particular appeal or particular class of appeals should be expedited is essentially a judicial matter for application to the relevant tribunal at the relevant time.
It is easy for the hon. Member for Newham, North-East and myself, given the circumstances of especially sad and difficult cases, to say that they should have priority in the queue. But that is essentially a judicial matter, and we do not believe that it is appropriate that Ministers should interfere.
The other recommendations are perhaps properly described as subsidiary, and they relate to the collection of statistics. The Benefits Agency is fully aware of its responsibilities to ethnic minorities and for the delivery of the benefits, but we are trying to reduce the administrative costs of the Department, not to increase them. We do not see that there is an administrative need to record the statistics.
Similarly, the recommendation made on statistics on appeals seems plausible, until one realises that income support is a complex benefit. There are a number of conditions to be satisfied, as we all appreciate. But what are we measuring? The claimant may win on the issue of habitual residence and lose on some of the other many conditions.
We are talking about a matter of administration that would be expensive to bring up to date, if that were desired, to deal with the detail that has been requested.
We would find ourselves undertaking some form of manual, clerical, statistical sample. That is not entirely satisfactory.
I have dealt with the time that is taken to process appeals. The National Association of Citizens Advice Bureaux has special experience in these matters. We should never forget that all the most difficult cases, if they have not found their way to the hon. Gentleman's surgery, or mine, are likely to end up in the local CAB. It is a body that receives public assistance from Government and from local authorities. It performs an excellent job. It sees the problems raised by the hon. Gentleman at the hardest and sharpest points. It deals with human problems in individual cases.
As a Department, we have responsibility to the taxpayer. The lacuna in the argument so far presented by the hon. Gentleman, and by NACAB, is what to do to stop benefit tourism. If we abolished the habitual residence test, we would provide opportunities for fraud and exploitation of the system. That was the position before August 1994. It was catching on. People knew increasingly about the opportunities. How do we stop that?
We cannot discriminate in favour of British citizens, however much that may seem the simple, easy, logical, politically desirable, practical and humane solution, because of the restrictions of the treaty. What do we do? My right hon. Friend took the concept of habitual residence, which I readily accept is a complex idea. It is not something that can necessarily be simply applied, because it involves guidance, the expertise of the adjudicating officers, who are independent, and the appeals process.
There have been numbers of appeals. Being turned down matters a great deal. The law has a vagueness that sometimes attaches to European legal concepts. It is a concept that people want properly to test. Inevitably we shall have many appeals.
We are familiar with the test of domicile. The Inland Revenue has a test of ordinary residence, to ensure that it gets its tax out of us. Habitual residence was a slightly related and not entirely unfamiliar test. Inevitably, as I have said, there have been a number of appeals.
We have seen what we hope is the last word--at the moment it is--in the form of a decision by Commissioner Howell. It sets out some general guidance. It may or may not be binding, but that is a matter for the independent tribunal service, the commissioners and the courts to decide. It appears to give some general guidance on how the test should be applied.
The point in it, apart from distinguishing it from other legal concepts, is a practical consideration. A British citizen who has lived in this country for a long time is likely to be able more readily, easily and in a readily shorter period to re-establish habitual residence, if it has been lost, than someone who has never set foot in the country before, or someone who has done so only for a short and transitory period.
We readily accept that there will be some hard cases. We are driven to the conclusion, however, that there is nothing else in European law that we have yet heard of, or that anyone, to my knowledge, has suggested, that would prevent benefit tourism and at the same time produce a more favourable result for British citizens. The general figures show that, by nine to one--95,000 to 9,000-odd--British citizens pass the test. I accept that there are hard cases, and I have no doubt that each one of the 9,738 involves a human problem. We suggest that that is a test which, in practical administrative terms, does the best possible.
I summarise the matter as follows. There was a problem, as the hon. Gentleman has fairly recognised. We had to find a solution within the European treaty, and we believe that we have done so. It is a solution for which the vires have been tested, and, as litigation presently stands, it has been upheld.
I accept that the habitual residence test has problems in terms of its exact meaning, but it appears, as the case law evolves, that we are getting a clearer picture, and that the adjudicating authorities are getting a clearer understanding of how properly to operate the test as they receive guidance from higher appeals to tribunals and the commissioners.
We believe that, at the end of it all, what we have implemented is as fair as any system can be to the British citizen and, at the same time, protects the interests of the British taxpayer and prevents the abuse of benefit tourism that we had.
My right hon. Friend the Secretary of State has read out to the House on several occasions--I shall not weary us at this late hour with the extracts from the Spanish and other continental press--evidence that the fact that London was an easy touch had become generally appreciated. That was not a problem to which we could simply turn a blind eye, and we could not just try to tighten up the administration of fraud, which is what the NACAB report ultimately suggests. We had to do something more than that.
We decided, because we were advised that it was the sensible solution--and, as far as we can yet see, the only solution in European law--to introduce the habitual residence test. That is working. I cannot say that it is working perfectly, but, in a less than perfect world, given the restraints of the European treaty, it appears to be working at least as well as anything for which either the hon. Gentleman or any other hon. Member has contended.
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