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Mr. Dalyell: Briefly, all I ask is that, in this consideration, specific reference be made to the concerns of Glasgow Women's Aid and Women's Aid throughout Scotland about legislation being amended, so that they can continue to be paid weekly. I shall give the Minister the papers. If he gives me the assurance, I shall not interrupt again.
Mr. Evans: I give the hon. Gentleman the assurance that I shall carefully look into that matter. We propose to make provision specifically for Scotland as soon as we can, and in any event before 7 October.
Mr. Welsh: I welcome the Minister's assurance and hope that he can deliver the goods when the time comes, but I am concerned that this situation arose in the first place. Why was it not noticed that Scotland was in a different position? Scottish Members of Parliament have a right to ask that, because we have specific legislation. Was it simply an oversight? Why did that situation arise?
Mr. Evans: It was not an oversight--we do not overlook Scotland, but it is difficult to fit the pattern of the English and Scottish legislation together so that a convenient dividing line can be drawn, which achieves what we wish to achieve. We shall do what we can to sort that out, and we intend to lay regulations to amend the position for Scotland.
A second issue, connected with the Scottish issue, is whether, in England, we have drawn the legislation too narrowly in respect of specific care orders. I have listened
to the representations made to the House this afternoon. Other representations have been made to us. I give an assurance that we shall go away and reconsider that aspect as well.
Mr. Clifford Forsythe (South Antrim)
rose--
Mr. Evans:
I shall give way to deal with Northern Ireland as well, if I am asked to.
Mr. Forsythe:
What consultation has the Minister had with the social security people in Northern Ireland about this matter? As he knows, it is handled differently in Northern Ireland.
Mr. Evans:
Northern Ireland is not directly comparable because it is a matter for my right hon. and learned Friend the Secretary of State for Northern Ireland. I shall convey the concerns expressed to him.
I was dealing with the exemptions to the under-25 principle, which I have illustrated. The third one is that we have exempted registered housing association tenants. Persons who are living in a household where a death has occurred are exempt for 52 weeks, and persons who could afford their rent prior to claiming benefit are exempt for 13 weeks. By drawing the exemptions in that fashion, we are targeting those in need and making arrangements which, coupled with the subsidy to local authorities to make discretionary payments in exceptional hardship, will provide a satisfactory outcome. I do not accept the point made by the hon. Member for Withington about discretionary budgeting in the course of the year. It is for local authorities to operate that scheme.
To summarise the first part of my speech, the changes for the under-25s will affect only single childless people who, basically, are seeking while on benefit to live beyond their means.
Before dealing with the second topic, I should make it clear that we shall monitor the change carefully to see what impact it has upon the market as a whole, as well as looking at the effectiveness of the change in respect of young people's choice of accommodation.
Mr. Frank Field:
If it is shown during the monitoring that an increasing number of young people become homeless, what will the Minister do?
Mr. Evans:
That is the most hypothetical of hypothetical questions. I shall monitor the change carefully and we shall see what happens. Obviously, it would be of concern to everybody in the House if the adverse consequences mentioned by the hon. Gentleman were to occur, but let us see.
I am conscious of the fact that, because I have given way, I have been speaking for longer than I had intended. I shall deal with the periodicity changes. Housing benefit is currently paid wholly or partly in advance at one, two or four-weekly intervals. It is normally sent to the claimant, who is then responsible for using it to pay his rent. In some circumstances, in order to protect the tenancy, the benefit is paid directly to the landlord, again normally in advance.
In practice, what happens now--before the instrument has come into effect--is that rent tends to be paid two weeks in advance and two weeks in arrears because of the
timing of the administration. However, payment in advance is inherently unsafe. It allows changes in circumstances that affect benefit entitlement, such as earnings from employment, to be taken into account at a later stage than they should be. Sometimes that leads to underpayment of benefit, thereby temporarily disadvantaging the claimant until the correct entitlement is restored. I am sure that we do not want that.
The serious concern for the Government in the context of the debate is that payment in advance sometimes leads to overpayment of benefit. Unfortunately, there are far too many overpayments--nearly £2 million in the private rented sector during 1994-95. Many of them are incurred quite innocently, but innocent or otherwise, I am sorry to say that it does not mean that recovery is not difficult.
We estimate that overpayments total about £400 million a year, including a staggering £165 million due to claimant error in the private rented sector alone.
Mr. Alan Howarth:
The hon. Gentleman expressed concern that payment in advance is inherently unsafe. Has he considered that his policy could have been calculated to generate a culture of fraud? In future, paying housing benefit in arrears--four weeks later--will put young people particularly under great pressure to fail to conform to their contractual obligations, because landlords invariably seek payment in advance. Has the Minister considered that? Will he also consider for whom it is inherently unsafe? Has he considered the position of tenants on very low incomes, who will be placed in immense personal difficulty as a result of having somehow to find the money not only for the first four weeks' rent but for a deposit?
Mr. Evans:
The hon. Gentleman raised a variety of points. Perhaps the most striking is the statement that landlords always expect their rent in advance. That is a result of market distortion arising out of rent restriction controls. Until 1919, the invariable practice was for rent to be paid in arrears. In the old days, the rent collector came round at the end of the week, not at the beginning of the week before the tenant had even lived there for a day. The long history of rent restriction this century has diminished the number of properties in the private rented sector, and landlords left in the market have been able to take advantage of the circumstances--partly created by the payment of housing benefit--and to demand rent in advance. In that situation, a form of bidding by the landlords takes place, based on the fact that the state will always pay.
We believe that there is a more appropriate way to help those faced with that situation, apart from removing the distortion in the market. Various rent deposit and guarantee schemes, run by local authorities and voluntary organisations, are springing up in different areas, and they are extremely successful. I have visited the scheme in Bristol and I was especially impressed that the guarantees are not usually called on, because all sides have played fair.
There is a real fraud problem, as the hon. Member for Birkenhead (Mr. Field), who chairs the Select Committee on Social Security, will be aware as a result of his report, to which the Government replied today. The purpose of payment in arrears is to remove one possibility for fraud.
The hon. Member for Withington quoted the Social Security Advisory Committee repeatedly: and that committee has said that it is legitimate for the Department, to aim to reduce overpayments of housing benefit, and that some overpayments would be avoided or reduced by the proposal to pay in arrears.
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