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Housing Benefit
11. Mr. Chris Mullin (Sunderland, South): What plans he has to increase local authority discretion in respect of the payment of housing benefit; and if he will make a statement. [84001]
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): We have announced our intention to publish a housing Green Paper later in the year. A modern housing policy should ensure that everyone has the opportunity of a decent home. The Green Paper will discuss options to address weaknesses in the current system of housing and housing benefit within our overall objectives for welfare reform.
Mr. Mullin: Is the Minister aware that, in many areas, housing benefit has become a subsidy for some of the worst landlords? The interests of both taxpayer and tenant might be better served if local authorities were given some discretion over which kind of landlords were eligible to receive housing benefit. I appreciate that my hon. Friend may tell me that the benefit goes to the tenant, not the landlord, but she knows that, although that happens in theory, in practice the money often goes directly to the landlord without touching the tenant's pocket.
Angela Eagle: My hon. Friend makes an important point, and we will consider it in our overall review. In November 1997, we introduced more discretion for local authorities to stop direct payment to landlords who are not fit and proper. That allows local authorities to enter into dialogue with local private sector landlords to ensure that correct standards are maintained, and to raise standards in some cases.
I hope that local authorities will take the new power seriously and use it where necessary. I have visited some local authorities that respond proactively to the local private sector by holding meetings to ensure that standards are correct. My right hon. Friend the Minister for Local Government and Housing recently published a consultation document on the regulation of houses in multiple occupation. My hon. Friend is on to something, and we are aware of the improvements that need to be made.
Mr. John Wilkinson (Ruislip-Northwood):
When the hon. Lady says that her hon. Friend is on to something, it is the understatement of the year. Is he not on to one of the biggest frauds and rackets in the administration of public money? How can the public have confidence that action
Ought not the Government to name and shame those local authorities in which there is maladministration of the system? The Audit Commission found clear evidence of fraud on the part of either elected representatives or officers in a quarter of the local authorities that it visited. That is a national disgrace.
Angela Eagle:
I welcome the hon. Gentleman's realisation that the housing benefit system, which was created by the previous Conservative Administration, is in need of much improvement. I also note, although it was not quite an apology, his indirect admission that in creating housing benefit and ensuring that its administration was fragmented to 409 different local authorities, particular difficulties of administration were created. Some local authorities administer the housing benefit system superbly and some do it very badly indeed.
One question that we are considering is how we can raise the standard of the worst to the best. We have already done a lot with respect to fraud. We have set up a simplification and improvement project, which has reported to the Prime Minister, to find out how we can make a complex system easier to understand and administer. We will continue our drive to improve standards in that area.
Mr. Peter L. Pike (Burnley):
As my hon. Friend the Member for Sunderland, South (Mr. Mullin) said, the biggest ripper-off of public funds is the landlord who buys a cheap terraced property in a constituency such as mine for £5,000 and can pay for it with housing benefit within 18 months. That is an abuse of public money and it needs clamping down on and stopping.
Angela Eagle:
It is that sort of matter that the review of housing policy and benefit will be considering. We will be publishing a Green Paper later in the year. We are as aware as anyone of some of the bad administration and the rip-offs that occur as a result of the system that we inherited. However, I caution hon. Members that we are talking about the roof over people's heads, so we have to be careful how we change a system on which many millions of people rely. We will do it, and there will be a lot of consultation around the Green Paper. We are serious about reform, but we must not underestimate the complexity or the seriousness of the issues that face us as we approach the publication of the Green Paper on housing policy later this year.
12. Mr. Eric Forth (Bromley and Chislehurst):
If he will make a statement on his policy for the detection of organised benefit fraud. [84002]
The Minister of State, Department of Social Security (Mr. Stephen Timms):
We have a national team of highly trained investigators in the Benefits Agency
Mr. Forth:
Why is the London organised fraud investigation team being wound up?
Mr. Timms:
Because of serious concerns about the way in which it operated. We are learning the lessons from that experience. That is why, in February, I asked John Scampion, the commissioner of the social fund, to carry out a review of our approach to organised fraud. He is extremely well placed to carry out the work owing to his familiarity with the benefits system--he was the local authority chief executive at Solihull for 18 years.
This is an area in which we in the Department need to work together with local authorities. Of course, the problem also affects the private sector. Last week, I joined the Association of British Insurers for the launch of its fraud web site, which has a link to the DSS fraud web pages, which gave me a chance once again to promote the need for all of us who are affected by fraud to co-operate in tackling it.
Mr. Frank Field (Birkenhead):
As the Government have promised an announcement later today on the benefit card, and as one of the reasons for it was that it should act as an effective measure against fraud, does my hon. Friend have to hand the figures for the savings that taxpayers would have made had ICL delivered it on time? If not, can he make them available in the Library before the end of the day?
Mr. Timms:
I do not have the figures to hand. If they are available, I shall ensure that they are placed in the Library.
Mr. Desmond Swayne (New Forest, West):
Does the Minister understand that virtual reality is no answer to the staggering amount of fraud in the system? Why are the Government reducing investigation and the emphasis on detection? Does he believe that detection and prevention are incompatible?
Mr. Timms:
No; that is nonsense. We are not reducing the effort at all. We are making sure that there is proper attention to prevention, and not just detection. That is the basis of the strategy that we published in March. We are measuring the amount of fraud in the system systematically for the first time, and we will reduce it. Through such measurements, we will be able to demonstrate that we are reducing it, as the hon. Gentleman will see.
13. Mr. Jeremy Corbyn (Islington, North):
What estimate he has made of the cost of linking the minimum income guarantee for pensions to average earnings. [84003]
Mr. Alistair Darling):
We intend to raise the minimum income guarantee for pensioners in line with earnings as resources allow, so that even the least well-off among today's pensioners can share in rising prosperity. We have pledged to raise it in line with earnings next April and estimate that that will cost an additional £220 million.
Mr. Corbyn:
As the Secretary of State accepts the need to raise the minimum income guarantee in line with earnings, does he not accept that the basic state pension should also be raised in line with earnings, instead of being raised only in line with prices, which means that pensioners are significantly worse off than they were when the Tories broke the link? Should not the Government at least redress that imbalance?
Mr. Darling:
No, I do not agree with my hon. Friend, because that would not help the poorest pensioners. I have made it clear in the House before that the Government's priority is to address a major problem that we faced on coming into office: the fact that many pensioners live on very low incomes. That is why we are investing more than £4 billion over this Parliament. The new minimum income guarantee for pensioners targets help on the poorest pensioners. We have increased the winter fuel allowance fivefold, to £100, for every pensioner household, starting this winter. We have also reformed pensions in the long term, particularly through the new state second pension, which will greatly increase the pension that low earners can accrue during their lifetimes.
The Government's strategy is to do far more than ever before to help pensioners who have lost out because of the policies of the previous Government. My hon. Friend's proposal would benefit middle and some higher income pensioners, but poorer pensioners would not benefit at all, which we want to avoid. I believe that the Government's strategy is right because it does more to help the pensioners who need help most.
Mr. Peter Viggers (Gosport):
Why do Ministers continue to say, more in hope than belief, that there is no disincentive to save? I am sure that the Secretary of State saw the reply to the parliamentary question that I tabled earlier this month showing that a single pensioner receives £60 a week more if he has done nothing to save for his retirement than someone who has savings of more than £16,000. The accumulated facts show that it would cost £43,000 to buy an annuity with that return. [Interruption.] Those facts were revealed in an answer given by the Minister of State, who is even now briefing the Secretary of State. Does not that mean that people must save £43,000 or not bother at all? Is not that the most massive disincentive to saving?
Mr. Darling:
No. The hypothesis behind the hon. Gentleman's question is unrealistic. Pensioners in the position that he described would have a SERPS entitlement that he seems to have ignored. Let me deal with the minimum income guarantee, which is what he is complaining about. As I understand it, in so far as the Conservatives have a policy on welfare, they are against the minimum income guarantee. That would mean that 1.5 million pensioners would lose out immediately.
"will bring forward proposals . . . shortly"--[Official Report, 19 March 1998; Vol. 308, c. 1436.],
yet we will not necessarily get a Green Paper until the end of this year.
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