Mrs.
McGuire: On a point of order, Mr. Hood. I am
seeking your guidance at the moment because there has been some
confusion. I am prepared to answer the hon. Gentleman’s point,
but I suspect that he is talking about old clause 38, which is now
clause 40. I am struggling with what I should do and whether or not you
will offer me appropriate advice.
Mr.
Boswell: Further to that point of order, Mr.
Hood, I understand. It became clear to me when I picked up the wrong
copy of the Bill. There were reasons for that, which I need not go into
now but I am indeed talking exactly on those points and I am happy,
with your guidance, to receive a response from the
Under-Secretary—either now or at the appropriate
moment.
The
Chairman: If it will help hon. Members, we will deal with
clause 38 stand part now, and if we want to vote on clause 40 stand
part when we get to it, we shall do so.
Mrs.
McGuire: Thank you, Mr. Hood. The hon.
Gentleman does not normally flummox me but he did today and I thought
that perhaps this was not the clause that I was about to speak
to.
The
Chairman: I have to apologise to the Under-Secretary. I
will now put the question on clause 38 and later she can reply to the
stand part debate onclause
40. Question put
and agreed to.
Clause 38 ordered to stand
part of the
Bill. Clause 39
ordered to stand part of the
Bill. Schedule
5 agreed
to.
New Clause
8Non-dependent
deductions ‘(1) The Secretary
of State shall make regulations such that the non-dependent deduction
for— (a) housing
benefit; (b) council tax
benefit; and (c) Local Housing
Allowance shall be nil where
the non-dependent— (i)
is in non-remunerative work,
or (ii) has a gross income from
remunerative work of under £101.00 per
week.’.—[Danny
Alexander.] Brought
up, and read the First
time.
Danny
Alexander: I beg to move, That the clause be read a Second
time. I endorse many
of the comments made by the hon. Member for Daventry and I look forward
to hearing the Minister’s response in due course. May I say how
much, in my brief time in the House, I have valued the hon.
Gentleman’s contribution from the Front Bench? I look forward to
that continuing from the Back Benches
too. New clause 8 is
designed to elicit a debate and probe in a bit more detail the
Government’s thinking about the non-dependent deductions regime
for housing benefit and other benefits. The thought behind it,
supported by evidence from Shelter and Citizens Advice, among others,
is that the current non-dependent deductions regime causes problems for
claimants from time to time and significant reform is needed. Reform of
the non-dependent deductions regime has been considered before. It may
be of interest to Labour Members, some of whom were not around at the
time, that when in opposition the Labour party raised a number of
concerns about it. In 2000 the Government’s housing Green Paper,
“Quality and Choice: a decent home for all” proposed the
simplification of non-dependent deductions. Of the 103 organisations
and individuals who responded to the consultation paper, only five
raised objections. It
may be worth discussing briefly the problemsthat can be caused
by the present non-dependent deductions regime. In some circumstances
it can lead to
rent arrears and consequential hardship, and perhaps even eviction and
homelessness. It can also, which is an important point in the overall
context of the Bill, create disincentives to work. In my constituency
casework I have had experience of the regime causing all those
problems, except eviction. Other hon. Members may have broader
experience than
that. The idea behind
the non-dependent deductions regime is that non-dependants living in a
person’s house, such as grown-up children, should make some
contribution toward the rent. One might ask who could argue with that.
In many cases that would be a fair point, but there are certain
categories of claimants for whom the current regime causes problems.
The regime has a minimum non-dependent deduction, which at this
year’s rate amounts to £7.40. The deduction is banded
according to income and the highest rate of non-dependent deduction
goes up to £47.75, but where no evidence of the income of the
non-dependant is provided, the deduction takes place at the highest
rate. The Department
for Work and Pensions has conducted some research on non-dependent
deductions and who claims them, but that research is rather out of date
as it is 10 years old. Is the Minister happy to agree that further
research should be carried out to update the figures? For example, 52
per cent. of claimants for the non-dependent deduction were aged 60 or
older and the average age was 58. Clearly, those figures apply to a
wide range of categories of people, but
mainly—probably—to those with children who have grown up
or are growing up, or adult non-dependants, such as spouses or
partners. A problem
arises—certainly it did in relation to a constituency case with
whom I have dealt—when the non-dependant is a child and the
parent is the claimant. Whether or not they are on benefits—my
constituent claimant was on other benefits—the parent has to
seek from the non-dependant some of the money to make up the
difference, if they do not wish to suffer a reduction in living
standards or a shortfall in their rent. In that case, if the minimum
amount applies, £7.40 would be required from the non-dependant
to meet the shortfall. Citizens Advice found that where the
non-dependant is a grown-up child under the age of 25, it can be very
difficult for parents to get the money to meet that
shortfall. Obviously,
I am anxious to hear the Minister’s response to the concern that
the rules, which are in place for very good reasons in the vast
majority of cases, are, in a minority of cases, causing hardship, can
cause rent arrears and might even in extreme circumstances lead to an
eviction. That is disruptive for the individuals concerned, and in some
cases for families.
My amendment reads:
“The Secretary of State
shall make regulations such that the non-dependent
deduction...where the non-dependent...is in non-remunerative
work, or...has a gross income from remunerative work of
under” a certain amount
should be nil, so that if the non-dependant is either living on
benefits or has no, or a low, remunerative income, the housing benefit
would be payable to the claimant in full. That is an attempt to get
around some of the problems. I appreciate that that might not
necessarily be a perfect solution, but I wanted to identify in this
debate the fact that in some
categories of case there are quite serious problemswith the
operation of the current rules. I encouragethe Minister to
update the Committee on the Government’s latest thinking on that
matter. Let me return
to the Government’s response to the Select Committee on Social
Security in 1999-2000. The Committee recommended
that “the number of rates
of non-dependent deductions is substantially reduced, and that this
should be accomplished by abolishing the higher rates of
deduction”. In their
response, the Government
said: “The
Government acknowledges that the present scheme does increase
complexity and that the highest rates of non-dependent deductions may,
in some cases, exceed total rent liability. There would of course be
costs arising from abolishing the highest two rates....The Housing
Green Paper put forward the idea of simplifying non-dependent
deductions and the consultation responses will need to be considered
before a decision is made about making any
changes.” At that stage
the Government’s thinking seemed to betray a degree of awareness
of the problems that the current regime can cause in a minority of
cases. I would be grateful if the Minister could inform the Committee
of whether under the new local housing allowance that issue could be
looked at
again.
Mr.
Ruffley: Good morning, Mr. Hood. It is a great
joy to see you again after such a long
break. I hope,
Mr. Hood, that you will not have to witness the scenes that
some of us had to witness in the Chamber, not once but twice. At oral
questions to the Department for Work and Pensions, there were dangerous
signs of a breakdown in the valuable consensus that has been displayed
in Committee. Ministers were actually criticising Opposition Members,
quite openly and on the record. [Laughter.]
11
am The debate
yesterday afternoon started badly and then got worse. I am glad those
scenes, which took place during the winding-up speeches, were after
the9 pm watershed because children should not have been
watching. There were sneering and barracking noises from Government
Members in a pathetic attempt to put off my hon. Friend the Member for
Runnymede and Weybridge (Mr. Hammond). I really hope that we
do not see scenes like that in Committee
today.
The
Chairman: I am sure we are getting round to the new
clause.
Mr.
Ruffley: I am merely trying to rebuild the consensus and
remind hon. Members on both sides of the divide of that. There is still
sedentary chuntering from the hon. Member for Glasgow, North-West, but
that is part of the great glory of the Committee. All shades of opinion
are welcome here under your excellent chairmanship, are they not, Mr
Hood? Let us move on
to the business of the clause. This important and probing amendment
owes much to the excellent work, campaigning and lobbying done by
Shelter and Citizens Advice. For Members of Her Majesty’s loyal
Opposition, the amendment is important for two reasons. First, the area
of non-dependent deductions is complex and Opposition
Members and—I think—Government Members want benefit
simplification higher up the agenda, mainly because it will help
customers, many of whom are the most vulnerable in society. Secondly,
the amendment would streamline Government business and make it more
efficient and cost-effective. The current regulations
discourage housing benefit claimants from allowing friends and adult
relatives on benefits and low incomes to reside with them. In extreme
cases, that may result in eviction, but I do not think there is any
great evidence of that, so we are not scaremongering. However, the
regulations may well encourage under-occupation of housing units,
particularly social
housing. The thrust of
the regulations is based on an unassailable proposition that
non-dependants with a reasonable income should be expected to
contribute to the cost of their housing. No one disputes that. However,
the current requirements and rates at which non-dependent deductions
are applied can cause hardship either to the non-dependant or the
claimant. What concerns us, and I am sure Government Members, too, is
the work disincentive effect. Another concern is the possible impact in
terms of family breakdown, which is why the modern Conservative party
is looking at the area of non-dependent deductions afresh and with
renewed interest. My
right hon. Friend the Member for Witney (Mr. Cameron) has,
in a modern way—not in a traditional, tub-thumping, right-wing
way—talked about the importance of the modern family and about
the way in which family units no longer have to have a marriage
certificate attached to them. Keeping families together is an important
part of any Government’s public policy, and it is a very
important part of the benefits system as well. Sometimes the system can
keep families together and sometimes it can keep them apart. I suspect
that the new clause teases out the problems that some families have in
relation to non-dependent family members. Quite often the elder member
of the family will be claiming housing benefit, and we can see that
there is a disincentive in keeping that non-dependant in the household
because of the way that the regime
operates.
Mr.
Jeremy Hunt (South-West Surrey) (Con): I, too, welcome you
back to the Chair, Mr. Hood.
Does my hon. Friend share two
of my concerns about non-dependent deductions with respect to work
disincentives? First, the statistics are very clear about the greater
incidence of child poverty in workless households. In such a
non-dependent deductions regime, there is a clear disincentive for
someone else living in the household to take work. There is therefore a
risk of increasing the number of workless households, which has a
direct impact on child
poverty. Does my hon.
Friend also share my concern about the possible impact on carers for
disabled people? If a carer is living with a disabled person, that
carer might also have a strong disincentive to work because of the
non-dependent deductions. Does he share those concerns, and does he
think that they might be another reason why the new clause should be
taken very seriously?
Mr.
Ruffley: I do indeed share my hon. Friend’s
concerns about the impact, both in relation to disabled people and on
child poverty. I think that I am right in saying that slightly fewer
than three out of four children in single parent workless households
are in poverty, whereas only one in eight children in single parent
working households are in poverty. Ministers would not disagree with
those figures. As they have a 2020 child poverty reduction target, I
know that they are seeking to tackle those figures and to halve them by
2010. We sign up to those aspirations, but it is certainly the
case—
The
Minister for Employment and Welfare Reform (Mr. Jim
Murphy) indicated
dissent.
Mr.
Ruffley: Target or aspiration—whatever. We
sign up to those propositions, but to get from where we are now to the
2020 target and to the first milestone at 2010, we must all understand
that the decisions made by the Government will have an impact on our
ability to meet that target. That is why the new clause is extremely
important. My hon. Friend the Member for South-West Surrey makes an
excellent point. My
first area of concern is benefit complexity. It contributes to delays
and cases of maladministration, but above all—this is the key
point for us now—it creates confusion for claimants, many of
whom are vulnerable and who will sometimes be in distress. The
confusion and uncertainty about how the quite complicated rates and
different levels operate can worry the non-dependant, who wishes to
stay in a family house or flat, as well as the housing benefit claimant
him or herself. That confusion is compounded by the knowledge that
failure to provide evidence of a non-dependant’s income will
result—without any ifs or buts—in the top rate deduction
of £47.75 being applied straight away, which seems quite a harsh
principle. Will the
Under-Secretary first explain the rationale for that sanction? I do not
think that there is any other word for it. One must remember that
individuals might not be able to provide accurate evidence, or any
evidence at all, of a non-dependant’s income, for perfectly
understandable reasons. In explaining the rationale for why that top
rate deduction is applied in such circumstances—where evidence
is not fully forthcoming—will she say whether there are any
derogations, such as mental illness, which might be just cause for not
disclosing that information? If such a good reason is given, could the
£47.75 hit be avoided? That is quite an important
point. On complexity,
it is worth reading into the record that quite a lot of rates are
involved for non-dependent deductions. My second question to the
Under-Secretary is why the rates start at the top with £47.75,
then descend to £43.50, £38.20, £23.35, £17
and finally £7.40? We understand a deduction regime is needed,
but will she explain why there are so many rates?
I hope that the Minister will
also fully answer my second question, which was: has she had any
discussions with her hon. Friend the Member for Warwick and Leamington
(Mr. Plaskitt), the Under-Secretary of State who is
responsible for benefit simplification? If she has not discussed with
her fellow Minister why there are so many levels of benefit, I ask
her to explain why not, because it is an area that is ripe for
simplification. We say yes to the principle of deductions, but why are
there so many rates? | 
