Welfare Reform Bill

Memorandum submitted by Zacchaeus 2000 Trust (WR 29)

DRAFT AMENDMENTS FOR THE WELFARE REFORM BILL; AND THE CASES FOR THEM

By Alan Murdie, Barrister,

Ben Jenkins, Parliamentary Researcher.

Rev Paul Nicolson, Chair,

Introduction

The Z2K Trust serves the most vulnerable debtors who are tangled in the welfare system and cannot pay their utility bills. We signpost mortgage and credit card debts to money advisers, in order to focus on cases below the radar. We were founded in 1995, registered as a Charity in 1997 and worked as volunteers for ten years servicing a contract with Wycombe Magistrates Court to help fine defaulters fill in their means statements. We have grown rapidly since 1997 by raising funds to employ three full time lawyers who support a growing number of volunteers, currently 32, servicing a growing number of cases, currently around 90 at any one time; the cases are time heavy. We also train and provide legal advice to other NGOs. We employ a Parliamentary Researcher and an Administrator.

We believe that growing poverty and the failure of national housing policy to provide affordable homes, in our increasingly expensive economy, is public health issue creating poverty related ill health and educational underachievement which costs the tax payer billions in the NHS and the schools and the economy at large.

Welfare Reform Bill:

Letter in The Guardian – 8th March 2011.

The welfare reform bill has carried the application of the economic theory of moral hazard to such extremes in its exaggerated claims of welfare dependency that unemployment benefits could be reduced to an amount incapable of keeping body and soul together.

The new universal credit will be made up of a standard allowance (SA), an amount for children, another for housing and one more for particular needs or circumstances. The bill does not attempt to explain how the level of the SA will be decided. There is no link to the escalating prices of food and other essential needs. The Centre for Research in Social Policy has calculated that some time in the next 10 years the weekly cost of a healthy diet will overtake the weekly amount paid in adult unemployment benefits.

The caps on housing benefit and the local housing allowance will create debts that will have to be paid out of the money needed for a healthy diet.

Rev Paul Nicolson

Chairman,   Zacchaeus 2000 Trust

Official and claimant errors have already created debts, other than £1billion fraud, owed to the DWP, HMRC and the Local Authorities totaling £2.6 billion in 2010.  The government insists on enforcing them against poverty incomes disregarding all the evidence from the Government Office for Science about the relationship between mental health problems and debt.  The poll tax did the same to poverty level unemployment benefits in the 1990s.

The following is a list of suggested amendments to the Welfare Reform Bill. Please note they may need some fine tuning by the Clerks as the Bill is complex and the Government publishes only the original statutes which are being amended not the statutes as they have been amended between 1995-2009 on the web versions.

The seven lean years of benefit thinking and their results which are our welfare state today are:

Housing Benefit – created 1987

Income Support – created 1987

The Social Fund - created 1988 ( John Major’s concept)

Community Charge Benefit - created 1990 - abolished 1993

Council Tax Benefit – created 1993

Job Seeker’s Allowance - created 1995

What has handicapped this system has been the complex rules and regulations adopted from 1987 onwards and still in force today.

It must be stressed that complexity in the welfare system causes problems for administrators, claimants and the advice sector. It also is very costly, since each re-write of regulation places an administrative burden across the system, with new computer programmes, new paperwork, new procedures, the need for staff training etc. leading to errors in payments by officials and claimants creating debts which are enforced against the poverty incomes of claimants. The costs of changes eat up any alleged savings to the public purse.

AMENDMENTS TO HOUSING BENEFIT PROPOSALS.

The reason housing benefit has escalated from £1 billion in 1987 to £21 billion in 2010 is because the Housing Act 1988 took away rent control and lending was deregulated allowing a flood of money to pour into a market in short supply so forcing up prices and rents. The government now seems intent on forcing the migration of hundreds of thousands men, women and children of the poorest households away from centres of high employment with expensive housing by capping housing benefit. We recommend that capping rents and building homes should be the priority in current social policy.

The regime which Universal Credit threatens to perpetuate is one of the glaring defects of the housing benefit system operating without any control on rents.

The following amendments are directed at tackling the housing benefit problem by capping rents. If rents are capped then housing element of Universal Credit will come down. The solution of capping housing benefit is the wrong approach. It is the level of rent which must be tackled.

AMENDMENT

Clause 1 (3) delete (c)

Insert (4) housing and council tax benefits shall pay 100% of rent and council tax of the claimants of the standard allowance.

See Appendix A for detailed brief.

NEW CLAUSES

INSERT

Clause 93 -94 - CAP TO RENTS.

INSERT AFTER CLAUSE 94(5)

In respect of the relevant amounts to housing the Secretary of State shall make regulations

(a) Re-introducing the system of rent control under the Rent Act 1977

(b) Providing that the sum or sums charging or charged in rent or other housing payment shall not exceed a prescribed sum

(c) That the sums charged in rent or other housing cost shall be subject to financial limitations set by the Secretary State based upon the relevant amount in Universal Credit for housing and other elements

(d) Other supplementary, incidental, consequential or transitional measures so as to ensure the restoration of the system of rent control under the Rent Act 1977

TAX CREDITS

TAX CREDITS TO BE INCLUDED IN SECTION 71 OF THE SOCIAL SECURITY ADMINISTRATION ACT 1992

EXPLANATORY NOTE

The current Bill seeks to include tax credits as part of the welfare system. Currently, tax credits fall outside of the scope of the welfare system, being treated as part of the tax system. The inclusion within section 71 would achieve consistency, ensuring that the regime on overpayments applies equally to tax credit recovery; particularly that which includes the power to write off overpayments which are due to the errors of officials. It also brings tax credits into line with other welfare benefits, which also appears to be the aim of other parts of the Welfare Reform Bill.

NEW CLAUSE

After Section 71 of the Social Security Administration Act 1992 shall be inserted

‘This section also applies to the recovery of tax credits payable to the claimant as to all other benefits covered by this section ‘.

CLAUSE 89

This clause gives unlimited powers to the Secretary of State. It might be called the ‘Oliver Cromwell’ Clause.

Its origins seem to lie in section 147 of the Local Government Finance Act 1998 (which gave us the poll tax). This created powers to re-write Acts of Parliament. It is not clear that if it includes a devolved communities Act or a Private Act of Parliament.

Suggest delete of the entire Clause and a substantial re-write

RECOVERABILITY – CLAUSE 104 – Application of the Limitation Act 1980

Where a sum is deemed recoverable within the period laid down by the Limitation Act 1980 the period for recovery is normally six years. This Clause appears to be trying to alter this in the case of social security benefits.

The origins of this Clause probably emerge with a recent council tax decision, the Court of Appeal in Bolsover District Council and another v Ashfield Nominees Ltd and other [2010] EWCA Civ 1129 October 19th 2010 where the Court of Appeal allowed the enforcement of council tax arrears against a company six years after the liability order had been obtained from the court.

But it should be stressed this was an action of insolvency proceedings against a company who would not be eligible for welfare benefits. The situation with an individual is very different.

The Z2K Trust has helped vulnerable debtors in court proceedings since 1996. The Trust frequently prepares means statements for debtors which are then used by magistrates’ courts and in the civil courts to make the appropriate order. It is essential of justice that courts and tribunals have the facts, and the correct information is given on behalf of debtors.

Clause 104 will make the position of advisers and courts more difficult. It will allow recovery methods to be used which may affect existing court orders. If the Secretary of State begins deducting benefits from a sum wrongly paid out six or more years ago, the claimant will never be certain when s/he submits a means statement to court whether that statement of income is accurate.

The benefit could have been wrongly paid out due to official or claimant error.

Chris Grayling (Minister of State (Employment), Work and Pensions; Epsom and Ewell, Conservative) answering a question from Kate Green MP on the 25 th January 2011.

The proportion of the annual sum wrongly paid in benefits attributed to fraud and error is shown in the following tables:

Worse, the Court may have reached a complicated decision on an order or a fine, only to have its work and its order undermined, since the Secretary of State will have decided to change the level of benefit or found some other way to extract money from the claimant, which means the information submitted to the court is wrong.

The aim of these orders is to achieve certainty in the debtor’s financial affairs so the court can stabilise the rights available to the creditor (private or state) to recover money and to set a system of regular payments which are realistic for the debtor in order to discharge obligations. In some cases the decision of the court takes effect as an administration order , a Debt Relief Order or a bankruptcy order. In other cases the arrangement is to ensure the payment of a criminal fine or in the civil context, the payment of utility bills.

The Clause appears to disapply the application of the Limitation Act 1980 as to providing a bar on recovery action. Effectively, it may be attempting to extend the powers on recovery following Bolsover District Council and another v Ashfield Nominees Ltd and other [2010] .

Clause (4) appears to raise the spectre of allowing the recovery of sums owing since 1980. This will cause a great deal of worry; in many cases the claimant concerned will be elderly or dead.

Amendment

delete Clause 104

Insert:

‘The Limitation Act 1980 applies as enacted to the recovery of the social security payments as with all other sums that may be recoverable from a person."

CLAUSE 108 - PENALTY IN RESPECT OF BENEFIT FRAUD NOT RESULTING IN OVERPAYMENT

This is a safe-guarding amendment against the power to impose a penalty when no loss to the DWP has actually occurred. The amendment is a provision in favour of the rights of the subject to ensure that penalties are only imposed where there is serious evidence of wrong-doing. With the complexities of the overpayment legislation it is simply not good enough that a citizen should face a penalty for the mere risk that there might have been overpayment. Overpayments are frequently caused by official error, and in many cases the system has got its calculations wrong. Before any penalty is imposed – given the high level of mistakes – the Secretary of State must be satisfied so that he/she is sure that an overpayment would have occurred or what the Claimant did was a genuine attempt to commit a fraud.

Amendment

In paragraph (2) of Clause 108 after (1A)(a) it appears to the Secretary of State or an authority that there are grounds for instituting proceedings INSERT THE WORDS

"and the Secretary of State or authority is satisfied on reasonable grounds

(i) any acts or omissions by the person would have constituted an offence under the Criminal Attempts Act 1981 and

(ii) claimant would that such a prosecution would have been likely to result in a conviction for an offence"

SANCTIONING AND PENALTIES

The Bill contains clauses for sanction and penalties. The difference between the two is not clearly set out. The sanction is a fine imposed by officials with the power to remove 100% of a claimants income. Magistrates do not have that power. Their fines have to be proportionate to means after a means enquiry; if they commit to prison the offender is fed. The the civil "offence" of disobeying an official of the DWP removes the capacity to buy food. We believe that is counter productive and the procedures for a means statement should be applied by the DWP before sanctions are applied to the poorest citizens.

Amendment

New Clause.

Means inquiry before sanctions imposed

(1) In any case where regulations made by the Secretary of State under this Act or other powers contain provisions for the imposition of sanctions resulting in the loss or reduction of any sum in benefit payable to a person, the regulations shall a contain a duty that before any sanction is imposed

(i) An inquiry shall be conducted as to the means of the person.

to establish the person’s income, expenditure and debts

(ii) Regard shall be had to the welfare of any person residing with him

(iii) Regard shall be had to a medical report as to his physical and mental well-being and any person residing with him

(iv) Any sanction resulting in loss or reduction of benefit will be reasonable in the circumstances

(v) Regard shall be had to the impact of any deduction on the ability of the person to pay costs in respect of the accommodation which s/he may occupy

(2) Following consideration of the matters prescribed in paragraph (1) the decision maker must then determine whether the income remaining to the person who will be subject to the sanction falls below the minimum weekly income needed for healthy living is set by the Secretary of State.

(i) If any sanction is imposed following the inquiries in (1) above , the decision-maker shall ensure that no person will be left with a total income which is either

(ii) below the minimum weekly income needed for healthy living set by the Secretary of State or

(3) Where the means inquiry establishes that a person is already subject to deductions from benefit which, but for the effect of this sub-section, would result in the amount of benefit available to the person in any one week falling below the amount needed for healthy living set by the Secretary of State, the imposition of any deduction will be suspended.

(4) Any regulations made by the Secretary of State permitting or allowing any sanction resulting in loss or reduction of benefit to any person shall contain provision for a right of appeal.

(5) Any person affected by a sanction imposed may appeal to the Secretary of State for a variation of the amount, provided that no variation however occasioned shall have the result of leaving the person with less than the sum prescribed in regulations under paragraph 2

Alternatively, an amendment could be proposed to cover both penalties and sanctions

NEW CLAUSE – Matters to be considered by before the Imposition of a Sanction or Penalty

In respect of the imposition of a sanction under the Job Seeker’s Act 1995 or any other provision or in the case of a penalty imposed under section 115C of the Social Security Administration Act 1992 the Secretary of State or an authority shall consider

(i)Evidence of the physical condition of the claimant and his/her state of health

(ii)Evidence of the psychological state of health of the claimant

(iii)Evidence relating to the means and income of the claimant

(iv)Evidence of relating to the accommodation occupied by the Claimant and the effect that the imposition of a sanction or penalty may have on the right to occupy such accommodation

(v) The family circumstances of the claimant and the impact that it may have on other family members and dependents

(vi) Evidence of the impact that a sanction or penalty may have on the ability of the claimant to fulfil obligations to third parties including those relating to the fulfilment of benefit entitlement conditions.

Before deciding whether to impose a sanction or penalty and shall only do so where it, having considered all the relevant circumstances, it is reasonable to do so

Regarding evidence as to means the Secretary of State must consider

(i) The income of the claimant

(ii) The capital of the claimant

(iii) The expenditure of the claimant

In order to facilitate the enquiry into the matters set out in Clause

(1) the Secretary of State or Authority may:

(i) Arrange for a medical examination of the claimant

(ii) Obtain information from any agency holding relevant information on the income and resources of the claimant

(iii) Receive evidence from any other person or persons with a knowledge of the circumstances of the claimant

A person who is subject to a penalty may appeal to a Tribunal (Lower Tier) against the imposition of such a penalty

MISCELLANEOUS

New Clause

Bank and account charges not to be deducted from benefits paid through the Secretary of State

Regulations shall provide that where a Universal Credit or any other qualifying benefit is paid to

(a) any qualifying person entitled under the Social Security Administration Act 1992, Universal Credit the Job Seekers Act 1995 or any other legislation

(b) Arrangements are in force for the benefit for that person is paid into a bank account or account operated by another

(c) It is a term or condition of that account that charges would normally be paid on that account which are set by the provider of the bank account, whether at the discretion of the provider or under agreement or otherwise

(d) The terms of the account permit the deduction of charges from a sum paid in benefit to the qualifying person,

(e) the bank or account operator shall not entitled to deduct any sum in respect of charges that exceeds more than one tenth of the sum in benefit to which a person is entitled to receive in any one week during any three month period or lesser period, subject to sections (2) and (3) below.

(2) In the case of a newly unemployed claimant who is eligible for benefit and the benefit is paid into a bank of other account, no sum whatsoever in charges may be deducted for the first six months during which benefit is payable.

(3) In the case of any person who is unemployed and in receipt of benefit paid into a bank account or other account, the amount of charges deducted from the benefit set out in paragraph one are limited to only one deduction from the account in any three month period.

(4) No additional charges or penalties of any sort may be deducted where a person moves from being in receipt of benefit into employment.

(5) The restriction on bank charges set out in paragraphs 1-4 above in this section shall not be nullified by any term or condition contained in the contract between the qualifying person and the bank or account holder and any agreement purporting to so nullify the effect shall be void in law.

(6) Where a bank or account holder deducts charges from the benefit of a qualifying person in breach of paragraphs (1) – (3) above the bank or account holder shall be liable to pay compensation.

DISABLITY BENEFITS

NEW CLAUSE

Unemployed persons not to be subject to costs of medical report or Secretary of State to make provision for obtaining one

(1) Regulations shall provide that where a question has arisen as to whether a person who is in receipt of Universal Credit a qualifying benefit has a medical condition which is relevant to their entitlement to Universal Credit or to the imposition of any sanction, and the Secretary of State requires that person to adduce medical evidence, no charge may be imposed for any report issued by

(i) The General Practitioner with whom that person is registered

(ii) Any NHS hospital including any NHS Trust where that person is receiving treatment or has received treatment in any period relevant to the determination

(iii) Any private hospital or institution which is or has provided treatment or care on behalf of the person however funded in any period relevant to the determination

(iv) A military, air force or naval unit or establishment in which medical or surgical treatment is provIded

(2) The Secretary of State may make regulations limiting or waiving the payment which is required by her for any report, including the prescribed upper limit for any payment.

(3) Any payment made by a claimant to any person or party in breach of section 1 above shall be refunded by the doctor, person or body imposing the charges, together with a sum equal to twice the charge imposed on the claimant.

March 2011

Watch our 9 minute video on Google - YouTube

friends in need Z2K justice for vulnerable debtors

http://www.youtube.com/watch?v=1dZPYuqQNe0

APPENDIX A.

Inadequate benefits become lower

1. The Welfare Reform Bill has carried the application of the economic theory of moral hazard to such extremes that unemployment benefits, already kept low to discourage people from idling on the dole, could be reduced to an amount incapable of keeping body and soul together.

2. It is assumed that the "standard allowance" for adults of the Universal Credit in Clause 1 will be the same as JSA which from April will be £67.50 a week, and £53.45 for the under 25s, with additions for families and for particular needs and circumstances. Their already inadequate values are diminishing due to the move from RPI to CPI and the steep rise in the price of food, domestic fuel and other necessities. By 2020 the weekly cost of a healthy diet, currently £45.65 a week, could over take the adult weekly "standard allowance" if current policies are continued. (Donald Hirsch – University of Loughborough).

3. The adult unemployment benefits are 60% of the median poverty threshold and 42% of the Rowntree Minimum Income Standard. (see tables below)’. The Bill does not attempt to explain how the level of the SA will be decided. There is no link to the escalating prices of food and other essential needs in the shops or from the utilities or the minimum quantities needed for healthy living. Supporting the Bill at the moment feels like signing permission to create a black hole for the poorest citizens.

4. Current policy will leave some of the rent unpaid by the Appropriate Maximum Housing Benefit (AMHB) in Clause 68. Council tax could be left unpaid by households because local authorities will be deciding who gets council tax benefit – the future of council tax benefit is very unclear. Without some clarification it is impossible to assess what the statutory minimum incomes of the unemployed or the employed are going to be.

5. It should be a matter of rigorous national and local policy that the standard allowance in Clause 1, plus additions for children and for other particular needs or circumstance, will never be reduced by any rent not covered by national AMHB or any council tax not covered by local CTB.

6. Unless that rule is applied in all cases the unemployed will be expected to pay those amounts out of the already inadequate standard allowance plus additions for children and disabled. inevitably creating debts, with consequent damage to mental and physical health, to education, to fitness for work, and there will be pressure for fraud, homelessness or disappearance into the informal economy.

7. The very low unemployment incomes are already expected to repay inevitable debts with consequences for mental health. The poll tax has the same impact on unemployment benefits in the 1990.

8. Official and claimant error also create debts for claimants at DWP, HMRC and the Local Authorities totaling £2.6 billion in 2010; it is government policy that they should be enforced against claimants. (Chris Grayling HC Deb, 25 January 2011, c257W)

9. Mothers before conception, and their fetus during pregnancy, are particularly damaged by poverty and debt; they have already lost £1734 due to the cuts (Sam Royston – Family Action) during pregnancy and during the first year of the baby’s life; poverty before conception also adds to the risks of low birthweight. The enforcement of rent and council tax arrears exacerbates damage to the fetus and the mother.

10. Three groups are receiving only the totally inadequate adult JSA;

a. Young people from aged 18.

b. Childless adults including those denied disability benefits.

c. Unemployed parents when their children exceed the age that child benefits are paid and their unemployment incomes are reduced to the adult’s rate.

Unemployment benefits at APRIL 2009 and 60% median income

Shortfall from 2020 target.

The research by the Center for Research in Social Policy at the University of Loughborough and the Family Budget Unit at the University of York into Minimum Income Standards (MIS) published by Joseph Rowntree Foundation on the 1st July 2008 is shown below. They defined minimum income standards as follows.

"A minimum standard of living in Britain today includes, but is more than just, food, clothes and shelter. It is about having what you need in order to have the opportunities and choices necessary to participate in society. (MIS groups’ definition of acceptable minimum)"

JRF/MIS compared with out of work benefit income, April 2010

£ per week Single working Pensioner couple Couple+2 Lone parent Age children + 1 child

MIS excluding rent. Council Tax

and childcare 161.41 203.65 381.17 217.48

Income Support'/Pension Credit 65.45 207.19 235.29 140.42

Difference (negative number

shows Shortfall) -95.96 3.54 -145.88 -77.06

Benefit income as % of MIS 41% 102% 62% 65%

'Including child benefit and child tax credit

Two case histories. Similar cases continue to happen.

The level of adult benefits has not changed in real terms since these cases.

Due to the change from RPI to CPI they will lose a £1 a week mounting to £52 a week in the 10th year.

1.NO SUPPORT

Local Government Ombudsman reports the case of Mr "Watson", a single, semi literate adult living alone in Southwark. On the 12th January 2001 CSL, Southwark’s out sourced agent collecting council tax, sends Mr. Watson a summons for unpaid council tax of £235.10, plus costs, for a hearing on 9th February 2001. The summons contains the following threats, in bold type and highlighted. Thousands are dispatched daily:

"If a liability order is granted the council will be able to take one or more of the following actions: Instruct bailiffs to take your goods to settle your debt - this can include your car. You will be liable to pay the bailiffs costs which could substantially increase the debt. Instruct your employer to deduct payments from your salary or wages. Deduct money straight from your jobseekers allowance or income support. Make you bankrupt. Make a charging order against your home. Have you committed to prison".

His sister-in-law calls on him. His body is hanging in his flat. The police found the summons with him, paper littered with rough calculations and a note:

"Dear …. I at to do this I am in so much in Detr good By for ever Love……"

Jobcentreplus had mistakenly told Southwark that they had cancelled his Job Seekers Allowance (JSA). That stopped housing and council tax benefits, triggering the blind, computer driven enforcement. Threats of eviction for rent arrears were not far off. JSA was £53.05 a week after rent and council tax. (Now £56.20 to be increased by £1.25 in April 2006). The London School of Hygeine and Tropical Medicine has shown a national minimum income for healthy living for a single adult needs to be at least £84.76 a week or £125 in London.

2.McKENZIE FRIEND SUPPORT.

We work with ATD Fourth World who are close to the poorest people in London. They asked for our help with "Sarah" a 51 year old who is single, unemployed, semi literate and in debt to Lambeth Council. Her Doctor tells us "she has learning difficulties and is illiterate and for many years has had chronic anxiety with episodes of panic. Were the Bailiffs to proceed with the seizure of her goods, the effect would be catastrophic for her and would seriously compromise her health".

She receives £53.05 a week income. She pays each week a £4.13 a week water rate, £2.50 rent arrears £36.42 to buy every thing but rent and council tax. Capita Business Services in Bromley collect council tax for the Council.. She owes £468 from a failed attempt at low paid work. The failure caused the debt. Equita Bailiffs in Northampton whose computers, blind to her ill health, illiteracy and poverty, threaten "We have arranged for our bailiff to call at your home this weekend to seize your goods and transport them to the auction rooms for sale", and two days later "NOTICE PRIOR TO COMMITTAL TO PRISON PROCEEDINGS". We tell Lambeth Council who call off the bailiffs. The computer still runs. Another threat to sell the furniture storms its way from Northampton to Lambeth. To relieve her anxiety Zacchaeus promises to pay the £468. council tax arrears should the

APPENDIX B

CONCERNS ABOUT THE DESTINATION OF HOUSING BENEFITS.

The deregulation of the UK housing market led to speculation on land an housing which does not prioritise the importance of a secure home for every family. It is one in which a small percentage land lords, including of foreign nationals, can loot and exploit the housing market in general, and the welfare system in particular, with the local authorities pay housing benefit directly into local banks and into the overseas banks of overseas landlords.

In London the risk is that landlords are not domiciled in the UK and are not UK taxpayers – the market is beyond the price of many British people. Members of the Government over the last 15 years have repeatedly complained about money being paid to asylum seekers and there have been press complaints against workers coming from other parts of the European Union and claiming benefits. There have been press stories about families in properties costing £1000 or £2000 a week. Yet no-one has asked who has actually got this money – the answer is it has often gone tax free to the overseas bank of an overseas landlord. What the Government and the press have not faced up to is that many landlords resident abroad are extracting every week large sums of money.

Four examples: -

£425 paid for housing benefit a week for a badly repaired two bedroom flat near Baker Street with a landlord believed to be in Morocco.

A landlord resident in South Africa, Ethiopia and Namibia - – with a UK bank account never once in credit in 4 years - had regular payments of £900 -1200 per month from Westminster City Council in housing benefit, with a further £400 coming from the tenant. The property was an ex-council flat which previously raised rent for the local authority.

The next withdrawal on the gentleman’s bank statements – which were produced in evidence in court – shows that the same money is extracted in Cape Town or Johannesburg or Namibia through the banking system. This can be repeated in the case of tenants on housing benefit whose landlords live respectively in Ireland, Italy, Nigeria, Ghana, the Lebanon, Singapore, Malaysia, Cyprus, Bangladesh and the United States of America and many other places.

This is at a time when all aspects of public spending are under review and being cut, including provision for the armed services in Afghanistan. Yet the current Government seeks to perpetuate a system whereby foreign nationals who are not even taxpayers in the UK can get even richer, simply by having the title to a house or flat in the UK

However, this Bill will perpetuate a system whereby wealthy foreign nationals are effectively milking the benefit system as the ultimately recipients of the money.

REQUIREMENT THAT LANDLORD IN RECEIPT OF RENT PAID BY A CLAIMANT IN RECEIPT OF UNIVERSAL CREDIT SHALL BE A UK TAXPAYER

(1) Regulations shall contain conditions to be imposed on any person to whom the housing element of Universal Credit is ultimately paid in order for the Claimant to occupy accommodation as his home

(2) Such a person in (1) is the person receiving rent in his capacity as a landlord or any housing cost or charge payable so that the Claimant may occupy the property as his principal home

(3) Such conditions shall include

(a) A requirement that in the case of an individual renting or providing accommodation paid for by Universal Credit that individual is a UK taxpayer for income purposes

(b) That in the case of a company or corporate body renting or providing accommodation paid for by Universal Credit that corporation tax is paid in the UK

(c) That the individual company, company or corporate body demonstrates that tax is so being paid in the UK

(d) That in order to be eligible to receive such payment the individual shall establish his liability to pay UK income tax or in the case of a corporation its liability to pay corporation tax

(e) Such other conditions as are reasonably necessary to ensure that the person to whom rent or other housing charges are ultimately paid in respect of accommodation paid for by the housing element of Universal Credit shall be a UK taxpayer.