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Lord Mackay of Ardbrecknish: My Lords, I of course take the reprimand from the noble Baroness. In every example she gave, needless to say, the household was crowded. Given average housing occupancy in this country, that would be pretty rare. Needless to say, in almost every case, she was talking about elderly parents and disabled parents.
Baroness Hollis of Heigham: My Lords, will the Minister give way? I was careful to say that the DoE research showed that half of them were elderly or disabled. Again, the Minister is trying to put words into my mouth that I did not use. Is his case so weak that he cannot rely on his own arguments and has to impute arguments to me?
Lord Mackay of Ardbrecknish: My Lords, I was just trying to point out that if the noble Baroness really meant what she said, then the logical conclusion to her argument--perhaps "logical conclusion" are not the right words--would be that those non-dependent deductions should be abolished. Because if they bite in the way the noble Baroness complains that the changes to which I shall come in a moment will bite, they must bite at the other levels--the lower levels. The noble Baroness cannot have it both ways. She can make a targeted criticism of our changes, but I regret to say that she seemed to be making a pretty scatter-gun attack on the whole principle of non-dependent deductions.
The noble Baroness clearly wishes to have a discussion on that subject and not on the detail of her amendment. Her amendment, interestingly enough, would introduce consultation, but there is already a fair amount of consultation because changes to housing benefit regulations are subject to referral to the SSAC. It is for that committee to decide whether it wishes to consult interested parties about the Secretary of State's proposals. Additionally, for housing benefit and council tax benefit the Secretary of State is required to consult organisations representing local authorities.
When the Secretary of State consults the SSAC, and the committee decides to go out to consultation and reports subsequently, the Secretary of State is obliged to provide a report to Parliament on his response when the regulations are laid before us. In that respect, the proposed amendment merely duplicates that requirement.
I believe that the noble Baroness is more interested in having a discussion about the changes we have made. As she has rightly pointed out, to date there have been four different groups relating to non-dependent deductions: a group of less than £76; £76 to £114; £114 to £150; and £150 and over. We have decided that we should group after £150. We should group £150 to £200; then £200 to £250; and over £250, rather than make the deduction, which is £32 beyond £150, go beyond £150 and as far as one cares to go. We feel we should put in a couple of extra steps, which is what we have done. So
Those are the changes we propose. The SSAC to which we sent the proposal has agreed that it does not wish to consult on the proposed changes. Nor indeed did it consult formally on the amendments which introduced the present structure of deductions in 1992. The current proposed amendment regulations are still with the local authority associations for consultation.
Non-dependent deductions form an integral part of the social security scheme. I am pleased to hear that the noble Baroness agrees entirely that they should do so. It is a long-established principle that a claimant should not have housing costs paid in full by other taxpayers if there are others in the household who can contribute to those costs. That principle was accepted by the SSAC when the regulations that provide for the current structure were referred to it in 1992.
It is unnecessary to place extra steps into the system when we already have consultation on the statute book. As I have said, that consultation has led in this instance, as on the previous occasion, to the SSAC not going out to consultation.
The noble Baroness made much--of course one can make it at any level, not just at the two new steps we are introducing, which was the point I was making, and which seemed to sting her a little--of the fact that a parent may not know what the other adult member in the household is earning, or the other adult member may not know that deductions from housing benefit are being made. We are talking about adults. It is up to the people who live in the household to make suitable financial arrangements. It is up to the tenant to do so with those people who live with him or her. That includes adult non-dependants, who will most often be the grown-up youngsters of the family. We cannot intervene in arrangements between adults. They should be a matter for them.
The noble Baroness always manages to bring in the disabled. We already provide extra help for a tenant by ignoring the presence of non-dependants if the tenant receives AA or the care component of DLA or is registered blind. Indeed, SSAC acknowledged that in 1992 and agreed that there was no evidence that NDDs were a disincentive for caring. I hope that answers the point that the noble Baroness made.
I am not entirely sure that it would be cheaper for a non-dependant to move out. Even if the non-dependant were paying above the maximum of £39 a week, if your Lordships contrast that with the average private-sector rent of £65 a week, plus £10 a week council tax, they will see that it compares favourably with the maximum total NDD of rent and council tax of £43 a week. That is considerably less than the £75 a week which one might expect on average. I know that that is an average but we must look at the average situation. Therefore, I do not believe that the case is made that young people who live in the family home will find the proposal an imposition which forces them to leave the family home and obtain more expensive accommodation elsewhere.
Non-dependent deduction is an important part of the benefits system. It has a key part to play because it would clearly be quite wrong if, when deciding on housing benefit, we absolutely ignored other income coming into the household. It would be unfair to other taxpayers and rent payers, some of whom might be earning less than the individual who is bringing in the earnings to the household where he is not the tenant.
I believe that we are taking a sensible step forward in adding the two rates at the higher earning level. Of course we will make modest savings but they are part and parcel of the continuing effort which the Government must undertake in order to keep government spending under control. As I said earlier, it is important that we in social security, with a budget of one-third of all government spending, are particularly careful to ensure that in all cases we are being absolutely fair to the taxpayers from whom we take that vast amount of money.
I believe that we are making a small and sensible change which reflects the reality that in some households there will be people earning £150, £200, £250 and more a week. It is quite just that they should be asked and expected to pay their fair share of the rent and council tax imposed on that house.
Baroness Hollis of Heigham: My Lords, I do not believe that the Minister understands exactly what happens in such families. He suggested that we were trying to ignore other income. The amendment never provided for that and I never asked for it. It is proper that adult non-dependants should make a reasonable contribution to the household living expenses. In my opening remarks I made it clear that I believe that the steps proposed are excessive. I believe that the non-dependent deductions are counter-productive and that the additional steps are excessive.
The reason for that is that the vast majority of rented housing is not private-rented housing, as the Minister said; it is council housing and, to a lesser extent, housing association property. The average rent of a local authority council property is £42 a week across the country. If one excludes London from that figure, the national average in England and Wales is considerably lower. Nevertheless, perhaps we may take £42 a week as the national average rent for a local authority property--
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Baroness for giving way. From time to time she accuses me of not living in the real world but I do not believe that in the real world a single adult--that is the type of person about whom we are probably talking--if he decided to leave the parental home, would qualify for a council house. Therefore, I believe that we are talking about him looking for a house in the private-rented sector. I should be amazed if he would qualify immediately for a council house.
Baroness Hollis of Heigham: My Lords, perhaps I was not clear or the Minister was not concentrating. That was not what I said. The family, the household, would be living in a council house for which the average
Let us assume that, as a result of believing that it is unreasonable that he should pay £39 out of £42 a week rent, he moves out perhaps to a private-rented flat or, if he is on a waiting list, to a council flat. He might move in with someone else. However, he will almost certainly find somewhere cheaper than the £39 a week that he is contributing to his parents' housing benefit. Immediately he moves out the Government have to pay the housing benefit in full for the parental home; that is the full £42 a week. If the son, now in a place of his own, loses his job the Government will have to pay his housing benefit too.
Although there may be some short-term savings, I believe that the consequences of the Government's position are perverse. I speak from experience because I see young people moving out of the home when they are expected to contribute half or even more of the rent of the parental home. I am worried not only about the financial consequences but about the fact that we are breaking up a family situation. The adult child might have been willing to live at home and there may now be implications for the family, especially as regards carers where there is a disabled member of the family. However, I beg leave to withdraw the amendment.