Instruments reported
The Committee has considered the following instruments
and has determined that the special attention of the House should
be drawn to them on the grounds specified.
A. Social Security (Claims and Payments) Amendment
(No. 2) Regulations 2006 (SI 2006/3188)
Summary: These Regulations aim to encourage low-cost
lending schemes by allowing third-sector lenders to have repayments
deducted from a claimant's benefits where normal repayment arrangements
have broken down. The Social Security Advisory Committee (SSAC),
a statutory consultee, has recommended that the Government should
not implement these Regulations. SSAC was concerned about the
cost-effectiveness of the scheme's administration and about the
impact on the claimant of multiple deductions from benefits which
risks undermining the original purpose of such deductions: that
of clearing priority debts such as housing and fuel costs. We
consider that the Explanatory Memorandum for this instrument is
unsatisfactory: it does not explain how this new scheme will fit
in with the existing structures, and gives no evidence of why
it will be an effective solution. We also consider that a cost/benefit
analysis and consideration of a range of other options for achieving
the same objective by alternative means should have been provided,
particularly in the light of the SSAC's criticisms that the proposal
does not appear to present value for money.
These Regulations are drawn to the special attention
of the House on the ground that they may imperfectly achieve their
policy objectives.
1. The Department for Work and Pensions (DWP)
have laid these Regulations under sections 5, 189 and 191 of the
Social Security Administration Act 1992 together with an Explanatory
Memorandum (EM). The Regulations are the subject of a report by
the Social Security Advisory Committee (SSAC)[1],
a statutory consultee, which recommends that the Regulations should
not be implemented.
2. The "third party deduction scheme"
currently allows money to be deducted from certain benefits to
repay housing, council tax, child support or utility debts and
court fines. These Regulations extend the scheme to allow third-sector
lenders (e.g. credit unions) to have repayments deducted from
a claimant's benefits where normal repayment arrangements have
broken down, with the aim of encouraging low-cost lending schemes.
Under the new arrangements, deductions will be set at a maximum
of 5% of the benefit (or £2.90 for 2006-07), but there is
also a ceiling which limits total deductions to 25% of benefit
entitlement. If the claimant has already reached this limit, then
other third party debts could displace the credit union debt and
so the lender would have to make alternative arrangements for
its recovery. We consider that the stated objective of reducing
the risk to those providing low-cost loans may not thus be secured.
3. Although a statutory consultee, a report such
as that issued by the SSAC in this case is unusual. The report
expresses a number of concerns about the cost effectiveness of
the scheme's administration, and about the impact on the claimant
of multiple deductions from benefits which risks undermining their
aim of providing the claimant with adequate fuel and food. The
SSAC Report concludes: "The Government should look for
more effective ways of improving access to low cost credit for
low income consumers. We also recommend that there should be a
review of the system of deductions from benefits including those
for debts to third parties, before there is any further widening
of the scheme. This review should consider issues of consistency
in policy and efficient administration as well as the impact on
claimants of the deductions from benefits." (paragraphs
7.1-2).
4. The Government response to the Report (published
in the same Command Paper as SSAC's Report) indicates that they
have made some modifications to meet minor elements of the SSAC's
criticism, but the changes do not alter the basic principles of
the proposal.
5. The Government argue that it is necessary
to encourage credit unions and those that offer low-cost loans
to reduce the reliance of the lowest paid in society on "loan
sharks" who charge punitive interest on the unsecured loans
they provide. We applaud that objective, but remain to be convinced
that these Regulations will achieve it in a cost-effective way.
Departmental set-up costs of £3m are mentioned, but take-up
is not expected to be more than a maximum of 50 lenders or 5,000
cases per year. The SSAC Report took the view that this scheme
would not be cost-effective and noted that the minutes of the
Financial Inclusion Taskforce meeting in July 2006 also reached
this view (paragraph 5.3 (i)). Certain respondents to the SSAC
consultation suggest that the set-up costs could be used to address
the problem in more effective ways, and others stated that, as
credit unions already have a facility that enable state benefits
to be paid directly to a claimant's credit union account, the
scheme was potentially adding no value.
6. The Explanatory Memorandum to this instrument
was unsatisfactory. The document refers to but does not explain
the instrument's connection with, or the purpose of, Growth Funds,
the Government's Financial Inclusion Strategy and Social Fund
Budgeting Loans. It rehearses the difficulties of the poorest
in society in obtaining affordable credit, but lacks convincing
arguments why this scheme will be an effective solution. We also
consider that a cost/benefit analysis and consideration of a range
of other options for achieving the same objective should have
been provided, particularly in the light of the SSAC's criticisms
that the proposal does not appear to present value for money.
B. Housing (Assessment of Accommodation Needs)
(Meaning of Gypsies and Travellers) (England) Regulations 2006
(SI 2006/3190)
Summary: These Regulations define the term "gypsies
and travellers" for the purpose of section 225 of the Housing
Act 2004, which places a duty on local housing authorities to
assess the accommodation needs of gypsies and travellers when
assessing the housing needs of the population under section 8
of the Housing Act 1985 (periodical review of housing needs).
The Regulations respond to concerns about the importance of ensuring
that the accommodation needs of gypsies and travellers are taken
into account by local housing authorities.
These Regulations are drawn to the special attention
of the House on the ground that they give rise to issues of public
policy likely to be of interest to the House.
7. The Department for Communities and Local Government
(DCLG) have made these Regulations under section 225(5)(a) of
the Housing Act 2004 ("the 2004 Act"). An Explanatory
Memorandum (EM) and Regulatory Impact Assessment (RIA) have also
been provided.
8. Section 225 of the 2004 Act imposes a duty
on local housing authorities to carry out an assessment of the
accommodation needs of gypsies and travellers residing in or resorting
to their district, when undertaking a review of housing needs
in their district (under section 8 of the Housing Act 1985). These
Regulations define "gypsies and travellers" for the
purposes of that duty in relation to England.
9. The EM states that, following enactment of
the 2004 Act, priority was given to completing an internal Gypsy
and Traveller Policy Review (conducted between 2004 and 2005),
and that this review highlighted the need for a broader definition
of gypsy and traveller for Housing Act purposes. As a result,
the Government consulted on the definition of "gypsies and
travellers" to be included in the Regulations between February
and April 2006[2].
10. The EM confirms that the definition of gypsies
and travellers used in SI 2006/3190 mirrors the definition used
in the Social Landlords (Permissible Additional Purposes) (England)
Order 2006 (SI 2006/1968), which was laid before Parliament in
July of this year. While the Committee did not bring SI 2006/1968
to the special attention of the House, we received additional
information from DCLG which we published as an Appendix to our
44th Report of the 2005-06 Session. That information contained
much of the material offered in the latest EM to explain why the
Department have rejected the use of a single definition of "gypsies
and travellers" for housing and planning purposes. In addition,
the latest EM sets out the Department's reasons for proposing
a definition that "separates the various groups that are
covered by it although it still encompasses other travellers who
pursue a nomadic way of life rather than being confined to Romany
Gypsies and Irish Traveller".
11. The House debated SI 2006/1968 on 3 November
2006.[3] Lord Avebury commented
on the delay in bringing forward that Order, and acknowledged
that it had resulted from the need to consult on the definition
of gypsies and travellers. As the latest EM makes clear, this
consultation process has also delayed SI 2006/3190. In making
the Regulations, the Government have taken an important step towards
responding to concerns expressed in this House about the importance
of ensuring that the accommodation needs of gypsies and travellers
are taken into account by local housing authorities.
C. Common Agricultural Policy Single Payment
and Support Schemes (Cross-compliance) (England) (Amendment) Regulations
2006 (SI 2006/3254
Summary: These Regulations amend existing arrangements
for securing cross-compliance by those receiving direct payments
under the Common Agricultural Policy. We continue to be concerned
that these arrangements may be unduly complex.
These Regulations are drawn to the special attention
of the House on the ground that they give rise to issues of public
policy likely to be of interest to the House.
12. The Department for Environment, Food and
Rural Affairs (DEFRA) have made these Regulations under section
2(2) of European Communities Act 1972. An Explanatory Memorandum
(EM) has also been provided.
13. The EM states that the Regulations ("the
2006 Regulations") amend the Common Agricultural Policy Single
Payment and Support Schemes (Cross-compliance) (England) Regulations
2005 (SI 2005/3459: "the 2005 Regulations"), notably
to designate a competent control authority (enforcement body)
for the new animal welfare standards; to make changes to the competent
control authority designations for existing standards; and to
revise the requirements for the Soil Protection Review. It specifies
a number of other minor amendments made by the Regulations.
14. As the EM explains, cross-compliance links
direct payments under the current European CAP to compliance with
certain standards and requirements. In recent years, DEFRA have
brought forward a number of statutory instruments to implement
the policy of cross-compliance in agriculture. These included
the 2005 Regulations (SI 2005/3459), which the Committee brought
to the special attention of the House in January of this year.[4]
In our report, we commented that the 2005 Regulations demonstrated
the complexity of the arrangements (standards, conditions, rules
etc.) which apply in these areas, and that they underlined the
importance of providing clear and effective guidance to farmers
required to comply with them.
15. After considering the 2006 Regulations, we
feel obliged to reiterate those comments. The arrangements include
both statutory management requirements (SMRs), derived from Community
legislation, and standards of good agricultural and environmental
condition (GAEC), decided by Member States. The 2006 Regulations
provide for three new animal welfare SMRs (nos. 16-18), and also
amend and update provisions relating to the Soil Protection Review,
to take account of those who will for the first time need to complete
such a review.
16. The EM states that these changes are set
out in the "Cross Compliance Handbook for England: 2007 edition
supplement", which was sent out in November 2006 to all farmers
claiming the Single Farm Payment.
17. The principal text of the Cross Compliance
Handbook for England (CCH) is the 2006 edition which can be accessed
on DEFRA's website,[5]
and which runs to 77 pages. A 2006 supplement has to be read alongside
the CCH; also available on DEFRA's website,[6]
this extends to 20 pages. The 2007 supplement is published on
the Rural Payment Agency's website,[7]
and runs to 50 pages. It contains the following introductory statement:
"The Cross Compliance Handbook for England 2006
edition sets out the cross compliance requirements and standards.
This supplement details the new Statutory Management Requirements
for 2007 and updates other cross compliance requirements for 2007
and subsequent years. It includes important information that you
should read in conjunction with the Cross Compliance Handbook
for England 2006 edition … and the Cross Compliance Handbook
for England 2006 edition supplement …."
18. We understand this to mean that the full
extent of the current text of the CCH comprises over 140 pages,
issued in three separate tranches. We would repeat that this suggests
an unhelpful degree of complexity in DEFRA's approach to securing
cross-compliance. We consider that this concern appears all the
more justified in the light of the statement included in the introduction
to the 2007 supplement that "during 2007, we plan to begin
work on a full 2008 Handbook, including a new design and format
developed in consultation with the farming industry and stakeholders
to be of greater benefit to you".
19. The House may wish to seek assurances from
the Government that the arrangements for cross-compliance in agriculture
are being kept under review, and that efforts are being made to
purge them of undue complexity.
1 Command Paper Cm 6974. Back
2
The consultation paper was entitled "Definition of the term
'gypsies and travellers' for the purposes of the Housing Act 2004". Back
3
See HL Deb, 3 November 2006, col 540.
Back
4
20th Report of Session 2005-06. Back
5
See: http://www.defra.gov.uk/farm/capreform/pubs/pdf/XCHandbook2006.pdf
Back
6
See: http://www.defra.gov.uk/farm/capreform/pubs/pdf/CrossCompSupp02.pdf
Back
7
See: http://www.rpa.gov.uk/rpa/index.nsf/15f3e119d8abcb5480256ef20049b53a/d038c52f444da928802572220057e46e/$FILE/PB12276.pdf
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