New Clause 8
Welfare Reform Bill
10:45 am
Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)
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.