Amendments of Supplementary Benefits Act 1976

Clause 12 – in the House of Commons at 12:00 am on 24th March 1977.

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Lords amendment: No. 4, in page 12, line 21, at end insert (2A) Subject to subsection (7A) below, regulations under the preceding provisions of this section may be so made as to take effect from the commencement of the Supplementary Benefits Act 1976.

Photo of Mr Eric Deakins Mr Eric Deakins , Waltham Forest Walthamstow

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

With this, we are to discuss also Lords Amendments Nos. 5, 6 and 7.

Photo of Mr Eric Deakins Mr Eric Deakins , Waltham Forest Walthamstow

These amendments became necessary as a result of the judgment of the Court of Appeal in the case of Atkinson v. the Barnsley Supplementary Benefits Appeal Tribunal, which was delivered after the Bill had left us for another place. The aim of the amendments is, in brief, to provide statutory backing for the Commission's use of its discretionary power in the past—not just in its application to students—and to provide a firm statutory base for the continuation of its policies in the future.

The judgment of the Court of Appeal was to the effect that the Supplementary Benefits Commission has been in error in law in its past handling of claims from students and that it cannot rely on its existing discretionary powers to implement its long-standing policies towards students. The House agreed on Report that the Commission should continue to implement its traditional policies towards students, and inserted Clause 12(1) and (2), which will, after Royal Assent, give the necessary statutory backing. The present amendments introducing a new subsection 2(A) to Clause 12 contain a power to ensure that regulations made under Clause 12(1) and (2) may be made so as to cover past cases. This is to avoid having to look again at cases that have been settled since the Supplementary Benefit Scheme began 10 years ago, which would bring the Commission's current work on meeting urgent need to a halt. I should make clear the purpose of the new sub-section (7A), which is to ensure that the legislation does not have the effect of nullifying the judgment of the Court of Appeal in relation to the particular case which was before it.

The amendments also seek to deal with a general issue which arose in the judgment of the Court of Appeal to which I have referred. The court also ruled that the wording of the Supplementary Benefits Act was not such as to enable the Commission to use its discretionary powers in relation to classes of cases as distinct from individuals, and this has left the Commission in the position of having an extremely shaky statutory basis for a wide range of its policies and the payments it makes.

Paragraph 4(1) of the First Schedule to the Supplementary Benefits Act 1976, which consolidates a similar paragraph in the 1966 Act, gives the Supplementary Benefits Commission power to increase or, in the case only of a supplementary allowance, reduce the benefit entitlement which would otherwise be arrived at, in order to take account of any exceptional circumstances. The Commission uses this power not only in relation to exceptional circumstances of an individual case but also in relation to categories of cases. Indeed, it is inevitable that discretion should be exercised in this way in such a scheme as supplementary benefit which deals with millions of claims a year. It would clearly be impracticable to consider each case individually.

Ever since 1966 the power has been used in many circumstances to increase benefit. I shall give two examples. The Commission awards substantial heating additions at standard rates and special diet addition of set amounts to fairly wide categories of claimants meeting specified criteria, such as illness or infirmity, or with accommodation that is difficult to heat. At the moment, over 1 million heating additions are in payment and there are about 300,000 additions for special diets. On the other hand, it has also been used on a much smaller scale to reduce or deny benefit to some categories of claimants whom it would be anomalous to support from public funds.

6.0 p.m.

As I have indicated, the Court of Appeal's judgment would lead to additional expenditure in some areas, possible hardship in others and a breakdown of confidence in the Supplementary Benefits Scheme. Urgent action has to be taken to restore the position to what the Commission had hitherto thought it was, and this is the purpose of our proposed subsection (6A).

It has been found necessary, as with the provisions relating to students, to ensure that this amendment has effect in relation to past cases, otherwise there is a real risk of old cases being reopened and so disrupting the work of local offices in trying to help people currently in need. This simply restores the situation to that which successive Governments have for many years thought existed. No claimant will suffer any detriment.

Consequential amendments to Clause 21 of the Bill ensure that the provisions embodied in these amendments shall come into force on the passing of the Act.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

We come now to the latest chapter in what has been the very chequered history of the Government's intention to make sense of the provision for students during vacations. The process started on 23rd February with a Written Answer from the former Secretary of State for Education and Science, when he announced that, from the start of the new academic year which began last September, students would be treated as having part of their grants attributable to the Christmas and Easter vacations and that that would be switched from the summer vacation.

The Government tried to give legislative backing to that announcement when they published the Social Security (Miscellaneous Provisions) Bill before Christmas. It was in a form which aroused hostility from all parts of the House, for the simple reason that it proposed to disentitle students from supplementary benefit at all and to replace that entitlement with a hardship scheme to take care of the minority of students in special circumstances—those who were householders, had dependants or had to maintain flats during the vacation.

On Second Reading, however, we found that "There ain't no hardship scheme." It did not exist. There was no money, no administration and no provision for financing it. Furthermore a number of hon. Members, notably the hon. Member for Coventry, South-West (Mrs. Wise), asked forcibly what a hardship scheme would achieve that the Supplementary Benefit Scheme could not. After one of the most hard-pressed speeches that he can have made in his political career—I shall never forget the way in which he was hammered from all sides—the Minister for Social Security undertook to take the Bill away and look at it again.

As a result, a new clause in Committee reinstated the entitlement to supplementary benefit but provided that the parental contribution, even if not paid, should be treated as paid. That aroused some hostility. First, it was obvious that the Government were forgoing the savings that they had undertaken by introducing the clause in the first place. Second, it appeared that the Department of Education and Science, none of whose Ministers was on the Committee, had played no part in the matter at all, apart from the former Secretary of State's original announcement. Altogether, the position appeared to be one of considerable confusion and conflict. Therefore the Committee rightly threw out the relevant subsection and the Bill was reported with that clause headless, as it were—lacking its main operative part.

On Report the Government sought to put the clause back, saying that it was essential if they were to give statutory backing to the SBC's practice of treating a parental contribution as though it were paid even if it were not. Some Government supporters still felt in difficulties, but the Opposition felt that that was the responsible thing to do.

We have all along accepted the view of the SBC, as expressed in paragraph 5.11 of its 1975 Annual Report, that it is not a proper function of the Supplementary Benefit Scheme to see to student support. We accept that and we hope that it is still the Department's long-term aim.

Then the Government lost yet another case before the courts. They have been very unlucky in their litigation—Laker Airways and Tameside, for instance. In this case, a 22-year-old law student took them to the Court of Appeal and single-handedly defeated the entire might of the Department of Health and Social Security. He established his entitlement to supplementary benefit on the footing that the Commission was not entitled—I must say this very carefully, because Mr. Atkinson wrote a letter to The Guardian setting out his case exactly—to take account of the parental contribution, and that it did not form part of the resources to which the Commission had to have regard in fixing a student's entitlement to benefit.

The Minister just now thanked all parties in another place for the speed with which they had dealt with this matter. I cannot reciprocate, because the Government have dealt with it in an astonishingly lackadaisical way. I shall not quote all the passages from Committee, but the Government made it clear that they had to get the Bill out of Committee by 1st February so that it could become law in time for the new rule to operate from the start of the Easter vacation. We did not then know the outcome of the Atkinson case, but the Government wanted the statutory authority to start at that time.

We gave them the Bill out of Committee on 1st February, but it was not until 14th February—a whole week later than necessary—that it was considered on Report. After Report and Third Reading in this House, the House of Lords did not have its Second Reading debate until 3rd March—more than another fortnight—and the Committee stage there did not begin until 14th March, nearly another fortnight later.

From the time that the Bill left Standing Committee here until it went into Committee in the Lords, nearly six weeks was wasted when perhaps no more than two or two and a half weeks would have been necessary. As a result, students are lining up before the counters in supplementary benefit offices and doing what the Government did not intend them to do—claiming supplementary benefit. Moreover, they are claiming it on the basis of the Atkinson case, on the footing that the parental contribution cannot be treated as part of the resources if it is not paid.

We also know from what was said in The Guardian before Christmas that the Government had already sent out circulars to their supplementary benefit offices instructing them to deal with students on the basis of the existing practice—that the parental contribution should be treated as paid.

Therefore, we now have a yet further application, again involving retrospective legislation, to try to clear up the muddle the Government have got themselves into. The Government have got themselves tied to this problem because of their disaster before the Court of Appeal. A further factor, as the Minister made clear, is that the practice on which the SBC has been operating—of making rulings for whole classes of people—turns out to have no statutory backing. The Government must therefore put that right. Goodness knows how much money could be at risk if that were not done.

With our customary responsibility, our interest in the welfare of the public purse and our intention that everything is done which should be done, we will not oppose the amendments. Once again, however, I cannot congratulate the Government on the way in which they and their Departments have handled this matter.

The handling of this matter has been shameful There has been total confusion from beginning to end because there has been real conflict between the interests of the Department of Education and Science, with its concern for students, and the Department of Health and Social Security, with its interest in the proper administration of the Supplementary Benefit Scheme. That is the real reason for the trouble, whatever might have been said by the Minister of State for Education and Science in a truly astonishing speech on Report. The Minister cannot look back on that speech with any pride.

The people who have been the losers are the normal clients of the Supplementary Benefits Commission—people who look to that Commission for their livelihood because they have no other means at their disposal. But they have had to queue up with students who should not be there, and their claims have been made more difficult as a result.

The Commission's staff had hoped that they would not be grappling with payments of supplementary benefits to students. We know that 73 per cent. of students in respect of whom the parental contribution is assessed do not get the whole or part of that parental contribution. That is a high proportion of students, and as a result of the Atkinson case these people are now entitled to go to the Supplementary Benefits Commission and draw benefits on the basis that the notional contribution cannot be treated as part of their resources. This is not the happiest chapter in the affairs of either the Department of Health and Social Security or the Department of Education and Science.

I urge the Minister to give us two clear, categorical pledges. The first is that he will go back to the Department of Education and Science and tell his right hon. and hon. Friends there that he will not put up with this sort of thing again. The Department must now produce a proper scheme to make sure that students do not suffer hardship in the vacation, but it is no part of the functions of the Supplementary Benefits Commission to do this. The Department of Health and Social Security must make that clear to the Department of Education and Science.

The second pledge is much more immediate. The Government have given an indication that they want the Bill finished before 7 p.m., when we are to consider opposed private business. The Bill will then return to the Lords and the matter will be finally disposed of, and Royal Assent will be given later tonight or tomorrow. We will see that this is done. Is it the intention of the Government, the minute Royal Assent is through, to make sure that from that moment their intentions are implemented? The great generality of students should not be entitled to clog up the counters of the Supplementary Benefits Commission.

We are already half way through the Easter vacation, and it is up to the Government to salvage something from the wreckage. Public money should cease to be paid out in this way. If the Government can give those undertakings on both those fronts, we could perhaps allow this Lords amendment to go through.

6.15 p.m.

Photo of Mr Eric Deakins Mr Eric Deakins , Waltham Forest Walthamstow

I think that the right hon. Gentleman has given, even for him, a rather biased summary of the progress of the Bill and of this particular provision. He has mixed up what happened in Committee on the clause relating to supplementary benefits—Clause 13(1)—with Amendment No. 63, which was voted down by the Opposition. Amendment No. 63 had nothing at all to do with withdrawing supplementary benefit from students. It was the guts of the proposal that we brought back at Report stage and which went back into the Bill as Clause 12(1) and (2).

The right hon. Gentleman knows that I am not responsible for what goes on in another place. I know that their rules of procedure are rather different from ours because of the number of days that have to elapse between the various stages of Bills.

I hope that we will be able to tidy this up once and for all. The Court of Appeal has helped to get us into this position. We had no idea when the Bill was drafted that this particular judgment would come up at this particular time. It is just as well it did, because it has enabled us to take cognisance of that decision and to put the law back to the state in which we thought it was. In this matter I speak for all Governments—we all thought that the law was different from what it actually was.

There was a certain amount of confusion in Committee and we did our best to put it right. Talking about the contributions of specialists in education to this debate, a prime example was the very long speech in Committee from the hon. Member for Ripon (Dr. Hampson) who joined in our deliberations.

Certainly we shall be, and are, in touch with the Department of Education and Science. We are in close contact with that Department over the student grants system and the amendments that will be needed because of the provisions of the Bill.

The second provision is more urgent. Claims determined before the Bill becomes law, and the regulations made under it, will be dealt with in accordance with the law as defined by the Court of Appeal—£4 disregard will be given, and no account will be taken of parental contribution when satisfactory evidence is produced that that has not been made. All claims determined after the Bill becomes law and the regulations have been made will be dealt with as it is then—normally no disregard, and parental contribution will be taken into account. Exceptions will be made in the case of severely disabled students and lone parents, who will get a disregard of £2 on their grant and the assessed parental contribution will not be taken into account unless it is made in cash or kind.

The regulations will be made immediately after Royal Assent. The right hon. Gentleman is in possession of information that I do not have. I have no idea when Royal Assent will be given, but I assure him that the regulations will be made as quockly as possible after Royal Assent.

Question put and agreed to.

Lords Amendments Nos. 5, 6 and 7 agreed to.