Housing Benefit

– in the House of Commons at 5:35 pm on 27th June 1985.

Alert me about debates like this

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 5:35 pm, 27th June 1985

I have to inform the House that I have selected the amendment in the name of the Prime Minister.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security) 7:13 pm, 27th June 1985

I beg to move, That this House condemns the Government's record on Housing Benefit which brought administrative chaos when it was introduced and has since been repeatedly cut with the result that pensioners and poorer families have been deprived of essential help with housing costs; and opposes further proposals in the social security reviews which would bring further cuts and greater poverty. The history of housing benefit has been one of the most extraordinary—and and that is saying something—in the lifetime of this Government. The Government have been warned consistently about the structure of the benefit itself and about the problems created by the timing of the changes that they propose. Consistently, the Government have ignored the warnings and now, in their amendment, they blandly try to take credit for simplifying the system that they introduced. I shall look first at the proposals that the Government have laid before us and then briefly at their record in this area.

Housing benefit highlights the absurdity of the Government's pretence in the Green Paper, that no figures are available for the changes that they have discussed. Not only have examples been given of a joint taper of 70 per cent. that might be proposed, but we have been told what losses or cuts the Government expect to make from their housing benefit proposals. They expect to save some £500 million.

On the basis of the 70 per cent. example given in the Green Paper, I understand that a pensioner couple on about £75 a week would lose the whole of their present rebate of almost £5. Similarly, a married couple with two children on £110 a week, which is not a large sum by anybody's standards, would also lose all or most of their present rebate, again of almost £5. Those are substantial sums for people on such incomes, particularly for those who are trying to raise children.

One of the first things that we hope to hear from the Government in the debate is whether those figures are accurate and how great the damage to claimants will be. The Government know that they will save £500 million but they claim that they do not know who will contribute to the savings. They do not know how they will contribute to the savings or how much each particular group will lose in order to make that contribution. My first quesion is: is there any further titbit of information that the Under-Secretary can give us about the numbers of gainers and losers? If not, why not? If not, the unworthy thought occurs to us that it may be because of the contrast between the review team's proposals and those of the Government, and perhaps more because of the effects of the review team's proposals.

In the recommendations from the carefully selected group that carried out the review, we were told that about one third of those who get housing benefits would lose, although about one quarter — a smaller, but still substantial, number—might gain. However, when the review team suggested that there might be somewhat more losers than gainers, and that that was the order of magnitude, it was on the basis that the same money would be available from the scheme as a whole, and that there would be separate rent and rates tapers. Even with those provisos, the review team identified losses for what was reckoned to be 3 million people who now receive housing benefits.

The Government are not making the same proposals. They are proposing not nil-cost changes, but changes that will save at least £500 million. Nor are the Government proposing separate rent and rates tapers—they are going for a joint taper. On rebates alone, it looks as if the Government's proposals will mean losses for 5 million people. On rent and rate rebates, it looks likely that about 7 million people will suffer losses in their housing benefit.

If those figures are incorrect, we should be happy to learn from the Minister what the real figures are, but the Government's reluctance so far to give us any information makes us suspect that those figures may be accurate. Of the 5 million to 7 million people who will lose benefit, it has been estimated that between 1 million and almost 2 million will lose all entitlement to any housing benefit.

That brings me to the second question that I should like to ask the Minister, which is in two parts. First, I noticed that on Monday his hon. Friend the Minister for Social Security said in a reply to my hon. Friend the Member for Dunfermline, East (Mr. Brown) that the £500 million savings that the Government hope to gain may be drawn over a period. The first thing that we want to know is, what period?

Secondly, what we should most like to know is whether the £500 million savings quoted by the Secretary of State include the savings from the proposal that claimants pay at least 20 per cent. of their rates. It has been estimated that taking 20 per cent. of rates from claimants would bring in some £250 million. If that is part of the £500 million, we accept that it is a substantial part of it, although we would argue that it is an unjust proposal. However, if it is not part of the £500 million, it means that we are talking about savings of some £750 million, an increase of 50 per cent. on the savings that the Government have admitted, so far, that they wish to make.

We are talking about enormous sums—more than the Government have already saved in the many cuts that they have made in housing benefit in the past couple of years. The savings through the 20 per cent. of rates proposal will be more than the Chancellor tried to cut from housing benefit in July 1983, just after a general election campaign in which he told us how terrific our economic performance was, and that roses and gaiety were around the corner. Sadly, only a month or so later, he had to introduce cuts in housing benefit. We are talking about even greater cuts than those.

These large savings do not result from the recommendations of the Government's review body, and this applies particularly to the proposal to take 20 per cent. "at least", to use the Government's phraseology, in rates. The review body said: 100 per cent. help with housing costs for those on the lowest incomes is the only fair way of meeting their needs within the present vagaries of the housing market. We wholeheartedly support that view.

We know that the Government intend to remove help with water rates while at the same time, with another hat on, they are forcing up the water rates. Is there any intention to offer any recompense to those claimants who will be asked to pay 20 per cent. of their rates, even at the level of the rough justice of an average figure, which will be disadvantageous to those in areas with high rates?

Apart from the proposals to take 20 per cent. of rates from claimants, we also oppose the severity of the proposed rate taper. Here, both the Government and the review team are guilty of peculiar logic. In the phrase much beloved of the Government, they say that the rate taper goes too far up the income scale. Their justification for that is that it goes further up the income scale than the rate taper. However, the only reason for that is the Government's cuts in April 1983, April 1984 and November 1984. They have used the cuts that they made to justify further cuts in the rate taper.

The proposal for such a combined sharp taper will hit most the least well off owner-occupiers who get help only with their rates, and who so often figure among those groups for whom the Government claim to have concern. Again, the Government and the review team part company. The review team proposed to sharpen the rates taper. Although we question its logic in doing so, it also proposed that some form of what one could call rent rebate—in other words, some other help—should be available to all owner-occupiers, so that the impact of the reduced rate rebate that it proposed would have been diminished. Characteristically, the Government have taken the proposal for cuts and left out the proposal for improvement. Once again, one of their hand-picked review teams has gone too far and been too generous for the Government's liking.

It seems that the Government may further restrict the entitlement of those on supplementary benefit for help with mortgages, although they must be aware that that is bound to lead to an increase in the number of evictions. I understand that the number of people in serious arrears, which was running at 8,400 in 1979, rose to 29,000 last year. That is under a Government who claim to be devoted to encouraging owner-occupation. Proposals such as those that the Government are making can only lead to these figures rising, and to increases in evictions.

Photo of Mr Roland Boyes Mr Roland Boyes , Houghton and Washington

Is it not a fact that in 1984, according to building society figures, there were 11,000 repossessions? A number of those people will find themselves on the homeless lists, and a number will come under board and lodgings regulations. The Government had to admit this week that they had got those regulations wrong. Is there not a strong possibility that they have also got this proposal wrong?

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

My hon. Friend is correct, and it is an unfortunate feature of the Government's housing and social security policies that they continually create conditions of whose affects they then complain.

Another action proposed by the Government that will create substantial disadvantages is the proposal to remove from local authorities the discretion they have to give greater help to particular groups. As local authorities seem mostly to exercise, that discretion to the benefit of groups such as widows and war pensioners, about whom the Government claim to be concerned, this is a strange proposal for the Government to introduce. How many gainers and losers will there be from the proposals to remove that discretion from local authorities?

How many gainers and losers are there likely to be from the effects of removing the extra help available for those in high-rent areas? I seem to recall that last March, when we were discussing the changes that the Government were then making in the proposals for high rents, some 120,000 people were being affected. Presumably, those people are likely to be affected, all of them for the worse, by the Government's proposals and in some areas undoubtedly substantial sums could be involved for the individuals who will be affected.

All these proposals are particularly disgraceful because they follow the removal of the Government's general subsidy, which has forced up rents. We are horrified and appalled at the thought that the Government are likely to try to take as much as £500 million from housing benefit. Since 1979, they have already taken about £1,300 million from general subsidies for housing and councils' housing revenue accounts. This follows the pattern identified by my hon. Friend the Member for Houghton and Washington (Mr. Boyes).

When the Government began this process of cutting the general subsidy to housing accounts, they gave reasons that may sound remarkably familiar. They said that it was better to cut the general subsidy because then they would be able to target help on the poorest through housing benefit. Having cut the general subsidy, and increased rents so that more people were forced to draw housing benefit, they then forgot about targeting help on the poorest, and said that, as too many people were claiming housing benefit, that would be cut.

In these curcumstances, it is no wonder that not only the Labour party but all who are on benefits regard the Government's talk about targeting and efficiency with considerable cynicism. They know that targeting and efficiency, may be the buzz words for cuts this year, but next year and the year after the Government will have different buzz words, although they will be pursuing the same policy.

Photo of Roger Gale Roger Gale , North Thanet

Does the hon. Lady concede that the purpose of social benefit is to help those in most need and that therefore targeting is worth while if the system is to be effective?

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

The hon. Gentleman has fallen prey to a delusion common to Conservative Members. The words he used, and the description he gave, have been given for every mean-minded poor law system since time began. The idea of the welfare state is not what the hon. Gentleman identifies.

Photo of Roger Gale Roger Gale , North Thanet

The hon. Lady is ducking the question.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

I am not ducking the question. I am not surprised that the hon. Gentleman does not understand, because the policies of his Government show every sign not only of a lack of understanding but of their wish to destroy the welfare state. The whole point of the welfare state is that it is for everybody—everybody pays as much as he can when he can, and everybody should have the right to draw when he has a need. That is what the welfare state is about, and it is because it is about everybody being able to draw to the extent that he needs when he has need that it is more expensive. The welfare state is not just for the poorest.

Surely the Government are not claiming that, under them, anybody who has need can draw benefit. Over 1 million people have lost entitlement to housing benefit since 1983. These people had need and were drawing benefit and they have lost the money only because the Government have made cuts so that they could give more away in tax handouts to the wealthy. If the hon. Member for Thanet, North (Mr. Gale) does not understand that, he does not understand the welfare state.

Photo of Roger Gale Roger Gale , North Thanet

Answer the question.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

I have answered the question. The hon. Gentleman does not understand anything about the welfare state or the reasons why most people attach such value to it. Fortunately, it is a loss that will cost him and his party dear.

Over the past couple of years, the Government have taken 1 million people out of housing benefit entitlement. The numbers of claimants have grown only because of the failure of the Government's economic and housing policies—a failure that, characteristically, they blame on everybody but themselves. However, the penalty for that failure they exact from claimants. The Government's proposals are also likely to cause problems for local authorities.

The subsidies for housing benefit, now 100 per cent., though less in some cases, will be cut to 80 per cent. From what we can discover — the Government give no justification—this is an arbitrary figure. As I am sure the Minister is aware, local authorities believe that this will mean substantial cuts in the sums made available to them. Will local authorities lose money, because of the change in the subsidy offered to them? If so, what is the justification?

Local authorities will lose the 60 per cent. grant that they were given towards the cost of administering the scheme—yet another flagrant breach of an undertaking which the Government gave only a couple of years ago, when the scheme was introduced. This is another extraordinary example of how the Government are proceeding. In the same Green Paper, the Government have reduced the money local authorities receive in subsidies for administration and they have had the cheek to say that claimants have got to pay at least 20 per cent. of rates to encourage them to press authorities to reduce the costs that the Government have just increased by the proposed administrative changes. Not the least of these is the burden of collecting the 20 per cent. deduction from, I understand, some 2·5 million households. The Government then have the unmitigated gall to tell local authorities that they are reducing this 60 per cent. subsidy, not—perish the thought—just to save money, but to provide a greater incentive to local authorities to contain costs and improve efficiency". The local authorities are less than amused by the gall of the Government. Local authorities never wanted the housing benefits scheme as it was introduced, and they have consistently told the Government that they have not been allowed enough time or enough funds to run the scheme properly. The permanent secretary to the Minister's Department admitted that to the House recently. The Government have now taken the subsidy away from the local authorities, they say to encourage local authorities to improve efficiency. This is similar to the nonsense that we heard about the National Health Service, and it is equally unwelcome.

The justification which is continually cited for cutting housing benefit is that benefit is paid too far up the income scale. May I remind the Minister again—we cannot get this on record too often — that, for those who pay average rents, all entitlement to benefit for a two-child family is lost at more than £40 below average national wages. Those who live in areas where rents are higher have had rents forced up, but they receive housing benefit above that level, perhaps even up to average wages. I assure the Minister that those people would be only too pleased if the Government were to restore the housing subsidies cut so that their rents could be cut and hence there was no need for them to claim housing benefit, only to be abused by the Government for doing so.

We condemn the effects of the proposals in the Green Paper. We find it outrageous that the proposals are put before us in the Green Paper while we are in the middle of a consultation period — a consultation period of a whole four months. That was not excessive, one might have thought, for—what was it?—the most fundamental review since Beverage. But four months is too long for this Government to wait for their policies to come to the House to take effect.

The changes which the Government have proposed in the uprating—it may be an uprating in some benefits but the term is not justified for housing benefit—make exactly the same kind of reductions in rate support that are proposed in the Green Paper, or at least in some of the proposals. It is proposed in the Green Paper to reduce the rates taper to 21 per cent. on net income. However, in the November upratings, when the Government make the rate taper 13 per cent. on gross income, they will carry out the policy which they put forward for consultation in the Green Paper. That is one of the most controversial changes that they have put forward in terms of housing benefit. It is the change that bears hardest on owner-occupiers and it is likely to bear hardest on pensioner owner-occupiers. It was introduced in June, two weeks after the Green Paper, without any opportunity for consultation or reply.

I hope that the Minister will be able to confirm my figures. About 2 million households will lose money from the housing benefit changes and about 500,000 again will lose all entitlement to housing benefit. There is no need for those changes as part of the uprating because, in the scheme that preceded housing benefit, changes and tapers were not made customarily. In this case, they are merely yet another aspect of the Government's desire to make cuts.

I believe that a pensioner couple who are paying £5 in rates a week can now get rate rebate on an income of up to £95 a week but that, from November, under the uprating of which the Secretary of State spoke so warmly today, they will cease to qualify for housing benefit on a gross income of £85 a week—£10 a week less. Many of those who are affected by these latest proposals are the same people who have lost rebates in every cut that the Government have made in the few months since the scheme was introduced, but this cut will be the steepest so far.

I notice—I ought to say this to save the Minister the trouble—that there are some small improvements in the housing benefit scheme. The Minister of State claimed credit for the increase in the dependent child addition, in response to a question asked by my hon. Friend the Member for Dunfermline, East (Mr. Brown). We occasionally give the Government the odd cheer, or perhaps even two cheers, but I do not think that the Government deserve even half a cheer for that. We are singularly bored with giving the Government any cheers for the increase in the child addition, as this is the third time that it has been before the House. They give the addition, postpone it, take it away altogether and then decide to give it again. Every time they say that they will increase the child addition, they expect a fresh round of applause. Not tonight, I am afraid. That behaviour is typical of the Government's approach to housing benefit, which befits the short title of the party to which they belong—it is a con.

We all know that the Government have made massive cuts in the sums available for housing support, whether through general housing subsidy or, once they managed to cut that, through housing benefit, which many families were forced to take in its place. They know, as do we, that pensioners and less well-off families are bearing the burden of cuts in housing support, but the Government merely increase the burden still more, complain about those who are still able to claim benefits and expect to be congratulated on their compassion.

The housing benefit scheme shows up the Government's incompetence and callousness. The cuts that they are proposing in the November uprating and in the Green Paper will, I am afraid, inflict further damage on claimants. The only advantage is that the cuts may inflict so much damage that they will help us to remove the Government.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe 7:37 pm, 27th June 1985

I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof, welcomes the Government's objective of securing a structure of income-related benefit which will ensure greater equality of help with housing costs for people at the same level of income, whether in or out of work, will remove the need for housing benefit supplement and will be simpler for staff to administer and for claimants to understand.". After the hysteria of the technique of the hon. Member for Oldham, West (Mr. Meacher), it is something of a relief to have the rather more controlled approach of the hon. Member for Derby, South (Mrs. Beckett). Although the difference is welcome, the basic song is the same. We have the same cries against change—any sort. Indeed, at one point, the hon. Lady seemed to be against the change from the original scheme which failed in the 1970s — the dual scheme of rates and rents and the complications between the Department of Health and Social Security and local authorities. It was a system that the whole of society interested in these matters, including the Supplementary Benefits Commission, thought desperately in need of change. The hon. Lady and her colleagues seem prone to harking back to what they regard as halcyon days.

We also heard the usual rigmarole about cuts in the social security programme. My right hon. Friend reminded the House that, following his uprating that was announced 10 days ago, the social security programme will now run at £42 billion a year. There are significant increases in all major benefits, taking into account the large increase in the number of beneficiaries, who include the unemployed and the 800,000 retirement pensioners. In spite of that, the hon. Lady talks about cuts and the record returns to the familiar topic of destroying the welfare state.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

Will the Minister confirm that last week's uprating statement and the parliamentary answers that I have received mean that 2 million people will lose cash as a result of the housing benefit changes, and that 460,000 people will be taken off housing benefit altogether for savings of slightly more than £50 million? Will he tell the House how many people will lose cash, and how many will lose housing benefit to enable the Government to achieve their planned savings of £500 million?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

The hon. Gentleman happily makes the point that I am coming to. Opposition Members seem to think that the rates and coverage of every single benefit must be frozen in aspic, except that benefit must always increase. They pay no attention to the real rate of increase in the amount of public money that is devoted to the social security fund.

The hon. Lady follows the leading Labour spokesman on social security in offering no Labour policy, and in simply producing a list of negatives, all of which are ill-founded. We have had a classic demonstration from the hon. Members for Dunfermline, East (Mr. Brown) and for Derby, South that whatever the level, and whether or not the benefit is rising, they would continue to pay benefit money and be irresponsible about the effect of that on the Exchequer.

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

Does my hon. Friend agree that he may be being slightly unfair to the Opposition in saying that they have no policy in this area because their policy in at least part of this area was announced on Monday when they told us that they intended to abolish our board and lodging measure altogether by bringing it within rent control?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

My hon. Friend is following the Opposition's announcements closely, and one must keep at them to understand what their policy is. Earlier this evening we explored the fate of the policies announced by the hon. Member for Oldham, West (Mr. Meacher), which were quickly jettisoned by his colleagues.

Clearly, the Government would never lightly reduce any of the benefits that we pay. We clearly understand that we are dealing with the lowest income groups and the poorest sections of society and, as will be observed and as has been demonstrated in the uprating statement which my right hon. Friend announced 10 days ago, all those changes are carefully cushioned. In our budget we have protected all the rates, and housing benefit has doubled in real terms while we have been in office. It now covers not 5·5 million, but 7·5 million people, yet the Opposition continually talk about cuts.

Even after the change in the rates taper to 13 per cent., more than 7 million people will continue to receive housing benefit—more than one household in three. If we take the Opposition at their word, we understand that they will be completely content to allow that sort of spending to continue to increase.

The figures that we were offered recently suggested that this year, in addition to 7·5 million people on housing benefit, there would be a further 300,000. That sort of expansion, both in the amount of expenditure and in the increase in the case load, would be unjustified. We have only to make comparisons with other overseas societies which are wealthier than we are, to see that no system compares in any way with the scope, range and expense of our housing benefit system.

Our aim is to give help where it is needed. Unlike the hon. Lady, we are not confused about precisely what that means. We understand what targeting means and give help where the need is found, but the hon. Lady clearly found that question uncomfortable and carefully ducked it.

Photo of Frank Field Frank Field , Birkenhead

I am confused by the case that the hon. Gentleman is presenting to the House. Am I right in thinking that the Government claim credit for having increased the sum paid in housing benefit until now, but that at this stage they are cutting that sum? That contrasts vividly with their policy on mortgage interest tax relief, which continues to increase by leaps and bounds.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

In a budget of the enormous size of the social security budget, judgments must be made when that budget is increasing at the rate that it is in this particular sector. It makes sense to make adjustments from time to time. Retargeting is the only responsible policy, which is what we would expect from the Government.

Several Hon. Members:

rose

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I shall not give way. The hon. Member for Birkenhead asked me two points, and I should like now to deal with mortgage interest tax relief. I would be interested to know the attitude of the Labour party on that matter. Clearly we make no apology for recognising the importance of home ownership. Certainly, it seems that many Opposition Front Bench Members have come to understand that the British people value that policy. Opposition spokesmen are now seeking late in the day to follow us in our policy of home ownership for council tenants. When the hon. Member for Oldham, West suggested the abolition of mortgage interest tax relief, it took only hours before that policy was squashed.

We recognise that a balance must be struck. The aim of our social security policy is to produce help where it is needed. The housing benefit system, as it has developed, does not achieve that aim effectively. It is cumbersome, inefficient—

Photo of Frank Field Frank Field , Birkenhead

It is the Conservative party's scheme.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

Yes, it is our scheme, and we are improving it. The existing scheme was an improvement on what went before. It appears that the hon. Member for Derby, South hankers after what went before.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

When the Minister says that the Government are improving the scheme, does he mean that it is acceptable to reduce the numbers of claimants of housing benefit by 400,000 in 1983, 500,000 in 1984, and a further 500,000 in 1985? Is that what he means by improving the system?

Mr. Whitby:

We mean precisely what I have said. If it is necessary, I shall repeat what we mean for the third time. We must ensure that the large sums that we are spending in the social security programme as a whole, and certainly on housing benefit, are carefully directed. Even with the change announced 10 days ago by my right hon. Friend, we are talking of a benefit which goes to more than one household in three—to more than 7 million people. If the hon. Gentleman wishes to spread the jam more thinly and higher up the income scale, I should be interested to see his figures, as, I am sure, would the voters.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I have already given way to the hon. Gentleman, and I must make progress.

Therefore, we seek to make improvements in the scheme. We recognise that while it has had successes, it needs improvement, as the examination of the housing benefit review demonstrated. The system is not at all well understood and it is definitely difficult to administer. Therefore, we must seek to reduce the case load and to control expenditure. The November uprating was a step along that road. The hon. Member for Derby, South claimed that this pre-empted the Green Paper proposals. It did nothing of the sort. It was a reform and an improvement which was needed. It would be strange if we took steps which were not consistent with the Green Paper proposals.

The change will produce a saving of about £57 million. However, the majority of people will not be affected. Those people on supplementary benefit will not be affected. By November, a pensioner couple with a total income of perhaps £13 above the retirement pension—a total of £74—would lose only 10p a week, taking into account the significant increase in the retirement pension of £4.

The hon. Lady was kind enough, with her customary charity, to pay due credit, albeit a little backhandedly, to the fact that the change in the child's needs allowance in housing benefit is a real increase of 95p and represents a step forward. It is another demonstration of our interest in protecting low—income families with children. It is estimated that about half a million poor families will benefit from that change. We believe that the changes that we have already made in the housing benefit system announced in the uprating statement are sensitive, prudent and fair.

We have never denied that housing benefit expenditure must be reduced and controlled. I cannot go into more detail on the target, because the consultation process is continuing, but it is about £500 million. A proportion of that will be made up by the minimum contribution to rates, which is one of the points that the hon. Lady raised. I must point out that that £500 million represents one sixth of the increase in the cost of housing benefit since 1979.

We have been down the familiar path of figures. The hon. Lady made another sortie or two to test whether she could catch any fish at the end of her line—if I may mix my metaphors. I must repeat that it is essential to have an agreement on the structure. Everyone, even the Opposition, understands that there is a need to change the structure of the housing benefit system. It makes sense to have a national debate on the subject.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The Minister suggested that the debate should be about philosophy, not about facts and figures. He also suggested that the aim of housing benefit reform is to target benefit to those most in need. How does targeting help those most in need if an unemployed person on £28 a week, who may be deprived of single benefit, must now pay £2 or £2·50 a week for his rates bill? How is it targeting on those in need to ask a pensioner on £35·80 a week, who may also lose heating additions and other benefits, to pay £2 or even £3 towards a rates bill? How is the principle of targeting to be achieved when the Minister proposes that, no matter how poor a person is, he must pay 20 per cent. of his rates?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

That is the last time that I shall give way to the hon. Gentleman. The document from which he was reading is the one that was leaked to him before the final version was drafted, and he clings desperately to that and to his illusions. As always, he tries to insert figures where there are none. The hon. Gentleman will understand later how misguided he is.

It must make sense to conduct a sensible debate about the structure of a phenomenon as complicated as the housing benefit scheme and its relations with other benefits without, at this stage, getting to the figures. We must discuss the merits of basing housing benefit assessments on the new income support rates. Of course, the rates will not be announced until 1987. Therefore, we must get the structure right first.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I have read the final version of the report. At present, the rates and housing benefit relief of many council tenants in Scotland is dealt with by the same authority. Did the Government calculate how much it would cost to set up a separate department dealing exclusively with rates relief?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

One benefit of the new structure is its simplicity. We shall soon begin to discuss with the local authorities the administration of the new structure, and I am sure that the result will be a scheme which is easier to operate not only for claimants but for local authorities.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I will not give way again, because other hon. Members wish to speak in this short debate.

Other elements in our proposals are, of course, subject to developments in other areas. For example, as the hon. Member for Dunfermline, East (Mr. Brown) suggested, we have proposed a 20 per cent. minimum contribution to rates. However, that will depend upon the outcome of the review of local government finance being undertaken by my right hon. Friend the Secretary of State for the Environment. We must re-establish the link between the local residents and local services. We should take account of the fact that 3 million households pay no rates and that our proposed changes would insulate them further. We are convinced that it is right to make local authorities more accountable to their ratepayers and to strengthen the link between ratepayers and services.

The Government recognise the anxiety about the impact of the changes, but we shall certainly consider them with great sensitivity. We have already shown great sensitivity in all the changes that we have made since 1979. However, we are convinced that we need a scheme that is simpler, easier to explain and more equitable. For example, the single taper will be greatly welcomed, and the system of using net incomes and the parallel with the income support arrangements will be of great benefit. They will tackle the poverty and unemployment traps and produce the important effect that the support available will be the same for those in work as it is for those out of work.

The Government's housing record is good. Our proposals for housing benefit reform will be of great advantage to the country and to the economy and to those at the lower end of the incomes scale.

I invite the House to accept our amendment.

Photo of Mr John Cartwright Mr John Cartwright , Woolwich 7:59 pm, 27th June 1985

The one thing that the Minister said which should unite both sides of the House is that the complexity and incomprehensibility of the housing benefit scheme desperately needs simplification. We have a system which is impossible for ordinary people to understand, which makes it impossible for anyone to calculate his entitlement unless he has a computer. It is a scheme in which papers are passed backwards and forwards between DHSS offices and local authority housing departments, which between them seem able to create a bureaucratic jungle which is impossible for the average person to penetrate. There are delays in calculating benefit and in notifying alterations, which means that tenants suddenly discover themselves substantially in arrears.

I ask the Minister to consider the reaction of an old person, for example, who has always taken pride in the fact that he or she has always had a clear rent account—never owed a penny piece—and who is suddenly faced with substantial rent arrears as a result of the operation of a system which he or she does not understand.

There are many such cases. I shall quote one that came to my notice yesterday. A 76-year-old widow in my constituency suddenly received a letter from the local authority saying that her housing benefit should have been withdrawn on 3 December 1984 and that as a result there had been an overpayment of £494·98. She was also told that henceforward she would be responsible for paying her own rent in full. That was a computerised letter, sent by the London borough of Greenwich. Someone in the department clearly felt unhappy about it, however, because there was a handwritten note which said: Do not worry about this letter. Please complete an application for standard housing benefit. She did that, and as a result she now receives standard housing benefit, the arrears have been wiped off and she is £17 in hand.

This lady does not begin to understand how that has been worked out. She has a page of calculations on the back of the second notification letter which runs to 26 lines of figures explaining her entitlement. She has a daughter who could help her, but we all know of people who have no one to help them and who cannot begin to understand the complexities of such a system. It is extremely frightening for old people suddenly to receive such letters out of the blue. I am sure that the Minister recognises the difficulty.

A simplification of the system is essential. What worries me and, I think, other Opposition Members is that the Government seem to be mixing simplification with the cutting of benefits. That is something that we find much less attractive. For example, a case can be made for the introduction of the single taper, which withdraws housing benefit, combining the rent and the rate elements in one assessment.

The review team which recommended that also sounded a warning about it. It pointed out that the practical effect of such an approach would be to the disadvantage of owner—occupiers, since home owners are eligible for help only with their rates. They would, as a result, be counted as having low housing costs under a combined assessment and their housing assistance would therefore be withdrawn more quickly than now, and more owner—occupiers would cease to receive any help.

The review team made a clear recommendation. It said: In our view, in a combined assessment eligible housing costs should be extended to include some element of mortgage interest, to balance out the eligible costs of owner—occupiers and tenants. In other words, the review team was calling for an approach to owner-occupiers similar to that of tenants.

It is a matter of regret that in the Green Paper the Government seem to have rejected that approach. As a result, what they suggest in the Green Paper will have a harsh impact on home owners who receive assistance only towards their rates. Their benefit will be withdrawn, as the review team warned, at a much steeper rate under a combined taper than it would have been under the separate rate taper.

As has already been suggested, the main losers under such an approach are likely to be owner—occupiers whose incomes are just above supplementary benefit level. Most of them are likely to be pensioners with small occupational pensions, people who own their own homes, whose only assistance from the state is help with their rates. They are the thrifty, prudent people who made provision for their retirement — the type of people about whom the Government say they are worried. However, it seems to be those thrifty, prudent people who will be in the firing line as a result of the proposed changes. That is unnecessary. The Government could have accepted the review team's recommendations and could have treated mortgage interest on the same basis as rent.

If the Government had combined that with a sensible reform of rates and the introduction of a practical local income tax it would have been a much fairer way to treat people than they are now suggesting.

In the review, we see a Government determined to dress up a cost—cutting exercise as a radical reform. The Government are, as we have heard, seeking housing benefit cuts to a target figure of £500 million. The November uprating seems to be the first phase in those cuts. As other hon. Members have said, with the November cuts we are talking about 2 million households suffering a cut in housing benefit and about 500,000 households losing benefit altogether. That follows two years during which a similar policy has been operated. In April 1983, for example, about 2·25 million households suffered losses in housing benefit and 400,000 households lost benefit altogether. That was a package which saved the Government about £50 million. In April 1984, about 2 million households again suffered losses in their benefit and 500,000 households lost benefit altogether. That package saved the Government £215 million.

What that means to people struggling to balance their weekly budget is underlined by something the Government's Social Security Advisory Committee said in its comments on the 1984 housing benefit cuts. The report was produced in February 1984. The SSAC said: It is clear that, for many people, the loss of income will be very severe … We join with all those who gave evidence to us in deploring the reduction, which we believe will have an unduly harsh effect on many individuals. The committee concluded: It seems extraordinary that so much money should now be taken out of housing benefit within so short a time. That might have been extraordinary, but the Government's current proposals show that it is a policy that is continuing. However, the Government say—the Minister implied much the same tonight—that there are no cuts because they have increased the amount of money available for housing benefit. I notice that the Secretary of State made just that point on 3 June, when he said: housing benefit expenditure has increased from £1·2 billion in 1979 to £4·2 billion in 1985–86."—[Official Report, 3 June 1985; Vol. 80, c. 45.] The Policy Studies Institute has examined those claims and has clearly proved that the figures do not reveal the whole story. It points out that the apparent rise in the amount paid in housing benefit is what it calls "entirely artificial". It said: of the£3·1 billion increase since 1981–82 (at 1984–85 prices), £2·7 billion is simply the book-keeping transfer of supplementary benefit cases; the other £0·4 billion provided a modicum of protection to the poor against a £1·7 billion fall in council housing subsidies. What the Government claim is an increase in overall support for housing costs is clearly a cut. Those Opposition Members who point to cuts are plainly proved right by such an analysis.

I am pleased that the Government now realise that with the present housing benefit scheme they have created an insensitive, bureaucratic monster. Some of the reforms which the Government suggest are sensible, but I object to the fact that they are trying to cut corners. They are trying to slip through cuts in the guise of reform. Those cuts will have a severe impact on some of the most deserving households. That is why I and my colleagues will vote for the motion tonight.

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West 8:10 pm, 27th June 1985

The review that we are discussing today sets four targets in relation to husing benefits — simplification, equalisation, accountability and administrative savings. I am surprised and horrified at the extent to which all those objectives—which should be entirely laudable and welcomed in all parts of the House—have received such scant praise and acknowledgement from the Opposition.

To fill the gap left by the Opposition I intend to say what the Government seek to achieve in connection with housing benefits. The most important aspect of the Green Paper is simplification. A scheme to abolish the complexities and low take—up of housing benefit supplements and replace it as part of a new income support scheme on a more broadly drawn basis can only be administratively simpler, more easily understood and undoubtedly more popular.

The concept of replacing six different tapers, as people move up and down the housing benefit scale, with one taper, can only be welcomed as an exercise in making the scheme more intelligible.

One major advantage in the proposed simplification is that it will remove many complications caused by the present system under which the needs allowance is based on gross income and supplementary benefit on net income. Cuts have been mentioned, but many of the proposed changes will create benefits. For instance, a constituent of mine, a frequent visitor to my surgery, did not believe that it was worth waiting for the Green Paper but now that he has seen it and I have explained it to him he has gone away rather happier.

Photo of Frank Field Frank Field , Birkenhead

I cannot say that about my constituents.

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

My constituent had over many years set aside as much as he could out of a relatively low-paid job to provide a pension for himself. He believed that that pension would be a modest help in his retirement. He retired in the early 1970s thinking that that relatively small pension would help to support him through his retirement. Since then he has lived through the inflation of the Labour Government and seen his pension dwindle almost to nothing in real terms. Nevertheless, he was very proud of the principle that he had saved to buy himself an additional pension, no matter how small. Under the existing housing benefit scheme, because with his state pension and his works pension he was earning just enough to pay tax, he found himself suffering a reduction of 100 per cent. in the pension of which he was so proud through a combination of tax and the taper.

As a result of the scheme now proposed, which will be based on net rather than gross income, I have been able to tell my constituent that all his efforts were not totally worthless and that although he will not keep much of his pension as a result of the changes he will at least keep some of it.

Photo of Frank Field Frank Field , Birkenhead

I would not want the hon. Gentleman to mislead his constituent, who may be listening to this debate. How can the hon. Gentleman give that assurance, when we do not have the figures necessary to know the nature of the scheme?

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

My constituent has read about the 70 per cent. taper and drawn conclusions from that. I accept that there is no absolute assurance but at least he now has some idea of what is to happen.

The need for simplification of housing benefit is clear. People on supplementary benefit are treated more favourably than people with low incomes and almost identical resources. That is clearly unfair and needs correction. Help with rates goes further up the income scale than help with rent. That, too, is illogical and needs simplification. Moreover, no one who handles constituency cases can seriously suggest that the complexities of the present system are capable of explanation to anyone who has not made a detailed study of the subject.

Photo of Frank Field Frank Field , Birkenhead

The hon. Gentleman presents all this as a major advance in understanding for our constituents and that may be so, although I suspect that many of my constituents will still not have the energy to follow these matters in detail, but is not another advantage of simplification the possibility that the staff running the scheme will understand it when previously they did not?

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

Yes, I had intended to refer to that.

With regard to equalisation, it is surely right that people with similar needs and circumstances should have similar benefits whether they are in or out of work. At present, certificated cases — those on supplementary benefit—have 100 per cent. of their rent paid. Standard cases—those in work or with some kind of income—receive 60 per cent. benefit which is tapered up or down on one of six tapers and may also attract housing benefit supplement. Equalisation was clearly needed and that is what has been offered.

The third advantage is accountability. There are many different views about the desirability of the domestic rating system, but most people agree that one of its major faults is that far too few people pay rates. This makes swingeing rate increases such as the 55 per cent. increase promised for next year by Avon county council even more painful to people at all points on the income scale. The Government's proposal to increase the number of people who pay rates will inevitably be to the advantage of the rating system and of accountability by local government and may even make spendthrift councils such as Avon pay more attention to the views of the people whom they claim to represent, because they will be attacking far more of their constituents when they increase the rates. A proposal which means that an additional 7·5 million households—one household in three—will have to take note of rate increases is clearly an advantage in terms of accountability.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

How does the hon. Gentleman square the comments in the review about the need for 100 per cent. of housing costs to be returned to people in the lowest income brackets with the advantages that he claims will accrue to them from paying rates? How does he square the enthusiasm of some Conservatives for targeting help on the poorest people with his view that it will be an advantage to those people to have to pay sums that they do not now pay?

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

I see many advantages for the whole of society, and certainly for the poorest members of society if, as a result of the increased accountability that the new scheme will bring, more and more people realise the extent to which their environment is being impoverished by spendthrift councils. That advantage will extend to all who inhabit areas in which spending comes first and value a long way behind.

Photo of Mr Michael Stern Mr Michael Stern , Bristol North West

I have given way several times and many other Members wish to speak. I hope that the hon. Gentleman will forgive me if I do not give way again.

I turn to the administrative savings that will result from the Green Paper's proposals. The existing arrangements have been widely criticised by the Public Accounts Committee. Any system that is unintelligible but which involves 8,500 local staff costing £117 million is not immune from criticism. The Green Paper's proposals will enable local authorities to save money which can then be used either for other forms of spending or for rate reductions. On those four grounds, I commend the Green Paper's proposals.

Photo of Mr Peter Pike Mr Peter Pike , Burnley 8:20 pm, 27th June 1985

The speeches in the debate on child benefit and the speech of the Under-Secretary of State for Health and Social Security in this debate have convinced me that the Government intend to axe the welfare state, not to reform it. The purpose of the exercise is to make major public expenditure cuts. The Government are wrong not to give the figures.

The Under-Secretary of State said that the annual cost of the social security budget is £42 billion. I believe that the Government intend considerably to reduce that figure. They are not prepared, however, to say what their target is because they wish to avoid a major outcry at this stage. The public will not be conned by the Government's actions. The figures will be made known when the legislation is introduced. Unless they change their mind before that stage is reached, people will then know exactly what the Government intend to do. The reviews will be the greatest single reason for the Government's defeat at the next General Election.

The only figure we have been given is a cut of £500 million in housing benefit. This will result in 7·2 million households losing benefit. It means that one third of households will lose benefit. Four million of the 7·2 million householders are pensioners. And 1·8 million householders will probably lose all of their housing benefit, of whom 1·2 million are pensioners.

Housing benefit is to be made available to those, both in and out of work, who receive the level of income set for income support. That may seem to be fair and reasonable. However, such a policy subsidises low wages and is consistent with the Government's policy of abolishing wages councils. The Government believe that the solution to unemployment is to reduce wages. I have yet to see reduced pay resulting in the safeguarding of jobs and the avoidance of redundancies.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

Is the hon. Gentleman opposing the family credit scheme?

Photo of Mr Peter Pike Mr Peter Pike , Burnley

No, I am not opposing it, but I do not believe that it is the right solution. Nevertheless, if it is the only solution on offer, we have to accept it. We ought to ensure that every worker is given a reasonable wage with which to support his wife and family. Family income supplement is wrong. Its replacement is also wrong. Supplements of that kind mean that employers are subsidised. As income increases over the base that is to be set, people will be hit very hard by the sharp reduction in income supplement. Although the Government have not said what the taper will be under the new scheme, if the tapers that are used in the example in the Green Paper are put into effect the poverty trap will be made even worse. For those paying tax and national insurance and receiving a rent and rate rebate, the marginal rate of tax has already increased significantly since housing benefit replaced the previous rebate-allowance scheme. The marginal rate of tax of working households receiving housing benefit in March 1983 was 61·75 per cent.; in April 1983, 67 per cent.; in April 1984, 74 per cent.; and in November 1984, 77 per cent. The rate of withdrawal of benefit foreshadowed in the Green Paper, of 70p. of net income, would mean a marginal tax rate for working households receiving housing benefit of 82 per cent. at current levels of tax and national insurance rates. This will make it even more difficult for low wage earners to improve their standard of living by working overtime and earning extra money.

Furthermore, capital will be taken into account. Those with capital of over £6,000 will be barred from housing benefit. Those with capital of over £3,000 will lose benefit of 40p for every £100 of capital between £3,000 and £6,000. These further blows have to be considered on top of the other attacks on housing by the Government. The insufficient HIP allocations mean that housing conditions will be made worse. It will not be possible either to build or to improve houses in both the public and the private sectors.

Since this Government were elected, the support available to the housing revenue account has been considerably reduced. The last figure fixed in 1979 by the outgoing Labour Government in my borough was £1·6 million for 8,000 houses. For each of the last four years it has been zero, zero, zero and zero. It does not take a mathematician to work out what that means for people's rents. The Government forced up rents. Although they say that they want people to have a choice, they have eliminated for many people the choice of living in rented council accommodation.

Over 15,000 households in Burnley receive some form of housing benefit. Nearly three quarters of council house tenants receive some form of housing benefit. An additional burden will be placed upon local government because of the central Government reduction of subsidy from 90 to 80 per cent. The Government do not intend to increase the grants paid to local councils. It would be a nonsense for the Government to transfer grants from one heading to another. This means that the additional 10 per cent. burden to meet housing benefit will be passed on to council tenants in the form of rent and to ratepayers as a whole. A further burden will be thrown on local authorities. Rate capping will also throw an additional heavy burden on local government. Local government will have to bear an additional burden of 10 per cent.

It is wrong that mortgage interest payments should no longer be eligible for consideration in the assessment of housing costs. The Government claim to be the friend of owner—occupiers, yet they intend to hit those whom they claim to be their greatest allies. It is a bad policy.

I do not accept the proposal that everybody should bear 20 per cent. of the rate burden. The inference is that unless householders pay something towards the rates they should have no say in local Government elections. The Government infer that because people may pay no rates they vote irresponsibly. What nonsense. The reverse suggestion might be that if they do not pay rates they should lose their local election vote, and if people do not pay taxes they should lose their parliamentary vote. Their motto at the next election could well be, "No representation without taxation."

The independent review team recommended 100 per cent. help with housing costs for those on the lowest incomes as the only fair way of meeting their needs within the present vagaries of the housing market". While the Government have accepted that argument for rent, they have not done so for rates. The Green Paper states: The Government are firmly of the view that should domestic rates continue to be a significant element of local authority revenue then all households should make a contribution towards them. I have already said that I cannot accept the logic of that argument.

The Government have suggested that claimants should meet at least 20 per cent. of their rates, although this could be revised. One assumes that, under a Conservative Government, a revision would be an increase rather than a decrease. This is a foot in the door, and it will put a further burden on the people. The hon. Member for Woolwich (Mr. Cartwright) has referred to the kind of people who will be hit.

The consequences for claimants on income support of having to meet 20 per cent. of their rates could be considerable. Disturbingly, there is no indication in the Green Paper as to whether the loss to claimants of 20 per cent. of their rates benefit will be compensated for by an equivalent increase in the income support scales. At best this could be done only on a rough justice average basis which would involve an increase of around £1 a week to the income support scheme, equivalent to 20 per cent. of the average rate bill. Again, it would be absolute nonsense to assume that the Government will consider this, as that would merely transfer the figure from one heading to another. In my opinion, this exercise is designed to save money. Unless the Government say that they intend to do this, one assumes that they will not do so.

The consequence would inevitably be to generate increased debt problems. The absence of any pledge even to make this average compensating adjustment is particularly worrying, and I do not believe that the Government will be prepared to say that they will do that, given that their objective is to save money rather than to simplify the system.

It is clearly inappropriate and unrealistic to expect people on income support to find sufficient money to meet 20 per cent. of their rates bills without extra assistance. The Minister failed to answer the forceful and pertinent points raised by my hon. Friend the Member for Dunfermline, East (Mr. Brown), and I hope that he will answer them when he replies to the debate.

No figures are given in the Green Paper of the saving that would be made by the DHSS if the 20 per cent. were not compensated for, but it seems likely that it could be of the order of £250 million.

Making income support recipients pay at least 20 per cent. of their rates would turn on its head one of the key arguments used by the DHSS to persuade local authorities to agree to the introduction of the housing benefit scheme in 1982–83—that by rebating claimants' rent and rates at source, local authorities would greatly reduce the rent and rate collection tasks as well as the arrears problem. That problem will now be reintroduced in respect of 20 per cent. of the rates for every ratepayer. Approximately 2·5 million households that now have their rates fully rebated at source will, under this proposal, have to resume payments. The administrative costs for authorities and the potential for increased arrears should not be underestimated.

The attack on housing contained in this part of the reviews shows that this is not a caring or compassionate Government. They intend to make the poorest and most deprived areas of the country pay the penalty. They will give tax hand-outs to the rich and wealthy at the expense of the poor and the poorer regions.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South 8:34 pm, 27th June 1985

There are three key elements in the Opposition's motion. First, as critics of the principle of housing benefit, they cite the administrative problems, which undoubtedly are still in the system, as a condemnation of the principle of housing benefit. I take this opportunity to pay tribute to the city officers of Nottingham, who in that first year dealt with 55,000 certificated and standard cases. Secondly, they claim that pensioners and poor families are deprived of help. That may be a subjective opinion, but it is certainly not truthful. Thirdly, the motion pours scorn on the social security review and, in my view, assumes that such a review must of necessity bring greater poverty.

Those three elements illustrate beyond doubt the Opposition's unwillingness to face facts, as well as the very synthetic nature of their concern.

On the first point, there has been no mention of the justice of bringing in a new scheme to replace the tangle of the old one prior to housing benefit. No mention has been made of the fact that, in order to be as even—handed as possible in an undoubtedly major reorganisation, housing benefit supplement — the real complicating factor—was provided. There is no recognition of the fact that had the Government gone for total simplicity and ignored losers there might not have been any of the administrative chaos to which the motion refers. Perhaps the Opposition wish the Government to put simplicity before fairness. If so, it is a very strange brand of new Socialism.

I wish to touch on one of the least mentioned reasons for the original change, which also added to the administrative difficulties. Sadly, it is still in the system. I refer to what in euphemistic jargon is called financial flexibility. That actually meant that one could do what one liked with the money that one was given to pay the rent—booze or make whoopee if one wished—and that other tenants would, through higher rents, pay the bad debts that had to be written off by local authorities.

Expenditure on housing support, which has risen from £1·4 billion in 1979–80 to £4·2 billion in 1984–85—and a budget of £4·5 billion next year—cannot remotely be described as depriving the pensioner or the poor. No one could describe that gradation as a cut. I understand the impact of unemployment on those figures, and there is no comfort or pleasure in those human statistics, but to accuse the Government of not meeting the social cost of this problem on behalf of the community at large is the ultimate humbug.

While we are talking telephone numbers, my understanding — I am sure that my hon. Friend the Minister will correct me if I am wrong — is that spending under the review is likely to rise from £40 billion to £42 billion. When I went to school—

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

Does the hon. Gentleman not accept, as I think the Minister will confirm, that the object of the housing benefit proposal is to save £500 million? On top of that, money is to be saved from the child benefit budget, and almost certainly from the supplementary benefit budget. There are savings as a result of the review. The suggestion made a year ago that this was a nil-cost review has been totally undermined by the various announcements made by the Government. Why did the housing benefit review recommend no change or cuts in housing benefit? Why did it not recommend that the poor pay 20 per cent. of their rates entitlement? Why have these proposals been totally undermined by the decisions of the Cabinet and Ministers?

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

The hon. Gentleman abuses the courtesies of this House, because on two or three occasions he has sought to intervene in every speech. All that we have had is a catalogue of the minuses. We are saying in the broad approach to this matter, yes, there have to be losers and there have to be minuses. I have said that in the totality of spending we have gone from £40 million to £42 million, and I am sure that I shall be corrected if I am wrong. The hon. Member for Dunfermline, East (Mr. Brown) is shaking his head. When I went to school I thought that that was an increase, but, standards being what they are these days, I suppose that that now has to be pronounced a cut. In Socialist jargon, any spending that is less than what Labour promises—with the honourable exception of what the hon. Member for Birkenhead (Mr. Field) said this evening—becomes a cut.

The sad part of all this is that so many people are beginning to swallow that humbug. First, there is the opposition to the review in general. After 40 years, what reasonable person would not say, "And about time too."? When there is such a tangle of interrelated allowances, benefits, discards and adjustments, it is insulting the intelligence to say that it could all be straightened out with nobody being the loser. Indeed, natural justice demands that where benefit is going where it should not go, the recipients should lose. Midas himself would not have the resources so to increase the level of all benefits—this applies as much to housing benefit as to any other sphere—that no one tends to end up with less than before. But even if that were done, I am certain that Opposition Members would leap to their feet and claim that, because some people had more than others that, too, would be wrong. Nothing, but nothing, would satisfy the Opposition.

Losers might indeed arise, if, for example, we consider student support. Few people outside the House realise that, in addition to grant and or parental support, housing benefit may be paid. Losers might prefer it if we try to simplify the speed or frequency with which benefits change with changed personal circumstances. Losers would probably arise simply in the consideration of minimum payments.

There is one group of losers whom I should not be sorry to see lose. They were highlighted in the report, and I might refer to them as the free-loading up-marketeers. So long as some recipents — I stress some — of housing benefit are satisfied that there is no limit to what they can get, they will stick out for a house of the size and quality and in the precise place that they want to be until, in the end, a housing officer grants them that property. I am sure that all of us with council estates in our constituencies know of people who will continue to refuse until they get the house that they want.

The hon. Member for Derby, South (Mrs. Beckett), who opened the debate for the Opposition, is gazing at me as if to imply that that does not happen. If that is so, I do not know where the hon. Lady has been when dealing with housing, because this is a matter which gets up the noses of most honest straightforward tenants who regard themselves as playing by the rules, and they are irritated, and rightly so, by those who abuse what ought to be a reasonable and fair system.

I deal next with the non-dependant reductions, which, as the review body rightly points out, ought to be called non-dependant contributions. I agree entirely with the view of the review body. This should remain in the calculations on the basis that those who are sharing a household should contribute to it, or at least be assumed to be contributing to it, if they have the income to do so.

I join my hon. Friends in welcoming the sound approach of the recent uprating. We should underline the point that, contrary to what is stated in the Opposition motion, a pensioner couple will need to have an income of nearly £700 a year over the retirement pension level before housing is reduced by even lop per week. As the review body made clear, there are bound to be difficult judgments on how to provide assistance in a fair and equitable manner within the limits of public expenditure. There are limits, and it is nonsense to suppose otherwise. It is dishonest politics to tell people that there are no limits.

The review body went on to point out—this refers to the last part of the Opposition motion—that the review should not be allowed to stand in the way of the basic reforms necessary to achieve a similar and equitable system.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

The hon. Gentleman referred to dishonesty. Does he agree that it is a little dishonest to quote the review body without acknowledging that it did not propose cuts in housing benefit, whereas the Government are proposing cuts of £500 million and then casually saying, "Mind you, there have to be changes in priorities."?

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

I do not think that I could be accused of having made selective quotations or of being dishonest, unless the hon. Lady wishes me to read out the whole document to prove that I have read it, or am I misunderstanding her point?

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

I think that the hon. Gentleman has not understood. I accept that the hon. Gentleman does not make selective quotations. My point is that the review body, which he chooses to quote as stating what should be a fair system—of course choices have to be made—did not propose any cuts in the overall cost of housing benefit. In my view, it is a little dodgy to use the words of the review body report about changes in the system which do not imply overall cuts to justify what the Government are doing, which is to make cuts of £500 million.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

If I appear to have been suggesting that the review body stated that we should reduce benefit by £500 million, of course I apologise. The hon. Lady is correct. That was not the task of the review body. That is the task of the Government and of politicians. Their task is to consider the report of the independent review body and to decide what is good in it and with what they agree or disagree, and to establish whether those recommendations can be fitted into the totality of what can be spent in the public sector. This would apply whether the hon. Lady was speaking from the Opposition Dispatch Box or from the Government Dispatch Box. The hon. Lady will be in the same position of examining the report and saying, "What can I take out of it that I agree with, what do I disagree with, and how much can we afford?"

There is always a limit to public expenditure, whichever party is in government. The Government seem to be going about it in the right way, and they have my complete support.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield 8:47 pm, 27th June 1985

I have listened to most debates on the review, and in the matter of housing benefit, I am convinced that there has been a con trick by the Government. The Minister talks about simplification. It will be worse later than it is now. I do not know how many surgeries the Minister has, or the Secretary of State, for that matter.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I hold surgeries regularly to meet constituents about their problems.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I mean those I hold to discuss housing benefit when constituents have lost it. Is the Minister going to say that he has those as well?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I am certain that all our constituents will welcome the simplicity which will be built into the new system, and they will then understand it.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I did not ask the Minister that question. I asked whether he had constituents enjoying housing benefit who have now had it taken away. That is the kind of constituent who comes to my surgery with a problem. I am asking the Minister whether any of the electors come to him and complain about losing housing benefit. I notice that he is not coming back to the Dispatch Box. He knows full well that those people come to see him, but he is not saying anything because the Government robbed the people last year, never mind what they will do in the future.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

The hon. Gentleman seems to want to tempt me, and I am happy to be tempted up to a point. We all have constituents who enjoy housing benefit. In 1979, 5·5 million people enjoyed housing benefit; now, there are 7·5 million. That is the arithmetic.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Gentleman has dodged it again. I am talking about his constituency, not about the national level. I am asking him specifically about his constituency and the people he represents. It is obvious that he is not going to say that his constituents have complained that their housing benefit has been taken away because of the Government's policies. The hon. Gentleman is not going to admit that. If he does not give us the answer, he is not being really honest.

Photo of Mr Jimmy Hamilton Mr Jimmy Hamilton , Motherwell North

Does my hon. Friend recognise that the Under-Secretary of State has said that in 1979 5·5 million people received housing benefit and that the figure is now 7·5 million? Is that not because of Tory policy, the large number of unemployed and the low wages that are being paid?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I am happy to point out that the whole of our social security benefit system, including housing benefit, has kept well ahead of the drain involved in the sad unemployment figures. That unemployment is the reason why we must keep public spending under control. If we trod the road down which the Opposition are tempting us, we would spend billions and billions of pounds and unemployment would double and treble. That is the point that the Opposition must grasp.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Gentleman really is naughty. I have not yet made any suggestions. I have only asked him a question, and he has not answered it. Good grief, that is the limit.

Let us look at the cold facts. I have heard the Prime Minister and other Ministers at the Dispatch Box pour out compassion, but there has not been an ounce of real compassion from the Government. I know that the hon. Member for Nottingham, South (Mr. Brandon-Bravo) is a member of Nottingham city council. When he made his contribution, all his thinking concerned finance. He was not thinking about the problems created for the people who will be totally dependent upon these benefits. That is why I say that this is a con trick. Ministers are constantly asked for figures, but they talk only about structure. We were given only one or two figures.

When my hon. Friend the Member for Dunfermline, East (Mr. Brown) put his questions, the Minister did not want to respond, because he knew full well that my hon. Friend had all the answers. My hon. Friend knows what will happen with social security from A to Z, right through the benefit schemes, and he knows what the Government want to do.

I remember what happened when the right hon. Member for Daventry (Mr. Prentice) was the Minister with responsibility for the disabled. History is now being repeated. The Opposition were moaning and groaning as we do constantly, about unemployment. The right hon. Gentleman set up a scheme with one thousand storm troopers to find out where he could rob the disabled. [HON MEMBERS: "No."] Government Members have bad memories. The hon. Member for Derbyshire, South (Mrs. Currie) was not a Member then and did not hear what was said. I assure her that that programme was implemented. The Government are again robbing the poor people to feed the rich.

I well remember the last time a massive decrease in income tax was given to the rich. When the Prime Minister was asked what would happen, she said, "The money that they get back will be invested in industry. It will create jobs, and will get the nation back to work." It did not do that. The restrictions were lifted, and all the money flowed out of the country.

The same thing will happen with SERPS. Unless the Government back off from their proposal, the insurance companies will invest their money abroad, just as they do now. This will affect the working-class people who contribute to SERPS. The Government will push money overseas, instead of investing it in Britain.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

Like all his colleagues, the hon. Gentleman makes constant references to handouts to the rich. Does he want us to return to the days before the top tax rate was more than 60 per cent., back to those confiscatory levels that created the brain drain?

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

Talk about the brain drain. Pop stars? Are those the people to whom we want to give back all the money? There are thousands of them. That is not work. I have worked in the pits; I know what work is. I contributed to SERPS. But we are talking not about that scheme but about housing benefit.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

The hon. Gentleman made that point.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Member for Nottingham, South (Mr. Brandon-Bravo) intervened in response to my point. I raised that matter only in passing, but he extended it. Let us consider fairness. Members of Parliament obtain relief for a second home, yet we are talking about taking the benefit from those who desperately need it.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Lady is half asleep. If she does not know about the entitlements of Members of Parliament, she should go the Fees Office and find out.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I shall not give way. The hon. Lady should go to the Fees Office and clarify what I have just said.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

It is in Hansard. The hon. Lady can go to the Fees Office and find out: about those entitlements. Hon. Members have the right to claim relief on a second home, and are doing so. Conservative Members applied pressure to bring about those benefits. That is how fair they are. They are looking after themselves as well as the rich.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

For his own sake, will the hon. Gentleman give way?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. The hon. Member for Ashfield (Mr. Haynes) is not giving way. The hon. Member for Derbyshire, South (Mrs. Currie) must resume her seat.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

I am grateful to the hon. Gentleman for giving way.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I am not giving way.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

The hon. Member clearly is not giving way. The hon. Lady must resume her seat.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

I am grateful to the hon. Gentleman.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I am not giving way. I respect the Chair. When Mr. Deputy Speaker is speaking, we sit down.

It is a continuous shackling that is going on. The Government are going to shackle the people in the very low income groups so that they cannot have the benefits that we say they are entitled to. It all lines up with this Government's policy of shackling the trade unions.

If the Government do not back off from this scheme, it will burden the local authorities. The staff of Nottingham city council will be burdened with more work. When the housing benefit scheme was transferred from the DHSS to the local authorities, it was made clear to the authorities that they must not take on any more staff. Here is more work coming their way, and if this proposal comes into operation, I shall be interested to see how the local authority staff react. It will mean more work for less money for them.

Conservative Members have come up with excuses about complications, and saying that the structure must come first and that figures are necessary. Some of us have attended meetings and tried to explain what the Government are doing.

Recently in the Nottinghamshire county council points have been raised about unfairness and the allowances that the police get — massive rent allowances and free prescriptions. The Government put the cost of prescriptions up to £2 not long ago, but the police get free prescriptions, free spectacles, free dentistry. What is going on is totally unfair. If hon. Members want to understand about fairness, they should listen to some of the contributions made from the Opposition Benches. The people who can afford to pay should be paying and the people in the lower income groups should not have to pay what they can ill afford for what they need.

In this review the Government, I maintain, are conning the public, but they will not get away with it. Slowly but surely the people are waking up to what is going on. The Government will force local authorities to implement these proposals and no doubt they will watch very carefully to see how many people the authorities take on to do the job. These proposals show quite clearly where the Government are going as far as the lower paid people of this nation are concerned. I think that after next Thursday the Government will get the message, because, make no mistake, when we get the opportunity we will put all these wrongs right and the rich will have to make their contribution, because they are not making it at present.

Photo of Mr Timothy Wood Mr Timothy Wood , Stevenage 9:03 pm, 27th June 1985

I have listened with interest to some of the criticisms of the Government action on housing benefit, but I must confess that I find many of the criticisms of the proposed changes, whether in the uprating or in the social security benefits review, misguided. I know that the present system of housing benefit was introduced by this Conservative Government, but I and many of my colleagues have been highly critical of some of its complexities. We have believed it to be in some respects illogical.

I believe that the variations in taper that apply at the moment are extremely difficult for people to understand. The variation concerning a lower taper in terms of rates compared with rents is rather absurd. Therefore, a change that will gradually move away from the present position to what I hope will be, after consideration of the Green Paper and further consideration of the White Paper and the eventual legislation, a common taper, will be a much better, more comprehensible and fairer system in terms of those receiving housing benefit.

The move that has been made to alter the taper and rates will minimise the impact of any change in one year, so avoiding those most in need being grossly adversely affected. As the Minister pointed out, old-age pensioners receiving £10 or £13 above the basic pension will find their housing benefit position changed only negligibly because of the taper alteration. I applaud the decision to proceed in that way.

It seems absurd that of the 7 million people who are covered by that benefit, a substantial number are paying income tax, some at a significant level. The changes in housing benefit—the alterations being made now and the changes that will result from the discussions on the Green Paper—will create a more satisfactory system.

Some extraordinary scare stories have circulated about the likely results of the various reviews into benefits and the legislation that may flow from those reviews. I have made some calculations, taking into account the rates of family credit, housing benefit and changes that are proposed in the social security system.

In view of the way in which the family credit system may be based on net income — after which housing benefit will apply, on the basis of net income also, taking family credit and other benefits into account—we may. find that housing benefit payments fall considerably for large families simply because the family credit that will be paid in those cases will be substantially increased.

In other words, because of some interesting interplays among the various benefits, we are likely to find that one aspect of the system shows a significant saving, although the people who will be benefited or disbenefited, as the case may be, will have their needs met.

The present combination of benefits — FIS, supplementary benefit for unemployed people, housing benefit and so on—acts as a disincentive to people to improve their position at work by doing overtime or undertaking other responsibilities. There is an overwhelming case for making the system simpler and for introducing greater equity, while at the same time maintaining help for those who really need it.

Despite all the Opposition's protestations, the truth is that those who are in most need will be supported as effectively as in the past. That is as it should be. But, equally, there will be an element of incentive for those who can take advantage of opportunities in work and so on to do so. I believe that that, in its turn, will reduce some of the pressures on the present benefit system.

Some of the Opposition's arguments are nonsense. Do they really support what I believe was a mistake when it was introduced, the variations in taper? Do they really think that it is best to have a 9 per cent. taper in rates? Or do not they think that it is more appropriate to have one taper covering all those housing benefits? Surely that is the more straightforward approach—the better approach. If the Opposition believe that that would be a more logical eventual solution to the problems and difficulties of the present system, surely it is equally logical, sensible and reasonable to move in that direction in gradual stages—not in one jump. Legislation may be passed, but it might be possible to make some modest moves in that direction that do not hit any particular group substantially at one time.

In what they have done on housing benefit and the other benefits that interrelate with it, the Government have taken a courageous stand, proposing to make changes that will lead to a more efficient and effective system. As the Opposition frequently tell us, the complexities of the present system, whether in family credit, family income supplement or housing benefit, are such that large numbers of people who may be entitled to them do not claim the benefits. The hon. Member for Ashfield (Mr. Haynes) mentioned people coming to see him at his surgeries. I must confess that many people come to see me at my surgeries about housing benefit. The fact is that in most instances they do not understand the tabulations that they receive. They find them too complicated. They do not understand the picture that is presented in that way. They are desperate for a system that is simpler and more comprehensible so that they will—

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

The hon. Gentleman's remarks are of considerable interest. They follow on from remarks in a debate not long ago, which was not on this subject, but on social security. I think that he is falling into the trap that his hon. Friend the Minister for Social Security fell into on that occasion. Of course everybody wants a simpler system, and there is much to be said for having a single taper. However, there is not much to be said for having a single taper that will make things so much worse that people will lose money. I ask the hon. Gentleman to think for a moment whether those who come to his constituency surgeries with justified complaints about the complexity of the system, are brought there by losing money. In my experience, although they may also be concerned about the complexity of the system, they are much more concerned about whether they gain or lose by the changes that are made. As the Minister for Social Security suggested on one occasion that people would prefer a Rolls-Royce system even if it meant less money, does the hon. Gentleman share that delusion?

Photo of Mr Timothy Wood Mr Timothy Wood , Stevenage

Obviously, those who complain would rather have more money. Nevertheless, adding together the various benefits—family income supplement, housing benefit and so on—it is equally true that if a £1 gain means that one is worse off, one cannot conceivably defend that system. If changing the system to a more equitable one means that, relatively speaking, some will be a little worse off and some will be better off, I am afraid that that is a change that I accept. One has to go down that path. As some of those who may be marginally worse off may complain loudly, I welcome the courage of the Government in nevertheless pursuing the changes to a more equitable system.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

I do not wish to persecute the hon. Gentleman, but if what the Government are doing will simplify the system, there might be a slight tendency to applause from the Opposition. However, that is not all the Government are doing. In simplifying the system, they are taking £500 million out of it, and that means that there will be hardly any gainers but many losers. That is what makes what they are doing so utterly indefensible.

Photo of Mr Timothy Wood Mr Timothy Wood , Stevenage

I might accept that general proposition if I did not also take account of the fact that a vast proportion of those so-called beneficiaries of the benefit system are also paying income tax. If one could devise a system, as I believe one can, whereby less benefit may be paid in particular sectors, and at the same time less income tax is paid by the same people, that would be a more sensible and rational system.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

Does my hon. Friend agree that it is ludicrous that one third of all households, and 50 per cent. in places such as Liverpool, should be taxed and rated to such an extent that they cannot afford to pay their own rent and rates? We must evolve a system whereby people can pay their own housing costs, and the sooner the better.

Photo of Mr Timothy Wood Mr Timothy Wood , Stevenage

That is right and, as I have said, at the moment we have an absurdly complicated system in which people are receiving housing and other benefits and paying income tax. We need to change that system. The whole nature of the proposed benefit system changes is such that in terms of net income, housing benefit can fall for families with many children, but they will be getting substantial increases through the family credit system, and all to the good.

The savings that may be achievable in the benefits system will provide the possibility of raising tax thresholds, which will mean that those people who may in some circumstances have lost out on benefits will pay less in tax. That is wholly desirable. I cannot understand the Labour party opposing such a principle.

Photo of Mr Roland Boyes Mr Roland Boyes , Houghton and Washington

The trouble is that the hon. Gentleman cannot understand anything.

Photo of Mr Timothy Wood Mr Timothy Wood , Stevenage

I can understand. I look at the figures and I listen to complaints made by the people in my surgery. The changes in the housing benefit system—the moves to a common taper and a more simplified system—will mean that there will be a better take-up for those in need, which will give the opportunity for the raising of tax thresholds so that we do not at the same time have benefits received and taxes paid.

Therefore, overall, instead of the whingeing that we have heard from the Opposition Benches, we should be welcoming the changes, and the fact that gradual modifications are being made in the housing benefit system so that there will not have to be dramatic changes when the social security reviews are completed. We should welcome the move to more effective means to help those in real need. I am pleased to see the changes this year and I look forward to the further changes coming from the benefits review in the coming years.

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central 9:18 pm, 27th June 1985

I am told that there has today been a conference on this subject in Manchester. It was attended by about 200 delegates from various local authorities in the north-west of England. There is much worry about the housing benefit shake-up, and the conference must have considered the implications of the changes to the housing benefit system and how the Government are organising future handouts while saving £500 million.

Local authorities have gone through chaos. They have only recently got the housing benefit system right after the last change, and they regard any further upheaval as unnecessary, costly and time-consuming. I am sure that the conference will have expressed its concern about the restructuring of the system and the reduction from 96 to 80 per cent. of the moneys that local government gets from Whitehall. It is estimated that that cut will cost Manchester city council about £12 million. The Government have promised to take that reduction into account when agreeing levels of support for local authorities, but councils are extremely dubious about the Government's intentions, because of their track record.

Another serious worry is the time factor in making changes. Last time the chaos reigned for nearly two years, for recipients and administrators of the system alike. Many hon. Members have referred to their advice bureaux. Mine is in a highly deprived area of the city and it was always full of worried people on Friday evening and Saturday. I fear a recurrence of that, and of many elderly people and people who rely on benefits waiting for advice because they are bemused by the complexities of the system. So great was the confusion last time that local authorities put out leaflets which tried to describe in layman's terms what was going on. It was a traumatic experience for many elderly people. Anybody who runs an advice bureau must be worried about that happening again.

This time, however, town halls have just 21 months before the deadline of April 1987. Councillor Frances Done, the chairman of Manchester city council's finance committee, has declared that the cut in funding is a direct attack on local government finances and could cause dire administrative problems. This is especially true for inner-city areas such as Manchester. Extra staff will be required to cope with the paperchase that will result from these proposals. Manchester city council is trying to employ an extra 20 or 30 staff to administer the system—to collect rates towards which tenants will have to contribute 20 per cent., water rates and the heating element of rates, all of which will be an administrator's nightmare.

We have heard much about the losers and the gainers today. It is difficult to get figures these days, but it seems that about 500,000 people will gain, that 1 million people will lose up to £1·40 a week and that 5 million people will lose between £1·40 and £3 a week. It is estimated that 650,000 people will lose between £3 and £6 a week, and that 150,000 people will lose more than £6. In all, 7 million people will be losers. Those are some conclusions of the research carried out by Manchester city housing benefit section.

In Manchester alone 112,000 people receive housing benefit, and of those 105,000 will lose some or all of that benefit. With all the pressures of collection and administration, the authority has a dismal prospect of seeing any reduction in the £12 million rent arrears. Indeed, with the Government's proposals, and with the extra administration and rent collection, it is estimated that there will be a massive increase in rent arrears.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

Does the hon. Gentleman agree that, with ratepayers being obliged to pay at least 20 per cent. towards their rate bills, the proposal will increase the public accountability of local authorities to their ratepayers? Does he think that that will be good for Manchester city council, which employs twice as many local government employees per head of the population as neighbouring Stockport?

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central

We could debate rates all night. Manchester's rate is high because of the Government's cuts. The extra administration that is being put on the authority by the Government will require far more local government finance. With rate capping, where is the money to come from? The Government always blame shortfalls on the greed of Manchester city council or the people who live in Manchester. In the past we have provided marvellous services, and they must be paid for. People are willing to pay for them.

The hon. Gentleman is not comparing like with like. In Manchester we have massive deprived inner city areas, with massive unemployment, including massive youth unemployment, and elderly, sick and disabled people. There has been a mass exodus from the city to the new towns and suburbs. People have left the deprived areas. That is why we have asked for more rates. We could debate rates all night, but at present we are debating housing benefit, which is only one aspect of the matter.

All the extra responsibilities of local authorities and housing associations will have their effect on administration and finance. Once again chaos will reign supreme. One of the briefs that I have received about what the Government should do states: Housing Benefit should be based on an equality of treatment between those who get 'benefit' in the form of tax relief on mortgage interest and those who receive benefit to help with rent and rates. The Green Paper in no way addresses itself to this relationship.Rising levels of council rents mean that housing costs have become a much higher proportion of the outgoings of families on low income. Not only does the Government not recognise this but, having already slashed the Housing Benefit budget, it is drastically reducing entitlement to Housing Benefit. Fully adequate provision for housing costs must be introduced. The Government should take heed of that.

Finally, I wish to reiterate the point made by my hon. Friends. The Government are to make a cut of £500 million in the amount of benefit paid to the poorest people, who cannot pay, so that they can meet their manifesto commitment of tax handouts for the rich. That is their only purpose.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire 9:28 pm, 27th June 1985

I hope it will not be necessary to make an apology for being on my feet twice in one day, but housing benefit is an extremely important subject. We spend another £4,000 million on it, and it affects large and increasing numbers of our constituents, yet from looking around the House this evening it seems a desperate pity that so few hon. Members have bothered to take an interest in the subject. It is not enough to moan about housing benefit when there are changes. Hon. Members should be present to put points to the Ministers at the opportunity that they have.

The hon. Member for Manchester, Central (Mr. Litherland) will be surprised to hear that I agree with much of what he said. Many of the administrative problems that he highlighted, especially in the major cities, will cause considerable trouble when the proposed changes are introduced.

Before I go on to my main remarks, I wish to pick up the comments of the hon. Member for Ashfield (Mr. Haynes), who claimed with great fervour and determination that hon. Members could obtain relief on a second home. If he is claiming tax relief on the mortgage for a second home, he had better be careful, because the Inland Revenue will come down on him like a ton of bricks. We are not entitled to claim tax relief on a second home. The only people who can do so are those who have a second home for a dependent relative, and that dependence must be disability, age or, at a pinch, mental handicap. The provision does not apply to hon. Members. What we can claim is an allowance from our parliamentary allowance against the interest on any mortgage that we might pay—exactly the same as though we were paying rent. We can claim that, but not tax relief.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

In a sense, the hon. Lady has made the point that I was about to make. I was about to say that she was nit-picking. My hon. Friend the Member for Ashfield (Mr. Haynes) talked about the assistance that Members of Parliament can get if they buy second homes. The hon. Lady said that his remarks were true. Whether she chooses to define it as tax relief on a second mortgage matters not to me or to my constituents—or, I suspect, to her constituents.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I think that we had better get back to the housing benefit that is mentioned on the Order Paper.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

Yes, Mr. Deputy Speaker. It is simply a question of what we mean by the words we use. I was simply trying to assist the hon. Gentleman.

The housing benefit scheme was born of good intentions. It was intended to simplify the previous complicated rebates system, and it was intended that the DHSS should pay rent directly to landlords or to housing authorities so that there could be no abuse. I was the chairman of the housing committee in Birmingham when the scheme was introduced, and I welcomed it at the time and thought it was entirely laudable. But it is worth pointing out that, although all Labour Members have spoken tonight about the importance of the housing benefit system, when it was introduced, they voted against it. They did not want it in the form in which it was introduced, but now they want to keep it in the form in which it was introduced. They want no changes. They should remember some of the debates that took place before I entered the House.

Some of the problems that resulted from the scheme were caused partly by the lack of time to introduce it. That problem was recognised by the previous Minister of State and the previous Under-Secretary of State, and the period for the introduction of housing benefit was extended. Part of the problem was caused by the pressure for concessions, and the need constantly to recognise the extra needs and arrangements that were required. However, rough justice may be the best system. Every time we try to make the system fairer, we make it more complicated, and the complications destroy the fairness that we try to introduce.

The result is that the system is fiendishly complicated, with six separate tapers, different systems for rent and rates and different systems for the type of claimants. It has had unforeseen results that no one in the House would have wanted. It means that young people are better off leaving home than if they stayed at home. It destroys the link between rate-paying and voting. No one intended that to happen, but it did. It is so generous that, in many cases, a majority of the people in some areas are in receipt of benefit. In the ward that I represented in Birmingham which had almost half council tenants, in 1982, 50 per cent. were claimants of one sort of another. Now the figure is 75 per cent., and it is increasing. Their economic circumstances have not changed. What has changed is the generosity of the system.

The stigma now attaches to the people who do not claim benefit. One of my problems in my advice bureaux is trying to explain to good-hearted people, many of whom have worked in the mines, paid for their pensions and are comfortably off—thank God they are—that they are not entitled to housing benefit. So much for the stigma.

I suspect that many people who claim rate rebates, especially owner-occupiers, do not realise that some public expenditure is involved. They believe that their rates forms arrive with the rebates included, or simply crossed off, and that no transaction or handing over of money is involved. They repeatedly say to me, "I do not get anything from the state. I am not a scrounger. I do not get anything that I have not paid for." They do not realise that rate rebates, like many other benefits, are non-contributory benefits which cost the Government money. That money comes from other taxpayers, and if they are at the same time, as many of them are, occupational pensioners and taxpayers they are paying for their own rebates and they do not realise it.

Another aspect of the system which has escaped attention and not been mentioned this evening, is that the existence of generous non-cash-limited housing benefit means that no local authority has any incentive to keep down its rents. The Department of Environment for some years has imputed a rent increase each year as it calculates the rate support grant, housing investment programme and so on. I raised the rents in the year that I was chairman by more than that figure. I did it to get some money for repairs. Every penny was spent on housing repairs. I did it to encourage people to take another look at housing purchase, and we were successful at that as well.

I could do that with impunity, because the DHSS would pay. One of the results is seen clearly in a quotation from the Rowe report on the housing benefit review. In paragraph 1.20 he said: Since 1979 rents and rates have increased much faster than inflation so that, according to DHSS figures, expenditure on rent rebates alone is now over 50 per cent. higher than it would have been than if rents and rates had remained at the same level in real terms as in 1979. In other words, the existence of the benefit generates increases in rents. No housing authority has any incentive to keep down its rents.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

That is the most stupid thing I have ever heard the hon. Lady say, and that is saying something. Is she completely unaware that the rise in rents has something to do with the £1·3 billion that the Government have cut from the general housing subsidy? It has nothing to do with the generosity of housing benefit. The cut in housing subsidy was justified by the Government because they said that they would be able to give housing benefit which would target help on the poorest—and now they are cutting housing benefit.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

Of course I am aware of that. I simply make the point that it is possible to increase the rents—and I did it, so I know what I am talking about—it is possible to increase the rents by more than the loss in housing subsidy, by more than the increase in rents enforced by the Department of the Environment, and by more than the money that is needed for repairs. It is possible to increase the rents by whatever figure one fancies, because the DHSS will pay.

It is not just Sheffield that has done that. It is every local authority in the country; and many of them are now achieving something which I regard as quite wrong, and that is a surplus on their housing revenue account—in other words, a profit, and the profit is coming from the DHSS.

Photo of Frank Field Frank Field , Birkenhead

I wish to return to the point that my hon. Friend the Member for Derby, South (Mrs. Beckett) made. We have had statement after statement from Ministers saying that they are deliberately putting up rents partly to encourage buying, as the hon. Lady has noted. The defence of that has been that those on lower incomes and those who are poorest will not be affected because of the rebate scheme. We have now had the rents increased, but we are having the rebate scheme cut. Surely that is wrong.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

I do not disagree with a word that the hon. Gentleman says, except his last sentence. He has described the situation very aptly. The sad thing—I am sure that he will join me in this—is that, despite all the extra money that has been spent on housing and despite the huge increase in housing benefit, so many people are still badly housed. There are more than 30,000 empty council properties in London alone waiting for repairs, but the money does not get spent on repairs. It gets spent in other ways, and to my mind that is quite wrong.

Something had to be done. The proposals in the Green Papers are intended to remove all that muddle and to replace it with something much simpler. By insisting that we all actually contribute to our rates, we will be restoring some local democracy. Surely everyone on both sides of the House can say that those are laudable intentions, just as we said three or four years ago.

I am afraid that I am a bit of a grotty old cynic. I have a couple of words of caution to offer to my right hon. and hon. Friends on the Front Bench. The first refers to the remarks that were made by the hon. Member for Manchester, Central (Mr. Litherland) about the small bills for the 20 per cent. that people have to pay towards their rates. He mentioned similarly the bills that we have to collect at the moment in the local authorities for water rate payments and so on. He was absolutely right. The average payment for rates by a council tenant is about £5 a week. If we are going to take 20 per cent. of it—that is £1 a week—and if we seriously think that local authorities will spend an awful lot of time chasing around for bills of £1 a week, I have to say that I think that my right hon. and hon. Friends are mistaken. What will happen is the same as with the water rates: the local authority will end up writing it off. The benefit to be achieved simply will not match the adminstrative costs.

Further, if my colleagues seriously think that people are going to start voting Tory in huge numbers in the inner cities because instead of paying £1·05 per week they may be asked to pay £1·10 per week I think that they are mistaken. I hope that I am wrong but I honestly do not think that that amount of money is sufficient to wake people up from their apathy of not voting or to change their voting intentions.

My other word of caution is directed to the Department of the Environment and the Treasury as much as to the DHSS. It came out of a discussion that we had yesterday in the Select Committee on Social Services, which is doing reviews of the reviews. My right hon. Friend the Minister was there. The Green Paper proposes to reduce the DHSS contribution to housing benefit administration and the actual contribution to housing benefit to about 80 per cent. At present, the DHSS pays 90 per cent. or 106 per cent. depending on the benefit. At present, local authorities have to find £135 million. We have seen various calculations which suggest that local authorities in the future will have to find anything from £400 million to £700 million extra.

According to volume 2 of the Green Paper, paragraphs 365 and 366, that will be taken into account in the rate support grant. Well, will it? If we seriously say to the Department of the Environment that we want £500 million extra for rate support grant, will it actually cough up? I hope so, because if it does not, there will be yet more rates increases, most of which will be borne by the ratepayers, and many more people will qualify for housing benefit. The poor old DHSS, which pays for just about everything else in this country, will then end up spending even more. I have a nasty feeling that the benefit system is so complicated and so all-embracing that almost every change will provoke howls of rage and end up costing us more. It is like trying to get a fat lady into a corset. It will all pop out somewhere else. I see my hon. Friend the Whip looking at me—I wish that he would not while I am talking about fat ladies and corsets.

If we do nothing about the situation, we simply bank up a bigger and bigger bill and yet more people will be claimants, including the most respectable people, who have never before asked or wished to claim a noncontributory benefit. People like that should not be drawn into this all-suffocating net. I applaud every effort made by my right hon. and hon. Friends to improve the housing benefit system and I wish them luck.

Hon. Members:

She has already finished.

Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone 9:42 pm, 27th June 1985

Like the hon. Member for Derbyshire, South (Mrs. Currie) I also have a nasty feeling. I have a nasty feeling that the Government are continuing the process of milking the poor. Year after year they have "reorganised" the housing benefit system. There were reorganisations in 1983, 1984 and 1985 and the Green Paper seeks to continue the process into the future.

The reason for all this reorganising is that the Government have fallen into the trap to which the hon. Member for Derbyshire, South referred. By cutting central Government funding to local government, they forced local government to put up the rates. To get over that, they brought in a rate-capping system to ensure that local government could not recover for the benefit of their localities the money that had been taken from them by the Government. The Government also brought in a system which forced local authorities to put up rents.

Naturally, every time the rents and rates went up, the number of claimants increased. Indeed, we encouraged people to apply for benefits that were theirs by right. The Government have now recognised that consequence and the Green Paper seeks to do a rate-capping job on the poorest tenants. In my area we now have 21,525 council tenants claiming rent and rates rebates, 554 indirect ratepayers and 13,669 direct ratepayers claiming rate rebates.

That is a total of 35,748, or 41·63 per cent. of the population. Fifty per cent. of my constituents receive rent and rate rebates. That is a direct result of the Government's policy of forcing up rent and rates.

The new proposals are no more than an excuse to claw back some of the money that the Government are having to pay out. No figures have been provided. They have been left out for two possible reasons: first, so that calculations cannot be made and, secondly, to gauge the reaction of the country and then to provide the figures.

What will happen to housing benefits in November 1985? In June 1985 the Secretary of State announced the benefit uprating. The changes deliberately resulted in a cut in housing benefit entitlement for many recipients. About 50 per cent. of my constituents will be affected by the changes. It is estimated that 2 million households will suffer reductions and that 500,000 households will receive no benefit. Those who will be affected are poor people with families and pensioners. There will be a further twist to the spiral and a further increase in rent and rates. More people will try to obtain benefit from the housing benefit scheme. The Government will then have to pay out more money, which will result in a further twist to the downward spiral.

The Government were given the opportunity to introduce a scheme that would benefit people, not take benefits away from them. I accept that money for such schemes has to be found from somewhere, but money should not be taken from the poor to be given to those who are even poorer. Money should be taken from those who can afford it to help those in need. In that way the economy will grow, not decline. I am certain that we shall debate this matter again, because 50 per cent. of the population will be affected by it.

Photo of Mr Tony Newton Mr Tony Newton , Braintree 9:47 pm, 27th June 1985

I hesitated to intervene in the argument about how many households could be provided with mortgage tax relief, but I am tempted to think that there ought to be some kind of tax relief for having to do this kind of thing twice over in one evening.

Two elements in the debate are related but distinct. I shall try to deal with some of the strategic questions that were raised by the hon. Member for Derby, South (Mrs. Beckett). First, however, it would be sensible to say a few words about another element in the debate: last week's uprating and, in particular, the proposal about the housing benefit rates taper. I shall not rehearse the details of the uprating, apart from reiterating that against the background of a £2 billion increase it is ridiculous to say that the Government are solely concerned with cutting social security benefits.

The housing benefit needs allowances were fully uprated by 5·8 per cent. Far from housing benefit expenditure being cut, it is likely that this year it will be larger than it was last year, though just a little less large than it would have been but for the changes that we announced last week. About 7 million people will be helped by housing benefit, to which must be added a fact that was acknowledged by a few hon. Members—that about one third of a million low-paid families with children will receive additional housing benefit over and above what they would otherwise have received as a result of the real improvement in the child needs allowance.

That is the context in which the motion has sought to concentrate only on the proposal to increase from 9p in the pound to 13p in the pound the rate at which help is withdrawn from people in the upper ranges of those on housing benefit in respect of help received with their rates.

I wish to emphasise three points, even in relation to that proposal. First, someone on supplementary benefit will not be affected in any way at all. His housing benefit remains exactly the same. Secondly, no one with an income below the needs allowance is affected in any way at all. That means that no single pensioner will be affected who has an income below £48·55, and no married pensioner couple will be affected with an income of just over £71. No one at any level of income will be affected at all in respect of help with rent.

The hon. Member for Derby, South overplayed her hand in some of the figures she gave. She claimed that from November a pensioner couple paying £5 domestic rates would not be entitled to benefit with an income of £85. If she checks her figures, she will find that in November such a couple will still be on benefit with a weekly income of £90. That is the advice that I have been given.

It puts these figures in context when I repeat that the average loss for pensioners in respect of the housing benefit rates taper proposal is about 47p a week. That should be contrasted with the fact that the retirement pension is going up by £4 a week for a married couple. Put another way, a pensioner will have to have an income of £13 above the basic state retirement pension level to lose as much as 10p a week. That helps to put the matter in context.

Having made those remarks about the uprating, I come to the major theme of the debate, including the serious and thoughtful speech of the hon. Member for Derby, South about the review. So far as I can, I shall respond in like terms. To do so, I must begin by putting housing benefit into the broader context of some of the other proposals in the review.

Alongside the pension proposals and the family credit proposal, the most important theme of the review is one that I have emphasised on a number of occasions. This is probably the first attempt ever, certainly in 50 years, to look at income-related benefits as a whole. Beveridge did not do that job. In the succeeding period, things have turned out optimistically under any Government, but he assumed that income-related benefits would be a small tail to the system. That has never been true. In the years immediately after Beveridge, 1 million people were on supplementary benefit. It was 2 million in the mid-1960s, 3 million by the late 1970s and about 4 million now. Neither side of the House can crow about that record.

Because Beveridge had assumed that income-related benefits would be a relatively insignificant part of the system, no one has ever stood back and looked at it as a whole. There have been changes in supplementary benefit from time to time. We invented rent and rates rebate schemes and turned them into housing benefit. We invented FIS in the early 1970s, and that has been improved and extended since. But no one has ever attempted to look at the range of income-related benefits as a whole. They all have different rates and structures as well as their own complexities, and they have contributed mightily to the problems of the poverty and unemployment traps, which are now such a marked and unhappy feature of the British social security system.

Underlying the proposals on housing benefit, which have been the subject of so much criticism tonight, is the fact that for the first time there is an integrated approach across the range. There is a common basis of assessment using net income instead of a mix of net and gross income as at present. Perhaps more important still, there is a common benefits structure. Our family premium concept was carried through from one benefit to the other, and the age relationship for help with children was carried through from supplementary benefit to housing benefit into the proposed new family credit.

Alongside those two major simplifications in housing benefit, we are bringing rent and rates together with a single taper instead of two schemes with six different tapers, which lead to the sort of complications to which the hon. Member for Woolwich (Mr. Cartwright) referred.

Having presented in the review this pattern of income-related benefits as a whole, we will make a number of major gains. It virtually removes the unemployment trap in the literal sense of people being better off out of work than in work, and it greatly eases the poverty trap and in particular eliminates the possibility of marginal tax rates over 100 per cent.—in other words, that one gets worse off by earning more money. Those are major gains across the whole field.

In terms of housing benefit specifically, the structure that we have proposed produces for the first time a system which is fair as between those in and those out of work because it is giving help related to 100 per cent. of rent at the same level of income for supplementary benefit cases and those who are not on supplementary benefit. That in turn enables us to get rid of housing benefit supplement—one of the worst single complexities of the entire social security system—and it enables us to bring about greater equality of treatment between those receiving help with their rent and those receiving help with their rates — that is, between tenants and owner-occupiers.

All those changes—I ask Opposition Members who are critical of expenditure to concentrate attention also on these structural proposals—are major gains in terms of the efficiency of the social security system for any Government, whether this Government or any future Government, in making effective use of whatever resources they decide to spend. That is again regardless of the party political knockabout argument of how much money one spends at a particular time.

I had my doubts whether the hon. Member for Derby, South had fully understood the importance of this in her remarks about high rent schemes when she suggested that, as a result of the review, those who are affected by the current high rent schemes would suffer. One of the important points about going to 100 per cent. help at the same level of income in respect of rent is that the need for high rent schemes disappears. Those high rent schemes had to be invented as an additional complication to the system because we were giving 100 per cent. help to those on supplementary benefit, but help related to only 60 per cent. of rent for those who were not on supplementary benefit and standard cases. High rent schemes go out of the window not because there are great numbers of new losers automatically but because the system is fairer and more equitable between those two different groups of people.

These changes necessarily mean changes in the relativities among those who are on housing benefits. There will be some who do better than they otherwise would have done and some who do worse than they otherwise would have done. As the House knows, it is impossible for me to give figures of exactly what will happen because they depend on income support rates and other factors that we cannot yet settle.

Broadly, the position will be that those who have high rents or low incomes will do better than they otherwise would have done — a perfectly reasonable gain for targeting—and those who have lower rents or the higher range of incomes among those on housing benefit will probably do worse than they otherwise would have done. That is just another way of describing more effective targeting, which is what we are aiming at in the proposals.

I hope that Opposition Members, in continuing the political debate about how much money should be spent, will recognise the real gains in terms of the fairness and effective use of resources which these proposals make possible for any Government from the time of their introduction.

It seems to me that what underlines the motion as much as anything else is that argument about money. That reflects in turn the Labour party's persistent refusal to recognise that spending has to be paid for, and very often by those with very little more money than those one is seeking to help, and their refusal to recognise that the merciless inflation over which the last Labour Government presided did more damage to the poor than anything that the present Government have done on social security. What this motion shows more than anything else is that the Labour party has not thought seriously about the real problems of social security, let alone of its reform. Its position is simply that of a party that will say and do anything to get power — power which, if Labour Members got it, they would not have the slightest idea how to use.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 135, Noes 221.

Division No. 252][10.00 pm
AYES
Abse, LeoHogg, N. (C'nauld & Kilsyth)
Archer, Rt Hon PeterHolland, Stuart (Vauxhall)
Ashley, Rt Hon JackHowell, Rt Hon D. (S'heath)
Ashton, JoeHoyle, Douglas
Atkinson, N. (Tottenham)Hughes, Robert (Aberdeen N)
Banks, Tony (Newham NW)Hughes, Simon (Southwark)
Barnett, GuyJanner, Hon Greville
Beckett, Mrs MargaretKilroy-Silk, Robert
Beggs, RoyKirkwood, Archy
Benn, TonyLamond, James
Bennett, A. (Dent'n & Red'sh)Leadbitter, Ted
Bermingham, GeraldLeighton, Ronald
Blair, AnthonyLewis, Ron (Carlisle)
Boothroyd, Miss BettyLewis, Terence (Worsley)
Boyes, RolandLitherland, Robert
Bray, Dr JeremyLofthouse, Geoffrey
Brown, Gordon (D'f'mline E)McCartney, Hugh
Brown, R. (N'c'tle-u-Tyne N)McCrea, Rev William
Brown, Ron (E'burgh, Leith)McDonald, Dr Oonagh
Buchan, NormanMacKenzie, Rt Hon Gregor
Caborn, RichardMcNamara, Kevin
Callaghan, Jim (Heyw'd & M)McWilliam, John
Campbell-Savours, DaleMadden, Max
Carlile, Alexander (Montg'y)Martin, Michael
Carter-Jones, LewisMaxton, John
Cartwright, JohnMeacher, Michael
Clark, Dr David (S Shields)Mikardo, Ian
Clay, RobertMillan, Rt Hon Bruce
Cocks, Rt Hon M. (Bristol S.)Miller, Dr M. S. (E Kilbride)
Cohen, HarryMitchell, Austin (G't Grimsby)
Concannon, Rt Hon J. D.Molyneaux, Rt Hon James
Conlan, BernardOakes, Rt Hon Gordon
Cook, Frank (Stockton North)O'Brien, William
Cook, Robin F. (Livingston)Park, George
Corbyn, JeremyParry, Robert
Cowans, HarryPatchett, Terry
Cox, Thomas (Tooting)Pavitt, Laurie
Craigen, J. M.Pendry, Tom
Crowther, StanPike, Peter
Cunliffe, LawrencePowell, Rt Hon J. E. (S Down)
Davis, Terry (B'ham, H'ge H'l)Prescott, John
Deakins, EricRedmond, M.
Dewar, DonaldRees, Rt Hon M. (Leeds S)
Dixon, DonaldRichardson, Ms Jo
Dobson, FrankRoberts, Allan (Bootle)
Dormand, JackRoberts, Ernest (Hackney N)
Dubs, AlfredRoss, Stephen (Isle of Wight)
Eastham, KenRowlands, Ted
Edwards, Bob (W'h'mpt'n SE)Ryman, John
Evans, John (St. Helens N)Sedgemore, Brian
Field, Frank (Birkenhead)Shore, Rt Hon Peter
Fisher, MarkShort, Mrs R.(W'hampt'n NE)
Flannery, MartinSilkin, Rt Hon J.
Foot, Rt Hon MichaelSkinner, Dennis
Forrester, JohnSmith, Rt Hon J. (M'kl'ds E)
Foster, DerekSnape, Peter
Fraser, J. (Norwood)Soley, Clive
Freeson, Rt Hon ReginaldSpearing, Nigel
Freud, ClementStott, Roger
George, BruceStrang, Gavin
Godman, Dr NormanTorney, Tom
Golding, JohnWareing, Robert
Gould, BryanWelsh, Michael
Hamilton, James (M'well N)Winnick, David
Hamilton, W. W. (Central Fife)Young, David (Bolton SE)
Harman, Ms Harriet
Harrison, Rt Hon WalterTellers for the Ayes:
Hart, Rt Hon Dame JudithMr. Ray Powell and
Haynes, FrankMr. Allen McKay.
Heffer, Eric S.
NOES
Adley, RobertArnold, Tom
Alexander, RichardAshby, David
Alison, Rt Hon MichaelAspinwall, Jack
Amess, DavidAtkinson, David (B'm'th E)
Ancram, MichaelBaker, Nicholas (N Dorset)
Baldry, TonyLilley, Peter
Banks, Robert (Harrogate)Lloyd, Peter, (Fareham)
Batiste, SpencerLord, Michael
Bellingham, HenryLuce, Richard
Bendall, VivianLyell Nicholas
Bennett, Rt Hon Sir FredericMcCurley, Mrs Anna
Benyon, WilliamMacGregor, John
Best, KeithMacKay, John (Argyll & Bute)
Biffen, Rt Hon JohnMaclean, David John
Biggs-Davison, Sir JohnMcNair-Wilson, P. (New F'st)
Blackburn, JohnMcQuarrie, Albert
Blaker, Rt Hon Sir PeterMajor, John
Bonsor, Sir NicholasMalins, Humfrey
Boscawen, Hon RobertMalone, Gerald
Bottomley, PeterMaples, John
Bottomley, Mrs VirginiaMarlow, Antony
Bowden, Gerald (Dulwich)Marshall, Michael (Arundel)
Brandon-Bravo, MartinMates, Michael
Bright, GrahamMather, Carol
Brinton, TimMawhinney, Dr Brian
Brooke, Hon PeterMaxwell-Hyslop, Robin
Brown, M. (Brigg & Cl'thpes)Mayhew, Sir Patrick
Bruinvels, PeterMellor, David
Bryan, Sir PaulMerchant, Piers
Burt, AlistairMeyer, Sir Anthony
Butterfill, JohnMills, Iain (Meriden)
Carlisle, John (N Luton)Miscampbell, Norman
Carlisle, Kenneth (Lincoln)Mitchell, David (NW Hants)
Carttiss, MichaelMoate, Roger
Cash, WilliamMontgomery, Sir Fergus
Chalker, Mrs LyndaMorris, M. (N'hampton, S)
Chapman, SydneyMorrison, Hon C. (Devizes)
Chope, ChristopherMoynihan, Hon C.
Clark, Hon A. (Plym'th S'n)Murphy, Christopher
Clarke, Rt Hon K. (Rushcliffe)Needham, Richard
Clegg, Sir WalterNelson, Anthony
Colvin, MichaelNeubert, Michael
Conway, DerekNewton, Tony
Coombs, SimonNicholls, Patrick
Couchman, JamesNormanton, Tom
Cranborne, ViscountNorris, Steven
Critchley, JulianOnslow, Cranley
Crouch, DavidOppenheim, Phillip
Currie, Mrs EdwinaOppenheim, Rt Hon Mrs S.
Dickens, GeoffreyOsborn, Sir John
Dicks, TerryOttaway, Richard
Dorrell, StephenPage, Sir John (Harrow W)
Dunn, RobertPage, Richard (Herts SW)
Eggar, TimPattie, Geoffrey
Emery, Sir PeterPawsey, James
Evennett, DavidPercival, Rt Hon Sir Ian
Eyre, Sir ReginaldPorter, Barry
Fairbairn, NicholasPortillo, Michael
Fallon, MichaelPowell, William (Corby)
Farr, Sir JohnPowley, John
Favell, AnthonyPrentice, Rt Hon Reg
Fookes, Miss JanetPrice, Sir David
Fowler, Rt Hon NormanProctor, K. Harvey
Fox, MarcusRees, Rt Hon Peter (Dover)
Gale, RogerRhodes James, Robert
Gardner, Sir Edward (Fylde)Rhys Williams, Sir Brandon
Garel-Jones, TristanRidley, Rt Hon Nicholas
Glyn, Dr AlanRidsdale, Sir Julian
Grant, Sir AnthonyRoberts, Wyn (Conwy)
Greenway, HarryRobinson, Mark (N'port W)
Griffiths, Sir EldonRoe, Mrs Marion
Hamilton, Hon A. (Epsom)Rossi, Sir Hugh
Hayes, J.Rost, Peter
Hickmet, RichardSackville, Hon Thomas
Higgins, Rt Hon Terence L.Sainsbury, Hon Timothy
Holland, Sir Philip (Gedling)Sayeed, Jonathan
Hunter, AndrewShaw, Sir Michael (Scarb')
Jenkin, Rt Hon PatrickShelton, William (Streatham)
Johnson Smith, Sir GeoffreyShepherd, Richard (Aldridge)
King, Rt Hon TomShersby, Michael
Latham, MichaelSims, Roger
Lawson, Rt Hon NigelSkeet, T. H. H.
Lennox-Boyd, Hon MarkSmith, Sir Dudley (Warwick)
Lewis, Sir Kenneth (Stamf'd)Smith, Tim (Beaconsfield)
Lightbown, DavidSoames, Hon Nicholas
Speed, KeithVaughan, Sir Gerard
Speller, TonyViggers, Peter
Spence, JohnWaddington, David
Spencer, DerekWakeham, Rt Hon John
Spicer, Jim (W Dorset)Walden, George
Squire, RobinWalker, Bill (T'side N)
Stanbrook, IvorWalker, Rt Hon P. (W'cester)
Stanley, JohnWall, Sir Patrick
Steen, AnthonyWaller, Gary
Stern, MichaelWard, John
Stevens, Lewis (Nuneaton)Wardle, C. (Bexhill)
Stevens, Martin (Fulham)Warren, Kenneth
Stewart, Allan (Eastwood)Watts, John
Stewart, Andrew (Sherwood)Wells, Bowen (Hertford)
Stewart, Ian (N Hertf'dshire)Wheeler, John
Stokes, JohnWhitney, Raymond
Stradling Thomas, J.Wiggin, Jerry
Sumberg, DavidWinterton, Mrs Ann
Taylor, Teddy (S'end E)Winterton, Nicholas
Temple-Morris, PeterWolfson, Mark
Thomas, Rt Hon PeterWood, Timothy
Thompson, Donald (Calder V)Yeo, Tim
Thompson, Patrick (N'ich N)Young, Sir George (Acton)
Thorne, Neil (Ilford S)
Townsend, Cyril D. (B'heath)Tellers for the Noes:
Tracey, RichardMr. Ian Lang and
Twinn, Dr IanMr. Tony Durant.
van Straubenzee, Sir W.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House welcomes the Government's objective of securing a structure of income-related benefit which will ensure greater equality of help with housing costs for people at the same level of income, whether in or out or work, will remove the need for housing benefit supplement and will be simpler for staff to administer and for claimants to understand.