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I beg to move amendment No. 209, in page 35, line 26, at end insert
'in the case of benefit payable to an owner-occupier is to be in the form of an owner-occupier allowance covering prescribed housing costs including mortgage interest and the full amount which he is liable to pay by way of rates, and in any other case. '
I turn first to the Government's proposal announced last weekend to cut by half the mortgage interest payments of the unemployed during the first six months on supplementary benefit. We object to the way in which the announcement was made, sneaked out by written answer at the last minute after a Green Paper, after a six-month consultation period, after the White Paper and after the three-month Committee stage on the Bill without reference to this matter. We object even more to the content of the statement. It will sentence thousands of people to eviction and homelessness as a penalty for being unemployed. Government policy has already robbed thousands of people of jobs and now they will begin to rob those people of their homes as well. It will be the last straw that finally ditches thousands of people who exercise their right to buy.
We know that the Tory party has made great play of people's rights to be able to buy their homes. Apparently that applies to everyone except the jobless and the poor. It seems that the Prime Minister is quite willing to accept £35 a week in mortgage interest tax relief on her new £500,000 Dulwich home while at the same time denying much smaller sums for people who cannot keep a roof over their heads without mortgage interest cover.
The justification given by the Government for this proposal is that in some cases the help given is so generous that people are better off out of work. That assertion is based on figures so absurd that it is surprising that even this Government takes them seriously. A table in the note supplied to the SSAC compares in-work and out-of-work incomes for married men with earnings between £80 and £150 a week and with a £16,000 mortgage. We are told that that is the average mortgage for a two-child family. The table shows that where earnings are between £80 and £120 a week the man is better off out of work. That is the Government's justification. The table does not show how many people with £16,000 mortgages have earnings as low as this. I submit that the answer is virtually nobody. Irrespective of that, is it not typical of the Government that, when faced with a situation where the low paid in work receive little or no more help with housing costs than the unemployed because low income prevents them getting much mortgage interest tax relief, the Government prefer to put the knife further in to the unemployed rather than to take the other option of extending housing benefit to owner-occupiers on low incomes?
A report in The Guardian on Saturday said:
Senior ministers knew that the proposals were in the wind, but they knew nothing about the timing of the announcement. It was seen as especially inept and insensitive that the news should have been given immediately after the unemployment figures showing a further increase, after 3,500 job losses in the shipyards and cuts of 1,000 jobs at British Caledonian. The announcement had originally been scheduled a few weeks ago, but was postponed on the grounds that it would be inopportune in the run-up to last week's local elections.
The documents relating to this were finally released, but without the promised copies of the inspectorate's report. However, they have been subsequently placed in the Library.
The reasons for not distributing the report more widely are plain enough. It simply does not support the Government's case. For example, it shows that in the Government's sample of over 300 claimants, the average mortgage payment was £72 a month but one in four were paying between £100 and £250 a month. The implications of the Government's proposal for those at the upper end of that range are appalling. Eighty-seven of those claimants had approached the lender for a reduction in their mortgage payments. Only 69 per cent. of them had been able to negotiate a reduction, usually for only three months at a time. All that they were asking for was to be allowed to pay their mortgage interest only, not the principal. One wonders what the lenders would have said if they had wanted to pay only half the interest. Even under the present rules, in the inspectorate's sample that the Government have produced, one claimant had been forced to put his home up for sale and two others were under pressure to do so.
The Government's proposal is that only half the interest should be paid for the first six months, but that means the first six months on supplementary benefit. In many cases, those concerned will already have been living on a low income for many months before they claim supplementary benefit. Worse still, some people will be caught in what will no doubt be known as the mortgage trap. Because only half their mortgage interest will be taken into account, they will not qualify for supplementary benefit at all. Therefore, they will be unable to clock up the six months on benefit necessary to qualify for having the whole of their mortgage interest met.
Take, for example, a family with two children when the father is on invalidity benefit. His total income will be £99·40 a week. If he has to pay mortgage interest of £20 a week, under the present rules he will qualify for supplementary benefit after 12 months of sickness. But if only half his mortgage interest is taken into account he will not qualify and he will go on not qualifying indefinitely. Such a family will find themselves in the deepest trouble.
I would rather that the hon. Gentleman made his speech. There is great pressure on time because of earlier statements and I intend to be as brief as I can.
The SSAC's words are worth quoting in full. It said:
If mortgage interest is not met in full for an initial period on benefit, but instead an arrangement is made to reschedule the loan at a higher amount once the period is over, an owner-occupier claimant could well have less incentive to return to work.
That is important because the Government's argument is that people should have a greater incentive to return to work. The committee went on:
After a given period, income support would begin to pick up the bill, but if a claimant got a job (or recovered from sickness) after any lengthy break, the rescheduled payments could have risen to a level difficult to manage on low wages. In such circumstances there would be a strong temptation to remain on income support until a better-paid job came along.
For those reasons we unequivocally reject this last nasty, vicious kick at the unemployed, right at the end of the Committee and Report stage of the Social Security Bill.
Let me now deal briefly with amendment No. 152. The Bill seeks to take general powers to vary housing benefit levels by means of regulations, powers which potentially embrace the 20 per cent. cut, and, indeed, a lot more. It would be possible for the Government to use those powers to render an even larger proportion of rates ineligible for benefit and it would be helpful today if we could be told that the Government will not do that. I ask explicitly that, in replying, the Minister gives a guarantee that the Government will not make a larger proportion even than 20 per cent. ineligible for benefit. They manifestly intend to extend the thinking behind this sort of cut to the proposed community charge.
The Government would not only have powers to increase the proportion of rates or community charge which is ineligible for benefit, but the community charge would be levied upon a range of low income non-householders, who currently do not pay rates. They will be victims of the clause.
The extent of hardship which will be brought about on present figures alone is considerable. There will be some 7 million losers on the housing benefit side as the result of the clause and some three quarters of the £450 million which will be taken from claimants is accounted for by the cut in eligible rates.
Even if an average amount were to be incorporated into the income support rates as compensation, as some have suggested, for the loss of rate rebate from the measure, hardship would still be inflicted because of the wide variations in rate levels in different parts of the country. It is incredible that the Government have refused to compensate income support claimants even to that extent. There is to be no compensation in income support and that means that money which at present is given for food, clothing and fuel will now have to be used to pay for rates. Hardship will not be confined to the purely financial. Rate arrears will undoubtedly rise as a result of the proposal and increasing numbers of poor people will find the bailiff knocking at the door and find themselves in court.
The Government justify this measure on grounds of local accountability. That excuse is incredible. First, it suggests that those who currently receive part of their income by way of full rate rebate are therefore lesser citizens—a sort of local tier of voter—than those who are better off financially. That may well appeal to those Conservative Members who hanker nostalgically for the days when people on low incomes did not have the vote at all. But to the rest of us it is another depressing manifestation of the neo-19th century outlook which informs so much of the Bill.
Secondly, it is clear that the proposal has nothing whatever to do with the principles of social security. The idea is that the financial hardship inflicted on claimants will cause pressure to be exerted on local councils. In other words, families on some of the lowest incomes in the land are being used by the Government as cannon fodder in their obsessional quarrel with those local authorities whose standards of service are too high for the Government's liking.
One of the supposed advantages of the current housing benefits scheme, as it was introduced in 1982, is that in large numbers of cases the local authority does not need to operate any collection procedures in respect of council tenants or direct ratepayers. The proposed cut in eligible rates would require the collection of some payment in virtually all cases, thus wiping out the administrative advantages which are supposed up to now to have been one of the main attractions.
Collection will have to be recommenced in respect of over 4 million ratepayers and often the amount to be collected, while a significant loss for a claimant on a low income, will cost more to collect than the amount recovered. As I say, there will be an inevitable growth in rate and rent arrears resulting from other aspects of housing benefit cuts and at the same time the Government are proposing to cut local authorities' administrative costs subsidy in relation to housing benefit.
The proposal to make the cut in rates which are eligible for rebate flies in the face of the advice clearly and explicitly given by the housing benefit review team, of the overwhelming majority of submissions to the review, of the Social Security Advisory Committee and the Select Committee on Social Services. It is a combination of a desire to extract savings from some of the poorest households and a desire to wage a political offensive against local authorities using claimants as ammunition. Both amendments reflect some of the nastiest and most distateful measures in the Bill, and I ask hon. Members on both sides of the House to accept them.
I endorse much of the sentiment expressed by the hon. Member for Oldham, West (Mr. Meacher), if not the way in which it was presented. On mortgage interest for the unemployed, I should be interested to hear the results of the consultations that were promised in Committee and which have led to the decision. The Minister said that he would consider the matter carefully and that a decision would be made in due course. A decision has been made, but we do not know much about the consultations. It is staggering that those who were consulted consented willingly to the proposal announced by the Minister last week. I cannot support the way in which it was done or the results that it will produce.
Conservative Members should consider carefully what is proposed in amendment No. 152. Like the family credit proposal which we discussed last night, the 20 per cent. rates contribution has little if anything to do with the Bill. If it was excised from the Bill, the social security reform that the Government propose would proceed almost unaltered, and they need not face the severe test at the next election of defending the proposals, which will necessarily involve people in receipt of supplementary pensions and benefits making contributions of at least 20 per cent. to their rates bills. That will inevitably, as night follows day, push people below the subsistence level. We struggled to force the Government to define the true level of subsistence, but, whatever it is, the proposal will push those people well below it.
As the hon. Member for Oldham, West said, although we have heard that the 20 per cent. contribution will be introduced, in Committee the Government said that the matter was still under consideration. In addition, we were told that the proposal should be seen in the context of the Green Paper on the financing of local government. That paper has been published, but it gives me no cause for consolation on the 20 per cent. rate contribution. It is silent on the subject. Recently, the Scottish Grand Committee debated the rates reform that will be visited on Scotland a year before it will be visited on England. When the Secretary of State for Scotland was asked about the 20 per cent. rate contribution, he said, "It has nothing to do with me. My Department has nothing to do with this." The Government cannot hide behind the fact that some solace and consolation will be found in the introduction of the new system of local government finance.
In Committee, I accepted—I still accept it—that an argument exists for accountability in local government. offer the Government a way round that difficulty. If they wish to enhance accountability in local government, the way forward is staring them in the face. It is to introduce proportional representation into local government, which will enhance the quality of votes so that the electorate will decide what sort of local administration they have. Their local votes will be of a much higher quality, and we would not need so many central Government powers to clobber local authorities. That is how the alliance would enhance local accountability. The Minister of State frowns. That is by far the best way to get accountability back into local government.
The Government's proposals will inevitably hurt pensioners, especially those in my part of the world. I do not know how at the general election the Government and Conservative Back-Bench Members will defend the proposals in the context of the Social Security Bill, in which they have no place.
If the Government are looking for more savings—they should drop the fallacious argument about accountability because the only argument they could use is one of cost—the £450 million that they are taking out of housing benefit in other parts of the Bill should be enough. They cannot justify imposing further financial agony on the elderly and claimants by making them pay 20 per cent. towards their rates for the spurious reason of increasing local democracy. It is a ridiculous proposal, and I hope that the Government, even at the 11th hour, will reconsider it.
This is the first opportunity that the House has had to reflect upon and consider last week's announcement, which caused a considerable furore at the weekend. I do not support the solution proposed in either amendment. I should tell the hon. Member for Oldham, West (Mr. Meacher) that his remarks on amendment No. 209 went far beyond legitimate comment even among those of us who are worried about the content of last week's announcement. I tell him well in advance that I shall not go into the Division Lobby with him should he press the amendment to a vote. However, I must tell my hon. Friend the Minister that the proposal to cut by half the mortgage interest payment assistance for the first six months of unemployment has come at a signally unfortunate moment. To make the announcement in the same week as the announcement of a further increase in unemployment and the fact that long-term unemployment shows no sign of being alleviated was, to say the least, unfortunate.
There is an underlying assumption in what the Government appear to propose that jobs are lost voluntarily and that there must be a continuing incentive for people to go back to work. That may be the case in the prosperous south-east and some other areas, but it is certainly not so in those areas where jobs are not only difficult but almost impossible to obtain. To that extent, there is an element of insensitivity in making the recommendation now.
It is said that there is a disincentive to work. Sometimes we are told that there is an incentive towards industrial action for as long as the present assistance with mortgage payments should continue. I still await proof that that is the case. In areas of high unemployment, it simply does not apply.
I have one overriding objection to last week's proposal. It seems to discriminate in a way which the Minister and I would not wish to discriminate against the owner-occupier and in favour of the person in rented accommodation. If we are talking about disincentives to find work, I cannot understand why we should reduce the assistance that we give to owner-occupiers but continue the assistance that we give to those in rented accommodation. If there is a disincentive, it must apply irrespective of the accommodation that one occupies. At a time when the Government and the Conservative party are recommending the movement into owner-occupation of people who have not considered it previously, and when we have argued strongly for the purchase of council houses and encouraged their occupants to move over to owner-occupation, the proposal will be seen as discriminating against those who have believed our suggestion that owner-occupation is a good thing.
I say to the Minister, as gently as I can, that the timing of the announcement was wrong and that its direction, to say the least, is not proven. I think it was a wise move to refer it to the SSAC for its recommendations and its reaction. We have, of course, already been treated to an indication of what the SSAC will say.
All I will say at this stage is that, strictly as a personal opinion, I believe that we should all be mindful of the need to cut the very substantial bill that social security runs up for the taxpayer, but I am not as yet persuaded that this is the right way to do it. Neither am I persuaded that the amendment and proposal to which I am speaking is the right way to solve the problem.
I therefore hope that my hon. Friend the Minister in replying to the debate will give further consideration to this. I know that in the Department officials have long been mulling over whether this is the only way to go, and whether, it it were to proceed, we might be doing what we have all along tried to resist, that is, providing a disincentive to ordinary people owning their own homes. Because I genuinely believe that those who have purchased council houses could arguably be most adversely affected by the measure announced last week, I hope that my hon. Friend will reconsider his intention.
I wish to begin with a complaint that I think is a matter for you, Mr. Deputy Speaker. It is most unfortunate that the two important subjects of mortgate payments and the 20 per cent. rate charge have been allotted less than an hour for discussion. These matters by some chance—I do not say that it was engineered — seem not to have been adequately discussed in Committee. Perhaps you can consider this, Mr. Deputy Speaker, in the interests of some of our Back Benchers who have been trying to speak. There was a change in business last night, and we are now confronted with this situation in which it is impossible to do justice to some of the points that I wish to raise.
While my party is responsible for tabling the amendment dealing with owner-occupation, which amendment I support, I am in the curious position of wanting to support the Liberal amendment. I have no choice in this—it is the only one that is open to me because of the way this place works.
As to the whole issue of a 20 per cent. rates charge on every single adult, I think that this is one of the worst things that the Government have produced — and they have produced many. The Minister will recollect that some of my hon. Friends raised this in Committee. It was a most
disappointing debate. The Minister was expected to cover about 20 amendments, which he obviously could not do. May I remind him what he said in response to my hon. Friend the Member for Sheffield, Heeley (Mr. Michie) and, indeed, to my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman) and for Derby, South (Mrs. Beckett):
bearing in mind the great uncertainties that surround the issue of rates in relation to the consultative proposals on rates reform which have been submitted".
I repeat what the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) stated, that Ministers with responsibility for social security say, "It is nothing to do with us because the Government are in the middle of consultations about changes in rates proposals." The Minister emphasised this again when he said:
It is foolish for any of us to try to draw final conclusions from any of those matters in relation to rates and the 20 per cent. proposal at the moment." — [Official Report, Standing Committee B, 4 March 1986; c. 632–44.]
I do not know that there is anything foolish about it. It is high time that the Government gave some indication of their intentions.
I am one of those irritating practical people who like to be able to say to constituents, "I'm sorry, you're getting £40 at the moment, but after all this comes into being either you will get only £38 or you will get £42, as the case may be". In regard to income support, I know that the Government cannot give the levels of support, but the Minister is an able Minister, he has been in the job a long while and he must know what we are driving at. We are accusing him of being a little vague in this respect.
Although my next point is not a Scottish Office point, I observe that there is no Minister from the Scottish Office present, and there should be, because it is rates that we are discussing. The Secretary of State for Scotland, if nothing else, is a slick debater, but that does not win votes in Scotland — we are a hit too long in the tooth and politically crude for that. Let me tell the Minister what he said about this in the Scottish Grand Committee. In reply to the hon. Member for Dunfermline, East (Mr. Brown), he said:
First of all, the hon. Gentleman knows that the 20 per cent. proposal is nothing to do with the Green Paper. We can have a debate on other matters if the hon. Gentleman wishes, but he knows that certain proposals are irrespective of whether we keep domestic rates or have a community charge. I am speaking today on the proposals in the Green Paper".
He went on to repeat that in reply to the same question asked by the hon. Member for Dundee, East (Mr. Wilson):
The suggestion arises out of the social security proposals. I shall not deal with them now, because they do not arise out of the Green Paper."—[Official Report, Scottish Grand Comittee, 28 April 1986; c. 2–9.]
This is not good enough. I hope that the Minister will recognise that, and give some more specific information than we have had up to now.
How does the timetable fit into this? In the Green Paper on rates it is made clear at paragraph 8.48 that there could be a change in the domestic rate system, but with effect from April, 1989. This is not a Scottish point just because circumstances have compelled the Government to do something in Scotland sooner than they might otherwise have liked.
I suggest that the Government have not even thought about the rates proposals. It is still not clear to us in Scotland who will be ahead of the field in the so-called
reform of rates and how the 20 per cent. social security imposition will work. It is not good enough to say, as the Scottish Office has said in its official reply,
Who will be eligible for rebates? Assistance will be given through Social Security to those on low incomes, but all will have to pay a contribution to their local tax, as the Government has already proposed in the White Paper on Social Security reform.
Is this a tax on the poor? I do not want to embarrass the Secretary of State for social services.
I appeal to my hon. Friend — the Secretary of State made a significant concession last night, and I am a reasonable man. I have been in Parliament long enough to recognise that there is a great deal of argument going on currently in the Conservative party; its members do not know what is wrong and I have some sympathy with them. When a party does now know where it is going, it can hardly come up with solutions.
I do not know where the Secretary of State stands in this. May I refer the Minister to what his right hon. Friend the Member for Chingford (Mr. Tebbit) said as chairman of the Conservative party as reported in The Guardian. The headline reads:
Tebbit blames the poor for anti-Tory slant".
That was before the local elections. He was challenged about the accountability argument to which the hon. Member for Roxburgh and Berwickshire referred. What did the chairman of the Conservative party say? The Guardian report says:
He said they would be fair to the extent that everyone had the opportunity to vote. 'But the result will be slanted in that some people vote secure in the knowledge that they won't have to pay for what they will vote for,' he said.
Unfortunately that is true, but his great eloquence of phrase suggests that he wants to put the boot into the poor. There is no other justification for what he said.
How can it be justifiable to say to people who, through no fault of their own, are on supplementary benefit, "We will clobber you. The only section guaranteed to come out of the social security review worse will be you, the poorest section of the community"? I probably have more of those people in my constituency than anyone else in the country. How can it be right for the Government to make this imposition on them?
I echo what the hon. Member for Roxburgh and Berwickshire said, apart from his comments on proportional representation, the bad part of his speech. There is a genuine problem. In areas of deprivation people are full of hopelessness. They will not be encouraged to have dignity and to take a responsible attitude to the cost of running local government unless there are signs of improvement for their future.
I have not got time to go into all the evils of poverty caused by unemployment, but we will not make people more responsible by attacking them in this way. Even at this late stage, I hope that the Minister will co-operate and will consider the matter again in the interests of all hon. Members who are concerned about looking after their constituents.
It will not surprise anyone in the House when I say that I do not intend to support the amendment, although the hon. Member for Oldham, West (Mr. Meacher) has raised a most important question about the proposals which were suddenly sprung upon us last week. My hon. Friend the Minister for Social Security should tell us whether the proposed cut will apply to the first six months of social security payments rather than the first six months of unemployment. That would be a different proposition.
It is a pity that there was not more discussion before the announcement was made so suddenly. I agree very much with my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), although there is no satisfactory time to make such an announcement. It might have been sensible for the Government to have taken note of the new clause which I tabled, proposing to limit the amount of mortgage interest relief to, say, £30,000. Huge amounts of money are being squandered on payments to wealthy people when things go wrong. A case which has come to my notice was reported in the Daily Mail of 27 March; the state was paying £1,200 a month in mortgage interest relief for a person whose business had failed and whose house was mortgaged for £100,000. That is unacceptable and totally wrong. It would have been much more sensible for the Secretary of State to have discussed the matter and to have put a limit on the amount of mortgage interest relief which would be paid.
I also take the point of my hon. Friend the Member for Brentwood and Ongar that we have been persuading people to buy council houses and have been issuing leaflets saying that in the event of unemployment their mortgage interest relief would be paid. Therefore, we ought not to spring such a change suddenly on them. The matter should be thought through carefully. There is scope for great savings to be made. There should not be an open-ended commitment. In due course, there should be a cut-off point when a house would have to be sold if the person was unable to fulfil his commitments. I urge my right hon. Friend to think more carefully about how such announcements are made.
Time is brief, but I want to make some comments because I represent a constituency in a borough with high unemployment, as the Secretary of State knows full well. The official rate of unemployment locally is 17·5 per cent. A large number of people of working age are on supplementary benefit. It is no credit to the Government, as I said yesterday, that people should be forced to live on sums of money that are totally inadequate, with the prospect of finding another job being very remote indeed.
It is difficult to imagine any measure more determined to penalise the poorest in the community than the proposal to ensure the payment of at least 20 per cent. of rates. As my hon. Friend the Member for Oldham, West (Mr. Meacher) has rightly said, it will mean that much less money will be available for the basic essentials of life. We are dealing with people for whom every single penny counts. If this sum of money has to be paid in rates, there will obviously be less money for food and other essentials. Therefore, this measure penalises the poorest. There can be no justification for it.
Even in the present Parliament it is beyond my understanding that any Back-Bench Conservative Member can bring himself to support such a measure. Any Conservative Member who votes for a measure which penalises the poorest cannot complain if such action is well publicised in his or her constituency. It is a vindictive proposal that clearly comes from No. 10 Downing street. I do not blame the Secretary of State for it. I do not think that he dreamed up the proposal. Whatever differences I have with the right hon. Gentleman, I do not think that he would bring forward such a measure on his own initiative. I think that it has come from the Prime Minister. I also believe that the Secretary of State humiliates himself by introducing the measure. The same applies to the Minister for Social Security who always likes to present himself as a reasonable person. There is nothing reasonable in what he is about to try to justify to the House today.
As for reducing the amount payable for mortgage interest relief, how can this be justified? Does it not to a large extent explain the current unpopularity of the Government? If the Government are worried, as they obviously are, about losing by-elections, about all the reverses in the local elections, and about why their standing is so poor in the opinion polls, it should not be difficult for them to understand the reason. It is because of the cuts in housing, education and so on which have been mentioned many times during the past week. It is also because of such measures as this, for example, to reduce assistance for payment of mortgage interest relief in the first six months for those who are unemployed.
What is that supposed to prove? What is the rationale behind the move? Are the Government saying that those who are unemployed for less than six months are not genuinely seeking work? Do they want to spread the poisonous lie that many of our fellow citizens who are unemployed, and who have been unable to find another job in the first six months of unemployment, do not want to work? Is that the kind of lie that the Government want to demonstrate to justify the present level of unemployment? My constituents dread being made redundant and the Secretary of State must be aware of the position as his constituency is in the west midlands. My constituents who are in their forties and fifties especially dread being made jobless because their chances of finding another job are so remote.
Many of my constituents, and this is perfectly understandable in view of the position that prevails in the west midlands, have a daily fear that they will lose their jobs. If my constituents are made jobless and so suffer all the difficulties that will accompany that, why should they be further penalised by these proposals? It is strange and hypocritical that these proposals should come from a Government who say that they are in favour of home ownership. That is a strange way of demonstrating that belief in home ownership. The Government are taking measures to penalise people who are made jobless.
I said that I would keep my remarks brief. I believe that the two measures that we are debating are contemptible and are worthy of a contemptible Administration.
The amendments raise two major subjects and in the relatively short time available to me I will try to make some comment on these. I would like to start by considering some of the points that have been raised about the mortgage interest proposals which were sent for consultation to the Social Security Advisory Committee last week.
I would like to take this opportunity to inform the House that the proposal was clearly contained as a possibility in the social security Green Paper published almost a year ago. The proposal can be found in paragraph 2.92 of that Green Paper, which concluded
The Government intend to discuss with building societies and other interested bodies arrangements whereby less of the burden—particularly for people on benefit for a short time— falls immediately and directly on the social security system.
I must also emphasise that that was echoed in the White Paper published last December. Paragraph 3.41 of that White Paper states:
The Government will continue to discuss with the building societies and other major lenders what changes might be appropriate, including the possibility of a limit on the proportion of mortgage interest which would be met during an initial period in receipt of benefit.
While I acknowledge the points that my hon. Friends have made, it is fair for me to make clear that, far from suddenly emerging last week, this proposal had been clearly signalled for some time.
I will give way when I have finished my next point.
Two of my hon. Friends referred to the leaflets which dealt with the right to buy. I must stress that, in an issue published in September of last year, the proposal was specifically signalled to anyone reading the leaflets. In parenthesis, page 8 of the leaflet published in September, after describing the current position, states:
However, current proposals may mean that help is not generally available during the first six months of eligibility for supplementary benefit.
That was revealed in September in a leaflet specifically published for that purpose. In an addendum in January, a passage referred to, and quoted from, the same extract that I quoted from the White Paper. Whatever else I may be told, it is wrong to suggest that these proposals were unexpected, unheralded and unheard of. That is manifestly not the case.
There is no mystery about the fact that the Government believed that the matter needed consideration and it is obvious from the documents that I have quoted that we were considering the matter. The proposals that we put forward last week represent the view that we have had formed on what should be put to the Social Security Advisory Committee for full consultation in the normal way for which social security legislation provides.
The hon. Member for Oldham, West (Mr. Meacher) referred to the figures in a document sent to the Social Security Advisory Committee about the position of those in and out of work in specific circumstances. The figures were based on a family with two children and a £16,000 mortgage. Although I note that the hon. Gentleman suggests that there are very few people in that position, it is unarguable that, on figures that relate to a net income of £120 a week and a £16,000 mortgage, the income after meeting housing costs for a family in work would be £68·50 and for someone out of work, in receipt of supplementary benefit, the income would be £74. I would have thought my hon. Friend the Member for Norfolk, North (Mr. Howell) would have attached some importance to that point.
Some hon. Members questioned whether that position is fair, especially when one compares the position of those in work with those on benefits but not on supplementary benefits who have relatively low incomes. Those people do not receive comparable help. There is an obvious issue in relation to incentives and that is clearly a factor in what is known as the unemployment trap. There is widespread agreement in the House that we need to tackle that and many of the Bill's proposals, including the family credit proposals. are designed to tackle that problem by helping families in work.
Besides those problems, which must be considered and which cannot be dismissed, there is the wider issue whether it is correct that, even for short periods of difficulty that cause someone to be on supplementary benefit, it is right to expect the taxpayer immediately to pick up the bill. Part of that bill will be met by people who are meeting their own mortgages out of relatively modest incomes derived from some other source rather than supplementary benefit.
It is well known, and is a credit to the building societies, that building societies try to help those who find themselves in short-term difficulty. Such difficulties can occur for a variety of reasons and these by no means affect only those who may be in receipt of supplementary benefit. The notion that the building societies will rush into foreclosure is wide of the mark. In its formal response to the Green Paper, the Building Societies Association assured us that it would handle any change in arrangements sympathetically and would continue with its basic aim to help as many people as possible to achieve home ownership.
Having weighed all the issues, we brought forward the proposals that were published in detail last week. The first of those states that the amount of mortgage interest payable with supplementary benefit should be limited to half for the first six months on benefit for all claimants aged under 60.
The second proposal is that those remaining on benefit after that period would, as now, have their mortgage interest payments met in full.
The third major proposal, which is also highly relevant to the balance of the consideration of these proposals, is that we would allow interest on arrears which have accumulated in those cases where the six-month limitation to qualify for benefit causes such arrears to attract specific assistance and give encouragement to lending organisations to re-schedule loans in appropriate cases where the interruption of earnings turned out to be longer term.
The fourth proposal is a smaller point but is one which the House should consider. We propose a further change in the regulations to enable home owners who take out mortgage protection policies to benefit from them through a special supplementary benefit disregard of the income from such policies. In other words, we are trying to encourage and assist the provision of insurance against the risks that a home owner may sometimes incur.
We estimate that about 90,000 people might be affected by these proposals, whereas there are 6 million borrowers from building societies. We also estimate that the average benefit involved for people on benefit for six months or more would be about £200. That helps to put the matter into perspective.
This is a reasonable and fair way in which to strike a balance between the taxpayer, the borrower and the lender. The regime in Britain is known to be more generous than that in any other country in the world. The Government are trying to ensure through the Bill and other social security ——
|Division No. 186]||[6.00 pm|
|Adams, Allen (Paisley N)||Fatchett, Derek|
|Anderson, Donald||Faulds, Andrew|
|Archer, Rt Hon Peter||Fields, T. (L'pool Broad Gn)|
|Ashdown, Paddy||Fisher, Mark|
|Ashley, Rt Hon Jack||Flannery, Martin|
|Ashton, Joe||Foot, Rt Hon Michael|
|Atkinson, N. (Tottenham)||Forrester, John|
|Bagier, Gordon A. T.||Foster, Derek|
|Barnett, Guy||Foulkes, George|
|Barron, Kevin||Fraser, J. (Norwood)|
|Beckett, Mrs Margaret||Freeson, Rt Hon Reginald|
|Beith, A. J.||Freud, Clement|
|Bell, Stuart||Garrett, W. E.|
|Bennett, A. (Dent'n & Red'sh)||George, Bruce|
|Bidwell, Sydney||Gilbert, Rt Hon Dr John|
|Blair, Anthony||Godman, Dr Norman|
|Boothroyd, Miss Betty||Gould, Bryan|
|Boyes, Roland||Gourlay, Harry|
|Brown, Gordon (D'f'mline E)||Hamilton, James (M'well N)|
|Brown, Hugh D. (Provan)||Hamilton, W. W. (Fife Central)|
|Brown, N. (N'c'tle-u-Tyne E)||Hancock, Michael|
|Brown, R. (N'c'tle-u-Tyne N)||Hardy, Peter|
|Caborn, Richard||Healey, Rt Hon Denis|
|Callaghan, Jim (Heyw'd & M)||Heffer, Eric S.|
|Campbell, Ian||Hogg, N. (C'nauld & Kilsyth)|
|Campbell-Savours, Dale||Holland, Stuart (Vauxhall)|
|Canavan, Dennis||Home Robertson, John|
|Cartwright, John||Howells, Geraint|
|Clark, Dr David (S Shields)||Hoyle, Douglas|
|Clarke, Thomas||Hughes, Dr Mark (Durham)|
|Clay, Robert||Hughes, Robert (Aberdeen N)|
|Clelland, David Gordon||Hughes, Roy (Newport East)|
|Clwyd, Mrs Ann||Hughes, Sean (Knowsley S)|
|Cocks, Rt Hon M. (Bristol S)||Hughes, Simon (Southwark)|
|Cohen, Harry||Hume, John|
|Coleman, Donald||Janner, Hon Greville|
|Conlan, Bernard||John, Brynmor|
|Cook, Frank (Stockton North)||Johnston, Sir Russell|
|Cook, Robin F. (Livingston)||Jones, Barry (Alyn & Deeside)|
|Corbett, Robin||Kennedy, Charles|
|Corbyn, Jeremy||Kilroy-Silk, Robert|
|Craigen, J. M.||Kirkwood, Archy|
|Crowther, Stan||Lambie, David|
|Cunliffe, Lawrence||Leadbitter, Ted|
|Cunningham, Dr John||Leighton, Ronald|
|Davies, Rt Hon Denzil (L'lli)||Lewis, Ron (Carlisle)|
|Davis, Terry (B'ham, H'ge H'l)||Lewis, Terence (Worsley)|
|Deakins, Eric||Litherland, Robert|
|Dewar, Donald||Lloyd, Tony (Stretford)|
|Dixon, Donald||Lofthouse, Geoffrey|
|Dobson, Frank||McCartney, Hugh|
|Dormand, Jack||McDonald, Dr Oonagh|
|Douglas, Dick||McGuire, Michael|
|Dubs, Alfred||McKay, Allen (Penistone)|
|Duffy, A. E. P.||McKelvey, William|
|Dunwoody, Hon Mrs G.||MacKenzie, Rt Hon Gregor|
|Eadie, Alex||McNamara, Kevin|
|Eastham, Ken||McTaggart, Robert|
|Edwards, Bob (W'h'mpt'n SE)||McWilliam, John|
|Evans, John (St. Helens N)||Madden, Max|
|Mallon, Seamus||Shore, Rt Hon Peter|
|Marek, Dr John||Short, Ms Clare (Ladywood)|
|Marshall, David (Shettleston)||Short, Mrs R.(W'hampt'n NE)|
|Mason, Rt Hon Roy||Silkin, Rt Hon J.|
|Maxton, John||Skinner, Dennis|
|Meacher, Michael||Smith, Cyril (Rochdale)|
|Meadowcroft, Michael||Smyth, Rev W. M. (Belfast S)|
|Michie, William||Spearing, Nigel|
|Millan, Rt Hon Bruce||Steel, Rt Hon David|
|Mitchell, Austin (G't Grimsby)||Stewart, Rt Hon D. (W Isles)|
|Morris, Rt Hon A. (W'shawe)||Stott, Roger|
|Morris, Rt Hon J. (Aberavon)||Strang, Gavin|
|Nellist, David||Straw, Jack|
|Oakes, Rt Hon Gordon||Taylor, Rt Hon John David|
|O'Brien, William||Thomas, Dafydd (Merioneth)|
|O'Neill, Martin||Thompson, J. (Wansbeck)|
|Orme, Rt Hon Stanley||Thorne, Stan (Preston)|
|Owen, Rt Hon Dr David||Tinn, James|
|Park, George||Torney, Tom|
|Parry, Robert||Wainwright, R.|
|Patchett, Terry||Walker, Cecil (Belfast N)|
|Pavitt, Laurie||Wallace, James|
|Pendry, Tom||Wardell, Gareth (Gower)|
|Pike, Peter||Wareing, Robert|
|Powell, Raymond (Ogmore)||Weetch, Ken|
|Radice, Giles||Welsh, Michael|
|Randall, Stuart||White, James|
|Raynsford, Nick||Wigley, Dafydd|
|Redmond, Martin||Williams, Rt Hon A.|
|Rees, Rt Hon M. (Leeds S)||Wilson, Gordon|
|Richardson, Ms Jo||Winnick, David|
|Roberts, Ernest (Hackney N)||Woodall, Alec|
|Robertson, George||Wrigglesworth, Ian|
|Robinson, G. (Coventry NW)||Young, David (Bolton SE)|
|Ross, Ernest (Dundee W)|
|Ross, Stephen (Isle of Wight)||Tellers for the Ayes:|
|Sedgemore, Brian||Mr. Chris Smith and Mr. Frank Haynes.|
|Sheldon, Rt Hon R.|
|Shields, Mrs Elizabeth|
|Adley, Robert||Buchanan-Smith, Rt Hon A.|
|Alexander, Richard||Buck, Sir Antony|
|Alison, Rt Hon Michael||Budgen, Nick|
|Amess, David||Bulmer, Esmond|
|Ancram, Michael||Burt, Alistair|
|Arnold, Tom||Butcher, John|
|Ashby, David||Butler, Rt Hon Sir Adam|
|Atkins, Rt Hon Sir H.||Butterfill, John|
|Atkins, Robert (South Ribble)||Carlisle, John (Luton N)|
|Atkinson, David (B'm'th E)||Carlisle, Kenneth (Lincoln)|
|Baker, Nicholas (Dorset N)||Carttiss, Michael|
|Baldry, Tony||Cash, William|
|Banks, Robert (Harrogate)||Channon, Rt Hon Paul|
|Batiste, Spencer||Chapman, Sydney|
|Beaumont-Dark, Anthony||Chope, Christopher|
|Bendall, Vivian||Churchill, W. S.|
|Bennett, Rt Hon Sir Frederic||Clark, Dr Michael (Rochford)|
|Benyon, William||Clark, Sir W. (Croydon S)|
|Best, Keith||Clarke, Rt Hon K. (Rushcliffe)|
|Bevan, David Gilroy||Clegg, Sir Walter|
|Biffen, Rt Hon John||Cockeram, Eric|
|Biggs-Davison, Sir John||Coombs, Simon|
|Blackburn, John||Cope, John|
|Blaker, Rt Hon Sir Peter||Cormack, Patrick|
|Body, Sir Richard||Corrie, John|
|Bonsor, Sir Nicholas||Couchman, James|
|Boscawen, Hon Robert||Cranborne, Viscount|
|Bottomley, Peter||Crouch, David|
|Bottomley, Mrs Virginia||Currie, Mrs Edwina|
|Bowden, Gerald (Dulwich)||Dickens, Geoffrey|
|Boyson, Dr Rhodes||Dorrell, Stephen|
|Braine, Rt Hon Sir Bernard||Douglas-Hamilton, Lord J.|
|Brandon-Bravo, Martin||Dover, Den|
|Brinton, Tim||du Cann, Rt Hon Sir Edward|
|Brittan, Rt Hon Leon||Durant, Tony|
|Brooke, Hon Peter||Dykes, Hugh|
|Browne, John||Edwards, Rt Hon N. (P'broke)|
|Bruinvels, Peter||Eggar, Tim|
|Bryan, Sir Paul||Emery, Sir Peter|
|Evennett, David||Knight, Dame Jill (Edgbaston)|
|Eyre, Sir Reginald||Knowles, Michael|
|Fairbairn, Nicholas||Knox, David|
|Fallon, Michael||Lamont, Norman|
|Farr, Sir John||Lang, Ian|
|Favell, Anthony||Latham, Michael|
|Finsberg, Sir Geoffrey||Lawler, Geoffrey|
|Fletcher, Alexander||Lawrence, Ivan|
|Fookes, Miss Janet||Lawson, Rt Hon Nigel|
|Forman, Nigel||Lee, John (Pendle)|
|Forsyth, Michael (Stirling)||Lennox-Boyd, Hon Mark|
|Forth, Eric||Lester, Jim|
|Fowler, Rt Hon Norman||Lightbown, David|
|Fox, Marcus||Lilley, Peter|
|Franks, Cecil||Lloyd, Ian (Havant)|
|Fraser, Peter (Angus East)||Lloyd, Peter (Fareham)|
|Freeman, Roger||Lord, Michael|
|Fry, Peter||Lyell, Nicholas|
|Galley, Roy||McCrindle, Robert|
|Gardiner, George (Reigate)||McCurley, Mrs Anna|
|Gardner, Sir Edward (Fylde)||Macfarlane, Neil|
|Garel-Jones, Tristan||MacGregor, Rt Hon John|
|Gilmour, Rt Hon Sir Ian||MacKay, John (Argyll & Bute)|
|Glyn, Dr Alan||Maclean, David John|
|Goodhart, Sir Philip||McLoughlin, Patrick|
|Goodlad, Alastair||McNair-Wilson, M. (N'bury)|
|Gorst, John||McNair-Wilson, P. (New F'st)|
|Gow, Ian||McQuarrie, Albert|
|Gower, Sir Raymond||Major, John|
|Grant, Sir Anthony||Malins, Humfrey|
|Greenway, Harry||Malone, Gerald|
|Gregory, Conal||Maples, John|
|Griffiths, Peter (Portsm'th N)||Marland, Paul|
|Grist, Ian||Marlow, Antony|
|Ground, Patrick||Marshall, Michael (Arundel)|
|Grylls, Michael||Mates, Michael|
|Gummer, Rt Hon John S||Maude, Hon Francis|
|Hamilton, Hon A. (Epsom)||Mawhinney, Dr Brian|
|Hamilton, Neil (Tatton)||Maxwell-Hyslop, Robin|
|Hampson, Dr Keith||Mayhew, Sir Patrick|
|Hanley, Jeremy||Mellor, David|
|Hannam, John||Merchant, Piers|
|Hargreaves, Kenneth||Miller, Hal (B'grove)|
|Harris, David||Mills, lain (Meriden)|
|Harvey, Robert||Miscampbell, Norman|
|Havers, Rt Hon Sir Michael||Mitchell, David (Hants NW)|
|Hawkins, C. (High Peak)||Moate, Roger|
|Hawkins, Sir Paul (N'folk SW)||Monro, Sir Hector|
|Hawksley, Warren||Montgomery, Sir Fergus|
|Hayes, J.||Moore, Rt Hon John|
|Heathcoat-Amory, David||Morris, M. (N'hampton S)|
|Heddle, John||Morrison, Hon C. (Devizes)|
|Hickmet, Richard||Morrison, Hon P. (Chester)|
|Hicks, Robert||Moynihan, Hon C.|
|Higgins, Rt Hon Terence L.||Murphy, Christopher|
|Hill, James||Neale, Gerrard|
|Hind, Kenneth||Nelson, Anthony|
|Hirst, Michael||Neubert, Michael|
|Hogg, Hon Douglas (Gr'th'm)||Newton, Tony|
|Holland, Sir Philip (Gedling)||Nicholls, Patrick|
|Holt, Richard||Norris, Steven|
|Hordern, Sir Peter||Onslow, Cranley|
|Howard, Michael||Oppenheim, Phillip|
|Howarth, Alan (Stratf'd-on-A)||Oppenheim, Rt Hon Mrs S.|
|Howell, Ralph (Norfolk, N)||Page, Sir John (Harrow W)|
|Hubbard-Miles, Peter||Page, Richard (Herts SW)|
|Hunt, David (Wirral W)||Patten, J. (Oxf W & Abgdn)|
|Hunt, John (Ravensbourne)||Pattie, Geoffrey|
|Hunter, Andrew||Pawsey, James|
|Jackson, Robert||Peacock, Mrs Elizabeth|
|Jessel, Toby||Pollock, Alexander|
|Johnson Smith, Sir Geoffrey||Porter, Barry|
|Jones, Gwilym (Cardiff N)||Portillo, Michael|
|Jones, Robert (Herts W)||Powell, William (Corby)|
|Jopling, Rt Hon Michael||Powley, John|
|Joseph, Rt Hon Sir Keith||Prentice, Rt Hon Reg|
|Kellett-Bowman, Mrs Elaine||Proctor, K. Harvey|
|Kershaw, Sir Anthony||Raffan, Keith|
|Key, Robert||Raison, Rt Hon Timothy|
|Knight, Greg (Derby N)||Rees, Rt Hon Peter (Dover)|
|Rhodes James, Robert||Thatcher, Rt Hon Mrs M.|
|Ridley, Rt Hon Nicholas||Thomas, Rt Hon Peter|
|Roberts, Wyn (Conwy)||Thompson, Patrick (N'ich N)|
|Robinson, Mark (N'port W)||Thorne, Neil (Ilford S)|
|Roe, Mrs Marion||Thornton, Malcolm|
|Rossi, Sir Hugh||Thurnham, Peter|
|Rost, Peter||Townend, John (Bridlington)|
|Rowe, Andrew||Townsend, Cyril D. (B'heath)|
|Rumbold, Mrs Angela||Tracey, Richard|
|Ryder, Richard||Trippier, David|
|Sainsbury, Hon Timothy||Trotter, Neville|
|Sayeed, Jonathan||Twinn, Dr Ian|
|Shaw, Sir Michael (Scarb')||van Straubenzee, Sir W.|
|Shelton, William (Streatham)||Vaughan, Sir Gerard|
|Shepherd, Colin (Hereford)||Viggers, Peter|
|Shepherd, Richard (Aldridge)||Waddington, David|
|Silvester, Fred||Wakeham, Rt Hon John|
|Sims, Roger||Waldegrave, Hon William|
|Skeet, Sir Trevor||Walden, George|
|Smith, Sir Dudley (Warwick)||Wall, Sir Patrick|
|Smith, Tim (Beaconsfield)||Waller, Gary|
|Soames, Hon Nicholas||Walters, Dennis|
|Speed, Keith||Ward, John|
|Speller, Tony||Wardle, C. (Bexhill)|
|Spencer, Derek||Warren, Kenneth|
|Spicer, Jim (Dorset W)||Watson, John|
|Spicer, Michael (S Worcs)||Watts, John|
|Squire, Robin||Wells, Bowen (Hertford)|
|Stanbrook, Ivor||Wheeler, John|
|Stanley, Rt Hon John||Whitfield, John|
|Steen, Anthony||Wiggin, Jerry|
|Stern, Michael||Winterton, Mrs Ann|
|Stevens, Lewis (Nuneaton)||Winterton, Nicholas|
|Stewart, Allan (Eastwood)||Wolfson, Mark|
|Stewart, Andrew (Sherwood)||Wood, Timothy|
|Stewart, Ian (Hertf'dshire N)||Woodcock, Michael|
|Stokes, John||Yeo, Tim|
|Stradling Thomas, Sir John||Young, Sir George (Acton)|
|Sumberg, David||Younger, Rt Hon George|
|Tapsell, Sir Peter|
|Taylor, John (Solihull)||Tellers for the Noes:|
|Taylor, Teddy (S'end E)||Mr. Carol Mather and Mr. Donald Thompson.|
|Tebbit, Rt Hon Norman|